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World Bank Approves $100 Million Energy Sector Credit in Nepal

The World Bank has recently approved its first loan of $100 million to Nepal’s energy sector. According to the World Bank, the loan has been approved under Nepal’s energy sector development policy credit (DPC), which aims to implement key policy, regulatory and institutional measure.

The main goal of the loan is to improve the financial ability of the Nepal Electricity Authority (NEA). Other plans include restructuring NEA, promoting electricity trade and making a transparent, autonomous, and accountable framework. Faris Hadad-Zervos, World Bank Country Manager for Nepal, said that the goal of the loan was to seek integration into the regional electricity market and create a competitive wholesale market.

According to a press release issued by the World Bank, in Nepal 95% of the population is estimated to have access to the grid and off-grid electricity, the per capita electricity consumption of 177 kWh per year is a twentieth of the global average, and a fifth of the per capita electricity consumption in South Asia.

The statement also mentioned that Nepal relies heavily on electricity imports to reduce the electricity shortage in the country and that large export-oriented hydro-power projects were yet to materialize in spite of there being ample opportunities. The credit is therefore aimed to implement policy and institutional measures to overcome these challenges and help bring about structural reforms in the energy sector, to ensure affordable electricity services and encourage predictability for sustainable investment.

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