Nepal and India Prepare for 200 kV Electricity Exchange by December 2026 Ahead of Full 400 kV Transmission Line Launch

Purushottam Subedi, KalimNews, Kathmandu, October 8, 2026 : Preparations are underway under the Millennium Challenge Account Nepal (MCA-Nepal) to initiate an interim 200 kV cross-border electricity exchange between Nepal and India starting December 2026, utilizing the under-construction 400 kV cross-border transmission infrastructure.

Under this temporary bilateral arrangement, both nations will supply power to each other on a mutual-need basis while construction on higher-capacity components continues. Although the overarching transmission corridor is engineered for a 400 kV high-capacity load, Nepal's permanent 400 kV substation infrastructure at New Butwal in Nawalparasi (Bardaghat-Susta West) will only be completed by December 2027. Consequently, authorities have coordinated a phased operational approach: cross-border power flow will initially link to India through New Butwal's recently prepared 200 kV system by December 2026. Once the permanent 400 kV infrastructure and related substation expansions are fully commissioned at the end of 2027, the transmission line will shift to operating at its full 400 kV capacity.

According to Bishwa Ranjan Mishra, Project Chief of the New Butwal Substation under the Nepal Electricity Authority (NEA), setting a phased target allows both sides to prevent transmission bottlenecks and activate bilateral electricity exchange a full year ahead of final substation completion. Both sides are currently expediting works to link the cross-border lines by the December 2026 milestone.

On the Nepali side, the MCA-Nepal Development Committee—executing the project under the MCC Nepal Compact—has completed the construction of all towers and lines across the critical 18-kilometer stretch extending from the New Butwal Substation to the Nepal-India border within the scheduled timeframe. Following a formal request from the Ministry of Energy, Water Resources and Irrigation, MCA-Nepal prioritized and delivered this segment, successfully fulfilling its defined scope for tower and line construction on the cross-border link.

On the Indian side, construction of towers and transmission lines across the approximately 96-kilometer stretch from the international border to Gorakhpur is progressing rapidly, while the terminal 400 kV substation infrastructure in Gorakhpur has already been prepared and readied for connection.

Photo: New Butwal Substation located in Nawalparasi (Bardaghat-Susta West) district.

Before the transmission line is charged and commercially operationalized, the remaining procedural clearances, technical protocols, and formal inter-governmental approvals for Nepal-India cross-border power flow will be completed.

The 18-kilometer cross-border section forms an integral component of MCA-Nepal's broader Electricity Transmission Project. The larger initiative encompasses the construction of a 315-kilometer high-voltage transmission network and three major substations, along with specialized technical assistance to both the Electricity Regulatory Commission (ERC) and the Nepal Electricity Authority. Designed to enhance the availability, stability, and reliability of domestic electricity, the project serves as a cornerstone for Nepal's national energy security, future generation evacuation, and long-term cross-border power trade.