The proposed project will complete the reinforcement and modernization of the power supply system in Kathmandu in Bagmati Province. This project will also begin strengthening distribution systems outside of Kathmandu in a systematic and phased manner starting with the Bharatpur metropolitan area of Chitwan district in Bagmati Province and Pokhara of Kaski district in Gandaki Province, where supply interruptions are frequent and prolonged. The project will also support Province 2, where the quality of electricity supply is poor and about 20% of households are still without access to the national grid. Further, the project will strengthen transmission lines for evacuation of hydropower to the main load center in Kathmandu and other load centers, while excess power is traded with neighboring countries.
Project Name | South Asia Subregional Economic Cooperation Power Transmission and Distribution System Strengthening Project | ||||||||||||
Project Number | 50059-003 | ||||||||||||
Country | Nepal |
||||||||||||
Project Status | Active | ||||||||||||
Project Type / Modality of Assistance | Grant Loan Technical Assistance |
||||||||||||
Source of Funding / Amount |
|
||||||||||||
Strategic Agendas | Environmentally sustainable growth Inclusive economic growth Regional integration |
||||||||||||
Drivers of Change | Gender Equity and Mainstreaming Governance and capacity development Knowledge solutions Partnerships Private sector development |
||||||||||||
Sector / Subsector | Energy / Electricity transmission and distribution |
||||||||||||
Gender Equity and Mainstreaming | Effective gender mainstreaming | ||||||||||||
Description | The proposed project will complete the reinforcement and modernization of the power supply system in Kathmandu in Bagmati Province. This project will also begin strengthening distribution systems outside of Kathmandu in a systematic and phased manner starting with the Bharatpur metropolitan area of Chitwan district in Bagmati Province and Pokhara of Kaski district in Gandaki Province, where supply interruptions are frequent and prolonged. The project will also support Province 2, where the quality of electricity supply is poor and about 20% of households are still without access to the national grid. Further, the project will strengthen transmission lines for evacuation of hydropower to the main load center in Kathmandu and other load centers, while excess power is traded with neighboring countries. | ||||||||||||
Project Rationale and Linkage to Country/Regional Strategy | Nepal is a landlocked, mountainous country located between the large and fast-growing economies of the People's Republic of China to the north and India to the east, west, and south. Nepal's gross domestic product (GDP) growth averaged 7.3% during fiscal year (FY) 2017-FY2019. With deepening economic uncertainties due to the coronavirus disease (COVID-19) pandemic, compounded by social and health emergencies, the preliminary estimates from the Central Bureau of Statistics in Nepal show that GDP growth will significantly decline to 2.3% in FY2020. The need to stimulate post-COVID-19 economic recovery by developing Nepal's infrastructure has become more relevant. Following years of facing chronic electricity shortages, especially during dry winter months (October to March), Nepal made significant improvements in electricity supply during FY2017 and FY2018. These improvements were achieved through a combination of (i) increased electricity imports from India of about 400 megawatts (MW); (ii) improved transmission capacity and operational flexibility by commissioning new transmission facilities; and (iii) better load management involving major industrial customers. While there is currently no significant gap between electricity demand and supply, the power transmission and distribution systems need further strengthening to increase network capacity and redundancy and eliminate bottlenecks between generation hubs and load centers. Also, although 78% of Nepal's population has access to grid-supplied electricity, the distribution systems require immediate upgrading and expansion to improve the reliability and quality of supply, and to facilitate expected future demand growth. The poor financial position of Nepal Electricity Authority (NEA), due to poor