Nepal: Electricity Grid Modernization Project – Additional Financing

Sovereign Project | 54107-002

ADB approved the Electricity Grid Modernization Project (the project) amounting to $156 million on 26 November 2020 financed by ADB's concessional OCR. The legal agreements were signed on 30 December 2020, and the project became effective on 4 February 2021. The original loan closing date is 30 September 2026.

The outcome of the ongoing project is to improve reliability, efficiency, and financial sustainability of electricity supply in Nepal. The ongoing project includes three main outputs: (i) electricity transmission capacity in project areas strengthened and modernized (output 1); (ii) electricity distribution system in project areas strengthened and modernized (output 2); and (iii) capacity of Nepal Electricity Authority (NEA) to implement its Corporate Development Plan strengthened (output 3). The executing agency for the project is NEA.

Project Details

  • Project Officer
    Acharya, Jiwan S.
    South Asia Department
    Request for information
  • Approval Date
    17 September 2021
  • Country
    Nepal
  • Sector
    • Energy

Related Projects

Project Name Electricity Grid Modernization Project – Additional Financing
Project Number 54107-002
Country Nepal
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 4109-NEP: Electricity Grid Modernization Project Additional Financing
Concessional ordinary capital resources lending US$ 60.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Sector / Subsector

Energy / Electricity transmission and distribution
Gender Equity and Mainstreaming Effective gender mainstreaming
Description

ADB approved the Electricity Grid Modernization Project (the project) amounting to $156 million on 26 November 2020 financed by ADB's concessional OCR. The legal agreements were signed on 30 December 2020, and the project became effective on 4 February 2021. The original loan closing date is 30 September 2026.

The outcome of the ongoing project is to improve reliability, efficiency, and financial sustainability of electricity supply in Nepal. The ongoing project includes three main outputs: (i) electricity transmission capacity in project areas strengthened and modernized (output 1); (ii) electricity distribution system in project areas strengthened and modernized (output 2); and (iii) capacity of Nepal Electricity Authority (NEA) to implement its Corporate Development Plan strengthened (output 3). The executing agency for the project is NEA.

The proposed additional financing is for NEA to further improve transmission and distribution network in the country (output 1 and 2) and is programmed to be delivered in 2021 as Electricity Grid Modernization Project Additional Financing in ADB's Country Operations Business Plan (COBP) 2021 2023 for Nepal.
Project Rationale and Linkage to Country/Regional Strategy The additional financing for NEA is proposed to further improve transmission and distribution system in the country. Government has sought assistance from ADB to enhance the capacity of critical transmission and distribution network to improve electricity supply in the selected load centers. These investments [which could not be accommodated in the ongoing project due to lack of readiness at the time] are needed to ensure delivery of increasing requirement of power and meet customer demand in an efficient and reliable manner. The proposed additional scope is strongly linked to the ongoing project's scope and can be efficiently implemented under the same implementation arrangements. The overall project scope is aligned with the government's 2018 white paper in which government's vision for the energy sector has been articulated. It is also aligned with the ADB's country partnership strategy (CPS) for Nepal, 2020 2024 and supports the government's development objective of accelerated and inclusive economic growth.
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)
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 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. There is 1 contract for project supervision .
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. There are 6 contracts including one for project supervision and all are below $20m. There are contractors and consulting firms easily available and expected to receive good response during the bidding.
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 10 Mar 2021
Fact Finding 19 Apr 2021 to 23 Apr 2021
MRM 17 Jun 2021
Approval 17 Sep 2021
Last Review Mission -
Last PDS Update 03 Dec 2021

Loan 4109-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
17 Sep 2021 26 Nov 2021 30 Nov 2021 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 24 Dec 2021 0.00 0.00 0%
Counterpart 15.00 Cumulative Disbursements
Cofinancing 0.00 24 Dec 2021 0.00 0.00 0%

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
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: Gender Action Plan Gender Action Plans Aug 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: Project Administration Manual Project/Program Administration Manual Aug 2021
Electricity Grid Modernization Project - Additional Financing: Procurement Plan Procurement Plans Jul 2021

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 - Additional Financing: Resettlement and Indigenous Peoples Plan Combined Resettlement Plan and Indigenous Peoples Plans Jun 2021
Electricity Grid Modernization Project - Additional Financing: Initial Environmental Examination Initial Environmental Examination Jun 2021

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.

Contracts Awarded

No contracts awarded for this project were found