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The government has finally approved the Electricity Bill from the Council of Ministers, which once approved by the parliament, will pave the way for the private sector to engage in power trading.

The much-awaited bill by the Nepali private sector will be tabled at the federal parliament by Energy Minister Shakti Basnet for parliamentary endorsement.

Once the bill is endorsed by the parliament and authenticated by the President, the Nepali private sector which has been solely involved in electricity generation till now, will be allowed to be involved in the power trading. As of now, the state-owned power utility Nepal Electricity Authority (NEA) has a monopoly in power trading.

This signifies a significant shift in the power sector, allowing private entities to actively participate in buying and selling electricity. The proposed law aims to create a framework that enables private sector involvement and facilitates competition in the power trading market.

The Nepali private sector, including independent power producers, has been advocating for their involvement in power trading. This demand stems from the fact that the Nepal Electricity Authority (NEA) currently holds a monopoly on power purchase agreements (PPAs), leaving no other entity in the country authorized to sign such agreements.

In the bill, it has been proposed that the Energy Ministry should grant licenses to the entities that have been registered with the purpose of power trade.

The government has brought forward the electricity bill with provisions that a single entity cannot be involved in the generation, transmission, and distribution of electricity. This provision means the state-owned NEA has to be unbundled.

It is mentioned in the bill that if any entity is currently involved in the generation and transmission of electricity, it has to be unbundled within five years.

The government has also proposed to issue generation licenses for hydropower projects through competition. Currently, the Department of Electricity Development (DoED) initially issues survey licenses for a five-year period, during which the power developers will have to complete the study and then submit the application to get generation licenses. Now the government will study the projects itself and invite the private sector to get hydropower projects through competition.

While the Electricity Bill to amend the Electricity Act 1992 had reached the parliament earlier, it got stuck for more than two years and failed to get endorsed. The then Energy Minister Pampha Bhusal withdrew the bill from the parliament in September 2022.

The Sher Bahadur Deuba-led government did make efforts to facilitate the entry of the private sector into power trading by introducing an ordinance last year. The Deuba government withdrew the long-pending Electricity Bill at the National Assembly and opted for an ordinance instead.

In October 2022, the Deuba government passed an ordinance to ratify the Electricity Act 1991 to give licenses to the private sector for power trade. However, the then President Bidya Devi Bhandari did not endorse the ordinance sent by the government for authentication.

The Nepali power producers have been gearing up for power trading licenses by establishing power trade companies. According to the Department of Electricity Development (DoED), Nepal Power Exchange Ltd (NEPEX) and Power Trading and Energy Exchange Ltd (PTEEL) have applied for power trading licenses. Similarly, Nepal Infrastructure Bank has applied to the Ministry of Energy, on behalf of the Power Trading Company (PTC) Ltd, and the Himalayan Trading Company is also preparing to register an application for the license.

While the private sector in Nepal is still awaiting the trading license to sell electricity in both domestic and foreign markets, some private entities have already signed the memorandum of understanding (MoUs) with Indian companies for cross-border power trading.

The Nepal Power Exchange Limited (NPEL), subsidiary of IPPAN has already signed an agreement with Manikaran Power Limited, India to carry out cross-border electricity trade. As per the MoU, the Indian company will buy 500MW of electricity from the Nepal Power Exchange Limited besides investing in the Nepali company itself.

During the Power Summit 2023, Nepali and Indian companies signed initial deals for selling 2,200 MW of electricity to India. Manikaran Power Limited signed a memorandum of understanding (MoU) to purchase around 200MW of electricity directly from the hydropower projects. Vedanta Resources, a sister company of Vedanta Limited, also initiated the process to buy 2,000MW of hydropower from Nepal in the next five years.

Tourist arrivals in Lumbini have significantly increased in recent years. The data shows the birthplace of Gautam Buddha experienced a surge in the influx of tourists in the post-COVID-19 period.

According to the Lumbini Development Trust, as of July of 2023, the tourist arrivals (except Nepal and India) increased by 500 percent compared to the corresponding period last year.  Likewise, the number of visitors from India was more by 30 percent followed by a similar rise in the arrivals of domestic tourists.

As of July, 2023, a total of 23,942 tourists from third countries had been in Lumbini and this figure was 3,975 during the corresponding period last year, according to LDT public relations chief and information officer Dr Hari Rai.

Lumbini welcomed people from 96 countries in 2022 and till July this year, tourists from 67 visited the historic city.  It is said more Indians are visiting Lumbini following Indian Prime Minister Narendra Modi's visit here in May, 2022.  

Six years after Nepal signed an agreement with the Millennium Challenge Corporation (MCC), the much-debated MCC Nepal Compact will finally enter into the implementation phase on Wednesday.

