Looking Back at 2025: A Year of Escalating Conflict in the Energy Sector

The year 2025 proved turbulent for Nepal’s energy sector, marked by policy disputes, institutional power struggles and repeated confrontations between the government, regulators and private energy developers.

At the beginning of the year, the government unveiled the Energy Development Roadmap 2081, a 10-year plan that sets an ambitious target of generating 28,500 megawatts of electricity and exporting 15,000 megawatts by 2035. Nepal currently has an installed generation capacity of around 4,000 megawatts.

However, instead of coordinated efforts between the public and private sectors to meet these goals, 2025 saw intensifying conflicts—both among government agencies and between the state and private investors.

Policy-related disputes emerged between energy entrepreneurs and the Government of Nepal, including the Securities Board of Nepal (SEBON), while disagreements over dedicated and trunk line electricity arrears escalated tensions between the Nepal Electricity Authority (NEA), industrialists and the Ministry of Energy. The dispute eventually led to a change in leadership at the NEA.

Ghising–Khadka Conflict

Former NEA Managing Director Kulman Ghising was repeatedly asked to clarify his actions by then Minister for Energy, Water Resources and Irrigation Deepak Khadka, who sought his removal from office. The dispute centred on the collection of outstanding dues related to dedicated feeders and trunk lines supplied to industries.

Minister Khadka exerted pressure on Ghising not to collect the dues from the industries and repeatedly sought clarifications from the then NEA chief on ‘why he should not be removed from office’.

Ultimately, the Cabinet meeting of March 24 decided to remove Ghising and appoint Hitendra Dev Shakya as the new Managing Director of the NEA.

Claiming that his removal was unlawful, Ghising filed a petition at the Supreme Court seeking reinstatement. However, the court did not rule in his favour at the time.

Following Shakya’s appointment, the NEA claimed that the authority—previously reported to be operating at a profit—was actually running at a loss of Rs 5.26 billion, creating confusion among the public over the utility’s financial status.

Dispute Between Energy Developers and SEBON

In April-May 2025, tensions flared between private energy developers and the Securities Board of Nepal. Developers alleged that individuals claiming proximity to SEBON Chairperson Santosh Narayan Shrestha demanded commissions in exchange for approving initial public offerings (IPOs) of hydropower companies.

At the time, 89 companies had applied for IPO approval, with clearances reportedly stalled for nearly 22 months. Developers claimed approvals were conditional on payment of commissions, allegations that further strained trust between regulators and the private sector.

Government–Developer Standoff Over ‘Take-And-Pay’

Another major flashpoint emerged with the government’s announcement, through the budget for Fiscal Year 2025/26, that the NEA would sign power purchase agreements (PPAs) with run-of-river projects under a “take-and-pay” model—meaning electricity would be purchased only when required.

The announcement sparked strong backlash from energy developers, who warned of shutting down project powerhouses if the decision was not reversed. Developers claimed the policy would block the construction of nearly 300 projects with a combined capacity of 17,000 megawatts and jeopardise investments worth approximately Rs 66.22 billion.

The standoff continued for nearly two months before the government withdrew the decision, after which protests subsided.

Bhote Koshi Power Company Controversy

A separate controversy arose when a group identifying itself as Gen-Z activists demanded 10 percent free shares from the 45-megawatt Bhote Koshi Hydropower Project in Sindhupalchok. The so called group later made similar demands from nearly a dozen projects nationwide.

Using the dispute as leverage, the group disrupted operations at the Bhote Koshi project for about a month, causing losses estimated at over Rs 300 million. Eventually, under pressure, the company agreed to issue 10 percent shares through an IPO.

Kulman’s Return and Renewed Confrontation

Following the collapse of the KP Sharma Oli-led government amid the Gen-Z movement, an interim government headed by Sushila Karki was formed. Kulman Ghising, who had earlier been removed from the NEA, was appointed to lead three ministries, including the Ministry of Energy.

Soon after assuming office, Ghising removed Hitendra Dev Shakya from the NEA leadership and appointed Manoj Silwal, considered his close aide, as Managing Director. Together, they resumed efforts to recover outstanding dues of the dedicated feeders and trunk lines.

When industries resisted payment, the NEA—on Ghising’s directive—disconnected electricity supply to about 26 industries for nearly two weeks. A meeting involving Prime Minister Sushila Karki, Federation of Nepalese Chambers of Commerce and Industry President Chandra Prasad Dhakal, and Minister Ghising eventually brokered a compromise.

Industries agreed to pay the first instalment of their dues, which they did. According to the NEA, most industries have since also paid the second instalment.

Toward the end of the year, the Supreme Court ordered the reinstatement of Hitendra Dev Shakya as NEA Managing Director, leading to the removal of Manoj Silwal from the post.