On the same day that Hitendra Dev Shakya was appointed as the Executive Director of Nepal Electricity Authority (NEA), the Board of Directors of the stat-owned power utility decided to open the process for purchasing electricity equivalent to 5,000 MW.
According to sources, the NEA Board meeting held on Tuesday night approved the signing of Power Purchase Agreements (PPAs) for projects with existing electricity installation permits. Additionally, the board decided to issue a white paper outlining NEA’s financial status, provide a 50 percent discount on electricity service charges for low-income households, and import electricity from India to mitigate industrial power cuts and prevent household load shedding.
Immediately after Shakya assumed office, Energy Minister Deepak Khadka—who also chairs NEA’s Board—convened the meeting. The board had not met for nearly two months before this session.
“The PPA has been opened in line with the energy development roadmap issued by the government. It was necessary to proceed with PPAs to prevent difficulties for investors who have already secured electricity connection agreements,” a source said.
As per the roadmap, NEA will allocate PPAs for 45 percent of the total capacity to run-of-river (ROR) hydropower projects, 30 percent to semi-reservoir (PROR) projects, and 25 percent to reservoir-based (storage/pumped storage) projects. Solar energy PPAs will be limited to 10 percent of the total hydropower capacity. Previously, in January 2023, NEA’s board had approved PPAs for 1,500 MW of non-reservoir projects, which have been progressing accordingly.
NEA was previously reluctant to sign new PPAs, citing concerns about surplus electricity without a guaranteed market. The energy development roadmap estimates annual electricity generation at 6 gigawatt-hours per megawatt from ROR projects, 5.5 gigawatt-hours per megawatt from PROR projects, and 4 gigawatt-hours per megawatt from storage/pumped storage projects.
White Paper on NEA’s Financial Status
The NEA board also decided to issue a white paper detailing its financial situation, particularly during the seven years and eight months under Kulman Ghising’s leadership. Energy Minister Khadka has accused Ghising of misrepresenting NEA’s profitability.
“There are unresolved financial matters, including Rs 1.5 billion yet to be received from the Chamelia Hydropower Project. Many such issues persist. The white paper will clarify NEA’s overall financial position,” a source said.
The board also approved a 50 percent reduction in demand charges for consumers using up to 20 units of electricity per month. The current charge of Rs 30 is expected to be reduced to Rs 15, subject to approval by the Electricity Regulatory Commission.
Importing Power from India to Prevent Load Shedding
To address the ongoing power shortages, Shakya has decided to import electricity from India, even if it means higher costs. India currently permits the import of solar power during daylight hours (6 a.m. to 6 p.m.), but the 350 MW import through the Project Steering Committee (PSC) has been suspended. The limited import window has led to 12-hour load shedding in Nepal’s industrial corridors.
