A political economy analysis of electricity tariff restructuring in Nepal
This paper employs a political economy framework to analyze the politics of tariff restructuring—both the power purchase agreement (PPA) and the retail tariff. It identifies the interests of actors and institutions, and the strategies they used to navigate and affect an outcome. The first section establishes some background by exploring key issues pertaining to the tariff restructuring. It does so by mapping stakeholders’ interests in the context of a rapidly developing hydropower sector in Nepal. The section that follows explains the involvement of The Asia Foundation (the Foundation) and its implementing partner, the Niti Foundation (Niti). The third section examines the turn of events that resulted in the decision to allow a hike in PPA rates, then outlines the activism that culminated in a hike in the consumer tariff. In conclusion, the paper critically reflects on Niti’s engagement in the tariff restructuring process, and discusses the implications for future engagement in the policy arena.