In a significant policy shift, the government of Nepal has announced the introduction of differential electricity tariffs based on the time of consumption for industrial and domestic consumers. Finance Minister Bishnu Prasad Paudel made this announcement while presenting the budget for the fiscal year 2082/83 (2025/26) during a joint session of the Federal Parliament on Thursday at 3 PM.

“Electricity tariffs for industrial and domestic consumers will vary based on demand, consumption, and time of use,” Minister Paudel declared. He also revealed that NPR 86.01 billion has been allocated to the Ministry of Energy, Water Resources, and Irrigation to drive sectoral development.

The budget prioritizes research and development in the energy sector, digitization of underground water resource utilization, diversification of energy production for energy security, and a focus on reservoir-based hydropower projects. To boost private sector participation, the government will encourage investments in electricity generation, distribution, and transmission. Paudel also emphasized diplomatic efforts to increase electricity exports.

The budget includes plans to study green hydrogen production and promote solar and wind energy by offering purchase rates equivalent to reservoir-based hydropower for electricity fed into the national grid. Investment frameworks for projects like Upper Arun, Sunkoshi-3, and Karnali Chisapani will be developed, with the latter’s engineering design set to be completed.

To ensure timely infrastructure development, transmission lines will be planned to align with the completion of hydropower projects. A “take-and-pay” policy will be implemented for run-of-the-river projects. Additionally, industries building their own transmission lines will be subject to wheeling charges.

The government will advance cross-border transmission line construction, with the Kohalpur-Surkhet 132 kV line targeted for completion this year. To reduce reliance on LP gas, the promotion of electric stoves was also announced. Revenue from electricity generated by projects like Ranijamara, Kulariya, and Sunkoshi Marin Diversion will be deposited into the federal consolidated fund.

This ambitious energy-focused budget aims to enhance Nepal’s energy security, promote sustainable practices, and strengthen its position in regional electricity markets.