KATHMANDU, AUG 13 -
The Nepal Electricity Authority (NEA) has to hike the power tariff by at least 25 percent to prevent the NEA from being bankrupt, said experts.

The Electricity Tariff Fixation Commission has proposed increasing the tariff from around Rs. 7 per unit to at least Rs. 9 on average to provide attractive electricity rates to the private hydropower developers, solve the current financial crisis and help the NEA get attractive returns from the projects in the country.

The proposed hike, say experts, is necessary to compensate NEA’s annual loss. Speaking at a stakeholders’ meeting organised by the commission on Friday, Diwakar Poudel, deputy director at the Department of Finance under the NEA, said the authority is selling power in lesser than the required rate for the last nine years without adjusting the tariff rates.

He said the authority is facing loss in more than 90 percent of the electricity sold to consumers. The NEA sells around three billion units. 

The NEA has so far incurred a loss of around Rs. 19.50 billion. The annual loss is estimated to be around Rs 5.30 billion this year, Poudel said.

Meanwhile, due to Khimti and Bhotekoshi Hydro Electricity Projects, NEA is incurring the annual loss of Rs 2.52 billion. The power purchase agreements for both projects were signed in dollars not in rupees unlike for other hydel projects operated in Nepal. Ramesh Chandra Poudel, member of the three-member team formed by the commission to adjust new tariff rates, said increase in tariff rates is required to prevent NEA from being bankrupt and ensure investments in new projects.


Posted on: 2010-08-14 09:12

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