Norway provides US $35m grant for upgrading power distribution networks in Nepal

Electricity transmission

The government of Norway is providing a US $35m cofinancing grant for the installation and upgrading of power distribution networks in Province 2 and various substations to evacuate hydropower in Nepal. In addition, it is providing a US $5m technical assistance grant for capacity development of the Nepal Electricity Authority to ensure that gender equality and social inclusion are strengthened, and new technologies are used to make electricity infrastructure resilient.

The project is aligned with the South Asia Subregional Economic Cooperation program on intraregional power trade through cross-border power exchange. The upgrading of substations in Khimti, Barhabise, and Lapsiphedi to 400 kilovolts will facilitate cross-border power exchange with India.

Also Read: ADB approves US $200m loan to modernize power supply in Nepal

Power distribution in Nepal

Nepal has made significant progress in electricity supply after years of chronic power shortages. However, its power transmission and distribution systems need further strengthening to increase network capacity, improve quality and reliability, and remove delays between generation hubs and load centers.

The Asian Development Bank (ADB) and other development partners have been engaged in Nepal’s power system reform efforts, including the approval of the Nepal Electricity Regulatory Commission Act of 2017, which created the Electricity Regulatory Commission as an independent regulatory body with respect to tariff-setting and consumer protection.

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