Expected Results
Background
Landlocked Nepal highly depends on biomass, oil products, coal, and hydropower for its energy needs. Particularly in the rural areas, biomass—in forms of firewood, agricultural waste, and animal dung—is the main source of energy due to the lack of alternative energy sources and the poor state of the rural economy.
While the residential sector takes the largest share of energy consumption, recent decades have seen a steady rise in the share of consumption by the industry and transport sectors.
Nepal’s rich hydro resources, which have development potential of 83,000 megawatts (MW) and commercially exploitable hydropower generating potential of about 42,000 MW, have not been stepping up to the plate to address the country’s supply gaps. Ironically, only 1,320 MW of indigenous and clean hydropower have been realized by end of 2019.
Following years of facing chronic electricity shortages especially during dry winter months, Nepal is making significant improvements in addressing its electricity supply. This, through a combination of increased electricity imports from India of about 400 MW, improved transmission capacity and operational flexibility of new transmission facilities, and better load management involving major industrial customers.
Interventions
As an example of these efforts, ADB is working with the Nepal Water and Energy Development Company Private Limited on the Nepal: Upper Trishuli-1 Hydropower Project, with cofinancing from Canadian Climate Fund for the Private Sector in Asia II for $30 million. The project seeks to boost domestic power generation and help reduce imports of electricity into Nepal.
Specifically, the project seeks long-term financing to construct and operate a 216 MW run-of-river hydropower plant. The project comprises the design, construction, commissioning, operation and maintenance of the power plant, 1.2 kilometers of transmission lines, and associated infrastructure on the Trishuli River.
Following ADB’s Policy on Gender and Development, the project incorporates several design features and targets to improve access to better education and healthcare facilities, economic and financial resources, and basic rural infrastructure for women in communities near the project.
The project is consistent with ADB’s Strategy 2030 where ADB works to expand and broaden its support to the private sector for building critical infrastructure with strong development impacts. The project also aligns with ADB’s Country Partnership Strategy for Nepal, aiming to help the country achieve high and inclusive economic growth through higher capital investment, in among other areas, energy and transport infrastructure.
Expected Results
The project will contribute to reducing inequalities and lifting the quality of the lives of people in the rural communities served by the power plant. The constructed 216 MW hydropower plant and installation of 1.2 km of 220 kilovolt transmission lines are expected to generate 1,282 GWh of clean electricity annually to be dispatched to the national grid. Local employment is also expected to rise from the construction of the project, create economic opportunities for women, and eventually, expand the local economy.