India Renews Nepal's Electricity Export Permit for Three Months Amid Concerns of Impending Energy Shortages

India has recently extended the permission for electricity export to Nepal for a mere three months, with the existing agreement set to expire on March 31. Despite the Nepal Electricity Authority's (NEA) consistent pursuit over the past three months, the Indian counterpart confirmed the renewal merely three days prior to the deadline. NEA spokesperson Chandan Kumar Ghosh stated that the agreement has been prolonged until June 30, facilitating the import of 500 megawatts of electricity via the Dhalkebar-Muzaffarpur cross-border transmission line and 54 megawatts through Tanakpur.

However, the NEA's request to import 650MW via the Dhalkebar-Muzaffarpur transmission line and 54MW through Tanakpur was not fully met. With Nepal potentially facing up to 10-hour-long load-shedding during the dry season without the import of approximately 600MW of electricity from India, the Energy Ministry spokesperson Nabinraj Singh highlighted the permission's validity until June-end. The new arrangement stipulates import of 554MW solely between 6am to 6pm, potentially leading to electricity shortages, particularly affecting industrial estates during peak hours.

Despite ongoing negotiations with India for extended supply hours, Nepal braces for a substantial energy deficit, projecting a demand of around 2,000MW in the next two months against a domestic production of approximately 1,400MW, as river water levels diminish significantly during the dry season. The looming challenge underscores the criticality of securing adequate electricity imports to sustain essential services and industrial operations during this period of heightened demand and dwindling domestic supply.