$440 million project planned at Marsyangdi, Kali Gandaki corridor

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    KATHMANDU, MAY 07 –

    trlLack 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.

    Source : The Kathmandu Post