NEA strengthens cross-border power trade after industrial dues dispute

KATHMANDU: The Nepal Electricity Authority (NEA) has increased its daily electricity exports to India to approximately 1,100 megawatts, following the disconnection of power supply to 25 large industries that failed to clear long-pending electricity dues. The move has resulted in the redirection of around 200 megawatts of electricity—originally allocated for industrial use—into the export market, according to NEA officials.

NEA Managing Director Manoj Silwal said the authority’s decision aligns with the national policy of supplying power domestically based on demand and exporting surplus energy to maximize revenue. “We are exporting the electricity saved from industries that have not paid their dues. At present, roughly 200 MW that was previously allocated to those industries has been added to our export volume,” Silwal stated.

Higher Export Earnings Than Domestic Tariffs

Industries in Nepal currently pay NPR 9 to 12 per unit, while the NEA is exporting power to India at roughly NPR 11 per unit.
Silwal emphasized that exporting surplus power does not result in financial loss for the authority.

“Selling electricity to India yields more revenue compared to supplying industries that do not pay on time. Therefore, NEA is not operating at a loss,” he said.

Industrial Dues Recovery: A Long-Standing Challenge

The NEA has been struggling for years to recover outstanding payments worth billions from private-sector industries. Despite repeated warnings and flexible installment options, many companies did not comply. The NEA had previously provided a 21-day period to clear dues in up to 28 installments, but several industries did not respond within the deadline.

As a result, NEA cut lines to companies including, Jagdamba Steel, Reliance Spinning Mills, Shivam Cement, Ghorahi Cement, Arghakhanchi Cement, Triveni Spinning, Everest Paper Mills, SR Steel, Panchakanya Steel, Goenka Foods, Shyam Plastic, Everest Rolling, Sonapur Minerals, Butwal Cement, among others.

However, nine industries that paid their first installment have had their power supply restored, while Hetauda Cement and Udayapur Cement—both state-owned—avoided disconnection after committing to payment.

Production Pressure and Natural Disasters Affect Supply

Although Nepal’s hydropower system has a total installed capacity of approximately 4,000 MW, seasonal variations, maintenance issues, and natural disasters have limited effective output.
Recent floods and landslides in Ilam and the Everest region temporarily shut down 100–150 MW of hydropower plants, while another 110 MW plant remains non-operational due to infrastructure damage.

Export Strategy Strengthens Nepal’s Energy Position

Nepal’s ability to export surplus electricity—especially during periods like Tihar, when domestic demand declines—helps maintain foreign revenue inflows, bolsters energy self-reliance, and strengthens cross-border electricity trade ties with India.

Silwal reaffirmed that NEA will continue its strict policy against unpaid industrial dues, “There will be no compromise on dues recovery. Industries that clear payments, even in installments, will immediately have their supply reconnected. Those who do not will remain disconnected.”