Nepal Grapples with Soaring Electricity Import Costs at Rs 16 Per Unit Amid Profitable NEA Performance

The Nepal Electricity Authority (NEA) is facing financial strain as it pays as high as Rs 16 per unit to import electricity from India, aiming to meet the country's energy demand during the dry season. With a peak domestic demand of 1,860 MW, electricity production has dropped to a mere 1,300 MW, significantly below the installed capacity of over 2,800 MW, due to reduced water levels in rivers. NEA has been importing approximately 500 MW daily from India since December to address the energy shortfall.

NEA revealed that the higher tariff rates are a result of India's recent hike in electricity prices supplied to Nepal, with the average rate this season hovering around Rs 11.50 per unit. Despite NEA's claims of electricity exports, the country faces a deficit, having imported electricity worth Rs 19.44 billion against exports of Rs 10.45 billion in the last fiscal year. The current year's electricity imports are projected to exceed Rs 20 billion.

In a contrasting development, NEA reports a significant profit surge, with earnings totaling Rs 15.36 billion in the first six months of the current fiscal year. This marks a substantial increase of Rs 4.44 billion compared to the same period in the previous fiscal year. Managing Director Kulman Ghising attributes the profit boost to effective measures in controlling electricity leakage, minimizing internal costs, increased domestic consumption, and an uptick in electricity exports to India. Despite profitable performance, the utility grapples with the financial challenges posed by high electricity import costs.