Two years after its completion, the Samundratar-Trishuli 3B 132kV Transmission Line Project has yet to get Rs400 million from the European Investment Bank (EIB).

The cause for the delay is that the European bank has bundled its funding for the Samundratar project with the Marsyangdi Corridor Transmission Line, which in turn has failed to complete the Cumulative Impact Assessment on time.

“After failing to receive the EIB’s funds, the Nepal Electricity Authority made payments to the contractor from its pocket,” said Tharka Bahadur Thapa, chief of the Trishuli 3B 220kV Transmission Project who also oversaw the EIB-funded section of the Samundratar transmission line. “We await the bank’s reimbursement.”

Thapa said that Samundratar-Trishuli3B 132kV Transmission Line had no problem meeting the conditions set by the EIB to get the funding. The then prime minister KP Sharma Oli had inaugurated the project in early July 2021.

The 26-kilometre transmission line stretching from Samundratar in Dupcheshwar Rural Municipality of Nuwakot to Trishuli 3B Hub substation in Kispang Rural Municipality can transmit up to 270 megawatts of electricity.

While the Nuwakot-based transmission line is yet to receive Rs400 million from the EIB, the Marsyangdi Corridor Transmission Line, which stretches from Dharapani, Manang to Bharatpur, Chitwan along the Marsyangdi and Narayani rivers, has also failed to get a second instalment of fund for the past year and half.

“We failed to conduct the environmental and social studies on time,” said Tara Pradhan, deputy managing director of the NEA. “So we are yet to get as much as Rs3.5 billion from the EIB.”

He, however, said the NEA had completed the studies a few months ago and submitted the reports to the EIB, adding that the state-owned power utility has been seeking a response from the European bank.

The NEA had completed Cumulative Impact Assessment report of the 220kV Marsyangdi Corridor in February this year in line with the Standard 1 on ‘Assessment and Management of Environmental and Social Impacts and Risks’ and ‘Guidelines for the Assessment of Indirect and Cumulative Impacts as well as Impact Interactions’ (European Commission 1999).

“We had prepared tender documents in line with the Asian Development Bank (ADB) standards, which require no extra environment and social impact assessment,” said Pradhan, who heads the NEA’s project management directorate that oversees Marsyangdi corridor.

The ADB was instrumental in bringing the EIB to this project. Later, they financed two separate projects, with EIB financing the Marsyangdi corridor, while the ADB financed the Kaligandaki corridor and the Marsyangdi-Kathmandu Transmission Line Project.

“We signed a separate agreement with the EIB and we were required to conduct a detailed impact assessment of not only the transmission line but also of the hydropower projects along the river basin,” said Pradhan. “This time of study takes more than a year.”

He said besides the need for additional impact assessment, complaints made by the local people of Lamjung district about the impact of the transmission line on their livelihoods also contributed to the delay in the disbursement of funds by the EIB.

Under the Cumulative Impact Assessment, the project is supposed to pay special attention to the rights of vulnerable groups including indigenous people, ethnic minorities, women, migrants, the very young and the very old.

The NEA had awarded the contracts of Marsyangdi Corridor in three packages—Udipur-Markichowk-Bharatpur 220 kV Transmission Line Project; 220/132/33 kV Udipur and Bharatpur Substation; and the transmission line from Dharapani (Manang) to Udipur (Lamjung).

“Construction of two substations is almost complete,” said Pradhan. “There has been around 60 percent physical progress in the Udipur-Bharatpur transmission line and around 40 percent progress in the Dharapani-Udipur power line.”

Besides these transmission line projects, the EIB has also partially funded the 140MW Tanahun Hydropower Project. This project is also experiencing a setback in the disbursement of funds from the EIB.

“We should have received over Rs1 billion from the EIB in the current fiscal year, but we have so far not gotten a single penny,” said Kiran Kumar Shrestha, managing director of the Tanahun Hydropower Project. “The problem with the EIB is that it stops disbursements for incidents we consider minor.”

According to him, the EIB had raised two issues—dam safety and social issues—for the disbursement of funds. “On dam safety, our consultant and EIB’s review panel could not reach consensus for a long time,” said Shrestha. “The EIB also remained reluctant to disburse money because of the complaints registered by 14 households who have refused to accept the compensation citing insufficient amounts.”

The EIB, which is a consortium partner along with the ADB and the Japan International Cooperation Agency (JICA), had promised to pump in $85 million (Rs11.18 billion) into the Tanahun Hydropower Project.

The project had sought disbursement of around Rs2 billion, including for works completed in the current fiscal year and works to be carried out in the six months of next fiscal year. “The last time we sought disbursement from the EIB was in April after a broad consensus was reached with the bank on dam safety,” said Shrestha. “But the finance ministry advised us against seeking disbursement immediately due to the higher interest rate associated with the EIB loan.”