MCA-Nepal breaks ground on Ratmate, New Damauli substations, 297 km transmission line

RATMATE, NUWAKOT: Millennium Challenge Account Nepal (MCA-Nepal) today broke ground on the Ratmate Substation, the New Damauli Substation and a 297 km transmission line that form part of the Electricity Transmission Project under the Millennium Challenge Corporation (MCC) Nepal Compact.

The project, funded jointly by a $550 million US grant and a $197 million investment from the Government of Nepal, will construct high-capacity 400 kV substations and about 315 km of transmission lines. Officials say the infrastructure aims to strengthen the national electricity grid, reduce transmission bottlenecks, improve reliability for households and businesses and support Nepal’s participation in regional electricity markets.

The 297 km transmission network includes the Ratmate–New Damauli and New Damauli–New Butwal corridors, and the Lapsiphedi–Ratmate–New Hetauda section.

Dr Ghanshyam Upadhyaya, Secretary of the Ministry of Finance and MCA-Nepal Board Chair, said, “The Government of Nepal considers this project a critical investment in the country’s economic future. Strengthening electricity transmission infrastructure is essential to ensuring energy security, promoting investment and industrial growth, and maximising the benefits of Nepal’s energy potential.”

US Chargé d’Affaires a.i. Scott Urbom reaffirmed the United States’ partnership with Nepal and its commitment to the MCC Nepal Compact. “Through this Compact, we are building the backbone of Nepal's energy future. Reliable power will flow across the country and beyond its borders. For families, this means lights that stay on. For factories and farms, it means steady energy to drive production. For Nepali businesses, it unlocks new horizons for growth,” he said.

MCC Resident Country Director Diane Francisco highlighted the long-term significance for economic growth and regional energy integration. “These investments will help Nepal unlock the full potential of its energy sector by strengthening the transmission system needed to deliver reliable electricity to households, businesses, and industries. MCC is proud to partner with Nepal on this transformative infrastructure initiative,” she said.

At the ceremony, Dirghayu Kumar Shrestha, Acting Managing Director at Nepal Electricity Authority, said the new infrastructure will be an important addition to the national transmission network. “The infrastructure being constructed under the MCC Nepal Compact is not a standalone system; it is an important addition to Nepal's national transmission network,” he said.

MCA-Nepal Executive Director Khadga Bahadur Bisht called the event a major milestone for the country’s energy infrastructure. “Today marks a major milestone in Nepal’s energy infrastructure development. This stronger, more reliable, and future-ready electricity transmission network will benefit generations of Nepalis and establish Nepal as a key player in regional energy markets,” he said, noting the project will ease transmission bottlenecks and enhance connectivity domestically and regionally.

Four contractors have been engaged for the work. Techno Electric and Engineering Company, India, will construct the Ratmate and New Damauli substations. Ashish–Bozlar JV will build the 117 km Lapsiphedi–Ratmate–New Hetauda transmission line section. Angelique–Skipper JV and Waiba–Salasar JV will construct the Ratmate–New Damauli and New Damauli–New Butwal transmission line sections, respectively, each spanning roughly 90 km.

Once completed, the Ratmate and New Damauli substations are expected to rank among Nepal’s largest high-voltage substations and, together with the transmission lines, to support long-term energy demand and economic growth.