India has raised the price of electricity that it exports to Nepal.
As per the new power purchase agreement by Nepal Electricity Authority (NEA) and India's NTPC Vidyut Vyapar Nigam Ltd signed on Wednesday, electricity imported from India will become costlier by 60 paisa. India will now sell electricity to Nepal at IRs 3.6 (Rs 5.76) per unit, up from IRs 3.98 (Rs 6.36).
The new PPA will come into effect after the existing PPA signed by the NEA and NTPC Vidyut Vyapar Nigam Ltd in December last year expires on March 31 (Saturday). According to the new PPA, the price rate will increase by 5 percent again after six months.
According to My Republica, that the new PPA has ensured smooth supply of 120 megawatt of electricity via Dhalkebar-Muzzafarpur cross-border transmission line for 15 months.
Nepali officials say that India raised the price of electricity exported to Nepal as the southern neighbor has also increased electricity tariff in its domestic market. “We had maintained our stance during the negotiation with Indian side to supply electricity at the existing price rate. However, we have to agree on the increased tariff as they argued that they cannot must increase price rate due to rise in electricity tariff in Indian market,” Prabal Adhikari, chief of the Power Trade Department of NEA.
He said that the NTPC, the nodal agency of Indian government in the business of power trading, increased the price rate, citing the rise in the cost of production of electricity in the Indian market. He said that average clearing price of electricity exchange is IRs 4.19 (Rs 6.7) per unit in India.
India has agreed to sell electricity to Bangladesh at 7.7 cent per unit for 15 years.
NEA has been importing electricity from India on commercial basis as well as based on power exchange, and Mahakali agreement. NEA imports electricity from Dhalkebar-Muzzafarpur cross-border transmission line on commercial basis and on power exchange basis from other routes.
The power utility imports electricity from Bihar, Uttar Pradesh and Uttarakhand states of India based on the tariff set by the Power Exchange Committee where there is representation of India and Nepal. The tariffs of electricity imported via these Indian states are IRs 5.55 (Rs 8.88), IRs 6 (Rs 9.6) and IRs 6.45 (Rs 10.32) per unit, respectively. Compared to the tariff via these states, the price rate of electricity imported via Dhalkebar-Muzzafarpur cross-border transmission line is still on the lower side.
Nepal started import of electricity via Dhalkebar-Muzaffarpur transmission line from February last year following the inauguration of the cross-border transmission line jointly by Prime Minister KP Sharma Oli and his Indian counterpart Narendra Modi.