The government has allocated a budget of Rs 87.45 billion for the Ministry of Energy, Water Resources and Irrigation (MoEWRI) for fiscal year 2023/24, which is Rs 21.15 billion less compared to the amount allocated in the sector for the current fiscal year.

The government has cut the budget for the sector, which was in the government’s top priority lists for the past several years. The government says it reduced the budget size due to a shortfall in the financial resources.

The budget has allocated funds of Rs 5 billion for the Nepal Electricity Authority (NEA) alone. The amount is less than half of Rs 12 billion allocated for the sector in the current fiscal year.

An NEA official said the amount set aside could not be sufficient to expand transmission lines and related infrastructures which are much needed to upgrade the quality of the electricity distribution.

The projects related to internal and cross-border transmission lines will be receiving Rs 38.32 billion.

The government has targeted to produce an additional 900 MW of electricity in the next fiscal year, aiming to take the total production capacity to 3,600 MW.