Kathmandu, June 19: The government has decided that it will now allow private hydropower producers to sell electricity directly to clients, ending the Nepal Electricity Authority's (NEA) monopoly on power trade.

On Wednesday, the Electricity Regulatory Commission (ERC) released the draft Open Access Directive 2025, designed to boost private sector participation. Stakeholders have 30 days to provide feedback before final approval.

Once enacted, the directive will let large companies purchase power directly from private producers, bypassing NEA. These producers can use NEA’s transmission lines by paying distribution, wheeling, and deviation charges.

ERC Chairperson Ram Prasad Dhital said the policy will expand open access, attract more investment, foster competition, reduce risks, and enable private firms to enter international power markets.

Currently, private companies can generate electricity but are barred from direct sales or building their own transmission lines. The directive will change this, allowing captive plants (min. 1 MW) and projects (5 MW or more on 33 kV lines) to sell directly to commercial and industrial buyers.

For cross-border sales, private firms must supply at least 10 MW. The NEA’s System Operation Department will act as the nodal agency for these transactions.

The government has recently introduced flexible policies to involve the private sector in power distribution. In December, it signed a public-private partnership to jointly develop transmission infrastructure, though private firms still await permission to build lines independently.

This market liberalization comes as Nepal expands regional trade. It recently signed a deal with India to export 10,000 MW over 10 years. Bangladesh plans to import 9,000 MW by 2040 and is already buying 40 MW.

To achieve its goal of generating 28,500 MW by 2035, the government sees private sector involvement as vital, acknowledging that NEA alone cannot meet the required transmission demands.

People’s News Monitoring Service