ADB to support expansion of power transmission, battery storage capacity in Nepal through PPP

The Asian Development Bank (ADB) has signed two public-private partnership (PPP) -- first of its planned ones -- transaction advisory services agreements with the government to encourage private sector investment in power transmission and battery storage infrastructure.
ADB Country Director for Nepal Arnaud Cauchois and Nepal Electricity Authority (NEA) managing director Dirghayu Kumar Shrestha signed the agreements in Kathmandu, today.
These landmark agreements represent the first transaction advisory services for a power transmission public-private partnership and a standalone utility-scale battery energy storage system in any member country of the bank, according to the multilateral bank. "Through these deals, the bank will assist the NEA with feasibility studies, procurement, tendering, project agreements, and capacity building. The initiatives are projected to mobilise more than $200 million in private sector capital."
Highlighting the energy achievements of the nation, Cauchois noted the rapid expansion of electricity access. "Nepal has made significant progress in providing electricity to its people, with access to power increasing from 58 per cent in 2016 to 99 per cent in 2025," he said, adding that the challenge now is to translate this growth into reliable domestic supply and sustained export capacity. "Achieving this will require the timely expansion of transmission and battery storage infrastructure, with private sector participation playing a critical role in mobilising the capital, expertise, and efficiency needed to deliver these investments at scale."
NEA managing director Shrestha welcomed the collaboration, stating, "We appreciate ADB's partnership through these Transaction Advisory Services Agreements, which will help advance strategically important transmission line projects and battery energy storage systems, attract private sector investment, and support the long-term growth and sustainability of Nepal's power sector."
The first agreement concentrates on the design, financing, construction, operation, and maintenance of a 134-kilometre, 400-kilovolt transmission line spanning Tingla, New Khimti, and Dhalkebar. This project is anticipated to enhance grid reliability, allow for greater integration of renewable energy, and facilitate regional electricity trade.
The second agreement entails the design, financing, installation, and operation of a 100 to 150 megawatt-hour multisite battery energy storage system at selected substations. Operating under a public-private partnership model, this system aims to resolve peak-period grid constraints, support variable renewable energy integration, and provide essential grid management services to ensure system stability.
Together, the projects are expected to strengthen the energy system of Nepal by expanding power transmission and battery storage capacity. The investments will also improve the reliable evacuation of electricity from generation projects and open up private capital mobilisation in the energy sector.