Nepal Electricity Authority

Bhadra 2059 (August 2002)
Durbar Marg. Kathmandu

NEPAL ELECTRICITY AUTHORITY
Head Office: Durbar Marg, Kathmandu, Nepal
Phone: +977-1-227725

Fax: + 977-1-227035,266673

Email : neamd@mos.com.np

Webpage: www.nea.org.np

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CONTENTS

The Chairman's Message

Photographs : Board of Directors

Corporate Structure of NEA

Photographs : Chief Executives
Photographs : Directors

7 Managing Director's Report

12. ~—sIntroduction

13. Sectoral Review

21 ~~ ~Project Highlights

27 ~=—~ Project Studies

29 Highlights : FY 2001/02
30 ~=Balance Sheet

42 ~3=Profit & Loss Statement
33 ~—sTariff

35 = Statistics, Schematics, Maps

Cover Photo : Dam Site of Kaligandaki 'A' HEP

COMPLIMENTARY COPY

JIA

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MESSAGE

From The Chairman

lam happy to send this message for inclusion
inthis year's NEA's Annual Review-the publication
of which coincides with the celebrations of
seventeenth anniversary of NEA's operations.

At the outset,। must congratualate NEA for
winding up its operations for this year with
creditable performance and consumer
appreciation. The year has been distinctively
marked as a year when NEA resurfaced with a
generation sufficiency in its system-relying almost
entirely on the country's own hydropower
resources. The healthy stream of projects that are
coming on-line with the joint efforts of the private
and public sectors have been instrumental in
rescuing NEA from almost a decade of power
shortage and the compelling recourse to
unpopular "load shedding". This emerging
situation of encouragement, besides providing a
solution to our domestic demands, also opens up
the prospects of entry into a much larger regional
power market. This emanates in a period when
the climate of investment in Nepal's hydropower
is gaining interest from all sectors-including long-
standing donors and the private sector. Such
investment is necessary to expand NEA's services
to a large segment of the country's population.
The promulgation of the anti-theft act which will
recognise theft of electricity as a crime against
society will aid in improving NEA's financial
performance in the future.

NEA is also presently in the crucial juncture of
corporate development which must align with
the policies of His Majesty's Governments on
hydropower development. The Government's
policy places considerable stress on the
participation of the private sector in the
development of hydropower in Nepal. This has
been necessary to allow the government to divert
its scarceresources to more pressing social services
and poverty alleviation programs in the country.
In order to attract the private investment there are
fundamental reforms on market competition and
regulatory control that need to be put in place.
NEA, as the lead player in Nepal's power sector,
has an important role in this scenario. As the
single buyer of electricity generated by the private

sector, NEA has the responsibility that must ensure
its own financial health as well as maintain the
sustenance of private sector interests.

The past year has seen the management of
NEA making all efforts to bring about the desired
reforms to meet the requirements that lie ahead.
These have been introduced to induce a
mechanism that will make it possible for NEA to
perform effectively along lines of internal
privatization. Introducing core units operating
along lines of self-sustenance, independence and
accountability along with the concepts of the
profit and user-owned cooperatives in the
distribution schemes form the essence of these
reforms. It is hoped that these will be adequate to
meet the contributions that are expected of NEA
as a national utility that can perform in unison
with the private sector.

In its quest towards developmentand industry,। must stress that NEA retain the appreciation of
electricity as a nature-endowed resource must
transcend political boundaries and provides to
mankind a form of energy that is conducive to its
sustainable existence for myriad milleniums to
come. This means that NEA must be aware of our
fragile environment and our rich cultural heritage
that must co-exist with the development works.।
believe that our rich hydropower resources can
be developed as a form of clean energy that the
entire world has been long awaiting.

To end my message,। wish to reiterate that in
the environs of business, development and
existance, the human resources of NEA have
functioned as NEA's major strength.। wish to
congratulate the staff of NEA of all levels for their
sincere efforts to put forth a performance that is
encouraging even in times of turbulence and
turmoil in the country.। am confident that this
capability will continue to improve in the years to

come.

Bijay Kumar Gachhadar

Minister for Water Resources and
Chairman, Nepal Electricity Authority

BOARD OF DIRECTORS

Chairman
Mr. Bijaya Kumar Gachhadar
Minister of
Water Resources.

Mr. L. M. 5. Karki Dr. B. P. Koirala Dr. B. G. Vaidya

Secretary Secretary
Ministry of Water Resources Ministry of Finance

Mr. M. R. Gautam Mr. रि. B. Shrestha Mr. M. है, Basnet
President FNCCI

Member Secretary
Dr. Janak L. Karmacharya
Managing Director, NEA

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IN REVIEW

1461]. NI

VAN 40 FANLONALS ALVAOdUOD

CHIEF EXECUTIVES

Mr. D. B. Thapa

General Manager General Manager
Distribution Consumer Services Engineering Services

Mr. Govinda K.C. Mr. P.M.S. Pradhan Mr. B. C. Thakuri
General Manager Deputy Managing Director General Manager
Generation Planning & Monitoring Transmission & System
Operation

Mr. D. टि. Bhattarai Mr. R. K. Bajracharya
Deputy Managing Director Act. Deputy Managing

Director
Information Technology &
Secretariat

Finance & Administration

Mr G. B. Shrestha

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Mr S. B. Shrestha। VY
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Mr U. Vaidya Mr J.R. Shrestha Mr K. 6. Shrestha

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Mr K.P. Upadhyay Mr K.P. Koirala Mr B. R. Regmi Mr D. P. Upadhyay

Mr S. छै, Shresth Mr T. N. Thakur

Mr M. P. Pradhan Mr रि, N. Pradhan

Mr 5. R. Shrestha Mr S. C. Jha Me रि. Yadav Mr B. B. Singh

MANAGING

A YEAR

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IN REVIEW
M3lAad NI

DIRECTOR'S REPORT

It gives me great pleasure to report on the
activities of Nepal Electricity Authority (NEA) for
the fiscal year 2001/02 (corresponding to the year
2058/59 of the Bickram Sambat). This is being
reported on the occasion of the seventeenth
anniversary of the organization which marks yet
another year of its successful operations. There is
no doubt that the year that has passed saw NEA's
steadfast perseverance in maintaining the
country's most essential service under hostile
conditions of rampant destruction of its assets and
operations resulting from an open state of
insurgency that prevailed in the country.

NEA in Nepal's Power Sector

The world over, the power sector continued
its evolution into one that would provide better
services for the consumers in an environment of
competition, transparency and choice. The
progress made has been slow and steady and now
involves almost all countries in the south Asia
region.

The shape of the power sector that His
Majesty's Government (HMG) intends to create
was made manifest in its amendment to the
Hydropower Development Policy. The Policy
underscores the Government's view to promote
private sector investment in the power sector and
outlines a number of steps which must be in place
to create the conducive environ. The path that
NEA must adopt to remain as the national utility
can be inferred from this document.

In parallel, NEA has been taking its own
critical introspective reviews and based on such
analysis of its performance, the shape of its future.
In attempting any reform, NEA believes that it
must pay heed to the strengths, weaknesses,

opportunities and threats that characterize the
organisation. In case of NEA, its human resources
have been recognised as its major strength. The
competency of its technical personnel is being
increasingly acclaimed as second to none in the
performance of generation, transmission and
distribution functions in the environs being faced
in the country. Weaknesses that impair NEA's
performance take the shape of its relatively high
tariff levels and the system losses that drain its
revenue. Nepal's immense hydropower potential
has been identified as the major opportunity that
NEA needs to exploit in broadening the market
that is developing in the domestic and regional
areas. Threats are the non-availability of funds
and country risks that NEA must confront in the
expansion and delivery of its services.
Following from the systematic studies to bring
about sustainable commercial orientation and
efficiency in NEA's operations, steps were taken
in the past year to put the recommendations into
practice. The most noteworthy event that has put
NEA on the mainstream of power sector reform
has been introduction of a form of internal
unbundling in NEA's organisational structure
without changes in ownership patterns. Discrete
entities of generation, transmission and
distribution have been formed as core business
groups in NEA and have been organised to
undertake semi-autonomous functions with
accountability through performance agreements
with NEA's corporate offices. The core groups
will carry on transactions within themselves
through a system of transfer prices. Mechanisms
have been built in to prevent the transfer of
inefficiencies and liabilities between core units.
On the other hand, several activities such as
planning and monitoring, finance and

administration, information technology and
engineering and consultancy services have been
retained as central activities. Emphasis has been
placed on adequate monitoring from the corporate
offices of activities at all levels.

It is hoped that this system will function with
success and establish itself as a form of reform that
is more suitable for a small utility of a developing
country like Nepal. We also hope that reform will
enhance NEA's performance to operate in unison
with private operators in the power sector and
compete with them in the fields of generation and
customer services.

Operational Status

On the operational side of the past financial
year, the system peak of the interconnected system
was recorded on December 12, 2001 at the level
of 426 MW registering an 8.95 percent increase
over the last winter's figure.

During the past financial year, the electrical
energy available for use within the NEA system
totaled 2087.61 GWh which was an increase of
219.19 GWh (11.23 percent) over the previous
year's figure of 1868.42 GWh. This comprised of
1116.64 GWh obtained from NEA's hydro
generation and 17.92 GWh from NEA's thermal
generation. A total of 237.78 GWh was imported
from Indian State Electricity Boards in accordance
with the Power Exchange agreements and 715.27
GWh purchased from private generators.

Electricity sales totaled 1574.465 GWh an
increase of about 167.338 GWh (11.89 percent)
over last year's sales figure. Internal sales within
Nepal increased to 1431.565 GWhand accounted
for 90.92 percent of the total sales and registered
an increase of 150.438 GWh (11.74percent)
over the last year's figure. Exports to India
increased to 142.90 GWh aan increase of 16.90
GWh over last year.

Over the past financial year, the number of
customers grew by an estimated 132186 (or
17.72 percent) over the previous year's figure to
reach a total of 878178. The domestic category
accounted for 95.7 percent of the total customer
numbers, 36.69 percent of the sales and
contributed to 37.57 percent of the revenue. The
industrial category formed only2.28 percent of
the total customers, but accounted for 37.99
percent of sales and contributed to 36.53 percent

of the revenue. Non-commercial category
constituted 0.9 percent of the customers,
accounted for 5.12 percent of the sales and 7.50
percent of the revenue. Likewise, the commercial
category constituted 0.55 percent of the total
customers, accounted for 6.08 percent of the
sales and provided 8.80 percent of the revenue.

Improving NEA's Financial Health

NEA's financial picture remained encouraging
for another year. NEA's total revenue totaled Nrs.
10766.4 million, and increase of 22.99 percent
over the figure for the precious year. NEA's net
fixed assets increased to reach an estimated Nrs.
42.3246 Billion. Expenditure in operation and
maintenance activities increased by 16.08 percent
reaching a figure of NRs. 10137.9 million as
compared to NRs. 8733.8 million of the previous
year. On the overall, NEA registered a net profit
before tax of NRs. 413.9 million as compared to
a net loss before tax of NRs. 1.9 million in the
previous year.

The past year also saw the initiation of steps to
improve the financial performance of NEA in key
sectors such as the improvement in the sale of its
generated energy by prompting the domestic
industry to use more electricity and to solicit the
increase in the power export to India. Because of
the large percent of NEA's revenue spent on the
purchase of Independent Power Producer (IPP)
power, studies were also initiated to revisit the
power purchase agreements with IPPs and see if
amendments based on mutually acceptable terms
could be made to lessen their undesirable impact
on NEA finances.

It was also evident that a healthy financial
performance of NEA depended on readily
accessible and accurate availability of its financial
transactions. This called for the computerisation
of its billing, inventory control and accounting
systems. Steps were thus taken to achieve these
software tools through a fast-track strategy.
Improvement in NEA's performance also meant
the prioritisation of activities in all core business
in the process of budget preparation. To keep
expenditures down, attempts were made to cut
down costs in operation and maintenance. To
improve NEA's receivables, dialogue was
maintained with the municipalities of country in
an attempt to redeem long-standing dues for the

use of electricity in streetlight applications. Success
was attained in recouping some of these arrears
though HMG intervention.

To improve our financial position, concerted
efforts were made to take stern action against
those charged on cases of theft and misuse of our
supplies. 1६85 efforts were bolstered by the
enforcement of the Anti-theft Act that recognizes
theft of electricity as a social crime that is
punishable by law.

Status of Projects under Execution

In order to meet the demands of a growing
consumer family, NEA continued to invest
judiciously in development projects to strengthen
and extend its generation, transmission,
distribution and support capabilities.

Of foremost significance in project execution
was the completion of the 144 MW Kali Gandaki
A hydropower project which emerged as the
largest hydropower project currently in operation
in Nepal. The project commenced operations
with the last of the three units starting generation
on May 24, 2002. Generation from this project
elevated NEA from a decade-long state of power
deficiency to a state of adequacy even offering
surplus export possibilities during the wet months.
Equally important for meeting the demands of the
near future, the construction of the 70 MW Middle
Marsyangdi with grant financing from kfW
commenced with project civil works and more
work packages were tendered for implementation.
Offering benefits in regional economic as well as
system balance, the 30 MW Chameliya
hydropower project, situated in the remote mid-
west district of Darchula, saw another step towards
implementation with the completion of its detailed
engineering and the preparation of tender
documents. The project now awaits appropriate
financing to move ahead into the implementation
phase.

A state-of-art addition to NEA's system control
capabilities will be available in the near future
with the completion of the new Load Dispatch
Center (LDC). This center will be interlinked with
all the major power stations and sub-stations
through aSCADA system enabling system security,
ready response to system disturbances, generation
optimization and systematic supervision of system
operations. The new LDC along with a sub-

A YEAR
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station extension at Balaju have been undertaken
with a loan from KfW.

With generation attaining a level where limited
export possibilities now became possible, the
construction of three 132 kV exchange links with
India in conformity with arrangements agreed in
the India-Nepal Power Exchange committee
assumed considerable importance. NEA stepped
in to wholly finance the construction of one of the
lines from Butwal to Sunauli on the Nepal-India
border leaving India to continue the construction
to Anandnagar in India. Another transmission
line project calling out for urgent construction
was the Birgunj corridor reinforcement project.
This involved the construction of a 132 kV
transmission line alongside an older 66 kV line
which was already heavily overloaded in serving
large industrial loads along the "Birgunj Corridor".
Considering its potential to provide fast returns,
the project was entirely financed through NEA/
HMG resources. A number of.transmission line
projects were also undertaken to provide better
transmission performance by "hot" stringing a
second circuit on towers that had provisions for
such addition.

