Powering a Stronger Partnership
India and Nepal have turned up the voltage on their cross-border cooperation with a series of landmark agreements designed to expand power connectivity and boost regional energy security. Signed on October 29, 2025, the deals establish a framework for building two major 400 kV transmission corridors, marking one of the most ambitious steps yet in South Asia’s energy integration.
The agreements symbolize a deepening of the Indo-Nepal strategic partnership, positioning both nations as leaders in green energy collaboration and setting the stage for long-term economic and environmental gains across the region.
The Deals: Two New Energy Arteries Across Borders
The historic agreements were inked between India’s POWERGRID Corporation and the Nepal Electricity Authority (NEA) in the presence of Nepal’s Energy Minister Kulman Ghising and India’s Power Minister Manohar Lal.
At the heart of the pact are two high-voltage, cross-border projects that will enable seamless electricity flow between the two countries:
· Inaruwa (Nepal) – New Purnea (India): Stretching 26 km in Nepal and 109 km in India, this double-circuit line will form an eastern corridor linking Nepal’s hydropower plants to India’s power-hungry northern and eastern grids.
· Lamki (Dododhara, Nepal) – Bareilly (India): Covering 33 km on the Nepalese side and 185 km in India, this western corridor strengthens bilateral energy trade and enhances the stability and redundancy of both national grids.
Each project will be developed through joint venture companies, one in each country, with a 51:49 ownership ratio favoring the host nation. Financing will be drawn from a mix of debt, equity, and multilateral support, reflecting both nations’ commitment to transparent, sustainable infrastructure development.
Strategic and Economic Implications
· Powering Trade and Growth
The new corridors will allow Nepal to export its surplus hydropower—a clean and renewable resource—to India, helping the Himalayan nation transform from an energy-deficient economy into a green power exporter. For India, the inflow of renewable electricity will support its decarbonization targets, aligning with national commitments to cut emissions and expand green energy capacity.
· Strengthening Grid Resilience
High-capacity cross-border links improve load management, real-time balancing, and resilience against blackouts. This level of coordination enhances regional grid reliability—essential for meeting rising demand as both economies grow.
· Attracting Fresh Investments
Robust transmission infrastructure is expected to unlock new investment opportunities in Nepal’s hydropower sector, spurring job creation and regional development. The deals also signal policy predictability, which could attract foreign investors and development partners.
Regional and Diplomatic Context: Building a South Asian Power Network
These accords build on the Long-Term Power Trade Agreement of June 2023, which set an ambitious target of 10,000 MW of electricity trade within ten years. The new projects move that vision closer to reality, laying the foundation for multilateral energy cooperation involving Bangladesh, Bhutan, and other South Asian nations.
They also reinforce both countries’ alignment with the International Solar Alliance (ISA) and broader climate transition goals, creating momentum for a regional grid that balances hydropower, solar, and other renewables.
Looking Ahead: From Bilateral to Regional Powerhouses
During the signing ceremony, both ministers reviewed ongoing hydropower projects and agreed that transmission infrastructure remains the backbone of sustainable energy collaboration. Discussions centered on technology upgrades, faster project execution, and deeper policy coordination—critical for scaling up clean energy trade.
As both sides look to the future, the focus will shift toward digitalized grids, smart metering, and AI-driven energy forecasting to make cross-border power exchange more efficient and transparent.
Bright Prospects for a Shared Green Future
The India–Nepal power partnership stands as a model for cooperative development in South Asia—where energy is not just electricity, but diplomacy in motion. These new cross-border transmission projects illuminate a path toward mutual prosperity, sustainable growth, and regional stability.
By fusing their natural and technological strengths, India and Nepal are not only powering homes and industries but also lighting the way toward a more integrated, energy-secure South Asia.
(With agency inputs)
