The Independent Power Producers' Association of Nepal (IPPAN) has welcomed the Power Sales Agreement (PSA) for 40 MW of electricity signed between Nepal and Bangladesh last Thursday. According to IPPAN, this agreement marks a historic milestone in Nepal's electricity trade.

IPPAN highlighted that while Nepal has a long-term agreement with India to export 10,000 MW of electricity over the next 10 years, this new agreement with Bangladesh not only opens up a fresh market for Nepal’s electricity but also paves the way for deeper cooperation, partnership, and investment exchanges between the two countries. The agreement is expected to strengthen energy development and expansion efforts, both in the government and the private sector levels.

The Government of Bangladesh has set a target to import 9,000 MW of electricity from Nepal by 2039, aligning with its growing energy needs. Similarly, the Government of Nepal aims to export 5,000 MW of electricity over the next 10 years. IPPAN stated that Nepal’s private sector is prepared to support the implementation of these ambitious targets.

Alongside the agreement, IPPAN called on the Nepal Electricity Authority (NEA) to fully open Power Purchase Agreements (PPA). “We see an urgent need for the government to issue licenses to the private sector for electricity exports, encourage banks and financial institutions to increase investment in the energy sector, and offer more concessions for energy production. There is also a pressing need to address the policy, administrative, and procedural hurdles that are currently slowing down the construction of energy projects,” IPPAN stated in its press release.

IPPAN also urged the government to make immediate policy and procedural reforms to facilitate targeted electricity exports to both India and Bangladesh.