AIIB approves first sovereign-backed loan to increase electricity acces in Nepal
Nepal: The Asian Infrastructure Investment Bank’s (AIIB) Board of Directors has approved a USD112.3 million loan to Nepal to increase access and improve the quality and efficiency of electricity supply across the country’s western regions.
While 78 percent of Nepal’s population have access to grid electricity, there is a large regional disparity. The rural and hilly areas of western Nepal are the least connected, requiring substantial investments in distribution networks.
The Distribution System Upgrade and Expansion Project is AIIB’s first sovereign-backed financing project in Nepal. This is also the first project approved, of which AIIB’s technical assistance under the Special Fund has supported compressive project preparation from the very early stage. In 2018, Nepal received a USD 1 million grant under AIIB’s Special Fund to assist the government to prepare the electrification program in western Nepal, in terms of feasibility study, technical design, and environmental and social management.
The project covers 13 districts in Provinces 5 and 6 (Karnali Pradesh) and will include the construction of 21 primary substations and over 2,000 km of supply lines. A key component focuses on strengthening the capacity of Nepal’s Electricity Authority to plan, analyze and modernize the network performance of the project.
Source: Energy News