India, Nepal sign pact to build new cross-border power transmission

India and Nepal have taken a major step toward strengthening regional energy cooperation by signing two key agreements to develop new cross-border power transmission lines. The agreements were finalized on October 29, 2025, between India’s Power Grid Corporation of India Limited (POWERGRID) and Nepal’s Nepal Electricity Authority (NEA) in New Delhi. The signing ceremony was attended by Union Minister Manohar Lal, Ministry of Power, and Kulman Ghising, Nepal’s Minister for Energy, Water Resources and Irrigation.

Overview of the Agreements

The newly signed agreements aim to enhance electricity trade between the two nations by developing high-voltage transmission lines that will improve grid stability, boost energy exchange, and support regional economic integration.

Key Projects under the Agreement

Two major 400 kilovolt (kV) double circuit transmission lines will be constructed under this initiative. These projects will significantly improve electricity flow between northern India and eastern Nepal.

1. Inaruwa (Nepal) – New Purnea (India) 400 kV Transmission Line

• Length: 26 km in Nepal and 109 km in India
• Type: Double Circuit (Quad Moose) line
• Objective: Enhance power transfer capacity between eastern Nepal and Bihar, supporting regional electricity balancing and reducing grid congestion.

2. Lamki (Nepal) – Bareilly (India) 400 kV Transmission Line

• Length: 33 km in Nepal and 185 km in India
• Type: Double Circuit (Quad Moose) system
• Objective: Improve electricity exchange from western Nepal to northern India and ensure long-term energy reliability.

Financing and Implementation Structure

The transmission projects will follow a joint financing model combining both debt and equity.

• Financing Ratio: 80% debt and 20% equity
• Project Structure: Establishment of two joint venture (JV) entities — one in India and one in Nepal — between POWERGRID and NEA
• Implementation Timeline: Construction to be completed by 2030

These JVs will be responsible for planning, construction, operation, and maintenance of the high-voltage power lines.

Significance of the India-Nepal Energy Cooperation

The new agreements represent a significant advancement in India-Nepal bilateral energy relations, reinforcing commitments made under the India-Nepal Joint Vision Statement on Power Sector Cooperation (2022).

Major Benefits:

• Strengthens cross-border power trade and energy security.
• Supports Nepal’s goal of becoming a net electricity exporter.
• Helps India meet its renewable and clean energy import commitments.
• Enhances regional power grid stability under the BBIN (Bangladesh, Bhutan, India, Nepal) initiative.