Adequacy of generation also meant the
possibility of undertaking more extensive
distribution schemes. After meeting stringent
conditions imposed by the Asian Development
Bank (ADB), the RE, Distribution and Transmission
Project finally reached a financial close and
commenced preliminary works. The project
involves loan proceeds from ADB and OPEC in
addition to local costs being borne by HMG/NEA.
In addition to transmission and _ institutional
support components, the major portion of the
project will be dedicated to developing the
distribution systems of NEA so as to meet the
increased loads on the NEA system and distribute
the additional power generated to 155,621 new
households spread over 277 village development
committees (VDC) and provide extensive system
reinforcement to existing distribution. Another
distribution project financed through a Danish
grant and located in Kailali and Kanchanpur
districts in far-west Nepal re-commenced project
surveys after running on a delayed schedule
owing to the necessity to review its design
parameters. With financial resources contributed
by HMG, NEA also continued to undertake a
large number of distribution and rural

MilA7¥8 NI

IN REVIEW
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electrification projects some of these involving
the construction of off-grid small hydropower
projects.

NEA was also the active participant of the
USAID sponsored SARI/E program. Over the year
NEA participated in 22 training programs,
seminars, workshops, executive/peer exchange
and biannual review programs which involved
48 senior officers of NEA. NEA also became the
member of anew regional partnership in the field
of Disaster and Security Preparedness and
Response Partnership with the first meeting held
in the USA in May 2002. A Trilateral Hydropower
Partnership with a participation of NEA, National
Hydropower Corporation of India and a US Utility
yet to be identified has also been launched to
provide cooperation in hydropower development.

The NEA-TACOMA Power-Wisconsin Electric
Energy Partnership funded by USAID and
managed by USEA came to a close with a
Recognition Ceremony. The program held on
February 28, 2002 in Kathmandu during the last
visit of the US team to Nepal. The Chief Executive
Officers of NEA, TACOMA Power, and Wisconsin
Eléctric were felicitated for their contributions in
making the partnership a success.

Planning and Future Perspective

With NEA''s system configuration and its
institutional form taking shape for a substantial
change for the better, the need to plan ahead was
given equal importance. A special activity
undertaken in the past year was the preparation of
Nepal's Tenth Five-Year Plan in which NEA
assumes the role of a key player in the power
sector. A forerunner plan entitled the Mid Term
Expenditure Framework (MTEF) was also prepared
with an accent on poverty alleviation in
preparation for the Nepal Development Forum
(NDF) which was held in Kathmandu in January
2002.

The generation capabilities within NEA
assumed an encouraging picture with hydropower
projects coming on stream as planned to meet the
anticipated growth in domestic demand.
Hydropower projects such as Middle Marsyangdi,
Chameliya, Upper Karnali, Upper Tama Koshi
and anumber of other projects were identified in
NEA's generation plan to cover the demands upto
2011. The resources to meet the massive

development costs would be met through private
sector participation or private-public enterprises.
The increasing enthusiasm from the independent
power producers (IPP) to participate in the
development of hydropower generation in the
framework of a limited domestic demand pressed
home the message to look across the borders for
a larger market to sell the accumulating generation
potentials. There also emerged the necessity to
trade system surplus that started to accrue in the
system because of the lack of storage facilities in
a highly season-sensitive energy output
characteristic of NEA's generation projects.
Future planning of the transmission system
will stress on capability of the grid to evacuate
power from generation stations and transmitting
them to load centers over the entire country. This
willimply more extensive enhancement of voltage
level as in the case of the 220 kV Hetauda-
Bardghat section or the addition of second circuits
where the tower configuration makes this possible.
Interconnection links and their capability to
transfer power to an immense market across the
border will be considered in their different voltage
level and system configurations depending on
the amount of export that needed tobe considered.

Resource Mobilisation

It is evident that NEA still requires immense
investment for projects which are required to
expand its services to the extensive unelectrified
parts of the country and improve the quality of
supply where electrification already exists.
Working in resource-strapped conditions this often
means the resort to Donors and Lenders for the
required finances. Over the past year a number of
financing proposals took shape in the project
development.

Japan emerged as a foreunner in commitments
through a variety of financing schemes that
involves loans, grants, technical assistance,
training and experts. Japan's major development
agency, JICA, and development bank, the JBIC,
sent teams to study the prospects of financing
projects in Nepal and preliminary indications are
that they will be willing to finance the construction
of the Hetuada-Bardaghat 220 kV transmission
line and the engineering of the Kulekhani III
hydropower project which is presently being
Study to a feasibility level though another JICA

grant assistance. The Government of Japan also
confirmed its commitment to go ahead with the
implementation of the third phase of the
Kathmandu Valley Master Plan with the
undertaking of the K3 sub-station sited in the
urban center of Kathmandu to cater to the rapidly
rising load in the metropolis.

Norway through its development agency
NORAD, expressed its interest in assisting NEA
with the feasibility study of the Upper Tama Koshi
Hydropower Project. NORAD also contemplates
assistance for developing the Khimti-Dhalkebar
220 kV transmission line which will assist in
better system balance in the eastern portions of
the country. Possibility of French Government
assistance for the study and development of 40
MW Upper ModiA hydropower projectin western
Nepal is being explored.

In order toaddress inbalance between seasonal
demand and supply of electricity, the need for
developing medium size storage project has been
recognised. Efforts are now being made to mobilise
financial resources for developing such a project.

Private Sector Participation

Independent Power Producers from the private
sector remained an important part of the NEA's
generation, contributing to almost 20 percent of
the total installed capacity. Besides the Khimti।
and Bhote Koshi hydropower projects which
moved on to their second year of operations, the
latest additions to the IPP projects to join the NEA
grid were the 185 kW Syange and the 7.5 MW
Indrawati Ill hydropower project which is expected
to commence commercial operations in the near
future. In addition, over adozen small hydropower
projects have been cleared to interconnect with
the NEA grid and sell all their generation to NEA.
These IPP projects are in various stages of progress.

In order to encourage local investment in
smaller hydropower projects it will be recalled
that NEA maintains a policy to buy upto 50 MW
of power from IPP promoted projects in the range
1-10 MW at pre-determined tariff rates
denominated in local currencies. In accordance
with the NEA commitment to purchase total! of
upto 50MW of power from IPP-promoted small

hydropower projects in the capacity range 1-10
MW, four power purchase agreements (PPAs)
were signed with Molnia Power (P) Ltd., Sanima
Hydropower (P) Ltd., Kantipur Hydropower (P)
Ltd. and Unique Hydel Co. Ltd. for purchase of
power from the 5MW Mailun Khola, 2.60 MW
Sunkoshi, 10 MW Langtang Khola and 1 MW
Baramchi small hydropower projects respectively.

Acknowledgements

To conclude,। wish to take this opportunity to
thank all those contributing to NEA's activies over
the past year.। must stress that it is only through
positive teamwork that a big organization like
NEA can function and achieve results which
require to be appreciated by the customers and
the stakeholders of this organisation.। wish to take this opportunity to thank His
Majesty's Governmentof Nepal for their continued
assistance in our operations and their contributions
to our development activities. Thanks also to the
donors and Development Banks that have made
it possible for NEA to undertake the works for its
development.। must thank the staff of NEA at all levels of
duty for their continued perseverance and support
to the management. As। have alluded to in the
early paragraphs of this report, the events of
insurgency in the country have created a scenario
that challenge the endurance of personnel to the
limits.। wish to express my special thanks to those
members of NEA's staff who have stood by in
these times of trial.

Last but not the least,। also wish to assure our
valued customers that NEA, with the new
organisational set-up will function in a more
effective and accountable way thereby ensuring
quality electricity supply at a reasonable tariff.

Thank you.

———— ly
(Dr. Janak Lal Karmacharya)
Managing Director

A YEAR

ङ्
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रै

YVIAV

INTRODUCTION

Bhadra 1, 2059 (August 17, 2002) marks the
beginning of NEA's eighteenth year of existence.
Created under NEA Act 2041, NEA is a wholly
HMG/N owned undertaking responsible for
planning, construction, operation and
maintenance of the power system throughout the
kingdom of Nepal including power trading with
India.

The past year was an eventful year for NEA.
Some of the noteworthy events in the country's
power sector were:

* HMG/N = adopted the Hydropower
Development Policy 2001. The policy sees a
conducive environment for the healthy
development of increased private sector
investment in the country's power sector. The
generation, transmission & its operation and
distribution functions of NEA are to be
separated and entrusted to different entities.

० Some major structural adjustments were made
in NEA's organization. Four key functions of
NEA namely: generation, transmission and
system operation, distribution and engineering
services were entrusted to separate General
Managers with increased independence and
are to be held accountable for the duties they
discharge. A performance contract with each
of the General Managers is in the offing to
facilitate their functioning and to spell out
NEA management's expectations from them.
it is hoped that the new organizational set up
of NEA will help in its smooth transition to
different entities as per the Hydropower Deve-
lopment Policy 2001 and also realize the
policy's objectives albeit on an interim basis.

e The Electricity Theft Control Act 2058, that
treats electricity theft as a criminal offence,
has been enacted and enforced. To
operationalise this Act, its regulation is being
drafted by HMG/N. It is anticipated that the
Act together with its regulation will help in
curbing electricity theft.

¢ Definite steps have been taken towards NEA's
commercialization functions. NEA has
designated fifteen of its distribution divisions
as Profit Centres for theircommercial operation
and accountability. The Profit Centre Managers
would have wide latitude in discharging their
duties for better consumer services, curbing

losses and improving overall performance.

° The year saw the commissioning by NEA the
144 MW Kali Gandaki 'A' Hydropower
Project. The plant, biggest to date in the NEA
system, would help in meeting the growing
power needs of the country for the next
couple of years.

* The construction of the 70 MW Middle
Marsyangdi Hydropower Project is in good
progress to ensure its commissioning weil in
time to meet the projected peak demand of FY
2004/05.

० The ADB funded Rural Electrification, Distri-
bution and Transmission Project is now firmly
in place for execution after the Bank finally
declared its loan effectiveness. Although
delayed by more than a year, the project will
help in extending rural electrification and
augmenting NEA's distribution and trans-
mission facilities. NEA is committed to honour
all its commitments made to ADB and other
Donors.

० With the 144 MW Kali Gandaki 'A'
Hydropower Project already in place, the
supply position of NEA is considerably impro-
ved. To make use of surplus capacity, NEA is
actively pursuing the implementation of three
new 132 kV exchange links with India. The
Power Exchange Committee between Nepal
and India, had earlier agreed in principle to
enhance the present power exchange level of
50 MW to 150 MW by building the three new
132 kV exchange links.

० The institutional capacity building of NEA is
considerably improved from the USAID
funded South Asia Regional Initiative / Energy
and Partnership Programs.

० NEA iscontinuing its dialogues withthe Donor
communities for the implementation of
different projects.

In the following pages of this Annual Review,
an attempt has been made to prepare an easily
comprehensible overview of significant events
and developments of the past fiscal year.
Schematics and graphical presentations have been
included to give a visual display of the year's
achievements.

AYEAR

SECTORAL REVIEW

NEA BOARD AND MANAGEMENT MATTERS

In the FY 2001/02 there were two changes in
the Board of Directors of Nepal Electricity
Authority (NEA). Mr. Mahesh Bahadur Basnet
replaced Mr. Kishor Baskota as a member on
November 9, 2001 and Dr. J. L. Karmacharya
became new member secretary of NEA Board
and Managing Director from April 24, 2002. The
appointment of Dr. Karmacharya who had long
experience of working in NEA was quite significant
because immediately, after joining in NEA he
endeavoured to revitalize NEA by restructuring
the organization of NEA. Four major core sectors:
Generation, Transmission & System Operation,
Distribution & Consumer Services and
Engineering Services were assigned to four
General Managers with increased independence.
With the new organizational set up, accountability
will be established and help in improving
organizational efficiency; liabilities and
inefficiency of a Unit would not be reflected in
any of the other units; and private sector
participation in the country's power sector would
be encouraged. The Managing Director is to be
supported by three Deputy Managing Directors
in discharging central function responsibilities of
Planning & Monitoring, Finance & Administration
and Information Technology & Secretariate. The
new organizational set up of NEA will help in its
smooth transition to different entities as per the
Hydropower Development Policy 2001 of HMG/
14. The NEA Board approved this revised
organizational structure on June 3, 2002.

GENERATION

Under the new organisational set up,
Generation will take over the ownership of all
power stations of NEA for their operation and is
also responsible for construction of new power
stations. It will sell the power in bulk to
Distribution & Consumer Services under a Power
Purchase Agreement to be agreed upon between
the two.

In the FY 2001/02 the total available energy
recorded was 2087.61 GWhan increase of 219.19
GWh (11.73 % increase) when compared to the

figure of 1868.42 GWh in FY 2000/01. The peak
load recorded was 426 MW on December 12,
2001. Of the total available energy, hydropower
generated by NEA contributed 1116.64 GWh
(53.49 %), thermal 17.92 GWh (0.86 %), Import
from India 237.78 GWh (11.39 % ) and purchase
from Nepal 715.27 GWh ( 34.26 % ). The role of
IPPs in the NEA power system is ever increasing,
contributing more than a third of the total available
energy in the NEA system.The performance of
NEA's major generating stations are as follows:

Hydro Generation

Kulekhant। Hydropower station

Kulekhani। hydropower station generated
145.42 GWh in FY 2001/02. Overhauling of
vertical water pump and greasing system and
other minor maintenance works were carried out
in the plant.

Kulekhanl Il Hydropower station

Kulekhani Il hydropower station generated
65.69 GWh in FY 2001/02. Maintenance in
cooling water pump, overhauling generator and
exciter cleaning are the major works carried out
in the plant.

Marsyangdi Hydropower station

In FY 2001/02 Marsyangadi hydropower
station generated 386.13 GWh. Overhauling of
Unit no. 3, runner replacement and maintenance
on butterfly valve and cooling water system were
carried out.

Trisuli Hydropower station

This hydropower station generated 128.24
GWh in the fiscal year 2001/02 against 141.56
GWh in the fiscal year 2000/01.1n this fiscal year,
Unit no. 1&2 of this power station have been
rehabilitated along with the rehabilitation and
repair works of 5 nos. out of 12 nos. of 6.6 kV SF,
breakers which were lying damaged since last 3
years. 7 nos. of 11 kV Vaccum circuit breakers (VCB)
were installed in the 6.6/11 kV sub-station for
better and reliable distribution of electrical energy
in the district. Oneno. of 4 MVA, 33 kV transformer
from Banepa section was transported,installed

and commissioned at Trisuli for better
distribution. Trisuli -Chilime 66 kV
transmission line was charged in 11 kV
and power was supplied to the Chilime
project for construction works.

