The World Bank has approved a US$38M assistance package for Nepal to help construct a transmission line and substations to evacuate power that will be generated in the Kabeli corridor in eastern Nepal, facilitating efforts by Nepali private hydropower developers to arrange financing for their projects
The Kabeli Transmission Project will construct a 132kV transmission line that will extend from Kabeli Bazaar in the north of Panchthar district to Damak in Jhapa district, both in eastern Nepal. Substations will be built in the vicinity of Kabeli Bazaar and at the towns of Phidim, Ilam and Damak. The project’s location is significant from the perspective of the strategic development of the Integrated Nepal Power System as it will open up the extreme east of Nepal for power sector development and will shorten the distance required to transmit electricity to the country’s main industrial center around Biratnagar.
The project was identified as a priority in the Government of Nepal’s Electricity Management Plan, formulated in response to the dramatic worsening of electricity supply that took place in 2008. The plan includes a focus on developing new transmission corridors to facilitate the development of new generation projects which require transmission capacity to evacuate their power to the national grid. The Kabeli Corridor is one of five priority transmission corridors identified in the plan. The transmission line will facilitate efforts by Nepali private hydropower developers to arrange financing for their projects, as generation projects must have a credible plan for transmitting power before banks will offer financing.
Another objective of the project is to provide access to electricity to communities in the area of the Kabeli transmission line. Where technically feasible, the grid will be extended to presently unelectrified communities located in the area. Communities for which grid extension is not a feasible option will receive funding and technical support for off-grid rural electrification and other energy services, such as biogas for cooking.
The assistance package will be a blend of credit and grants from the International Development Association (IDA), the World Bank’s concessionary lending arm. Financing will comprise US$27.4M in IDA credit and US$10.6M in IDA grant.