Nepal : Electricity Transmission Expansion and Supply Improvement Project

Project Name

Electricity Transmission Expansion and Supply Improvement Project

Project Number

41155-013

Country / Economy

• Nepal

Project Status

Active

Project Type / Modality of Assistance

• Grant
• Loan
• Technical Assistance

Source of Funding / Amount

Grant 0270-NEP: Electricity Transmission Expansion and Supply Improvement Project

Source	Amount
Asian Development Fund	US$ 19.00 million

Grant 0271-NEP: Electricity Transmission Expansion and Supply Improvement Project

Source	Amount
Government of Norway	US$ 25.00 million

Loan 2808-NEP: Electricity Transmission Expansion and Supply Improvement Project

Source	Amount
Asian Development Fund	US$ 56.00 million

TA 7923-NEP: Gender-Focused Capacity Development in Clean Energy

Source	Amount
Technical Assistance Special Fund	US$ 250,000.00

Strategic Agendas

• Environmentally sustainable growth
• Inclusive economic growth
• Regional integration

Drivers of Change

• Gender Equity and Mainstreaming
• Governance and capacity development
• Partnerships

Sector / Subsector

• Energy / Electricity transmission and distribution - Energy efficiency and conservation - Energy sector development and institutional reform

Gender

Effective gender mainstreaming

Description

The project will improve the reliability of energy supply in Nepal and strengthen the transmission infrastructure needed to promote Nepal's capacity for cross-border energy trade. It will provide support in three critical areas in the electricity supply industry, which has experienced severe underinvestment: (i) electricity transmission capacity expansion, (ii) strengthening of distribution systems including those along the Tamakoshi (Khimti)-Kathmandu transmission line, and (iii) rehabilitation of selected small hydropower plants.

Project Rationale and Linkage to Country/Regional Strategy

The current available generating capacity of 705 megawatts (MW) in Nepal comes predominantly from hydropower. At system peak time, up to 400 MW of load is shed countrywide, depending on variations in available water resources and transmission limitations. Six hydropower projects totaling 592 MW are presently under construction. Another six projects with a total capacity of 1,335 MW are planned or proposed in the near to medium term. Limited transmission capacity in Western region of Nepal has restricted additional electricity imports through the western border with India. The first large-scale cross-border transmission line with India between Dhalkebar (Nepal) and Muzarffarpur (India), with a capacity of 1,000 MW, is at an advanced stage of preparation. This will enable Nepal to import electricity from India initially and later facilitate hydropower export. However, the full benefits of this critical regional connection can be harnessed only when adequate strengthening of the related transmission infrastructure within Nepal is undertaken.

Impact

Increased access to reliable supply of electricity

Project Outcome

Description of Outcome

Improved electricity supply

Progress Toward Outcome

Subprojects are at different stages of implementation and expected to ensure achievement of the outcome.

Implementation Progress

Description of Project Outputs

Increased electricity transmission

Expanded electricity distribution

Enhanced electricity generation

Efficient project management

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

1. Increased electricity transmission: Second circuit stringing of Kohalpur - Mahendranagar 132 kV transmission line has been completed. It is under operation along with the associated substations. Tamakoshi (New Khimti) - Kathmandu 220/400 kV and 132 kV transmission lines are under construction.

2. Expanded electricity distribution: All packages under distribution component (i) Part B Lot 1: Augmentation of Distribution Services (East), (ii) Part B Lot 2: Augmentation of Distribution Services (West), and (iii) Part B Lot 3: Upgradation of Distribution Lines are completed and under operation.

3. Enhanced electricity generation: Sundarijal hydropower plant (960 kilowatts) is under operation after successful rehabilitation.

4. Efficient project management: Work completed and data collection is ongoing for electrification. Training programs have been completed with 80% women and marginalized groups.

Geographical Location

Nation-wide, Amuwa, Bagmati Zone, Bahrabise, Belbari, Bheri Zone, Bhimeshwor, Bhurigaun, Butwal, Chandragadhi1, Chapali, Dhading, Gaddachauki, Gaur, Gorkha, Janakpur Zone, Jorpati, Kanchanpur, Kathmandu, Khimti, Kohalpur, KrishnaNagar1, Mahakali Zone, Mahendranagar, Mirmi, Nijgarh, Parasi, Seti Zone, Sundarijal, Syanja, Taulihawa

