Nepal | August 04, 2020

Proposal to allow private sector to trade electricity in foreign market tabled

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A bill has been registered at the Parliament with a proposal to allow the private sector to conduct electricity trade after obtaining a licence for the purpose with neighbouring countries.

The proposal has been included in the bill presented at the National Assembly to amend and consolidate the prevailing laws and regulations related to electricity.

Currently, there is no legal provision for international trade in electricity by private sector players.

The Ministry of Energy, Water Resources and Irrigation has taken forward the issue of international trade of electricity by the private sector by including it in the amendment bill. Provisions related to international trade are mentioned in Article 30 of the proposed bill.

“Trade licensed entities will have to seek approval from the ministry for inter-country electricity trade and export of electricity,”

Sub-section 1 of the bill mentions.

As there is no provision for inter-country trade in the prevailing law, it has not been mentioned in the licences issued so far. Therefore, it has been included in the bill.

At present, Nepal Electricity Authority (NEA) has the responsibility of power generation, transmission, distribution and trade. The jurisdiction of NEA for inter-country trade of electricity will be reduced once the bill is endorsed.

It has been made clear in the bill that approval will be given on the basis of the need and justification of international electricity trade and the licensed entity can trade electricity in the international market.

Prabin Aryal, joint secretary at the ministry, said that a legal arrangement has been proposed to allow the government and licensed entities to trade in electricity in the international market as the issue of inland trade of electricity has been raised in Nepal for a long time.

According to Aryal, the licensed entity will be allowed to trade electricity in the international market during the period specified in the licence.

As per the Article 14 of the proposed bill, the private sector will be able to get permission for a maximum of 25 years.

Article 15 of the bill stipulates that the licence can be renewed after the 25-year period is over. However, the authority has been delegated to the government in such a way that other provisions in this regard will be as prescribed.

A version of this article appears in e-paper on July 8, 2020, of The Himalayan Times.

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