Nepal has raised approximately Rs. 72.93 billion (US$ 537 million) to enhance and modernize its electricity transmission and distribution system, aiming to improve the reliability and quality of domestic electricity supply while boosting electricity trade with neighboring countries.
The Asian Development Bank (ADB) has committed a concessional loan of USD 311 million (Rs. 42.24 billion) and a grant of USD 30 million (Rs. 4.07 billion) to support the project. Additionally, the European Union will provide USD 22.6 million (Rs. 3.06 billion), and the Norwegian government will contribute USD 31 million (Rs. 4.21 billion). The Strategic Climate Fund will also contribute USD 10 million (Rs. 1.35 billion).
The government of Nepal will contribute USD 132.4 million (Rs. 17.98 billion) for the project’s implementation. The funds will be used for the construction of 290 kilometers of transmission lines, the establishment of five new substations, and the upgrading of two existing substations.
The project, under the South Asian Subregional Economic Cooperation (SASEC) initiative, will also include the installation of smart meters in households in Kathmandu Valley (Phase II), the automation of substations with supervisory control and data acquisition (SCADA) systems, and the expansion of the national transmission line in Karnali Province.
The Nepal Electricity Authority (NEA) will oversee the implementation of the project. Managing Director Kul Man Ghising emphasized that the resources will be used to address frequent power outages, improve infrastructure, and support regional electricity trade.
ADB’s Nepal Resident Mission Director Arnaud Cauchois highlighted that the project will strengthen grid infrastructure, helping meet the growing demand for electricity and increasing Nepal’s capacity for green energy exports. The expansion will also support electrification efforts in Karnali and Lumbini provinces, helping to reduce energy poverty and promote socio-economic equality.
