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After Nepal and India signed an initial agreement on long-term power trade, the Nepal Electricity Authority (NEA) is going to enter into a medium-term power purchase agreement (PPA) with India to sell 200 MW of electricity in the first phase. The state-owned power utility has recently sent a draft of the PPA to India's NTPC Vidyut Vyapar Nigam Ltd (NVVN) to sell 200 MW of electricity starting this wet season. After NVVN approves the PPA, the NEA plans to enter into an agreement with the Indian power company for a five-year period. According to NEA officials, NEA plans to export 200 MW of electricity from this wet season. "We have sent a draft proposal to NVVN, the electricity trading company in India, to sell electricity for the medium term," said a senior NEA official. A preliminary agreement for the power trade agreement has been signed between Nepal and India during Prime Minister Dahal's recent visit to India. During the visit, the southern neighbor agreed to buy 10,000 MW of electricity from Nepal in the next 10 years. The authority has planned to export up to 1,200MW of electricity to India this year. The NEA is preparing to export 200 MW by signing the medium-term PPA and the rest to the Indian energy exchange. NEA plans to export power generated from six power projects - 83.42 MW Solukhola (Dudhkoshi) Project, 40.74 MW Mistry Khola Project, 34.92 MW Upper Balefi A Project, 28.17 MW Likhukhola-1 Project, and 12.75 MW Upper Chaku Khola Project. Nepal has been requesting the southern neighbor for a long-term power trade deal arguing that an inter-government agreement would lock in the market and end the unpredictability of the Indian market’s availability for electricity from Nepal in the long run. The signing of the preliminary agreement, according to Nepali officials, has ensured a market for electricity produced in Nepal. Based on the agreement reached between the two countries, the NEA is planning to complete a medium-term PPA (five-year period) to export 200 MW of electricity in the first phase. According to NEA sources, it was planning to sign PPA with NVVN during Prime Minister Dahal's India visit. However, the Indian side failed to endorse the PPA draft sent by the NEA on time. "Now, NEA and NVVN can enter into medium-term and long-term PPA," said an official of the Ministry of Energy. According to the sources, NEA is planning to sell electricity at a rate of INR 5 which is equivalent to Rs 8 per unit. The authority has been purchasing electricity from domestic power developers at Rs 4.80 per unit. NEA has been selling electricity to Indian energy exchange for up to INR 12 per unit. However, Nepali officials say it will be difficult to get the same rate in the case of medium and long-term PPA. Nepal has started exporting surplus electricity to India during the wet season, it has to import electricity in the dry season to meet the power demand. The NEA has been selling electricity in the day-ahead market of Indian Energy Exchange Limited (IX) through daily bidding. Currently, the southern neighbor has allowed Nepal to sell 452.6 MW of electricity generated by 10 hydropower projects in the Indian power market. Since the approvals given to the 10 hydropower projects need to be renewed every year, Nepal has been pushing for a long-term power agreement with India.

The Nepal Stock Exchange (NEPSE) gained 4.68 points to close at 1,932.33 points on Wednesday. Similarly, the sensitive index surged by 0.38 points to close at 365. 47 points. A total of 6,541,388-unit shares of 261 companies were traded for Rs 2. 36 billion. Meanwhile, Unique Nepal Laghubitta Bittiya Sanstha Limited was the top gainer today, with its price surging by 10. 00 percent. Similarly, Siddhartha Equity Fund was the top loser as its price fell by 4.35 percent. At the end of the day, total market capitalization stood at Rs 2. 82 trillion.

Backed by the strong performance of the publicly listed hotels and tourism companies, the Nepal Stock Exchange (Nepse) recorded a double-digit growth on Tuesday surging by 25.66 points or 1.35 percent. The Nepse has started recovering from the dip after the government's budget announcement that individual and institutional investors have to pay the due tax amount on income from mergers, acquisitions, and further public offerings (FPOs) of publicly listed companies. After Finance Minister Prakash Sharan Mahat committed to agitating investors that capital gains tax will be the final tax on share trading, Nepse has begun to move upwards. The daily turnover was recorded at Rs 1.98bn on Tuesday which was Rs 1.97bn on Monday. On Tuesday, the benchmark index opened at 1,902.75 points and hit an intraday low of 1,893.61 points before going up to the intraday high of 1,927.66 points and settling at 1,927.65 points. A total of 5.54 million units of shares were traded on Tuesday. The stock of hotels and tourism-related companies was a major attraction on Tuesday as the share price of the hotels increased. The share price of Soaltee Hotel Limited surged by 8.75 percent to reach Rs 320. Similarly, the share price of Chandragiri Hills increased by 3 percent, Kalinchok Darshan by 2.65 percent, Oriental Hotel by 4 percent and Taragaon Regency by 4 percent. Along with hotels, the share price of insurance companies also increased on Tuesday. The non-life insurance sub-index grew by 4.64 percent, while the hydropower sub-index surged by 3.15 percent. All the sub-indices turned green on Tuesday with the hotel sub-index gaining the most. On Tuesday, the shares of Soaltee Hotel Limited were traded the most as the company recorded the highest turnover of Rs 96.8m. Nyadi Hydropower Limited, Sunrise Focused Equity Fund, Soaltee Hotel Limited, Prabu Insurance Limited, and Siddhartha Premier Insurance Limited came as the top gainers while Century Debenture 2088, Manakamana Smart Laghubitta, Gurkhas Finance Limited, Support Microfinance, and Citizens Mutual Fund 2 were the top losers.

