Construction of Butwal-Gorakhpur 2nd transnational transmission line moves forward

The process to construct the proposed 400 kV new Butwal-Gorakhpur second transnational transmission line between Nepal and India has moved forward. The Nepal Electricity Authority (NEA) has got approval for foreign investment in the project.

Under the joint venture project between the NEA and the Indian Power Grid Corporation, a company will be established in India to do the construction work on the Indian side. For that NEA has to manage Rs 736 million, which is 50 percent share. But, the NEA itself will bear the cost to construct the project on the Nepali side.

The double circuit transmission line is around 120 kilometres between New Butwal substation at Sunawal Municipality-13 in Nawalparasi district and Gorakhpur substation in India. Of the area covered by the project, around 20 kilometres falls in the Nepali side and the remaining in the Indian side.

NEA Executive Director Kulman Ghishing said that with the permission to NEA for foreign investment has paved the way for establishing a company in India on joint venture of NEA and Power Grid for the development of the project. “An article of association and regulation are readied for the company establishment and with the obtainment of a permit for investment from India, the establishment of the company will move ahead,” he said.

It may be noted that the seventh meeting of a mechanism of Nepal-India energy secretaries and joint-secretaries on October 14, 2019 finalized the investment model for the development of the transmission line. The estimated cost of the project is Rs 7.039 billion and the final management will be ensured through 80 percent loan and 20 percent equity.

Preparations for bid documents are going on for the selection of project development and NEA plans to complete it in three years of its commencement. NEA and Power Grid in August-September 2021 signed a MoU for joint investment.

The Cabinet meeting on August 3 allowed NEA to invest a 50 percent share in the construction of the transmission line segment in India.

Nepal will construct the transmission line in Nepal on its own, while the part in India will be constructed under a joint venture of NEA and Power Grid.

The transmission will have the capacity of supplying around 2,000 megawatt of electricity.