World Bank supports Nepal energy project

The World Bank has approved a US$ 99 million finance package to support the Nepal-India Electricity Transmission and Trade Project (NIETTP) - a programme to develop a cross-border transmission line between the two countries.

The government of Nepal declared a national energy crisis in December 2008 and has had to ration its energy supply ever since. The World Bank stepped in to support the country's Electricity Crisis Management Action Plan, which includes development of the cross-border Dhalkebar-Muzaffarpur transmission link under the NIETTP.

The 1000 MW transmission project will provide Nepal with at least 100 MW of additional electricity imported from India to meet its power needs. The project will cost a total of US$ 202 million and will also see the development of key segments of the backbone high voltage system to help expand access to electricity across Nepal.

The NIETTP has also been supported by the private sector as well as the governments of Nepal and India. The Bank's assistance package for NIETTP comprises US$ 84 million in credit and a grant of US$ 15 million.

"The energy situation throughout the South Asia Region (SAR) is characterised by poor consumer access to electricity, high dependence on imported oil and/or petroleum products, slow development of energy sources and supply infrastructure, weak distribution and almost no intra-region energy trade," the World Bank said.

Upon completion, Nepal could end electricity rationing by 2015, according to the World Bank.