NEPAL DISTRIBUTION SYSTEM UPGRADE AND EXPANSION

The project will increase access to electricity supply in selected areas of Western Nepal by 2024, while also improving quality and efficiency of the service. It would also contribute to national development objectives as defined in the 2013 National Energy Strategy of Nepal.

The project is expected to be in line with the EU's priorities identified in the Agenda for Change in Nepal, as well as with the EU's External Lending Mandate's objectives on the development of social and economic infrastructure. It is expected that rural electrification will promote inclusive economic growth, job creation, a more dynamic private sector and poverty reduction as well as environmental sustainability.

The project's contribution to climate change mitigation and adaptation will be investigated during appraisal. Substations and distribution lines under this project, if located in the EU, would fall under Annex II of the Directive 2014/52/EU, amending the Environmental Impact Assessment (EIA) Directive 2011/92/EU. An Environmental and Social Management Framework (ESMF) has been developed for this project to review its components against relevant Nepalese Environmental and Social Legislation, the Environmental and Social Standards of the Asian Infrastructure Investment Bank, and the EIB Environmental and Social Standards. The environmental and social due diligence will follow the EIB's procedures and standards and cover the promoter's capacity, capability and track record, as well as the technical assistance to the promoter for the implementation of the project. The EIB will require the promoter to ensure that implementation of the project will be done in accordance with the EIB Environmental and Social Standards.

The promoter will have to ensure that implementation of the project will be done in line with the EIB's Guide to Procurement.

This operation is covered by the ELM Guarantee.

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