Nepal : Electricity Grid Modernization Project

Sovereign Project | 54107-001

The project will finance high-priority electricity grid modernization investments both in transmission and distribution system in Nepal under the following outputs:

Output 1: Electricity transmission capacity in project areas strengthened and modernized. The project will finance (i) automation of 40 grid substations throughout the country; (ii) construction of 3 units of modern 132/11 kV grid substations with automation (each with 2x45 megavolt ampleres [MVA] capacity) together with 16 km of 132 kV double circuit underground line along Chobhar-Lagankhel-Sinamangal, and 5 km of 66 kV double circuit underground transmission line along Sinamangal-Chabahil in Kathmandu Valley; (iii) upgrading of 237 km of 132 kV transmission lines with more efficient high-temperature-low-sag conductors; and (iv) commissioning of transmission system consisting of 4 automated grid substations with capacity of 290 MVA and 48 km transmission lines in Myagdi and Dhading districts.

Project Details

Project Name Electricity Grid Modernization Project
Project Number 54107-001
Country / Economy Nepal
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 4014-NEP: Electricity Grid Modernization Project
Concessional ordinary capital resources lending US$ 156.00 million
Loan 4109-NEP: Electricity Grid Modernization Project " Additional Financing
Concessional ordinary capital resources lending US$ 60.00 million
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
Sector / Subsector

Energy / Electricity transmission and distribution

Gender Effective gender mainstreaming
Description

The project will finance high-priority electricity grid modernization investments both in transmission and distribution system in Nepal under the following outputs:

Output 1: Electricity transmission capacity in project areas strengthened and modernized. The project will finance (i) automation of 40 grid substations throughout the country; (ii) construction of 3 units of modern 132/11 kV grid substations with automation (each with 2x45 megavolt ampleres [MVA] capacity) together with 16 km of 132 kV double circuit underground line along Chobhar-Lagankhel-Sinamangal, and 5 km of 66 kV double circuit underground transmission line along Sinamangal-Chabahil in Kathmandu Valley; (iii) upgrading of 237 km of 132 kV transmission lines with more efficient high-temperature-low-sag conductors; and (iv) commissioning of transmission system consisting of 4 automated grid substations with capacity of 290 MVA and 48 km transmission lines in Myagdi and Dhading districts.

Output 2: Electricity distribution system in project areas modernized. This will include (i) construction of distribution control center in Kathmandu; (ii) installation of additional 350,000 smart meters in Kathmandu Valley; (iii) construction of 8 substations with automation along with distribution system reinforced and extended in Dhading, Dharan, Morang, Nepalgunj, Parasi, Sindhupalchowk and Surkhet; and (iv) 150,000 new households (including xx women-headed households) connected to the national grid.

Output 3: Capacity of NEA and electricity users in project areas strengthened. Considering the importance of continued support to NEA and users, the project will support increasing knowledge of (i) at least 40 eligible NEA staff (including 30% eligible women) on automation of grid substations; (ii) at least 30 eligible NEA staff (including 30% women) on NEA's organizational development; (iii) at least 20 eligible NEA staff (including 30% women) on putting in place improved billing and collection measures; and (iv) at least 2,000 electricity consumers in project areas (40% women and disadvantaged group on safe and efficient use at distribution centers. The project will also support implementation of key actions from NEA's gender equality and social inclusion (GESI) strategy and operational guidelines in its regional offices, to complement corporate level activities covered under a forthcoming project.

These outputs will result in the following outcome: access to efficient grid electricity supply in Nepal improved. The project will be aligned with the following impact: investments in industrial and commercial hubs promoted.

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 FY2017FY2019. With deepening economic uncertainties because of 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.
Impact

Reliable and efficient electricity for all achieved

NEA developed as modern and sustainable corporate entity that provides reliable services to its customers

Project Outcome
Description of Outcome

Reliability, efficiency, and financial sustainability of electricity supply in Nepal improved

Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Electricity transmission capacity in project areas strengthened and modernized

