Kathmandu, March 29

Nepal Electricity Authority (NEA) has renewed the power purchase agreement (PPA) with NTPC Vidyut Vyapar Nigam (NVVN) of India, which was going to be phased out from March 31, for next 15 months. The NEA had earlier renewed the PPA for three months in December-end.

NEA Managing Director Kul Man Ghising and Chief Executive Officer of NVVN Arun Kumar Garg inked the pact in New Delhi on Wednesday, as per the NEA.

NEA has been importing 120 megawatts of power from the Muzaffarpur-Dhalkebar cross-border transmission line and the latest PPA will be valid till June 2019. This means Nepal will be importing power from India till the beginning of wet season of 2019 even though the Upper Tamakoshi hydropower project is expected to be completed by end of this year.

NVVN has raised the tariff of the electricity by five per cent in the renewed PPA, and the cost of per unit electricity will be INR 3.98 or Rs 6.36. NEA will be purchasing round-the-clock electricity from NVVN. The initial PPA rate with NVVN was INR 3.44, which was gradually adjusted as per the local tariff to INR 3.60 before the latest renewal.

PPA rate of the electricity is decided during the Nepal-India energy secretary-level talks. However, the meeting that was supposed to be held in November last year was pushed back due to the elections back then. The government of India has appointed NVVN as the nodal agency for the cross-border electricity trade.

NVVN has raised the tariff citing that the power generation cost has gone up following the Supreme Court’s decision to ban cheaper electricity generated from petroleum coke and coal to curb adverse impact on the environment. The electricity exchange average ‘market clearing price’ of per unit electricity in India is INR 4.19.

NEA has also been importing electricity from Bihar at INR 5.5, from Uttar Pradesh at INR six and from Uttarakhand at INR 6.45 per unit based on the tariff fixed by power exchange committee.