ADB plans to fund 3 power projects in Nepal


The Asian Devel­op­ment Bank (ADB) has said it plans to fi­nance three ma­jor power projects — two hy­dropower plants and a new Nepal-In­dia cross-bor­der trans­mis­sion line — in the next few years.

The two hy­dropower stor­agetype projects are the 300 me­gawatt Dudh Koshi Hy­dropower Project and the 410 mege­watt Nals­ing Gadh Hy­dropower Project.

The cross-bor­der trans­mis­sion line will be built un­der ADB’s South Asia Sub-Re­gional Eco­nomic Co­op­er­a­tion (SASEC) Power Sys­tem Ex­pan­sion Project.

ADB’s coun­try di­rec­tor for Nepal Kenichi Yokoyama said the lender plans to fund Dudhkoshi sub­ject to project readi­ness and progress in on­go­ing en­ergy projects. The ADB pro­vided grant as­sis­tance for the project prepa­ra­tion in 2013. Al­though the ADB has pri­or­i­tized en­ergy in its fi­nanc­ing, poor per­for­mance in re­sources dis­burse­ment in the sec­tor is a wor­ri­some trend to make ad­di­tional loan com­mit­ment, Yokoyama said.

Ac­cord­ing to Lila Nath Bhat­tarai, act­ing deputy man­ag­ing di­rec­tor of Nepal Elec­tric­ity Au­thor­ity (NEA), tasks like de­tail en­gi­neer­ing, prepa­ra­tion of bid­ding doc­u­ment, study of so­cial and en­vi­ron­men­tal as­pects and se­lec­tion of con­trac­tor, among oth­ers, are un­der way.

“Once th­ese pro­cesses con­clude, the project will go into the im­ple­men­ta­tion phase,” he said, ad­ding the govern­ment was hold­ing talks with the ADB for fund­ing the project and was op­ti­mistic the project would be read­ied on time.

NEA has pro­vided a grant worth US$12.5 mil­lion for study­ing the project. As per a study con­ducted in 1998, the project cost has been es­ti­mated at US$550 mil­lion. “Once we com­plete the study, we will as­cer­tain the ac­tual project cost,” Bhat­tarai said. “We have ex­pe­dited the study. We aim to award the con­struc­tion con­tract by De­cem­ber 2015.”

As far as Nals­ing Gadh project is con­cerned, the ADB has said it is ex­pected to be de­vel­oped un­der the pub­lic- pri­vate part­ner­ship model based on con­sul­ta­tions with the govern­ment. “How­ever, the de­tailed modal­ity is yet to be worked out,” said Yokoyama. A de­tailed project re­port (DPR) is cur­rently be­ing pre­pared. “It will take around two and half years for us to com­plete the DPR. Whether to take fi­nan­cial sup­port from the ADB will be known after that,” Moti Ba­hadur Kuwar, ex­ec­u­tive di­rec­tor of Nals­ing Gadh Hy­dropower Project Devel­op­ment Com­mit­tee, said.

“The govern­ment is will­ing to fund the project on its own. If the govern­ment de­cides to go with mul­ti­ple fi­nancers, we can con­sider the ADB’s pro­posal,” Kun­war said. The cost of the project is es­ti­mated at around 100 bil­lion ru­pees (US$961.5 mil­lion). “How­ever, the ac­tual cost will be known only after the DPR is read­ied,” Kun­war said.

As the coun­try has only one stor­age-type project (Kulekhani), it is likely to face load-shed­ding in the dry sea­son for a longer pe­riod. The govern­ment aims to end­ing the load-shed­ding dur­ing wet sea­son by 2018, with a num­ber of run-ofthe-river type projects are ex­pected to be com­pleted by then. As for the trans­mis­sion line project, it has been planned to be built as the sec­ond cross-bor­der trans­mis­sion line from Bardghat in cen­tral Nepal to Go­rakh­pur in In­dia to ex­port elec­tric­ity from hy­dropower projects in the Kali Gan­daki and other basins.

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