KATHMANDU, Jan 31: Investors and experts have complained that electricity generated in Nepal is going to waste due to the failure to construct transmission lines on time. While the country’s power generation capacity continues to reach new heights, the lack of timely transmission infrastructure to deliver electricity for domestic use and export has become a major concern.
Billions of rupees are invested in power generation projects, but in the absence of transmission lines to evacuate the electricity, much of it is being wasted. Delays in the construction of transmission lines and substations have resulted in the state losing revenue, weakening investor confidence. The situation has also had a direct impact on employment generation and industrial expansion. Stakeholders warn that if the current trend continues, nearly 1,200 megawatts of electricity could go to waste in the coming year.
At a discussion titled “Strengthening Nepal’s Grid: Today’s Transmission Landscape and Future Outlook,”organized by the Diwakar Golchha Organisation, energy experts, government officials, and private sector representatives concluded that the transmission infrastructure crisis is deepening. According to them, policy uncertainty, tax disparities, and neglect of domestic industries have slowed the construction of transmission lines and substations.
Energy experts say that although electricity generation capacity is increasing rapidly, weak transmission and distribution infrastructure has forced the country to bear significant economic and social costs. Policy ambiguity, an imbalanced tax structure, and disregard for domestic industries have further complicated the problem.
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Energy entrepreneur Guru Prasad Neupane said that despite Nepal having the capacity to produce steel materials required for transmission towers, poles, and substations domestically, government policies favor imports, creating serious challenges. “Last year alone, electricity worth millions of rupees was wasted due to delays in projects like the Mechi Corridor,” he said, warning that continued repetition of this trend would result in major losses next year as well.
He also pointed out that delays have been caused by the flawed practice of repeatedly awarding projects to the same contractors, along with weak designs that have increased forest-related and local-level obstructions. “Instead of cutting trees, alternatives such as taller towers could have been explored. Towers need to be built taller than forest cover. Many transmission projects not being completed on time have created multiple problems,” he said.
Nepal Electricity Authority Executive Director Hitendra Dev Shakya said that transmission infrastructure expansion could be accelerated if the private sector adopts a model where it takes construction risks while ensuring returns after completion. He acknowledged that the lack of testing equipment remains a challenge in using domestically produced towers.
Director General of the Department of Electricity Development, Man Devi Shrestha, said that more than 96 percent electrification has been achieved through the national grid and that the energy roadmap includes a target of constructing 17,000 circuit kilometers of transmission lines by 2035.
However, the private sector has complained of a wide gap between targets and implementation. Green Energy Entrepreneurs Nepal President Surya Prasad Adhikari said it is a policy contradiction to provide tax exemptions on imported transmission materials while imposing taxes of over 30 percent on domestic products. “There are discussions of 400 kV and 765 kV transmission lines, but Nepali companies have not received even 10 percent of the total infrastructure work,” he said.
RPGCL CEO Sagar Shrestha said that the proposal to merge an institution established specifically for transmission line construction back into the authority reflects policy uncertainty. However, he claimed that some projects have begun moving forward under the public–private partnership (PPP) model.
Diwakar Golchha Organization’s Managing Director Himanshu Golchha said that zero customs duty on transmission tower materials imported from India, while domestic products facing taxes of up to 30 percent, has created unfair competition. “Even if the government cannot provide subsidies, it should at least ensure a level playing field,” he said. Electricity Regulatory Commission member Dr Madhusudan Adhikari stated that an open access directive incorporating private sector participation through transmission tariff determination has already been prepared, adding that the use of domestic products would generate multidimensional benefits for employment, industry, and the overall economy.
Experts say rapidly rising electricity generation capacity without corresponding expansion of transmission infrastructure has emerged as the biggest challenge in Nepal’s energy sector. If policy uncertainty, tax imbalances, and neglect of domestic industries persist, the risk of large-scale electricity wastage will continue in the coming years, they added.
