EU launches new project on regional energy connectivity in South Asia

The European Union (EU), together with its partners, on today (9 July), Thursday launched a regional energy connectivity project in South Asia.

The €5 million EU-funded initiative aims to support a more connected regional power market that delivers affordable, clean, and reliable electricity to people in Bangladesh, Bhutan, India, Nepal, and Sri Lanka.

High-level government representatives, development partners, energy sector leaders, regulators, investors, and technical experts from Bangladesh, Bhutan, India, Nepal, and Sri Lanka gathered in Kathmandu for the regional launch of the Energy Connectivity in South Asia (ECSA) project.

Funded by the European Union and implemented by Expertise France, the project seeks to advance regional energy cooperation and cross-border electricity trade across South Asia.

The event, titled "Powering South Asia's Energy Future: Advancing Cross-Border Electricity Trade, Investments and Energy Security," marked the official launch of the four-year regional programme aimed at supporting increased cross-border electricity trade (CBET), enabling large-scale renewable energy integration, enhancing energy security and economic resilience, and catalysing greater investment in renewable energy infrastructure, including from Europe.

Enhanced regional energy connectivity will strengthen energy security, create jobs, and boost economic growth across the region, in line with the EU's Global Gateway investment strategy, the EU said.

Nepal's Minister of Energy, Water Resources and Irrigation, Biraj Bhakta Shrestha, welcomed the initiative and underscored the importance of regional collaboration.

"South Asia possesses vast renewable energy resources and growing electricity demand. Enhanced cross-border electricity trade can help countries meet their development goals while improving energy reliability, affordability, and sustainability. Nepal looks forward to strengthening regional partnerships through initiatives such as ECSA," said the Nepalese minister while speaking as the chief guest.

European Commissioner for International Partnerships Jozef Síkela said energy connectivity powers economies and daily lives, and that, with the launch of this Global Gateway flagship initiative, the European Union is investing in cheaper, cleaner, and more reliable electricity that will strengthen resilience and unlock opportunities for communities and businesses across South Asia.

"It shows that the partnership between the European Union and South Asian countries is growing stronger."

EU Ambassador to Nepal Véronique Lorenzo highlighted the importance of regional cooperation in addressing shared energy challenges.

"Europe's experience in building an integrated electricity market has demonstrated that stronger energy connectivity creates more resilient, affordable, and sustainable energy systems. Through the Energy Connectivity in South Asia project, the European Union is proud to work in partnership with South Asian countries to help unlock the tremendous benefits of regional energy cooperation and clean energy integration."

Director of the Sustainable Development Department at Expertise France Nicolas Chenet noted the project's role in fostering dialogue and technical cooperation between Europe and South Asia by supporting stakeholder engagement among the participating countries.

"ECSA will serve as a platform for knowledge exchange, capacity building, and collaborative problem-solving. By combining European and South Asian experience, expertise, and priorities, the project seeks to support practical pathways towards a more integrated regional electricity market."

A keynote presentation on "Energy Connectivity in Europe - Governance, Experience and Lessons Learned" highlighted how Europe has developed interconnected electricity markets through coordinated transmission planning, common regulatory frameworks, market coupling mechanisms, and strong institutional cooperation.

Participants discussed how key lessons, including transparent market rules, independent regulation, regional planning, and coordinated grid investments, could be contextualised to South Asia's unique circumstances.

The first panel discussion, "Enabling Policy and Regulatory Environment - How Can the ECSA Project Complement Ongoing Initiatives," addressed how the ECSA project can add value to ongoing regional processes.

The discussion identified opportunities to further deepen regulatory cooperation, advance the harmonisation of technical and market frameworks, strengthen institutional capacity, and enhance coordination among national stakeholders and development partners.

The second panel discussion, "Cross-Border Electricity Trade – Investment and Energy Security Opportunities," focused on how regional power trade can stimulate investment in renewable energy generation, transmission infrastructure, and modern power systems while enhancing energy security across South Asia.

Participants highlighted the importance of predictable regulatory environments, bankable project pipelines, and regional cooperation in attracting public and private investment.

Participants agreed on several priority areas for the project, including strengthening regional policy dialogue, supporting evidence-based planning and technical studies, enhancing institutional and regulatory capacities, facilitating investment discussions, and promoting knowledge exchange on cross-border electricity trade and renewable energy integration.

The ECSA project covers Bangladesh, Bhutan, India, Nepal, and Sri Lanka and seeks to increase regional electricity trade, reduce greenhouse gas emissions, improve energy security, and promote greater integration of renewable energy resources across South Asia.