Urja Khabar
KATHMANDU; Electricity leakage in the distribution system of the Nepal Electricity Authority (NEA) increased to 10.44 percent in the last fiscal year (FY 2025/26), despite significant expansion of the country’s power distribution infrastructure.
According to NEA records, the distribution leakage rate stood at 10.39 percent in the previous fiscal year. The marginal increase indicates that the authority has yet to make meaningful progress in reducing electricity losses even as it expands its distribution network and electricity sales.
During the review year, the NEA sold 12.376 billion units of electricity, an increase of 9.64 percent. However, around 1.44 billion units were lost through the distribution system over the year.
The financial impact of the leakage is substantial. The NEA received an average of Rs 9.69 per unit from electricity sales for distribution in FY 2025/26. At this rate, the electricity lost through distribution leakage represents potential revenue of approximately Rs 14 billion.
The increase in leakage comes despite a major expansion of the distribution network. The NEA added 192.52 circuit kilometres of 33 kV lines, 1,164.76 circuit kilometres of 11 kV lines and 6,699.77 circuit kilometres of 0.4/0.23 kV lines during the year.
Likewise, 7,323 distribution transformers were installed, increasing the total transformer capacity by 916.19 MVA across the country. The authority also brought 10 new 33/11 kV substations into operation.
Despite these additions to the distribution infrastructure, electricity losses failed to decline, raising concerns over the effectiveness of the NEA’s efforts to improve distribution efficiency.
Meanwhile, NEA’s revenue from electricity sales increased by 9.76 percent to Rs 119.88 billion during the review period. Per capita electricity consumption also rose from 394.69 units to 418.31 units.
There was, however, an improvement in the operating efficiency of the distribution system. According to the NEA, distribution-related operation and maintenance costs fell from Rs 1.74 per unit to Rs 1.06 per unit during the year.
The decline in operating and maintenance costs suggests improved efficiency in managing the distribution network, but the continued rise in electricity leakage indicates that infrastructure expansion alone has not translated into lower distribution losses.
