India has given a positive signal that it would purchase electricity produced in Nepal. In a virtual discussion between the concerned bodies with the Ministry of Energy of Nepal and India, the Indian side said that it was willing to buy Nepal’s surplus electricity.

Acting Managing Director of Nepal Electricity Authority (NEA) Hitendra Dev Shakya said Indian officials were willing to buy surplus electricity from Nepal. “They have expressed the will to purchase electricity from Nepal,” he said. “We have requested the Indian side to send a proposal for the purchase.”

Shakya said that NEA has asked the Indian side to make a proposal and necessary preparations for the purchase of electricity within three months. “We have requested the Indian side to send the necessary proposal for the purchase of electricity. They look very positive,” he said, adding that the rate will be determined as soon as the proposal is received. He said that the tariff framework for selling Nepal's electricity has not been decided yet. Dr Rajib Mishra, Managing Director of NTPC Vidyut Vyapar Nigam Limited (NVVN) and others participated in the virtual meeting.?

Shakya said if everything goes according to the plan between the two sides, electricity can be exported by mid-May next year. “If the purchase agreement is finalized, we will be able to export electricity from next year but the way for trade will be opened only after the proposal is approved by the council of ministers,” he said.

According to NEA, even if the electricity is not being officially sold, the two countries have been informally trading electricity. NEA states Nepal will have surplus electricity after the completion of 456 MW Upper Tamakoshi Hydropower Project. The project is expected to be connected to the national grid within the current fiscal year.

NEA has met the domestic demand by importing 1.72 billion units from neighboring India out of a total of 7.74 billion units in the fiscal year 2019/20. The value of electricity imported from India is more than Rs 13.58 billion. Of the 7,741 gigawatt hours (7.74 billion units) of electricity consumed last year, 22.34 percent was imported from India.

In the last fiscal year, 3.2 billion units were supplied from NEA projects and 2.99 billion units were procured from private sector companies. NEA has stated that the electricity import from India has decreased in the last fiscal year compared to the previous fiscal year.