Nepal Electricity Authority (NEA) has sought financial aid from the Asian Infrastructure Investment Bank (AIIB) to materialize the ‘Energy Development Roadmap and Action Plan 2023.’

In a meeting with the AIIB’s board of directors, the NEA Managing Director Kulman Ghising, requested the AIIB to increase investment in electricity infrastructure improvement and expansion projects. According to the NEA, Ghising requested the AIIB delegates to provide the power utility with the concessional loans for this purpose.

Ghising said a large investment is needed to build production, transmission and distribution structures for adequate, reliable, quality and safe electricity supply, to expand electricity trade with neighboring countries. "The country requires approximately US$ 60 billion is needed for the implementation of the roadmap of the energy sector up to 2035 forwarded by the Ministry of Energy," said Ghising.

In September 2023, the government launched its ambitious and comprehensive action plans for the overall development of the country’s energy sector by 2035. The action plan envisages harnessing the country’s untapped energy potential to take the production capacity to 28,000 MW, up from around 3,000 MW, within the stipulated time frame.

As of now, the AIIB has provided a concessional loan of US$ 112.3 million to Nepal for the implementation of electricity distribution system improvement and expansion project. The loan amount obtained through the project is being spent on the expansion and improvement of the electrification and distribution system of Dang, Bake, Bardiya and Rolpa districts of Lumbini Province and eight districts of Karnali Province, according to the NEA.

The AIIB-funded project has targeted to install 19 units of 33/11 kV distribution substations, 350 km of 33 kV transmission lines, 1,798 km of 11 KV transmission lines, 3,159 km length of low tension lines and 1,045 units of distribution transformers. The contract agreement and project design have already been finalized for the implementation of the project.

In addition, the AIIB in consortium with Korean companies has provided a loan of US$ 40 million to construct the 216 megawatt Upper Trishuli-1 hydropower project, which is under construction in Rasuwa district.