billing and collection practices, and inadequate tariffs, impinge on its capacity to invest in distribution system expansion, and address high technical and commercial losses arising from deteriorated and under-capacity assets and electricity theft. These investment requirements over the next 10 years until 2030 are beyond the budgetary resources of the government. At the same time, the investment environment in the sector, including regulation, is not sufficiently mature to attract private sector capital and participation at the level required, particularly in the transmission and distribution subsectors. The government recognizes the continued need for physical investment in electricity supply infrastructure. Government issued the White Paper on Energy, Water Resources and Irrigation Sector's Current Status and Roadmap for Future on 8 May 2018 outlining priorities and reform initiatives for 2018 2028 including hydropower development, and modernizing transmission and distribution subsectors. The Government of Nepal initiated plans to install an additional 15,000 MW of generation capacity by 2028 to meet domestic demand, and to export surplus electricity to India and Bangladesh. In this regard, the government will support the construction of selected storage-type hydropower plants while encouraging the private sector to invest in run-of-river hydropower projects and other renewable energy sources. As indicated in the White Paper, the focus of Nepal's power system investment program is now gearing toward delivering a reliable and high-quality supply of electricity to domestic consumers through enhanced transmission and distribution systems and positioning the country to become a net energy exporter. These investments are critical to satisfy the country's power supply needs in the longer-term and to provide universal access to reliable electricity supply by 2030. These investments will also contribute to promoting sustainable energy for all (Sustainable Development Goal 7) and achieving Nepal's Nationally Determined Contributions to the United Nations Framework Convention on Climate Change to reduce the country's dependency on fossil fuel by 50%. |
||||||||||||
Impact | (i) Reliable and efficient electricity for all by 2028 achieved (National Energy Crisis Reduction and Electricity Development) (ii) Energy trade infrastructure in SASEC countries improved (SASEC Operational Plan Update, 2016-2025) |
Project Outcome | |
---|---|
Description of Outcome | Access, reliability, efficiency of power supply in Nepal improved |
Progress Toward Outcome | . |
Implementation Progress | |
Description of Project Outputs | Power system transmission capacity increased. Distribution system in the Kathmandu Valley, Bharatpur, and Pokhara, and consumers awareness on energy efficiency and safety improved. Distribution network and capacity of women to use electricity for energy-based enterprises development in Province 2 improved. |
Status of Implementation Progress (Outputs, Activities, and Issues) | Procurement of goods and services ongoing. Procurement ongoing. |
Geographical Location | Nation-wide |
Safeguard Categories | |
---|---|
Environment | B |
Involuntary Resettlement | B |
Indigenous Peoples | C |
Summary of Environmental and Social Aspects | |
---|---|
Environmental Aspects | |
Involuntary Resettlement | |
Indigenous Peoples | |
Stakeholder Communication, Participation, and Consultation | |
During Project Design | |
During Project Implementation |
Business Opportunities | |
---|---|
Consulting Services | A project supervision consultant will be hired to support NEA in implementing the project. Procurement (including consulting services) will follow ADB Procurement Policy (2017, as amended from time to time) and Procurement Regulations for ADB Borrowers (2017, as amended from time to time). As requested by NEA, advance contracting and retroactive financing will be considered, subject to a ceiling of 20% of the loan amount and a time limit of not more than 12 months prior to the date of the respective loan agreement. |
Procurement | The EA has been implementing ADB projects and has a PMD in place. Under the PMD, a Project Management Unit will be established and supported by project management consultants. Project procurement classification B is appropriate |
