Nepal : South Asia Subregional Economic Cooperation Power Transmission and Distribution System Strengthening Project
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 Details
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Project Officer
Manandhar, Pushkar
South Asia Department
Request for information -
Country/Economy
Nepal -
Sector
- Energy
Project Name | South Asia Subregional Economic Cooperation Power Transmission and Distribution System Strengthening Project | ||||||||||||
Project Number | 50059-003 | ||||||||||||
Country / Economy | Nepal |
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Project Status | Active | ||||||||||||
Project Type / Modality of Assistance | Grant Loan Technical Assistance |
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Source of Funding / Amount |
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Operational Priorities | OP1: Addressing remaining poverty and reducing inequalities OP2: Accelerating progress in gender equality OP3: Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability OP4: Making cities more livable OP6: Strengthening governance and institutional capacity OP7: Fostering regional cooperation and integration |
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Sector / Subsector | Energy / Electricity transmission and distribution |
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Gender | 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 20182028 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%. |
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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 | |
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Description of Outcome | Access, reliability, efficiency of power supply in Nepal improved |
Progress Toward Outcome | Project implementation is ongoing as envisioned. Upon completion of the planned subprojects, anticipated project outcome will be achieved. |
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) | Package A1-Construction of 132kV underground transmission line and 132/66/11kV substation at Koteshwor: The substation is planned to be constructed on land owned by the Department of Water Supply and Sanitation Management (DWSSM) and a discussion is ongoing between NEA and DWSSM on this matter. Preparation of bidding documents is underway and the IFB would be published after the finalization of the land at Koteshowr (Balkumari). Package A1.2- Construction of 132 kV line from Bhaktapur substation to Thimi substation and bay addition works at Bhaktapur substation: IFB published with a target to award the contract by December 2022. Package A2-Design, Supply, Installation, and Commissioning Of 400kv GIS at New Khimti, Barhabise, and Lapsiphedi: Works are ongoing but the progress is behind the schedule. The Lapsiphedi SS, which accounts for 60% of the total scope of works, the contractor could not commence any works due to NEA's inability to hand over the site due to local obstruction. As a result, the total cumulative progress of the project is only 14% against the elapsed time of 60%. NEA has been working to resolve existing local obstructions at Lapsiphedi and handover the site to the contractor. Package B1-Distribution System Reinforcement and Modernization of Eastern Western Part of Kathmandu Valley (Kirtipur, Kuleswar, Baneswor, Balaju and Jorpati DCs): The contract for this package was awarded on 24 June 2020. The works are currently ongoing. Package B2-Lalitpur and Bhaktapur Urban Distribution Network Reinforcement (Lagankhel, Pulchowk, Bhaktapur and Thimi DCs): The contract for this package was awarded on 4 June 2021. Detail survey of HT, LT network, and consumer indexing was completed. Most of the HT/LT Network drawings of the Thimi area finalized. HT network reconfiguration drawing for Bhaktapur approved. Lalitpur HT and LT network reconfiguration proposal for Lalitpur submitted by the contractor, which is currently under review by NEA. Soil Investigation work completed. Dispatch of material also commenced in limited quantity. Package B3-Reinforcement and modernization of distribution systems in Bharatpur and Pokhara: The contract for this package was awarded on 8 October 2021. Survey works have been completed. Desing works and vendor finalization process is currently ongoing. Package B4- Rural Electrification and Distribution Network Reinforcement in Madesh Pradesh: The scope of work includes expanding and upgrading distribution systems in all 8 districts of Madhesh Pradesh. This package contains 5-lots, the contract for this was awarded on 17 March 2021. Works under all lots commenced by the contractors. Survey works are mostly completed. Civil works began for 5 substations (out of 8), and the erection of the pole started in Lot 5. However, the supply of major materials such as transformers and conductors is delayed due to an unprecedented increase in the price of both ferrous and non-ferrous materials in the international market. Package C1- Supply, delivery, installation, testing, commissioning, operations, and maintenance of electric vehicle charging stations: The scope of work under this subproject includes supply, delivery, installation, testing, commissioning, operations, and maintenance of 50 numbers of electric vehicle charging stations across the country. Works are ongoing satisfactorily, and installation and commission of the electric charging station are expected to be complete within 2022. Package C2-Upgrading existing 132kV double circuit transmission line from Pathlaiya to Parwanipur and construction of a new 132 kV substation in Pokhariya: The procurement of this package is yet to commence and IFB is likely to be published by September 2022. Package D1 Project Supervision Consultant- The project supervision consultant is onboarded and providing required support to the subprojects. |
