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Minister for Energy, Water Resources and Irrigation Biraj Bhakta Shrestha has said that private sector participation in electricity trading is becoming increasingly necessary to expand Nepal's clean, green, and reliable energy competitively in regional markets. He clarified that the government is positively studying whether the existing legal framework is sufficient or whether new legislation is required to facilitate such participation.

Speaking during a meeting with officials of the Independent Power Producers' Association, Nepal (IPPAN) at the ministry on Friday, Minister Shrestha noted that while the private sector has made a significant contribution to electricity generation, it has not yet been given adequate opportunities in electricity trading. Considering the changing energy market and the growing potential for regional electricity trade, he said it is time to make appropriate policy decisions regarding private sector involvement.

The minister said he is positive about granting the private sector the necessary approvals to explore international markets through a business-to-business (B2B) model in coordination with the Nepal Electricity Authority (NEA).

He added that, as Nepal is implementing its domestic energy consumption and electricity export strategies, electricity trading could become a new avenue for investment and business opportunities for the private sector.

Minister Shrestha emphasized that while allowing private sector participation in electricity trading, the role, authority, and responsibilities of the Nepal Electricity Authority must remain protected, and the state's financial returns should not be compromised. He also stressed the need for detailed studies on issues such as open access to the transmission network, shared use of transmission infrastructure, allocation of responsibilities, and digital management of electricity trading.

Expressing confidence that the expansion of the energy sector would make a significant contribution to Nepal's Gross Domestic Product (GDP), the minister said the sector could play a decisive role in achieving the national goal of expanding the economy to NPR 100 trillion. He added that the government has prioritized the expansion of transmission lines during the current fiscal year and will focus on strengthening the electricity distribution system next year. Accordingly, he urged the private sector to prepare for greater participation in electricity trading.

During the discussion, former Energy Ministry Secretary Dinesh Ghimire said that private sector participation is essential for creating a competitive electricity market. He argued that involving private companies in electricity trading would help effectively market surplus electricity generated during the monsoon season, ease pressure related to Power Purchase Agreements (PPAs), and ensure fair electricity pricing.

Ghimire also urged policymakers not to view electricity trading solely in terms of exports, noting that domestic electricity demand is expected to increase significantly as the internal market expands. If necessary, he suggested that the government could either enact new legislation or amend existing laws to allow private sector participation in electricity trading.

Similarly, former IPPAN President Ganesh Karki pointed out that many hydropower projects worth billions of rupees are still waiting for PPAs. He said that permitting the private sector to engage in electricity trading would also reduce the government's burden in signing additional PPAs.

IPPAN President Mohan Dangi stated that private sector participation in electricity trading and the transmission system is no longer an option but a necessity. He emphasized that the government should adopt policies that encourage genuine investors.

At the event, IPPAN Senior Vice President Uttam Blon delivered a presentation explaining that a multi-seller, multi-buyer market would create healthy competition, resulting in fair electricity pricing and broader market expansion. He stressed the urgent need for a system that allows Nepal to sell electricity in regional markets based on timing, price, and demand. He also urged the government to amend relevant laws, if necessary, to provide a legal pathway for private sector participation in electricity trading.

Participants in the discussion shared the view that the expertise the private sector has gained in electricity generation should now also be utilized in electricity trading and market expansion. They agreed that doing so would make Nepal's energy sector more competitive, investment-friendly, and export-oriented.