Electricity distribution system in project areas strengthened and modernized

Capacity of NEA to implement its corporate development plan strengthened

Status of Implementation Progress (Outputs, Activities, and Issues) Implementation is ongoing
Geographical Location Nation-wide
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples B
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 The project will be implemented and supervised by the project management unit under the Project Management Directorate (PMD) of NEA. NEA will assign a dedicated team headed by a project director. Environmental and Social Management Plans and Occupational Health and Safety Plan implementation and monitoring support will be provided to the safeguard unit at PMD. A project supervision consultant will be hired to support NEA in implementing the project. Most of the contracts are expected to be tendered as turnkey for project implementation. 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). The government will ensure proper coordination during implementation of this project.
Procurement Nepal Electricity Authority (NEA) is the proposed executing and implementing agency which has significant experience in implementing ADB projects and established processes and capacity to handle ADB procurement. While most of the contracts are limited to specific geographical area, the substation automation package involves 40 substations throughout the country but would be easy to implement.
Responsible ADB Officer Shah, Grishma
Responsible ADB Department Sectors Group
Responsible ADB Division Energy Sector Office (SG-ENE)
Executing Agencies
Nepal Electricity Authority (NEA)
Timetable
Concept Clearance 03 Jun 2020
Fact Finding 22 Jun 2020 to 26 Jun 2020
MRM 20 Aug 2020
Approval 26 Nov 2020
Last Review Mission -
Last PDS Update 16 Sep 2022

Loan 4014-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Nov 2020 30 Dec 2020 04 Feb 2021 30 Sep 2026 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 195.00 Cumulative Contract Awards
ADB 156.00 02 Apr 2024 132.91 0.00 85%
Counterpart 39.00 Cumulative Disbursements
Cofinancing 0.00 02 Apr 2024 38.31 0.00 25%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Unsatisfactory Unsatisfactory Satisfactory Satisfactory Unsatisfactory

Loan 4109-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
17 Sep 2021 26 Nov 2021 08 Feb 2022 30 Sep 2026 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 75.00 Cumulative Contract Awards
ADB 60.00 02 Apr 2024 58.23 0.00 97%
Counterpart 15.00 Cumulative Disbursements
Cofinancing 0.00 02 Apr 2024 5.76 0.00 10%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Unsatisfactory Unsatisfactory Satisfactory Satisfactory Unsatisfactory

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
Electricity Grid Modernization Project: Proactive Integrity Review Proactive Integrity Reviews (PIR) Jan 2024
Electricity Grid Modernization Project: Nepal Electricity Authority Audited Project Financial Statements (17 July 2022-16 July 2023) Audited Project Financial Statements Jan 2024
Electricity Grid Modernization Project: Procurement Plan Procurement Plans Jul 2023
Electricity Grid Modernization Project: Nepal Electricity Authority Audited Project Financial Statements (16 July 2021-16 July 2022) Audited Project Financial Statements Feb 2023
Electricity Grid Modernization Project - Additional Financing: Audited Project Financial Statements (16 July 2021-16 July 2022) Audited Project Financial Statements Feb 2023
Loan Agreement (Ordinary Operations [Concessional]) for Loan 4109-NEP: Additional Financing for Electricity Grid Modernization Project Loan Agreement (Ordinary Resources) Nov 2021
Project Agreement for Loan 4109-NEP(COL): Additional Financing for the Electricity Grid Modernization Project Project/Program Agreements Nov 2021
Electricity Grid Modernization Project - Additional Financing: Report and Recommendation of the President Reports and Recommendations of the President Aug 2021
Electricity Grid Modernization Project - Additional Financing: Gender Action Plan Gender Action Plans Aug 2021
Electricity Grid Modernization Project - Additional Financing: Project Administration Manual Project/Program Administration Manual Aug 2021
Electricity Grid Modernization Project - Additional Financing: Procurement Plan Procurement Plans Jul 2021
Loan Agreement (Ordinary Operations [Concessional]) for Loan 4014-NEP: Electricity Grid Modernization Project Loan Agreement (Ordinary Resources) Dec 2020
Project Agreement for Electricity Grid Modernization Project Project/Program Agreements Dec 2020
Electricity Grid Modernization Project: Report and Recommendation of the President Reports and Recommendations of the President Nov 2020
Electricity Grid Modernization Project: Gender Action Plan Gender Action Plans Nov 2020
Electricity Grid Modernization Project: Project Administration Manual Project/Program Administration Manual Nov 2020
Electricity Grid Modernization Project: Initial Poverty and Social Analysis Initial Poverty and Social Analysis Jun 2020

