Nepal: In a major boost for bilateral power trade, Nepal and India have signed an investment agreement for the construction of the second Butwal-Gorakhpur 400 KV cross-border transmission line. A joint venture (JV) and shareholder agreement have been inked between the Nepal Electricity Authority and the Power Grid Corporation of India Ltd, in New Delhi on Thursday, according to the Nepal Electricity Authority. The agreement was signed by NEA Managing Director Kulman Ghising and PGCIL Executive Director Y.K. Dixit.

An agreement on implementing the transmission line is also a prerequisite for the multi-million dollar MCC-Nepal compact -- viewed by many in Nepal as a counter-initiative under the Indo-Pacific Strategy of the US against China's Belt and Road Initiative -- to become effective.

After completing the project, Nepal, and India can easily trade around 2,000 MW of energy from this dedicated transmission line. The proposed transmission line is a key component of the USD 630 million "Nepal Compact", an agreement between the Nepal government and the US' Millennium Challenge Corporation to fund electricity and road projects of strategic importance in Nepal.

Nepal's Council of Ministers has already approved the NEA's proposal to invest 50 per cent shares in the company to be set up for the construction of the Butwal-Gorakhpur cross-border transmission line.

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