ADB grants loan to Nepal for power

Asian Development Bank (ADB) has agreed to provide a loan assistance of Rs 4714 million and a grant assistance of Rs 326 million totaling about Rs 5,040 million to the government for the implementation of Energy Access and Effiecncey Improvement Project.

The agreements to this effect were signed between the government and the ADB at the Ministry of Finance today. The agreement was signed by Rameshwore Prasad Khanal, finance secretary and Barry Hitchcock country director, ADB Kathmandu on behalf of their respective institutions.

The project consists of three main categories that is Energy Access, Clean Energy and Capacity Building with seven components facilitating access to clean energy, energy access, quality enhancement, clean energy improvement, Supply side energy efficiency improvement, energy efficiency in lightening, renewable energy for street light and capacity building. The major project activators include construction of middle Marshyangdi-Damauli-Marshyangdi TL, construction of second circuit of BUtwal - Kohalpur TL, construction and expansion of Chapali and Matatirtha grid sub stations, installation of capacitor banks, construction of primary distribution sub stations and switching stations. Similarly rehabilitation of two small scale hydropower plants, distribution of about one million CFLSs, installation of 1000 solar and solar winds streetlights, and providing expert services to Nepal Electricity Authority (NEA).

This project will support the government long term vision to provide universal coverage using grid based and off grid supplies by 2027. It is hoped that the proposed loan and grant assistances will address the urgent needs attributed to the electricity supply crisis in Nepal, to a large extent. IN the short term the transmission network strengthening will add capacity by increasing evacuation of power from hydropower stations in the mid western region and allow increased energy imports across the eastern border and in the medium term, it will allow cross border energy trade. Moreover, the project will also lead to improve the financial performance of NEA. The NEA is the implementing agency and the project is expected to be completed by September 30, 2014.

In the mean time, the project agreements related to the project were also signed by Jivendra Jha, managing director NEA and Barry Hitchcock country director, ADB, Kathmandu.