Stakeholders have emphasized that for the sustainable development of the hydropower sector, the private sector should be involved not only in power generation but also in the construction of transmission lines and electricity trading. Speaking at a program held on Sunday to mark the 26th anniversary of the Independent Power Producers’ Association of Nepal (IPPAN), speakers stated that there has already been a delay in bringing the private sector into transmission and power trading, and stressed that the current government should make the necessary policy arrangements to open the way.

At the program, Ram Prasad Dhital, Chairperson of the Electricity Regulatory Commission, stated that non-discriminatory access to the transmission and distribution networks is essential for the development of a liberalized electricity market in Nepal. Emphasizing that electricity is not only a service but also a tradable commodity, he said that an inclusive and competitive market is possible only through a balance of supply and demand and the participation of multiple buyers and sellers.

Chairperson Dhital clarified that legal provisions, from the Electricity Act of 1992 to the present, have already laid the foundation for private sector participation and an open market. He noted that although network businesses such as transmission are inherently monopolistic in nature, providing equal and non-discriminatory access to all is the core principle of a liberalized electricity market.

Dhital said that the guideline on open access to the transmission and distribution system recently made public by the Commission is not a draft, but a policy guidance issued through the exercise of the Commission’s authority. He stated that the guideline was prepared based on suggestions from stakeholders including the private sector, the Nepal Electricity Authority, and the National Transmission Grid Company, and informed that cost determination will follow a “cost-plus” model, with charges to be approved after verification of actual costs.

Chiranjibi Chataut, Secretary at the Ministry of Energy, Water Resources and Irrigation, said that the government is seriously preparing to grant permission to the private sector for electricity trading. He informed that although the new Electricity Bill could not move forward due to the dissolution of Parliament, preparations are underway to open electricity trading on an interim basis through amendments to existing regulations. He added that after obtaining consent from the Ministry of Finance and the Ministry of Law, the proposal is being prepared for submission to the Cabinet.

Secretary Chataut noted that if generation, transmission, and distribution are not balanced, the overall system will be affected, and said that a process has been initiated to involve the private sector in the expansion of the transmission system through tariff-based competitive bidding. He also made it clear that the government’s policy is to engage the private sector in transmission line construction through the PPP (Public–Private Partnership) model.

Hirendra Dev Shakya, Managing Director of the Nepal Electricity Authority, said that the Authority is fully open to bringing the private sector into electricity trading and transmission line construction. He stated that the issuance of the Open Access Guideline and the approval of the framework related to the “TB model” for transmission line construction are significant achievements for facilitating private sector entry.

Energy trade expert Prabal Adhikari said that although progress has been made in generation, new challenges have emerged due to weak transmission infrastructure and trading mechanisms. Stating that there should be no further delay in involving the private sector in transmission line construction, he remarked that the main weakness lies not in policy and law, but in implementation and political will.

Sushil Gyawali, Chief Executive Officer of the Investment Board Nepal, said that there is no discrimination between domestic and foreign investors in the energy sector. Pointing out that electricity generated during the monsoon season cannot be utilized due to weak transmission and distribution infrastructure, he emphasized that private sector participation in transmission line construction is essential.

IPPAN Vice President Uttam Blon Lama said that the private sector is facing major difficulties due to the lack of permission for electricity trading. Noting that there is currently a surplus of around 1,850 megawatts of electricity, he warned that if market access and transmission management are not arranged in time, the government, the Nepal Electricity Authority, and the private sector could face significant financial risks.

At the program, representatives from the National Transmission Grid Company, energy law experts, and other stakeholders also expressed the view that legal and policy clarity is necessary to involve the private sector in all three areas - generation, transmission, and electricity trading. On the occasion of IPPAN’s 26th anniversary, various personalities were also honored.

Jalasarokar