Supporting Nepal’s Energy Infrastructure Our Top Priority: US Ambassador Thompson

US Ambassador to Nepal, Dean R. Thompson, reaffirmed the United States’ commitment to enhancing Nepal’s energy infrastructure at a contract signing ceremony in Nawalparasi (Bardaghat Susta East) district, Lumbini Province. The event marked a significant milestone in the partnership between the two nations, with the signing of a contract between Millennium Challenge Account – Nepal (MCA-Nepal) and Linxon India Pvt. Ltd. to construct the 400 kV New Butwal Substation.

Expected to complete within 39 months, this Gas Insulated Switchgear (GIS) substation is a critical component of Nepal’s strategy to boost its electricity transmission capacity. “The U.S. Government is committed to working with the Government of Nepal to ensure that the compact delivers on Nepal’s energy needs,” Ambassador Thompson stated during the ceremony. He further elaborated on the project’s impact, noting that the substation will “enhance Nepal’s transmission capacity, contributing to reliable and affordable electricity for household consumption, expanded commercial and industrial enterprises, and cross-border electricity trading.”

Reflecting on the collaboration via social media, Ambassador Thompson tweeted: ““Happy to join the MCA-Nepal team for their contract signing event for the New Butwal Electricity substation between Linxon India Pvt. Ltd and @MCA_Nepal. Yet another great development in our longstanding friendship with Nepal! The USG is committed to working with the Government of Nepal to ensure that the compact delivers on Nepal’s energy needs. The 400 kV New Butwal Substation will improve Nepal’s transmission capacity, contributing to reliable and affordable electricity for Nepali households, Nepali commercial and industrial enterprises, and cross-border electricity trading for Nepal.”

Happy to join the MCA-Nepal team for their contract signing event for the New Butwal Electricity substation between Linxon India Pvt. Ltd and @MCA_Nepal. Yet another great development in our longstanding friendship with Nepal! The USG is committed to working with the Government… pic.twitter.com/vre5EDIRXF

— U.S. Ambassador Dean R. Thompson (@USAmbNepal) May 9, 2024

The ceremony was also attended by Nepal Electricity Authority (NEA) Managing Director Kulman Ghising, alongside local authorities and people’s representatives. Ghising emphasized the importance of the new substation to the region’s energy trade, stating, “The 400 kV substation has been a priority for NEA and will supplement the existing 220 kV substation to significantly increase cross-border energy trade in the region.”

MCA-Nepal Executive Director Khadga Bahadur Bisht updated attendees on the progress of the MCC Nepal Compact, which funds the project. “We are at the final stages of the procurement process to sign the contract for the construction of the remaining two substations as well,” Bisht explained.

This development is part of a larger initiative funded by the U.S. Government’s Millennium Challenge Corporation (MCC) and the Government of Nepal, which also includes the construction of additional substations in Ratmate, Nuwakot district, and Damauli, Tanahun district.

In a significant procedural update, the MCA-Nepal Board, chaired by the Secretary at the Ministry of Finance, recently resolved to expedite the 18 km Nepal portion of the New Butwal-Gorakhpur power transmission line, aiming to facilitate timely initiation of cross-border power trade as outlined in the agreement with India.

The establishment of the New Butwal Substation is anticipated to herald a new era of energy security and economic growth for Nepal, reinforcing the deepening ties between Nepal and the United States in developing sustainable infrastructure projects.