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

Sovereign (Public) Project | 50059-003 Status: Active

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

Project Officer
Acharya, Jiwan S. South Asia Department Request for information
Country
  • Nepal
Sector
  • Energy
 
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
Grant 0711-NEP: South Asia Subregional Economic Cooperation Power Transmission and Distribution System Strengthening Project
Government of Norway US$ 35.00 million
Loan 3943-NEP: South Asia Subregional Economic Cooperation Power Transmission and Distribution System Strengthening Project
concessional ordinary capital resources lending / Asian Development Fund US$ 200.00 million
TA 6526-NEP: South Asia Subregional Economic Cooperation Power Transmission and Distribution System Strengthening Project
ATF - Norway TA Grant US$ 5.00 million
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.

Title Document Type Document Date
South Asia Subregional Economic Cooperation Power Transmission and Distribution System Strengthening Project: Procurement Plan Procurement Plans Jan 2021
Loan Agreement (Ordinary Operations [Concessional]) for Loan 3943-NEP: South Asia Subregional Economic Cooperation Power Transmission and Distribution System Strengthening Project Loan Agreement (Ordinary Resources) Aug 2020
Grant Agreement (Externally Financed) for Grant 0711-NEP: South Asia Subregional Economic Cooperation Power Transmission and Distribution System Strengthening Project Grant Agreement Aug 2020
Project Agreement for Loan 3943-NEP and Grant 0711-NEP: South Asia Subregional Economic Cooperation Power Transmission and Distribution System Strengthening Project Project/Program Agreements Aug 2020
South Asia Subregional Economic Cooperation Power Transmission and Distribution System Strengthening Project: Technical Assistance Report Technical Assistance Reports Jun 2020
South Asia Subregional Economic Cooperation Power Transmission and Distribution System Strengthening Project: Report and Recommendation of the President Reports and Recommendations of the President Jun 2020
South Asia Subregional Economic Cooperation Power Transmission and Distribution System Strengthening Project: Project Administration Manual Project/Program Administration Manual Jun 2020
South Asia Subregional Economic Cooperation Power Transmission and Distribution System Strengthening Project: Gender Action Plan Gender Action Plans Jun 2020
South Asia Subregional Economic Cooperation Power Transmission and Distribution System Strengthening Project: Initial Poverty and Social Analysis Initial Poverty and Social Analysis Sep 2019

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

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.

Tenders

Tender Title Type Status Posting Date Deadline
3943-NEP: SASEC Power Transmission and Distribution System Strengthening Project [PMD/PTDSSP/PBDSRP-077/78-01] Invitation for Bids Active 08 Feb 2021 25 Mar 2021
Procurement and Project Management Specialist Individual - Consulting Closed 26 Jan 2021 01 Feb 2021
Implementation Support for Gender Equality and Social Inclusion Firm - Consulting Closed 24 Oct 2020 13 Nov 2020
3943-NEP: SASEC Power Transmission and Distribution System Strengthening Project [PMD/PTDSSP/LBDSRP-076/77-01] Invitation for Bids Closed 24 Jul 2020 30 Sep 2020
50059-NEP: SASEC Power Transmission and Distribution System Strengthening Project [ICB-PMD-REDNRP-076/77-01] Invitation for Bids Closed 27 Mar 2020 15 Jul 2020
50059-NEP: SASEC Power Transmission and Distribution System Strengthening Project [PMD/PTDSSP/EVCS/2076/77-01] Invitation for Bids Closed 21 Jan 2020 31 Jul 2020
Consulting Services: Project Supervision Consultant of SASEC: Power Transmission and Distribution System Strengthening Project Firm - Consulting Closed 29 Aug 2019 27 Sep 2019
50059-NEP: SASEC Power Transmission and Distribution System Strengthening Project [PMD/PTDSSP/KVWDSEP - 075/76-01] Invitation for Bids Closed 17 May 2019 25 Jul 2019
50059-NEP: SASEC Power Transmission and Distribution System Strengthening Project [PMD/PTDSSP/KBL- 075/76-01] Invitation for Bids Closed 17 May 2019 13 Aug 2019
NEP: SASEC Power Transmission and Distributing System Strengthening Project (PTDSSP) Advance Notice Active 16 May 2019

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