India and Nepal Deepen Energy Ties with Major Power Transmission Agreements

In a significant boost to regional energy cooperation, India and Nepal have advanced their partnership in the power sector through the signing of landmark agreements that pave the way for enhanced cross-border electricity trade and infrastructure development. The momentum was set during a high-level bilateral meeting held in New Delhi, where His Excellency Kulman Ghising, Nepal's Minister for Energy, Water Resources and Irrigation, met with Shri Manohar Lal, Union Minister of Power and Housing & Urban Affairs of India.

Strategic Dialogue on Regional Energy Security

The meeting marked a continuation of the close bilateral engagement between the two South Asian neighbors, with both leaders reaffirming their commitment to deepening cooperation in the energy sector, particularly in hydropower development, grid connectivity, and clean energy integration.

At the center of the discussions was the joint effort to develop Nepal's vast hydropower potential, which is emerging as a cornerstone of the country's economic transformation and a key resource for regional energy security. Nepal is home to an estimated 83,000 MW of hydroelectric potential, of which only a fraction has been tapped.

India, as Nepal's largest power trade partner, plays a pivotal role in facilitating the transmission, investment, and development of Nepal's hydropower sector through technology transfer, financing, and grid integration.

Game-Changing Transmission Corridor Projects

In a landmark development, Joint Venture and Shareholders' Agreements (JV&SHA) were signed in the presence of the two ministers. These were signed between:

• POWERGRID, India's Maharatna Central Public Sector Enterprise, and

• Nepal Electricity Authority (NEA)

The agreements provide for the establishment of two joint venture entities—one based in India and the other in Nepal—to develop high-capacity cross-border transmission links. These joint ventures will drive forward two strategic transmission corridors:

1. Inaruwa (Nepal) – New Purnea (India) 400 kV Double Circuit (Quad Moose) Transmission Line

2. Lamki (Dododhara) (Nepal) – Bareilly (India) 400 kV Double Circuit (Quad Moose) Transmission Line

These links, once operational, will significantly enhance power exchange capacity between the two countries, enable seasonal optimization of electricity supply, and strengthen grid resilience across the region.

Key Benefits and Long-Term Impacts

The development of these corridors holds immense significance for both nations:

• For Nepal, it ensures assured markets for surplus hydropower, boosts foreign exchange earnings, and supports energy export-led economic growth.

• For India, it provides access to reliable and clean hydropower, helping the country meet its renewable energy targets and reduce its dependence on fossil fuels.

The infrastructure will also serve as a foundation for expanded sub-regional energy cooperation involving other South Asian nations, thereby promoting regional integration and stability.

A Growing Energy Partnership

This engagement builds on a series of transformative initiatives in recent years. In 2022, India began importing power from Nepal on a commercial basis. By 2024, Nepal had begun exporting surplus electricity to India under long-term power trade arrangements. The two countries also finalized a long-term Power Trade Agreement (PTA) covering the next 25 years, setting ambitious targets for power flows in both directions.

Speaking at the event, Minister Manohar Lal emphasized the importance of clean energy diplomacy in India's neighborhood-first policy. He reaffirmed India's commitment to helping Nepal realize its hydropower potential for shared regional prosperity.

Minister Kulman Ghising welcomed the progress and hailed the signing of the JV agreements as a milestone in Indo-Nepal power diplomacy, further solidifying Nepal's position as a future green energy exporter in the region.

Looking Ahead

The successful implementation of the new cross-border projects will not only enhance energy reliability and affordability for millions but also contribute meaningfully to climate goals through the promotion of low-carbon energy systems.

With deep-rooted people-to-people ties and growing institutional collaboration, India and Nepal are poised to build a robust energy bridge that links economies, empowers communities, and strengthens strategic trust.