Nepal Finance Secretary and Asian Development Bank (ADB) Alternate Governor Sishir Kumar Dhungana and Country Director Mukhtor Khamudkhanov on 27 August, 2020, in Kathmandu, Nepal, signed an agreement for the modernization of the power supply systems in Kathmandu, Province 2, and other locations in Nepal.

Under the South Asia Subregional Economic Cooperation (SASEC) Power Transmission and Distribution System Strengthening Project, the loan and grant agreement will strengthen transmission lines for the evacuation of hydropower for domestic consumption and facilitate power exchange with neighboring countries.

The project will be financed through a $200 million concessional loan from ADB, a counterpart fund from the Government of Nepal worth $87 million, and a cofinancing grant from the Government of Norway amounting to $35 million. The Government of Norway is also providing a $5 million technical assistance grant to develop capacity of the Nepal Electricity Authority to improve gender equality and social inclusion.

The project will modernize the power supply system in Kathmandu Valley in Bagmati Province and Pokhara in Gandaki Province and improve electricity supply in Province 2. The project is aligned with the SASEC program on intraregional power exchange with India, through planned upgrades of substations in Khimti, Barhabise, and Lapsiphedi to 400 kilovolts.

The project will help Nepal meet demand from communities, including women entrepreneurs. It will allow Nepal to meet future demand for commercial and industrial activities, and help create jobs for skilled and unskilled labor as the country adopts measures to face the socioeconomic impact of the coronavirus disease (COVID-19) pandemic.

• Nepal: South Asia Subregional Economic Cooperation Power Transmission and Distribution System Strengthening Project