Prime Minister Pushpa Kamal Dahal has highlighted the initial agreement between Nepal and India for a long-term power trade deal as the major achievement of his recent India visit. While opposition parties, including the main opposition CPN -UML, have downplayed the agreement saying that nothing concrete has been achieved, Prime Minister Dahal and government officials who took part in the negotiations claim the deal as an important breakthrough in power sector cooperation between the two nations. Upon his return, Prime Minister Dahal said a long-term power trade deal was fully concluded but the only part remaining in this deal is a ‘formality.’ Dahal, while speaking in the federal parliament on Monday, said that the agreement made during his visit to India has ensured the legal basis for electricity export in India. "The long-term electricity export agreement has ensured the market to promote investment in the hydropower sector in Nepal in the future," he said. Officials at the Ministry of Energy, Water Resources and Irrigation (MoEWRI) also corroborated with what PM Dahal said. “Bilateral signing of the agreement could not take place only because India’s cabinet could not endorse it on time,” said a senior MoEWRI official. “Both sides reached an understanding that India will first get the agreement approved by the cabinet and the signing date will be fixed shortly after that.” Since the details of the initial agreement have not been made public, it is not clear how Nepal will benefit from it as claimed by government officials. Energy sector experts said that the fact that India did not give a concrete answer to Nepal's request to export an additional 1,200 MW of electricity including that of the Upper Tamakoshi Hydropower Project during Dahal's India visit, does raise questions about India's intention to buy electricity from all Nepali projects. While India has not stated it publicly, experts say the southern neighbor has shown reluctance to buy electricity generated from projects with Chinese investment or the involvement of Chinese contractors. However, the government officials who're part of the negotiation said that it is a 25-year-long agreement that will be renewed automatically as long as the two countries don't want to amend it. “Companies from two countries sign medium and longer-term deals for procurement of the electricity,” the MoEWRI official said. “A medium-term power purchase agreement can be signed for five years and the companies will be free to sign longer PPA as well.” Currently, Nepal is only allowed to sell power in the day-ahead market of India’s energy exchange. The day-ahead market means that Nepal can sell electricity once quantity and price are determined a day ahead of the trading day. Nepal has been requesting the southern neighbor for a long-term power trade deal arguing that an inter-governmental agreement would lock in the market and end the unpredictability of the Indian market’s availability for electricity from Nepal in the long run. Nepali Officials said that the government-to-government long-term agreement will help the country to address the risk of electricity spillage as well as open the door for massive investment in Nepal’s hydropower. According to them, the Indian announcement of buying so much power from Nepal should be considered both an opportunity and a challenge. “As the market has been guaranteed, we will have to increase investment massively to boost hydropower generation and build transmission infrastructure to ensure smooth energy trading between the two countries,” said a senior official of the Nepal Electricity Authority (NEA). Currently, projects with a combined capacity of over 3,000MW are under construction after the signing of the power purchase agreement, according to NEA. NEA and the companies developing the power projects have signed power purchase agreements for projects over 6.000MW of electricity. “As India promised 10,000 MW and we also plan to export power to Bangladesh, it is necessary to invest not only to generate power but also in transmission infrastructure,” the NEA official said. Nepal’s transmission infrastructure has remained poor with so far only a single high-capacity transmission line having been completed to trade electricity with India. Currently, Dhalkebar-Muzaffarpur Transmission Line is the only power line whose capacity is 400kV. There is no transmission line with this capacity for domestic transmission of power. However, optimism is growing that more high-capacity power lines will be developed within the country or cross-border power transmission. Nepal is about to start construction of a 315 km long 400kV transmission line under grant assistance from the Millennium Challenge Corporation, a US aid agency. This power line will connect Kathmandu, Ratmate (Nuwakot), Damauli (Tanahun), Hetauda (Makawanpur), and Butwal (Rupandehi). During Dahal’s India visit, the Prime Ministers of the two countries laid a foundation stone for the construction of the New Butwal-Gorakhpur Transmission Line Project. Nepal and India agreed to develop the 400kV Inaruwa (Duhabi-Purnia, Bihar) and 400kV New Lamki (Dodhara-Bareli, Uttar Pradesh) cross-border lines by 2027-2028 and 2028-2029, respectively during the 10 h meeting of Joint Steering Committee on Energy Cooperation held in India in February.