The state-owned Vidhyut Utpadan Company Limited (VUCL) is set to invest approximately Rs 2 billion in a 30-megawatt solar energy project in Ward No. 13 of Dullu Municipality, Dailekh district.

This initiative marks VUCL's inaugural venture into solar energy. Executive Officer Bakhat Bahadur Shahi stated that the project aims to enhance electrification in Dailekh district, with plans to expand capacity to 100 megawatts within the next three years.

Although the government has granted construction permission, the project has faced delays due to the absence of a Power Purchase Agreement (PPA). The Nepal Electricity Authority (NEA) has stipulated that the PPA will be finalized through a competitive bidding process. NEA spokesperson Chandan Kumar Ghosh emphasized that, "Even if it is a government company, it must come through competition." The NEA has set a maximum price of Rs 5.94 per unit for solar energy and follows a policy of purchasing energy from the company that offers the lowest price among technically capable producers.

To address reduced hydropower production during the winter season, the NEA prioritizes purchasing solar energy to balance electricity demand and supply, supplementing imports from India. In this context, VUCL has initiated its solar energy projects.

Shahi revealed that VUCL intends to produce up to 300 megawatts of solar energy in one of the Karnali, Sudurpaschim, or Lumbini provinces within the next three years, with a search for suitable land currently underway.

According to the NEA, Karnali Province has the lowest electrification rate in Nepal, at 74.38 percent, compared to other provinces. In Dailekh district, where the solar project is planned, electrification stands at 81.05 percent.

In addition to solar projects, VUCL is engaged in constructing several major hydropower projects, including the 480 MW Phukot Karnali Hydropower Project, the 454 MW Kimathanka Arun Project, the 1,902 MW Mugu Karnali Project, and the 106 MW Jagadulla and Nalgad Hydropower Projects.

Shahi noted that, "Since hydropower generation is expensive and time-consuming, solar energy is a faster and more cost-effective alternative. Small-scale solar energy projects can also contribute to the government’s goal of generating 28,500 megawatts of electricity by 2035."

Electrification rates in Karnali Province districts are among the lowest in the country, with Mugu at 31.80 percent, Rukum West at 95.08 percent, Surkhet at 86.48 percent, Salyan at 79.50 percent, Jajarkot at 49.80 percent, Kalikot at 70.96 percent, Jumla at 62.47 percent, Dolpa at 42.75 percent, and Humla at 32.51 percent.