Nepal and India have agreed to enhance electricity trade by signing an agreement on the construction of an cross border transmission line. The goal is to enable the export of 15,000 MW of electricity from Nepal to India and Bangladesh by 2035.

The Memorandum of Understanding was signed by Suresh Acharya, Secretary of Nepal's Ministry of Energy, Water Resources, and Irrigation, and Pankaj Agarwal, Secretary of India's Ministry of Power, during a secretary-level meeting in New Delhi.

Following the secretary-level talks and agreement between the two countries, the construction of the transmission line will now progress. Since the Sher Bahadur Deuba-led government took office in 2021, Nepal-India electricity trade has seen significant growth.

Under the leadership of Kul Man Ghising, Managing Director of Nepal Electricity Authority, and then-Secretary Dinesh Ghimire, Nepal has fostered a positive environment for electricity trade with India. As a result of these efforts, Nepal began exporting electricity to India in June 2022.

During the official visit of Foreign Minister Dr. Arju Rana Deuba in September, Nepal and India agreed to explore regional electricity trade between Nepal and Bangladesh via a transmission line in India. Nepal has already exported 50 MW of electricity to India.

Ministers from the Maoist party, along with the current Minister of Energy, Water Resources, and Irrigation, Deepak Khadka, have played a role in the development of an international transmission line.

When Maoist leader Shakti Basnet served as Minister of Energy, an agreement was signed with India for the purchase of 10,000 megawatts of electricity over a 10-year period. The importance of expediting the construction of the transmission line for electricity supply was emphasized.

At the 12th meeting of the Energy Joint Secretary-level Working Group between Nepal and India on January 21, it was agreed to accelerate the construction of the transmission line. The meeting also decided to construct an international transmission line to facilitate easier import and export of electricity.

This agreement was further confirmed during a secretary-level meeting between the two countries.

Discussions during the joint secretariat meeting covered topics such as the existing electricity transmission line between Nepal and India, ongoing and proposed international transmission line projects, various hydropower projects with Indian investment, related transmission line projects, and international electricity import-export.

During the secretary-level meeting, it was decided to complete the construction of two 400 kV transmission lines from Inaruwa in Nepal to Purnia in India and from Dodhara in Nepal to Bareilly in India by 2030.

A joint company will be established on both sides of the mentioned transmission line, with ownership shares divided between Nepal Electricity Authority and India's Power Grid Corporation Limited.

Following the agreement between the two nations, Nepal will hold a 51 percent stake in the joint company on the Nepal side, while India will have a 51 percent ownership on the Indian side. The remaining 49 percent of shares in the companies on both sides will be held by the other country.

Similarly, the completion of the Detailed Project Report (DPR) for the Chamelia-Jouljivi 220 KV double-circuit transmission line by 2025 has been agreed upon. Additionally, there is an agreement to enhance the capacity of the Dhalkewar-Muzaffarpur transmission line from 800 MW to 1000 MW.

Likewise, the construction of the 400 kV Nijgarh-Motihari and Kohalpur-Lucknow transmission lines is set to be completed by 2035 as per the agreement reached during a secretary-level meeting between the two countries.

Previously, Nepal and India signed a long-term electricity trade agreement for the export of 10,000 megawatts over 10 years, with the export of 40 MW of electricity already underway to Bangladesh.

The meeting was attended by Secretary Acharya, Joint Secretary Sandeep Kumar Dev, Director General of the Electricity Development Department Navinraj Singh, Managing Director of Nepal Electricity Authority Kulman Ghising, Deputy Managing Director Dirghayukumar Shrestha, and other officials from the Authority.