Energy Minister Viraj Bhakta Shrestha announced that the government has formulated policies aimed at increasing electricity production to generate economic and social value. The government is prioritizing strengthening the transmission system, boosting domestic consumption, and promoting cross-border electricity trade. According to Minister Shrestha, the government aims to end the ‘license raj’ in the hydropower sector by establishing a transparent and competitive system.
1 Bhadra, Kathmandu – The government is now focusing not only on increasing electricity production but also on creating economic and social value from that production. Speaking on the occasion of the 41st anniversary of the Nepal Electricity Authority, Energy, Water Resources and Irrigation Minister Viraj Bhakta Shrestha informed that along with electricity generation, the government is prioritizing improvements in domestic consumption, transmission and distribution systems, and expansion into foreign markets. According to Minister Shrestha, since Nepal’s electricity production exceeds domestic demand, it is imperative to increase consumption and expand exports. He added that the government is committed to providing reliable electricity to domestic consumers at affordable rates and supplying electricity at stable rates to productive industries. Efforts are also underway to implement seasonal tariffs during the monsoon season to maximize electricity usage.
Focus on Expanding Transmission Infrastructure
Minister Shrestha noted that this fiscal year, the government’s special focus is on expanding and improving transmission infrastructure. Although electricity production is increasing, weak transmission systems render these gains ineffective, he said. Therefore, the government is accelerating plan implementation to construct strategically important transmission lines, substations, grid strengthening, and cross-border transmission infrastructure. He emphasized that expanding the transmission network alongside production is crucial to prevent wastage of generated electricity. The government is advancing plans to increase electricity exports as part of efforts to reduce the foreign trade deficit.
Modernizing Distribution System Next Fiscal Year
Minister Shrestha identified the key future challenge as not expanding electricity access alone but providing sustainable, reliable, and quality services to consumers. From the upcoming fiscal year, modernization of the distribution system will receive special priority. He clarified that replacing old and dilapidated infrastructure, increasing capacity, deploying smart technologies, controlling electricity leakage, managing demand, and expanding digital technologies in service delivery are necessary.
The minister highlighted the need for policies that improve the Authority’s investment capacity and financial health while attracting private and foreign capital. He stressed that investment priorities should be clarified through project return and risk assessment, and public resources must be used judiciously. While strengthening the Authority is necessary, it should not translate into a monopoly. He emphasized that since the private sector undertakes significant investment and risk in energy development, protecting and promoting these efforts is a state responsibility. Creating a regulatory and competitive environment is needed to attract further investment.
Minister Shrestha revealed that the government’s goal is to end the long-standing ‘license raj’ in the hydropower sector by establishing a fair, transparent, and competitive system. The government is moving forward with policies to decentralize the economic and administrative powers of the Authority. The expectation is to speed up decision-making, clearly assign responsibilities, and directly impact service delivery. He urged that structural reforms and restructuring of the Authority should be viewed not as weakening any entity but as opportunities to make the overall energy sector competitive, capable, and investment-friendly.
Minister Shrestha said the government’s approach to resolving electricity revenue arrears is based on laws and regulations. Recognizing electricity revenue as a main source of income, he stated that collecting arrears remains a daily priority for the Authority’s management. He emphasized that electricity is no longer just a means to light homes but has become fundamental to employment, industry, agriculture, education, health, and comprehensive economic transformation. According to him, the energy sector has now established itself not only as a facilitator but as a key pillar in Nepal’s economic transformation.
