Asian Development Bank (ADB) and government today signed a loan agreement worth Rs 18.25 billion ($156 million) for upgrading the electricity grid system in Nepal.
Joint secretary of the Finance Ministry Shreekrishna Nepal and officer-in-charge at Nepal Resident Mission of ADB Rudi Louis Hendrikus Van Dael signed an agreement on behalf of their respective institutions at a programme today, according to a press release issued by the Finance Ministry.
The development partner is providing loan to support the Electricity Grid Modernisation Project to be implemented by Nepal Electricity Authority (NEA). “Of the estimated total costs of Rs 22.81 billion, the government and the power utility will jointly invest the remaining Rs 4.56 billion of the project, it reads, adding that the project has targeted to improve electricity transmission and distribution systems and reduce power leakages.
“The objective is to improve the power transmission and distribution system of the Electric Grid Modernisation Project, to make the power supply sustainable and reliable by modernising the power grid and to develop and strengthen the capacity of NEA,” the press note adds.
The total cost of the Electric Grid Modernisation Project is about Rs. 22.81 billion and Rs 18.25 billion will be borne by the ADB and the remaining Rs. 4.56 billion will be invested by the Government and Nepal Electricity Authority.
The Finance Ministry has stated that the energy saved from the power grid modernisation project can be exported to the neighboring countries by minimizing the energy loss due to power leakage and this will also make a positive contribution to the economic activities.
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