Geographical Location | Nation-wide |
Safeguard Categories | |
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Environment | B |
Involuntary Resettlement | B |
Indigenous Peoples | C |
Summary of Environmental and Social Aspects | |
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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 following ADB's safeguard policy. The resettlement plan was prepared and was publicly disclosed on ADB's website. Public/stakeholders consultations had been undertaken as and when needed to address public concerns and grievances. The consultation process will be continued throughout the project period. |
Indigenous Peoples | The resettlement plan covers due diligence for indigenous peoples. The project does not have any impacts on dignity, human rights, livelihood system, culture, or natural resources of the indigenous people. |
Stakeholder Communication, Participation, and Consultation | |
During Project Design | A series of consultations with affected persons and communities were conducted by the project implementing agency for project preparation, and this will be continued. |
During Project Implementation | Implementation of the project has been commenced. Required consultations/meetings with affected persons and communities will be conducted during project review missions, and as and when needed throughout the project implementation. |
Business Opportunities | |
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Consulting Services | A project supervision consultant has been 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 has 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 Project Management Directorate (PMD) in place. Under the PMD, a Project Management Unit has been established and supported by a project supervision consultant (PSC). Project procurement classification is B, and is appropriate. |
Responsible ADB Officer | Manandhar, Pushkar |
Responsible ADB Department | South Asia Department |
Responsible ADB Division | Nepal Resident Mission |
Executing Agencies |
Nepal Electricity Authority (NEA) |
Timetable | |
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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 | 15 Jul 2022 |
Grant 0711-NEP
Milestones | |||||
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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 | ||||
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Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
Project Cost | 35.00 | Cumulative Contract Awards | |||
ADB | 0.00 | 26 Apr 2023 | 0.00 | 31.00 | 89% |
Counterpart | 0.00 | Cumulative Disbursements | |||
Cofinancing | 35.00 | 26 Apr 2023 | 0.00 | 7.27 | 21% |
Status of Covenants | ||||||
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Category | Sector | Safeguards | Social | Financial | Economic | Others |
Rating | - | Satisfactory | Satisfactory | Satisfactory | - | Satisfactory |
Loan 3943-NEP
Milestones | |||||
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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 | ||||
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Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
Project Cost | 287.00 | Cumulative Contract Awards | |||
ADB | 200.00 | 26 Apr 2023 | 165.63 | 0.00 | 83% |
Counterpart | 87.00 | Cumulative Disbursements | |||
Cofinancing | 0.00 | 26 Apr 2023 | 39.32 | 0.00 | 20% |
Status of Covenants | ||||||
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Category | Sector | Safeguards | Social | Financial | Economic | Others |
Rating | - | Satisfactory | Satisfactory | Satisfactory | - | Satisfactory |
TA 6526-NEP
Milestones | |||||
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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 | |||||||
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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 Apr 2023 | 1,459,613.20 |
Status of Covenants | ||||||
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Category | Sector | Safeguards | Social | Financial | Economic | Others |
Rating | - | Satisfactory | Satisfactory | Satisfactory | - | Satisfactory |
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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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.
Related Publications
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ADB Approves $200 Million Loan to Modernize Power Supply, Distribution System in Nepal
ADB has approved a $200 million concessional loan to improve power supply and distribution systems in Nepal.
