Power Sharing: Plans to increase cross-border electricity trade in SAARC region

Plans to increase cross-border electricity trade in SAARC region

India is emerging as a frontrunner in developing interconnections with the South Asian Association for Regional Corporation (SAARC) member states for trading electricity. During the 18th SAARC summit held in Kathmandu, Nepal, in November 2014, the eight member states – Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka – accorded approval to the South Asian Framework Agreement (Electricity). The aim of this pact is to develop cross-border transmission links between the member states to enable trading of power for mutual benefit, and ultimately lead to the development of a unified regional power grid.

At present, India has bilateral linkages with Bangladesh, Bhutan and Nepal, aggregating to a total transfer capacity of around 2,210 MW. It also has a host of projects that are either under construction or at the planning stage.

Power Line provides an update on various cross-border electricity transmission projects, the challenges involved, and the way forward…

Cross-border interconnections India-Bangladesh

Since the commissioning of the Baharampur (India)-Bheramara (Bangladesh) transmission link in October 2013, Bangladesh has been importing around 500 MW of power from India. The link includes a 100 km long 400 kV double-circuit (D/C) transmission line between the Baharampur and Bheramara substations, a 400 kV switching station at Baharampur, and a 500 MW 400/230 kV back-to-back high voltage direct current (HVDC) substation at Bheramara. In this regard, Power Grid Corporation of India Limited (Powergrid) and Power Grid Company of Bangladesh Limited entered into a bulk transmission agreement in July 2010.

In October 2015, the Asian Development Bank (ADB) provided an additional loan of $120 million to the Bangladesh portion of the project for augmenting the capacity of the interconnection system to 1,000 MW. The upgradation work includes the development of the 12 km long 230 kV Bheramara to Ishurdi D/C transmission line with a river crossing; and a second module of a 500 MW back-to-back HVDC station and 400/230 kV switchyard equipment at Bheramara. Along with ADB’s loan assistance, the Bangladesh government will provide financing of $63.2 million. The project is expected to be completed in June 2018.

Bangladesh is also expected to import an additional 100 MW through the 81 km long 400 kV D/C line between Suryamaninagar in western Tripura and Comilla in eastern Bangladesh. The power to be exported to Bangladesh will be procured from the Oil and Natural Gas Corporation’s 726.6 MW Palatana gas-based power plant in Tripura . The final price for power export has been fixed at Rs 5.50 per unit. The line was commissioned in December 2015.

Consensus is also being gathered for constructing a ±800 kV 7,000 MW HVDC multi-terminal bipole D/C grid line with suitable tapping points at Barapukuria in Bangladesh to evacuate power from Rangia/Rowta in north-eastern India to Muzaffarnagar through Bangladesh.


Bhutan exports a significant share of electricity from its hydroelectric projects (HEPs), and India is one of its major trading partners. India imports around 1,500 MW of power through the transmission systems (220 kV, 132 kV and 400 kV) associated with four HEPs: Tala (1,020 MW), Chukha (336 MW), Dagachhu (126 MW) and Kurichhu (60 MW). In 2015, between April and December, power imports from Bhutan stood at around 5,081 MUs.

Transmission interconnections associated with the Punatsangchhu I (1,200 MW), Mangdechhu (720 MW) and Punatsangchhu II (1,020 MW) HEPs are also under implementation at present and are expected to be commissioned by 2019.

In addition, seven HEPs (Kholongchhu, Sunkosh, Chamkhar, Kurigongri, Wangchu, Amochhu and Bunakha) aggregating 8,620 MW, along with their associated transmission interconnections, have been planned for exporting power to India by 2020. A 6,000 MW transmission line from Bhutan to Rangia (Assam) to West Bengal via Bangladesh is also at the feasibility report stage.