Responsible ADB Officer | Acharya, Jiwan S. |
Responsible ADB Department | South Asia Department |
Responsible ADB Division | Energy Division, SARD |
Executing Agencies |
Nepal Electricity Authority (NEA) P. O. Box 5352 Kathmandu Nepal |
Timetable | |
---|---|
Concept Clearance | 03 Oct 2019 |
Fact Finding | 21 Oct 2019 to 25 Oct 2019 |
MRM | 25 Feb 2020 |
Approval | 26 Jun 2020 |
Last Review Mission | - |
Last PDS Update | 10 Dec 2020 |
Grant 0711-NEP
Milestones | |||||
---|---|---|---|---|---|
Approval | Signing Date | Effectivity Date | Closing | ||
Original | Revised | Actual | |||
26 Jun 2020 | 27 Aug 2020 | 24 Nov 2020 | 30 Jun 2026 | - | - |
Financing Plan | Grant Utilization | ||||
---|---|---|---|---|---|
Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
Project Cost | 35.00 | Cumulative Contract Awards | |||
ADB | 0.00 | 26 Jun 2020 | 0.00 | 12.24 | 35% |
Counterpart | 0.00 | Cumulative Disbursements | |||
Cofinancing | 35.00 | 26 Jun 2020 | 0.00 | 2.03 | 6% |
Loan 3943-NEP
Milestones | |||||
---|---|---|---|---|---|
Approval | Signing Date | Effectivity Date | Closing | ||
Original | Revised | Actual | |||
26 Jun 2020 | 27 Aug 2020 | 24 Nov 2020 | 30 Jun 2026 | - | - |
Financing Plan | Loan Utilization | ||||
---|---|---|---|---|---|
Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
Project Cost | 287.00 | Cumulative Contract Awards | |||
ADB | 200.00 | 26 Jun 2020 | 87.91 | 0.00 | 44% |
Counterpart | 87.00 | Cumulative Disbursements | |||
Cofinancing | 0.00 | 26 Jun 2020 | 6.46 | 0.00 | 3% |
TA 6526-NEP
Milestones | |||||
---|---|---|---|---|---|
Approval | Signing Date | Effectivity Date | Closing | ||
Original | Revised | Actual | |||
26 Jun 2020 | 30 Jul 2020 | 30 Jul 2020 | 31 Jul 2025 | - | - |
Financing Plan/TA Utilization | Cumulative Disbursements | |||||||
---|---|---|---|---|---|---|---|---|
ADB | Cofinancing | Counterpart | Total | Date | Amount | |||
Gov | Beneficiaries | Project Sponsor | Others | |||||
0.00 | 5,000,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 5,000,000.00 | 26 Jun 2020 | 0.00 |
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.
Title | Document Type | Document Date |
---|---|---|
SASEC Power Transmission and Distribution System Strengthening Project: Initial Environmental Examination | Initial Environmental Examination | Feb 2020 |
SASEC Power Transmission and Distribution System Strengthening Project: Resettlement Plan | Resettlement Plans | Nov 2019 |
Evaluation Documents See also: Independent Evaluation
None currently available.
Related Publications
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 Approves $200 Million Loan to Modernize Power Supply, Distribution System in Nepal
ADB has approved a $200 million concessional loan to improve power supply and distribution systems in Nepal.
Tenders
Contracts Awarded
Contract Title | Approval Number | Contract Date | Contractor | Contractor Address | Executing Agency | Contract Description | Total Contract Amount (US$) | Contract Amount Financed by ADB (US$) |
---|---|---|---|---|---|---|---|---|
CONSULTING SERVICES FOR PROJECT SUPERVISION CONSULTANT OF SASEC: POWER TRANSMISSION AND DISTRIBUTION SYSTEM STRENGTHENING PROJECT (D1) | Loan 3943 | 01 Dec 2020 | WAPCOS LIMITED IN JV WITH SMEC INTL PTY LTD. | 76-C INSTITUTIONAL AREA, SECTOR 18 GURUGRAM, HARYANA INDIA | Nepal Electricity Authority (NEA) | CONSULTANCY | 1,742,396.30 | 1,742,396.30 |
DESIGN, SUPPLY, INSTALLATION AND COMMISSIONING OF UNDERGROUND DISTRIBUTION NETWORK UNDER KIRTIPUR, KOLESHWOR, BANESHWOR, BALAJU AND JORPATI DC (B1) | Loan 3943 | 30 Nov 2020 | LARSEN & TOUBRO CO., LTD. | MOUNT POONAMALLEE ROAD, MANAPAKKAM PB 100979, CHENNAI-600859 INDIA | Nepal Electricity Authority (NEA) | TURNKEY | 42,102,274.89 | 42,102,274.89 |
DESIGN, SUPPLY, INSTALLATION AND COMMISIONING OF 400KV GIS AT NEW KHIMTI, BARHABISE AND LAPSIPHEDI (PACKAGE A2) | Loan 3943 | 30 Nov 2020 | GRID SOLUTIONS SAS | 204 ROND-POINT DU PONT DE SEVRES BOULOGNE-BILLANCOURT 92100 FRANCE | Nepal Electricity Authority (NEA) | TURNKEY | 49,479,828.09 | 43,694,737.99 |
Procurement Plan
Title | Document Type | Document Date |
---|---|---|
South Asia Subregional Economic Cooperation Power Transmission and Distribution System Strengthening Project: Procurement Plan | Procurement Plans | Jan 2021 |