Nepal's Electricity Exports Surge Amid Challenges

Electricity Exports from Nepal

Kathmandu, Oct 7: Nepal has successfully exported electricity valued at NPR 15 billion (around INR 9.37 billion) since the start of the fiscal year 2025–26 in mid-July, establishing electricity as a vital export product for the nation.

According to a press release from the office of Kul Man Ghising, the Minister for Energy, Water Resources, and Irrigation, this revenue was generated by selling approximately 1000 megawatts (MW) of electricity, primarily to India and a smaller amount to Bangladesh.

This announcement followed Minister Ghising's inspection of the Load Dispatch Centre of the Nepal Electricity Authority (NEA), the country's sole state-owned power utility, after several hydropower projects suffered damage due to recent floods and landslides.

Nepal has been exporting its surplus electricity—after fulfilling domestic needs—to India mainly through the Indian Energy Exchange (IEX) in both the Day-Ahead and Real-Time Markets at competitive prices, along with bilateral medium-term agreements with the Indian states of Haryana and Bihar.

Furthermore, the country exports 40 megawatts of electricity daily to Bangladesh utilizing India's transmission network.

Transactions for electricity sold to India are conducted in Indian rupees (INR), while exports to Bangladesh are priced in US dollars (USD), allowing Nepal to earn in both currencies. The NEA has received authorization to export a total of 1,165 MW of electricity to both India and Bangladesh.

After experiencing extended load-shedding throughout much of the 2010s, Nepal began exporting electricity to India in November 2021, as it started generating surplus energy during the rainy season. Typically, the country exports power from late May to mid-November when production exceeds local demand. The NEA reports that Nepal's installed power generation capacity has now approached nearly 4000 MW.

"With the export season still ongoing, Nepal is anticipated to generate additional revenue from power exports," stated Rajan Dhakal, spokesperson for the NEA. "However, earnings from the Indian market may be impacted due to a decrease in electricity prices in India this year, although the volume of energy exported is expected to increase."

In the previous fiscal year 2024–25, Nepal's earnings from electricity exports amounted to NPR 17.5 billion, as per NEA statistics.

Despite the damage to several hydropower projects from recent floods and landslides, the supply of electricity to India and Bangladesh remains unaffected, Dhakal noted.

The Independent Power Producers’ Association, Nepal (IPPAN), which represents private-sector power developers, reported on Monday that 32 hydropower projects were impacted by the floods, including 17 operational projects with a total capacity of 180 MW and 15 projects under construction totaling 338 MW.

"The overall capacity of the hydropower projects affected by the floods is not substantial enough to hinder Nepal’s electricity export capabilities," Dhakal explained. "Additionally, domestic power demand has decreased due to the festive season."

Nepal has set an ambitious goal to generate 28,500 MW of power by 2035, with plans to export 15,000 MW, including 10,000 MW specifically to the Indian market. In January 2024, Nepal and India formalized a long-term power trade agreement, wherein India pledged to purchase 10,000 MW of electricity from Nepal over the next decade.