India has agreed to reduce the price of electricity that is exported to Nepal.

Electricity from India is imported from different Indian states via cross-border transmission lines.

 With this agreement, per unit price of electricity being imported from different Indian states via 132 kv, 33 kv and 11 kv cross-border transmission line will be cheaper by IRs 0.07, 0.08 and 0.09 respectively. The per unit cost of electricity imported from 132 kv transmission line will be IRs 5.55. Similarly per unit cost of electricity imported from 33 kv and 11 kv lines will be IRs 6 and IRs 6.54 respectively. 

After a Nepal Electricity Authority (NEA) delegation led by Managing Director Kulman Ghising on Tuesday requested Central Electricity Authority (CEA) of India to slash the electricity price, they agreed to reduce the price of electricity exported to Nepal.  A Ghising-led team is in New Delhi currently to participate in the second edition of the Nepal-India Power Exchange Committee meeting, a bilateral platform to make decision on a number of issues related to cross-border electricity trade like tariff rate, quantity and modality. The NEA’s major agenda in the committee meeting was to convince CEA to reduce the price of electricity imported from various states of India apart and it was successful in doing so.

The new rate will be applicable immediately and until the next power exchange committee meeting which will be held in March 2018, according to Prabal Adhikari, chief of power trading department of NEA and member of the Ghising-led delegation.

Currently, Nepal imports around 300 MW of electricity from India through various cross-border transmission lines. Around 50 percent of the total imports are done through the Dhalkebar-Muzaffarpur and Tanakpur-Mahendranagar power lines at cheaper rate of IRs 3.60 per unit. However, purchase made through other cross-border lines from different Indian state-owned authorities used to cost IRs5.62 to IRs6.54 per unit before this reduction.

The first meeting of the Nepal-India Power Exchange Committee in 2011 had fixed the tariff at less than IRs4 per unit. It agreed to review prices at subsequent meetings that would be held annually. As no meetings were held since then, the tariff rate grew by 5 percent every year for six consecutive years as decided by the first meeting. 

Although committee meetings were supposed to be held annually, they didn’t happen because of India’s unwillingness to do so.

The NEA kept pressing India for meetings to review the charge for electricity purchased from different state governments in India.

The CEA, according to an NEA source, became ready to hold the meeting this time after Indian Power Minister Piyush Goyal urged the Indian state-owned authority to hold it before his probable visit to Nepal later in August. Nepal’s Ambassador to India Deep Kumar Upadhyay also lobbied Indian political leaders and government officials including Minister Goyal for the meeting.