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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.

After Nepal and India signed an initial deal on a long-term power trade deal as well as agreed to pave the way for power export to Bangladesh from Nepal during Prime Minister Pushpa Kamal Dahal's recent India visit, private power producers are demanding that a power purchase agreement (PPA) should be opened. They have also demanded that the private sector be allowed in power trading in the domestic and foreign markets. Currently, the Nepal Electricity Authority (NEA) has the authority to sign PPAs with power producers in Nepal. However, the state-owned power utility is yet to conclude PPAs of projects with an estimated total capacity of 10,500 MW. NEA had introduced the quota system in PPA citing the lack of market guarantee. With Nepal and India signing an initial agreement on a long-term power deal recently, the Independent Power Producers' Association Nepal (IPPAN) has again raised its demand of resuming the PPAs. IPPAN officials argue that since the understanding reached during the Prime Minister's recent India visit has ensured the market for electricity, there is no point for NEA to continue refusing to sign PPAs with private power companies. "India has already said that it will buy 10,000 MW of electricity in 10 years. In addition, Nepal will also be exporting 40 MW of electricity to Bangladesh starting this year," said Krishna Prasad Acharya, President of IPPAN, "Given these developments, there is no point in keeping the PPAs of the projects on hold. The private sector should be encouraged to generate electricity by opening the PPAs immediately." Acharya also demanded that the private sector should also be given licenses for power trading. NEA had stopped signing PPAs with the hydropower developers of the run-of-river (ROR) projects three years ago citing the 'financial risks' involved in such power produced by such projects. According to NEA, buying more power will add more financial burden to the organization as it is experiencing power spillage during the rainy season due to low domestic consumption and inadequate access to the Indian market. In April 2018, the Ministry of Energy, Water Resources and Irrigation (MoEWRI) issued a white paper and decided to generate 15,000 MW of electricity in the next 10 years. Of the targeted 15,000 MW, PPAs were planned on the basis of the take-or-pay principle by keeping the ratio of reservoir and pump storage at 30 to 35 percent, peaking RoR at 25 to 30 percent, RoR at 30 to 35 percent, and other alternative sources. A meeting of the cabinet of ministers on July 8, 2022, reviewed the production mix ratio and reduced it by 10 percent for reservoirs and increased it by 10 percent for RoR projects. As per the latest revision, the ratio of reservoir projects will be maintained at 20 to 25 percent, peaking RoR at 25 to 30 percent, RoR at 40 to 45 percent, and other alternative sources at 5 to 10 percent. With this, the limit for PPA for the RoR project increased from 5,250 MW to 6,750 MW. NEA in the second week of February decided to sign PPAs for up to 1,500 MW with RoR projects after the then-energy minister Rajendra Lingden ordered NEA to resume PPAs. NEA decided to move ahead with PPAs of RoR projects on the basis of the date-wise chronological order of the Grid Connection Agreement. Besides the decision to buy 1500 MW of power, the PPAs of other ROR projects have been stopped. Now IPPAN wants the government to open the PPAs immediately for the rest of the projects. According to Acharya, signing PPA is vital for power developers as banks and other investors decide to invest in the projects based on the purchase agreement. The delay in PPAs has stalled the construction of many projects that have already completed the initial study and survey. IPPAN has also demanded that the private sector should be allowed to enter the power trading as there is no other entity in the country currently to sign PPAs. "This would allow the private sector to enter into PPAs with a private power trading company, which will ensure the construction of the projects," said Acharya.