India secures 4,700MW in Nepal, but little progress on projects
Summary
Nepal has secured Indian investment in seven major hydropower projects totaling about 4,700MW, but only one is under construction and delays are slowing expected electricity-export revenue. Cross-border transmission lines are advancing, while unresolved approvals, financing issues and policy delays continue to hold back key projects such as Lower Arun and Upper Karnali.
Key Points
- Nepal and India signed a 10,000MW electricity export agreement in January 2024, but the gains depend on stalled hydropower projects moving forward.
- Indian companies have secured seven major hydropower projects in Nepal, including Arun-III, Lower Arun, Upper Karnali and West Seti, but only Arun-III is under construction.
- Government procedures, financing hurdles and export approval rules tied to third-country investment have delayed several projects, especially those involving Chinese contractors.
- Cross-border transmission lines such as Dhalkebar-Muzaffarpur and Dhalkebar-Sitamarhi are progressing and are expected to raise Nepal-India power trade capacity.
