The Ministry of Energy, Water Resources, and Irrigation has dismissed recent news reports about Nepal-India electricity trade as false and unfounded.

The Ministry has refuted claims made in certain media outlets that Nepal will be solely responsible for paying the transmission line charge for 25 years to connect with India, and that Nepal will have to pay 8 to 10 billion rupees to India even if India does not purchase any electricity from Nepal in the next five years. The Ministry has expressed serious concern over these reports.

According to the Ministry, regarding the news published in some media outlets claiming that Nepal alone will have to pay the transmission line charge for 25 years to connect with India and that even if India does not purchase a single unit of electricity from Nepal in the next five years, Nepal will still have to pay 8 to 10 billion rupees to India, this Ministry’s serious attention has been drawn.

According to the agreement between Nepal and India to construct 400 kV cross-border transmission lines for electricity import and export between the two countries, the Dhalkebar–Muzaffarpur 400 kV cross-border transmission line is currently in operation, while the New Butwal–Gorakhpur 400 kV cross-border transmission line is under construction.

For the construction and operation of the Dhalkebar–Muzaffarpur transmission line’s Nepali and Indian sections, separate joint venture companies have been established in both Nepal and India. In the joint company established in Nepal, the Nepal Electricity Authority (NEA) holds 50% shares, while in the joint company established in India, the NEA holds 16% shares. Likewise, for the construction of the Indian section of the New Butwal–Gorakhpur transmission line, a joint venture company has been established in India in which the NEA holds 50% shares.

To raise investment for both of these cross-border transmission lines, the NEA has made a “capacity booking” commitment for 25 years.

Following this same model, during the 12th meeting of the Joint Steering Committee (JSC) between Nepal and India, it was decided to construct two additional 400 kV cross-border transmission lines - Inaruwa–Purnea and Dododhara–Bareilly - in joint investment. To implement this decision, a Joint Venture and Shareholders Agreement has recently been signed between the NEA and the Power Grid Corporation of India Limited (PGCIL) regarding the establishment of joint venture companies.

A press statement issued by Sandeep Kumar Dev,Spokesperson and Joint Secretary of Ministry of Energy, Water Resources and Irrigation, said,” as per this agreement, in the joint companies to be established for the construction of the Nepali and Indian sections of these two transmission lines, the NEA will hold 51% shares in one and 49% shares in the other. For both of these transmission lines, the NEA has also made a 25-year capacity booking.

However, the transmission service charge is not to be paid by Nepal to India, as reported in the news, but to the joint venture companies, in which the NEA itself is an equal shareholder. The NEA will also receive dividends from these companies in proportion to its shareholding.

So far, the NEA has signed Power Purchase Agreements (PPA) for a total capacity of 11,433 MW. Among the total applications received for 12,646 MW of power purchase and sale, Grid Connection Agreements for 5,230 MW have been completed.

For ensuring the market for electricity generated by the projects that have signed PPAs and those that have applied for PPAs, it is extremely important to complete the construction of the above-mentioned cross-border transmission lines on time.

Furthermore, since such transmission lines are constructed purely for commercial purposes, the general public is requested not to be misled by the misleading news interpretations published in the media.