Nepal inks deal with US agency for $500 m grant

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    The grant will be for 400 KVA transmission line and for maintaining 300 km of roads 
    KATHMANDU, July 2: Nepal and the US government have agreed to instal a mega electricity transmission line and carry out maintenance on 300 km of roads. Negotiations  with Millennium Challenge Corporation (MCC), a US government foreign  aid agency, on US $500 million in grants for the two projects  concluded on Friday, according to a tweet posted from Washington DC by Joint Secretary at the Ministry of Finance Baikuntha Aryal.

    Officials at the Office of Millennium Challenge Nepal (OMCN) in Kathmandu confirmed the conclusion of the negotiations but details  are not yet available.

    The assistance provided by MCC will be a record high for Nepal from a single development partner. The Nepal government’s commitment amount for the two projects  is $ 130 million.A total amount of $ 630 million will be mobilized for the  projects.

    An amount of $ 580 million is to be allocated for the double circuit 400 KVA transmission line connecting Hetauda and Butwal via Naubise and Damauli. Another US $ 50 million is for road maintenance.

    The 278 km transmission line  will smoothen the national electricity supply system and enable electricity import from and export  to India.

    Likewise, the road projects picked for maintenance include  parts of the Mechi Highway and the Hetauda-Bhimphedi road. It took about two years for carrying out a rigorous feasibility study on the short-listed projects before entering into final negotiations for the grant.

    All the projects should be completed within five years from the declared date of entry into force (EIF).  Otherwise the allocated funds may return to the MCC. OMCN can count the EIF date from the  completion of  prerequisites such as land acquisitions.

    National coordinator for OMCN Tulasi Prasad Sitaula and about a dozen high-level officials are in the US for the grant negotiations. “We have  information that the  deal has been signed but we are yet to receive details of the negotiation amount and budget allocations under different heads for  execution of the project,” informed Jay Nishaant, core team member of OMCN.

    Officials believe implementation of the transmission line project will be both an opportunity and  a challenge. It’s an opportunity because  the transmission line will improve the electricity distribution system and also facilitatate power exports and imports. Maintenance of the roads enhances connectivity.

    With the past poor record of time and cost overruns, implementation of these projects within the set  time will be a challenge. Several  transmission line projects implemented by Nepal Electricity Authority have encountered resistance from both private land owners and government offices dealing with forest issues.

    Nepal was selected as eligible for MCC funding  in December 2014.

     

    Source : Republica