KATHMANDU, MAY 07 -
Lack of transmission lines has been a major deterrent to potential
local and foreign investors in the hydropower sector, prompting donors
to help Nepal set up power lines by providing a massive cash infusion.
The Asian Development Bank (ADB), European Investment Bank (EIB),
Norway and Strategic Climate Fund are prepared to invest in a $
440-million project under which new transmission lines will be erected
in the Marsyangdi and Kali Gandaki corridors as well as the Marsyangdi- Kathmandu section will also be constructed.
The government has accorded priority to the construction of
transmission lines in the Kali Gandaki corridor (220/400 kV double
circuit) and Marsyangdi corridor (220kV double circuit) and has
requested the ADB for financial support. There is also a component of
renewable energy.
The construction of new transmission lines will take place under the
ADB’s South Asia Sub-Regional Economic Cooperation (SASEC) Power System
Expansion Project. The bank will administer the resources to be provided
by other donors too.
The ADB has confirmed that it plans to invest $ 180 million in the
project subject to approval by its board. According to officials at the
Ministry of Energy, the government will invest around $ 60 million and
donors will put up the rest of the required capital.
Loan negotiations between the government and donors are yet to take
place. Joint secretary at the Energy Ministry Keshav Dhowj Adhikari said
that talks were scheduled to start on May 18. Currently, a fact-finding
mission of the donors is studying the proposed transmission line
projects. Meanwhile, the ADB said that the project had not been approved
yet. “The proposed project is still under consideration for approval by
the development partners.”
The ADB and the EIB are joining hands in the mega power sector project
after first pledging to invest in the 140 MW Tanahun Hydropower Project
with other donors. A senior official of the Energy Ministry said that it
was one of the biggest investments by donors in transmission lines at a
time when the country’s focus has been on infrastructure. The ADB said
that the project had been initiated considering the fact that an
inadequate power evacuation network was a bottleneck to meeting domestic
power demand and engaging in power trade with neighbouring countries.
“Given the government’s failure to invest in transmission lines, the
donors came forward with a helping hand,” said a Finance Ministry
official.
The government has focused on constructing these transmission lines as
the Central Region is the major consumer of power. It has also planned
to build a 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.
“The proposed project will support the construction and operation of
national high-voltage transmission lines for domestic demand and also
enhance cross-border power trading capacity,” said the ADB. Presenting
its reasons for choosing the project, the ADB said that large-scale
hydropower developments were currently underway in the Kali Gandaki and
Marsyangdi basins, targeting both domestic demand and export to India.
The two hydropower projects of 92 MW and 119 MW capacities respectively
being built here by independent power producers are scheduled to be
commissioned by 2018, according to the power purchasing agreements
signed between them and the Nepal Electricity Authority.
The ADB said that the project would contribute to Nepal’s energy
development objectives by facilitating near-term expansion of domestic
power transmission capacity, medium- and long-term cross border power
exchange, augmentation and expansion of the distribution networks, and
mini-grid based renewable energy access in rural areas.
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