Tenders
Contracts Awarded
Contract Title | Approval Number | Contract Date | Contractor | Address | Executing Agency | Total Contract Amount (US$) | Contract Amount Financed by ADB (US$) |
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Design, supply, installation and commissioning of 132 kV underground line from Bhaktapur Substation to Thimi Substation and Bay addition works at Bhaktapur Substation (Package A1.2) | Loan 3943 | 22 Dec 2022 | KEC International Limited | RPG House, Dr. Annie Besant Road Worli, Mumbai, India | Nepal Electricity Authority (NEA) | 6,713,403.09 | 6,713,120.18 |
Contract for Pokhara-Bharatpur Distribution System Reinforcement Project | Loan 3943 | 27 Oct 2021 | M/S TATA Projects Limited India | TATA Projects Limited,Mithona Towers, Prenderghast Road, Secunderabad-500 003, Telangana, India Communication/Execution Office: TATA PROJECTS LIMITED 1st Floor, Tower-1, Okay a Centre, B-5, Sector-62 Noida Uttar Pradesh- 201301 | Nepal Electricity Authority (NEA) | 20,867,534.44 | 20,867,534.44 |
DESIGN, SUPPLY, INSTALLATION, AND COMMISSIONING OF UNDERGROUND DISTRIBUTION NETWORK AT LAGANKHEL, PULCHOWK, BHAKTAPUR AND THIMI DIST CENTER | Loan 3943 | 21 Jun 2021 | TATA PROJECTS LIMITED, INDIA | 18TH FLOOR, TOWER-1, OKAYA CENTRE,B-5, SECTOR-62, NOIDA UTTAR PRADESH-201301 INDIA | Nepal Electricity Authority (NEA) | 33,557,363.33 | 33,457,824.96 |
SUPPLY, DELIVERY, INSTALLATION, TESTING, COMMISSIONING, OPERATION AND MAINTENANCE OF ELECTRIC VEHICLE CHARGING STATION (C-1) | Loan 3943 | 21 Apr 2021 | WANBANG DIGITAL ENERGY CO., LTD. | NO. 39, LONGHUI ROAD, WUJIN DISTRICT CHANGZHOU, JIANGSU CHINA, PEOPLE'S REP. OF | Nepal Electricity Authority (NEA) | 3,178,475.98 | 3,178,475.98 |
Capacity Development | Technical Assistance 6526 | 09 Apr 2021 | Stichting Hivos (NETHERLANDS) | Grote Marktstraat 47a The Hague, Netherlands | Nepal Electricity Authority (NEA) | 1,969,288.00 | — |
DESIGN SUPPLY INSTALLATION AND COMMISSIONING OF RURAL ELECTRIFICATION AND DISTRIBUTION NETWORK | Grant 0711 | 17 Mar 2021 | TATA PROJECTS LIMITED | 1ST FLOOR TOWER-1 OKAYA CENTRE B-5 SECTOR-62 NOIDA-20131 UTTAR PRADESH INDIA | Nepal Electricity Authority (NEA) | 3,451,337.24 | — |
DESIGN SUPPLY INSTALLATION AND COMMISSIONING OF RURAL ELECTRIFICATION AND DISTRIBUTION NETWORK | Grant 0711 | 17 Mar 2021 | TATA PROJECTS LIMITED | 1ST FLOOR TOWER-1 OKAYA CENTRE B-5 SECTOR-62 NOIDA-20131 INDIA | Nepal Electricity Authority (NEA) | 4,083,432.01 | — |
DESIGN SUPPLY INSTALLATION AND COMMISSIONING OF RURAL ELECTRIFICATION AND DISTRIBUTION NETWORK | Grant 0711 | 17 Mar 2021 | TATA PROJECTS LIMITED | 1ST FLOOR TOWER-1 OKAYA CENTRE B-5 SECTOR-62 NOIDA-20131 UTTAR PRADESH INDIA | Nepal Electricity Authority (NEA) | 4,287,801.16 | — |
