India likely to fund power line along Postal HighwayNepal Electricity Authority has sought around $700 million of the unused $750 million line of credit-4 that was meant for post-earthquake reconstruction.
The state-run Nepal Electricity Authority (NEA) is likely to build transmission lines along Nepal’s two national highways that span the country’s length.
The power utility has identified resources for the construction of a transmission line alongside the Hulaki Rajmarga (Postal Highway) while the preparation of a detailed feasibility study is in the final stages for the construction of a power line aligned with the Mid-Hill Highway, electricity officials said.
“The process of building ‘multi-circuit’ 400kV, 220kV and 132kV transmission lines along the Postal Highway has begun,” said Kul Man Ghising, the NEA managing director, at a press meet on Thursday. Loan assistance for this project has been made available from India’s Export Import (Exim) Bank.
Parts of the Postal Highway were also built with the help of the Indian government’s grant.
Ghising said the detailed project report of the proposed power line along the Mid-Hill Highway is also in the final stages.
The proposed line along the Postal Highway, according to the power utility, will work as an alternative to the transmission line along the East-West Highway, when it breaks down.
NEA officials believe the new line will also power industrial firms along the Postal highway and provide a shorter route for cross-border electricity trade.
The Postal Highway crisscrosses inner Tarai along the border with India, connecting 21 districts in the country’s southern belt.
The 1,857 km network of roads connects several north to south corridors besides its primary links between the East-West highway and the Tarai’s inner towns.
Dirghayu Kumar Shrestha, chief of the transmission directorate at the NEA, said the power utility had sought to build most parts of the transmission line along the Postal Highway with the Indian line of credit. “I have heard that India is ready to fund the project,” he added.
With India’s $750 million line of credit-4 remaining unused, the NEA wanted the fund to finance the transmission project. “We have sought around $700 million from India’s Exim Bank for this project,” said Shrestha.
The NEA plans to build three sections of transmission lines along the Postal Highway with India’s funding: Inaruwa-Anarmani, Nijgadh-Harniya-Bodhebasai and Gandak (Narayani)-Nepalgunj. “We hope the finance ministry will soon sign a funding agreement with India’s Exim Bank,” said Shrestha.
After the 2015 earthquakes, the southern neighbour had announced an assistance package of $1 billion for reconstruction works in Nepal. Of the total, $250 million was provided as grant and the remaining $750 million extended as line of credit-4.
This line of credit was unused as the Nepal Reconstruction Authority, established to coordinate rebuilding works, folded its operations in December, 2021. Nepal had been seeking, from as early as 2018, India’s approval for diverting this fund to areas other than reconstruction.
Shrestha had earlier told the Post that the decision to seek India’s funding was taken as the transmission lines would be built close to the Nepal-India border.
“The proximity with India will make it easier to develop cross-border connectivity for energy trade between the two countries,” the NEA’s Ghising told the Post last summer.
NEA officials say as there have been talks about creating an integrated sub-regional electricity grid involving Bangladesh, Bhutan, India and Nepal (BBIN), better connectivity with India is necessary to facilitate large-scale power trade between Nepal and its South Asian neighbours.
The transmission line along the Postal highway will provide multiple transmission connectivity between Nepal and India because of its proximity.
According to Ghising, the transmission line is part of a wider plan to develop high-capacity transmission projects in view of the future demands for electricity. The NEA will build the east-west transmission line in multiple phases.
When it comes to the transmission line along the Mid-Hill Highway, the DPR is being undertaken for two sections.
“The DPR was conducted for Damauli-Kushma-Burtibang in western region and Arun-Tingla-Khimti in the eastern region,”said Tara Pradhan, deputy managing director at the NEA.
The transmission line along the Mid-Hill Highway will enable private sector developers to evacuate electricity from hydropower plants.