Work on the Indian section of the proposed New Butwal-Gorakhpur Cross Border Transmission Line is likely to start in the next two months with contractors for both substations and power line having been selected, a senior official of the Nepal Electricity Authority said.

Prime Minister Pushpa Kamal Dahal and his counterpart Indian Prime Minister Narendra Modi had virtually held a groundbreaking ceremony for the 400kV cross border power line during Dahal’s New Delhi visit from May 31 to June 3.

“I expect that the contractor will be mobilised in the field in the next one or two months,” said Dirghayu Kumar Shrestha, chief of transmission directorate at the NEA.

“The contractors for both substations and transmission lines have been selected but the company is yet to sign an agreement with the contractor.”

Shrestha, who is also a board member at the Butwal-Gorakhpur Cross Border Power Transmission Limited, a joint venture company established in India, said that it could take up to two months to sign the contract.

Butwal-Gorakhpur Cross Border Power Transmission Limited is an equal-share joint venture between Nepal Electricity Authority (NEA) and Power Grid Corporation of India.

The two countries have agreed to complete construction of the 120 km power line by March 2025. The Nepal section of the line that is around 20km will be funded by the Millennium Challenge Corporation (MCC) Nepal Compact.

Currently, the 400KV Dhalkebar-Muzaffarpur Cross-border Transmission Line, is the only high capacity cross border power line between two countries. It is being used for electricity trade between the two neighbours. Nepali officials said that an additional cross border power line is a must to enable Nepal to export more power in the days to come.

The Dhalkebar-Muzaffarpur can transmit up to 1000MW. Nepal and India have agreed to transmit a maximum 800MW through this line.

By mid-July 2025 when the New Butwal-Gorakhpur Cross Border Transmission Line is expected to be completed, Nepal is projected to generate 5,251MW while domestic demand is projected to remain at 2,568MW, according to the NEA. So, additional transmission lines will be required to export more power to India, according to the NEA officials.

According to the NEA, the New Butwal-Gorakhpur line can transmit up to 3500MW.

Besides this, the two countries during the energy secretary-level Joint Steering Committee meeting in February, have also agreed to develop two other cross-border transmission lines—400kV Inaruwa (Duhabi-Purnia, Bihar) and 400kV New Lamki (Dodhara-Bareli, Uttar Pradesh)—by 2027-2028 and 2028-2029, respectively, according to the energy ministry’s statement.

During the meeting, the two countries had also agreed to trade power through the 400kV Dhalkebar-Sitamarhi Transmission Line being built by the SJVN Arun-3 Power Development Company Pvt Ltd for evacuating the power generated by the 900MW Arun 3 Hydropower Project. A joint technical team formed by the two countries has been instructed to study the spare capacity of the transmission line so that power generated from other projects could also be evacuated through this line.

Once all these projects are built, there will be five high-capacity cross-border power lines, which will facilitate smooth trade of power between the two countries.