Nepal Electricity Authority Appeals to AIIB for Financing Electricity Infrastructure Expansion

The Nepal Electricity Authority (NEA) has recently sought financial assistance from the Asian Infrastructure Investment Bank (AIIB) to realize its 'Energy Development Roadmap and Action Plan 2023.' During a meeting with the AIIB's board of directors, NEA Managing Director Kulman Ghising emphasized the necessity for increased investment in electricity infrastructure improvement and expansion projects.

Ghising specifically urged the AIIB to provide concessional loans to the power utility for this purpose, emphasizing the critical need for substantial investments in production, transmission, and distribution structures to ensure adequate, reliable, and safe electricity supply and to facilitate expanded electricity trade with neighboring countries.

Ghising underscored that significant investment is imperative to achieve the objectives outlined in the Ministry of Energy's roadmap for the energy sector, estimating a requirement of approximately US$ 60 billion by 2035. The government of Nepal launched its comprehensive action plans in September 2023, aiming to elevate the country's energy production capacity to 28,000 MW within the specified timeframe, a significant increase from the current capacity of around 3,000 MW.

As part of ongoing collaborations, the AIIB has already extended a concessional loan of US$ 112.3 million to Nepal for the implementation of an electricity distribution system improvement and expansion project. This initiative focuses on enhancing electrification and distribution systems in various provinces, including Lumbini and Karnali, through the installation of substations, transmission lines, and distribution transformers. Furthermore, the AIIB, in conjunction with Korean companies, has provided a loan of US$ 40 million for the construction of the Upper Trishuli-1 hydropower project, a 216-megawatt endeavor currently underway in Rasuwa district.