Devighat Hydropower Station

This power house generated 92.02
GWh in the fiscal year 2001/02 against
96.06 GWh in the fiscal year 2000/
01.One unit of this power house was
rehabilitated along with the maintenance
and repair work of the governor of Unit
no.3. One repaired 6.6/66 kV power
transformer was installed in the substation
replacing 3 nos. of single phase
transformer whereas one 6.6/66 kV
power transformer which was burnt due
to heavy electrica! fault was replaced by
3 nos. of single phase transformer. 66 kV
and 11 kV circuit breakers were also
repaired and maintained.

Gandak Hydropower Station

This power station was generating
power smoothly after all of its units were
rehabilitated but in the fiscal year 2001/
02 heavy oil leakage in the wicket gate
servo motors of unit 1 and problems in
the governor system of unit 2 caused
major setback in the overall generating
performance of this powerhouse. The
repair and maintenance works of servo
motor and replacement of governor and
excitation systems shall be taken up in
the coming fiscal year. The maintenance
work of 132 kV circuit breaker was carried
out along with replacement of 132 kV
lightening arrestor.

Sunkoshi Hydropower Station

This powerhouse generated 50.82
GWh in the fiscal year 2001/02 against
54.28 GWh in the fiscal year 2000/
01.The rehabilitation work of unit no.1
of this station was carried out successfully.
Besides this,the maintenance of breakers
and control systems were also carried
out along with the regular -maintenance
of civil works.

Modi Khola Hydropower Station

This newly constructed power station
came under this department in the middle
of fiscal year 2000/01 .This powerhouse
generated 41.45 GWh in the fiscal year
2000/01 and in the fiscal year 2001/02,

it generated 51.17 GWh. This year a
major damage in the intake portion was
observed and accordingly the repair and
maintenance work of this damage was
taken up immediately.

Seti hydropower Station

This power house generated 8.04
GWh in the fiscal year 2001/02 against
8.79 GWh in the fiscal year 2000/01.The
rehabilitation work of unit no.1 was
carried out along with the repair and
maintenance works of the control and
protection systems successfully. The
repair and maintenance of the head-
works of this power station was taken up,
even-though, it was the responsibility of
the irrigation department.

Panauti Hydropower Station

This powerhouse generated 4.65
GWh in the fiscal year 2001/02. Unit
no.2 of this powerhouse was rehabilitated
along with the repair and maintenance
of control and protection system. After
therehabilitation works, the powerhouse
is able to generate upto 90% of its
installed capacity.

Apart from the above hydropower
stations, there are other four small
hydropower stations under this
department. They are Puwa Khola;
Sundarijal; Chatara and Fewa. Except
Chatara, all are running smoothly as per
the availability of water and were
maintained and repaired as per the
maintenance schedule. The Chatara
Hydropower Station needs major
overhaul of its governor and excitation
system. For this an expert from the
manufacturer is required. Necessary
action has been taken up and the expert
is expected at site very soon.

Thermal Generation

Machines of Duhabi Multifuel,
Hetauda and Marsyangdi Diese! Power
Plants are in operating conditions. They
are regularly test run, maintained and
are planned for scheduled maintenance
to keep them in good operating
conditions.

The requirement for thermal
generation has lately been minimal due
to additions of number of new
hydropower stations in the NEA system.

The total thermal generation in FY 2001/
02 was only 17.92 GWh out of which
13.66 GWh was generated by the 39
MW Duhabi Multifuel Power Plant. The
role of thermal generating plants has
lately been limited to as stand by due to
surplus hydropower generation after the
addition of 144 MW Kali Gandaki 'A'
Hydropower Plant in the NEA system.

TRANSMISSION AND SYSTEM
OPERATION

The Transmission and System
Operation will take over the ownership
of all High Voltage Transmission and
Sub-station Network (66 kV and above).
It is responsible for operation and
management of the system and further
development and expansion of HV
Transmission network. It will wheel
power from the point of generation to
the bulk selling outlets. The wheeling
charge will be as per the power wheeling
charge agreement between the units of
NEA. The Transmission and System
Operation may also have the freedom, if
necessary, to enter into agreement with
the IPPs to wheel their generated power.

Grid Operation Department

The department is responsible for
the construction, operation and
maintenance of 66 kV and above voltage
transmission line and sub-stations. The
Grid Operation Department performed
following major works in fiscal year 2001/
02.

० 132 kV sub-station capacities were
enhanced in Pokhara from 13.5 MVA
to 22.5 MVA and in Bharatpur from
31 MVA to 55 MVA. Works are
currently underway in Butwal and
Anarmani Sub-Stations to up-grade
their capacities from 20 MVA to 40
MVA and from 15 MVA to 22.5 MVA
respectively.

¢ The displaced 6 MVA transformer in
Pokhara sub-station was relocated to
Bardghat Sub-Station. The displaced
12.5 MVA transformer in Bharatpur
sub-station was relocated to Lahan
sub-station. The other displaced 6.3
MVA transformer in Bharatpur sub-
station will be relocated to Simara

Sub-Station. The 10 MVA transformer
in Lahan sub-station was relocated to
Dhalkebar sub-station.

e Six 132 kV Circuit Breakers were
added at Attaria, Bharatpur and
Bardghat Sub-Stations. New
protection system was added in
Attaria Sub-Station for the Lamki
Feeder.

e Disturbance Recorder with Fault
Locators were installed in 8 major
Sub-Stations.

० This Department also repaired 10
MVA transformer at Dhalkebar and
5 MVA transformer at Bardghat and
overhauled 6 MVA transformer at
Syuichatar.

न" Old Chinese make 11 kV switchgear
were replaced with VCB indoor
switchgear at Chanauta.

e Chinese 11 kV VCBs were replaced
with new VCB panels at Lahan.

System Operation Department

Load Dispatching

Load Dispatch Center, working round
the clock, continued to keep the
operation of the Integrated Nepal Power
System (INPS) on the right track. The
Center successfully performed their part
of the responsibility in the testing and
commissioning of Kali Gandaki 'A'
Hydroelectric Project on time. The
overstressed transmission lines coupled
with the bottlenecks at several
transmission links presented a new
frontier of challenge in dispatching of
this added capacity. To make matters
worse, terrorist actions targeting vital
transmission and generation facilities in
different parts of the country led to varying
degree of setbacks. However, the efforts
put up by the Center and other wings of
NEA during such time of distress helped
in lessening the illeffects. The affected
facilities were put back to operation one
after the other by repairing the damages
on war footing.

With Kali Gandaki 'A' on line, the
demand-supply scenario has also
undergone significant transformation —
now the system endowed with summer-
peaking capacity of 570 MW has about

450 MW of unconstrained summer
demand to meet. In terms of energy, the
summer time river-flow allow the system
to generate more than 8000 MWh energy
each day but the daily demand is yet to
scale above 6000 MWh. If the demand
growth continue to remain stagnant,
excess energy will further increase as
number of power purchase agreements
are being signed.

DISTRIBUTION AND CONSUMER
SERVICES

The Distribution and Consumer
Services will take over the ownership of
all Low Voltage Distribution Network
(33 kV and below). It is responsible for
operation and management of
distribution network and its further
development and expansion including
rural electrification. It will purchase
power in bulk from Generation and will
sell it to all segments of consumers at a
price fixed by the Tariff Fixation
Commission.

The functions of DCS are: (i) to plan,
design and implement the distribution
system up to 33 kV, (ii) to operate and
maintain the distribution network; and
(iii) to execute the meter reading, billing
and revenue collections. These functions
are being executed through its 2
Departments, 6 Regional Offices, 61
Branch Offices, 26 small hydro power
plants of which 11 are leased and 2 solar
power plants.

Distribution and Consumer Services
(DCS) is one of the core activities of NEA.
Supplying consumers with electric power
and collecting revenue from them are
the major responsibilities of DCS.
Electricity has been extended to all the
75 districts headquarters. The Integrated
Nepal Power System (INPS) covers 57
districts, 2 districts are supplied from
solar power andthe remaining 16 districts
are supplied from isolated small
hydropower plants. At present about 20
percent of the population is being
supplied with electricity but the potential
population coverage of the existing
network is 32 percent.

Total number of consumers and
energy sold in FY 2001/02 are 878,178
and 1574 GWh respectively. This is an
increase of 17.72% and 11.89%

॥? छि
[

IN REVIEW

UVIAV

respectively when compared to that of
FY 2000/01. Total sales in Nepal was
1431 GWh and accounted for 91 % of
the total sales. This is an increase of 150
GWh (11.7%) over the last fiscal year's
figure. The revenue for FY 2001/02 is
Rs.10,320.89 million which is about 23
% more than that of last fiscal year.

The domestic consumer category
accounted for about 96 % of the total
number of consumers, 36.60 % of sales
and 37.57 % of revenue. The industrial
consumer category accounted for only
2.28% of the total number of consumers
but its contribution to sales and revenue
are 38 % and 36.5 % respectively. The
commercial consumer category
accounted for only 0.55% of the total
number of consumers but contributed 6
% of total sales and 8.8 % of total revenue
respectively. Likewise, non-commercial
consumers constitute 0.89 % of the total
number of consumers, and accounted
for 5.12 % of the sales and 7.5 % of the
revenue.

NEA is striving to provide better
service quality to its consumers. For
maintaining cordial consumer
relationships public awareness for timely
payment of bills and issues like meter
reading, loss reduction and safety are
being disseminated through electronic
media and newspapers.

Despite the concerted efforts to curb
losses, it still remained a burning issue
for NEA. To reduce losses, DCS has
undertaken various measures like
installation of aerial bundle cable (ABC)
conductor, launching of public
awareness program, regular inspection
of big and medium consumers, correct
metering system and introducing
electronic meters. Yet it requires the
continued and committed efforts from
all walks of society to contro! the
electricity losses. An Act to curb the
unauthorized leakage of electricity has
already been enacted and enforced, and
the regulation thereof has been submitted
to HMG for approval.

Performance Contract is tobe entered
into with each of the branch managers of
the 15 Profit Centers from FY 2002/2003
for the commercial operation, better
consumer services, improved efficiency,
cost savings, increased revenue,
accountability, institutional

A YEAR

strengthening and electricity loss
reduction. The Profit Centers are: 1)
Kathmandu Central, 2) Kathmandu East,
3) Kathmandu West, 4) Lalitpur, 5)
Bhaktapur, 6) Birgunj 7) Hetauda, 8)
Bharatpur, 9) Janakpur, 10) Biratnagar,
11) Dharan, 12) Pokhara, 13)Bahirahawa,
14) Butwal and 15) Nepalgunj.

Small Hydro and Rural Electrification
Department

During FY 2001/02, normal activities
of this department were seriously affected
due to the prevalence of non-working
atmosphere in the hilly and remote areas.
Construction works of 33 kV transmission
and 0.4 kV distribution lines in most of
the districts remained suspended due to
the security reason. Construction
materials could not be transported to the
site in some of the districts due to the
non-availability of the transportation
facilities.

Operation and maintenance activities
of this department are limited in 34
districts of 12 zones of Nepal. The
departmental functions are carried out
by 7 branch offices and 26 offices of
Small Hydropower Plants of which 11
have been leased to the private operators
and 2 solar power generating plants.

The following Small Hydropower
Plants have been damaged by terrorist
and are not currently in operation:

eases Jumla SHP
1) Bajhang SHP
iii) Bhojpur SHP
iv) Khandbari SHP
५) — Phidim SHP
५४) TaplejungSHP
vii) Acham SHP
viii) Okhaldhunga SHP
ix) Kalikot SHP

(200 kW)-
(200 kW) -
(250 kW)-
(250 kW)-
(240 kW)-
(125 kW)-
(400 kW)-
(125 kW)-
(500 kW)-

ENGINEERING SERVICES

The Engineering Services will be
responsible for all power development
activities, directly or indirectly funded
by NEA and HMG, ranging from preli-
minary studies to detail engineering
design. It is to be developed into a

commercial subsidiary company of NEA.
It will carry out relevant jobs for NEA as
well other agencies on commercial basis.

Soil, Rock and Concrete Laboratory,
NEA

As per the present organizational set-
up of NEA; the Soil, Rock and Concrete
Laboratory (SRCL) reports to the General
Manager, Engineering Services. Main
scope of services include geological sur-
vey (geological mapping, geo-physical
survey works, drilling), construction
material investigation, hydro-sedimento-
logical, in-situ & laboratory testing and
geodetic investigation. Besides these, it
has also been involved in environmental
study and engineering design of different
hydropower projects. This year the Labo-
ratory provided its services mainly to
NEA and few other external agencies.
Major projects completed in the year
2001/02 are:

० Techno-Feasibility Study: Rural
Electrification and Distribution
System Reinforcement of eight
districts,

"न Kulekhani Storage and Project
identification: Sedimentation study
of Kulekhani Storage, identification
of different HE Projects,

० Galwa Gad SHP Project: Detail
Engineering Design,

Leased Plant
Leased Plant
Leased Plant
Leased Plant
Leased Plant
Leased Plant
NEA Mgmt

NEA Mgmt

not damaged but not in operation due to un-
accessibility

* Naumure Storage Project: Review
Study,

० Madi Isaneshwar Storage Project:

damaged on 2059/01/11
damaged on 2059/01/07
damaged on 2058/10/13
damaged on 2058/09/08
damaged on 2058/12/20
damaged on 2058/12/21
damaged on 2058/11/04
damaged on 2058/12/15

Feasibility Study Phase।

« Upper

Seti

Feasibility Study,

न Upper Tamakoshi (Rolwaling)

Storage Project:

Hydroelectric Project: Feasibility
Study Phase I,

Pancheshwar Multipurpose Project:
Seismic refraction survey,

Tatopani SHP Project: Post
evaluation study,

Design of NEA Block 'A' Building:
Structural analysis/architectural
design,

Kulekhani II] HE Project: Technical
support & Construction supervision
of test adit,

Ghami/Charang Khola SHP Project:
Feasibility Study,

Golplingtar Lift Irrigation Project:
Techno-feasibility Study.

Pancheshowar Multipurpose
Project: Core Drilling at Purnagiri re-
regulating dam site.

Other projects that are nearing
completion are:

Kankai Storage HE Project : Field
works comprising of topographic
survey, seismic refraction survey,
surface geological mapping, core
drilling works, hydrological survey
and construction material survey
have been completed. Design works
and report preparation is in the final
stage.

Upper Tamakoshi HE Project :
Topological survey of access road
and bridges have almost been
completed. Collection of base line
information for EIA Study has been
completed. Preparation of scoping
document is presently under way.

Madi Isaneshor Storage Project:
Final Report is being prepared based
on the additional information
collected.

Langtang Storage HE Projects: Field
works comprising of topological
survey, seismic refraction survey,
hydrological survey have been
completed. Design works is in the
final stage.