Safeguard Categories

Environment

B

Involuntary Resettlement

B

Indigenous Peoples

C

Summary of Environmental and Social Aspects

Environmental Aspects

The initial environment examinations were prepared following ADBs Safeguard Policy Statement (2009), the governments environmental impact assessment guidelines, and related national policies and legislation. Public consultation and information disclosure requirements have been met. Alignment of transmission lines has avoided any environmentally and ecologically sensitive areas. Out of the total length of the Tamakoshi (Khimti)-Kathmandu line, 16 kilometers have been reported to pass through some forest areas in Chanrawati Watershed area. Any loss of vegetation within the right-of-way will be directly offset by reforestation activities consistent with the requirements of the government. The NEA will ensure that ongoing reforestation initiatives within the Chanrawati Watershed will not be affected. Installation of the second circuit for the Kohalpur-Mahendranagar line did not have any significant impacts as existing right-of-way. Decommissioned equipment and materials from the rehabilitation of distribution substations and the small hydropower plants did not cause any risk to community health and safety as these will be stored on site until they can be safely reused and redistributed to other substations. Disposal of unusable equipment will comply with national and international requirements such as the Stockholm Convention. The environmental management plan (EMP) includes mitigation measures, monitoring, and adequate budgetary provisions for its implementation. The EMP will be part of the bidding documents and the NEA will supervise the construction contracts and EMP implementation. Monitoring reports will be submitted semiannually by the NEA to ADB. EMPs will be updated if unanticipated impacts are identified during implementation. Third-party services will be utilized for monitoring and mitigation activities as necessary.Initial Environmental Examination(IEE) is approved for Tamakoshi-Kathmandu 220/ 400kV Transmission Line Project by Government Of Nepal.

Involuntary Resettlement

A detailed resettlement plan will guide the resettlement process and describe the nature of impacts, range of and eligibility for entitlements, income and livelihood restoration, rehabilitation assistance, and compensation for losses incurred. The resettlement plan details the institutional arrangements for implementation, a procedure for grievance redress, a structure for periodic and regular monitoring and reporting of project activities, detailed cost and budget estimates, and a time-bound implementation schedule. The resettlement plan will be updated as needed and publicly disclosed to interested stakeholders on the ADB and NEA websites.

Indigenous Peoples

No adverse impacts on indigenous groups are expected from project activities. People using or living along the transmission line will be temporarily impacted and restricted to using affected land for agricultural purposes. Affected persons will be eligible for compensation in line with ADB s Safeguard Policy Statement requirements. Project-affected peoples will be consulted on a regular basis as needed, in a timely, open, transparent, and culturally sensitive manner and in the local language.

Stakeholder Communication, Participation, and Consultation

During Project Design

Consultations were conducted during project preparation with relevant stakeholder groups (i.e., Ministry of Energy, Nepal Electricity Authority, local authorities, civil society groups, the communities living around the facilities funded under the loan, electricity consumers who benefitted from the project and any associations representing them) through field visits and workshops.

During Project Implementation

Regular meetings with the executing agency and implementing agency-Nepal Electricity Authority (NEA), and contractors of critical packages jointly with NEA are being done. Regular missions to review the progress, identify the issues and ways to resolve them are being carried out. Under TA, stakeholder communication, participation and consultation are being done.

Business Opportunities

Consulting Services

A consulting firm has been recruited, using ADB's Quality and Cost-Based Selection (QCBS) method, to provide support for the 220/400kV Tamakoshi (Khimiti)-Kathmandu Transmission Line and capacity building for staff of the Nepal Electricity Authority. Consultant for the design and implementation of Part C (i.e., the rehabilitation of Sundarijal HPP (640KW) and Tinau HPP (1MW) has been recruited based on the procedures acceptable to ADB for recruiting individual consultants.

Recruitment of a consulting firm, Project Supervision Consultant using ADB's Consultants' Qualifications Selections (CQS) method and recruitment of individual consultant, Social Safeguard Expert using Individual Consultant Selection method have been completed.

A national NGO and an international Technical Advisor have been engaged under the TA project in accordance with ADB Guidelines on the Use of Consultants (2010, as amended from time to time).

Procurement

All procurement to be financed under the ADB will be carried out in accordance with ADBs Procurement Guidelines. International competitive bidding procedures are/ will be used for all the components.

All the contracts have been awarded.

Contact

Responsible ADB Officer

Shah, Grishma

Responsible ADB Department

Sectors Group

Responsible ADB Division

Energy Sector Office (SG-ENE)

Executing Agencies

Nepal Electricity Authority (NEA)

Timetable

Concept Clearance

26 Jan 2021

Fact Finding

22 Aug 2011 to 26 Aug 2011

MRM

06 Oct 2011

Approval

15 Nov 2011

Last Review Mission

-

PDS Creation Date

02 Sep 2010

Last PDS Update

16 Sep 2022

Funding

Grant 0270-NEP

Grant 0271-NEP

Loan 2808-NEP

TA 7923-NEP