DESIGN SUPPLY INSTALLATION AND COMMISSIONING OF RURAL ELECTRIFICATION AND DISTRIBUTION NETWORK | Grant 0711 | 17 Mar 2021 | TATA PROJECTS LIMITED | 1ST FLOOR TOWER-1 OKAYA CENTRE B-5 SECTOR-62 NOIDA-20131 UTTAR PRADESH INDIA | Nepal Electricity Authority (NEA) | 4,423,973.64 | — |
DESIGN SUPPLY INSTALLATIONK AND COMMISSIONING OF RURAL ELECTRIFICATION AND DISTRIBUTION NETWORK | Grant 0711 | 17 Mar 2021 | TATA PROJECTS LIMITED | 1ST FLOOR TOWER-1 OKAYA CENTRE B-5 SECTOR-62 NOIDA-20131 UTTAR PRADESH INDIA | Nepal Electricity Authority (NEA) | 5,805,822.78 | — |
DESIGN, SUPPLY, INSTALLATION AND COMMISSIONING OF RURAL ELECTRIFICATION AND DISTRIBUTION NETWORK REINFORCEMENTIN PROVINCE 2 | Loan 3943 | 24 Mar 2021 | TATA PROJECTS LIMITED | 1ST FLOOR, TOWER-1 OKAYA CENTRE, B-5 SECTOR-62, NOIDA-20131, UTTAR PRADESH INDIA | Nepal Electricity Authority (NEA) | 8,185,649.89 | 3,728,859.91 |
DESIGN, SUPPLY, INSTALLATION, AND COMMISSIONING OF RURAL ELECTRIFICATION AND DISTRIBUTION NETWORK REINFORCEMENT IN PROVINCE 2 | Loan 3943 | 24 Mar 2021 | TATA PROJECTS LIMITED | 1ST FLOOR, TOWER 1, OKAYA CENTRE, B-5 SECTOR-62, NOIDA-20131, UTTAR PRADESH INDIA | Nepal Electricity Authority (NEA) | 10,757,630.17 | 4,893,586.96 |
DESIGN, SUPPLY,INSTALLATION AND COMMISSIONING OF RURAL ELECTRIFICATION AND DISTRIBUTION NETWORK REINFORCEMENT IN PROVINCE 2 | Loan 3943 | 24 Mar 2021 | TATA PROJECTS LIMITED | 1ST FLOOR, TOWER-1, OKAYA CENTRE, B-5 SECTOR-62, NOIDA-20131, UTTAR PRADESH INDIA | Nepal Electricity Authority (NEA) | 6,386,433.07 | 2,909,048.31 |
DESIGN, SUPPLY, INSTALLATION, AND COMMISSIONING OF RURAL ELECTRIFICATION AND DISTRIBUTION NETWORK REINFORCEMENT IN PROVINCE 2 | Loan 3943 | 24 Mar 2021 | TATA PROJECTS LIMITED | 1ST FLOOR, TOWER-1, OKAYA CENTRE, B-5 SECTOR-62, NOIDA-20131, UTTAR PRADESH INDIA | Nepal Electricity Authority (NEA) | 7,573,849.71 | 3,441,825.63 |
DESIGN, SUPPLY, INSTALLATION, AND COMMISSIONING OF RURAL ELECTRIFICATION AND DISTRIBUTION NETWORK REINFORCEMENT IN PROVINCE 2 | Loan 3943 | 24 Mar 2021 | TATA PROJECTS LIMITED | 1ST FLOOR, TOWER-1, OKAYA CENTRE, B-5 SECTOR-62, NOIDA-20131, UTTAR PRADESH INDIA | Nepal Electricity Authority (NEA) | 7,933,635.58 | 3,614,083.43 |
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) | 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) | 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) | 49,479,828.09 | 43,694,737.99 |
Procurement Plan
Title | Document Type | Document Date |
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South Asia Subregional Economic Cooperation Power Transmission and Distribution System Strengthening Project: Procurement Plan | Procurement Plans | Aug 2022 |