Nepal and India have signed a joint venture (JV) and shareholder agreement to construct the Inaruwa-Purnia and Lamki-Dododhara-Bareilly 400 kV cross-border transmission lines.

The agreement was signed in New Delhi on Wednesday in the presence of Minister for Energy, Water Resources and Irrigation, Physical Infrastructure and Transport and Urban Development Kulman Ghising and Indian Power Minister Manohar Lal Khattar.

The signing ceremony was attended by Nepal's Ambassador to India Shankar Prasad Sharma, Indian Power Secretary Pankaj Agrawal, Additional Secretary at the Ministry of External Affairs, Joint Secretary at the Ministry of Energy, Water Resources and Irrigation Sagar Raj Gautam, among others.

The agreement was signed by Deputy Executive Director Subhash Kumar Mishra and Chief Operating Officer, International Business, Power Grid Corporation of India Limited Sanjay Kumar Gupta on behalf of Nepal Electricity Authority. With the signing of the joint venture agreement, the way has been opened for the establishment of companies for the construction of both transmission lines with the investment of the Authority and Power Grid.

At the event, Minister Ghising mentioned that the construction of two more cross-border transmission lines is another important milestone for bilateral and regional electricity trade. He said that the construction of the cross-border transmission line will pave the way for Nepal to export electricity generated in Nepal between the two countries and at the regional level, and it will make it easier to bring domestic and direct foreign investment in Nepal's hydropower by increasing Nepal's access to the international energy market.

Indian Power Minister Khattar said that after the construction of two more cross-border transmission lines, the electricity exchange between Nepal and India will be substantially strengthened, and regional energy security will improve, and a strong grid will be created, which will contribute to the economic growth of both countries.

The meeting of the Council of Ministers on 30 Ashoja had approved the establishment of two joint companies in both Nepal and India with the investment of the NEA and Power Grid for the construction of the transmission line and the NEA to invest equity in these companies.

The NEA will have 49 percent share in the joint company to be established in India for the construction of the Indian section of the two cross-border transmission lines and 51 percent share of Power Grid. Similarly, the joint company to be established in Nepal for the section falling in Nepali territory will have 51 percent of the NEA and 49 percent of Power Grid.

The construction of the two transmission lines will be financially managed with 80 percent debt and 20 percent share capital. About 26 kilometers of the Inaruwa-Purnia transmission line will fall on Nepali territory and 109 kilometers of the Indian territory. About 33 kilometers of the Lamki-Bareilly transmission line will be built on Nepali territory and 185 kilometers of the Indian territory.

According to the study report prepared by the Nepal-India Joint Technical Team in 2019, the initial cost of the Inaruwa-Purnia transmission line is estimated to be 2.65 billion and 4.13 billion Indian rupees (INR) for the Nepali and Indian sections, respectively.