The MCC Nepal Compact implementation will formally be announced at a formal program at the Finance Ministry on Wednesday through an official ‘Letter of Exchange’ between the officials of Nepal and the United States. Finance Minister Dr. Prakash Saran Mahat and MCC Vice President Cameron Alford will attend the event which will be the entry into force (EIF) of the MCC Nepal Compact.

The countdown for the five-year project will begin from the day of EIF. “The last date of the Nepal Compact is August 30, 2028,” said an official of Millennium Challenge Account (MCA) Nepal, a special-purpose vehicle established to implement the Nepal Compact. Earlier on August 16, a meeting of the board of directors of Millennium Challenge Account (MCA) Nepal, fixed August 30 as the date for EIF.

The execution of the Nepal Compact will span a precise five-year duration from its initiation, at which point the responsibility for the projects will shift to Nepal. Once this five-year period concludes, the funding from the MCC for the execution of the MCC Compact initiatives will cease.

Initially, the Nepal Compact was supposed to enter into the implementation stage on June 30, 2020. However, the delay in the ratification of the compact by Nepal’s Parliament amid a controversy threw the US assistance into uncertainty. The Nepal Compact finally moved ahead after the parliament endorsed it in February 2022.

MCC, the US aid agency has committed to provide $500 million while the government had earlier pledged $197 million to implement the transmission line and road improvement projects under the MCC Nepal Compact.

A 315-km high-capacity transmission line will be built and a section of the East-West Highway upgraded under the $500 million US aid. Five segments of transmission lines to be built are—New Butwal-India Border (18km), New Butwal-New Damauli (90km), New Damauli-Ratmate (90km), Ratmate-New Hetauda (58km), and Ratmate-Lapsephedi (59km). Three substations will be built in Ratmate, Damauli, and Butwal.

Once completed, these transmission lines are expected to provide a vital missing link for power projects of different river basins to the existing high-voltage grid in Nepal.

The government has allocated Rs 10.84 billion for the MCA-Nepal for the current fiscal year. While Rs 9.27 billion had been set aside for the entity in the last fiscal year, only Rs 4.11 billion was spent, according to the Finance Ministry.

With only two weeks left for entry into force, the preparatory work of the MCA Nepal Compact is far from over. Mainly, the land acquisition for the transmission lines has not been completed. Approximately 104 hectares of land will be procured across 10 districts to accommodate the towers needed for the 315 km transmission line corridor.

According to MCA Nepal, five out of the six prerequisites outlined in the compact agreement necessary for its execution have been met. These include designating the electricity transmission project as a matter of national importance, enacting legislation to establish the Electricity Regulatory Commission, finalizing the Project Implementation Agreement (PIA), formulating an operational work plan, reaching agreements between Nepal and the Indian governments regarding cross-border transmission lines, and securing approval for the compact from Nepal's Parliament.

MCA-Nepal has to acquire lands in Chitwan, Nawalparasi and Nawalpur, Kavrepalanchok, Kathmandu, Dhading, Makwanpur, Palpa, Rupandehi, and Tanahun for the transmission line project.

Except for Kathmandu, the process of land acquisition has started in other nine districts. A compensation and compensation determination committee has been formed under the coordination of the Chief District Officer.

Six Indian companies have submitted bids to construct the power line which will be constructed in three separate packages. An association of Megha Engineering and Infrastructure Ltd and Power Mech Projects Ltd along with Kalpataru Power Transmission Limited, KEC International Ltd, Transrail Lighting Ltd, Tata Projects Ltd, and Larsen & Toubro Ltd participated in the bid.

The three packages of the power line include Lapsiphedi-Ratmate-New Hetauda 400kV D/C Transmission Line, Ratmate-New Damauli 400kV D/C Transmission Line, New Damauli-New Butwal 400kV D/C Transmission Line (Base), and New Butwal Nepal/India Border 400kV D/C Transmission Line. The high-capacity transmission lines will be built connecting Nepal's major power consumption centers including Kathmandu Valley, Butwal, and Hetauda. This transmission line will also work as a bridge to link the eastern and western parts of the country with high-capacity transmission lines.

The MCA Nepal has also opened a tender for the construction of the substation. The last date for the submission of the bid is September 4th.

The Nepal Stock Exchange (NEPSE) plunged by 2. 82 points to close at 1,990.59 points on Wednesday.

Similarly, the sensitive index dropped by 1. 13 points to close at 381. 171 points.

A total of 3,803,244-unit shares of 276 companies were traded for Rs 1. 13 billion.

Meanwhile, City Hotel Limited was the top gainer today with its price surging by 9. 88 percent. Likewise, Siddhartha Equity Fund was the top loser as its price fell by 7. 94 percent.

At the end of the day, the total market capitalization stood at Rs 2. 97 trillion.