Nepal Electricity Authority (NEA) in a bid to purchase 100 MW of electricity generated by solar power plants has called for power purchase agreement (PPA) through competition.

For this purpose, the state-owned power utility has called the interested firms to submit their letter of intent (LoI). Last year, the NEA decided to open the PPA of solar power through a competitive bidding process.

According to the NEA, the step is a part of its plan to promote the mix-energy sources. The new measure is expected to make the purchase of solar power more accessible and transparent.

The NEA has fixed deadline of February 26 to file LoI on the technical proposal. The companies selected in the first phase will have to submit their financial proposal. According to the NEA, the approved companies will have to complete installation of solar plants in the next 18 months.

The power utility has maintained a threshold of 10 percent of the total electricity flown in the national grid to fix the base rate of the PPA. Likewise, the PPA will be opened only for the areas chosen by the NEA.

NEA’s Spokesperson Suresh Bahadur Bhattarai said the projects will have to be installed only in the areas defined by the authority. “We will be targeting to supply solar power in the areas where there are relatively less potentials of hydropower,” he said.

As of now, NEA has been purchasing solar electricity at Rs 7.10 per unit. In the revised rule, the base rate for PPA has been fixed at Rs 5.94 per unit.

The NEA has signed PPA with 21 solar projects to purchase 110 MW of electricity. Of these, six projects have supplied 29 MW of electricity in the national grid.