ADB, Norway to Help Nepal Overcome Power Shortage

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Researched by Industrial Info Resources India (Delhi, India)--Multilateral funding agency Asian Development Bank (ADB) (Manila) and the Government of Norway have entered into an agreement to co-finance South Asia Sub-regional Economic Cooperation (SASEC) Power Expansion Project, which will support development of transmission lines to overcome Nepal's power supply barriers.

ADB will administer a grant of $360 million from the Government of Norway for implementation of the SASEC Power System Expansion Project, according to a press statement issued by ADB.

The main objective of the project is to increase electricity access and help overcome power shortages in Nepal. In addition, the project aims to export surplus power to neighboring India by strengthening and increasing the power transmission capacity and network in the country.

Under the power transmission and distribution capacity development component, approximately 45 kilometers of 400-kilovolt (kV) transmission lines, and 192 kilometers of 220-kV transmission lines along Kali Gandaki Corridors and Marsyangdi-Kathmandu route, will be constructed.

This is, by far, the largest single project supported by the Norwegian government in Nepal's energy sector. "This is in line with the Norwegian development policy on energy," Norwegian Ambassador to Nepal Kjell Tormod Pettersen said during the signing of co-financing agreement with ADB.

The grant from Norway will complement a $180 million loan from ADB's concessional loan of $120 million from the European Investment Bank; and a $11.2 million grant from the ADB-administered Strategic Climate Fund. The project aims at increasing the mini-grid based renewable energy systems in off-grid areas and improving the management capacity of Nepal Electricity Authority (NEA) (Kathmandu), and Alternative Energy Promotion Centre (AEPC) (Lalitpur, Nepal).

With several new hydropower projects coming on board in the next few years, this project is crucial in developing a reliable transmission network, which could allow transfer of electricity to main load centers to meet domestic needs, besides facilitating export of at least 1,200 MW of power to India.

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