9 Dec, Kathmandu. The government has given permission to Nepal Electricity Authority’s subsidiary ‘Electricity Trading Company’ to trade electricity. The cabinet meeting held on Thursday has decided to issue licenses so that the subsidiary company of NEA can do the work of national and international electricity trade.
Minister for Energy, Water Resources and Irrigation Pampha Bhusal told a press conference on Friday that the subsidiary of the authority, ‘Vidyut Vyapar Company’, could now also do electricity trade. Stating that the private sector can also be given license to do inter-country electricity trade, she said that the old trend of manipulating only to get and sell electricity trade but not working will be considered.
“If the license is only to be sold to others, it will not be allowed. We will give license to those who come to trade electricity with reliable and solid basis,” she said.
NEA Executive Director Kulman Ghising said that the work of inter-country electricity trade will now be carried out through NEA’s subsidiary company. He also said that NEA would welcome private companies competing to export electricity produced in Nepal.
“If someone sells 500 megawatts of electricity in some place, why not get it,” he said. ‘
Independent energy producers and entrepreneurs have been urging the private sector to allow electricity trade for a long time. The government is ready to end the ‘monopoly’ of the Nepal Electricity Authority (NEA) in electricity trade as the electricity generated during the rainy season is wasted in Nepal.
Since there is no legal provision for licensing the private sector in electricity trade, the private sector can be given this role by taking a special decision from the Council of Ministers.
The private sector has been pressuring the government for months to get involved in the electricity trade. The private sector argues that commercialization of electricity is necessary as the banking sector will collapse if the generated electricity authority cannot buy it.
As the power generation is increasing, Nepal Infrastructure Bank (NIFRA) has made a written proposal to the Ministry of Energy to set up a private level ‘Power Trading Company’.
The bank argues that in the future, about 50 percent of the bank’s investment will be in the field of electricity generation and various financial institutions have invested Rs 5 trillion in this sector.
Nifra claims that the new company will facilitate the increase in electricity generation, transmission and trade generated from the new and big projects launched in Karnali, Bheri and Seti. Nifra argues that the purchase and sale of electricity is important to raise investment in 4,500 MW projects such as Phukot Karnali, Betan Karnali, Jagadulla, Bheri, West Seti, Tila 1 and Tila 2.
The proposing company argues that the government will be comfortable with the private sector being attracted to the construction of large and inter-country transmission lines when the private sector electricity trading company comes.