The Board of Directors of the Nepal Electricity Authority has made important decisions to move forward with electricity imports and exports with India in the current fiscal year and the coming years in a manner that is systematic, competitive, and ensures maximum benefit.

The 1,020th meeting of the Authority’s Board of Directors, held on December 30, 2025 under the chairmanship of then Minister for Energy, Water Resources and Irrigation Kulman Ghising, clearly set the direction to institutionalize electricity trading through 24-hour (RTC) mode, power exchange mechanisms (Indian Energy Exchange – Day-Ahead Market/Real-Time), and bilateral agreements.

Electricity Imports Inevitable During Winter

According to the meeting’s conclusion, electricity generation from run-of-the-river hydropower projects declines during the winter and dry-season months, making it likely that Nepal’s domestic production will again be insufficient to meet demand. In such circumstances, the Authority has concluded that importing electricity from India will be unavoidable to maintain system balance and reduce load-shedding.

Cheaper Electricity from IEX (Day-Ahead/Real-Time Market), but ‘Peak Hour’ Remains a Challenge

The meeting minutes note that until last year, Nepal had been permitted to import electricity from the Indian Energy Exchange (IEX) mainly during solar hours (from morning to evening), which had led to supply problems during peak hours. It was also concluded that electricity purchases made through the Power Exchange Committee had, in some cases, turned out to be expensive and that it had been difficult to supply electricity in line with demand during peak hours.

Agreements with NVVN and PTC India, but hurdles in approval from the ‘Designated Authority’ (DA)

The meeting minutes state that the Authority received a proposal from NTPC Vidyut Vyapar Nigam (NVVN) to purchase 100 MW of round-the-clock electricity for the period January–March 2026 at a rate of INR 6.60 per unit. Similarly, although an agreement was signed with PTC India for electricity imports through the Dhalkebar–Muzaffarpur transmission line, the Board discussed that it could not be implemented due to the failure to obtain timely approval from India’s Designated Authority (DA).

Preparation for 200 MW Imports and 500 MW Exports Through Competitive Bidding

The Board of Directors, anticipating an increase in surplus energy (Energy Spill) in Nepal in the coming years, has decided to invite competitive bids for exporting up to 500 MW of electricity to India during the monsoon season and importing up to 200 MW during the dry season.

For this, a Single Stage, Two Envelope e-Bidding Process (PPMO e-GP system) will be adopted, with a minimum rate of INR 5.45 per unit and the Maximum Per Unit Net Benefit as the main criterion. Former Managing Director of the Authority, Manoj Silwal, had earlier initiated the process of purchasing and selling electricity during the winter and monsoon seasons through competitive bidding.

Focus on Long-Term Trade Structure

The meeting, noting that the Authority has been designated as the Nodal Authority by the Government of Nepal, reaffirmed that prior approval has already been obtained to conduct cross-border electricity trade with India and Bangladesh through short-term, medium-term, and long-term arrangements.

Jalasarkar