Nepal’s winter power supply pressure has eased after India agreed to renew supply of 654 megawatts (MW) of electricity, providing critical relief to the Nepal Electricity Authority (NEA) during the dry season when domestic generation drops sharply.

According to the NEA, India’s Central Electricity Authority under the Ministry of Power has renewed permission allowing Nepal to import electricity at competitive rates through the Indian Energy Exchange (IEX). The approval enables round-the-clock imports through both the day-ahead and real-time markets.

Under the renewed arrangement, Nepal will be allowed to import up to 600 MW through the 400 kV Dhalkebar-Muzaffarpur transmission line and an additional 54 MW through the Tanakpur-Mahendranagar line, taking the total to 654 MW.

The approval will remain valid from January 1 to March 31, 2026. Renewal for the subsequent period from April 1 to August 31, 2026, will be processed later, the NEA said.

Minister for Energy, Water Resources and Irrigation Kulman Ghising had on Tuesday reportedly requested Indian authorities to renew the power import approval. Ghising said the renewed permission would help balance electricity demand and supply during the winter months, when hydropower output declines.

Most of Nepal’s hydropower plants are run-of-river projects, whose generation falls sharply in winter due to receding river flows. Private power producers say electricity generation has already dropped to around 1,600 MW, despite the country’s installed capacity exceeding 3,800 MW.

The renewed import approval comes amid controversy surrounding the NEA’s earlier decision to purchase electricity at a higher tariff from PTC India, one of India’s leading power trading companies. However, the NEA board on Tuesday scrapped the plan to buy power from PTC India.

Following the appointment of Manoj Silwal as NEA’s executive director three months ago, the authority had planned to purchase 180 MW of electricity from PTC India at a tariff of INR 6.95 per unit - higher than the initially proposed INR 6.74. The NEA was criticised for delays in decision-making, which reportedly pushed up the cost.

The NEA board decided to cancel the purchase plan after PTC India failed to provide timely approval. Instead, the NEA has opted to procure electricity through open bidding.

“The process is expected to help the NEA purchase electricity at a cheaper rate,” an NEA official said.