March 27: Nepal Electricity Authority (NEA) has urged the Asian Infrastructure Investment Bank (AIIB) to increase investment in electricity infrastructure projects in Nepal.

During a meeting with a visiting delegation of AIIB comprising the bank’s board of governors led by AIIB Director RMP Rathnayake on Monday, NEA Executive Director Kulman Ghising requested the AIIB to ramp up investment at cheaper interest rate for infrastructure improvement and expansion projects related to electricity transmission and distribution system.

On the occasion NEA Executive Director Ghising apprised the AIIB delegation of the outline of the energy sector development in Nepal and the investment needs for the same. He said there is need of huge investment for building infrastructures for production, transmission and distribution of electricity for expanding electricity trade to the neighbouring countries.

"Investment of nearly USD 60 billion (including for the private sector) is required for projects related to the production, transmission and distribution of electricity in order to implement the Energy Sector Roadmap until 2035 prepared by the Ministry of Energy. Concessional loan at cheaper interest rate is required for this from multilateral institutions like the AIIB," he added.

The AIIB team expressed the bank's willingness to make investment required for the energy sector. The delegation on the occasion inquired about the progress of projects under construction on AIIB investment, environmental and social security topics, restructuring of the energy sector and market guarantee for power export.

AIIB has provided concessional loan of USD 112 million to Nepal for the implementation of the Electricity Distribution System Improvement and Expansion Project. This loan is being spent for carrying out electrification and distribution system expansion and improvement in Dang, Banke, Bardiya and Rolpa of Lumbini province and the eight districts in Karnali province. Nineteen 33/11kV distribution substations, 350 kilometres of the 33kV transmission line, 1798-kilometre 11kV line and a 3159 kilometres LT line is to be constructed as well as 1045 distribution transformers are to be installed as part of this project. Contract agreement and project design have already been completed for implementing the project.

AIIB has released a loan of USD 40 million for the 216-megawatt Upper Trishuli-1 Hydropower Project which is under construction through foreign direct investment led by a consortium of Korean companies. -- RSS