Kathmandu: Nepal Power Exchange Limited (NPEL), subsidiary of Independent Power Producers’ Association Nepal (IPPAN), has signed an agreement with Manikaran Power Limited, India to carry out cross border electricity trade.

According to IPPAN, two companies inked the agreement amid a special function on Monday. Once the agreement comes into effect, this paves the way for the NPEL to sell electricity produced by the private sector via the Indian company. The NPEL now has to receive a license from the government.

As of now, only Nepal Electricity Authority has been exporting electricity to India. At present, the government is preparing to issue licenses to private sector companies allowing them to carry out the cross-border power trade. According to the Ministry of Energy, Water Resource and Irrigation, a working guideline is being prepared in this regard.

Apart from India, another neighboring country Bangladesh has recently expressed its interest to sign power purchase agreement directly with Nepal's private sector hydropower producers. Bangladesh has said that the authorities there will soon be upgrading the cross border transmission line and dedicated line to purchase Nepali production.