The Nepal Electricity Authority (NEA) and the Central Electricity Authority (CEA) of India have not yet finalised the funding and implementation modalities for the New Butwal Gorakhpur Cross-Border Transmission Line Project.

As mandated by the fifth energy secretary-level joint steering committee (JSC) meeting held between Nepal and India in April, the NEA and the CEA are required to recommend the procedures before its sixth meeting scheduled for October.

The two entities were supposed to study the power transfer requirements of both countries and recommend the funding modalities accordingly. However, they have not reached an agreement with just over a month left for the sixth JSC meeting.

In July, the NEA and the CEA held a meeting where the Nepali side led by NEA Managing Director Kulman Ghising proposed an operation modality under which Nepal would use the 400 kV power line to import electricity from India for the first three years and to export electricity thereafter. 

The CEA didn’t reveal its plan during the conference. It recently informed the NEA that the operation and financing modalities would be decided by the Indian Power Ministry and Ministry of External Affairs.

Ghising told the Post that a breakthrough in the talks was not possible before the next energy secretary-level meeting. “As the CEA is waiting for the decisions of two Indian ministries, it might take some time to reach an agreement regarding the operation and funding modalities,” said Ghising.  

The Energy Ministry is anxious to execute the project as Nepal has already arranged the financing to build its portion of the transmission line. It is planning to construct the transmission line with a grant provided by Millennium Challenge Corporation (MCC), an independent US government agency. An agreement to this effect has been signed, but the Nepal government must get the Indian government’s consent over the financial terms and operational modality, as per the preconditions set by MCC.

Delays in reaching a conclusion regarding the financial and operational modalities will affect the implementation of the Electricity Transmission Project being executed by a $500 million grant from the MCC which includes the construction of approximately 300 km of double-circuit 400 kV transmission lines in central Nepal.

There are five components in the project—one segment starting from the northeast of Kathmandu at Lapsiphedi and extending to the west of Kathmandu near Ratmate, a second segment from Ratmate to the industrial town of Hetauda located south of Kathmandu, a third segment from Ratmate to Damauli in the west, a fourth segment from Damauli to Butwal in the southwest, and a fifth segment from Butwal to the Indian border which is part of the cross-border transmission line.

The Energy Ministry has prioritised the construction of the New Butwal-Gorakhpur Cross-Border Transmission Line as it can efficiently distribute imported power to high energy consuming cities like Bhairahawa, Butwal, Pokhara and Narayangadh. The power line can also be used to evacuate surplus energy produced in the Budhi Gandaki, Marshyangdi and Trishuli corridors where most of the country’s hydropower projects are located.