Nepal’s government has moved ahead with a plan to allow private companies to prepare for cross-border electricity trade, a step welcomed by the energy sector on October 23, 2026. Under the proposed process, the government will issue letters of intent to private-sector participants and grant trade licences after the required legal and regulatory procedures are completed. Narendra Ballabh Pant, vice-president of the Independent Power Producers’ Association, Nepal (IPPAN), said the move opens new business opportunities in the energy sector and could encourage investors to explore commercial possibilities in electricity trade.
A staged route into electricity trade
The plan sets out two stages for private-sector participation. First, companies would receive letters of intent to prepare for cross-border electricity trade. Trade licences would follow only after the necessary legal and regulatory processes have been completed. The announcement therefore signals progress towards private-sector involvement, but it does not mean that licences have already been issued or that companies can begin trading immediately.
The distinction between the two steps is central to the proposed approach. Letters of intent would allow prospective participants to prepare, while licensing would depend on the completion of the required formal processes. The government’s move indicates that it is advancing a framework for private participation while leaving the final authorisation subject to legal and regulatory requirements.
IPPAN welcomes new commercial opportunities
Pant said the initiative has been welcomed by the private sector because it opens a new area of business in Nepal’s energy industry. His comments reflect interest among energy-sector participants in exploring electricity trade as a commercial opportunity, alongside their existing involvement in the sector.
The move is also expected to encourage investors to consider new possibilities in electricity trade. By outlining a route from preparatory intent to licensing, the government has given prospective participants a clearer indication of how private involvement could proceed. Whether and how individual companies take part will depend on the completion of the required processes and the opportunities they identify.
For investors, the announcement marks an opening to assess the potential of cross-border electricity trade as the policy and regulatory steps progress. The government’s decision to begin with letters of intent provides a preparatory stage before licences are granted, while the requirement to complete legal and regulatory processes remains a condition for moving forward.
What happens next
The next step is the completion of the relevant legal and regulatory procedures. The government has said licences will be granted once those processes are complete. Until then, the plan remains a pathway for preparing private-sector participation rather than confirmation that trading licences are in place.
IPPAN’s response highlights the private sector’s positive reception of the announcement and its potential to widen commercial activity in the energy sector. The development could prompt investors to explore the business prospects of cross-border trade as the framework advances, while the timing and implementation of licensing remain tied to the required processes.