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
Electricity Grid Modernization Project: Social Monitoring Report (January-June 2023) Social Monitoring Reports Jul 2023
Electricity Grid Modernization Project: Environmental Monitoring Report (January-June 2023) Environmental Monitoring Reports Jul 2023
Electricity Grid Modernization Project: Environmental and Social Monitoring Report (July-December 2022) Environmental and Social Monitoring Reports May 2023
Electricity Grid Modernization Project - Additional Financing: Environmental and Social Safeguard Monitoring Report (January-June 2022) Environmental and Social Monitoring Reports Nov 2022
Electricity Grid Modernization Project: Environmental and Social Safeguard Monitoring Report (January-June 2022) Environmental and Social Monitoring Reports Nov 2022
Electricity Grid Modernization Project: Environmental Monitoring Report (July-December 2021) Environmental Monitoring Reports Mar 2022
Electricity Grid Modernization Project: Environmental Monitoring Report (January-June 2021) Environmental Monitoring Reports Jun 2021
Electricity Grid Modernization Project: Social Monitoring Report (January-June 2021) Social Monitoring Reports Jun 2021
Electricity Grid Modernization Project - Additional Financing: Initial Environmental Examination Initial Environmental Examination Jun 2021
Electricity Grid Modernization Project - Additional Financing: Resettlement and Indigenous Peoples Plan Combined Resettlement Plan and Indigenous Peoples Plans Jun 2021
Electricity Grid Modernization Project: Initial Environmental Examination Initial Environmental Examination Oct 2020
Electricity Grid Modernization Project: Initial Environmental Examination Initial Environmental Examination Aug 2020
Electricity Grid Modernization Project: Combined Resettlement Plan and Indigenous Peoples Plan Combined Resettlement Plan and Indigenous Peoples Plans Jul 2020

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
4109-NEP: Electricity Grid Modernization Project-Additional Financing [PMD/EGMPAF/CPCUGTLP-079/80-01] Invitation for Bids Closed
4014-NEP: Electricity Grid Modernization Project (A-3) Invitation for Bids Closed
4014-NEP: Electricity Grid Modernization Project (C-1) Invitation for Bids Closed
Project Management Consultant for Supervision of Implementations of Enterprise Resources Planning (ERP) and Revenue Management System (RMS) at Nepal Electricity Authority Firm - Consulting Closed
4014 NEP: Electricity Grid Modernization Project (PMD/EGMP/TLUP-077/78-01 (RE) - Rebidding Invitation for Bids Closed
Procurement of National Individual Social Safeguard Expert Individual - Consulting Closed
Procurement of National Individual Environment Safeguard Expert Individual - Consulting Closed
Procurement of National Individual Gender Equality & Social Inclusion (GESI) Expert Individual - Consulting Closed
54107-NEP: Electricity Grid Modernization Project [PMD/EGMP/PSSP-077/78-01] Invitation for Bids Closed
54107-NEP: Electricity Grid Modernization Project [PMD/EGMP/GKTLS-077/78-01] Invitation for Bids Closed
4014-NEP: Electricity Grid Modernization Project [PMD/EGMP/BNRTLSS-077/78-01] Invitation for Bids Closed
Project Supervision Consultant Firm - Consulting Closed
54107-NEP: Electricity Grid Modernization Project [PMD/EGMP/DCC-077/78-01] C2 Invitation for Bids Closed
54107-NEP: Electricity Grid Modernization Project [PMD/EGMP/DRTLS-077/78-01] Invitation for Bids Closed
54107-NEP: Electricity Grid Modernization Project [PMD/EGMP/TLUP-077/78-01] D1 Invitation for Bids Closed
54107-NEP: Electricity Grid Modernization Project [PMD/EGMP/KRON- 077/78-01] Invitation for Bids Closed

