Nepal and India establish Butwal-Gorakhpur Cross Border Power Transmission Company

Kathmandu; Nepal and India have jointly set up a separate entity to facilitate the construction of Butwal-Gorakhpur cross-border transmission lines for power trade.

According to Nepal Electricity Authority (NEA), Butwal-Gorakhpur Cross Border Power Transmission Company was registered in the Registrar of Companies, India, on August 31. While the NEA and Power Grid Corporation (PGC) of India each hold 50 percent of the equity of the joint company, each of the power utilities of the two countries has contributed INR 500,000 to maintain the paid-up capital.

A meeting of the Nepal-India Energy Secretary-Level Joint Steering Committee (JSC) held in Bangalore on October 14-15, 2019, decided to establish the company in the next three months from the date. However, the plan has materialized only after three years of the stipulated time.

It was just last year that NEA and PGC signed an agreement for joint investment in the company. These companies can start their work formally only after they ink the Implementation of Transmission System Agreement (ITSA).

The transmission line is expected to be constructed in three years from the date of commencement of the work, while 2,500 MW of electricity can be evacuated through the line. Of the 140 km stretch of the transmission line, 120 km will fall on Indian land while the rest of 20 km will be constructed on the Nepali side.

The latest study has estimated a total cost of Rs 6.40 billion for the construction of the transmission line. Of the amount, Rs 1.28 billion (20 percent) will be equity capital, out of which Nepal will invest Rs 640 million.