Nepal: Power Transmission and Distribution Efficiency Enhancement Project
The Asian Development Bank is helping Nepal upgrade power distribution and transmission systems for the Kathmandu Valley. The project will help the Nepal Electricity Authority optimize its use of smart grid technology to reduce system overloads and power losses. It will support improved quality of life and new economic opportunities for valley communities.
South Asia Department
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- Technical Assistance
|Project Name||Power Transmission and Distribution Efficiency Enhancement Project|
|Project Type / Modality of Assistance||Loan
|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 / Electricity transmission and distribution - Energy efficiency and conservation
|Gender Equity and Mainstreaming||Effective gender mainstreaming|
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 The government has recognized the immediate need for reinforcement and upgrade of outdated distribution systems crucial to deliver the required energy to the customers even if the generation and transmission lines are in place.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.
|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)|
|Description of Outcome||Access to efficient, adequate, and high-quality power supply in the Kathmandu Valley improved|
|Progress Toward Outcome||Out of $150 million, Contract awarded for $139.03 million (92.69%). Bidding ongoing for procurement of distribution transformers. With lifting of the Covid-19 related restrictions, the works progress is gradually improving.|
|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)||
Preliminary works are ongoing in Changunarayan, Teku and Suichatar substations with the achievement of 7.42% physical progress. Work has been disrupted in Lapsiphedi due to obstruction from local communities. Work ongoing for construction of 220 kV substation in Barhabise with the overall progress of 33.24%. Similarly, works progressing in Phutung, Chovar, and Thimi substations under the 132 kV GIS substation in Kathmandu Valley contract with an overall progress of 23.27%. Works under design, supply, installation and commissioning of underground distribution network under Maharajgunj distribution center is ongoing with an overall physical progress of 46.58%. 46 Km of trench works, laying of 318 km of HDPE pipes, and 210 km of cables have been completed.
Similarly, works under design, supply, installation, and commissioning of underground distribution network contract under Ratnapark distribution center is ongoing with physical progress of 42.35%. By September 2021, 39.4 km of trench work, 238.6 km of HDPE pipe laying, and 160.4 km of cable laying works completed; and installation of RMU is ongoing. Under the smart metering subproject, the installation of smart meters is keeping its pace with overall physical progress of 95.4%. Total 86,540 smart meters have been installed against the planned 98,000. Rebidding is ongoing for procurement of the distribution transformers package. Utility management training was provided to senior managers and officers of NEA. Similarly, training on the new technological application was provided to NEA engineers. The NEA board has approved GESI strategy and operational guidelines, and it is under implementation.
|Geographical Location||Kathmandu Valley|
|Summary of Environmental and Social Aspects|
|Environmental Aspects||Initial environmental examinations (IEEs) have been prepared following ADB's Safeguard Policy Statement (SPS) (2009) and the government's environmental regulations. The project implementation is ongoing following the approved IEEs.|
|Involuntary Resettlement||Project implementation is ongoing based on the safeguard policy of ADB. Consultations had been undertaken and surveys were conducted. The resettlement plan was publicly disclosed to interested stakeholders on ADB's websites.|
|Indigenous Peoples||There is no indigenous peoples group in the project areas. So, no indigenous peoples impact is expected.|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design||A series of consultations were conducted with affected persons and communities by the project implementing agency during project preparation. This is will be continued during the project implementation.|
|During Project Implementation||A series of consultations/meetings with affected persons and communities had been conducted and will be conducted as and when needed throughout the project implementation.|
|Consulting Services||Project Supervision Consultant has been engaged for the project.|
All procurement of goods will be undertaken in accordance with ADB's Procurement Guidelines 2015, as amended from time to time. Before start of any procurement, ADB and the government will review the public procurement laws of the central and state governments to ensure its 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||Manandhar, Pushkar|
|Responsible ADB Department||South Asia Department|
|Responsible ADB Division||Nepal Resident Mission|
Nepal Electricity Authority (NEA)
P. O. Box 5352
|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||07 Dec 2021|
|Approval||Signing Date||Effectivity Date||Closing|
|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||07 Jan 2022||139.04||0.00||91%|
|Cofinancing||0.00||07 Jan 2022||48.27||0.00||31%|
|Status of Covenants|
|Approval||Signing Date||Effectivity Date||Closing|
|29 Jun 2017||24 Jul 2017||24 Jul 2017||29 Jun 2019||27 Dec 2021||-|
|Financing Plan/TA Utilization||Cumulative Disbursements|
|0.00||2,000,000.00||0.00||0.00||0.00||0.00||2,000,000.00||07 Jan 2022||1,612,336.09|
|Status of Covenants|
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 Access to Information Policy (AIP) 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.
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
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.
None currently available.
The Access to Information Policy (AIP) 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.
