MCA-Nepal finalizes contracts for 315 km transmission line, marking major milestone in compact implementation

KATHMANDU: Millennium Challenge Account Nepal (MCA-Nepal) has successfully completed the awarding of all contracts for the 315-kilometer transmission line project under the Millennium Challenge Corporation (MCC) Nepal Compact, a landmark step in strengthening Nepal’s electricity grid and regional energy trade.

On Thursday, MCA-Nepal signed the final contract with Ashish–Bozlar JV for the construction of a 117 km segment stretching from the Lapsiphedi Substation in Kathmandu district to Ratmate Substation in Nuwakot, and further to the New Hetauda Substation in Makwanpur. The contract, valued at approximately USD 76.65 million, was awarded through an international competitive bidding process.

The project includes the design, installation, testing, and commissioning of high-voltage 400 kV transmission lines, and is expected to be completed within a 42-month period. Executive Director of MCA-Nepal, Khadga Bahadur Bisht, and Nirman Gauli, representing Ashish–Bozlar JV, signed the agreement in the presence of MCC and MCA-Nepal officials.

Speaking at the signing ceremony, Diane L. Francisco, MCC Resident Country Director, emphasized the importance of the milestone: “The signing of this contract represents a wonderful milestone in the implementation of the Nepal Compact. This accomplishment is the result of the profound commitment and dedication of the MCA to the successful completion of this critical transmission line and its promise for the future development and prosperity of the Nepali people.”

MCA-Nepal’s Executive Director Bisht echoed the sentiment, stating: “It is a major achievement that all contracts for transmission line construction under the Electricity Transmission Project have now been awarded. This represents a significant step forward in the Compact’s implementation.”

Previous Contracts and Project Scope

Prior to this final agreement, MCA-Nepal had already awarded contracts covering 198 km of transmission lines linking Ratmate (Nuwakot) to New Damauli Substation (Tanahu) and onward to New Butwal Substation (Nawalparasi Bardaghart Susta West), including an 18 km interconnection with the Nepal–India border. Contracts for the construction of the Ratmate, New Damauli, and New Butwal substations had also been finalized earlier.

Landmark MCC Investment in Nepal

The MCC Nepal Compact, a USD 697 million grant program, is one of the largest investments in Nepal’s infrastructure development. It aims to strengthen energy transmission capacity, enhance cross-border electricity trade, and improve road maintenance systems. By expanding the grid and improving regional connectivity, the Compact is expected to unlock private sector investment, promote economic growth, and improve livelihoods.

The 315 km transmission line is regarded as a backbone project for Nepal’s electricity sector, enabling reliable power distribution domestically while also creating the infrastructure needed for electricity exports to India and beyond. Once completed, the line will significantly enhance Nepal’s energy security, reduce power losses, and lay the foundation for long-term sustainable growth in the energy sector.

Officials believe the project will not only strengthen Nepal’s infrastructure but also help position the country as a regional energy hub, leveraging its hydropower potential to attract foreign direct investment and promote economic stability.