ADB backs Nepal power transmission, battery storage projects through PPPs

Kathmandu / Oct. 01: The Asian Development Bank has signed two agreements with the Nepal Electricity Authority to support private-sector investment in power transmission and battery energy storage projects through public-private partnerships.

The agreements, signed on Thursday by ADB Country Director for Nepal Arnaud Cauchois and NEA Managing Director Dirghayu Kumar Shrestha, are ADB’s first transaction advisory services agreements for such projects in Nepal. The projects are expected to mobilise more than $200 million in private investment.

Under the agreements, the ADB will help the NEA with feasibility studies, project agreements, procurement and tendering, as well as capacity building.

The first project involves the design, financing, construction, operation and maintenance of an approximately 134-kilometre, 400-kilovolt transmission line along the Tingla-New Khimti-Dhalkebar corridor.

The project is expected to improve grid reliability, allow greater integration of renewable energy and support regional electricity trade, according to the ADB.

The second project involves the design, financing, installation and operation of 100–150 megawatt-hours of utility-scale battery energy storage systems at selected NEA substations. The systems will be developed at multiple sites under a PPP model.

The battery storage systems are intended to help address peak-period grid constraints, integrate variable renewable energy and provide grid management and ancillary services to improve system stability and reliability.

“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.”

He said expanding transmission and battery storage infrastructure would require private-sector participation to mobilise capital, expertise and efficiency.

Shrestha said the agreements would help advance strategically important transmission and battery storage projects, attract private investment and support the long-term growth and sustainability of Nepal’s power sector.

Together, the projects are expected to expand Nepal’s transmission and battery storage capacity, improve the evacuation of electricity generated by power projects and help mobilise private capital in the transmission and battery storage sectors.