In a historic shift, the Nepal Electricity Authority (NEA) has officially broken its long-standing monopoly on transmission infrastructure development. Facing a stark reality where transmission line expansion lags severely behind rapidly growing hydropower generation, the NEA has turned to the private sector and global markets for reinforcement.

Under the newly introduced Tariff Based Competitive Bidding (TBCB) framework—released by the Ministry of Energy, Water Resources and Irrigation in 2082 BS—the NEA has received 18 competitive proposals from major multinational energy companies.

Understanding the New Framework: TBCB & BOOT

To accelerate development, Nepal is leveraging an innovative corporate infrastructure model:

• The TBCB Model: The private or foreign company that proposes the most competitive annual transmission service charge wins the project contract.
• The BOOT Model (Build, Own, Operate, Transfer): Selected developers bear full responsibility for the detailed study, financial management, construction, operation, and maintenance of the transmission lines.
• The 20-Year Handover: Developers hold operational rights to collect tariffs for 20 years, after which the entire infrastructure must be handed over to the NEA free of cost.

"The company that proposes the most competitive annual transmission service charge in the final phase will get the responsibility of constructing the project."

— Dirgha Yu Kumar Shrestha, Acting Managing Director of NEA

The Four Major Transmission Projects

The NEA put forth four strategically critical transmission lines for bidding, drawing varying levels of interest based on engineering complexity and environmental hurdles:

Geopolitical Interest: India, China, and the US Face Off

The bidding process has triggered a high-stakes corporate face-off between global superpowers looking to anchor themselves in Nepal’s energy security grid:

• India: The state-owned Power Grid Corporation of India Ltd (South Asia's largest transmission utility) has bid on three projects. Other major Indian private players like Megha Engineering, Ashok Buildcon, and Resonia Limited are also aggressively competing.
• China: Prominent Chinese heavyweights TBEA Company and the China National Machinery Import and Export Corporation have placed bids across all four projects.
• United States: American engineering firm K&A Engineering has set its sights on the two smaller 132 kV projects.

Domestic Discontent: The 'Non-Bankable' Policy Debate

While foreign giants are enthusiastic, Nepal's domestic private sector feels sidelined and deeply skeptical.

Mohan Kumar Dangi, President of the Independent Power Producers' Association of Nepal (IPPAN), criticized the NEA for crafting the modality without consulting local industry players. The primary grievances include:

• Lack of Bankability: Local banks require a guaranteed return of 15% to 17% to finance such massive infrastructure. Private developers argue the current agreements are "non-bankable," making local financial institutions hesitant to back them.
• Ambiguity in 'Capacity Booking': IPPAN argues that cost-sharing and capacity guarantees remain flawed. Adding small hydro projects onto massive 220 kV or 400 kV lines makes it economically non-viable for private builders to recover costs without a clearer structure.

Looking Ahead: A Multi-Billion Dollar Necessity

With Nepal aiming to generate over 30,000 MW of electricity in the next decade, building out the transmission grid requires billions of dollars—an amount far exceeding the state treasury or the NEA’s solo financial capacity.

If successful, the TBCB model will offload immense financial risk from the public sector and accelerate sluggish construction timelines. The NEA is now moving into the technical and financial evaluation phase of the submitted Letters of Intent to short-list candidates for the decisive second round of competition.