24th December, Kathmandu
Nepal has secured an investment of NPR 72.93 billion (USD 537 million) for enhancing its electricity transmission and distribution system. This move is aimed at improving electricity reliability and expanding trade with neighboring countries.
Nepal Power Grid Upgrade 537M Investment
Funding Breakdown
The Asian Development Bank (ADB) will contribute a concessional loan of USD 31.1 million (NPR 42.24 billion) and a grant of USD 3 million (NPR 4.07 billion). The European Union (EU) will provide a grant of USD 2.26 million (NPR 3.06 billion), while the Government of Norway will add USD 3.1 million (NPR 4.21 billion). Nepal’s government will also invest USD 13.24 million (NPR 17.98 billion) for the project’s implementation.
Key Projects Underway
The project will strengthen key infrastructure, including the construction of a 290 km transmission line and the establishment of five new substations. Two existing substations will also undergo upgrades. Kathmandu Valley will see smart meters replacing single-phase meters, and distribution substations will become more automated with SCADA systems.
Focus on Regional Growth
A major focus is the construction of a new national transmission line in the Karnali Province, which will enhance electricity distribution. This project is expected to improve energy access, support hydropower generation, and help address energy shortages in rural areas.
Government and ADB Agreement
The Government of Nepal, ADB, and Nepal Electricity Authority (NEA) signed the agreement last Friday. NEA will manage the project and oversee its implementation.
Boost to Electricity Supply and Trade
NEA Executive Director Kulman Ghising explained that the funds will improve the country’s electricity system and prepare it for greater regional and subregional electricity trade. He emphasized the importance of strengthening infrastructure to ensure a reliable power supply, especially in rural and remote areas.
Regional Development and Economic Growth
Projects will extend transmission lines and build substations in areas like Nawalparasi, Rupandehi, and Dang. These upgrades aim to boost electricity trade with neighboring countries and accommodate growing energy demands in the industrial sectors. The Bara-Parsa Industrial Corridor, in particular, will benefit from reliable and high-quality electricity.
Karnali and Lumbini Provinces to Benefit
Transmission lines and substations in Karnali and Lumbini will support local industrial growth and reduce socio-economic disparities by improving access to electricity. The upgrades will also facilitate energy trade with India and increase Nepal’s capacity to export green energy.
Smart Grid Development for Future Demands
To address the growing power demands in the Kathmandu Valley, new 220 kV transmission lines will be built. These upgrades will support the city’s power needs up until the year 1993. Additional projects in the Karnali Province will further strengthen the national grid and enhance power distribution.
Positive Impact on Nepal’s Future
These investments are a significant step toward ensuring reliable and sustainable energy in Nepal. They will support the country’s growing energy needs and foster economic growth while helping to reduce energy poverty. The overall goal is to make electricity more accessible and support regional integration in the power sector.
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