Nepal Electricity Authority (NEA) and India’s NTPC Vidyut Vyapar Nigam (NVVN) on Saturday signed a supplementary power purchase agreement (PPA), giving continuity to the import of electricity through Dalkebar-Muzzafapur cross-border transmission line. As per the agreement, Nepal will receive up to 160 MW of electricity from June 1 to end of August 2017 through the transmission line.

NEA Managing Director Kulman Ghising and NVVN CEO Arun Kumar Garg signed the PPA on behalf of their respective organisations in New Delhi.

The three-member NEA team led by Ghising flew to India on Friday to hold talks on renewal of power purchase agreement for the import of electricity through Dalkebar-Muzzafapur cross-border transmission line. As the purchase power agreement to import electricity from Dhalkebar-Muzaffarpur cross border transmission is expiring at the end of May, the NEA a month ago had written a letter to NVVN—the Indian state-owned nodal agency through which the NEA is purchasing electricity—to sit down for negotiation. 

The state-owned power utility wrote the letter after it decided to give continuity to electricity import from the cross-border transmission line albeit in reduced quantum.

As per the agreement NEA can import up to 160 MW of electricity from the cross-border transmission line but the NEA is reducing the import to 80 MW from current import of 135 MW as it is expecting a surge in electricity generation from domestic hydropower projects. Currently, Nepal is importing electricity through the Dhalkebar-Muzaffarpur transmission line at IRs 3.60 per unit. Although, the NVVN requested the NEA to increase, the rate of electricity, it latter agreed to sell at the same rate till August. “Both the side agreed to review the rate during the fifth meeting of the Joint Steering Committee slated to be held in August 2017 in New Delhi,” said Prabal Adhikari, spokesperson of NEA. 

Nepal started importing electricity from Dhalkebar-Muzaffarpur transmission line since February after former Prime Minister KP Sharma Oli and his Indian counterpart Narendra Modi jointly inaugurated the cross-border transmission line. Initially, Nepal was importing 80 MW of electricity from the cross border transmission line and latter increased the quantum to 145 MW after the electricity generation by domestic hydropower projects dropped by almost 60 percent in the dry season with the reduced water level in the river. 

The import from Dhalkebar-Muzaffarpur transmission line was one of the major reasons for the NEA’s success to eliminate power cuts from the Kathmandu Valley and other major cities of the country.  

NEA currently is importing more than 350 MW of electricity from India through nine different transmission lines. Majority of the import is done through Dhalkebar-Muzaffarpur, Kataiya-Kushhawa, Tanakpur-Mahendranagar and Ramnagar-Gandak transmission lines. The authority is planning to reduce import gradually from other cross-border transmission line as domestic generation is expected to improve soon.