A new electricity trading tender issued by the Nepal Electricity Authority has sparked controversy after it set a fixed rate to export 500 MW of surplus power to India during the monsoon season for five years.
The tender offers to sell electricity at INR 5.45 per unit from June to November between 2026 and 2030. Critics argue that fixing the rate in advance could prevent competitive bidding and potentially lead to significant financial losses. The move has drawn scrutiny because the NEA is currently importing electricity from India at around INR 6.90 per unit, raising concerns that the authority may be buying at a higher price while committing to sell at a lower one.
If the full 500 MW is sold as planned, the first year alone would involve over 2.19 billion units of electricity. Over five years, total revenue could reach nearly INR 59.8 billion. However, analysts point out that even a marginal increase in the export rate could generate hundreds of millions more in revenue. A higher competitive rate could potentially add billions of rupees over the contract period.
The NEA board has previously recommended conducting competitive bidding without pre-fixing rates. Questions have also been raised about combining electricity purchase and sale provisions within the same tender notice.
The tender allows participation from Indian trading companies licensed by the Central Electricity Regulatory Commission. However, experts note that India’s approval process for importing electricity from neighbouring countries involves additional scrutiny at the government level.
With electricity prices in India fluctuating frequently, the fixed-rate decision has triggered debate over whether the authority has secured the best possible deal for the country.