Review and Upgrading of Identi-
fication and Feasibility Study of
Storage Projects : Data updating of
102 different projects (10-300 MW)
have been prepared under this study.

e Kulekhani Sedimentation Survey

and Project Identification
Sedimentation survey of Kulekhani
Reservoir has been carried out with
the report already submitted. Desk
study and field visit of different
hydropower projects are continuing
as part of Project Identification
Program.

« Study of Transmission Line : IEE
Study of a part of a transmission line
(re-aligned one) has been completed
for Eastern Regional Office, DCS,
NEA.

० Hewa Khola HE Project : Field study
(topographic survey, hydrology,
geological study) has been
completed. Inception report has been
submitted.

* Thankot - Chapagaon 132 kV TL
Project : Detailed survey work of
Thankot-Chapagaon 132 kV TL and
its associated sub-stations has been
completed.

० Indrawati Ul HEP : Sampling of
concrete lining of tunnel alignment
of Indrawati Ill HE Project has been
completed and its report submitted.

Environmental Study has become
one of the major activities of this
Laboratory for the last couple of years.
Presently it has been undertaking
foliowing projects :

e EIA Study of Butwal - Sunauli 132 kV
TL Project

e EIA Study of Dhalkebar - Bhittamore
132 kV TL Project

¢ IA Study of Parawanipur - Birgunj
132 kV TL Project

Environment and Social Studies
Department

The current policies of HMG/N stress
the importance of environmentally sound
and sustainable development of power
generation and transmission line projects.
According to Environmental Protection
Act, 1996 and the Environment
Protection Rule-1997 (First Amendment
1999) hydropower projects above 1 MW
(Initial Environmental Examination for
1-5 MW Projects and Environmental

Impact Assessment for 5 MW & above
Projects) are considered for the environ-
mental study. Similarly in transmission
line sector, 33 to 132 kV lines (IEE for 33
to 66 kV Transmission Line, Rural Electri-
fication Scheme of 1-6 MVA and EIA for
132 kV Transmission Line) require
environmental study. Besides these, NEA
is also responsible to meet the environ-
mental requirement of the donor agencies
such as ADB, World Bank, KfW, JICA,
etc. when executing projects funded by
them.

Since the Environmental and Social
Studies Department is the main wing of
NEA for implementation of environ-
mental and social studies, the following
projects were implemented under the
supervision and association of the
Department in Fiscal Year 2001/02.

« Co-ordinate the works between the
line agencies and Ministries for the
approval of EIA/IEE documents.

० Finalize the agreement with GEOCE
Consult (P) Ltd. to conduct the IEE
study of Dhading - Nuwakot 33 kV
sub-transmission line and 33/11 kV
substation project.

न" Get the approval of Middle
Marsyangdi HEP EIA report from
Ministry of Population and
Environment (MoPE). The EIA report
of Kulekhani Ill HEP and Upper Modi
'A' HEP isat the final stage of approval.

* Conduct fieldwork and prepare
Scoping and Terms of Reference
document for EIA of Rolwaling
Hydroelectric Project in association
with Soil Rock and Concrete
Laboratory.

० Co-ordinate and supervise scoping
exercise and TOR preparation work
for the EIA study of by Kankai Storage
HEP conducted by Nepal Consult (P)
Ltd.

* Co-ordinate and supervise scoping
exercise and TOR preparation work
for the EIA study Kulekhani III 132
kV Transmission Line Project
conducted by DIP Consult (P) Ltd.

* Co-ordinate and supervise scoping
exercise and TOR preparation work
for the EIA study of Chameliya

A YEAR।

IN REVIEW
छ 163० NI

Hydroelectric Project conducted by
East Consult (P) Ltd.

० Follow up the work of previous years
such as IEE studies for K vre 33 kV
Lalitpur 33 kV, Rural Electrification
Scheme in 37 districts and EIA of
Jagatpur-Madi 33 kV sub-tranmission
line and Middle Marsyangdi - Lower
Marsyangdi 132 kV Transmission
Line Projects.

The following mitigation and
Monitoring programs were imple-
mented by the Department in fiscal
year 2001/02.

० Continue the manpower deputation
to Kali Gandaki Environment
Management and Monitoring Unit
for the monitoring and implemen-
tation of mitigation measures.

० To minimize the impact of Middle
Marsyangdi Hydroelectric Projecton
affected people and agriculture pro-
duction, the detail design of
Goplingtar Lift Irrigation Project has
been completed.

e Review the Fish Hatchery operation
and maintenance proposal submitted
by Nepal Agriculture Research
Council to Kali Gandaki 'A' Hydro-
electric project. The proposal is
approved by NEA and memorandum
of agreement between NARC and
NEA will be signed in near future.

० Provide manpower to Soil Rock and
Concrete Laboratory NEA for the
Environmental Auditing of Modi
HEP.

न" Celebrate the World Environment
Day (June 5, 2002) and implemen-
tation program at NEA-Training
Center compound Kharipati. About
300 plants of various species were
planted.

NEA Training Center

The Training Center of NEA aims at
providing need-based training to NEA's
employees to enhance their performance
and to make them capable to plan,
implement, maintain and operate NEA's
system. With the infrastructure facility
already in place, the Center now hopes
in producing more tangible outputs with

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custom-designed training and managerial
development programs. The Center is
also conducting various types of training
programs on commercial basis to the
clients of NEA and other professionals of
power sector.

The training programs conducted
during the last fiscal year covered
a wide spectrum of areas in
Distribution, Transmission,
Generation, Hydropower,
Management, Information
Technology and other areas of
power utility business. A total of

Name of

the Project।

Upper Kali Gandaki
Upper Budhi Gandaki

Deumai

e) Tensioning equipment with a
capacity of 350 tons.

Central Workshop

Under the IDA loan for the Power
Sector Efficiency Project (PSEP), the

Development। Region District

Western

Eastern filam। lam

Installed
Capacity
(MW)

these eleven projects, three projects,
namely, Upper Kali Gandaki, Upper
Budhi Gandhaki and Deumai, have been
studied at reconnaissance level. The main
features of these three projects are
presented in the table given below.

Annual
Energy
(GWh)

290.89) R-O-

Design
Discharge
(m3/s)

Type

[७०]

160

794 NEA staff received training '
from the programs conducted by the
Training Center.

Electro-Mechanical Division

In the fiscal year 2001/02, Electro-
mechanical division was involved in the
final testing of the Modi-Khola Hydro-
electric Power Project (14.8 MW). Simi-
larly this division is also functioning as
the engineering consultant for the Chilime
Hydroelectric Power Project (20 MW)
that is presently under construction. This
division prepared the tender document
for the 132 kV transmission line and
reviewed the electro mechanical tender
document for the Chamelia Gad Hydro-
Electric Power Project (30 MW). This
division also reviewed the study of Kankai
Hydroelectric Power Project (60 MW).

Concrete Pole Plant, Amalekhgunj

The Pre-stressed Concrete (PSC) Pole
Plant was established in December, 1994
under the Seventh Power Project at
Amalekhgunj, Bara district. It has the
production capacity of 14,000 pieces of
poles of different sizes.

The plant consists of the following
equipment :

a) Concrete mixing plant with a capacity
of 15-20 cu.m. per hour, 0.5 cu.m.
per batch.

b) Steam boiler machine witha capacity
of 3 tons per hour.

c) Moulders of 11 m. (4 sets), 9 m. (10
sets) and 8 m. (15 sets).

d) Main gantry crane with a capacity of
5 tons and yard gantry crane with a
capacity of 2.5 tons.

Central Workshop of NEA was establi-
shed in 1998 at Hetauda, Makawanpur
district. The workshop has two sections:
(1) Repair and maintenance of distri-
bution transformers upto 500 kVA and
(2) Operation and maintenance of heavy
equipment.

Transformer Maintenance Section:
This section has equipment such as lathe,
shaping, bench drill machine, grinders,
air compressor, gas welding, 25 ton
electric overhead traveling crane, electric
oven for distribution transformer, electric
oven for power transformer (under
construction), transformer testing
equipment, etc. It has various testing
facilities also.

Operation and Maintenance of
Heavy Equipment Section: This section
has various kinds of heavy equipment
such as 12 and 25 ton wheel cranes, 2.3
m? wheel loader, 1.3 m? backhoe, 26
and 30 ton bulldozers, 8 ton dump trucks,
30 ton tractor trailer, 7 ton flat bed
trucks, road roller, grader, etc. The equip-
ment of the workshop is available on
hire basis to the contractors of projects
associated with NEA as well as to various
government and non-government
organizations.

Project Identification Program

The Project Development Depart-
ment of NEA has conducted various
studies for identifying feasible hydro-
power projects in Nepal. In the fiscal
year 2001/02, desk studies of eleven
hydropower projects in Eastern, Western
and Mid Western Development Regions
of the country were carried out. Out of

PLANNING AND MONITORING

Planning and Monitoring is respon-
sible for preparing expansion plans and
monitoring of projects of NEA. It facilitates
import and export of power as well as
power trading in bulk from IPPs.

System Planning Department

As its regular proceedings, System
Planning Department carried out
generation expansion plans including
the projects for which PPAs have been
signed. Several different scenarios were
studied. Transmission expansion plans
were also carried out for the different
generation expansion plans. This
department also provides technical
support to other departments of NEA for
carrying out power system studies.

Corporate Planning Department

Activities at the Corporate Planning
Department over the year comprised of
regular features such as the preparation
of the annual development budget and
programs, liaison with HMG/N on issues
of licenses and foreign aid proposals. A
special activity undertaken in the past
year was the preparation of Nepal's Tenth
Five Year Plan. A forerunner plan entitled
the Mid Term Expenditure Framework
(MTEF) was also prepared with an accent
on poverty alleviation in preparation for
the Nepal Development Forum (NDF)
which was held in Kathmandu in January
2002. The Department was also active in
assisting with the formulation of the
amendment to the Hydropower

Development Policy of HMG and the
Rural Electrification concept paper.

Promotion of private sector invest-
ment in the power sector was another
activity undertaken by the Department.
in accordance with the NEA commitment
to purchase total of upto 50 MW of
power from IPP-promoted small hydro-
power projects in the capacity range 1-
10 MW, four power purchase agreements
(PPAs) were signed with: Molnia Power
(P) Ltd., Sanima Hydropower (P) Ltd.,
Kantipur Hydropower (P) Ltd. and
Unique Hydel Co. Ltd. for purchase of
power from the 5 MW Mailun Khola,
2.60 MW Sunkoshi, 10 MW Langtang
Khola and 1 MW Baramchi small
hydropower projects respectively. The
first IPP promoted small hydropower
project, the 185 kW Syange Hydropower
Project developed by Syange Hydro-
power Co. (P) Ltd. came into commercial
operations on January 12, 2002.

NEA was also the active participant
of the USAID sponsored SARI/E program.
Over the year NEA participated in 22
training programs, seminars, workshops,
executive/peer exchange and biannual
review programs which involved 48
senior officers of NEA. A notable event
was the participation in the South African
Development Community (SADC)
Energy investment Conference in Victoria
Falls, Zimbabwe, in September 2001.
This gave an insight into the working of
the South African Power Pool (SAPP)
which is considered a success story in
the realm of regional power exchange.
NEA also became the member of a new
regional partnership in the field of
Disaster and Security Preparedness and
response Partnership with the first
meeting held in the USA in May 2002.

The NEA-TACOMA _ Power-
Wisconsin Electric Energy Partnership
funded by USAID and managed by USEA
came to a close with a Recognition
Ceremony. The program was held on
February 28, 2002 in Kathmandu during
the last visit of the US team to Nepal. It
was well attended by senior figures in
US and Nepal government including the
Minister for Water Resources Hon. Mr.
Gachhadar, and the Ambassador of the
United States of America, Mr. Michael
Malinowski, and the Mission Director of
USAID Mission in Nepal, Ms. Joanne

Hale, Mr. 8.8. Malla, the former
Managing Director of NEA, Mr. David
Ward of TACOMA Power, Mr. Larry
Bruneel of Wisconsin Electric were
felicitated for their efforts in making the
partnership a success. In total, the
program involved three exchange visits
each to the USA and Nepal. A dozen
person - visits from NEA benefited from
visits to USA. In addition, a larger cross-
section of the NEA staff interacted with
visiting US utility executives and experts
and established lines of communication
for further queries and exchange of notes.
Preparations are currently under way to
commence a new phase to the Energy
Partnership Program.

Nepal-indla Power Exchange
Transmission Lines

The power exchange between India
and Nepal is presently in the range of 50
MW. Considering the growth of power
demand both in Nepal and India and the
prospect of long term availability of
dependable power, specially from hydro
power stations in Nepal, the Power
Exchange Committee has agreed in
principle to enhance the present
exchange level to 150 MW and to
construct adequate facilities enabling
transactions at the proposed level.

In accordance with the agreement
reached, the joint - technical committee,
which was set up to identify possible
exchange links, has recommended three
new 132 kV interconnections to be taken
up for construction. As with the existing
systems, these new lines will operate in
isolated modes only. As per the
understanding, each country will be
responsible for the construction of the
facilities lying within their territory. The
three new 132 kV interconnections
recommended for construction are :

० Butwal - Anandanagar

¢ Birgunj - Motihari

¢ Dhalkebar - Sitamarhi

FINANCE AND ADMINISTRATION

Finance and Administration is
responsible for financial management,

auditing, funding central account and
administration of NEA.

Finance and Accounts

NEA's financial performance
remained encouraging for FY 2001/02.
NEA's total revenue increased by NRS
2012.5 million (23% increase) to reach
a figure of NRS 10766.4 million as
compared to NRS 8753.9 million in the
previous year. NEA's revalued assets
increased to 42374.6 million as
compared to NRS 37103.7 million in the
previous FY 2000/01. Expenditure in
operation and maintenance have
increased by 16.08% reaching a figure
of NRS 10137.9 million as compared to
NRS. 8733.8 million in fiscal year 2000/
01. Overall, NEA registered a net profit
before tax of 413.9 million as compared
to net loss before tax to 1.9 million in FY
2000/01.

In FY 2001/02, NEA has invested
NRS.6378.0 million in capital works and
projects, the funding of which comprised
of NRS. 1002.3 equity, NRS. 4873.5
million from borrowing and the rest
(502.2 million) from NEA's own
resources. By the end of FY 2001/02
NEA's total borrowing stood at NRS.
41581.0 million.

The financial audit for FY 2000/01
was completed within eight and half
months of the end of the fiscal year. The
audit for the year 2000/01 was
undertaken by auditors M/S Price
Waterhouse, India CSC &Co of Nepal.
For the financial audit of F/Y 2001/02
auditor M/S T.R.Upadhyay & CO., Nepal
have been appointed. Tax returns for the
F/Y 1994/95, 1995/96 and 1996/97 have
been filed with the Inland Revenue
Office and the tax auditing for the FY
1997/98, 1998/99, 1999/00 and 2000/
01 are in process.

