Nepal’s electricity export to India during the first four months of the fiscal year 2024/25 has contributed significantly to its revenue, amounting to Rs 12.72 billion. The Nepal Electricity Authority (NEA) exported a total of 1.68 billion units of electricity to India from mid-July to mid-November, at an average rate of Rs 7.63 per unit. This surplus electricity, primarily generated from domestic hydropower projects, was sold through the Day-Ahead and Real-Time Markets of the Indian Energy Exchange (IEX) and also through bilateral power sale agreements with the Indian states of Haryana and Bihar. Additionally, electricity exports to Bangladesh have begun, utilizing India’s transmission infrastructure.
However, the export figures were affected by natural disasters in September (Ashoj), when floods and landslides caused significant damage to key hydropower plants and transmission infrastructure. The Upper Tamakoshi, a major 456 MW hydropower project, was rendered non-operational due to structural damage, and the Kabeli Corridor transmission line was also affected, reducing export capacity by around 200 MW. Despite the setbacks, reconstruction efforts for both the Upper Tamakoshi project and the Kabeli Corridor transmission line are ongoing, with the latter now operational.
The NEA had initially set a target of exporting electricity worth Rs 30 billion for the current fiscal year, but it may struggle to meet this goal due to infrastructure damage and the seasonal decline in hydropower generation during the winter months. Reduced water flow in rivers will likely lead to a decrease in electricity production, and Nepal may even need to import electricity from India in some months.
In terms of specific exports, in Shrawan (mid-July to mid-August), Nepal exported 495.7 million units of electricity, generating Rs 4.15 billion in revenue. In Bhadra (mid-August to mid-September), 559.4 million units were exported, contributing Rs 3.68 billion. During Ashoj (mid-September to mid-October), 379.3 million units were exported, earning Rs 3.65 billion. In Kartik (mid-October to mid-November), 233.6 million units were exported, yielding Rs 1.84 billion.
This performance marks a turning point for Nepal, which has transitioned from being a net importer of electricity to a net exporter. In the previous fiscal year (2023/24), Nepal imported Rs 16.93 billion worth of electricity from India, while exporting Rs 17.06 billion, signifying a shift in the country’s electricity trade. With approval to sell 941 MW of electricity from 28 hydropower projects under various agreements in the Indian market, the NEA is well-positioned to continue its export efforts, though challenges such as seasonal production fluctuations and infrastructure repairs will need to be carefully managed.
