The Asian Development Bank (ADB) has agreed to support the Electricity Grid Modernization Project in Nepal by approving a concessional loan of $156m.

The loan will be used to modernise power transmission and distribution systems in Nepal.

ADB principal energy specialist Jiwan Acharya said: “ADB has been actively involved in major policy and institutional reforms in the power sector, and this project is a continuation of our support to provide reliable and efficient electricity supply in the country.

“Moreover, this project will position Nepal to be better prepared in its post-pandemic economic rebuilding.”

The project will finance the automation of grid substations, upgrade distribution and transmission systems, as well as complete the installation of smart metres in the Kathmandu Valley.

It will also support sector reform and institutional strengthening of the Nepal Electricity Authority (NEA).

220kV and 132kV automated grid substations will be installed as part of the project, which includes the construction of 113km of new transmission lines, and upgrade of 144km of existing transmission lines.

Furthermore, 34 existing grid substations will be automated, and an electricity distribution system command and control centre will be built in Kathmandu.

The project will also spread awareness among the consumers on the safe and efficient use of electricity for consumers, women and disadvantaged groups by conducting various activities.

The Electricity Grid Modernisation project will also enable NEA to bolster its institutional capacity by implementing a corporate development plan and training its staff in managing the automated grid substations, as well as improve financial sustainability and corporate financial reporting.

In June, ADB agreed to give a $200m concessional loan to help upgrade the power supply and transmission systems in Nepal.

The Nepalese Government allocated the money for the upgrade of the transmission system in Kathmandu Valley, Bharatpur metropolitan area in Bagmati Province, and the Pokhara of Kaski district in Gandaki Province.