India and Nepal Sign Landmark Agreements to Boost Cross-Border Power Connectivity

Historic Agreements Bolster Bilateral Energy Ties

In a significant step towards strengthening regional energy cooperation, India and Nepal officially signed two major agreements on Wednesday, October 29, 2025. These landmark agreements are set to boost power cooperation and facilitate the development of new high-capacity cross-border transmission lines, enhancing regional energy trade and connectivity. The signing ceremony took place in New Delhi, underscoring the commitment of both nations to a robust energy partnership.

New 400 kV Transmission Corridors Planned

The agreements, signed between India's POWERGRID Corporation, a Maharatna Central Public Sector Enterprise, and the Nepal Electricity Authority (NEA), focus on the establishment of two crucial 400 kV double-circuit transmission lines. These projects include:

• The Inaruwa (Nepal) – New Purnea (India) 400 kV Double Circuit (Quad Moose) Transmission Line
• The Lamki (Dododhara, Nepal) – Bareilly (India) 400 kV Double Circuit (Quad Moose) Transmission Line

The implementation of these projects will involve the incorporation of two joint venture entities, one in each country, to develop and operate the transmission infrastructure. The financing structure for both projects will comprise 80 percent debt and 20 percent equity. The total estimated investment for these transmission lines is approximately Rs 21 billion.

Enhancing Energy Security and Economic Growth

Officials from both sides highlighted the strategic importance of these new transmission corridors. Nepal's Minister for Energy, Water Resources and Irrigation, Kulman Ghising, and India's Union Minister for Power and Housing & Urban Affairs, Manohar Lal Khattar, were present during the signing. Minister Ghising described the agreement as a 'milestone in Nepal-India power cooperation,' emphasizing its role in facilitating electricity exchange and enabling Nepal to access international energy markets. Minister Khattar affirmed that the new lines would make electricity exchange more robust, enhancing regional energy security, strengthening grid systems, and contributing to economic growth in both nations. The projects are targeted for completion by 2030.

Broader Context of Bilateral Power Cooperation

These agreements build upon existing power sector collaboration between India and Nepal. Currently, the 400 kV Dhalkebar–Muzaffarpur cross-border transmission line is operational, and the 400 kV Butwal–Gorakhpur line is under construction. India has also committed to purchasing 10,000 megawatts of electricity from Nepal over the next ten years, making robust cross-border transmission infrastructure critical to achieving this target. The new agreements are expected to further improve power sharing, reinforcing decades of diplomatic partnership and a shared commitment to sustainable development and energy cooperation.