Millennium Challenge Account Nepal (MCA-Nepal) on Wednesday commemorated the initiation of construction of the 18-km transmission line and the New Butwal Substation in Sunawal, Nawalparasi West. 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.
MCA-Nepal Executive Director Mr Khadga Bahadur Bisht joined Honorable Minister of Finance Rameshore Prasad Khanal, the US Ambassador Mr Dean Thompson, and MCC Resident Country Director Ms Diane Franscisco at the construction initiation event.
Expressing his views at the event, Minister Khanal said, “This project reflects the Nepal 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.”
“The United States is proud to stand with Nepal as a committed partner in building a more reliable energy system,” said the US Ambassador Dean Thompson. “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.”
“Today marks a new chapter in strengthening Nepal’s energy security,” said Executive Director Mr Bisht. “The transmission line and substation will create new opportunities for power trade and bring long-term benefits to our citizens. MCA-Nepal is proud and committed to implementing this project in close partnership with the Nepal government and MCC.”
The 18km transmission line will connect the 400kV New Butwal Substation to the Nepal-India border. Together, these projects represent nearly USD 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 18km 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. 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. These improvements will help lower the cost of doing business, attract new private investment, and generate revenues that can be reinvested in Nepal’s development priorities.
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