December 19: The government has prepared a draft of electricity trade work procedure to allow the private sector to get involved in electricity trade. The Ministry of Energy, Water Resources and Irrigation has formulated the draft, informed a high-ranking official at the ministry.

According to the official, the electricity bill under consideration in the federal parliament has proposed to allow the private sector to trade electricity. The ministry has said the work procedure will include this matter in a more precise way. According to a source, it has been proposed to allow the private sector to trade electricity not only in the country but also in the regional market.

"Economic development is not possible without the participation of the private sector.  Therefore, we need to take the private sector along in energy development. Accordingly, we have prepared a draft to allow the private sector to trade electricity," said the source.

Currently, only the government-owned Nepal Electricity Authority is allowed to engage in such trade. The private sector has been demanding for a permit to participate in the trade of electricity for a long time. Now the government is going to make policy arrangements in this regard.

However, this procedure will be implemented after the electricity bill under consideration in the parliament is endorsed. "We will implement the procedure accordingly after the bill is passed," said the source.

Similarly, the ministry is also working to formulate guidelines on cross-border electricity trade. The ministry is ready to implement the guideline soon. The guideline is being formulated prioritizing electricity trade with India. As per the agreement reached between the two countries, India has already made such guidelines. The ministry expects the electricity trade to be more convenient once the guideline is prepared.

Although there are no policy at the moment, the private sector has already established companies to trade electricity. Nepal Power Exchange Company has already been registered with the investment of businessmen including Kumar Pandey. Entrepreneurs including Motilal Dugad and Sandeep Shah have also set up electricity trading companies. Nepal Electricity Authority has also established Nepal Power Trade Company.

Recently, Nepal Infrastructure Bank (NIFRA) has also set up a separate company to trade electricity. However, they have not been able to get permits due to lack of necessary policy. Entrepreneur Pandey says that the possibility of getting a license has increased as the government is making policy arrangements.

He said that an alternative company should come to trade electricity in the country. "NEA has monopoly in trading electricity here. From now on, with the participation of companies from the private sector, the energy sector should have multiple buyers and multiple traders."