Nepal and India have signed a Joint Venture and Shareholders' Agreement to construct the Inaruwa-Purniya and Lamki-Dodhara-Bareli 400 kV cross-border transmission lines.

The agreement was signed in New Delhi on Wednesday in the presence of Minister for Energy, Water Resources and Irrigation of Nepal, Kul Man Ghising, and Minister for Power of the government of India, Manohar Lal Khattar.

Deputy Managing Director of Nepal Electricity Authority Subhash Kumar Mishra and Chief Operating Officer of Power Grid Corporation of India Limited, International Business, Sanjay Kumar Gupta, have signed the agreement on behalf of their respective governments.

According to a press statement issued by Minister Ghising’s secretariat, the signing ceremony was attended by Ambassador of Nepal to India Shankar Prasad Sharma, Secretary of the Ministry of Power, Government of India, Pankaj Agrawal, and other senior officials from the governments of Nepal and India.

With the signing of the joint venture agreement, the way has been opened for the establishment of a company for the construction of both transmission lines with the investment of the NEA and Power Grid.

On the occasion, Minister Ghising said that the construction of two more cross-border transmission lines is another important milestone for bilateral and regional electricity trade.

He said that the construction of cross-border transmission lines will pave the way for exporting electricity generated in Nepal between the two countries and at the regional level, and it will be easier to bring domestic and direct foreign investment in Nepal's hydropower by increasing Nepal's access to the international energy market.

Indian Minister for Power Khattar said that after the construction of two more cross-border transmission lines is completed, the electricity exchange between Nepal and India will be substantially strengthened, while improving regional energy security and building a strong grid, which will contribute to the economic growth of the neighbouring country.

The meeting of Council of Ministers held on October 16 had approved the establishment of two joint companies in both Nepal and India with the investment of the NEA and Power Grid for the construction of transmission lines and the NEA to invest equity in these companies.

The NEA will hold 49 per cent and Power Grid 51 per cent shares in the joint company to be established in India for the construction of the section of the two cross-border transmission lines in Indian territory.

Similarly, the NEA will hold 51 per cent and Power Grid 49 per cent shares in the joint company to be established in Nepal for the section in Nepali territory.

Financial management for the construction of the two transmission lines will be arranged with 80 per cent debt and 20 per cent equity.

Of the Inaruwa-Purniya transmission line, about 26 kilometres will fall within Nepal’s territory and 109 kilometres within Indian territory.

Similarly, of the Lamki-Barelitransmission line, about 33 kilometres will lie within Nepal’s territory and 185 kilometres within Indian territory.

According to a study report prepared by the Nepal-India Joint Technical Team in 2019, the initial cost of the Inaruwa-Purniya transmission line is estimated at IRs 2.65 billion for the Nepal side and IRs. 4.13 billion for the Indian section.

Similarly, the initial cost of the Lamki-Barelitransmission line is estimated at IRs. 2.57 billion for the Nepali section and IRs. 6.14 billion for the Indian section. The NEA will invest equity of Rs. 1 billion and Rs. 2 billion in the joint companies to be established in Nepal and India from its own resources.

In accordance with the provisions of the Agreement on Electricity Trade, Cross-border Transmission Line Coordination and Operation between Nepal and India, the meeting of the Joint Steering Committee of the Energy Secretaries of the two countries held in New Delhi, India on 11 February 2025 agreed on the construction and operation and investment modalities of the transmission line.

After various rounds of discussions between the NEA and Power Grid, a Memorandum of Understanding (MoU) was signed on 22 April 2025 to establish a joint company for the construction of the transmission line.

The construction of both lines is targeted to be completed by 2030. The first 400 kV Dhalkebar-Muzaffarpur cross-border transmission line is currently operational for electricity trade between Nepal and India.

Similarly, the second cross-border transmission line Butwal-Gorakhpur is under construction.

The two countries have reached an agreement to build a 220 kV transmission line from Chameliya in Nepal to Jauljibi in Uttarakhand, India. Similarly, there are 132, 33 and 11 kV transmission lines connected to the Indian states of Bihar, Uttar Pradesh and Uttarakhand.

The NEA is currently exporting 1,000 MW of electricity daily to India and Bangladesh using the 400 and 132 kV transmission line infrastructure.

Minister Ghising meets Indian Power Minister Khattar

Minister for Energy, Water Resources and Irrigation, Physical Infrastructure and Transport, and Urban Development Kul Man Ghising met with Indian Power Minister Manohar Lal Khattar on Wednesday.

Minister Ghising, who is in New Delhi to participate in the 8th General Assembly of the International Solar Alliance (ISA), held talks with his Indian counterpart at the Ministry of Power.

During the meeting, the two ministers discussed energy cooperation between Nepal and India, electricity trade, expansion of transmission lines, the progress of hydropower projects under construction with Indian investment, and the long-term partnership between the two countries in the energy sector.

The meeting was also attended by Ambassador of Nepal to India Shankar Prasad Sharma, Secretary of the Ministry of Power, government of India, Pankaj Agrawal, Additional Secretary at the Ministry of External Affairs, and Joint Secretary of the Ministry of Energy, Water Resources and Irrigation, government of Nepal, Sagar Raj Gautam, among others.

By Laxman Kafle