With the aim of attracting private sector investment in electricity transmission infrastructure, the government has issued a “Tariff-Based Competitive Bidding (TBCB) Framework for Transmission Services.

The framework, issued by the Ministry of Energy, Water Resources and Irrigation in November–December 2025, has established a clear legal and procedural basis for selecting the private sector through competitive tariffs for the construction of transmission lines and substations.

The government has introduced this framework by prioritizing the expansion of the transmission system in line with its goals of strengthening energy security through domestic renewable energy, increasing internal electricity consumption, and positioning Nepal as a reliable exporter in the regional power market. According to Sandeep Kumar Dev, Joint Secretary at the Ministry, the TBCB will serve as an important tool to put into practice the concept of a competitive electricity market and open access envisioned by the Electricity Act, 2049 (1992) and the Electricity Regulatory Commission Act, 2074 (2017).

According to the framework, certain transmission projects will now be developed by the private sector under the Build, Own, Operate and Transfer (BOOT) model. Companies selected through a competitive tender process will be assigned the role of Transmission Service Provider (TSP). The TSP will be responsible for the construction, operation, and maintenance of the project and will transfer it to the government after the specified period.

The planning and coordination of the transmission system will be carried out by the Nepal Electricity Authority (NEA), the Rastriya Prasaran Grid Company Limited (RPGCL), or another agency designated by the government. A Transmission Plan covering transmission lines of 132 kV and above will be updated every five years and approved by the ministry.

Transmission Plan and Institutional Role The transmission system planning and coordination is to be carried out by the Nepal Electricity Authority (NEA), the National Transmission Grid Company (RPGCL) or an agency designated by the government. The Transmission Plan, covering transmission lines of 132 kV and above, will be updated every five years and approved by the Ministry.

Competitive Tendering and Minimum Charges

The TBCB process will adopt a one-stage, two-envelope system, where the company offering the lowest levelized Transmission Service Charge (TSC) among the technically qualified companies will be selected. The TSC will be determined in Nepali rupees and the foreign exchange risk will be borne by the private company.

The bidding process will be preceded by an Expression of Interest (EOI), followed by a Request for Proposal (RFP) and finally a Transmission Service Agreement (TSA) will be signed. The framework also provides for the issuance of a Letter of Intent (LOI) within seven days of the bid evaluation.

Role of the Regulatory Commission

Provisions have been made to inform the Electricity Regulatory Commission (ERC) before initiating the bidding process and after the final results, as well as to obtain approval of the benchmark cost. This is expected to ensure that transmission charges remain consumer-friendly and transparent.

A New Era in Transmission Expansion

Although power generation capacity in Nepal is increasing rapidly, weak transmission infrastructure has led to the problem of electricity wastage. Through the TBCB framework, the government expects to accelerate transmission expansion by bringing in private investment, efficiency, and competition, and to achieve overall reform of the energy sector.

Jalasarokar