Electricity Development Center (EDC) was established on July 16, 1993 (2050 Shrawan 1) under the then Ministry of Water Resources (MOWR) to develop and promote electricity sector and to improve financial effectiveness of this sector at the national level by attracting private sector investment. It was later renamed as Department of Electricity Development (DOED) on February 7, 2000 (2056 Magh 24).

The Department is responsible for assisting the Ministry in implementation of overall government policies related to power/electricity sector. The major functions of the Department are to ensure transparency of regulatory framework, accommodate, promote and facilitate private sector's participation in power sector by providing "One Window" service and license to power projects.