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The Asian Development Bank (ADB) has signed two public-private partnership (PPP) Transaction Advisory Services (TAS) agreements with the Government of Nepal to facilitate private sector investment in power transmission and utility-scale battery energy storage systems (BESS), marking ADB’s first such agreements in Nepal.

The agreements, signed on October 1, will support the development of critical transmission and battery storage infrastructure through PPP models and are expected to mobilize more than $200 million in private sector investment.

The agreements were signed by ADB Country Director for Nepal Arnaud Cauchois and Nepal Electricity Authority (NEA) Managing Director Dirghayu Kumar Shrestha.

Under the agreements, ADB will provide transaction advisory support to the NEA covering feasibility studies, preparation of project agreements, procurement, tendering and capacity building.

The initiative comes as Nepal seeks to expand its electricity transmission infrastructure and improve the reliability and flexibility of its power system following a substantial increase in electricity access across the country.

According to ADB, electricity access in Nepal increased from 58% in 2016 to 99% in 2025. With access having expanded significantly, the next challenge is to ensure reliable domestic electricity supply while building the infrastructure required to sustain and expand electricity exports.

“Nepal has made significant progress in providing electricity to its people, with access to power increasing from 58% in 2016 to 99% in 2025,” Cauchois said.

He said the challenge now is to translate that progress into reliable domestic supply and sustained export capacity. This, he added, would require timely expansion of transmission and battery storage infrastructure, with private sector participation playing a critical role in mobilizing the capital, expertise and efficiency required to deliver such investments at scale.

134-km, 400-kV transmission line

The first transaction advisory agreement will support the development of an approximately 134-kilometer, 400-kilovolt transmission line along the Tingla–New Khimti–Dhalkebar corridor.

The project will cover the design, financing, construction, operation and maintenance of the transmission line under a PPP structure.

The proposed transmission infrastructure is expected to strengthen Nepal’s grid reliability, enable greater integration of renewable energy into the national system and support regional electricity trade.

The transmission line is also expected to help improve the evacuation of electricity generated by power projects, particularly as Nepal continues to add renewable generation capacity.

100–150 MWh battery storage system

The second agreement focuses on developing 100–150 megawatt-hours (MWh) of utility-scale battery energy storage systems at selected NEA substations.

The multisite BESS project will cover the design, financing, installation and operation of the battery storage systems under a PPP modality.

The storage systems are intended to address peak-period constraints in the electricity grid, facilitate the integration of variable renewable energy and provide grid management and ancillary services.

According to ADB, the BESS infrastructure will help improve the overall stability and reliability of Nepal’s electricity system, while providing greater flexibility in managing fluctuations in electricity generation and demand.

First such PPP transaction advisory agreements

ADB said the two agreements are significant because they represent its first Transaction Advisory Services arrangements for a power transmission PPP and a standalone utility-scale BESS PPP in an ADB member country.

The agreements also represent ADB’s first TAS agreements of this nature in Nepal.

Through the advisory services, ADB will assist the NEA in preparing the projects for private-sector participation, including conducting feasibility assessments, structuring project agreements and supporting procurement and tendering processes.

The initiative is designed to bring private capital into areas of Nepal’s power infrastructure that have traditionally required substantial public investment.

NEA Managing Director Shrestha welcomed the partnership, saying the agreements would help advance strategically important transmission line projects and battery energy storage systems while attracting private investment.

“We appreciate ADB’s partnership through these Transaction Advisory Services Agreements, which will help advance strategically important transmission line projects and battery energy storage systems, attract private sector investment, and support the long-term growth and sustainability of Nepal’s power sector,” Shrestha said.

Focus on grid reliability and electricity exports

The two projects are expected to have a broader impact on Nepal’s power sector by expanding both transmission capacity and energy storage capacity.

ADB said the investments will improve the reliable evacuation of electricity from generation projects while creating opportunities to mobilize private capital in the power transmission and BESS sectors.

The combination of additional high-voltage transmission infrastructure and large-scale battery storage is expected to strengthen the electricity system as Nepal expands renewable energy generation.

The transmission project will also support the country’s ability to participate more effectively in regional electricity trade, while the battery storage component will provide additional flexibility for managing the national grid.

Together, the projects are intended to strengthen Nepal’s energy system, improve the reliability of electricity supply and create a framework for greater private-sector participation in critical power infrastructure.

ADB is a multilateral development bank supporting sustainable, inclusive and resilient growth across Asia and the Pacific. The institution works with its member countries and partners through financial tools and strategic partnerships to develop infrastructure and address complex development challenges. ADB was founded in 1966 and is owned by 69 members, including 50 from the Asia-Pacific region.