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The government has earmarked Rs 85.54 billion for energy production, transmission, and distribution infrastructure in the upcoming fiscal year, with a strong focus on accelerating national grid expansion and unlocking private sector participation in the power sector.

According to the Ministry of Energy, Water Resources and Irrigation, nearly Rs 70 billion of the allocation has been dedicated solely to completing under-construction transmission lines and substations, signaling a major push to strengthen the country’s electricity backbone.

Finance Minister Swarnim Wagle announced at a press briefing on Sunday that the FY 2083/84 budget places strategic emphasis on the energy sector, aiming to expand power generation, transmission, and cross-border electricity trade while attracting private investment across the value chain.

Ambitious Transmission Line Completion Target

The government has set a target to complete at least 10 major transmission lines within one year, including key high-voltage projects such as:

- Hetauda-Dhalkebar-Inaruwa 400 kV transmission line

- New Khimti-Barhabise-Kathmandu transmission line

- Hetauda-Ratmate-Lapsiphedi-New Damauli-New Butwal 400 kV corridor (fast-tracked expansion plan)

Despite long delays in several projects - particularly the Hetauda-Dhalkebar corridor due to local opposition, forest clearance challenges, and tree-cutting disputes - the government says recent policy interventions have helped revive progress.

Energy Minister Biraj Bhakta Shrestha has recently taken initiatives to resolve bottlenecks in transmission infrastructure development.

Key National and Regional Projects

The budget also prioritizes completion of several 132 kV and 220 kV transmission lines, including:

- Lalsbandi-Nawalpur-Salimpur 132 kV

- Kushaha-Biratnagar 132 kV

- Nepalgunj-Nanpara 132 kV

- Kusma-Tallo Modi-Naya Modi 132 kV

- Kaligandaki-Ridi 132 kV

- Tumlingtar-Shitalpati 220 kV

- Dhalkebar-Balganga 132 kV

- Bhumi-Haku 132 kV

Some lines, such as the Kohalpur-Dailekh-Surkhet 132 kV transmission line, have already been completed, while others are targeted for completion within the fiscal year.

Cross-Border Power Trade Expansion

A major component of the energy strategy focuses on expanding regional electricity trade through new interconnection lines, including:

- Butwal-Gorakhpur

- Inaruwa-Purnia

- Dhalkebar-Muzaffarpur-Sitamarhi

- Lamki-Dodhara-Bareilly

- Lamhii-Lucknow

- Nijgadh-Motihari

- Chilime Hub-Kerung (study completed, construction preparation underway)

These projects aim to strengthen electricity export capacity and improve regional energy integration with India and China.

Grid Expansion and Rural Electrification Push

The government has also pledged to accelerate the Karnali Corridor national transmission line, alongside expanding electrification in remote areas of Karnali Province that remain outside the national grid.

Officials say the goal is to ensure that no hydropower generation goes to waste while balancing supply and demand through a more resilient transmission system.

Industrial and Green Energy Drive

The budget further promotes:

- Electric vehicle production and adoption

- Charging station expansion nationwide

- Battery management systems

- Tax incentives for clean energy-based industries

The policy is designed to position electricity as a driver of industrial transformation and green economic growth.

Industry Reaction

Independent Power Producers’ Association of Nepal (IPPAN) Vice President IPPAN Nepal Uttam Bhallon Lama welcomed the announcement, describing the budget as encouraging and supportive of long-term sector growth.

Energy stakeholders have widely viewed the allocation as a significant step toward addressing transmission bottlenecks that have long constrained Nepal’s hydropower potential.