Nepal and India will hold discussions on developing new cross-border transmission lines as the two countries have moved in the direction of creating a common electricity market in South Asia. The topic will be discussed in the upcoming meetings of the joint secretary-level Joint Working Group and secretary-level Joint Steering Committee to be held in India. “A few potential cross-border lines have been identified and there will be a discussion on which will be developed during the next bilateral meeting,” said a senior official at Ministry of Energy, Water Resources and Irrigation. The Nepal Electricity Authority (NEA) has proposed to develop a 400KV transmission line connecting Inaruwa of Nepal and Purnia of Bihar, India. Similarly, the 400kV New Lamki (Dodohara)-Bareli Cross Border Transmission Line has also been planned with the NEA preparing a comprehensive design of this project.

Currently, the 400KV Dhalkebar-Muzaffarpur Cross-border transmission line is the only high-capacity power line for power trade between the two countries which can transmit around 1,000MW of electricity at a time.

Nepal and India have already moved ahead to develop the New Butwal-Gorakhpur Transmission Line which will have a capacity of transporting power as much as 3,500MW. NEA and the Power Grid Corporation of India have established a joint venture company in India to construct this transmission line in the Indian territory. The Millennium Challenge Account (MCA) Nepal, a special purpose vehicle established to carry out the MCC Compact project, will build the 18 kilometers section of this cross-border line from the New Butwal substation to the Nepal-India border. MCA Nepal has already invited tenders from interested contractors for the purpose. The Arun III Hydropower Project, which is being developed by an Indian company SJVN Limited, is also building its own dedicated cross-border transmission line between Nepal and India to export electricity generated by the project. With more electricity that will be generated by various power projects across the country coming to the national grid in the current and next fiscal years, there is an urgent need to initiate the construction of more cross-border transmission lines between Nepal and India. The two countries are going to discuss a new cross-border line at a time when there is a growing concern in Nepal that the lack of cross-border transmission infrastructure could be a hindrance to realizing the potential of power exports. During the wet season in 2022, Nepal suffered spillage of power as domestic consumption slumped while there was approval for exporting power from India. According to NEA, over 700MW is expected to be added to the national grid in the current fiscal 2022/23 while over 550MW is expected to be added in the next fiscal year 2023/24. Officials say it has become necessary to export more power in the upcoming days to prevent the wastage of surplus power. The state-owned power utility body sold electricity worth Rs11.16 billion to India beginning June last year until it stopped the exports in the third week of December last year owing to a decline in production during the dry season. NEA has set a target of selling power worth Rs 16 billion in the current fiscal year 2022/23 after resuming export in June next year. The then Energy Minister Pampha Bhusal told the previous House of Representatives in June last year that there was a possibility of exporting more than Rs 70 billion worth of electricity to India in the next five years. India has allowed Nepal to sell 452.6MW of power generated by eight hydropower projects in India’s energy market. But during the last meeting of the Joint Working Group and Joint Steering Committee in February 2022, India had agreed to increase the volume of power to be exported through Dhalkebar-Muzaffarpur Transmission once the 400kV Hetauda-Dhalkebar-Inaruwa Transmission Line is completed in 2023. A joint technical team was also supposed to study the possibility of developing a cross-border line between Nepal and the West Bengal State of India as per the agreement reached during the last bilateral meeting in February last year.