ADB approves $60 million loan to upgrade power distribution system in Nepal; NEA takes initiatives to increase electricity consumption

The Asian Development Bank (ADB) has approved a $60 million loan as additional support for the ongoing Electricity Grid Modernization Project that is upgrading power transmission and distribution systems in Nepal.

The ongoing project, approved in November 2020, is automating 34 existing grid substations across Nepal, completing the installation of smart meters in the Kathmandu Valley, upgrading 144 kilometers (km) and constructing 113 km of transmission lines, and establishing an electricity distribution system command and control center.

“The additional financing will scale up ADB’s support to provide reliable, efficient, and sustainable electricity supply in Nepal,” said ADB Principal Energy Specialist for South Asia Jiwan Acharya.

“This will provide additional investments to expand, strengthen, and modernize the transmission capacity and distribution networks so the country can reach its electricity consumption target of 700 kilowatt hours per capita by 2026.”

To expand the original project’s scope, the increased funding will help construct 16 kilometers of 132-kilovolt transmission lines from Nepalgunj to Kohalpur and from Chovar to Lagankhel.

It will introduce an additional 477 megavolt-amperes of substation capacity through the construction of substations in Dumkibas, Lagankhel, Mulpani, and Nepalgunj.

An enterprise resource planning and revenue management system will also be implemented to improve supply and system security and strengthen institutional capacity.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty, the Bank said in a statement. Established in 1966, it is owned by 68 members — 49 from the region.

Meanwhile, the Nepal Electricity Authority (NEA) has taken initiative to complete the construction of transmission and distribution lines, as well as substation projects as soon as possible to provide the required amount of electricity to big industries.

The power utility has prioritized infrastructure expansion to increase electricity consumption.

NEA has forwarded a plan to increase the power consumption of the industries as they are unable to provide electricity as per the demand due to lack of capacity of transmission and distribution lines and are facing financial loss.

Under the short-term plan, the industries demanding electricity will be provided electricity immediately by strengthening the transmission and distribution lines and the work of the projects under construction will be completed as soon as possible, according to NEA.

Under the long-term plan, construction of transmission and distribution lines and substations will be started by identifying the possible places where electricity consumption may increase.

After the industrialists complained that they did not get enough electricity, NEA Managing Director Kul Man Ghising inspected Hetauda, Simara, Birgunj, Bharatpur, Parasi and Bhairahawa Industrial Corridor on Saturday and Sunday.

“On the one hand, we are wasting millions of rupees on a daily basis by not being able to consume the electricity produced in the country. On the other hand, we are not able to supply the required amount of electricity to the industries due to lack of infrastructure. We want to end this painful situation,” Ghising said.

He urged all concerned to help in completing the work of the projects on time in the current challenging situation of increasing power consumption.