Nepal | September 26, 2020

IPPs establish power trading firm to export energy to India, Bangladesh

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Kathmandu, June 12

Twenty private power developers have come together to establish ‘Nepal Power Exchange Ltd’.

The independent power producers (IPPs) aim to supply power generated by private developers in the domestic market as well as export electricity to neighbouring countries like India and Bangladesh through the power trading company.

The IPPs have jointly formed the energy trading company as the additional electricity expected to be generated by the end of next fiscal is at risk of going to waste if the government is unable to export it. At present, the country is generating 1,142 megawatts of electricity, of which more than half is generated by IPPs.

“Despite our significant contribution to the energy sector, the government has largely ignored our genuine concerns,” claimed Asish Garg, managing director of the company, who is also the promoter and general secretary of Independent Power Producers’ Association, Nepal (IPPAN). “Hence, we have established a public company to ensure the market for electricity generated by IPPs.”

As per him, the company has submitted an application at the Electricity Regulatory Commission and the Ministry of Energy, Water Resources and Irrigation for further process.

The company is finalising some of the projects in Arun basin developed by IPPs that can export energy to India and Bangladesh in the near future.

“We have already inked a memorandum of understanding with the Bangladeshi government and their private sector regarding power trade and we will soon hold further discussions regarding mutual benefits for both parties,” Garg said.

In September last year, when Energy Minister Barsha Man Pun had visited Bangladesh, Bangladeshi government had expressed interest to purchase electricity generated from the Upper Karnali Hydropower Project of Nepal. The Bangladeshi government had said it would purchase 500 megawatts of power from the 900-megawatt project.

Back then, Energy Minister Pun had said that Bangladesh planned to buy 9,000 megawatts of power from Nepal by 2040. He added that the two countries were in discussion regarding Bangladesh purchasing around 1,500 megawatts of electricity to be generated from Dudhkoshi and Upper Arun Hydropower projects of Nepal.

At that time, Minister Pun had said the talks would be concluded soon.

As per Garg, the company is planning to visit India this week to discuss the prospects of power trade with the southern neighbour. “We are scheduled to hold discussions with the Central Electricity Authority of India, along with other power-related entities for power sales and other transmission line issues.”

According to him, the establishment of the firm will increase competitiveness and break monopoly of Nepal Electricity Authority in power trade.

A version of this article appears in print on June 13, 2019 of The Himalayan Times.

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