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Nepal : $180m ADB loan to ease power shortages in NEPAL

July 8, 2014

A $ 180 million loan has been sanctioned by the Asian Development Bank (ADB) to help Nepal overcome crippling power shortages and also to export surplus power to neighbouring India.

The loan sourced from the ADB s concessional resources, will complement a co-financing loan of $ 120 million approved by the European Investment Bank, a $ 60 million grant from the government of Norway, and a $ 11.2 million grant from the ADB-administered Strategic Climate Fund.

Through this loan amount, the Nepal Electricity Authority (NEA) will be able to finance a substantial upgrade and expansion of transmission and distribution lines and substations, facilitating the transfer of up to 2,000 MW of power to main load centres in the Kathmandu valley. With this network expansion Nepal will be able to export at least 1,200 MW of electricity to India, once a second 400 KV cross-border transmission line from Bardaghat to Gorakhpur in India is complete.

Lei Zhang, Energy Specialist with the ADB s South Asia Department, said, Right now, limited generating capacity and weak power transmission and distribution networks mean two-thirds of households in Nepal have no electricity and many of those who have power suffer power cuts for up to 12 hours a day during the dry season. There s a pressing need to provide more energy to domestic customers and harness more clean energy for sale overseas when the country has surpluses.

Additionally, through this project the Alternative Energy Promotion Centre (AEPC) will be able to provide electricity to hard-to-reach rural communities with mini-grid renewable energy systems, including mini hydroelectric, solar and wind generation, through provision of an ADB credit line and the ADB-administered Strategic Climate Fund.

Completion of the projects is expected by the end of 2021.

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Source: TendersInfo (India)

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