Despite an increase in revenue from electricity sales, the Nepal Electricity Authority (NEA) has reported a sharp decline in its net profit - a fall many blame on leadership changes after the removal of former Managing Director Kulman Ghising.

According to the annual financial performance of fiscal year 2081/82 (2023/24), NEA’s net profit before tax dropped by a massive 37.32 percent to NPR 9.06 billion, compared to NPR 13.31 billion in the previous fiscal year when Ghising was at the helm. The announcement comes just months after the government dismissed Ghising on Chaitra 11 and appointed Hitendra Dev Shakya as Managing Director.

Profit Shrinks Despite Rising Revenue

Under Shakya’s leadership, NEA earned NPR 125.27 billion from electricity sales, an 8.46 percent rise from the previous year. Of that, NPR 17.47 billion came from electricity export to India. Including all sources, NEA’s total revenue stood at NPR 138.87 billion.

However, rising operational costs, foreign exchange pressure, reduced average selling price of electricity, and increased administrative expenditure wiped out the gain - slashing overall profitability.

Shakya attributed the fall to “rising foreign exchange losses, a surge in administrative costs, and a decrease in average selling price of electricity,” while insisting that profitability would improve in the coming years. But staff unions and energy experts have directly criticized his leadership and direction.

Operational Expenses Surge

Operating expenses surged by 10.15 percent to NPR 97.78 billion.

Electricity purchase costs increased by 11.73 percent, with NEA spending NPR 77.10 billion on purchasing electricity from Independent Power Producers (IPPs).

Additionally, NEA spent:

NPR 2.07 billion on generation

NPR 3.24 billion on transmission

NPR 12.22 billion on distribution

NPR 1.84 billion on royalties

Total expenditure, including depreciation, interest, and exchange losses, amounted to a staggering NPR 129.81 billion.

Structural Figures and Operational Metrics

Total assets grew by 6.2% reaching NPR 684.91 billion.

Number of customers rose by 4.6% to around 5.71 million.

Power leakage decreased by 0.47 percentage points to 12.26%.

NEA provided free electricity (up to 5 Ampere) to about 2.07 million domestic users, consuming a total of 176.7 million units.

Internal Criticism Mounts

During the NEA’s 40th anniversary ceremony, employees openly questioned Hitendra Dev’s leadership capacity. The Rastriya Prajatantra Party affiliated union’s President, Shri Prasad Acharya, said, “Hitendra Dev has done nothing besides blame Kulman. He doesn’t have any way to prevent power cuts.” Employees warned that if current leadership continues this way, “the institution might shut down entirely.”

They also criticized increasing unannounced power cuts in several areas, reminding NEA leadership of its duty to ensure uninterrupted supply rather than playing blame games.

Production and Trade Dynamics

The national grid had a total installed capacity of 3,591 MW by the end of the fiscal year.

The highest recorded demand was 2,901 MW on Asar 18, of which 2,214 MW was consumed domestically, and 687 MW was exported to India.

NEA has permits to export 1,010 MW from 30 hydropower projects - but due to management inefficiency, it has failed to boost exports and reduce spillage (unused energy).

Nepal imported 1,712 GWh from India, while it exported 2,380 GWh, resulting in a net export of 668 GWh.

Total internal consumption grew by 10.7%, reaching 11,319 GWh.

Rising Confusion in Policy and Leadership

Critics say that the new leadership has failed to maintain momentum and confidence built during Kulman Ghising’s tenure - a period often remembered for eliminating loadshedding and strengthening NEA’s financial health. Under Shakya, frequent errors, rising costs, and delivery delays have become more visible.

As the government faces increasing pressure to clarify why Ghising was sidelined despite strong performance, electricity sector analysts warn that NEA could lose credibility among domestic consumers and foreign investors if reforms and accountability are not enforced immediately.