ADB $150 Million Loan to Help Improve Power Distribution, Efficiency in NepalADB's Board of Directors has approved a $150 million loan to help improve the reliability and efficiency of Nepal’s electricity supply and distribution through the Nepal Electricity Authority.
|Contract Title||Approval Number||Contract Date||Contractor | Address||Executing Agency||Total Contract Amount (US$)||Contract Amount Financed by ADB (US$)|
|CONTRACT FOR SUPPLY,DELIVERY INSTALLATION & COMISS IONING OF LAPSIPHEHI & CHANGUNARAYAN S/S AND OTHER S/S (PMD/PTDEEP/LCSCP-73/74 RE-01)||Loan 3542||30 Nov 2020||LARSEN AND TOUBRO LIMITED-INDIA | INDIA INDIA||Nepal Electricity Authority (NEA)||31,646,173.90||31,646,173.90|
|PROCUREMENT OF PLANT FOR DESIGN,SUPPLY,INSTALLATIO N ,INTEGRATION,TESTING AND COMISSIONING OF SS AUTO MATION SYSTEM(SAS) FOR EXISTING SS IN KATHMANDU||Loan 3542||05 Feb 2020||GE T & D INDIA LIMITED | T-5&T-6, PLOT I-14 AXIS HOUSE, UTTAR PRADESH, INDIA INDIA||Nepal Electricity Authority (NEA)||5,161,348.24||5,034,779.62|
|SMART METERS AND ASSOCIATED FACILITIES||Loan 3542||01 Apr 2019||M/S PINGGAO-WISDOM JOINT VENTURE | 22 NANHUANDONGROAD, PINGDINGSHAN CITY HENAN PROVINCE CHINA,PEOPLE'SREP.OF||Nepal Electricity Authority (NEA)||8,858,144.82||8,853,715.97|
|ENHANCEMENT OF DISTRIBUTION NETWORKS IN CENTRAL REGION OF KATHMANDU VALLEY (UNDERGROUND CABLE B-2)||Loan 3542||22 Mar 2019||KEI INDUSTRIES LIMITED | D 90 OKHALA INDUSTRIAL AREA PHASE I NEW DELHI INDIA||Nepal Electricity Authority (NEA)||34,692,135.06||34,609,337.50|
|ENHANCEMENT OF DISTRIBUTION NETWORKS IN CENTRAL REGIONS OF KATHMANDU VALLEY (UNDERGROUND CABLE - B1)||Loan 3542||22 Mar 2019||KEI INDUSTRIES LIMITED | D-90 OKHALA INDUSTRIAL AREA, PHASE I NEW DELHI INDIA||Nepal Electricity Authority (NEA)||30,422,591.51||30,354,895.34|
|Capacity Development||Technical Assistance 9334||17 Dec 2018||HUMANIST INSTITUTE FOR CO-OPERATION W/ DEVELOPING(NETHERLANDS) in association with Ricardo-AEA Ltd(UNITED KINGDOM) | RAAMWEG 16, DEN HAAG, JAWA BARAT 2508 CG NETHERLANDS||Nepal Electricity Authority (NEA)||1,762,331.00||—|
|PACKAGE A-3: GIS 220KV BARHABISE SUBSTATION (PLANT)||Loan 3542||27 Dec 2017||JV GUANGXI TRANSMISSION AND SUBSTATION | CO LTD. - 1 ROOM 2A, BUILDING A6, CHINA MERCHANTS GUANGMING NEW DISTRICT SHENZEN CHINA,PEOPLE'SREP.O||Nepal Electricity Authority (NEA)||—||11,869,761.00|
|PACKAGE A-1: PROCUREMENT OF DESIGN, SUPPLY, INSTAL &COMMISSIONING OF GIS 220KV LAPSEPHEDI SS & 132KV CHANGUNAYARAN SS||Loan 3542||18 Dec 2017||SINOSTEEL MECC-ZHAOWEI J/V | NO 2 EAST HIGHWAY, ECO DEV ZONE, DEZHOU CITY, SHANDONG PROVINCE PRC CHINA,PEOPLE'SREP.OF||Nepal Electricity Authority (NEA)||16,595,438.00||16,595,438.00|
|PACKAGE A-2: INSTALLATION OF 132 KV GIS SS||Loan 3542||13 Dec 2017||PINGGAO GROUP CO. LTD | 22 NANHUANDONG ROAD, PINGDINGSHAN CITY HENAN PROVINCE PRC 467000 CHINA,PEOPLE'SREP.OF||Nepal Electricity Authority (NEA)||15,095,682.00||15,095,682.00|
|PACKAGE D-1: PROJECT SUPERVISION CONSULTANTS||Loan 3542||13 Dec 2017||POWERGRID CORP IND LTD N ASSO W/PWC,IND &JADE | POWERGRID HOUSE GURGAON INDIA||Nepal Electricity Authority (NEA)||3,972,155.00||3,972,155.00|
|Title||Document Type||Document Date|
|Power Transmission and Distribution Efficiency Enhancement Project: Procurement Plan||Procurement Plans||Jul 2021|