Norway pledges $60m grant for power sector expansion

- POST REPORT, Kathmandu

Nov 14, 2014-

Norway has pledged a grant of 360 million Norwegian kroner ($60 million) for Nepal’s power sector to be spent under the Sub-Regional Economic Cooperation (Sasec) Power Expansion Project. The project’s lead donor, the Asian Development Bank (ADB), will administer the Norwegian aid.

The project aims to increase electricity access and help overcome power shortages in Nepal besides exporting surplus power to neighbouring India by strengthening and increasing the power transmission capacity and network in the country.

The ADB and the Norwegian Ministry of Foreign Affairs signed a co-financing agreement on Friday. This is by far the largest single project support by Norway to the energy sector of Nepal, said the ADB in a press release.

“We believe that the project will leverage private sector investment and extend access to energy services in Nepal. This is in line with the Norwegian development policy on energy,” said Norwegian Ambassador to Nepal Kjell Tormod Pettersen during the signing of the co-financing agreement with ADB.

“There is also a clear focus on immediate poverty reduction in the project as it supports the extension of electricity distribution lines to more than 70,000 households in the transmission corridor,” he added.

The grant from Norway will complement a $180 million loan from the ADB’s concessional resources (the Asian Development Fund), a loan of $120 million from the European Investment Bank, and a $11.2 million grant from the ADB-administered Strategic Climate Fund.

The project aims to increase the mini grid-based renewable energy systems in off-grid areas and improve the management capacity of the Nepal Electricity Authority and the Alternative  Energy Promotion Centre.

Under the power transmission and distribution capacity development component, approximately 45 km of 400 kV transmission lines and 192 km of 220 kV transmission lines along the Kali Gandaki Corridor and the Marsyangdi-Kathmandu route will be constructed. Likewise, grid substations will be constructed, augmented and replaced in various parts of the country.

The project will strive to achieve cent percent electrification by assisting connection to marginalised households in the new distribution corridors.

Later, Joint Secretary of the Finance Ministry Madhu Kumar Marasini and ADB Country Director Kenichi Yokoyama signed the grant agreement in the presence of Norwegian Ambassador Pettersen.

“With several new hydropower projects coming on board in the next few years, this project is crucial in developing a robust and reliable transmission network allowing transfer of power to the main load centres for domestic needs as well as giving Nepal the ability to export at least 1,200 MW of electricity to India,” said Marasini.

Published: 15-11-2014 09:19

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