ADB To Provide Rs 23.88 Billion Concessional Loan
August 27, 2020 | Investopaper
Asian Development Bank (ADB) has agreed to provide a concessional loan of Rs. 23.88 billion (US 200 million) for Nepal’s energy sector. In addition, the Norwegian government will provide Rs. 4.18 billion ($35 million) in grant assistance under the management of ADB. The assistance will be provided for strengthening the energy transmission and distribution system under the South Asian Sub-Regional Economic Cooperation (SOSEC).
A loan agreement was signed between Finance Secretary Shishir Kumar Dhungana and ADB Nepal-based Mukhtor Khamud Khamod at the Ministry of Finance on Thursday. Nepal Electricity Authority Executive Director Kulman Ghising has signed the agreement for the project.
The interest will be one percent per annum for a period of 32 years based on a grace period of eight years and 1.5 percent for the remaining period.
Nepal has made significant progress in electricity supply after years of chronic power shortages. However, its power transmission and distribution systems need further strengthening to increase network capacity, improve quality and reliability, and remove delays between generation hubs and load centers.
The project will finance the reinforcement and modernization of the power supply system in Kathmandu Valley, Bharatpur metropolitan area of Chitwan district in Bagmati Province and Pokhara of Kaski district in Gandaki Province, where supply interruptions are frequent and prolonged.
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