Human Resources Department

The Human Resources Department
has been entrusted with the following
functions under NEA's present Corporate
Structure:

Manpower planning
Staffing
Training and development

Career management

wm & WwW hw

Employees record keeping

ध31/435४ Ni

6. Staff welfare
7. Disciplinary actions
8. Administrative management

The total approved positions at the
end of FY 2001/02 is 10,073; of whicha
total of 9,790 staff are presently
employed.

During the year under review; 297
were appointed at different levels, 159
staffs retired, 36 staffs resigned and 45
staffs died. The recruitment process of
appointing 922 new staffs in different
positions is still on-going. Under
disciplinary actions, 14 staffs have been
cautioned.

A total of 109 staffs received training
abroad whereas the number of staffs
receiving training from different
organizations in Nepal is 62.

Staff Training
Fiscal Year 2001/02

Abroad 109
Higher Studies 2
Training 66
Seminar, Workshop etc. 24
Inspection 17
Nepal 62
Higher Studies 8
Training 25

Seminar, Workshop etc.

Legal Aspects of NEA

The Legal and Arbitration division of
NEA is performing all the legal activities
of NEA. It provides legal advice to the
management of NEA as wellas to different
offices of NEA. The division is also

Service

Officer

Assistant

7688

Present Manpower Strength in NEA
Approved Position

=<

0]
293
466

333]
एमा। area। ace। 8650
466

involved during negotiations for power
purchase and contract agreements with
different companies. The division is also
defending cases through NEA's legal
advisors in the different courts of the
kingdom of Nepal for disputes in which
NEA is a party.

In the FY 2001/02 out of a total of 80
cases; NEA won 21, lost 6 and the
remaining 53 cases are sub judice. Cases
are related mostly to the misuse of
electricity, land acquisition, employees
service termination, staff promotion, etc.
Some of the disputes related to Contracts
of projects under construction are being
resolved through arbitration.

The Electricity Theft Control Act 2058
has already been enacted and enforced.
Its regulation is in the process of being
approved. It is anticipated that the
Electricity Theft Control Act 2058
together with its regulation will help in
controlling electricity theft.

INFORMATION TECHNOLOGY

Information Technology is respon-
sible for developing and supporting
computer system in NEA and helps in
the enhancement of their use.

The NEA management has adopted
the policy of making significant use of
information technology (IT) for the
improvement of corporate governance
and to improve organizational effi-
ciency. IT is expected to maintain trans-
parency and disclose all financial and
non-financial related information in an
easily accessible and understood manner.
These features of IT help to improve
corporate governance. They also help to
improve efficiency because performance
can be measured and compared
objectively. Establishment of accounta-

Fiscal Year 2001/02

653
9

ia

1423

4105
2481
6586
7544

1095 1151

Existing Situation

Daily Wages। Total
58

404 ३209

bility and ease of evaluation are expected
to improve organizational productivity.

To achieve these objectives, a
network connecting computers at NEA
central office and some regional offices
has been completed. Works are currently
underway to expand this network to
connect 80 budget centers of NEA. This
computer network will be used to prepare
MIS reports; and to implement the
computerized accounting and inventory
systems of NEA. From FY 2002/03 MIS
reports shall be prepared on the monthly
basis using the MIS computer software
which has already been tested.

The computerized billing system of
Kathmandu West division which was
implemented as a pilot scheme has been
successfully replicated in Kirtipur,
Birgunj, Biratnagar and Bhairahawa DCS
branch offices. The preparatory work for
computerized billing in Janakpur and
Nepalgunj branch offices is also almost
complete and will be functional within a
few months.

Internal Audit

Last year, the internal audit
department introduced revenue auditing
and accounting software which was
developed with the help of local
consultant. This is found to be very useful
to consumer accounting and revenue
auditing. This package covers 12
branches and covers all the branches in
the far western region. It accounts for
1,65,581 consumers which is about 19
% of the total number of consumers of
NEA. With the introduction of this
software, the performance of revenue
section has improved remarkably.

Word/ Excel training was given to
403 ledger clerks and supervisory training
for 14 personnels.

Internal audit was carried
out in 38 branches in FY
2001/02 and audit observa-
tion is also sent to the concer-
ned branches for necessary
action and prompt reply.

High level audit report
monitoring committee is
formed for the purpose of
maintaining financial disci-
pline at the recommendation
of internal audit department.

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PROJECT HIGHLIGHTS

Kali Gandaki 'A' Hydroelectric Project

Construction works of this Project has been
completed and the Project has already started
feeding power to the national grid.

On January 9, 2002, Honorable Minister of
Water Resources Bijaya Kumar Gachchhadar
initiated the impounding of reservoir for wet
testing of intake and water conveyance system.
The initial test run of first unit (Unit No. 3) was
successfully carried out on March 7, 2002. Along
with reliability testing, power generation was
initiated from the first second and the third unit on
March 31, April 19 and May 24, 2002 respectively.

The Project has to face considerable opposition
from the local residents in transmission line works
in Pokhara sector giving rise to delays. However,
a solution was negotiated and works on 13 towers
along with associated optical fiber works were
finally carried out.

Kali Gandaki 'A' Hydroelectric Project located
about 180 km west of Kathmandu, is a run-of-
river scheme with 6 hours daily peaking capability
and 144 MW as installed capacity. The Project is
expected to generate in average 642 GWh of
energy each year.

The Project is spread over Syangja, Gulmi,
Parbat, Palpa, Kaski and Rupandehi districts, but
the main component of the Project is located in
Syangja district. The Project includes a 100 m
long and 43 m high concrete gravity diversion
dam, open surface desander basin, 6 km long
tunnel of 7.4 meter diameter and a surface
powerhouse. The tunnel shortcuts the 45 km long
natural loop of the Kali Gandaki river to gain anet
head of 115m. A pressured flow of 141 m/s feeds
three Francis turbines in the powerhouse. Power
generated is transmitted through 66 km long
single circuit 132 kV transmission line to Pokhara
and 40 km long double circuit 132 kV transmission
line to Butwal Substation.

Consulting services for the Project was
provided by Morrision Knudsen international
Inc. in association with Norconsult International
and IVO International. Civil works and hydraulic
steel works were contracted to Impregilo SpA and

Noell Stahl respectively. A joint venture of Mitsui,
Toshiba and Alstom was contracted for electrical
equipment. Similarly, a joint venture of Mitsui
and Toshiba was the mechanical contractor.
Transmission lines and substations works were
carried out by Tata Marubeni Joint Venture.

Middle Marsyangdi Hydroelectric Project

Middle Marsyangdi Hydroelectric Project is a
daily pondage run-of-river scheme with an
installed capacity of 70 MW and an average
annual energy generation of 398 GWh. This
Project is being funded by KfW (Germany) HMG/
N and NEA. The estimated cost of the Project is
about 13.65 billion rupees (US $ 190 million).

The Project site is about 170 km west of
Kathmandu, in Lamjung District. The dam site of
the Project is located at a narrow gorge of
Marsyangdi river near Phaliasangu in between
Udipur VDC and Chiti VDC and the powerhouse
site is at the right bank of the Marsyangdi river at
Siudibar, Bhote Odar VDC. The Project utilizes a
gross head of 110 m and discharge of 80 m?/s in
driving two Francis turbines of 36 MW capacity
each. The Project has a peaking capability of 5
hours even during the dry season. The major
components of the Project are: 62 m high 95 m
long combined concrete gravity and rockfill dam
with concrete spillway capacity of 4270 ॥12/5, 3
numbers of 12 m x 19.5 m spillway gates, a 1.6
million m? capacity peaking reservoir, three
numbers of underground desanding caverns (15
mx 100 m x 25.1 m each) with two basins in each
cavern to flush 95% of 0.2 mm particle size by
vertical flushing (BIERI) system, 5.4m diameter
5210 m long concrete lined power tunnel, 20 m
diameter 45 m high surge tank, a 450 m long
penstock, a surface powerhouse and a 41 km long
single circuit 132 kV transmission line.

The detailed design and construction
supervision of the Project is being done by Fichtner
Joint Venture. The Environmental Impact
Assessment report was prepared by environmental
consultant TAEC-NESS Joint Venture as per the
new environmental act and regulation and the

A YEAR

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same consultant is monitoring the
mitigation plan during the construction.

The construction of the Project has
commenced from June 25, 2001. The
civil works contractor Dywidag-
Dragados-CWE JV is presently carrying
out site installation works, access road
works, excavation works for dam, intake
and powerhouse, and tunneling works
for diversion and adits. NEA/Engineers
camp facilities works is the responsibility
of Tundi-Lama JV and is almost at the
completion stage. VOITH SIEMENS
Hydropower Genera-tion GmbH & Co.
and ALSTOM Energie-technik GmbH
are the contractors for mechanical
equipment works and GIS switchyard
works, respectively and these contractors
are at the stage of producing shop
drawings and manufacturing of
components. The electrical equipment
works has recently been awarded to
ALSTOM Power Generation AG,
Mannheim, Germany. Tender is being
called for transmission line works. The
total construction work is planned to be
completed within 43 months from the
commencement date.

The Project has already acquired
about 24.41 ha (480 ropanies) of land at
dam site, Phaliasangu and about 11.19
ha (220 ropanies) of land at powerhouse
site, Siudibar. Beside these, the Project
has also acquired 2.03 ha (40 ropanies)
of land necessary for resettlement at

Udipur, 3.66 ha (72 ropanies) at
Phedikuna for NEA/Engineer's Camp and
about 0.92 ha (18 ropanies) of land at
Bhote Odar for Bhakti Namuna Higher
Secondary School. As part of resettlement
and mitigation program, the Project has
carried out income generation oriented
training program and community
awareness program focused on public
health and traffic safety to the members
of the Project affected families and the
local people of the Project area.

Recent visits of KfW mission ('Conflict
Reduction Appraisal') and Panel of
Environment Experts (PoE) to the Project
site has resulted in a concept of
Neighborhood Support Program. The
main objective of this program is to
promote the level of understanding
between local people and the Project
and to provide tangible benefits to the
local people and the area. The program
will get underway once the
Neighborhood Support Program Office
(4520) is established at the site.

Chameliya Hydroelectric Project

Chameliya Hydroelectric Project is a
medium sized (30 MW) peaking run-of-
river plant with 6 hours daily peaking
capacity. The Project utilizes the water
from Chameliya River, a tributary of
Mahakali River. The Project site is located
in Darchula district of far western

development region of Nepal, which is
about 950 km from Kathmandu and 18
km north east of Gokule, the nearest
road head on Baitadi-Darchula road. The
detailed field investigation for conceptual
design was carried out by Civil Design
Department, in association with Soil,
Rock and Concrete Laboratory (SRCL),
NEA. The detailed design and preparation
of tender documents were carried out by
a consortium of Korean Consultants
(Hyundai Engineering Co., and Korea
International Cooperation Agency
(KOICA) in collaboration with NEA.

The main features of the Project are
54 high concrete gravity dam with two
13.5 meter high radial gates, under-
ground desander with 2 basins, 4067 m
long headrace tunnel, 49.8 m high restric-
ted orifice type surge tank, 461 m long
penstock and semi-underground power-
house with two units of 15.3 MW vertical
shaft Francis turbines. The Project will
generate 184.21 GWh energy annually.
The power will be evacuated through
131 km long 132 kV transmission line to
Attariya substation at Kailali district.

Out of 18 km long access road, earth
work and structural work of 17km portion
has been completed. Also, span Bailey
Bridge on Chameliya River spanning 40
m, and R.C.C. Bridge on Agari Khola
spanning 22.5 m have been completed.
Construction works of remaining portion
of access road, concrete bridge on Ghatte
Gad and a steel truss bridge over
Chameliya River at Balanch are under
progress. Two buildings have also been
constructed at powerhouse site.

Total cost of the Project is estimated
to be US$ 74.897 million. The Project is
envisaged for implementation under co-
financing from HMG/N, NEA and other
donor agencies.

Nepal-india Power Exchange
Transmission Lines

Presently, power is being exchanged
between Nepal and India in the range of
50 MW. Considering the growth of power
demand in India and the prospect of
long-term availability of dependable
power in Nepal, the Power Exchange
Committee has agreed in principle to
increase the present exchange level to
150 MW and to construct adequate

facilities for effecting the exchange at the
proposed level.

In accordance with the agreement,
the joint-technical committee, set up to
identify possible exchange links, has
recommended three new 132 kV inter-
connections, namely, Butwal-Sunauli,
Parwanipur-Birgunj and Dhalkebar-
Bhittamod Transmission Lines. As with
the existing systems, these new lines will
operate in isolated modes-only. As per
the understanding, each country will be
responsible for the construction of the
facilities within their territory.

Butwal-Sunauli 132 kV Transmission
Line Project

Contract for the construction of this
23 km long double circuit transmission
line, including for extension of two line
bays, was awarded to a company from
P.R. China at the end of the last fiscal
year. Funded jointly by HMG/N and
NEA, the Project is estimated to cost US$
1.8 million and is scheduled for comple-
tion in fiscal year 2003/04. In order to
complete the exchange link, this line
needs be connected to the substation in
Anandnagar (India) by constructing
another 45 km long transmission line on
the other side of the border.

Butwal substation is the main outlet
for power generated by the Kali Gandaki
'A' hydro power station. With the recent
commissioning of this power station, the
Project has assumed added significance,
as it will enable transmission of Kali
Gandaki 'A' power directly to India. It
may even be possible to dedicate some
of the generating units of Kali Gandaki
'A' power station to the Indian system.

Parwanipur-Birgunj 132 kV
Transmission Line Project

Under this Project, anew 15 km long
double circuit transmission line will be
constructed between Parwanipur
substation (being built under a separate
project) and Birgunj. Initially only one
circuit will be strung. The construction
of the line, along with the two associated
line bays at Parwanipur substation is
expected to cost US$ 1.85 million.
Another 45 km long line segment needs

to be built in India to link to substation in
Motihari, India.

Dhalkebar-Bhittamod 132 kV
Transmission Line Project

The main components of this link are
(i) construction of about 45 km long
double circuit line from Dhalkebar
substation to Bhittamod at Indo-Nepal
border and (ii) extension of two line bays
at Dhalkebar substation. The Project is
estimated to cost US$ 6.18 million. About
45 km of transmission line needs to be
constructed on the other side of the
border to connect the line to the
substation at Sitamadhi, India. Consider-
ing the proximity of this exchange link
with the planned hydropower generating
stations along Tamakoshi, Arun, Tamor
and other rivers in eastern Nepal, this
link will prove very beneficial in boosting
power export to India.

