Nepal’s Development Partners Pledges To Increase Support To Energy Sector

Nepal’s Development Partners Pledges To Increase Support To Energy Sector

March 2, 2024, 9:37 a.m.

The Nepal Electricity Authority is urging Nepal's development partners to increase their assistance in the energy sector. In response, the development partners of Nepal have committed to enhance their assistance in the energy sector.

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Due to the declining federal budget for the expansion of the transmission and distribution system, the NEA has very limited options. NEA needs over 500 billion rupees investment in transmission and distribution system over the next ten years. NEA's internal revenue and annual budget allocations from the federal budget are insufficient.

Kul Man Ghising, Managing Director of NEA, has requested Nepal's international development partners to increase assistance in the energy sector.

During a meeting with senior officials from Switzerland, the United Kingdom, the United States of America, the European Union, and the country heads of the World Bank and the Asian Development Bank, who have been providing support to Nepal, the managing director was requested to increase grants and loans.

The officials also inspected the 220 kV new Butwal Substation located in Sunwal Municipality-13 Suryavasti.

During the briefing on hydropower generation, transmission, and distribution in Nepal, as well as electricity trade with India and Bangladesh, MD Ghising stated that an investment of over 12-13 billion US dollars is required in the next 5-6 years.

He emphasized the need for significant investments in expanding and improving Nepal's electricity generation, transmission, and distribution.

Dr. Danielle Meuwly, the Swiss Ambassador to Nepal, Faris H. Hadad-Zervos, the World Bank Country Director for Nepal, Maldives, and Sri Lanka, and Arnaud Cauchois, the country director of the Asian Development Bank, along with representatives from development partners, including the European Union and USAID, visited Nawalparasi (Bardghat Susta West).

The Swiss Ambassador, Dr. Danielle Meuwly, began the field visit in Lumbini Province with Development Partners. The first on-site visit was to the new Butwal Substation and Industrial Area. This visit stimulated strategic dialogue on current and future support with the government and Nepali stakeholders.

The Butwal substation is a new addition constructed under the Kaligandaki Corridor 220 kV transmission line project. It was built with the investment of the Nepal Government and NEA, as well as a concessional loan from ADB.

MD Ghising requested increased assistance in the energy sector. The team appreciated the progress in Nepal's energy sector and pledged to increase investment.

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Managing Director Ghising stated that more than $6 billion is needed for electricity generation, $5 billion for transmission, and $2 billion for distribution in the next 5-6 years to increase electricity production and expand and strengthen the system.

Our priority is to increase domestic electricity consumption. Any excess electricity will be sold to neighboring countries. To achieve this, we require significant investment to expand our infrastructure. I urge our development partners to increase their investment.

Faris H. Hadad-Zervos, the World Bank's country director for Nepal, Maldives, and Sri Lanka, stated that the bank's investment in the 1063 megawatt Upper Arun hydropower project is in its final stage. He emphasized the need for special attention to be paid to environmental and social protection measures during the project's implementation.

Our site visits in Lumbini Province began with the New Butwal Substation, which is financed by @ADB_HQ and is helping to facilitate cross-border energy trade. This project is also ensuring access to clean, reliable, and sustainable energy sources in #Nepal.

Arnaud Cauchois, the country director of ADB's Nepal Residential Mission, mentioned that they have been partnering in Nepal's energy sector for the past 50 years.

ADB is working to manage the finances of the 635 MW Dudhkoshi reservoir hydroelectric project under the bank's leadership by 2024. During the visit, the team inspected the substation's control room and gathered information about the power transmission and distribution conditions.

The Kaligandaki Corridor now has a 220 kV double circuit transmission line and three substations. These have been constructed to integrate the power of the hydropower projects that will be built in Kaligandaki and its tributaries and integrate it into the national system.

The Kaligandaki Corridor 220 KV double circuit transmission line project has constructed approximately 130 km of double circuit transmission line. The line starts from Annapurna rural municipality-3 Dana substation in Myagdi and passes through Parbat, Baglung, Syangja, Palpa, Rupandehi, and ends at the new Butwal substation in Nawalparasi (Bardghat Susta West).

The transmission line has a capacity of carrying about 2,000 MW of electricity. The Nepal Government and Authority invested in the construction of the Kaligandaki Corridor Transmission Line Project, along with concessional loans received from the Electricity System Expansion Project under ADB's Asia Sub-Regional Economic Cooperation (SASEC).

Additionally, a new Butwal-Gorakhpur 400 KV second international transmission line is being constructed for electricity trade with India. The country will export excess electricity to India using the same transmission line.

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