ADB approves $60m loan to modernize electricity supply in Nepal

“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.

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 kilometres (km) and constructing 113 km of transmission lines, and establishing an electricity distribution system command and control centre.

“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 kilometres of 132-kilovolt transmission lines from Nepalgunj to Kohalpur and from Chovar to Lagankhel. It will introduce an additional 477 mega volt-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.