World Bank Okays $130-Million Loan for Solar Power, Transmission Projects in Nepal

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Researched by Industrial Info Resources India (Delhi, India)--The World Bank has approved a $130-million credit for Nepal Grid Solar and Energy Efficiency Project to help address the country's energy shortages. The project intends to increase electricity supply to the national grid through grid-connected solar power units and reduce distribution losses in the major distribution centers of the Himalayan nation.

The project has two components. The first component includes the design, supply, construction, commissioning, operation and maintenance of grid-connected solar farms, of total 25-megawatt (MW) capacity, to supply electricity directly to the Nepal Electricity Authority's (NEA) (Kathmandu) transmission network.

The second component envisages the preparation of a Distribution Loss Reduction Master Plan and implementation of pilot loss reduction projects in the selected distribution centers of NEA. The projects involve improvements of power transmission infrastructure aimed at reducing power losses.

"Reliable electricity is crucial for Nepal to achieve its full growth potential," said Takuya Kamata, the World Bank's country manager for Nepal. "This project will not only address short-term measures of introducing solar power generation into the system but will also contribute to the reduction of distribution losses" he added.

Nepal suffers up to 18 hours of electricity blackouts a day, especially in the winter months. According to the World Bank, solar power is one of the ideal power generation sources to complement the hydropower in Nepal as solar radiation is strongest in winters when the electricity demand is at the highest and hydropower generation at the lowest levels. The credit carries a six-year grace period and a maturity of 38 years.

World Bank-financed project involves improvements to power transmission infrastructure aimed at reducing power losses. Currently, the losses represent about 26% of the country's installed generation capacity of 770 MW. With the $84-million upgrades project, Nepal will aim to cut that loss to 10% by 2018.

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