Nepal opens national electricity transmission grid to private sector under wheeling-charge system

Nepal has opened its national electricity transmission grid to private users through regulated wheeling charges, introducing open access for electricity trading while retaining existing infrastructure ownership.

PUBLISHED02-OCT-2026 04:14 PM

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Nepal opens national electricity transmission grid to private sector under wheeling-charge system

Kathmandu, October 2, 2026 — The government has opened Nepal’s national electricity transmission grid to private power producers and consumers, allowing third parties to use existing transmission infrastructure by paying regulated wheeling charges.

The Electricity Regulatory Commission (ERC), under the Ministry of Energy, Water Resources and Irrigation, announced the transmission charges on Thursday in the presence of Energy Minister Biraj Bhakta Shrestha. The move introduces an open-access framework intended to enable greater private-sector participation in electricity trading.

Under the new arrangement, private companies and other eligible users can use transmission and distribution infrastructure operated by the Nepal Electricity Authority (NEA) to transmit electricity after paying the prescribed charges.

ERC Chairman Dr Ram Prasad Dhital said the charges were determined in accordance with the National Electricity Transmission Grid Transmission Charge Calculation Standards.

For fiscal year 2026/27, the commission has set transmission charges for medium- and long-term open access according to transmission capacity. Short-term users will pay 57 paisa per kilowatt-hour, or unit, of electricity transmitted.

The open-access mechanism allows private electricity producers or consumers to use the NEA’s transmission network without owning the infrastructure. In the electricity sector, the practice of transmitting power through another entity’s network in exchange for a fee is known as wheeling.

Dhital said the mechanism would allow private companies and other third parties to participate in electricity transactions within an open-market framework. Users will have to pay the NEA according to the rates and standards prescribed by the ERC.

The ERC said the wheeling charges were calculated on the basis of a projected maximum electricity load of 3,587 MW for the current fiscal year. The standards were prepared under Section 33 of the Open Access Directive for Electricity Transmission and Distribution Systems, 2025.

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According to the NEA’s audited financial statements for fiscal year 2024/25, the transmission system’s annual revenue requirement was Rs 11.015 billion. Based on an average annual increase of 27 percent in revenue requirements between fiscal years 2021/22 and 2025/26, the ERC projected the requirement at Rs 17.767 billion for fiscal year 2026/27 and used that figure to calculate the new charges.

The commission is also preparing a separate directive to determine transmission charges for radial and dedicated transmission infrastructure outside the national grid.

Nepal’s Electricity Act, 1992, does not clearly provide for private companies to establish commercial transmission firms and independently develop and operate major transmission networks. Large transmission infrastructure has so far remained under the NEA and the state-owned National Transmission Grid Company.

Private hydropower developers currently construct short transmission lines from their powerhouses to the nearest NEA substations at their own expense. However, they are not legally permitted to develop major transmission corridors or national-grid infrastructure to transmit electricity between different areas.

The new open-access mechanism does not alter that restriction. Instead, it allows private companies and other eligible users to access existing government transmission infrastructure by paying wheeling charges, expanding participation in electricity trading without transferring ownership or development of the national grid to the private sector.