Nepal: South Asia Subregional Economic Cooperation Power Transmission and Distribution System Strengthening Project

Energy / Electricity transmission and distribution

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%.

(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)

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.

Package A1:

Survey works for underground transmission lines have been completed. ToR for IEE of Bhaktapur-Thimi S/S section approved by MoEWRI (DOED) and the IEE has been completed. Bid package for 132 kV underground (UG) Line from Bhaktapur SS to Thimi SS (including Bay-Extension at Bhaktapur SS and Line Termination at Thimi SS) is under preparation.

Package A2 (Upgrading substations at Khimti1, Barabishe, and Lapshiphedi):

Contract awarded to M/s Grid Solution SAS France. Survey works and geotechnical investigation works at New Khimti & Barhabishe have been completed and civil works commenced by the contractor in both locations. Major equipment and construction drawings are being submitted by the contractor and being reviewed/approved for all the three substations.

Package B1- Distribution System Reinforcement and Modernization of Eastern -western Part of Kathmandu Valley (Kirtipur, Kuleswar, Baneswar, Balaju and Jorpati DCs):

The existing and proposed route survey of HT and LT network completed. Most of the equipment's (to be supplied) GTP, drawings and type test report have been approved. The Load Flow of the 51 feeders of the 5 Distribution Centers has been completed and is under the review for approval. The HT and LT network proposed drawing for underground network are submitted for approval. The Factory Acceptance Test of the RMU, LT AB cable and feeder pillars are completed. 120 nos. of RMU, 24km HDPE pipes, 825 nos. of feeder/service pillars, 36.13 km of 120 sq.mm AB cable, 100km of PLB duct delivered. Dispatch instruction issued for 75 km of FO cable, 39.30 km of 95 sq.mm AB cable, 6 HT feeders, and 3 LT feeders. NEA is seeking necessary work permit for works on the road from the Department of Road, municipalities and the local authorities for undergrounding works.

Package B2- Lalitpur and Bhaktapur Urban Distribution Network Reinforcement (Lagankhel, Pulchowk, and Bhaktapur):Contract awarded to M/s Tata Projects Limited, India on 4 June 2021. Survey and Design Works, GTPs submission (LT Feeder Panel, HDPE Pipes and XLPE Cables), soil investigation, subcontractor approval, GPR survey vendor credential, contractor's organization, contractor's office details etc. are submitted by the contractor.

Package B3- Distribution System Reinforcement and Modernization of Bharatpur and Pokhara: Contract for this package was awarded on 8 October 2021. Initial survey work being commenced.

Design, supply, installation, and commissioning of rural electrification and distribution network reinforcement in Province 2-

B4/Lot-1: Contract awarded for construction of 6 numbers of new 33/11kV substations and 97 ckt. km of 33kV line in Saptari, Siraha & Dhanusa Districts. Survey Work completed for 6 numbers of substation and 33 KV line. Soil investigation report approved. Vendor/source approval are under process.

B4/Lot-2 : Contract awarded for construction of four numbers of new 33/11kV substations and 226 ckt. km of 33kV line in Mahottari, Sarlahi, Rautahat, Bara & Parsa Districts to TATA on 17 March 2021. LC opened, survey works started. Design/drawing for Psc Poles and ACSR Conductor was approved. Soil investigation ongoing.

B4/Lot-3: Survey work completed for both 400V line.

B4/Lot-4: LC opened and survey works started. Design/Drawing Approval of Psc Poles and ACSR Conductor was done.B4/Lot-5: LC opened, survey works started. Design/Drawing Approval of Psc Poles and ACSR conductor was done.

Package C1 (Electric Vehicle Charging Station): Location survey completed. Design of charging station being undertaken by the contractor.

Package C2 (Upgrading existing 132 kV double circuit transmission line from Pathlaiya to Parwanipur and construction of 132 kV double circuit):

Survey for the line has been completed by Engineering Directorate-NEA. Likewise, ToR for IEE study has already been approved by GON, which has been assigned to Environment and Social Studies Division (ESSD) of NEA. IFB for construction of 132 kV line and 132 kV Substations (S/S) at Pokahariya is planned to be published immediately after completing land acquisition for Pokhariya S/S. This is expected to be completed by October 2021.

Distribution network and capacity of women to use electricity for energy-based enterprises development in Province 2 improved:

To early to report.