ADB inks $200m loan to improve Nepal's power supply

It will fund the reinforcement of Kathmandu Valley’s supply system.

The Asian Development Bank (ADB) has green-lighted a $200m concessional loan to boost power supply and distribution systems in Nepal, according to a news release.

It will finance, amongst others, the reinforcement of the power supply system in Kathmandu Valley, the Bharatpur metropolitan area of Chitwan district in Bagmati Province, and Pokhara of Kaski district in Gandaki Province.

The project also aims to support Province 2, where the quality of electricity supply is poor and about 20% of households are still without access to the national grid.

To complement the loan, the Norwegian government is providing a $35m co-financing grant for the installation and upgrading of power distribution networks in Province 2 and various substations to generate hydropower in the country. It will also grant a $5m technical assistance grant for capacity development of the Nepal Electricity Authority.

The project is aligned with the South Asia Subregional Economic Cooperation programme on intra-regional power trade through cross-border power exchange. The upgrading of substations in Khimti, Barhabise, and Lapsiphedi to 400 kilovolts will facilitate the cross-border power exchange with India.