Nepal and India Sign Agreement to Build Two Cross-Border Transmission Lines

Nepal and India have signed a landmark agreement to construct two 400 kV cross-border transmission lines: the Inaruwa–Purnia and Lamki (Dododhara)–Bareilly lines. The agreement, signed in New Delhi on Wednesday, paves the way for the establishment of two joint venture companies in each country to implement the projects.

According to Nepal’s Ministry of Energy, Water Resources and Irrigation, the agreement between the Nepal Electricity Authority (NEA) and Power Grid Corporation of India will enable the formation of joint companies to develop both transmission lines under a shared investment model. The signing took place during Energy Minister Kulman Ghising’s official visit to India.

Shareholding Structure

As per the agreement, the joint venture company to be established in India for the construction of the sections located within Indian territory will have a 51 percent shareholding by Power Grid Corporation and 49 percent by the NEA. Conversely, the company to be established in Nepal for the construction of the sections on the Nepali side will have a 51 percent NEA ownership and 49 percent ownership of Power Grid Corporation.

The projects will be financed through 80 percent debt and 20 percent equity. The Inaruwa–Purnia transmission line will include approximately 26 kilometers in Nepal and 109 kilometers in India, while the Lamki–Bareilly line will span about 33 kilometers in Nepal and 185 kilometers in India. Both transmission lines are targeted for completion by 2030.

Remarks from Energy Ministers

During the signing ceremony, Minister Ghising described the agreement as a significant milestone for bilateral and regional electricity trade. He said the construction of the new cross-border lines would enhance Nepal’s capacity to export surplus electricity to India and the broader international market, promoting both domestic and foreign investment in Nepal’s hydropower sector.

India’s Minister of Power, Manohar Lal Khattar, emphasized that the completion of the two new lines would strengthen electricity exchange between Nepal and India, improve regional energy security, and contribute to the economic growth of both nations through a more robust power grid.

Need for New Transmission Lines

India recently signed a long-term agreement to purchase 10,000 MW of electricity from Nepal over the next decade. However, without the construction of high-capacity cross-border transmission lines, the export of such large volumes of power remains constrained.

At present, only the 400 kV Dhalkebar–Muzaffarpur line connects the two countries for major power exchange, allowing up to 1,000 MW of transmission. Around a dozen smaller-capacity lines (132 kV, 33 kV, and 11 kV) facilitate limited electricity exchange of only a few hundred megawatts.

Currently, Nepal and India are connected through the operational Dhalkebar–Muzaffarpur 400 kV line, while the second major line, Butwal–Gorakhpur, is under construction. The two countries have also agreed to build a 220 kV Chameliya–Jhulaghat (India’s Uttarakhand) line. Additional cross-border lines link Nepal with the Indian states of Bihar, Uttar Pradesh, and Uttarakhand.

The Nepal Electricity Authority is presently exporting up to 1,000 MW of electricity daily to India and Bangladesh through its 400 kV and 132 kV transmission infrastructures.