Submit your Article

The Nepal Electricity Authority (NEA) is all set to evaluate the technical bids it received for the development of solar plants and supply of electricity to the state-owned power utility body. The NEA said in a notice that it would open the technical bids on Friday (June 9). On November 28, last year the state-owned power utility body had invited bids from the solar manufacturers to build up to 100MW of solar plants in different locations by setting the deadline for February 26, 2023. In an addendum notice, the NEA extended the deadline till March 13, 2023. However, the plan suffered a setback after the High Court, Patan, on May 5, 2023, issued an interim order barring the NEA from opening the bids. “After the high court scrapped the complaints registered at the High nearly three weeks ago, the NEA decided to open the technical bid,” said a senior official of NEA.  “There are about a dozen companies that have participated in the bid.” As per the bid notice,  the NEA has set an upper limit on the price it is ready to pay for solar power. It has fixed the maximum price of Rs 5.94 per unit for the bidders which many solar manufacturers say is unfeasible. In March last year, the NEA decided to cap the maximum rate to be offered to solar power generators at Rs 5.94 per unit.  Earlier, the NEA had been signing power purchase agreements with solar power developers at a fixed rate of Rs 7.30 per unit. Solar Electric Manufacturers Association Nepal registered a writ petition at the High Court claiming that the price cap would affect companies that have already made investments based on the prior price rate. While issuing the interim order, the High Court had taken into account the claims made by the association that the maximum price of Rs 5.94 per unit offered by the NEA would not be profitable for investors who had already made huge investments with the expectation of getting Rs 7.30 per unit, the rate fixed by the government earlier. In January last year, the NEA decided to procure solar energy only through competitive bidding,  putting an end to the practice of buying power at a fixed rate in the previous three years. The NEA plans to buy a maximum of 100 MW of power from such solar plants which have been proposed to be developed by the private sector at 16 locations across the country. According to the NEA, up to 230MW of solar power plants could be developed in those locations. As per the tender notice,  the bidders have to propose to develop plants with a capacity above 1 MW. The bidder can choose any solar photovoltaic power generation technology. The selected bidder will also be responsible for evacuating power from the plant to the nearby NEA substation, according to the tender notice. Nepal has a long way to go to realize its potential in solar energy with the country so far producing just 44.52MW from solar power, according to the energy ministry. Nepal has the potential to generate around 2,100MW of solar electricity, according to the Nepal Energy Sector Synopsis Report-2022. Nepal plans to have a certain portion of energy to be generated from solar. Nepal also aims to generate a total of 15,000 MW of electricity by 2030.  Of total energy generation. And it wants the contribution of mini and micro-hydropower, solar, wind, and bio-energy projects at 5-10 percent as an energy mix strategy.

Nepal Rastra Bank (NRB) has indicated that capital flight may be occurring through the practice of over-invoicing during the process of opening letters of credit (LC). The central bank recently cautioned the chairpersons of bank and financial institutions (BFIs), expressing concern over the escalating trend of over-invoicing when utilizing LCs for importing goods and services from overseas. Over-invoicing has emerged as one of the methods employed in trade-based money laundering schemes, facilitating the transfer of a larger sum from the importer to the exporter. Opening letters of credit (LCs) is a mandatory procedure when importing goods and services from foreign countries. However, officials from the central bank have revealed that they have received reports indicating that certain BFIs and businessmen have been opening LCs at inflated prices exceeding the actual value of the goods, resulting in the outflow of capital abroad. Although the central bank has not made any public statements regarding capital flight through over-invoicing, NRB Governor Maha Prasad Adhikari warned the chairpersons of BFIs during an interaction on Tuesday, saying that action would be taken against any BFIs found to be facilitating capital flight through the practice of over-invoicing. "It has been found that a group of BFIs and businessmen has been involved in the practice of opening LCs at prices surpassing the actual value and the capital has been illicitly transferred out of the country. This is a serious matter," said one of the BFIs' chairmen quoting Adhikari. "It is necessary to stop this trend immediately. If the BFIs do not stop it, we will be forced to take action against the concerned banks," Adhikari further said. Central bank officials have confirmed that Governor Adhikari indeed issued a warning to the BFIs' chairpersons regarding the issue of capital flight. The officials acknowledged that in the initial stage, the BFIs have been cautioned about their involvement in such activities. However, central bank officials also stated that if this trend persists, further measures will be taken to bring both the BFIs and businessmen engaged in this practice under the purview of the law. The timing of the central bank's warning is significant as Nepal's anti-money laundering regime is currently under review by the Financial Action Task Force (FATF), an international watchdog focused on combating money laundering and terrorist financing. According to the US-based think tank Global Financial Integrity (GFI), trade mispricing accounts for the majority of illicit outflows from least-developed countries (LDCs) like Nepal. In a report published by the GFI, it was revealed that Nepal experienced a significant capital flight between 2001 and 2010, resulting in a staggering loss of $8.01 billion for the country. The report, titled 'Illicit Financial Flows from Developing Countries: 2001-2010,' states that, on average, approximately $801.4 million left Nepal annually during that period.

The price of gold has increased by Rs 800 per tola in the domestic market on Friday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 112, 500 per tola today. The gold was traded at Rs 111,700 per tola on Thursday. Meanwhile, tejabi gold is being traded at Rs 111, 9500 per tola. It was traded at Rs 111, 150 per tola. Similarly, the silver is being traded at Rs 1,455 per tola today.

The Nepal Stock Exchange (NEPSE) gained 7.27 points to close at 1,939.61 points on Thursday. Similarly, the sensitive index plunged by 1.05 points to close at 364. 42 points. A total of 5,962,093-unit shares of 273 companies were traded for Rs 2. 30 billion. Meanwhile, Dolti Power Company Limited was the top gainer today, with its price surging by 10. 00 percent. Similarly, River Falls Power Limited was the top loser as its price fell by 6.64 percent. At the end of the day, total market capitalization stood at Rs 2. 83 trillion.