NEA signs PPAs for 750 MW solar power

KATHMANDU: The Nepal Electricity Authority (NEA) has signed Power Purchase Agreements (PPAs) for 750 megawatts (MW) of solar electricity, marking a major step toward diversifying Nepal’s energy mix and addressing seasonal power shortages, particularly during the dry winter months when hydropower generation declines.

The state-owned utility had initiated a competitive tender process around one and a half years ago to procure 960 MW of grid-connected solar power. Through that process, 63 companies were selected to develop solar projects across different parts of the country. Of the total planned capacity, PPAs covering 750 MW have now been finalized, while agreements for the remaining projects are in the pipeline.

Tharkabahadur Thapa, Director of NEA’s Electricity Trading Department, said the authority is moving quickly to complete the remaining contracts.

“PPAs for 750 MW have already been completed. The rest are also in the process, and soon all selected projects will have signed PPAs,” Thapa stated, indicating institutional urgency to bring solar capacity online.

Winter Energy Gap Driving Solar Push

Nepal’s power system is heavily dependent on run-of-the-river hydropower plants, which experience sharp output reductions during the winter due to low river flows. The NEA’s solar procurement strategy is designed to stabilize supply during the dry season, reduce reliance on electricity imports, and strengthen domestic energy security.

The 960 MW solar program represents one of the largest renewable energy procurement initiatives in Nepal outside the hydropower sector. It aligns with broader national efforts to integrate alternative energy sources into the grid, enhance peak management, and improve system reliability.

Major Share Secured by Uttam Bhlon-Linked Projects

Among private developers, energy entrepreneur Uttam Bhlon emerged as one of the largest beneficiaries in the tender process. Although projects linked to his business groups had secured rights to develop 230 MW of solar capacity, PPAs covering 210 MW have already been completed.

A total of 15 solar projects associated with Bhlon’s business groups have signed PPAs with NEA so far. These projects are being developed under different consortium and company structures, including:

• Mountain-Dordi Consortium
• Gyapert-Rapti Consortium
• Mount-Dordi Company

These entities collectively secured a substantial portion of the solar capacity offered under the tender.

Project Locations and Capacity Distribution

The solar projects linked to Bhlon’s groups are spread across multiple districts, supporting regional energy development and grid expansion:

Mountain-Dordi Consortium

• Nawalparasi – 25 MW
• Baglung – 20 MW
• Parbat – 20 MW

Gyapert-Rapti Consortium

• Tanahun – 20 MW
• Gulmi – 20 MW
• Arghakhanchi – 20 MW
• Kapilvastu – 10 MW
• Dang – 10 MW
• Banke – 10 MW
• Bardiya – 10 MW

Mount-Dordi Company

• Kapilvastu – Two projects of 10 MW each
• Banke – 10 MW
• Bardiya – 10 MW

The geographic spread of projects indicates a focus on the Terai and mid-hill regions, where land availability and solar irradiation conditions are considered favorable for utility-scale photovoltaic development.

Pre-Construction Requirements and Deadlines

Before construction begins, developers must complete several regulatory and preparatory processes, including:

• Land acquisition and site clearance
• Environmental Impact Assessment (EIA) approval
• Financial closure and investment arrangements

Under the PPA terms agreed with NEA, project timelines are clearly defined:

• Projects up to 10 MW must begin electricity generation within 18 months.
• Larger projects are required to start commercial generation within two years.

These deadlines are intended to prevent speculative holding of licenses and ensure timely addition of solar capacity to the national grid.

Strategic Implications

The large-scale solar rollout is expected to reshape Nepal’s generation profile by complementing hydropower with daytime solar output, improving load balancing, and reducing seasonal energy deficits. Once operational, the projects will contribute to energy diversification, grid stability, and reduced winter import dependency, while also opening new investment opportunities in Nepal’s renewable energy sector.