Nepal, India sign JV and shareholder agreement to build two new cross-border 400 kV transmission lines

NEW DELHI: Nepal and India have signed a Joint Venture (JV) and Shareholders’ Agreement to construct two major 400 kV cross-border transmission lines—Inaruwa–Purnea and Lamki–Dododhara–Bareilly—marking a significant milestone in expanding long-term regional electricity trade and energy connectivity.

The agreement was signed in New Delhi on Wednesday in the presence of Nepal’s Minister for Energy, Water Resources and Irrigation, Physical Infrastructure and Transport and Urban Development Kul Man Ghising, and India’s Minister of Power Manohar Lal Khattar. Minister Ghising is in India to attend the 8th Assembly of the International Solar Alliance (ISA).

The signing ceremony was attended by Nepal’s Ambassador to India Dr. Shankar Prasad Sharma, India’s Power Secretary Pankaj Agarwal, Additional Secretary of India’s Ministry of External Affairs, and Nepal’s Joint Secretary Sagar Raj Gautam.

On behalf of Nepal Electricity Authority (NEA), Deputy Executive Director Subhash Kumar Mishra signed the agreement, while Sanjay Kumar Gupta, Chief Operating Officer of International Business at Power Grid Corporation of India Ltd (PGCIL), signed from the Indian side.

Joint Investment Structure Finalized

The agreement paves the way to establish two joint venture companies, one in Nepal and one in India, to execute and operate the transmission lines:

The two transmission lines will be financed through 80% debt and 20% equity capital. NEA will invest NPR 1 billion in the Nepal-based JV and NPR 2 billion for the Indian JV from its own resources.

Transmission Line Specifications and Cost Estimates

Inaruwa–Purnea Line:

26 km in Nepal, 109 km in India

Estimated cost: INR 2.65 billion (Nepal) and INR 4.13 billion (India)

Lamki–Dododhara–Bareilly Line:

33 km in Nepal, 185 km in India

Estimated cost: INR 2.57 billion (Nepal) and INR 6.14 billion (India)

Both transmission lines are scheduled to be completed by 2030.

Strategic Importance: Expanding Nepal’s Electricity Export Capacity

Minister Ghising stated that the new transmission infrastructure will play a critical role in scaling Nepal’s electricity exports to India and beyond, improving access to regional and international power markets.

He emphasized that the projects will strengthen Nepal’s position as a clean energy supplier, attract foreign and domestic investment in hydropower, and enhance regional grid stability.

Minister Khattar highlighted that the two new lines will significantly enhance bilateral power exchange capacity, contribute to regional energy security, and support economic growth in both countries.

Background and Progress

Nepal’s Cabinet on 30 Asoj 2082 approved NEA to invest jointly with PGCIL to establish the JV companies.

The bilateral Joint Steering Committee at the Energy Secretary level agreed on the financing and construction modality during its meeting in New Delhi on 11 February 2025.

An MoU to form the JV was signed on 22 April 2025 after several rounds of technical discussions.

Nepal and India currently operate the 400 kV Dhalkebar–Muzaffarpur cross-border transmission line, while the 400 kV Butwal–Gorakhpur line is under construction. A 220 kV Chameliya–Jauljibi line has also been agreed upon. In addition, several lower-voltage (132 kV, 33 kV, 11 kV) transmission links connect Nepal to Indian states including Bihar, Uttar Pradesh, and Uttarakhand.

Nepal is currently exporting around 1,000 MW of electricity daily to India and Bangladesh through the 400 kV and 132 kV cross-border grids.

Separate Ministerial Talks on Broader Energy Cooperation

Earlier on Wednesday, Minister Ghising also held bilateral talks with Minister Khattar at the Indian Ministry of Power. Discussions covered:

Expanding electricity trade agreements

Progress of Indian-invested hydropower projects in Nepal

Future cross-border transmission expansion

Long-term strategic partnership in regional energy markets

Senior officials from both sides attended the dialogue.