India to purchase additional 251 MW of electricity at Rs 8.72 per unit

In the new development, India will be importing a total of 941 MW of electricity from Nepal

KATHMANDU, Aug 19: India has agreed to import an additional 251 MW of electricity from Nepal at a time when the Himalayan country has been requesting its southern neighbor to expand its purchase volume.

According to the Indian Embassy in Nepal, India has consented to purchase an additional 251 MW of electricity produced by 12 hydropower projects in Nepal. With the added electricity in place, Nepal can now sell a total of 941 MW of electricity produced by 28 hydropower projects to its southern neighbor.

In the recent development, the Central Electricity Authority of India permitted the Haryana State Authority to purchase an additional 125.89 MW and Bihar State to purchase 125.004 MW of electricity through medium-term agreements with Nepal Electricity Authority (NEA).

Currently, the NEA has been selling 109 MW of electricity to Haryana State of India. Out of the permitted electricity now, it will be supplying electricity produced by 10 hydropower projects to Bihar while those from the remaining two projects will be supplied to Haryana.

NEA Managing Director Kulman Ghising said they will be supplying the surplus electricity produced between June and October every year to these two Indian states. According to him, the NEA has fixed the electricity tariff rate at Rs 8.72 per unit for the power that will be sold to these Indian states. As of now, the NEA has been selling its electricity at Rs 8.40 per unit.

Ghising said the NEA will not have to bear any financial liabilities related to the fees of the transmission lines in India, leakage cost, trading margin, taxes and other surcharges while supplying additional electricity to India. “Additionally, Nepal will be able to export an extra 10 percent of the agreed amount on top. This in turn will enable us to sell more than 1,000 MW to India now,” he said.

Till date, Nepal has already become a net exporter of electricity to India. According to the NEA, it exported electricity worth Rs 16.93 billion to India in the last fiscal year 2023/24.

It was for the first time in October 2021 when India had approved 39 MW of power imports from Nepal. In less than three years’ period, this figure has grown by more than 24-fold.

Initially, Nepal first began exporting power by selling in the Day Ahead Market of the Indian Energy Exchange while the energy-hungry country also provided access to its Real Time Market. Now, the NEA has also entered into medium term power sales agreements in Haryana and Bihar states of India.

In addition, the agreement for long-term power exchange between two countries envisages the sale of up to 10,000 MW power from Nepal to India in the next 10 years. Just in the first year of the agreement coming into effect, Nepal has been able to sell over 1,000 MW of electricity in Indian markets.

Meanwhile, Nepal’s plan to sell 40 MW of electricity to Bangladesh has been halted due to the recent political developments in Bangladesh. Previously, a tripartite agreement was planned to be signed on 28 July, 2024.