Following his reinstatement by the Supreme Court as Managing Director, Hitendradev Shakya personally reached out to the Indian energy trading company NVVN via email, seeking proposals for importing electricity at a lower rate than the INR 6.95 per unit agreed upon by former Managing Director Manoj Silwal.

NVVN responded via email, offering to supply electricity at INR 6.60 per unit in January and February. Shakya publicized this email response as evidence of securing electricity at a reduced rate.

However, despite indicating in the email that electricity could be supplied at INR 6.60 per unit (for February and March), NVVN did not participate in the NEA’s official tender. NEA officials suggest that MD Shakya was embarrassed as he treated a transaction between government bodies of two countries as if it were his personal business.

No Indian company has submitted a proposal for the tender issued by the Nepal Electricity Authority (NEA) to purchase electricity from India through a competitive process. This has led to embarrassment for Hitendradev Shakya, the Managing Director of NEA, as his methods, such as seeking proposals via personal email without Board approval or consent from the Electricity Regulatory Commission, have been exposed as false. NEA officials have stated that Shakya's actions have increased the risk of load-shedding in the upcoming dry season. Despite attempts to reach Shakya for a response, he could not be contacted.

MD Shakya's miscalculation of energy prices in India and his push to import cheaper electricity have contributed to a major energy crisis in Nepal, leading to the announcement of scheduled power cuts starting in March. The decision to purchase electricity from India through a competitive process was made by the NEA Board of Directors, but the lack of applications from companies by the January 28 deadline has put the Authority in a challenging position.

How to prevent the energy crisis?

Most hydropower projects in Nepal operate on a run-of-the-river (RoR) basis. During the dry season, electricity generation decreases, leading to an energy crisis in the country. To address this, Nepal has been importing electricity from India.

Nepal is allowed to import 654 MW of electricity at competitive rates from India, with 600 MW through the Dhalkebar–Muzaffarpur 400 kV transmission line and 54 MW via the Tanakpur–Mahendranagar line. This permission is valid until the end of March.

If no companies participate in the tender process, it will be challenging to manage the energy crisis. One potential solution could be to re-tender with a slightly higher price. The Nepal Electricity Authority (NEA) faced difficulties when no companies showed interest in supplying 100 megawatts of electricity round-the-clock for four months at the specified rates. The

NEA Managing Director issued the tender with a ceiling rate of INR 6.60 per unit for February to March and INR 6.90 per unit for April to May, despite the NEA Board of Directors' decision.

The Maneuver to Bring the Rate Down to INR 6.60 per Unit

During the period when the Nepali Congress and UML held a nearly two-thirds majority government, the NEA issued a tender on August 8 to import 280 MW of electricity for the dry season of 2026 through a bilateral agreement. PTC India quoted INR 6.65 per unit in the tender, while NVVN quoted INR 7.74 per unit. PTC offered to supply electricity at INR 6.65 per unit from January to May if the NEA accepted its proposal by September 8.

At that time, Shakya was serving as the Managing Director of the NEA. However, he did not respond to PTC's proposal within the specified timeframe and instead went on a trip to France. Shortly after his departure (on Bhadra 23), the Gen G movement began, leading to the collapse of the government the following day. Following the government's downfall, Shakya traveled from France to South Korea.

During Sushila Karki's government, Kulman Ghising was appointed as the Energy Minister. Ghising reassigned Shakya to a special-class position at the Water and Energy Commission, and on Ashoj 4, Manoj Silwal was appointed as the Executive Director of the NEA.

After Silwal assumed his new role, discussions were initiated with PTC to procure electricity at the previous rate of INR 6.65 per unit. However, PTC did not agree to the terms. Subsequently, the NEA proposed a new rate, to which PTC responded with an offer of INR 6.95 per unit. An agreement was reached between the NEA and PTC to import 180 MW at INR 6.95 per unit.

Shakya had previously rejected PTC's offer of INR 6.65 per unit. Subsequently, when the NEA finalized the agreement at INR 6.95 per unit, Shakya initiated a campaign alleging that Minister Ghising and Executive Director Silwal had caused a loss of NPR 430 million to the NEA.

The agreement between the NEA and PTC can only be implemented after approval from the Designated Authority (DA) under India's Central Electricity Authority, which had not been granted as of Poush 16.

Despite the NEA Board's decision to cancel the agreement with PTC and issue a new tender due to the lack of DA approval and the inability to import electricity from January, Shakya failed to inform PTC of the Board's decision. Subsequently, Kulman Ghising resigned in the last week of Poush. However, in the first week of January, the Indian DA approved the agreement with PTC.

This approval came after the NEA Board had already decided to cancel the tender for importing electricity from January to February and to import electricity from India only for two months, from March to May. The Board had also opted not to set a per-unit price for imported electricity, citing limited competition and low participation likelihood.

After Ghising stepped down as Energy Minister, Executive Director Shakya issued a new tender on January 19 (Magh 5), once again defying the Board’s decision, to procure electricity imports from February to May and setting a predetermined maximum rate.

Risk of Power Shortage During Peak Dry Season

With no interest shown by any Indian energy trading company (Category-1) in the NEA’s proposal, the Authority now faces a significant challenge in managing electricity supply during the critical dry months of April and May. Nepal's demand for electricity during these months is approximately 1,000 MW.

Currently, Nepal is importing 180 MW from PTC India and 654 MW from the Indian Energy Exchange (IEX). Post-April, India only supplies electricity during daylight hours. Consequently, NEA is anticipated to encounter a deficit of 820 MW during peak hours (after deducting the 180 MW currently provided by PTC).

The NEA had previously

been buying and selling electricity from various Indian agencies through real-time and day-ahead markets during the winter season. However, the decision to adopt a competitive process was made after concerns were raised about high prices for imported electricity. Former Energy Minister Kulman Ghising had the Board decide to export 500 MW of electricity during the rainy season and import 200 MW during winter through tenders.

The NEA issued a tender to procure 100 MW of electricity from February to May. The tender specified that the price per unit should not exceed INR 6.60 from February to March and INR 6.90 from March to May. Indian companies may have refrained from applying due to these conditions.

An official explained that as summer begins in India during this period, electricity demand is high, leading to higher prices. The official questioned why Indian companies would sell electricity at lower prices in Nepal if they could get better prices in India.

Sources revealed that the Board initially planned to conduct the tender without setting a price ceiling, but NEA's Managing Director, Shakya, advocated for setting a price cap, believing that cheaper electricity could be procured. This decision was influenced by Shakya's past claims and efforts to bring electricity at lower rates.

The tender was open to Indian open-access consumers, regulated utilities, power producers, and businesses with specific electricity trading licenses from India's regulatory commission. The delivery point was designated as

the Muzaffarpur substation in India, connected via 132 kV cross-border transmission lines. The NEA would cover transmission charges and losses on the Nepali side, while the Indian bidder would bear costs on their side. A bid security deposit of INR 30,000 per MW per month was mandatory.

The Draft of National Electricity Policy (NEP) 2026, released by India's Ministry of Power, aims to revamp the country's power sector to establish India as the energy hub of South Asia by 2047, creating opportunities for regional trade.

The policy emphasizes strengthening cross-border interconnections under the vision of One Sun, One World, One Grid (OSOWOG). Despite this, Nepal Electricity Authority (NEA) was unable to secure a deal with an Indian company to purchase electricity during the dry season.