Thankot-Bhaktapur 132 kV
Transmission Line Project

Once completed, this 26-km long
132 kV transmission line from Thankot
to Bhaktapur will finally close the 132
kV ring main in the Kathmandu Valley.
The line comprises of double circuit
towers but only one circuit will be strung
under this Project. The Project also
includes one switching station at
Thankot, which will be converted to a
full-fledged 220 kV substation by the
end of this decade. During the same
period another 132 kV substation will be
constructed at Harisiddi. This Project
also covers upgrading of Balaju and
Bhaktapur substations. These reinforce-
ments will not only cater to the growing
demand in the valley but also reduce
system losses and improve quality and
reliability of the supply in the area.

The Project is estimated to cost US$
15 million. ADB will bear the foreign
currency component of this cost while
HMG/N and NEA will contribute the
local component. The expected comple-
tion period for the Project is three years.
At present, NEA is in the process of
selecting consultants.

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२५३:

Hetauda-Dhalkebar & Butwal-
Bardghat 132 kV Transmission Line
Project

This Project, scheduled to be
completed in fiscal year 2002/2003, will
greatly relieve the bottleneck being felt
in the evacuation of power generated
from Kali Gandaki 'A' power station.
This line will also help in correcting the
voltage at Duhabi substation in the east.

The Project comprises of stringing of
174 km single circuit lines onto the
empty side of existing double circuit
towers using hot line erection method.
Except for a 7-km stretch of the line, the
erection works have already been
completed. At present, extension of
associated line bays is in progress at the
four substations. Funded jointly by HMG/
N and NEA, the Project is estimated to
cost US$ 3.8 million.

Birgunj Corridor Reinforcement
Project

Under this Project, two 132 kv
substations will be built, one at Pathlaiya
and the other at Parwanipur. These sub-
stations will be linked by a 20 km long
double circuit 132 kV transmission line.
Parwanipur substation is scheduled to
be completed in the fiscal year 2003/04.
Once completed, this line will supple-
ment the existing 66 kV lines, which
presently serve the industrial belt in the
Birgunj corridor. Presently, power supply
in this region is being constrained by the
overloading of the 66 kV lines giving rise
to serious voltage problems. This Project
will not only cure the existing transmis-
sion problem in the corridor, but will
also facilitate exchange of power between
Nepal and India through the planned
Parwanipur-Birgunj Transmission Line
Project.

The Project is estimated to cost US$
4.75 million which will be met jointly by
HMG/N and NEA.

Panchkhal Substation Project

Under this Project, the existing 66
kV Panchkhal substation will be replaced
with anew substation to facilitate evacua-
tion of power from Indrawati Hydro-

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electric Project being executed under
private ownership. This Project will also
greatly benefit the surrounding area in
terms of improvement in supply quality,
reliability and higher substation capacity
for future electrification around the area.
The Project is estimated to cost US$ 1.03
million which will be funded jointly by
HMG/N and NEA.

Modikhola Substation Extension
Project

This Project aims at improvement of
quality and reliability of supply in the
region covered by the existing 33 kV line
between Pokhara and Baglung. Under
this Project, a 132/33 kV substation will
be built at Modikhola power station.
Funded jointly by HMG/N and NEA, the
Project is estimated to cost around US$
255,000. The Project is scheduled for
commissioning by the end of the fiscal
year 2002/03.

K-3 Substation Project

In the early nineties, ateam of experts
from JICA had proposed a 66 kV sub-
station at the heart of Kathmandu city as
a part of the master plan for reinforcement
and improvement of transmission and
distribution system in the Kathmandu
Valley. At present, the supply in this
region is mainly through low capacity
11 kV feeders, which have been under
heavy stress due to overloading. The
proposed 66 kV substation will not only
relieve these stresses and reduce system
loss but also help improve reliability and
quality of supply in the area. Furthermore,
such substation will also help in
accommodating the increasing demand
in the area.

Under this Project, a new 66/11 kV
substation with 36 MVA capacity will be
constructed which will be linked to the
existing Teku substation through a 3.5
km long 66 kV double circuit under-
ground cables. Several 11 kV feeders
will be drawn from this substation to
interlink the existing distribution network
in Kathmandu city area. HMG/N has
requested the Government of Japan for
financial assistance to the tune of 1600
million Yen for this Project.

Hetauda-Bardghat 220 kV Trans-
mission Line Project

NEA plans to construct its first 220
kV transmission line parallel to the
existing 132 kV line from Hetauda to
Bardaghat. The proposed line will also
form a segment of the 220 kV national
grid that is being envisaged under future
generation plans that include Upper
Karnali and West Seti in the far western
region and Arun in the eastern region of
the country.

The main features of this Project are
(i) construction of 152 km double circuit
220 kV line with single circuit stringing
using duplex Bison conductors and.
charged initially at 132 kV, and (ii)
installation of two 132 kV line bays at
Hetauda and Bardghat substations. The
estimated cost of this Project is US$ 29
million.

Khimti-Dhalkebar 220 kV Trans-
mission Line Project

This Project once completed, will
transmit power from the Khimti 1 power
station to the eastern region via the
Dhalkebar substation thereby improving
the voltage profile in the eastern region.
Besides, this Project will also facilitate
export of power to India via Bhittamod
exchange point.

Under this Project, a 75 km long 220
kV double circuit line will be constructed
from Khimti 1 power station to Dhalkebar
substation. Initially, only one circuit will
be strung and it will be charged at 132
kV till Upper Tamakoshi power station
comes into operation. The Project is
estimated to cost about US$ 23 million.

Transmission Development

This project component will
strengthen the transmission system in
Kathmandu valley. It includes:

¢ The expansion of existing 132
kV sub-stations at Bhaktapur and
Balaju.

¢ Construction of 26 km 132 kV
Matatirtha-Chapagaun-
Bhaktapur line thereby

completing the 132 kV ring in
Kathmandu valley.

¢ Construction of a new switching
station at Matatiratha and a new
sub-station at Harisiddhi.

LDC and Balaju Substation Extension
Project

Balaju Substation Extension part of
the Project has already been completed
in June 2001. This has greatly facilitated
the evacuation of power generated from
Khimti 1 and Bhotekoshi power stations.

Civil construction works of Load
Dispatch Center Master Station building
at Syuchatar has been completed and
installation of facilities and control equip-
ments areat the final stage of completion.
The new Master Station will be inter-
linked with all the major power stations
and substations in the country through
SCADA system enabling efficient and
systematic supervision of system opera-
tion. Adaptation works at various outsta-
tions required for this purpose are in
progress. Improved system security,
quick response to disturbances, reduction
in transmission loses, optimization of
generation with better hydro-thermal co-
ordination— these are some of the benefits
that will accrue to the organization once
the LDC Project is completed and
commissioned.

Small Hydro and Rural Electrification
Projects

Following works have been carried
out by Small Hydro and Rural
Electrification Department during the
year in review.

¢ Heldung Small Hydropower Project
(Jumia):
The tender for engineering,
procurement and construction (EPC)
on turnkey basis has been awarded to
RPP Enterprises. The work of the
project started in FY 2001/02 and
L.C. for electromechanical work has
already been opened. The project is
expected to be completed in FY 2004/
05 ata cost of nearly Rs. 129 million.

¢ Gamgad Small hydropower Project

(Mugu):

The tender for engineering, procure-
ment and construction (EPC) on
turnkey basis has been awarded to
Global Construction Company,
Chitawan. The work of the project
started in FY 2001/02 and L.C. for
electromechanical work has already
been opened. The project is expected
to be completed in FY 2004/05 at a
cost of nearly Rs. 161 million.

Sindhuwa-Khandbari 33 kV Trans-
mission Line Project:

This project started in FY 1997/98.
Till now 45 km of 33 kV transmission
line, 25 km of 11 & 0.4kV composite
distribution line and nearly 98% work
of 1.5 MVA 33/11 kV substation have
been completed. The project is expec-
ted to be completed in FY 2002/03 at
a cost of nearly Rs. 70.4 million.

Bulpa — Okhaldhunga 33 kV
Transmission Line Project:

Poles for 15 km of the transmission
line have been erected and L.C. for
the supply of 33 kV line materials has
been opened. This 29 km long 33 kV
transmission line project started in FY
1999/00 and is expected tobe comple-
ted in FY 2004/05. The project is
estimated to cost Rs. 104.7 million.

iam —Fidim- Taplejung 33 kV
Transmission Line Project:

The tender for supply and construction
of this transmission line project on a
turnkey basis was finalized in FY 2001/
02. This 90 km long 33 kV trans-
mission line project started in FY
1999/00 and is expected to be
completed by 2004/05 at an estimated
cost of Rs. 144.5 million.

Sheetalpati- Mushikot 33 kV
Transmission Line Project:

The tender for supply and construction
of this transmission line project on a
turnkey basis was finalized in FY
2001/02. This 50 km long 33 kV
transmission line project started in
FY 2001/02 and is expected to be
completed by 2005/06 at an estimated
cost of Rs. 142.5 million.

¢ Chinchu-Rakam-Jajarkot 33 kV

Transmission Line project:

The tender for supply and construction
of this transmission line project on a
turnkey basis was finalized inFY 2001/
02. This 70 km long 33 kV trans-
mission line project started inFY 2001/
02 and is expected to be completed
by 2005/06 at an estimated cost of Rs.
147.6 million.

Ghorahi-Halleri-Rolpa 33 kV
Transmission Line Project:

The tender for supply and construction
of this transmission line project on a
turnkey basis was finalized in FY 2001/
02. The project consisting of 45 km
33 kV transmission line and 100 km
of 11 & 0.4kV composite distribution
line was started in FY 2001/02. It is
expected to be completed by FY 2005/
06 at an estimated cost of Rs. 142.5
million,

Tatopani-Larjung-Muktinath 33 kV
Transmission Line Project:

This project is expected to be
completed in the coming fiscal year
at an estimated cost of Rs. 7.5 million.

Udipur-Beshishahar-Manang 33 kV
Transmission Line Project:

This 81 km long transmission line
project started in FY 2001/02 and is
expected to be completed by FY 2003/
04 at an estimated cost of Rs. 80
million. In FY 2001/02, transmission
line materials were purchased for the
project.

Dadeldhura-Baitadi 33 kV
Transmission Line Project:

This 8 km long transmission line
project started in FY 2001/02 and is
expected to be completed by FY 2003/
04 at an estimated cost of Rs. 32.1
million. In FY 2001/02, transmission
line materials were purchased for the
project.

Rasuwaghat-Khotang 33/11 kV Sub-
station Project:

This project started in FY 2001/02
and is expected to be completed in
FY 2005/06 at an estimated cost of Rs.
89 million. Transmission and distribu-
tion line materials were purchased

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and land for the sub-station was
decided in FY 2001/02. Under this
project, one 1.5 MVA 33/11 kV sub-
staion at Lichkiramche VDC (near
Rasuaghat) of Khotang district, 12 km
33 kV transmission line and 90 km 11
& 0.4 kV composite distribution line
will be constructed.

Budar 33/11 kV Sub-station Project:
The construction of this 1.5 MVA 33/
11 kV sub-station started in FY 2000/
01 and is nearing completion. The
cost of the project is estimated to be
Rs. 20.7 million. The sub-station will
be charged in FY 2002/03.

Jiri-Khimti 33/11 kV Sub-station
Project:

This project started in FY 2001/02
and is expected to be completed in
FY 2003/04. The project is estimated
to cost Rs. 25 million.

Small Hydropower Master Plan:

To assess the potential of small
hydropower projects, the Small
Hydropower Master Plan (SHMP)
Project was initiated in 1990. Under
this project, following are the major
works in FY 2001/02.

a) Inventory study of Charang Khola
(170 kW), Ghami Khola (930 kW),
Arung Khola (700 kW) and
Gadsera Gad (1200 kW) were
completed.

b) Feasibility study of Ghami Khola
(990 kW) was completed.

c) Feasibility study of Sarada Khola
(2100 kW) was started.

d) Detailed design of Inwa Khola
(2700 kW) was started.

Misc. Rural Electrification

The Rural Electrfication Programme
has been implemented in 2001/02
through the construction of nearly 117
km of transmission and distribution
lines in 42 Himalayan districts

Mid and Far Western Rural
Electrification Project

This Rural Electrification Project

covers Surkhet, Dailekh, Achham, Doti,
Dadeldhura, Darchula, Baitadi and

AYEAR

IN REVIEW

Bajhang districts of mid and far western
development regions of Nepal. The
Swedish Covernment, through the
Swedish International Development Co-
operation Agency (SIDA), has shown
keen interest to finance the project. The
total cost estimate of the project is about
18.7 million U.S. Dollar. For the prepara-
tion of Project Document and other
support services for the project, a Swedish
consultant has recently been appointed.

Distribution Network Development
Project

The Distribution Network Develop-
ment Project, financed by HMG and
NEA, has undertaken the techno-
feasibility studies for Rural Electrification
and Distribution System Reinforcement
(RE/DSR) in 19 districts of Far Western,
Mid Western, Western and Central
Regions of Nepal. The project has also
completed the Initial Environmental
Examination (IEE) of Lalitpur and
Kavrepalanchok districts and detail
engineering design for RE/DSR of
Lalitpur, Bhaktapur and Kavrepalan-
chowk districts. The World Bank is being
approached for funding the RE/DSR
schemes in Lalitpur, Bhaktapur Nuwakot,
Dhading and Kavrepalanchowk districts.

Kailali- Kanchanpur Rural
Electrification Project

The Kailali- Kanchanpur Rural
Electrification Project is being implemen-
ted with the support from DANIDA.
Review of Detail Engineering Design of
the project has been completed and
floating of tender for the construction of
the project is expected in August 2002.

The project includes construction of
three new 33/11kV sub-stations, rehabili-
tation of two existing sub-stations, cons-
truction of 501 km of 11 kV overhead
line and construction of 1270 km of 400/
230 volt distribution line.

Once the project is completed, it will
electrify 29 VDCs and 375 load centers
providing electricity to 30,000 new
consumers. The project on completion
will be managed by Independent User's
Cooperative Group. The project comple-
tion period is slated for three and half
years.

Rural Electrification, Distribution and
Transmission Project

This project is being implemented
with the funding from ADB, OPEC Fund,
HMG/N and NEA.

The main objectives of the project
are to: (i) extend the NEA distribution
system in rural areas so as to provide
service to more rural communities and
improve rural living standards and eco-
nomic development, (ii) develop
distribution and transmission systems of
NEA so as to meet the increased loads on
NEA's power system and distribute the
additional power generated by new
projects and (iii) improve NEA's operating
efficiency and reduce losses.

The Project consists of the following
components:

¢ Rural Electrification and Distribution
System Reinforcement
This project component has two
major scope of work: a) Rural
Electrification and b) Distribution
System Reinforcement.

