The state-owned power utility, Nepal Electricity Authority and the Central Electricity Authority of India are scheduled to meet in December to finalise the funding and implementation modalities for the New Butwal Gorakhpur Cross-Border Transmission Line Project. 

As mandated by the fifth energy secretary-level joint steering committee meeting held between Nepal and India in April, the two authorities have to study the power transfer requirements of both countries and recommend the funding and operation modalities. According to the Nepal Electricity Authority (NEA), their Indian counterpart has already communicated with them to hold the meeting. “They have proposed to hold the crucial meeting to finalise the funding and operation modalities by the end of December,” said NEA Spokesperson Prabal Adhikari. “We will soon visit India to finalise the deal.”  

Although both countries have agreed that the Nepal portion of the 400kV cross-border power line will be constructed by Nepal using its own resources, they are yet to finalise the modality for the construction of the line on Indian territory. 

“In regard to the Indian portion of the power line, both sides agreed that the line would be required by Nepal to import power from India in the initial few years and subsequently the power would be exported from Nepal to India,” reads the minute of the fifth joint steering committee (JSC) meeting. 

“Keeping this in view, the CEA and the NEA shall study and suggest quantum of utilisation of transmission capacity through the power line vis-a-vis its implementation/funding modalities.” 

Based on the recommendation from the NEA and Central Electricity Authority (CEA), the sixth joint steering committee (JSC) meeting scheduled in January will decide how funds will be arranged for the construction of the cross-border power and how it will be operated. Top officials of the two authorities had their first meeting in July. But it ended inconclusively after the CEA officials present in the meeting informed their Nepali counterparts that they needed consent from their higher authorities to finalise the modalities.  

The Energy Ministry is anxious to execute the project as Nepal has already arranged the financing to build its portion of the transmission line. It is planning to construct the transmission line with a grant provided by Millennium Challenge Corporation (MCC), an independent US government agency. An agreement to this effect has been signed, but the Nepal government must get the Indian government’s consent over the financial terms and operational modality for the agreement to enter into force, as per the preconditions set by MCC.

Delays in reaching a conclusion regarding the financial and operational modalities will affect the implementation of the Electricity Transmission Project being executed by a $500 million grant from the MCC, which includes the construction of approximately 300 km of double-circuit 400 kV transmission lines in central Nepal.

There are five components in the project—one segment starting from the northeast of Kathmandu at Lapsiphedi and extending to the west of Kathmandu near Ratmate, a second segment from Ratmate to the industrial town of Hetauda located south of Kathmandu, a third segment from Ratmate to Damauli in the west, a fourth segment from Damauli to Butwal in the southwest, and a fifth segment from Butwal to the Indian border which is part of the cross-border transmission line.