ADB to Back Nepal’s Power Grid and Battery Storage Expansion

Kathmandu: The Asian Development Bank (ADB) is supporting Nepal in expansion of power transmission and battery storage capacity under the Public-Private Partnerships (PPP) model.

ADB has signed two PPPs transaction advisory services (TAS) agreements with the Government of Nepal. This is the first time that multilateral lending institution has engaged in such agreements in the country, to facilitate private sector investment in power transmission and battery storage PPPs. The agreements were signed by ADB Country Director for Nepal Arnaud Cauchois and Nepal Electricity Authority (NEA) Managing Director Dirghayu Kumar Shrestha.

“Nepal has made significant progress in providing electricity to its people, with access to power increasing from 58 percent in 2016 to 99 percent in 2025,” Cauchois said. “The challenge now is to translate this growth into reliable domestic supply and sustained export capacity. Achieving this will require the timely expansion of transmission and battery storage infrastructure, with private sector participation playing a critical role in mobilizing the capital, expertise, and efficiency needed to deliver these investments at scale.”

The two agreements mark ADB’s first TAS for a power transmission PPP and a standalone utility-scale battery energy storage system (BESS) PPP in an ADB member country. Under the agreement, ADB will support NEA with feasibility studies, preparation of project agreements, procurement, tendering, and capacity building. The projects are expected to mobilize more than $200 million in private sector investment.

"We appreciate ADB's partnership through these Transaction Advisory Services Agreements, which will help advance strategically important transmission line projects and battery energy storage systems, attract private sector investment, and support the long-term growth and sustainability of Nepal's power sector," said Shrestha.

The first agreement will support the design, financing, construction, operation, and maintenance of an approximately 134-kilometer, 400-kilovolt transmission line crossing Tingla–New Khimti–Dhalkebar. The project is expected to strengthen grid reliability, facilitate greater integration of renewable energy, and support regional electricity trade.

The second agreement will involve the design, financing, installation, and operation of 100–150 megawatt hours of utility–scale, multisite BESS at selected NEA substations under a PPP modality. The BESS will help address peak-period grid constraints, facilitate the integration of variable renewable energy, and provide grid management and ancillary services to enhance system stability and reliability.

Together, the projects will strengthen Nepal’s energy system by expanding power transmission and battery storage capacity. The investments will also improve the reliable evacuation of electricity from generation projects and open up private capital mobilization in the transmission and BESS sector.

ADB is a leading multilateral development bank supporting sustainable, inclusive, and resilient growth across Asia and the Pacific. Working with its members and partners to solve complex challenges together, ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard our planet. Founded in 1966, ADB is owned by 69 members—50 from the region.