Kathmandu, Nov. 26
The new
infrastructure, part of the Millennium Challenge Corporation (MCC) Nepal
Compact, will strengthen Nepal’s electricity grid and establish a major energy
trade interconnection between Nepal and India, informed the MCA-Nepal in a
statement on Wednesday.
Minister of Finance Rameshore
Prasad Khanal, the U.S. Ambassador to Nepal Dean Thompson, and MCC Resident
Country Director Diane Franscisco initiated the construction. Executive
Director of MCA-Nepal Khadga Bahadur Bisht joined them.
“This project
reflects the government's strong commitment to expanding clean energy access,
enhancing regional power trade, and supporting our national goal of long-term
economic growth. With the support of MCC and MCA-Nepal, we are turning
agreements into action for the benefit of the country,” said FM Khanal.
Ambassador
Thompson said that the United States is proud to stand with Nepal as a
committed partner in building a more reliable energy system. “Projects like
this transmission line and substation will not only help keep the lights on for
families and businesses, but also create opportunities for trade, growth, and
prosperity across the region. Today’s event is a testament to what we can
achieve together,” he stated.
According to
Bisht, the transmission line and substation will create new opportunities for
power trade and bring long-term benefits to our citizens. He expressed MCA-Nepal's
commitment to implementing the project in close partnership with the
government.
The 18-km transmission
line will connect the 400kV New Butwal Substation to the Nepal-India border.
Together, these projects represent nearly US$ 50 million in investment and will
help Nepal export clean hydropower to India under the landmark 2024 power trade
agreement, which envisions 10,000 megawatts (MW) of electricity exports over
the next decade.
"The
transmission line and New Butwal Substation are vital to Nepal’s economic
future because they will connect the country’s growing hydropower supply to
regional markets," said the MCA-Nepal.
By strengthening
the backbone of Nepal’s high voltage grid, the project will make electricity
delivery more reliable for households and businesses, reduce power losses, and
enable Nepal to sell power to other countries.
The MCC of the US government has provided grant of US$
550 million while Nepal has agreed to put in US$ 197 million to construct the
high-power Nepal-India cross-border transmission line. A small portion of the
fund will be used for road upgradation project.
After much hiatus, political bickering and division of
opinion, Nepal endorsed the project through a parliamentary approval.
The implementation had begun on August 20, 2023 with a
five-year mandate.
Published in The Rising Nepal daily on 27 November 2025.
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