MCA Nepal has begun construction of the New Butwal substation and an 18-kilometre transmission line.
A ceremony was held in Sunwal, Nawalparasi (Bardaghat Susta West) on Wednesday to launch the construction work.
These infrastructures, being built under the MCC Nepal Compact programme, will strengthen Nepal’s electricity grid and establish an important energy trade linkage between Nepal and India.
Finance Minister Rameshwor Prasad Khanal, US Ambassador to Nepal Dean R Thompson, MCC Resident Country Director Diane Francisco, MCA Nepal Executive Director Khadga Bahadur Bista and local representatives attended the event.
At the programme, Minister Khanal said the project reflects the government’s commitment to expanding access to clean energy, enhancing regional energy trade, and achieving long-term economic growth.
“America is proud to stand with Nepal as a committed partner in building a more reliable energy system,” Ambassador Thompson said. “Projects like transmission lines and substations not only help light homes and businesses but also create opportunities for trade, growth, and progress across the region.”
MCA Nepal Executive Director Bista said a new chapter has been added to strengthening Nepal’s energy security. “The transmission line and substation will create new opportunities for expanding energy trade and deliver long-term benefits for Nepalis,” he said. “MCA Nepal is proud to implement this project in close partnership with the governments of Nepal and the United States and is committed to making it a success.”
The 18 km transmission line will connect the 400 kV New Butwal Substation to the Nepal–India border. With an investment of around USD 50 million, these infrastructures aim to support the export of 10,000 MW of electricity within the next decade. The system will facilitate the export of clean hydropower to India under the energy trade agreement.
MCA Nepal stated that the transmission line and New Butwal Substation are crucial for Nepal’s economic future, as they will link the increasing hydropower production with regional markets.
By strengthening Nepal’s high-voltage electrical grid, the project will make electricity supply more reliable for households and businesses. It will also reduce power leakage and enable Nepal to conduct cross-border energy trade. These improvements are expected to lower operational costs for businesses.
