Nepal Electricity Authority (NEA) has urged the Asian Infrastructure Investment Bank (AIIB) to increase investment in electricity infrastructure improvement and expansion projects.

During a meeting with a visiting AIIB delegation comprising the bank board of governors led by AIIB Director RMP Rathnayake on Monday, NEA Executive Director Kulman Ghising requested the AIIB to ramp up investment on cheaper interest rates in infrastructure improvement and expansion towards electricity transmission and distribution.

On the occasion NEA Executive Director Ghising apprised the AIIB delegation of the outline of the energy sector development in Nepal and the investment needs for the same. He said there is a need for huge investment for building infrastructures for production, transmission and distribution of electricity for expanding electricity trade with the neighboring countries.

"Nearly 60 billion US dollars investment (including for the private sector) is required for projects related to the production, transmission and distribution of electricity in order to implement the Energy Sector Roadmap until 2035 brought by the Ministry of Energy. Concessional loan at cheaper interest rate is required for this from multilateral institutions like the AIIB," he added.

The AIIB team expressed the bank's willingness to make investments required for the energy sector. The delegation on the occasion inquired about the progress of projects under construction on AIIB investment, environmental and social security topics, restructuring of the energy sector and market guarantee for power export.

Member of the AIIB board of directors from Nepal and chief of the International Economic Assistance Coordination Division, Ministry of Finance, Joint Secretary Shree Krishna Nepal also stressed on AIIB providing concessional loans for the development of the energy sector.

AIIB has provided a concessional loan of 112 million and 300 thousand US dollars to Nepal for the implementation of the Electricity Distribution System Improvement and Expansion Project. This loan is being spent for carrying out electrification and distribution system expansion and improvement in Dang, Banke, Bardia and Rolpa of Lumbini province and the eight districts in Karnali province.

Nineteen 33/11kV distribution substations, 350 kilometers of the 33kV transmission line, 1798-kilometer 11kV line and a 3159 kilometers LT line are to be constructed as well as 1045 distribution transformers to be installed as part of this project. Contract agreement and project design have already been completed for implementing the project.

AIIB has released a 40 million dollars loan for the 216-megawatt Upper Trishuli-1 Hydropower Project which is under construction through foreign direct investment led by the Korean companies.