Rs. 72.93bn raised to strengthen and expand electrification

By A Staff Reporter,Kathmandu, Dec. 24: An investment of about Rs. 72.93 billion (US$ 537 million) has been raised to expand, improve and modernise the transmission and distribution system to make electricity supply within the country reliable and qualitative and to increase electricity trade with neighbouring countries.

The Asian Development Bank (ADB) will provide a concessional loan of USD 311 million (Rs. 42.24 billion) and a grant of USD 30 million (Rs 4.07 billion) for the expansion and improvement of the electricity transmission and distribution system. 

Similarly, the European Union will provide USD 22.6 million (Rs. 3.06 billion) and the Norwegian government will provide a grant of USD 31 million (Rs. 4.21 billion). 

Likewise, USD 10 million (Rs 1.35 billion) will be received through the Strategic Climate Fund. 

The government of Nepal will bear the USD 132.4 million (Rs. 17.98 billion) required for the implementation of the project. The projects to be implemented through ADB's South Asian Subregional Economic Cooperation (SASEC) Power Transmission and Distribution Strengthening Project will mainly include the construction of 290 kilometres of transmission lines, five new substations, and the upgrading of two substations, according to the Nepal Electricity Project (NEA). 

In addition, under the project, work will be conducted for the installation of smart meters by replacing single-phase meters at homes of household customers in the Kathmandu Valley (Phase II), the installation of computer-based supervisory control and data acquisition (SCADA) to modernise and automate distribution substations, and the construction of a national transmission line and upgrading of the distribution system in Karnali Province. 

A concessional loan and grant agreement was signed between the government, ADB, and the Nepal Electricity Authority last Friday for the mobilisation of assistance. 

The plans and project will be implemented by the Nepal Electricity Authority.

Managing Director of NEA Kul Man Ghising said that the resources received from development partners will be utilised to improve and expand the power supply system within the country, build the necessary infrastructure as a backbone to make regional/subregional electricity trade reliable, and digitise the distribution system.

"A huge amount of money has been raised to address consumer complaints about frequent power outages and to implement the planned infrastructure improvements and strengthening works carried out in the past years for adequate, reliable, quality and safe power supply. Now the plans will be implemented immediately," said Ghising.

Country Director of the Nepal Resident Mission, ADB, Arnaud Cauchois said that the assistance will help remove the limitations of grid infrastructure in supplying electricity to the growing demand in the country and meet the goal of green energy exports. 

He said, "The assistance will be spent on the main components of the transmission and distribution master plan. This will help in transmitting electricity generated from hydropower projects for domestic consumption and increasing the capacity for cross-border electricity trade.”

“The transmission and distribution infrastructure in Karnali and Lumbini provinces will be expanded, improved, upgraded and rehabilitated, which will help in electrification, reducing energy poverty, and eliminating socio-economic inequality between provinces."