The Millennium Challenge Account-Nepal has signed the final substation contract with Techno Electric and Engineering Company Ltd. (TEECL), India to construct a US$38.89 million 400kV substation in Damauli, Tanahun concluding the task of awarding the contracts for all three 400kV stations to be implemented under the Millennium Challenge Corporation (MCC) Nepal Compact.

“Once completed, the New Damauli Substation will have a capacity of 1000 Mega Volt Ampere, making it one of the largest substations in the country along with the Ratmate Substation for which the MCA-Nepal signed a contract with the same company in June 2024,” the MCA-Nepal said in a statement on Wednesday. “The New Damauli Substation will serve as a critical point of connection for power flow with the Ratmate, Lekhnath and New Butwal substations.”

Khadga Bahadur Bisht, executive director of MCA-Nepal, and Rajiv Agarwal, director-commercial at TEECL India, signed and exchanged the contract in the presence of Minister for Energy, Water Resources and Irrigation Deepak Khadka, US Ambassador to Nepal Dean R Thompson, and MCA-Nepal officials.

Minister Khadka hoped that the substations would significantly contribute to strengthening the electricity distribution system in Nepal to pave the way for economic prosperity and requested all stakeholders to strengthen efforts for the timely completion of the project.

Ambassador Thompson acknowledged the significant role of the stakeholders and said that with sincere efforts from all, the Compact would be a shared success story.

“Standing together with the Government of Nepal, Ministry of Finance, Ministry of Energy, Water Resources and Irrigation, the Nepal Electricity Authority, and MCA-Nepal, I would like to acknowledge the important role each of you has played in the progress of this project and shaping a brighter future for Nepal,” the ambassador said. “The MCC Nepal Compact is going to be an important part of our shared success story, working with Nepal to power Nepali homes, power the Nepali economy, create jobs, and reduce poverty through inclusive and sustainable economic growth.”

Stating that all three substation contracts were completed within a year of launching the Compact in Nepal, the MCA-Nepal Executive Director Bisht termed the event as a milestone.

Along with the three substations, the Compact will fund the construction of up to 315km of transmission line from Lapsephedi, Kathmandu to the Nepal-India border in Nawalparasi (Bardaghat Susta West) under the Electricity Transmission Project.

The bids for the 18km cross-border transmission line have been received for evaluation. MCA-Nepal aims to award the contract in August, said the MCA-Nepal. “Likewise, preparations are on track to ensure the bids for the remaining 297km of transmission lines are relaunched at the earliest possible this year,” it said. “And, on the Roads Maintenance Project, MCA-Nepal is preparing to launch the Full Depth Reclamation procurement in August.”