Nearly a month after the expected date of the secretary-level meeting between Nepali and Indian energy officials, the meeting is nowhere in sight.

According to Energy Ministry officials, the Indian side is yet to propose a date for the crucial meeting expected to settle implementation and financial modality issues of the New Butwal-Gorakhpur cross-border transmission line, the major component of a $630 million pact between Nepal and US Millennium Challenge Corporation, among others.

“The meeting has been delayed due to the recent elections and probably because of bureaucratic changes in India,” said Prabin Raj Aryal, spokesperson for the Energy Ministry. “We are hopeful that our counterparts will propose a date in August and settle issues bogging down the important project. But we are yet to receive word.”

Initially, energy officials of both countries had decided to hold the seventh meeting of the committees—overseeing the implementation of various power sector deals between the neighbouring countries—in June in Bangalore, India.

Earlier this month, officials of the power utilities of both countries had decided to push the issue of the Butwal-Gorakhpur power line to the seventh secretary-level meet. However, no concrete terms have been fixed yet, apart from a broad agreement that the lines would be built by a commercial entity.

Talk of a commercial entity had surfaced after the Indian side rejected Nepal’s proposal to build the power line under a government-to-government financial model.

Officials now have proposed to form a joint venture between Indian and Nepali entities with an equal portion of grants and interest-free loans from the respective governments. But an agreement on the proposed investment modality is yet to be reached because of questions over the commercial viability of the arrangement.

According to Aryal, the Energy Ministry is still evaluating financing options and is in no position to call a meeting or set a date without receiving word from the Indian side.

The construction of the 135-km-long 400 kV transmission line will allow the power utility to export electricity procured at a lower rate during the rainy season when output swells due to high water levels in the rivers, and import power during the dry season when output drops.

Apart from hindering the progress of the multimillion electricity transmission and strategic road project, lack of an agreement will also limit the options for power trade with India, particularly deferring the export of surplus energy which Nepal is poised to produce in the upcoming year.

With this in mind, the government has also prioritised the initiation of the project in the 2019-20 budget.

The Energy Ministry has also accorded high priority to the project as it will allow efficient distribution of surplus power and imported power to high energy consuming cities like Bhairahawa, Butwal, Pokhara and Narayangadh.

Also, the lines can be used to evacuate energy produced in the Kali Gandaki, Marshyangdi and Trishuli corridors where there is a high concentration of power schemes.

As per a report issued by the National Renewable Energy Laboratory’s Strategic Energy Analysis Centre of the US, Butwal is a strategic location for cross-border energy trade between India and Nepal because of its proximity and ability to connect with India’s Uttar Pradesh state and the Northern Regional Load Dispatch Centre via Gorakhpur where power demand is high during the monsoon.

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