47036-001: Project Preparatory Facility for Energy | Asian Development Bank

Nepal: Project Preparatory Facility for Energy

Sovereign (Public) Project | 47036-001 Status: Active

ADB is helping Nepal lay the groundwork for projects needed to reduce local power shortages and to provide surplus electricity for export to India. The project will support feasibility studies and other preparatory work for selected hydropower projects, including an export-oriented hydropower project under a public-private partnership, and a second Nepal-India 400-kilovolt transmission line.

Project Details

Project Officer
Acharya, Jiwan S. South Asia Department Request for information
  • Nepal
  • Grant
  • Energy
Project Name Project Preparatory Facility for Energy
Project Number 47036-001
Country Nepal
Project Status Active
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0361-NEP: Project Preparatory Facility for Energy
concessional ordinary capital resources lending / Asian Development Fund US$ 21.00 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Private sector development
Sector / Subsector

Energy / Electricity transmission and distribution - Large hydropower generation

Gender Equity and Mainstreaming No gender elements
Description The Project Preparatory Facility for Energy (the Facility) is intended to prepare a series of hydropower projects and related transmission infrastructure for development in Nepal, emphasizing private sector participation and regional integration. The Facility will support for project preparatory activities of selected candidate hydropower projects and Kohalpur- Surkhet-Upper Karnali 400kV Transmission Line, Kohalpur-New Butwal 400kV Transmission Line, and produce a set of bankable documents. The study includes feasibility study and environmental / social impact assessments (EIA/SIA) etc. The hydropower projects for such study will be selected from various candidate projects being considered for development through private or public / public-private sectors.
Project Rationale and Linkage to Country/Regional Strategy The current inadequacy and unreliability of the power supply result from a low level of investments in the past. Ongoing weakness in strategic, operational, managerial, and financial policies aggravated the problem. An uneconomic tariff regime dents the financial standing of the Nepal Electricity Authority (NEA), the power sector's only utility, leaving it unable to cover its new capital investments as well as the current operation and maintenance costs. The government lacks the financial means and institutional capacity to resolve the energy crisis alone, and if the private sector is to play a bigger role, it needs more and better entry points for investment. In addition to building greater generation capacity, Nepal must also upgrade and expand its limited transmission and distribution networks. A major obstacle to exploiting Nepal's hydropower export potential is the shortage of adequate infrastructure to transmit electricity to neighboring India. Instead of exporting power, in fact, Nepal imports it from India. Developing Nepal''s hydropower generation, transmission, and export infrastructure would benefit both countries. ADB country partnership strategy emphasizes the development of hydropower generation, power transmission and distribution infrastructure.
Impact Infrastructure for hydropower developed
Project Outcome
Description of Outcome High-quality due diligence provided to support investments to transform the power sector
Progress Toward Outcome Ongoing.
Implementation Progress
Description of Project Outputs

Feasibility and detailed engineering studies carried out

PPP project development services provided

Status of Implementation Progress (Outputs, Activities, and Issues) -- A study on the detailed design of Dudh Koshi hydropower project is ongoing and the study on other hydropower projects are also being undertaken. The detailed study on transmission lines has started and will be completed by mid-2019.
Geographical Location Bardghat, Butwal, Kabhre Palanchok, Khotang, Ramechhap
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects NA
Involuntary Resettlement NA
Indigenous Peoples NA
Stakeholder Communication, Participation, and Consultation
During Project Design A series of consultations was conducted with relevant officers of the executing agency, persons who may potentially be impacted by projects related to the facility, and the general public who live in and around the proposed project sites. Community members and women's groups were consulted. Information on the preliminary facility and its anticipated benefits was shared in these consultations. Consultations also focused on eliciting the concerns, fears, and expectations of people to be affected by facility-related projects and subprojects, as well as the wider general public. Their suggestions and proposals for effective implementation were also sought. Opportunities for community participation in project planning and implementation were discussed and identified.
During Project Implementation Through email and ADB review mission.
Business Opportunities
Consulting Services

The project requires inputs of three consulting service packages for two candidate hydropower projects and one transmission line project. ADB will assist in the consultant selection process except for negotiation and contract signing. The EA (Nepal Electricity Authority) will be in charge of the recruitment, implementation and reporting process. All procurement activities will be carried out in accordance with ADB Procurement Guidelines (2015, as amended from time to time), and consultants will be recruited using quality and cost-based selection on 90:10 ratio, in line with ADB's Guidelines on the Use of Consultants (2013, as amended from time to time). Consultant recruitment process for component A is ongoing.

The Facility will be used over a seven year period (2013-2020). The Government will ensure adequate budgetary allocation of counterpart funds for timely completion.

Procurement No procurement is envisaged under the project.
Responsible ADB Officer Acharya, Jiwan S.
Responsible ADB Department South Asia Department
Responsible ADB Division Energy Division, SARD
Executing Agencies
Ministry of Energy
[email protected]
P. O. Box 2768, G. P. O. Kathmandu, Kathmandu, Nepal
Concept Clearance 12 Jul 2013
Fact Finding 05 Jul 2013 to 21 Jul 2013
MRM 26 Jul 2013
Approval 24 Sep 2013
Last Review Mission -
Last PDS Update 25 Sep 2018

Grant 0361-NEP

Approval Signing Date Effectivity Date Closing
Original Revised Actual
24 Sep 2013 29 Nov 2013 14 Mar 2014 30 Jun 2019 30 Jun 2020 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 26.25 Cumulative Contract Awards
ADB 21.00 24 Sep 2013 10.67 0.00 51%
Counterpart 5.25 Cumulative Disbursements
Cofinancing 0.00 24 Sep 2013 6.05 0.00 29%

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.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

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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.

Title Document Type Document Date
Project Preparatory Facility for Energy Resettlement Frameworks Jul 2013
Project Preparatory Facility for Energy Environmental Assessment and Review Framework Jul 2013
Project Preparatory Facility for Energy Indigenous Peoples Planning Frameworks/Indigenous Peoples Development Frameworks Jul 2013

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.

The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Contracts Awarded

Contract Title Approval Number Contract Date Contractor Contractor Address Executing Agency Contract Description Total Contract Amount (US$) Contract Amount Financed by ADB (US$)

Procurement Plan