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The Nepal Electricity Authority (NEA) has, for the first time, received expressions of interest (EOIs) from the private sector to participate in the transmission sector, with 18 domestic and foreign companies and joint ventures submitting applications.

Under a rate-based competitive bidding structure, the authority had invited EOIs for the construction of four major transmission line projects under the Build-Own-Operate-Transfer (BOOT) model.

The 400 kV Shitalpati (Arun Hub)–Inaruwa transmission line (Transmission Line-1), which will be built across Sunsari, Sankhuwasabha, Dhankuta, and Bhojpur, will be 95 km long and include 243 towers. The survey has already been completed, and the line will have a capacity to transmit 4,400 MW of electricity.

The 400 kV Tinga–New Khimti–Sunkoshi–Dhulikhel (Transmission Line-2), spanning Solukhumbu, Okhaldhunga, Ramechhap, Dolakha, Sindhuli, and Dhanusha, will be 133.99 km long with 385 towers. Its survey and preliminary environmental assessment have been completed, and it will have a transmission capacity of 4,080 MW.

The 132 kV Dandakharka–Burtibang (Transmission Line-3), to be built in Myagdi and Baglung, will be a 33 km double-circuit line with a capacity of 250 MW and is currently in the survey stage.

The 132 kV Ridi–Tamghas (Transmission Line-4) will be built in Palpa and Gulmi. This double-circuit line, about 28 km long, is also currently under survey.

Companies from Nepal, India, China, and the United States have shown interest in the four transmission line projects, either individually or through joint ventures. Among them, China’s TBEA Company Limited, China National Machinery Import & Export Corporation, and India’s Resonia Limited and Megha Engineering & Infrastructures Limited have submitted applications for all four transmission lines.

India’s Power Grid Corporation of India Limited has applied for Transmission Line-1, 2, and 3, while Ashoka Buildcon Limited has applied for Transmission Line-1 and 2.

Similarly, Techno Enterprises/Rausina Industries/Anand Solar (India), Paradise Builders/Applied Engineering Nepal/Absolute Projects India, and Nepal’s Sigma and Hulas Steel Industries Limited have applied for Transmission Line-1, 3, and 4.

K&A EPC – K&A Engineering – Cosmic JV (USA/Nepal), Viviana Power Tech (India), and Universal–Mountain Consortium (Nepal) have expressed interest in Transmission Line-3 and 4.

Nepal-based Bhalefi Hydropower/Litmus Cable/Sharma & Company has applied for Transmission Line-3, while a joint venture of Sharma & Company/Bhalefi/Litmus/Hulas Steel has applied only for Transmission Line-2.

Similarly, Power Transmission Company Nepal, High Himalaya Hydro Construction, Shivashree–Danphe JV, and Bhalefi Hydropower/Sharma & Company/Litmus Cable/Z Infra JV have submitted applications only for Transmission Line-4.

Although this is the first time the private sector has been invited to participate in transmission line development, interest from Indian companies appears to be higher, NEA spokesperson Rajan Dhakal said. “Even though the private sector had been requesting participation in transmission lines, there hasn’t been much response domestically,” he said. “Interest from Indian companies is comparatively higher.”

To attract the private sector, the Nepal Electricity Authority (NEA) said it has itself taken on the risk of electricity transmission and issued the call for expressions of interest (EOIs), according to officials.

He stated that the authority plans to develop transmission capacity of around 2,000 MW. “We don’t know which hydropower project will come in which year,” he said. “Investing right now involves risk. But if we build a 2,000 MW transmission line, include its capital cost and investment in a tariff code, then the risk is reduced for investors. The only risk for them would be whether the NEA can pay or not.”

He added that since the transmission line will be built and handed over as specified, companies will not have to bear the risk of whether electricity flows at full capacity or not.

According to the EOI process, all 18 applicants will first be evaluated and a shortlist will be published. Only shortlisted companies will be invited to submit detailed proposals (RFPs). In the RFP stage, bidders must propose detailed rates, including the “transmission service charge” for providing the service.

The selected private company (Transmission Service Provider – TSP) will be responsible for all aspects of the project, including survey, detailed feasibility study, raising investment, land acquisition and compensation distribution, obtaining forest and environmental clearances, construction, operation, and all associated risks.

The NEA will seek government approval to transfer any existing survey or transmission licenses to the successful bidder or its special purpose vehicle (SPV), and will provide necessary facilitation in line with the agreement.

Under the Transmission Service Agreement (TSA), the private company must complete design, financial closure, construction, and testing (commissioning) within the stipulated timeframe.

From the date the project begins commercial operation, the private company must operate and maintain the transmission line for 20 years in compliance with applicable laws and the TSA.

After the 20-year operating period ends, the private company must hand over the transmission line and related infrastructure to the NEA in a fully operational condition.

Officials said such conditions have made the private sector less attracted to the projects. According to former president of the Independent Power Producers’ Association Nepal, Ganesh Karki, these terms are discouraging participation.

“There are many conditions attached to the EOI for transmission lines,” he said. “These terms need to be improved. Only then will the private sector be attracted.”

Kantipur