Description: 

An electrification project that seeks to enhance Nepal’s electricity supply through renewable energy projects and improving on and off grid supply.

Background:

In a country where only 56% of the population has access to on-grid electricity, with 9% off-grid, the Government of Nepal has tapped SREP financing to address the country’s urgent energy needs and pave the way for long term low carbon development. Decisive steps have been taken to achieve an ambitious 4,000 MW in generation capacity by 2027, from Nepal’s current capacity of 762 MW.

In coordination with the ADB’s ongoing efforts, the South Asia Sub-Regional Economic Cooperation Power System Expansion Project seeks to increase on- and off-grid renewable energy supply, development capacity, rural access to renewable energy, and facilitate regional power exchange. The project, anticipated to be complete by December 2021, will cost an estimated $440 million, made possible by CIF, the World Bank, ADB, the Government of Norway, and EIB funding. The project will enable Nepal to reduce CO2 emissions, as well as rural dependence on lighting and cooking fuels.

Objectives and Outputs:

The project, in line with Nepal’s energy vision, will increase electricity access, export power across the border to India, and scale up the capacity of Nepal Electric Authority (NEA) and the Alternative Energy Promotion Centre (AEPC). Under the project, 2,000 MW will be evacuated along the Kali Gandaki and Marsyangdi corridors to the main load centers at Kathmandu Valley, and facilitate 1,200 MW of power exports to India. In off grid, select rural areas, the project will seek to install 4.3 MW of mini-micro hydropower plants, and 0.5 MW of mini-grid based solar or solar/wind hybrid systems, with CIF’s allocation.

The project’s on- and off-grid components are expected benefit the needs of 2.35 million people in Nepal, while facilitating the provision of 1,200 MW to India. 20,000 tons of CO2 are expected to be reduced per annum as a result of the project. New economic opportunities and improved quality of living is expected in rural areas, particularly for women and youth, through clean and affordable basic energy services. NEA and AEPC will be the implementing agencies, alongside ADB chosen consultants.

As of January 2015, NEA has established a Project Management Directorate and hired a Chief of the directorate. The project is expected to be completed by December 2021.

This project summary is drawn from draft project proposals [such as the PAD, PID, SAR, and country investment plan] and may not contain the most up-to-date information.

ADB Project Portal

Project Details
Cover Note | Project Document | Proposed Decision
Approved on May 9, 2014 (Approved Decision)
Approved amount(s):
USD 11.2 million (grant funding)

MDB Preparation and Supervision Services (MPIS)
Approved on May 9, 2014 (Approved Decision)
Approved amount(s):
USD 120,000 (Final tranche)

Comments and Responses:
Switzerland (May 1, 2014)
Switzerland (May 6, 2014) 
United Kingdom (May 6, 2014)
Switzerland (May 8, 2014)

ADB Response to Switzerland (May 5, 2014) 
ADB Response to United Kingdom (May 9, 2014)