Electricity Transmission Project

Improving Reliability of the Nation’s Power Grid

Nepal suffers from some of the worst electrical shortages in South Asia, with the nation’s power grid meeting only half of the country’s future electricity demand. The $398.2 million Electricity Transmission Project is designed to increase domestic electricity consumption by improving the availability and reliability of electricity in the nation’s grid.

Transmission Lines Activity

The Transmission Lines Activity will focus on the construction of an estimated 300 kilometers of high voltage transmission lines in Nepal, equivalent to one-third the length of the country. It will also support benefit-sharing activities, which may include targeted rural electrification efforts through off-grid solutions and community empowerment programs.

Substations Activity

This activity will construct three substations, which will help transform power from one voltage level to another for further transmission or distribution to customers in addition to serving as pooling hubs for generators. A substation at Ramnagar near Butwal will be the starting point for a second cross-border transmission line to facilitate electricity trade with India.

Power Sector Technical Assistance Activity

The compact’s technical assistance support seeks to strengthen the recently created Nepal Electricity Regulatory Commission (NERC) in areas such as tariff setting, rule-making, dispute resolution, and economic and technical regulation to help bring transparency, efficiency, inclusive consultation and competition to the power sector. It will also help the Nepal Electricity Authority improve its transmission operations and prepare for oversight from the new independent electricity regulator.

Program Management and Technical Oversight Activity

This activity will support project management, environmental and social impact assessment, and engineering and technical supervision to allow the compact to properly implement infrastructure investments while complying with MCC’s technical, environmental, and social standards.