Nepal faces acute power shortages. During 2014-15, its total installed capacity, inclusive of independent power plants as well as those belonging to the Nepal Electricity Authority, was 787 MW, while the annual peak demand stood at around 1,292 MW. Hence, to make up the shortfall, Nepal imports 190-210 MW of power from India. During 2014-15, the quantum of electricity exported by India to Nepal stood at 224.41 MW. At present, power is exported to Nepal via three transmission links (Kushah-Katiya, Gandak-Ramnagar, and Tanakpur-Mahendranagar) at the 132 kV level in radial mode and through 33 kV and 11 kV links.

Recently, on February 20, 2016, the 400 kV D/C Dhalkebar-Muzaffarpur transmission line was inaugurated by the prime ministers of the two countries. The link will facilitate immediate power flow of 80 MW, with an initial charge of 132 kV. However, the line will be augmented to 200 MW in October 2016 at 220 kV, and further to 600 MW by December 2017 at 400 kV.

Besides, the Dhalkebar-Muzaffarpur line, India and Nepal have proposed to construct five more cross-border power corridors between the two countries. The proposed 400 kV lines will connect Attariya-Uttarakhand, Lamki-Tikuniya, Kohalpur-Rupaidiha, Butwal-Gorakhpur, and Inaruwa-Bihar.

However, in about seven years, Nepal intends to develop its technically and economically feasible hydroelectric potential of around 40,000 MW and become a net exporter of about 300 MW of power to India.

Issues and challenges

A host of challenges, ranging from political, social, technical, legal, administrative, regulatory, geographical and geological, and financial, impede the development of cross-border transmission projects. The absence of a strong bilateral political consensus and political stability are major obstacles in the timely completion of such projects. Political upheavals like those seen in Bangladesh and Nepal in the recent past severely affect investment prospects in transmission projects as well.

The flow of investment is further dampened by the presence of weak legal institutions and complex regulatory processes in the countries. Except for Nepal and Bhutan, specific provisions pertaining to cross-border power trade in the electricity laws of India’s neighbouring countries are absent. Moreover, with regard to funding and investment, there is an undue reliance on grants and credits from the national government and international funding agencies. The absence of robust capital markets in India and the neighbouring SAARC countries, along with the poor operating and financial performance of their power utilities, severely affect funding prospects. Investments also get depressed due to the absence of competitive power trading markets.

The technical issues faced in executing such projects pertain to the harmonisation of grid codes and standards, grid operation parameters, and connectivity standards; the deployment of protection systems for load segregation; and the setting up of monitoring and communication systems.

In the case of India and Nepal, and India and Bhutan, transmission infrastructure is associated with HEPs. Hence, their execution timelines and costs are affected by geological and hydrological uncertainties, natural calamities and sediment loads (a major environmental challenge in Nepal). The development of cross-border transmission projects is also adversely affected by the absence of an independent regulator that specifically deals with issues in cross-border electricity trade. Another drawback is the lack of a single window between trading countries for obtaining clearances pertaining to land acquisition, right of way and environment.

The way ahead

India is planning to develop several new cross-border interconnections with neighbouring countries to give a further boost to power trading among the SAARC nations. Apart from Bangladesh, Bhutan and Nepal, plans for developing transmission interconnections between India and Sri Lanka and India and Pakistan are under way.

India and Sri Lanka have signed an MoU to carry out feasibility studies for a 360 km long 1,000 MW HVDC transmission system from Madurai (India) to New Anuradhapura (Sri Lanka). In addition, a 285 km long 400 kV transmission interconnection between Rameswaram in India and Talaimannar in Sri Lanka, with a transfer capacity of 1,000 MW, is in the early stages of development. Meanwhile, India and Pakistan are discussing the possibility of developing a 500 MW HVDC link between Amritsar (India) and Lahore (Pakistan).

Once commissioned, all these interconnections will lead to the optimal utilisation of regional electricity generating sources and enhance grid security and power availability in the SAARC regions. This will translate into higher economic growth and an improved quality of life. Moreover, as the countries move towards a higher proportion of renewable generation in their energy mix, cross-border trade can help deal with intermittency by providing access to a more diversified portfolio of plants over a wider geographical area. However, the realisation of benefits is contingent on the successful resolution of the issues faced at the implementation stage and after the completion of projects.