New Delhi, October 29 — Nepal and India have signed a Joint Venture and Shareholders’ Agreement to construct the Inaruwa–Purnia and Lamki–Dododhara–Bareilly 400 kV cross-border transmission lines.
The agreement was signed in New Delhi on Wednesday in the presence of Nepal’s Minister for Energy, Water Resources and Irrigation, Physical Infrastructure and Transport, and Urban Development, Kulman Ghising, and India’s Minister of Power, Manohar Lal Khattar.
The signing ceremony was attended by Nepal’s Ambassador to India, Shankar Prasad Sharma; India’s Power Secretary, Pankaj Agarwal; Additional Secretary from India’s Ministry of External Affairs; Joint Secretary from Nepal’s Ministry of Energy, Water Resources and Irrigation, Sagar Raj Gautam; among others.
The agreement was signed by Subhash Kumar Mishra, Deputy Executive Director of the Nepal Electricity Authority (NEA), and Sanjay Kumar Gupta, Chief Operating Officer of International Business at Power Grid Corporation of India Limited. With the signing of the joint investment agreement, the way has been paved for the establishment of a company to construct both transmission lines through investments from the NEA and Power Grid.
In the program, Minister Ghising stated that moving forward with the construction of two additional cross-border transmission lines marks another significant milestone for bilateral and regional electricity trade. He mentioned that the construction of these cross-border transmission lines would create a foundation for exporting electricity produced in Nepal to India and the broader region, thereby enhancing Nepal’s access to the international energy market and facilitating both domestic and direct foreign investment in Nepal’s hydropower sector.
Indian Power Minister Khattar stated that upon the completion of the two additional cross-border transmission lines, the electricity exchange between Nepal and India would be significantly strengthened. He added that this would also enhance regional energy security, lead to the development of a more robust power grid, and contribute to the economic growth of both countries.
The Council of Ministers, in its meeting on 16th October, had granted approval to the Nepal Electricity Authority (NEA) to establish two joint venture companies—one in Nepal and one in India—with investments from the NEA and Power Grid, and to make equity investments in those companies for the construction of the transmission lines.
In the program, Minister Ghising stated that the construction of two additional cross-border transmission lines would create a foundation for exporting electricity produced in Nepal to India and the broader region, expanding Nepal’s access to the international energy market and further facilitating both domestic and direct foreign investment in Nepal’s hydropower sector.
For the construction of the sections of the two cross-border transmission lines that fall within Indian territory, the joint venture company to be established in India will have a shareholding of 49% by the Nepal Electricity Authority (NEA) and 51% by Power Grid. Similarly, for the sections within Nepalese territory, the joint venture company to be established in Nepal will have a shareholding of 51% by the NEA and 49% by Power Grid.
The construction of the two transmission lines will be financed with 80% debt and 20% equity capital. Of the Inaruwa–Purnia transmission line, approximately 26 kilometers will lie within Nepalese territory and 109 kilometers within Indian territory. Similarly, of the Lamki–Bareilly transmission line, about 33 kilometers will fall within Nepalese territory and 185 kilometers within Indian territory.
According to a study report prepared in 2019 by the Nepal–India Joint Technical Team, the preliminary cost of the Inaruwa–Purnia transmission line is estimated at ₹265 million for the Nepalese section and ₹4.13 billion for the Indian section.
Similarly, the preliminary cost of the Lamki–Bareilly transmission line is estimated at Rs257 million for the Nepalese section and Rs614 million for the Indian section. The Nepal Electricity Authority (NEA) will make equity investments of Rs100 million and Rs200 million, respectively, in the joint venture companies to be established in Nepal and India from its own resources.
