An investment of approximately NPR 72.93 billion (USD 53.70 million) has been secured for the expansion, improvement, and modernization of the country’s electric transmission and distribution systems, aimed at ensuring reliable and quality electricity supply domestically and expanding electricity trade with neighboring countries.

The Asian Development Bank (ADB) will provide a concessional loan of USD 31.10 million (NPR 42.24 billion) and a grant of USD 3 million (NPR 4.07 billion) for the project. The European Union will contribute USD 2.26 million (NPR 3.06 billion), and the Norwegian government will provide USD 3.10 million (NPR 4.21 billion) in grants. Additionally, USD 1 million (NPR 1.35 billion) will be received from the Strategic Climate Fund. The Government of Nepal will bear the cost of USD 13.24 million (NPR 17.98 billion) for implementing the project.

The project, which will be implemented under ADB’s South Asia Subregional Economic Cooperation (SASEC) Power Transmission and Distribution Strengthening Project, will primarily focus on the construction of 290 kilometers of transmission lines, the establishment of five new substations, and the upgrading of two existing substations. The second phase of the project will include the replacement of single-phase meters with smart meters in residential homes in the Kathmandu Valley, the modernization and automation of distribution substations, the installation of Supervisory Control and Data Acquisition (SCADA) systems, the construction of national transmission lines in the Karnali Province, and the upgrading of the distribution system. The agreement for concessional loans and grants was signed on Friday between the government, ADB, and the Nepal Electricity Authority (NEA). The NEA will be responsible for implementing the projects.

NEA’s Executive Director Kulman Ghising stated that the funding will be used to improve and expand the electricity supply system domestically, build essential infrastructure as a backbone for regional and sub-regional electricity trade, and digitize the distribution system. He mentioned that significant amounts of money have been raised to address customer complaints about power outages and ensure sufficient, reliable, high-quality, and safe electricity supply. These efforts will strengthen and improve the existing infrastructure that has been planned over the years.

Arnold Kushwa, ADB’s Director for Nepal Residential Mission, stated that the assistance will help remove the limitations of grid infrastructure to meet the growing electricity demand and achieve the goal of green energy export. He added that the assistance will focus on transmission and distribution, which will enhance the capacity for cross-border electricity trade and increase the internal consumption of hydroelectric power. He further mentioned that the project will help reduce energy poverty, promote electrification, and address socio-economic inequalities among provinces.

The assistance will be used to construct a 160-kilometer long 400 kV double-circuit transmission line from the new Butwal substation in Sunwal Municipality-13, Nawalparasi (Bardghat Susta West), passing through Rupandehi, Kapilvastu, Arghakhanchi, and Dang. A 400 kV automated substation will be built at Lamahi using Gas Insulated System (GIS) technology. The transmission line and substation construction will cost USD 20.30 million.

Ghising explained that the existing 132 kV line from Butwal to the west will be upgraded to a 400 kV line and substation to meet the growing power demand and ensure reliable electricity trade with neighboring countries.

For industries in the Bara-Parsa Industrial Corridor, sufficient and reliable electricity will be provided through the 400 kV transmission line between Hetauda-Dhulikhel-Inaruwa, with a new 400 kV substation to be built at Nijgadh under a concessional loan from the Indian Exim Bank. The construction of a 400 kV line from Nijgadh to Parwanipur and a 400 kV substation at Parwanipur will cost USD 8.5 million from ADB.

Additionally, the construction of a 220 kV transmission line from Okharpouwa to Thinpiple and a 220 kV substation at Thinpiple will be carried out with an investment of NPR 40 million, targeting the electricity supply for the Kathmandu Valley until 2050.

The Dailkeh-Jumla 132 kV transmission line and the 132 kV transmission line in Jumla will cost an estimated USD 3.5 million, while the upgrading of the electricity distribution system in Karnali Province will be allocated USD 2.30 million.