Nepal: Tanahu Hydropower Project

Project Name Tanahu Hydropower Project
Project Number 43281-013
Country / Economy Nepal
Project Status Active
Project Type / Modality of Assistance Grant
Loan
Technical Assistance
Source of Funding / Amount
Loan 2990-NEP: Tanahu Hydropower Project
Asian Development Fund US$ 120.00 million
Loan 2991-NEP: Tanahu Hydropower Project (ADF Hard-term)
Asian Development Fund US$ 30.00 million
Loan: Tanahu Hydropower Project (ADF Hard Term)
European Investment Bank US$ 70.00 million
Loan: Tanahu Hydropower Project (ADF Hard-term)
Japan International Cooperation Agency US$ 184.00 million
Abu Dhabi Fund US$ 30.00 million
TA 8329-NEP: Support for Sustainable Energy Management and Reforms
Japan Fund for Prosperous and Resilient Asia and the Pacific US$ 1.50 million
Loan: Tanahu Hydropower Project
European Investment Bank US$ 15.00 million
Grant: Tanahu Hydropower Project
KfW US$ 33.55 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Partnerships
Private sector development
Sector / Subsector

Energy / Electricity transmission and distribution - Large hydropower generation

Gender Effective gender mainstreaming
Description The project has three main components: (i) a medium-sized hydropower plant of 140 megawatts (MW) with significant water storage facilities and associated transmission lines to evacuate the generated power; (ii) rural electrification and community development in the project area, and (iii) a reform and restructuring plan for the national utility, the Nepal Electricity Authority (NEA). The project site is in the Seti River in the Tanahu district, about 150 kilometers (km) west of Kathmandu.
Project Rationale and Linkage to Country/Regional Strategy Nepal faces a mounting energy crisis. Supplies fall well short of demand, the main utility operating the system is highly inefficient, the policy environment is weak, and the role of the private sector is far too small. The supply gap is growing, especially during the dry season in winter (NovemberApril). Kathmandu, the main consumption center, has blackouts of 1418 hours a day during this season and load shedding almost every day year-round. Supplies in the rest of the country fare even worse, although an additional problem here is a very low electrification rate. In the meantime, demand for electricity has been growing at 10% annually. This supply gap forces consumers to use diesel generators. These are expensive and very polluting. Rising diesel imports affect the balance of payments, and the doubling of diesel prices over the past 3 years also hurts the income base of people and businesses. The supply problem is becoming one of the biggest obstacles to economic growth. It curtails investment and trade, productivity, job creation, and the quality of life of most citizens. The proposed project is one of a series of similar investments to help overcome this supply problem.
Impact

Expanded access to clean and sustainable energy in Nepal

Project Outcome
Description of Outcome

Increased efficiency and supply of reliable hydropower energy

Progress Toward Outcome Contract for headworks package signed in March 2021. Site mobilization has taken place.
Implementation Progress
Description of Project Outputs

1. Hydropower plant and transmission system made operational

2. Rural electrification increased

3. Community development program in the project area implemented

4. NEA restructured

5. Other sector reforms undertaken

6. Equity sales scheme for hydropower development initiated

Status of Implementation Progress (Outputs, Activities, and Issues)

1. On track to meet target

2. On track to meet target

3. On track to meet target

4. On track to meet target

5. On track to meet target

6. On track to meet target

Geographical Location Nation-wide, Bharatpur, Central Region, Damauli, Dharampani, Lumbini Zone, Majhkot, Mid Western, Narayani Zone, Rapti Zone, Tanahun, Western Region
Safeguard Categories
Environment A
Involuntary Resettlement A
Indigenous Peoples A
Summary of Environmental and Social Aspects
Environmental Aspects Please see:http://www.adb.org/Documents/RRPs/?id=43281-013-3
Involuntary Resettlement Please see:http://www.adb.org/Documents/RRPs/?id=43281-013-3
Indigenous Peoples Please see:http://www.adb.org/Documents/RRPs/?id=43281-013-3
Stakeholder Communication, Participation, and Consultation
During Project Design Please see:http://www.adb.org/Documents/RRPs/?id=43281-013-3
During Project Implementation
Business Opportunities
Consulting Services At the request of the government and THL, consultants under Part D will be recruited directly by ADB under the Guidelines on the Use of Consultants (2010, as amended from time to time). The project's construction period is projected at 7 years, which includes about 1.5 years for project site development (building access roads and a bridge to reach the main construction site) and the execution of safeguard plans.
Procurement Procurement packages will be split into four parts: part A will cover main headworks; part B will procure equipment and other powerhouse facilities; part C will secure transmission and rural electrification lines; and part D will include project supervision and other technical expertise. Part B components will be procured by JICA. Parts A and C will follow international competitive bidding in line with ADB Procurement Guidelines (2010, as amended from time to time). Because of joint cofinancing, procurement under Part A will require a waiver. This is because it involves funding from ADFD and EIB and thus potentially procurement from non-ADB member countries.
Responsible ADB Officer Acharya, Jiwan S.
Responsible ADB Department Sectors Group
Responsible ADB Division Energy Sector Office (SG-ENE)
Executing Agencies
Ministry of Energy
Nepal Electricity Authority (NEA)
Tanahu Hydropower Limited
Timetable
Concept Clearance 25 Sep 2012
Fact Finding 13 Aug 2012 to 27 Aug 2012
MRM 23 Oct 2012
Approval 21 Feb 2013
Last Review Mission -
Last PDS Update 16 Sep 2022

Loan 2990-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
21 Feb 2013 22 Apr 2013 29 Aug 2014 30 Jun 2021 30 Jun 2026 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 191.00 Cumulative Contract Awards
ADB 120.00 26 Jan 2024 85.90 0.00 81%
Counterpart 71.00 Cumulative Disbursements
Cofinancing 0.00 26 Jan 2024 54.38 0.00 51%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Partly satisfactory Partly satisfactory - Satisfactory

Loan 2991-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
21 Feb 2013 22 Apr 2013 29 Aug 2014 30 Jun 2021 30 Jun 2026 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 30.00 Cumulative Contract Awards
ADB 30.00 26 Jan 2024 25.56 0.00 98%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 26 Jan 2024 9.94 0.00 38%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Partly satisfactory Partly satisfactory - Satisfactory

TA 8329-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
21 Feb 2013 22 Mar 2013 22 Mar 2013 31 May 2015 31 Dec 2016 30 Jun 2017
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 1,500,000.00 0.00 0.00 0.00 0.00 1,500,000.00 26 Jan 2024 1,433,527.37
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Partly satisfactory Partly satisfactory - Satisfactory

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Source URL: https://www.adb.org/projects/43281-013/main