50059-002: Power Transmission and Distribution Efficiency Enhancement Project | Asian Development Bank

Nepal: Power Transmission and Distribution Efficiency Enhancement Project

Sovereign (Public) Project | 50059-002 Status: Active

Electricity is a necessary requirement for accelerating the economic development of any country and is considered an important input to improve quality of life. Overall, the electricity demand has far outgrown the supply, leading to load curtailment and increased dependence on imports from India in recent times. The peak suppressed demand in Nepal in FY2013 2014 has been around 1,200 megawatt (MW) as against installed capacity of 787 MW, hence resulting in a deficit of about 440 MW due to non-availability of generation. Government has plans to generate additional 10,000 MW in the next 10 years. About 63% of the population in Nepal has access to electricity but the supply quality is unreliable and inadequate. The government has recognized the immediate need for reinforcement and upgrade of outdated distribution systems crucial to deliver the required energy to the customers even if the generation and transmission lines are in place.

Project Details

Project Officer
Acharya, Jiwan S. South Asia Department Request for information
Country
  • Nepal
Modality
  • Loan
  • Technical Assistance
Sector
  • Energy
 
Project Name Power Transmission and Distribution Efficiency Enhancement Project
Project Number 50059-002
Country Nepal
Project Status Active
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 3542-NEP: Power Transmission and Distribution Efficiency Enhancement Project
concessional ordinary capital resources lending / Asian Development Fund US$ 150.00 million
TA 9334-NEP: Strengthening the Capacity of Nepal's Energy Sector to Deliver Gender Equality and Social Inclusion Results
Japan Fund for Poverty Reduction US$ 2.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Energy / Electricity transmission and distribution - Energy efficiency and conservation

Gender Equity and Mainstreaming Effective gender mainstreaming
Description

Electricity is a necessary requirement for accelerating the economic development of any country and is considered an important input to improve quality of life. Overall, the electricity demand has far outgrown the supply, leading to load curtailment and increased dependence on imports from India in recent times. The peak suppressed demand in Nepal in FY2013 2014 has been around 1,200 megawatt (MW) as against installed capacity of 787 MW, hence resulting in a deficit of about 440 MW due to non-availability of generation. Government has plans to generate additional 10,000 MW in the next 10 years. About 63% of the population in Nepal has access to electricity but the supply quality is unreliable and inadequate. The government has recognized the immediate need for reinforcement and upgrade of outdated distribution systems crucial to deliver the required energy to the customers even if the generation and transmission lines are in place. In this regard, the need for immediate distribution network enhancement is included in the government's action plan to address energy crisis and provide universal access to reliable and efficient electricity for all by 2030. This will contribute in promoting sustainable energy for all (Sustainable Development Goal #7) and Nepal's Intended Nationally Determined Commitments for the United Nations Framework Convention on Climate Change.



ADB's Nepal country partnership strategy 2013 2017 supports the government's development objective of accelerated and inclusive economic growth. It seeks to address the infrastructure bottlenecks in the key areas such as energy services and creating an enabling environment for increased business and employment opportunities. ADB's support for the energy sector in Nepal has largely focused on generation and transmission with some distribution extension. This project will be ADB's first investment in Nepal specifically targeting energy efficiency through distribution system enhancements measures.

Project Rationale and Linkage to Country/Regional Strategy The Asian Development Bank (ADB) will provide a loan to the Government of Nepal (the government) to meet the immediate needs of electricity distribution network in Kathmandu Valley and strengthening of associated transmission lines by the Nepal Electricity Authority (NEA). Major sections of the existing distribution network in the valley were constructed decades ago and despite significant increase in electricity demand and the number of consumers, minimal reinforcement of the distribution network has been carried out. The project will enhance the distribution capacity and improve reliability and quality of electric supply in the Kathmandu Valley by reducing distribution system overloads and technical and commercial losses, which currently is about 20%. The project will also support implementation of other system efficiency upgrades and energy efficiency measures such as advanced grid operations software, distribution system automation, and smart metering. System efficiency improvements and loss reductions will improve NEA's financial health, while customers will benefit from a reliable and improved quality of electricity supply and reduced dependence on diesel generators to meet their daily electricity needs. Operational upgrades will also facilitate integration of new generation capacity scheduled to come on-line during the next three to four years. The project can be replicated in other cities in the country.
Impact Reliable and efficient electricity supply for all achieved by 2030 (National Energy Crisis Reduction and Electricity Development)
Project Outcome
Description of Outcome Access to efficient, adequate, and high-quality power supply in the Kathmandu Valley improved
Progress Toward Outcome Ongoing
Implementation Progress
Description of Project Outputs

