The project will also support the Province 2, where the quality of power supply is poor and nearly 20% of households are still without access to the national grid
ADB offers $200m loan to upgrade power supply and distribution system in Nepal. (Credit: Pixabay/Sebastián Faune)
The Asian Development Bank (ADB) has agreed to provide $200m funding to modernize power supply and distribution system in Nepal.
The Kathmandu Valley, Bharatpur metropolitan area in Chitwan district in Bagmati Province and Pokhara of Kaski district in Gandaki Province will benefit from the project.
These areas, which face frequent and prolonged supply interruptions, will receive financial support to reinforce and modernise their power supply system.
The project will also support the Province 2, where the quality of power supply is poor and nearly 20% of households are still without access to the national grid.
ADB principal energy specialist Jiwan Acharya said: “The project will help sustain Nepal’s improved electricity supply momentum over the past two years.
“This will facilitate meeting future demand from commercial and industrial activities as well as from communities, particularly women, who can now benefit from electricity-based enterprises and focus on productive economic and social activities.
“It is also very timely because the project will create employment opportunities for skilled and unskilled labor during the construction phase as the country adopts measures to mitigate the socioeconomic impact of the coronavirus disease (COVID-19) pandemic.”
Government of Norway is providing a $35m for the project
In addition to the funding from ADB, the Government of Norway is providing a $35m co-financing for the installation and modernization of power distribution networks in Province 2 and various substations to evacuate hydropower in the country.
Additionally, it is also providing a $5m technical assistance grant for capacity development of the Nepal Electricity Authority to ensure that gender equality and social inclusion are strengthened, and new technologies are used to make electricity infrastructure resilient.
Furthermore, the project is aligned with the South Asia Subregional Economic Cooperation program on intraregional power trade through cross-border power exchange.
The substations in Khimti, Barhabise, and Lapsiphedi will be upgraded to 400 kilovolts to facilitate cross-border power exchange with India.