EU Launches €5 Million Energy Connectivity Project to Strengthen South Asia’s Regional Power Market

EDUCAST: The European Union (EU) has officially launched the Energy Connectivity in South Asia (ECSA) project, a €5 million regional initiative aimed at strengthening cross-border electricity trade, improving energy security, and accelerating the integration of renewable energy across South Asia.

The four-year project, funded by the European Union under its Global Gateway investment strategy and implemented by Expertise France, will support Bangladesh, Bhutan, India, Nepal, and Sri Lanka in building a more connected regional electricity market that delivers affordable, reliable, and clean energy while promoting sustainable economic growth.

The regional launch event, held in Kathmandu under the theme “Powering South Asia’s Energy Future: Advancing Cross-Border Electricity Trade, Investments and Energy Security,” brought together senior government officials, development partners, energy regulators, investors, technical experts, and representatives from the five participating countries.

The event was inaugurated by Nepal’s Minister for Energy, Water Resources and Irrigation, Hon. Biraj Bhakta Shrestha, alongside H.E. Véronique Lorenzo, Ambassador of the European Union to Nepal, who jointly lit a ceremonial lamp to mark the official commencement of the project.

Speaking at the launch, European Commissioner for International Partnerships Jozef Síkela emphasized that stronger regional energy connectivity is essential for ensuring affordable and sustainable electricity while enhancing economic resilience across South Asia.

“Energy connectivity powers our economies and daily lives. With the launch of this Global Gateway flagship, the European Union is investing in cheaper, cleaner, and more reliable electricity that will strengthen resilience and unlock many opportunities for communities and businesses in South Asia. It shows that the partnership between the European Union and South Asian countries is growing stronger,” Commissioner Síkela stated.

Addressing the gathering, EU Ambassador to Nepal H.E. Véronique Lorenzo highlighted Europe’s own experience in developing an integrated electricity market, noting that regional cooperation has played a critical role in improving energy affordability, sustainability, and resilience.

She said that Europe’s experience demonstrates how stronger electricity interconnections can create more reliable and efficient energy systems, adding that through the ECSA project, the European Union aims to help South Asian nations unlock the benefits of regional energy cooperation and clean energy integration.

Chief Guest Hon. Biraj Bhakta Shrestha welcomed the initiative, describing it as a timely effort to harness South Asia’s abundant renewable energy potential while addressing the region’s rapidly growing electricity demand.

He noted that enhanced cross-border electricity trade would enable participating countries to achieve their development goals by improving energy reliability, affordability, and sustainability. Nepal, he added, looks forward to strengthening regional partnerships through initiatives such as ECSA.

The ECSA project seeks to facilitate increased cross-border electricity trade (CBET), encourage greater investment in renewable energy infrastructure, strengthen institutional and regulatory capacity, and promote coordinated planning among participating countries. The initiative also aims to reduce greenhouse gas emissions by enabling large-scale integration of renewable energy resources across the region.

During the launch program, Nicolas Chenet, Director of the Sustainable Development Department at Expertise France, described the project as an important platform for dialogue, technical cooperation, and knowledge sharing between Europe and South Asia.

He said the project will support practical solutions for creating a more integrated regional electricity market through policy advice, capacity building, technical studies, stakeholder engagement, and the exchange of best practices.

A keynote presentation titled “Energy Connectivity in Europe – Governance, Experience and Lessons Learned” showcased how Europe successfully developed interconnected electricity markets through coordinated transmission planning, harmonized regulations, market coupling mechanisms, and institutional cooperation. Participants discussed how similar principles could be adapted to South Asia’s unique energy landscape.

The launch also featured two high-level panel discussions. The first focused on creating an enabling policy and regulatory environment for regional electricity trade and explored how the ECSA project could complement ongoing regional initiatives. Experts emphasized the need for harmonized technical standards, stronger regulatory coordination, institutional capacity building, and enhanced collaboration among governments and development partners.

The second panel discussion examined investment opportunities arising from cross-border electricity trade and highlighted how regional power markets can stimulate investments in renewable energy generation, transmission infrastructure, and modern power systems. Speakers stressed that predictable regulatory frameworks, bankable energy projects, and stronger regional cooperation are essential to attract both public and private investment.

Participants collectively identified 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 renewable energy integration and cross-border electricity trade.

The ECSA project forms part of the European Union’s broader Global Gateway strategy, which seeks to reduce global investment gaps by supporting smart, clean, and secure infrastructure in energy, transport, digital connectivity, health, education, and research. Through the Team Europe approach, the strategy aims to mobilize up to €400 billion in public and private investment worldwide between 2021 and 2027.

By fostering closer regional cooperation and facilitating sustainable energy investments, the European Union believes the ECSA project will contribute significantly to improving energy security, expanding renewable energy deployment, reducing greenhouse gas emissions, and creating a more resilient and interconnected electricity market across South Asia.