The Nepal Weekly 
October 7, 2025
The Nepal Electricity Authority (NEA) has resumed signing Power Purchase Agreements (PPA) with electricity generating parties. The PPA signing had been stalled for months.
Energy professionals say that NEA’s starting of signing PPAs for solar electricity projects bear different importance as NEA has been doing PPAs for hydropower projects mainly. Manoj Silwal, the newly appointed managing director of NEA soon after assuming office has began making decisions on the pending works. So as he has signed PPAs for 24 solar projects with a total capacity of 355 megawatts.
Moreover, the PPA documents have been sent to Electricity Regulatory Commission (ERC) for approval.
It is also noteworthy that NEA had already issued letters of intent for 960 megawatts last year in around November. However, the developer companies had been rushing for PPAs. However, most of them were unable to secure PPAs. After becoming the managing director, Silwal approved the PPAs strictly following due process and directives.
According to the Authority source, projects with a capacity of less than 10 megawatts must begin generation within 18 months of signing the PPPA. For projects with a capacity of more than 10 megawatts, the provision requires them to start generation within 24 months of the PPA. The provisions are mentioned in the contract.
By this time, NEA is set to purchase electricity from solar projects to be located around the 220 kV, 132 kV, and 33 kV transmission lines.
According to a study conducted by the Ministry of Energy, the average cost of solar power was 800 million rupees per megawatt excluding the cost of land. However, with technology becoming cheaper in recent times, the average cost has dropped to around 500 million rupees per megawatt. Due to continuous technological advancements, the cost of solar power is steadily declining. A few years ago, the cost of solar in Nepal was as high as 2 billion rupees per megawatt.
Nepal’s solar potential is immense. Estimates suggest the country can generate up to 50,000 terawatt-hours (TWh) of solar energy annually, which is approximately 7,000 times more than its current electricity consumption. These figures may appear imaginative, but in fact, Nepal is falling short of exploiting the basic potential of solar capacity. Despite this vast potential, the country’s installed solar capacity remains around 107 megawatts as of June 2024.
In Nepal, the silver lining is the growing collective urge to adopt renewable energy sources, including solar energy. However, the structural inefficiency to usher in a transformative transition towards increased contribution of solar in total energy output remains a bottleneck.
Moreover, recently, Minister for Energy Kulman Ghising meeting with private sector representatives led by Renewable Energy Confederation of Nepal has assured the designed proportion of solar electricity and other renewable electricity generating technologies which allows 5 to 10 percent in electricity generation to widen. That has opened a new investment climate.