The physical size of RE includes:

* 277 village development
committees to be electrified

¢ 155,621 rural households to be
electrified

१ 8 new area substations (33 kV)
¢ 528 distribution transformers

1010 kilometers of 11 kV lines
and 69 km of 33 kV lines

* 1425 km of low voltage lines.

The distribution system reinforce-
ment program includes:

* 6 new substations (33 kV) and
upgrading 9 other area substations
and rehabilitation of 12
substations (33 kV)

* 15km of new 33 kV lines and 849
km of new or upgraded 11 kV line

¢ replacement of 503
distribution transformers

new

¢ 544 km of new or replaced low
voltage line.

७

Computerized Billing Systems
Under this project component, NEA
will implement the Computerized
Billing Systems in 15 largest DCS
offices.

Other Institutional Strengthening
This project component consists of
two parts: a) Fixed Assets Revaluation
and b) Distribution District Profit
Center.

Under the Fixed Assets Revaluation,
consulting services will be provided
to strengthen NEA's institutional
Capacity forre-valuing its fixed assets.
It includes establishing a computer
based fixed assets register, formulat-
ing an improved accounting proce-
dures to resolve issues raised by
NEA's external auditors relating to
revaluation of its fixed assets and
inventories; and designing an appro-
priate formula for the annual
revaluation of fixed assets on an
interim basis.

Under the Distribution District Profit
Center, consulting services will be
provided to assist NEA to finalize the
design and implementation of a
program for the establishment of
Distribution District Profit Center in
its 15 branch offices. The main
objectives of the program are to: (i)
establish the commer-cial basis and
orientation for NEA's distribution
operations with responsibility
accounting, improve distribution
efficiency and reduce cost; (ii) reduce
overall cost of distribution, increase
net annual profit of each distribution
center and establish an employee
incentive program to share a
reasonable proportion of increased
net annual profit among the
distribution center employees; (iii)
reduce technical and non-technical
losses; (iv) reduce internal electricity
consumption; (v) increase revenue
collection rate to at least 95% of
sales and reduce accounts receivable;
(vi) improve the quality of consumer
services; and (vii) prepare norms and
standards fornumber of staff, vehicle,
etc. required to run the profit center
on the basis of consumers, areas,
revenue, etc.

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PROJECT STUDIES

Hewa Khola HEP

This project was identified in fiscal year 1999/
00. Hewa Khola is an important tributary of
Tamor river in Koshi Basin. The project site is
located about 27 km north of Phidim Bazar in
Panchthar district. The first phase of project
feasibility study is currently in progress.

Capacity of the project will be between 10 to
15 MW. The project will comprise of: 5 meter
high weir with 30 meter wide spillway, 6 meter
wide undersluice, 65 meter long desanding basin,
and 3 km long tunnel. To evacuate the power
generated from this project, a 10 km long 132 kV
transmission line will be built connecting this
project with the proposed Kabeli 'A' HEP.

Upper Tamakoshi (Rolwaling) HEP

Upper Tamakoshi Hydroelectric Project
located at Lamabagar village of Dolkha district
near the Nepal-China Border, is a peaking run-of-
river power project: Feasibility study of this project
is being carried out in two phases, of which the
first phase was completed in July 2001. The first
phase study showed that this project will have
250 MW as installed capacity, and will generate
1570 GWh of energy annually.

The project will include headwork, regulating
pond, headrace tunnel, surge shaft, penstock,

underground powerhouse and tailrace outlet, in
addition to a 100 km long 220 kV transmission
line toevacuate the power to Dhalkebar substation.
headwork is proposed at the river valley in
Lamabagar village. Desanding basin will consist
of a double bay Doufour Type, each 14m wide
and 146m long and is designed to settle suspended
sediment particles larger than 0.2 mm in size.
Regulating pond with a storage capacity of 0.35
million cubic meters will supply the designed
discharge for 6 hours during lean flow period of
the year. Headrace tunnel will be 6.1 km long and
of 5m diameter. Surge tank of diameter 12m will
be 44.5 m high and will be of restricted orifice
type. Two penstock pipes each 1152 m long will
lead the high pressure discharge into four 62.5
MW-Pelton turbines in the underground power
station. A D-shaped tailrace outlet tunnel of 1.425
km length will release the discharge back to
Tamakoshi river.

Inventory of the Medium Sized Storage
Projects

NEA is currently undertaking an inventory
study of medium sized storage projects in Nepal.
This study which is a progeny of Coarse Screening
and Ranking Study carried out earlier in 1999/00
by NEA, covers a total of 94 projects, of which. 41
are in Eastern region, 27 in Central region and
remaining 26 in Western region. Based on the
available information, a number of promising
storage projects have been identified. These
include Kali Gandaki-Modi Storage Project (112
MW) in Baglung District, Nalsyaugad (256 MW)
in Jajarkot District, Barbung (123 MW) in Dolpa
District and Lower Daraudi (125 MW) in Gorkha
District. The projects have been ranked based on
the technical, environmental, financial and
economic parameters. The technical parameters
include requirement for the access road,
transmission line, storage volume, hydrological
and geological risks. Environmental parameters
include the number of the affected families,
submerged agriculture and forest areas and
infrastructures to be affected by the creation of the
reservoir. Financial parameters pertain to the risks
associated with capital outlay required for the
given capacity of the scheme. All the projects
have been optimized at preliminary level for 6
hours daily peaking operation during dry season.

Langtang Storage Project

Langtang Storage Project situated in
Rasuwa district was identified in 1999 as
avery high head (1500m) scheme during
the Identification & Feasibility Study of
storage project. However, at present,
both of storage and Peaking Run of River
schemes are under considerations.

The dam site is located at
Ghodatabela, around 18 km away from
Syafrubesi (Rasuwa) which is the nearest
road-head. Two underground power-
house options have been identified. The
first one is located at the left bank of
Bhote Koshi river at Syafrubesi while the
second option is located about 1.5 km
west of Sherpagaun. Gross head of the
later option is 195 m less than that of the
first alternative. Main features of the
storage scheme are a 105 m high dam,
8.7 km long headrace tunnel, drop shaft
in five cascades and 2.7 km long pressure
tunnel, underground powerhouse & 70
km long 220 KV transmission line.

Underground powerhouse will accom-
modate four Pelton turbines each with a
capacity of 54.5 MW.

The Peaking run of river scheme is
designed for an installed capacity of 175
MW with 6-hour daily peaking. The
headwork for such a scheme would be a
low weir of about 15 m height. This river
has very low sediment yield and relatively
high firm flow. These characteristics of
the river together with the high natural
head could enable the project to produce
electricity at low costs.

Madi Ishaneshwor Storage Project
Madi-lshaneshwor Storage Project

was selected for feasibility study based
onthe results of Fine Screening & Ranking

of storage projects in 1999. The project
site is accessible by 30 km earthen road
from Damauli Bazaar. The dam site is
located 3 km northwest of Bhorletar, just

downstream of Madi and Seti rivers
confluence. The project comprises of
137.5 m high RCC dam and 188 m long
steel penstock of 4.1 m diameter. The
surface powerhouse which will be built
near the toe of dam will be equipped
with two vertical Francis turbine/
generators each of 43 MW capacity.
Gross head of the scheme is 125 m and
design discharge is 129 cumecs. Annual
energy production is estimated at
363GWh. The power will be evacuated
by the 25.5 km long 132 kV transmission
line to the existing Damauli Substation.
The project is estimated to cost US$
164.6 million.

Review of Kankai Storage Project

Proposed Kankai Storage Project
situated in Ilam district was first identified
in 1965. The project was again studied
and reviewed by different agencies in
1978 and 1985. The later study resulted
ina multipurpose project with an installed
generating capacity of 60 to 90 MW.
NEA is currently undertaking review
study of the project. Major structures of
the project comprises of 95 m high dam,
222 m long headrace tunnel, 115 m long
surface penstock and surface power-
house with 2 units of Francis turbines.
Topographic mapping and drilling works
have been carried out at the project site.
A 5-km long 132 kV transmission line
will connect the project with the grid.
The dam height and plant capacity will
be optimized keeping in mind the system
requirement, topographic condition and
environmental impacts of the project.

This multipurpose project is envisaged
to provide irrigation facility to 16,000
hectares of farmland.

Kulekhani - Ui! HEP

Kulekhani-Ill Hydroelectric Project,
located about 115 km southwest of
Kathmandu at Bhainse VDC of
Makawanpur district will be a peaking
power station primarily driven by the tail
water discharge from Kulekhani-Il power
station. A discharge of 1.5 cubic meter
per sec from Khani Khola will be added
onto the 13.3 cumecs of discharge
coming off Kulekhani-ll tailrace. A 3.4
km long tunnel will carry the aggregate
discharge to 45 m high regulating dam
built across Yangrang Khola. Addition of
0.5 cumecs of flow from Yangrang Khola
will further boost the discharge to 15.3
cumecs which will be carried through
35 m long and 4.5 m wide headrace
tunnel to underground Kulekhani-lll
power station. The power station will
have a Capacity of generating 42 MW of
power for 4 hours and 50 GWh of energy
annually. The regulating pond will have
the capacity to hold 0.5 cubic meter of
water. A500 m long 132 kV transmission
line will connect this power station to
Kulekhani-l] power station. The project
is estimated to cost US$ 53 million.

Various works including core drilling,
topographic survey, etc. have been
completed as part of investigation, the
cost of which was jointly borne by HMG/

N and NEA. EIA study has also been
approved for the project.

As per the understanding reached
with JICA in November 2001, a team of
experts is undertaking upgrading of the
feasibility study, which is slated for
completion by December 2002.

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HIGHLIGHTS OF FY 2001/02

D ५ Increase/Decrease
escription Amount Percent

Total Revenue Net (M. NRs)
Net Sale of Electricity (M. NRs)

Income from Other Services (M. NRs)

10766.4
10096.4
670.0

8753.9
8160.8
593.1

Operating Expenses,

10137.9
2200.0
413.9
1164.6
41581.0
42374.6

Including Depreciation (M. NRs) 8733.8
1993.9
(-)1.9
1188.2
36707.5

37103.7

Depreciation (M. NRs) + +

Net Income, after interest befor tax (M. NRs)

Interest on Long-Terms Loans (M. NRs)

Long-Term Loans (M. NRs)
Net Fixed Assets (M. NRs)

Number of Customers

Total Sales Of Electricity (GWh)

Internal Sale (GWh)

Average Consumer's Consumption (KWh) +
Average Price Of Electricity (NRs/KWh) +

878,178
1574.465
1431.565
1630.162
6.81

745,992
1407.127
1281.127
1717.358
6.23

132186
167.338
150.438
(-)87.195
0.58

426.0
2087.61
1116.64
237.78
715.27
142.90
17.92
23.82
23.44

391.0
1868.42
1113.36
226.54
501.38
126.00
27.14
20.37
23.60

8.95
11.73
0.29
4.96
42.66
13.41
(-)9.22 (-)33.97
16.94
(-)0.16 (-)0.68

Peak Load Interconnected System (MW)

Total Available Electric Energy (GWh)

Hydro Generation (GWh)

Purchased Energy (GWh) India
Nepal

Exported Energy (GWh)

Thermal Generation (GWh)

Self consumption (Gwh)

Net System Losses (Percentage)

Note:

* Provisional figures; subject to final audit.
+ Internal
++ On revalued assets

छ YEAR

os

IN REVIEW
= [=

MAI NI

<

BALANCE SHEET AS OF JULY 15

in million NRs

EQUITY AND LIABILITIES 2001 2000 1999 1998 1997 1996 1995 1994 1993
Equity
Share Capital 1000.0 1000.0 1000.0 1000.0 1000.0 1000.0 1000.0 1000.0 1000.0

Share Allotment Suspense 14360.3 13634.0 12365.8 11324.3 9952.6 8231.6 7122.9 5796.7 5190.6

Capital Reserve 179.2 170.7 158.8 158.8 158.8 158.6 147.9 137.6 120.9
Reserves & Surplus 1159.6 1230.7 1065.5 1200.0 1046.5 359.0 (319.5) (346.0) (444.6)

Revaluation Surplus 8953.9 10108.2 10656.0 11965.6 13421.4 14799.3 14286.1 14238.3 13988.0

Insurance Fund 200.0 180.0 160.0 140.0 120.00 100.0 80.0 0 0
Total Equity 25853.0 26323.6 25406.1 25788.8 25699.3 24648.5 22317.4 20826.6 19854.9

eee oes

Long-Term Liabilities

Long-Term Loan 36707.5 30155.7 23824.3 20848.4 17403.2 14900.4 13367.2 12880.611649.5
36707.5 30155.7 23824.3 20848.4 17403.2 14900.4 13367.2 12880.6 11649.5

Total Long-Term Liabilities

Current Liabilities & Provisions

Deposit from Customers 93.6 107.0 76.6 59.5 76.8 61.6 90.5 36.0 42.4
Other Deposit 986.6 1057.7 784.8 677.5 407.7 359.3 235.0 183.2 84.5
Creditors for Goods 87.3 116.1 9.4 49.3 32.4 15.7 28.9 5.9 11.2

Other Creditors 121.2 186.8 266.1 201.6 429.1 26.1 22.6 31.1 16.8
Payable to Others for power purchase 1511.7 1363.5 707.9 377.6 4.3 6.6 8.3 11.6 4.6
Payable to HMG for Interest (Other) 419.8 481.2 777.5 877.1 647.6 319.0 407.8 270.0 224.5
Payable to HMG for Other (int) 812.6 535.9 975.1 914.4 440.4 102 263.2 648.8 171.8

Royalty Payable 838.1 640.3 752.1 398.7. 473.8 585.0 358.0

Temporary Bank Loan 200.0 - - - _ _ _ - -

Provision for Interest Tax 13.6 - - - - _ _ _ _

Provision for Bonus 30.1 30.6 40.9 39.4 38.1 31.5 16.6 11.9 6.4
Provision for Gratuity & Pension 313.4 276.4 140.3 140.3 140.3 140.3. 140.3 140.3 140.3

Provision for Medical Facilities 20.7 20.7 20.7 20.7 20.7 20.7 20.7 20.7 20.7

Provision for Accumulated Leave 13.4 13.4 13.4 13.4 13.4 13.4 13.4 13.4 13.4

Provision for Wealth Tax 0.20 - - 28.5 22.5 17.5 14.5 11.5 8.5

Provision for Income Tax 651.5 647.6 221.5 207.0 178.1 104.8 34.4 34.5 7.2

Total Current Liabilities& Provisions 6113.8 5477.2 4786.3 4005.0 2925.2 1803.7 1654.2 1416.9 752.3
inter Unit Balance (Net) - - - - - - - 34.9 52.7
TOTALUABILMESANDEQUITY

