The loan, from the bank’s concessional resources, will be complemented by a co-financing loan of $120m from the European Investment Bank, a $60m grant from the Government of Norway, and a $11.2m grant from the ADB-administered Strategic Climate Fund.
ADB said the loan will help the Nepal Electricity Authority finance a substantial upgrade and expansion of transmission and distribution lines and substations.
About 2,000MW of electricity will be transferred to main load centres in the Kathmandu valley.
The network expansion will give the ability to export around 1,200MW of electricity to India, upon completion of a second 400 kv cross-border transmission line from Bardaghat to Gorakhpur.
The projects are anticipated to be finished by the end of 2021.
ADB South Asia department energy specialist Lei Zhang said the current 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 are suffer power cuts for about 12 hours per 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," Zhang added.