Transmission grid capacity to feed the primary distribution networks for the Kathmandu Valley strengthened

Kathmandu Valley distribution network rehabilitated and capacity increased

Operational and financial performance of NEA distribution centers enhanced

NEA's capacity to operate and manage an advanced distribution system and intelligent network (smart grid) technology with GESI aspects in electricity access and end-user awareness programs developed

Status of Implementation Progress (Outputs, Activities, and Issues) Out of $150 million, $143 million (approximately 95%) worth contracts are now already published. The remaining one package of $7 million to be issued by NEA in December 2017.
Geographical Location Kathmandu Valley
Safeguard Categories
Environment B
Involuntary Resettlement A
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects Initial environmental examinations have been prepared following ADB's Safeguard Policy Statement (SPS) (2009) and the government's environmental regulations.
Involuntary Resettlement Consultations have been undertaken and survey conducted. The resettlement plan will be publicly disclosed to interested stakeholders on ADB's websites.
Indigenous Peoples No indigenous peoples' impact is expected as there is no indigenous peoples group in the project areas.
Stakeholder Communication, Participation, and Consultation
During Project Design A series of consultations with affected persons and communities have been conducted by the project implementing agency for project preparation, and they will be continued.
During Project Implementation A series of consultations with affected persons and communities will be continued throughout project implementation.
Business Opportunities
Consulting Services Project Supervision Consultant will be engaged for this project.
Procurement

All procurement of goods will be undertaken in accordance with ADB's Procurement Guidelines on ADBs Procurement Guidelines (2015, as amended from time to time). Before the start of any procurement, ADB and the government will review the public procurement laws of the central and state governments to ensure consistency with ADB's Procurement Guidelines (2015, as amended from time to time).

The procurement scope under the project will be limited to procurement of goods for the substations, distribution system enhancement and smart meters. International Competitive Bidding (ICB) procedures would be adopted where the estimated tender value is above the threshold limit as defined in the procurement Plan, and National Competitive Bidding (NCB) procedures may be adopted for bids with an estimated value up to the threshold limit. NEA has sufficient capacity to design and implement these activities. NEA has also demonstrated good performance and track record with procurement of goods and works other similar activities and has sufficient knowledge of NCB procedures.

Responsible ADB Officer Acharya, Jiwan S.
Responsible ADB Department South Asia Department
Responsible ADB Division Energy Division, SARD
Executing Agencies
Nepal Electricity Authority (NEA)
P. O. Box 5352
Kathmandu
Nepal
Timetable
Concept Clearance 22 Jul 2016
Fact Finding 16 Sep 2016 to 30 Sep 2016
MRM 11 May 2017
Approval 29 Jun 2017
Last Review Mission -
Last PDS Update 13 Sep 2017

Loan 3542-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 Jun 2017 10 Sep 2017 05 Dec 2017 30 Jun 2022 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 189.00 Cumulative Contract Awards
ADB 150.00 29 Jun 2017 0.00 0.00 0%
Counterpart 39.00 Cumulative Disbursements
Cofinancing 0.00 29 Jun 2017 0.00 0.00 0%

TA 9334-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 Jun 2017 24 Jul 2017 24 Jul 2017 29 Jun 2019 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 2,000,000.00 0.00 0.00 0.00 0.00 2,000,000.00 29 Jun 2017 0.00

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

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Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


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Contracts Awarded

No contracts awarded for this project were found