ADB approved $156 million concessional loan to modernize power transmission and distribution systems

KATHMANDU / The Asian Development Bank (ADB) has approved a $156 million concessional loan to modernize power transmission and distribution systems in Nepal.

While majority of Nepal’s population has access to grid-supplied electricity, there is a need to increase the capacity and reach of power distribution networks to meet current and future demands, improve reliability and quality of supply, and reduce losses. The Electricity Grid Modernization Project will finance the automation of grid substations throughout the country, modernize distribution and transmission systems in various areas, complete the installation of smart meters in the Kathmandu Valley, and support sector reform and institutional strengthening of the Nepal Electricity Authority (NEA).

“ADB has been actively involved in major policy and institutional reforms in the power sector, and this project is a continuation of our support to provide reliable and efficient electricity supply in the country,” said ADB Principal Energy Specialist Jiwan Acharya. “Moreover, this project will position Nepal to be better prepared in its post-pandemic economic rebuilding.”

The project will, among others, automate 34 existing grid substations, install 220-kilovolt (kV) and 132-kV automated grid substations, construct a total of 113 kilometers (km) of new transmission lines, upgrade 144 km of existing transmission lines with efficient conductors, and expand the installation of smart meters for 350,000 electricity consumers in the Kathmandu Valley. An electricity distribution system command and control center in Kathmandu will also be constructed. 

Awareness-raising activities on the safe and efficient use of electricity for electricity consumers, including women and disadvantaged groups, will be conducted. The project will strengthen the institutional capacity of NEA in implementing its comprehensive corporate development plan, train its staff in managing the automated grid substations, and improve financial sustainability and corporate financial reporting.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.