The Ministry of Finance (MoF), on behalf of the Government of Nepal and the Kathmandu-based German Embassy, on behalf of the Government of the Federal Republic of Germany, signed a grant agreement for the implementation of the Power Distribution Strengthening Programme (PoDiSP) in Nepal.

The Ministry of Finance said in a press release on Tuesday that Germany has agreed to extend 10 million Euros (approximately NPR 1.46 billion) as grant assistance to Nepal.

German ambassador to Nepal Dr. Thomas Prinz and Dhani Ram Sharma, joint secretary at the Ministry of Finance, signed and exchanged the agreement on behalf of their respective governments amid a program at the Ministry of Finance on Tuesday.

According to the ministry, the PoDiSP aims to strengthen Nepal's electricity distribution infrastructure and introduce climate-friendly technologies to ensure a more reliable and efficient power supply. The focus areas for development will be key regions in Nepal, including Bharatpur (Bagmati Province), Butwal and Bhairahawa (Lumbini Province), and Pokhara (Gandaki Province).

The programme will support the Nepal Electricity Authority (NEA) in preparing a detailed feasibility study and in upgrading the existing power distribution system with modern, climate-smart technologies.

The initiative is designed to improve energy efficiency and power reliability, ensuring sustainable access to electricity for the targeted areas, the statement added.

This project will be implemented as a German Financial Cooperation (FC) through KfW, Germany's development bank, and will be integrated into the Government of Nepal's budgetary system, being reflected in the red book for its official execution. The programme will commence in 2025, added the ministry.

During the signing ceremony, Joint Secretary Sharma emphasized that this support would greatly enhance the reliability of the power supply across the targeted regions. He extended his sincere gratitude to the Government of Germany for its continued commitment to strengthening Nepal's energy sector.

Ambassador Dr. Prinz expressed his satisfaction at the opportunity to support Nepal in enhancing the electricity distribution system, using modern and climate-friendly technologies to ensure energy efficiency. He further remarked that this agreement would deepen the longstanding relationship between Germany and Nepal.

The Government of Nepal also expressed its sincere appreciation to the Government of Germany for its continued support and its critical role in fostering Nepal's socio-economic development.

The signing ceremony was attended by senior officials from the Ministry of Finance, the Nepal Electricity Authority, the German Embassy in Kathmandu and KfW Nepal.