Nepal Power Exchange Ltd on Monday contracted a trading agreement with India's Manikaran Power Ltd under which it will sell electricity shaped by the domestic private sector to India via the Indian energy firm.
Nepal Power Exchange Ltd (NPE) is a subordinate of Independent Power Producers' Association of Nepal (IPPAN), a non-profit, non-government autonomous organisation which inspires the private sector to work in the area of hydropower in Nepal.
This is for the first time that the private sector of Nepal and India have signed an contract to facilitate power trading between the two countries, IPPAN said.
The agreement was contracted between Nepal Power Exchange (NPE) Managing Director Ashish Garg and Manikaran Power Ltd Managing Director Navajeet Singh Kalsi in the company of Energy Minister
Pambha Bhushal during a programme organised by IPPAN,it said.
The contract will allow Nepal to sell 500 MW of electricity to India in the initial phase, IPPAN said.
Under the agreement, Manikaran Power will invest in 15 per cent of shares belonging to NPE, which is equivalent to NRs 300 million, it said.
According to a report in news portal My Republica, once the agreement comes into effect, it will pave the way for the NPEL to sell electricity produced by the private sector via Manikaran Power.
The NPEL now has to obtain a licence from the government, it said.
As of now, only Nepal Electricity Authority (NEA) has been spreading electricity to India. At present, the government is preparing to issue licences to private sector companies allowing them to carry out the cross-border power trade, the report said.
Apart from India, Bangladesh has also spoken its interest to sign power purchase agreement directly with Nepal's private sector hydropower producers, it said.
Meanwhile, addressing the Nepal Power Market Summit 2022 in Kathmandu on Monday as chief guest, energy minister Bhushal said Nepal aims at spreading its surplus electricity to India by increasing its current electricity generation capacity, which comes around 200 MW in peak hour.
Appreciating the significant role played by Nepalese private sector in hydropower development, she said the Nepal government is working towards allowing the domestic private sector to directly sell electricity in the Indian market.