Despite the Nepal Electricity Authority (NEA) neglecting domestic private sector involvement, it has been found that private companies now contribute 55 percent to the electricity available in NEA’s system.

According to the annual report published by NEA today, out of the total 15.64 billion units of electricity available in the system, 8.6 billion units (55 percent) were contributed by the private sector.

NEA bought electricity at an average of NPR 6 per unit and sold it at an average of NPR 9.44 per unit, making a profit of NPR 9 billion last year. However, since Hitendra Dev Shakya became the Executive Director, NEA has stopped signing Power Purchase Agreements (PPAs) with the private sector.

Executive Director Shakya has repeatedly made public statements claiming that the authority is unable to purchase and utilize electricity produced by the private sector.

Mohan Kumar Dangi, Senior Vice President of the Independent Power Producers' Association of Nepal (IPPAN), stated that NEA has still kept electricity from 22 hydropower projects developed by the private sector under the "contingency" category, meaning the authority will only purchase electricity when needed.

Due to mistakes made by the state, private sector developers have been unable to produce electricity on time, yet NEA has been imposing penalties and has shown indifference toward extending the Required Commercial Operation Date (R-COD).

NEA and its subsidiary companies contributed 34 percent of the total electricity generation. Last year, 11 percent of the total electricity came from imports from India.

In the fiscal year 2081/82 (2024/25), NEA purchased electricity worth NPR 97.78 billion from the private sector and India.

According to the report published today, this is a 10.15 percent increase in electricity purchases compared to the previous year. In the previous year, NEA had spent NPR 88.77 billion for electricity purchases from the private sector and India. This reflects an 11.73 percent rise in electricity procurement costs.

According to the report, the private sector has produced 2,929.7 MW of electricity from 204 projects so far. NEA's five subsidiary companies have a combined installed capacity of 656.4 MW.

Currently, 142 projects with a total capacity of 4,303 MW are under construction, while 148 projects totaling 4,203 MW are still awaiting financial management.

NEA has stated that it has already signed PPAs for 11,436 MW of electricity, including solar energy.

Last year, NEA spent NPR 2.07 billion on electricity generation, NPR 3.24 billion on transmission, NPR 1.22 billion on distribution, and NPR 1.84 billion on royalties.

During the same period, the interest NEA had to pay increased by 11 percent. According to the report, NEA paid NPR 7.17 billion in interest last year, up from NPR 6.46 billion the previous year. The authority also incurred a loss of NPR 2.25 billion due to changes in foreign exchange rates.

NEA also bore the cost of NPR 1.12 billion for electricity exports to India last year.

NEA invested NPR 36.45 billion in various projects last year. This includes investments in generation, transmission, and distribution.