KATHMANDU: To optimize the profits from electricity exports, private-sector power producers in Nepal have pushed the government to address concerns about procedural hold-ups and give transmission line building a top priority. The new trilateral agreement for cross-border energy trade between Bangladesh, India, and Nepal has been welcomed by the Independent Power Producers Association of Nepal (IPPAN). However, IPPAN has stressed that additional government action is required to increase the potential for electricity export.
IPPAN has urged for legislative and administrative changes to ensure that the export targets are met, even though the agreement with Bangladesh and India permits large electricity exports. The president of IPPAN, Ganesh Karki, emphasized that these reforms are essential if Nepal is to meet its objectives in terms of international electricity trading.
Representatives from Bangladesh, India, and Nepal signed a long-awaited agreement on Thursday that will facilitate the flow of hydroelectric power from India to Bangladesh. Presently, 40 MW of power is imported from Nepal, and Bangladesh plans to increase this number to 9,000 MW in the next years.
Moreover, India has promised to buy 10,000 MW of power from Nepal during the following ten years. India now purchases 941 MW of energy from Nepal; however, the upcoming agreement is a reflection of the high demand for Nepal's hydropower resources.
By 2035, the Nepalese government wants to produce 28,500 MW of electricity in order to fully benefit from these accords. Although IPPAN acknowledges the importance of this objective, it contends that the government's present activities fall short of meeting the output targets.
In order to increase the rate of electricity production, IPPAN thinks the government needs to act more decisively. They stress that one important step would be to fully open power purchase agreements (PPAs), which have been closed for years to private suppliers.
The Nepal Electricity Authority (NEA) reopened PPAs for hydropower and solar projects in February 2024, but only with certain restrictions for earlier projects. Karki claims that the authority is still unwilling to grant PPAs for new projects, which restricts the energy sector's ability to grow.
In addition to calling for additional PPAs, IPPAN is in favor of expedited licensing processes for energy projects. By making these procedures simpler, the energy industry would be able to draw in more capital and increase output.
IPPAN also emphasized the significance of providing greater concessions, streamlining banking procedures to assist investments in energy projects, and altering legislative and regulatory frameworks to promote quick energy development.
In order for Nepal to fully profit from cross-border electrical commerce, IPPAN emphasized the importance of constructing important transmission lines, such as the Dordi Corridor. Even with the international accords in place, Nepal might not be able to reach its aggressive export goals in the absence of better infrastructure.
Nepal would find it difficult to fully seize the potential given by its expanding market for energy exports to neighboring countries, according to the power producers' organization, unless the government moves quickly on these fronts.
