Nepal Electricity Authority wants to develop the Nepal section of the 400kV New Butwal-Gorakhpur Cross Border Transmission Line which is supposed to be constructed under the compact programme of the Millennium Challenge Corporation.

The state-owned power utility body recently wrote to the Millennium Challenge Account Nepal (MCA-Nepal), a special purpose vehicle formed to implement the projects under the MCC Compact, asking the latter to drop the 18km-long section of the project from its plan and let the NEA undertake the construction of the section.

“We sent a letter about 7-10 days ago asking MCA-Nepal to allow the NEA to construct the 18-km section of the project,” said Dirghayu Kumar Shrestha, chief of the transmission directorate of the NEA. “The main reason behind our request to the MCC is we want to complete the construction of the 18-km stretch simultaneously with the Indian side, possibly within the next two years.”

Nepal is expected to add more power to the country’s power system in the next two years and in the event of failure to export power to India clubbed with the absence of electrical infrastructure to store additional electricity, NEA worries about spillage.

According to the NEA, the total installed capacity of power projects currently operating totals 2,190MW.

In an article in the Post in May, Prabal Adhikari, power trade director at the NEA wrote: “The installed generation capacity to be added to Nepal’s system is estimated to be 851.5MW for the fiscal year 2021-22 and 705.4MW for fiscal 2022-23, 706.8MW for fiscal 2023-24, 551.1MW for fiscal 2024-25, 787.2MW for fiscal 2025-26, and 976.7MW for fiscal 2026-27.”

Contingent upon more power being added to the power system, the power demand will, however, remain less than generated power. The projected peak power demands by fiscal 2022-23 stand at 2031MW, according to the NEA. By fiscal 2025-26, Nepal will have 2,456MW of maximum surplus power and 14,022 million units of annual surplus energy available for export, according to Adhikari.

In order to export such a large quantity of power, the country needs additional cross-border transmission lines to ensure that available power does not go to waste due to spillage. Currently, the Dhalkebar-Muzaffarpur Transmission line is the only high-capacity cross-border transmission line which can transmit around 1,000MW of electricity.

Since the MCA-Nepal has multiple sections of the transmission line to be constructed, the NEA is unsure if the compact would be able to complete the entire project in the next two years, according to Shrestha.

Under the MCC compact, a 315km double circuit 400kV transmission line will be constructed. Besides New Butwal-India Border (18km), four other segments of power lines will be built—New Butwal-New Damauli (90km), New Damauli-Ratmate (90km), Ratmate-New Hetauda (58km), and Ratmate-Lapsephedi (59km).

“If we construct the New Butwal-India Border section of the cross-border power line, we can dedicate time and resources to construct this project as early as possible,” said Shrestha.

Khadga Bahadur Bisht, executive director of MCA-Nepal confirmed that his office received the letter from the NEA. “But there has not been any discussions on it yet and no decision has been taken,” he said. “As the New Butwal-India Border section of the transmission line is supposed to be implemented under the MCC Compact, it will require correspondence between the Nepal government and the MCC too.”

Bisht, however, acknowledges the urgency with which the NEA wants to complete the construction of 400kV New Butwal-Gorakhpur Cross Border Transmission Line given that managing the growing supply of electricity to the national grid, especially during the wet season, is going to be difficult.

“Our process is longer. We also don’t construct a single section at a time, we don’t call for tenders for a single section. Taking all that into consideration, it may take around four years to complete this project under us,” he said.

Power Grid Corporation of India which will be a joint venture partner with NEA to construct the power line on the Indian territory has already issued a tender for constructing this section though the two entities are yet to register a joint venture company in India for the purpose of developing this project.

Shrestha, chief of the transmission directorate of the NEA, said that the tender was issued to fasttrack the process as the registration process would take some time.

In May, the cabinet gave a nod to the NEA to invest its money in a joint venture company to be set up in India. According to Shrestha, the NEA has already nominated NEA officials who will sign the memorandum of association and article of association.

If the NEA gets a go-ahead from MCA-Nepal on its proposal, it aims to start the work on the New Butwal-Gorakhpur Cross Border Transmission Line with high priority. Although the budget is yet to be allocated for this project under the NEA, Shrestha said it would not be difficult to generate funds for this project. “We can allocate resources from our own income or seek funding from the government if we are to construct this section of the transmission line,” he said.