Nepal and India on Wednesday signed a joint venture and shareholder agreement to construct two 400 kV cross-border transmission lines aimed at expanding electricity trade between the two countries.

The proposed projects include the Inaruwa (Nepal)–New Purnea (India) 400 kV double-circuit transmission line and the Lamki (Dodhara, Nepal)–Bareilly (India) 400 kV double-circuit transmission line. Officials said the projects are expected to significantly strengthen bilateral power sector cooperation and regional grid connectivity.

Once completed, these new transmission corridors will enhance electricity exchange, improve grid stability, and contribute to sustainable economic growth in both countries.

The agreement was signed in New Delhi in the presence of Energy, Water Resources and Irrigation Minister Kulman Ghising, who also holds the portfolios of Physical Infrastructure, Transport, and Urban Development, and India’s Power Minister Manohar Lal Khattar.

Subhash Kumar Mishra, deputy managing director of the Nepal Electricity Authority (NEA), signed the agreement on behalf of NEA, while Sanjay Kumar Gupta, chief operating officer of International Business at the Power Grid Corporation of India Limited, signed on behalf of Power Grid.

The deal opens the door for establishing joint venture companies between the NEA and the Power Grid to build the two transmission lines.

“This is another milestone in Nepal-India power cooperation,” said Ghising. “The construction of these transmission lines will facilitate electricity exchange not only between the two countries but also across the region. It will also allow Nepal to access international energy markets, boosting domestic and foreign investment in the hydropower sector.”

Khattar said the two new transmission lines would make electricity exchange between Nepal and India more robust, enhancing regional energy security, strengthening grid systems, and contributing to economic growth.

On October 16, Nepal’s Cabinet approved the establishment of two joint venture companies—one in Nepal and the other in India—with investments from the NEA and the Power Grid to construct the transmission lines. The Cabinet also authorised the NEA to invest equity capital in both companies.

The Indian company to be established for the portion of the transmission lines in Indian territory will be 51 percent owned by Power Grid and 49 percent by NEA. Similarly, the company to be established in Nepal for the section within Nepali territory will be 51 percent owned by NEA and 49 percent by Power Grid.

The financing structure for both projects will consist of 80 percent debt and 20 percent equity.

The Inaruwa–Purnea transmission line will span about 26 kilometres in Nepal and 109 kilometres in India, while the Lamki–Bareilly line will extend around 33 kilometres in Nepal and 185 kilometres in India.

According to the 2019 joint technical study prepared by the Nepal–India technical team, the preliminary estimated cost of the Inaruwa–Purnea line is Rs265 million for the Nepali section and INR4.13 billion for the Indian section. The Lamki–Bareilly line is estimated to cost Rs2.57 billion for the Nepali section and INR6.14 billion for the Indian section.

NEA will invest Rs1 billion in the Nepali company and Rs2 billion in the Indian company as part of its equity contribution.

The 11th meeting of the Nepal–India Joint Steering Committee at the secretary level—held on February 11, 2025, in New Delhi—agreed on the construction, operation, and investment modalities for the transmission lines in accordance with the provisions of the Nepal–India Power Trade, Cross-Border Transmission Interconnection and Operation Coordination Agreement.

Following several rounds of discussions, NEA and Power Grid signed a memorandum of understanding on April 22, 2025, to establish the joint venture companies for the projects. Both sides have set a target of completing the construction by 2030.

Currently, the 400 kV Dhalkebar–Muzaffarpur cross-border transmission line—the first of its kind between Nepal and India—is in operation, while the 400 kV Butwal–Gorakhpur line is under construction.

Similarly, the two countries have agreed to construct a 220 kV Chamelia–Jauljibi (Uttarakhand) transmission line.

Nepal is also connected with India through several 132 kV, 33 kV, and 11 kV transmission lines linking Bihar, Uttar Pradesh, and Uttarakhand. Using these existing networks, NEA currently exports about 1,000 megawatts of electricity daily to India and Bangladesh.

Meanwhile, in a separate meeting, Ghising and Khattar discussed bilateral energy cooperation, electricity trade, expansion of cross-border transmission lines, progress of hydropower projects being developed with Indian investment, and long-term partnerships in the energy sector.

Ghising is currently in India to attend the eighth General Assembly of the International Solar Alliance.