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 The government has recognized the immediate need for reinforcement and upgrade of outdated distribution systems crucial to deliver the required energy to the customers even if the generation and transmission lines are in place.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 Name||Power Transmission and Distribution Efficiency Enhancement Project|
|Project Type / Modality of Assistance||Technical Assistance
|Source of Funding / Amount||
|Strategic Agendas||Environmentally sustainable growth
Inclusive economic growth
|Drivers of Change||Gender Equity and Mainstreaming
Governance and capacity development
Private sector development
|Sector / Subsector||
Energy / Energy efficiency and conservation - Large hydropower generation
|Gender Equity and Mainstreaming||Some gender elements|
|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 The government has recognized the immediate need for reinforcement and upgrade of outdated distribution systems crucial to deliver the required energy to the customers even if the generation and transmission lines are in place.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.|
|Description of Outcome|
|Progress Toward Outcome|
|Description of Project Outputs|
|Status of Implementation Progress (Outputs, Activities, and Issues)|
|Geographical Location||Kathmandu Valley|
|Summary of Environmental and Social Aspects|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design|
|During Project Implementation|
|Consulting Services||The TA will require 31 person-months of international consultants and 46 person-months of national consultants. Consultants will have expertise in the areas of system planning, transmission, distribution, smart grids, supervisory control and data acquisition system (SCADA), economic and financial analysis, social and environmental safeguard, and procurement. ADB will hire consultants through a firm using quality- and cost-based selection process (90:10). Some individual consultants with expertise in areas such as intelligent energy network technologies, geographic information systems, safeguards, finance and economics may be recruited in instances where pre-existing knowledge of local conditions is required and the firm may not be able to rapidly mobilize experts with relevant expertise. Output-based (lump-sum) contracts will be considered for all consulting services where possible. Consultants' selection will be done in accordance with the Guidelines on the Use of Consultants (2013, as amended from time to time). The proceeds of the TA will be disbursed in line with ADB's Technical Assistance Disbursement Handbook (May 2010, as amended from time to time).|
|Responsible ADB Officer||Acharya, Jiwan S.|
|Responsible ADB Department||South Asia Department|
|Responsible ADB Division||Energy Division, SARD|
Nepal Electricity Authority (NEA)
P. O. Box 5352
|Approval||06 Jun 2018|
|Last Review Mission||-|
|Last PDS Update||27 Jul 2016|
|Approval||Signing Date||Effectivity Date||Closing|
|22 Jul 2016||18 Aug 2016||18 Aug 2016||31 Dec 2019||-||-|
|Financing Plan/TA Utilization||Cumulative Disbursements|
|500,000.00||1,500,000.00||0.00||0.00||0.00||0.00||2,000,000.00||22 Jul 2016||257,282.44|
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.
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|Title||Document Type||Document Date|
|Power Transmission and Distribution Efficiency Enhancement Project: Initial Poverty and Social Analysis||Initial Poverty and Social Analysis||Jul 2016|
|Power Transmission and Distribution Efficiency Enhancement Project: Concept Paper||Concept Papers||Jul 2016|
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.
None currently available.
Evaluation Documents See also: Independent Evaluation
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