ADB to provide USD 150 million assistance to Nepal

Asian Development Bank (ADB) will provide USD 150 million to Nepal to build a 140 MW capacity hydropower plant.

Kathmandu: Asian Development Bank (ADB) will provide USD 150 million to Nepal to build a 140 MW capacity hydropower plant that would help the country overcome the power crisis.

The Manila-based bank would provide the financial assistance for the USD 500 million project, which will be located around 150 kilometers west from here on the Seti River in Tanahu district, that will generate electricity year round.

"Nepal has an energy crisis, and this is affecting badly economic prospects," said Yongping Zhai, Director, Energy Division in ADB`s South Asia Department.

This energy project is a means to stop this crisis, he added.

"Electricity demand is growing at 10 per cent a year, but due to lack of investment, supplies are not keeping up," he said.

"Blackouts of up to 18 hours a day in the dry season are common, even in the capital Kathmandu. This forces businesses and households to use expensive and polluting diesel generators," ADB said in a statement.

Nepal`s mountain ranges and many swiftly flowing rivers endow it with huge hydropower resources.

However, the country`s total installed power generation capacity is just 700 megawatts - largely from hydropower, which represents only 1.5 per cent of Nepal`s hydropower potential.

To ensure steady supply even during the dry winter months of November through April, the plant will be fed from a 7.26 square kilometer reservoir, making it Nepal`s first major hydropower plant with water storage capacity and a sediment flushing system.

Around 85 per cent of its existing plants use the run of the river to generate power, which makes for lower output during the dry season.

The total cost of the project comes around USD 500 million and will be co-funded by ADB and the Japan International Cooperation Agency lending, the European Investment Bank, and the Abu Dhabi Fund for Development.