Union Cabinet approved agreement on grid connectivity with Nepal

The Union Cabinet chaired by the Prime Minister Narendra Modi on 24 September 2014 approved the India-Nepal Agreement on Electric Power Trade, Cross-Border Transmission Interconnection and Grid Connectivity.

The approval will facilitate and strengthen cross-border electricity transmission grid connectivity and power trade between the two countries.

The agreement would also provide a framework for imports, by Indian entities, of surplus power generated from future hydroelectric plants in Nepal, on mutually acceptable terms and conditions.

Nepal currently imports 200 MW of electricity from India annually. Besides, the constructions of the new cross-border transmission lines that are under construction will more than double the transmission capacity over the next two years.

Background

The power trade was approved in the light of the decision made during Prime Minister Narendra Modi's visit to Nepal in August 2014. During Modi’s visit it was decided that negotiations on the power trade agreement would be concluded within 45 days.