Kaligandaki Corridor Project and Nepal's Brighter Future

The Kaligandaki Corridor Transmission Line Project (220 kV) which includes the previously completed substations at Dana, Kushma, and New Butwal. This is a highly appreciated work of Nepal Electricity Authority (NEA) team under the Project Management Directorate which was executed during the challenging times of COVID-19 pandemic, in difficult terrain and under complex legal and environmental conditions for right-of-way and tree clearances. It is also delighted that part of the private sector investment for hydropower development has gained momentum in Kaligandaki river basin with the construction of this transmission line. This is a pleasant situation, there are more than a dozen 300 MW hydropower projects currently under development and some have reached an advanced stage of completion. 

Asian Development Bank (ADB) acknowledges the progress Nepal is making in cross-border power trade. We believe with the completion of such an important transmission line, which is connected to the New Butwal substation, one of the proposed points for cross border power trade with India, Nepal will be able to harness its resources for development and contribute to increasing the share of clean energy in the South-Asia region.  Additionally, we also anticipate the rapidly industrializing Butwal–Bhairahawa area will benefit from the power supply originating from the Himalaya and the hills.

I would like to highlight NEA’s commitment to ensuring vigilant procurement practices, robust supervision and monitoring, the allocation of adequate resources, and the application of innovative approaches during the implementation of this transmission line is truly commendable. ADB hopes to see these best practices continued in future projects, including the proposed 635 MW Dudh Koshi Storage Hydropower Project. Which is in end of the study phase in the eastert part of Nepal.
 
On the other hand, we are confident that NEA will complete the remaining section of the transmission line corridor from New Butwal to Bardaghat by the first half of 2024. We strongly urge NEA to promptly address any social safeguard related to outstanding payments, as required in the financing agreements for the completed transmission line sections. 
 
We take immense pride in our longstanding partnership with the Government of Nepal in the country’s development as well as over 50 years of active involvement in the country's energy sector. We have provided support for the recently inaugurated transmission line as part of the South Asia Subregional Economic Cooperation (SASEC) Power System Expansion Project, with the Government of Norway and the European Investment Bank as co-financiers. Within our active portfolio of $3.6 billion, we have committed approximately $960 million to the energy sector, with seven projects currently in various stages of implementation, covering areas such as generation, transmission, distribution, and renewable energy.
ADB remains committed to supporting Nepal's 'Green, Resilient, and Inclusive Development' (GRID) plan, which takes a proactive approach to addressing structural issues and emphasizes long-term green and sustainable growth, climate action, and resilience in the face of multiple risks. Lastly, ADB will be continue to play a significant role as a development partner to fulfill Nepal's aspirations of sustainable development and prosperity as well as a brighter future through the clean and green energy.

This article is an edited version of remarks delivered by Arnaud Cauchois, Country Director, Nepal Resident Mission, ADB during the inauguration of the 220 kV Kushma-New Butwal section of the Kaligandaki Transmission Line Corridor Project at Bhumai Nawalparasi susta Pashchim, on December 11, 2023.