Minister for Energy, Water Resources and Irrigation, Biraj Bhakta Shrestha, has said that private sector participation in electricity trade is becoming increasingly necessary to expand Nepal’s clean, green, and reliable energy competitively in the regional market. He stated that the government is studying whether the existing legal provisions provide a sufficient basis for this or if new laws are required.

In a discussion with officials from the Independent Power Producers’ Association Nepal (IPPAN) at the ministry on Friday, Minister Shrestha noted that although the private sector has made a significant contribution to electricity generation, sufficient opportunities have yet to open up in the area of trade. He said that, considering the changing energy market and the prospects for regional electricity trade, it is necessary to make timely decisions regarding private sector participation.

Minister Shrestha informed that he is positive about granting the necessary permission for the private sector to seek international markets through a business-to-business (B2B) model in coordination with the Nepal Electricity Authority.

He said that, at a time when the energy consumption and export strategy is in the implementation phase, electricity trade could become a new investment and business opportunity for the private sector. He emphasized that, while involving the private sector in trade, the role, authority, and responsibility of the Nepal Electricity Authority must be safeguarded and the state’s returns must not be affected.

Energy Minister Shrestha also mentioned that detailed studies are needed on issues such as open access systems, the use of shared transmission infrastructure, liability sharing, and digital management of electricity trade.

Expressing confidence that the expansion of the energy sector will make a significant contribution to the country’s gross domestic product (GDP), he said the energy sector could be decisive in achieving the national goal of reaching an economy of ten trillion rupees. He stated that the government has prioritized the expansion of transmission lines in the current fiscal year and will focus on strengthening the distribution system in the coming year, so the private sector should also prepare for commercial activities.

In the discussion, former Energy Secretary Dinesh Ghimire said that private sector entry is necessary to build a competitive electricity market. He said that involving the private sector in trade would be a positive step for the effective marketing of surplus electricity during the rainy season, managing pressure related to power purchase agreements (PPAs), and determining appropriate electricity prices.

Ghimire urged that electricity trade should not be viewed as limited to exports only, and said that with the expansion of the domestic market, electricity demand within the country would also increase significantly. He suggested that, if necessary, the private sector could be involved in trade through the creation of new laws or amendments to existing ones.

IPPAN President Mohan Dangi said that private sector participation in electricity trade and transmission systems has now become a necessity rather than an option, and stressed that the government should adopt policies to encourage genuine investors. In the program, IPPAN Senior Vice President Uttam Bhloan, in his presentation, said that with multiple sellers and buyers, a competitive market would help determine appropriate electricity prices and expand the market.