The credit line was agreed in principle during President Dr Ram Baran Yadav´s visit to India last January, but was formally signed Friday. [break]
Of the US$ 250 million, 90 million will be used in upgrading the Duhabi-Kataiya transmission line in the Koshi Power Corridor. Duhabi-Kataiya is currently a single circuit transmission line, and once upgraded to double-circuit it will enable Nepal to import an additional 100 MW from India.
Lack of adequate transmission lines connecting the two countries has been the major obstacle in importing more power from India to address the problem of chronic power cuts in Nepal, especially during the dry season when run-of-river power projects typically generate very little. Part of the money will also be used in the maintenance of the Bhairawa-Nautanawa transmission line.
The maintenance and upgradation of more than half a dozen other transmission lines inside the country will enable the national power grid to transmit an additional 100 MW, according to experts.
The remaining part of the credit will be used in the construction of new transmission lines in areas across the country where the government has already given generating licences to private power developers.
These new transmission lines will connect power plants coming into operation in future to the national grid. Construction of new transmission lines is expected to encourage private power developers to enter into a power purchasing agreement with Nepal Electricity Authority and begin construction work.
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