Asian Infrastructure Investment Bank To Provide Loan Assistance of Rs 13.70 Billion To Nepal
May 19, 2020 | Investopaper
Asian Infrastructure Investment Bank (AIIB) will provide loan assistance of Rs. 13.70 billion for the implementation of Nepal’s power distribution system upgrade and expansion project. The agreement on obtaining loan assistance was signed on Monday and exchanged electronically, according to the Ministry of Finance.
The agreement was signed by Shrikrishna Nepal, Chief and Joint Secretary of the Ministry of Finance, International Financial Assistance Coordination Division on behalf of the Government of Nepal, Kulman Ghising, Executive Director of Nepal Electricity Authority and Rajat Mishra, Acting Director General of the Asian Infrastructure Investment Bank.
Out of the US $ 224 million required for the project, an agreement has already been reached to get loan assistance of Rs. 13.20 billion from the European Investment Bank. The loan is being mobilized in a blended finance structure by mixing the loans of two different donor agencies. This is the first public sector investment in Nepal by Asian Infrastructure Investment Bank.
The objective is to increase the access of the people of Province No. 5, Karnali and Far Western Province to the electricity service and to increase the quality and efficiency of electricity supply. The project is targeted to be completed by December 2023.
Under the project to be implemented by Nepal Electricity Authority, construction of 33 and 11 kV substations and 33 kV supply lines, construction of 11 kV supply lines and distribution transformers and low voltage supply lines and capacity building and project implementation activities will be carried out.
The government aims to electrify all the seven states within the next two years. Although the target is to fully electrify a total of 40 districts in the current fiscal year, the work has not been able to move forward due to the impact of the corona epidemic.