Contracts Awarded

Contract Title Approval Number Contract Date Contractor | Address Executing Agency Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
ICB/FD/EGMPAF/RMS-078/79-02: Supply and Installation of Revenue Management System Loan 4109 26 Jan 2023 LongShine Technology Group Co., Ltd., PRC | LongShine Industrial Park, No. 118 Jinghui East Road, Xinwu District, Wuxi City, Jiangsu Provience, China Nepal Electricity Authority (NEA) 9,989,553.68 9,989,553.68
Design, Supply Installation, Testing, and Comissioning of Ghorahi-Madichaur 132KV TL and Associated Substations at Khungri and Ghorahi Loan 4014 30 Dec 2022 KEC International Limited, India | RPG House 463, 1st Floor, Dr. Annie Besant Road, Worli, Bombay, 400030, India Nepal Electricity Authority (NEA) 14,798,589.15 14,798,589.15
Design, Supply, Installation, Integration, Testing and Commissioning of Substation Automation System (SAS) for Existing Grid Substations of Six Grid Division offices across Nepal Loan 4014 23 Dec 2022 GE T&D India Limited | Noida, India Nepal Electricity Authority (NEA) 21,239,800.07 21,203,300.27
Design, Supply, Installation, Testing, and Commissioning of Borang-Naubise (Ratmate) 220kV Transmission Line and Associated Substations Loan 4014 16 Oct 2022 SEPCO1 & POWER SICHUAN JV | Building A2-6, Hanyujingu Business Center, Gaoxin Zone, Jinan, Shandong, China Nepal Electricity Authority (NEA) 30,821,508.18 30,806,749.19
Design, Supply, Installation, Testing, and Commissioning of 132/33/11 kV Pangtan Substation and Associated Bay Expansion works at Bahrabise Substation Loan 4014 24 Jun 2022 CQNEC-NHE JV | BUTWAL, RUPANDEHI DISTRICT Nepal Electricity Authority (NEA) 5,199,127.46 5,199,127.46
Procurement of Plant for Design, Supply, Installation and Commissioning of 132kV Transmission Line Upgrading Loan 4014 06 Jun 2022 HG Power Transmission SDN BHD | 15th Floor, Rohas Purecircle, West Wing, 9, Jalan P. Ramlee 50250 Kuala Lumpur, Malaysia Nepal Electricity Authority (NEA) 17,361,060.17 15,480,530.45
Project Supervision Consultant for Electricity Grid Modernization Project Loan 4014 29 Dec 2021 Tractebel Engineering Pvt. Ltd. | 37 Institutional Area, Sector 44, Gurugram Haryana 122002, India Nepal Electricity Authority (NEA) 1,520,332.56 1,520,332.56
Design, Supply, Installation, Testing and Commissioning of 132 kV Transmission Line and associated substations at Rahugyat-Dadakhet (Package A-2) Loan 4014 31 Dec 2021 Larsen & Toubro Limited | L & T House, Ballard Estate, Mumbai Construction Head Office, Construction Division, PT and D, TC-3, Tower B, 7th Floor, 'B' WingPost Box 979 Mount Poonamallee Road, Manapakkam, Chennai 600-089, India Nepal Electricity Authority (NEA) 26,493,999.86 26,493,999.86
Design, Supply, Installation and Commissioning of Distribution Command and Control Center Loan 4014 03 Aug 2021 Yangtai Dongfang Wisdom Electric Co. Ltd.China | No. 6, JINDU ROAD, LAISHAN DISTRICT, YANTAI CITY, SHANDONG PROVINCE, P.R.CHINA Nepal Electricity Authority (NEA) 11,691,346.50 11,691,346.50
SUPPLY, INSTALLATION, AND COMMISSIONING OF 132/33 KV AIR INSULATED SUBSTATIONS AT KERAUN, MORANG DISTRICT WITH ASSOC SUB-TL (PACKAGE B-2) Loan 4014 29 Jun 2021 ENERGYPAC ENGINEERING LTD | RABI BHABAN. KATHMANDU, NEPAL Nepal Electricity Authority (NEA) 6,320,024.04 6,312,446.27
Procurement of Plant for Design, Supply, Installation and Commissioning of 132kV Transmission Line Upgrading Loan 4014 06 Jun 2022 HG Power Transmission SDN BHD | 15th Floor, Rohas Purecircle, West Wing, 9, Jalan P. Ramlee 50250 Kuala Lumpur, Malaysia Nepal Electricity Authority (NEA) 17,361,060.17 15,480,530.45

Procurement Plan

Title Document Type Document Date
Electricity Grid Modernization Project: Procurement Plan Procurement Plans Jul 2023
Electricity Grid Modernization Project - Additional Financing: Procurement Plan Procurement Plans Jul 2021