686743 619565 540167 506422 46027.7 413525 373388 35124.1 322916

=
2
>
८५
[2]
z

M3IAI¥ NI

BALANCE SHEET AS OF JULY 15

in million NRs

- a
_ASSETS 2001 2000 1999 1998 1997 1996 1995 1994 1993
Fixed assets
Land 897.7 860.8 768.1 727.0 696.1 706.0 665.3 636.4 611.4
Buildings 1667.7. 1257.9 932.4 885.5 789.7 798.8 755.1 646.4 601.3
Hydraulic Plant & Machinery 17658.1 16668.7 16439.9 16619.5 16180.3 16174.1 15951.7 15802.5 15490.0
Internal Combustion P & M 1464.1. 1430.5 1524.4 594.1 651.0 708.0 716.9 737.2 752.0
Solar Power Plant 30.6 31.9 33.3 34.7 36.2 37.6 39.0 40.5 41.9
Transmission Line 4111.0 3808.3) 2713.2 2656.0 2837.9 3057.3 3024.9 2704.6 1815.0
Substation 3178.7 3393.8 2914.6 2432.9 2651.5 2901.0 2959.5 3038.4 2414.2
Distribution Line 7639.5 7362.5 5555.9 5630.6 4535.0 4750.1 3983.4 3042.6 2244.0
Meter & Metering Equipment 112.3 92.2 83.3 89.4 85.8 100.3 112.5 97.4 59.7
Consumer Service 18.8 19.3 20.5 25.6 31.2 37.0 42.8 48.4 50.3
Public Lighting 33.4 32.1 22.6 18.1 17.5 16.3 16.3 14.4 15.0
Tools and Instrument 49.5 37.0 38.4 20.2 17.0 13.3 12.4 7.6 5.2
Vehicles 105.0 108.0 93.0 80.5 55.8 92.4 85.4 37.9 10.8
Furniture & Office Equipment 133.6 91.2 81.9 76.0 46.3 43.4 46.4 39.8 14.8
Miscellaneous 3.7 1.5 1.3 1.2 2.1 3.0 2.0 0.4 0.2
Total Fixed Assets 37103.7  35195.7 31222.8 29891.3 28633.4 29438.3 28413.6 26894.5 24126.2
Other Assets

Capital Works in Progress 23640.4 18947.1 16542.7 14179.0 11974.6 7362.7 5229.1 5439.3 6250.1
Investment in Securities 517.1 521.1 326.1 247.7 150.6 54.0 30.5 356.7 79.0
Total Other Assets 24157.5 19468.2 16868.8 14426.7 12125.2 7416.7 5259.6 5796.0 6329.1
Deferred Expenditure 978.6 1302.8 615.0 443.3 267.3 410.8 588.5 98.6 108.6
Inter Unit Balance (Net) 120.9 228.7 256.9 188.7 133.2 335.7. 144.5 143.7 -

Current Assets

Inventories 960.9 982.3 740.0 914.9 804.0 617.9 429.1 340.4 289.5
Accounts Receivable 1678.5 1525.5 1530.9 1435.4 1209.1 1,040.0 682.6 569.9 474.8
Advances Recoverable 2634.9 1932.0 1634.2 1709.6 1329.0 848.4 471.7. 149.8 145.8
Cash & Bank 1039.3 1321.3) 1148.1) 1632.3) 1526.5 1244.7 1349.2 1131.2 817.6
Total Current Assets 6313.5 5761.1 5053.2 5692.2 4868.6 3751.0 2932.6 2191.3 1727.7
TOTAL ASSETS 68674.3 61956.5 54016.7 50642.2 46027.7 41352.5 37338.8 35124.132291.6

PROFIT & LOSS FOR THE YEAR ENDED JULY 15

Particulars

A. Revenue
Net Sale of Electricity
Income from Other Services

2002* 2001 2000 1999 1998 1997

1996

1995

in million NRs

1994 1993

10096.4 8160.8 6856.0 5396.7 5082.5 4767.3 3728.9 3218.5 2437.4 1786.8

550.0
120.0

239.8
353.3

188.8
167.6

180.6
204.1

157.6 135.0

W1.2

99.9

13.8 8.6

Interest & Other Income

Total-A

192.6
5432.7

181.3

10766.4 8753.9 7212.4 5781.4 5083.6

B. Operation & Maintenance Expenditure

Operation & Maintenance
& General Expenses

Power Purchase
Provision for Expenses
Bad debts written off
Royalty

Depreciation

2200.0 2102.1 1752.0 1724.7 1554.5 1049.4

4692.0
20.0

3348.9
299.3

1151.3
177.2

867.0
164.9

845.6
105.5

659.5
80.5
603.5 562.7 5248 423.4 348.9
2200.0 1993.9 1878.9 1995.5 1541.4

268.8
1482.2

172.0
4012.1

942.0

359.6
45.9
227.0
1455.3

145.1
3463.5

838.3

340.0
7.7

186.8

160.5 109.0
2611.7 1904.4

697.1 604.8

214.1
8.5

162.1
7.0

1202.4 1026.0

Deferred Expenditure Witten off
Total-B

. Net Operating

Surplus (Deficit) (A-B)
Loss of Capital Assets

Interest on Long-Term Loans

Profit and (Loss) before Prior Year's (536.1) (1168.1)

income & Expenses Adjustment

Prior year Income /
Expenses Adjustment

Profit & (Loss) after
Prior Year Adjustment

Transfer from
Revaluation Surplus

Excess Provision Corporate Tax
written back (1993-94)

Net Profit (Loss) Before Tax
interest Tax

Corporate Tax

Net Profit/(Loss) after Tax

Transfer to Insurance Fund

Net Profit/(Loss) after Appropriation 290.4

422.4
10137.9

426.9 440.8
8733.8 5925.0

236.8
5412.3

270.1
4666.0

188.7
3729.1

628.5 20.1 1287.4 369.1 766.7 1354.5

(1164.6) (1188.2) (1244.3) (1141.3) (1317.2) (1207.5)
43.1 (772.9) (550.5) 147.0

(50.0) 291.6 (216.7) (79.3) (91.7) (176.6)

(586.1) (876.5) (173.6) (851.5) (642.2) (29.6)

1000.0 874.6 930.1 1019.1 844.7 883.3

413.9 167.6
- 3.5
(103.5) 260.0
310.4 (95.9)
(20.0) 20.0
115.9

* Provisional Figures; subject to final audit.

204.4
3234.2

777.9

(813.5)
(35.5)

(99.0)

(134.5)

907.5

1296.0
162.0
2830.8

632.7
35.8
(797.0)
(164.2)

(397.0)

(561.4)

671.6

10.4

120.7
3.9
10.4
106.4
80.0
26.4

66.5 53.6
2188.6 1853.5

423.1 50.9

(716.6) (625.5)
(329.3) (574.6)

(411.7) (48.8)
(741.0) (623.4)

869.2 729.6

TARIFF RATES

(Effective from the Billing of September 17, 2001)

1: DOMESTIC CONSUMERS

A Minimum Monthly Charge: Minimum Charge Exempt
METER CAPACITY (NRs.) (KWh)
Upto 5 ampere 80.00 20
15 ampere 299.00 50
30 ampere 664.00 100
60 ampere 1394.00 200
Three phase supply 3244.00 400

B Energy charge:

Upto 20 units Rs. 4.00 per unit
21-250 units Rs. 7.30 per unit
Over 250 units Rs. 9.90 per unit
2: TEMPLES
Energy charge Rs. 5.10 per unit

3: STREET LIGHTS
A With Meter Rs. 5.10 एटा unit
B Without meter Rs. 1860.00 per kVA

4: TEMPORARY SUPPLY

Energy Charge Rs. 13.50 per unit
5: COMMUNITY WHOLESALE CONSUMER
Energy Charge Rs. 3.50 per unit
6: INDUSTRIAL Monthly Demand Charge Energy Charge
(Rs/kVA) (Rs/unit)
A_ Low Voltage (400/230 volt)
a) Rural and Cottage 45.00 5.45
b) Small Industry 90.00 6.60
B Medium voltage (11kV) 190.00 5.90
C Medium voltage (33kV) 190.00 5.80
D High voltage (66 kV and above) 175.00 4.60

7: COMMERCIAL

A. Low voltage (400/230 volt) 225.00 7.70
B. Medium voltage (11 kV) 216.00 7.60
C. Medium voltage (33 kV) 216.00 7.40

8: NON-COMMERCIAL

A. Low voltage (400/230 volt) 160.00 8.25
B. Medium voltage (11 kV) 180.00 7.90
C. Medium voltage (33 kV) 180.00 7.80

IN REVIEW

A YEAR

२४३६

MIIAIa NI

9:

IRRIGATION

A. Low voltage (400/230 volt) - 3.60
B. Medium voltage (11 kV) 47.00 3.50
C. Medium voltaghe ( 33 kV) 47.00 3.45

10 : WATER SUPPLY

A. Low voltage (400/230 volt) 140.00 4.30
B. Medium voltage (11 kV) 150.00 4.15
C. Medium voltage (33 kV) 150.00 4.00
11: TRANSPORT
A. Medium voltage (11 kV) 180.00 4.30
B. Medium voltage (33 kV) 180.00 4.25
TIME OF DAY (TOD) TARIFF RATES
Consumer Category Monthly Demand Energy charge (Rs/unit)

& Supply level Charge (Rs/kVA) Peak Time Off-Peak = Normal
18.00-23.00 23.00-6.00 6.00-18.00

A.

Note :

High voltage (66 kV & above)

1. Industrial 175.00 5.20 3.15 4.55
Medium voltage (33 kV)

1. Industrial 190.00 6.55 4.00 5.75
2. Commercial 216.00 8.50 5.15 7.35
3. Non-Commercial 180.00 8.85 5.35 7.70
4. Irrigation 47.00 3.85 2.35 3.40
5. Water Supply 150.00 4.55 2.75 3.95
6. Transport 180.00 4.70 2.95 4.15
7. Street Light 52.00 5.70 1.90 2.85
Medium volatage (11kV)

1. Industrial 190.00 6.70 4.10 5.85
2. Commercial 216.00 8.65 5.25 7.55
3. Non-Commercial 180.00 9.00 5.45 7.85
4. Irrigation 47.00 3.95 2.40 3.45
5. Water Supply 150.00 4.60 2.80 4.10
6. Transport 180.00 4.80 3.00 4.25
7. Street Light 52.00 6.00 2.00 3.00

a)। demand meter reads kilowatts (kW) then kVA -kW/0.8
b) 10% discount in the total bill amount will be given to the HMG/N approved Industrial District

c) 25% discount in the total bill amount will be given to HMG Hospitals and Health Center (except
residential complex)

AVAILABILITY FY2002

11% 1% 54%

@ Hydro @ Thermal OC Purchase India OU Purchase Nepal

-

[E Domestic Domestic छ Industrial ० Commercial
O Non-commercial @ Export कीरा

IN REVIEW

MalAia NI

UTILIZATION FY2002।

a internal छ Losses O Export O Self Consumption।

REVENUE FY2002

36%

०2 Domestic @ Industrial 0 Commercial
O Non-commercial B Export =' & Other

EXPENDITURE FY2002

5% 1% 4%

& 0%
7%

' @ Staff Cost

C Interest हा Depreciation
छ Fuel (Generation) 0 Revenue Expe

12%

@ Power Purchase O roa & Adm.

@ Royalty

A YEAR

z =

२४३८

TOTAL ENERGY AVAILABLE
AND PEAK DEMAND

2500 TY 450
0 400
+ 300
1500 250
दै z
r 200
1000
- 150

500। ~ 400
181।।। 1414 i।,

1994 1995 1996 1997 1998 1999 2000 2001 2002
FISCAL YEAR

(SB Thermal क Hydro——) Nepal —— Import ™mm Total Energy —™— Peak Demand (Mw)।

Particulars 1994 1995 1996 1997 1998 1999 2000 2001 2002*

Peak Demand (र 231.0 244.0 275.0 300.11 317.00 326.4 351.9 391.0 426.0

Available Energy (GWh) 1030.89 1,117.46 1,261.96 1,368.58 1,373.17 1475.00 1701.45 1868.42 2087.61

1. Hydro 835.48 848.74 1,072.75 1,096.64 971.96 1046.51 1233.22 1113.36 1116.64

2. Diesel 62.20 80.92 36.64 39.73 107.45 118.82 66.73 27.14 17.92

3. Purchase from 133.21 187.80 153.57 232.21 293.76 309.67 401.50 727.93 953.05

(a) India 102.77 113.84 72.96 153.98 210.29 232.39 २32.20 226.54 237.78

(b) Nepal 30.44 73.96 80.61 78.23 83.47 77.28 169.30 501.38 715.27
Note :- Peak demand is for all areas covered by integrated system including supply to India.

* Provisional figures; Subject to final audit

छ (हे रि

=
2
>
८1
ध्ट
Z

M3lAad NI

५४३८

GROWTH OF CONSUMERS

900000-—

800000-"
700000 ;~
छ =
ae .
2 500000 +
5 4000005"
2
300000"
200000"
100000 *
0 छ
1994 1995 1996 1997 1998 1999 2000 2001 2002
FISCAL YEAR
छ Total  DomesticO Others। @ Total @ DomesticO Others
Particulars 1994 1995 1996 1997 1998 1999 2000 2001 2002*
Domestic 4,04,452 4,36,631 4,71,599 503,330 548,110 593,468 643,314 713,307 840,400
Non-Commercial 6,321 6,369 6,548 6338 7,192 7,654 7,815 7,643 7,800
Commercial 1,848 2,008 2,162 2441 2,637 2,948 3,096 3,386 4,800
Industrial 10,737 11,480 12,329 12928 14,062 14,996 16,179 17,701 20,000
Water Supply 155 166 1727 190 2059 215 232 २236 320 Suppl 155 166 177 190 205 215 232 236 320
Irrigation 500 3071237 876 96७४ 1,083 1,600
Street Light उ ब20 436 42 ७683 AR 932 012 1200
Temporary Supply 188 189 187 155 175 207 144 141 80
Transport 15 8 8 8 12 21 47 37 72
Temple 525 698 782 867 992 1,131 1,248 1,441 1,900
Community Sales ** Community Sales ** eT
Total (Internal Sales) 425,206 4,58,599 4,94,.960 527,452 574,844 622,358 673,974 745,987 878,173
Bulk Supply (India) 4 5 5 5 5 5 5 5 5
Grand Total 4,25,211 4,58,604 4,94,965 5,27,457 574,849 622,363 673,979 745,992 878,178

Note :- * Provisional figures; subject to final audit.
** This community sales incorporates 7,200 consumers.

ELECTRICITY SALES

Energy (in GWh)

1994 1995 1996 1997 1998 1999 2 2001 2002
FISCAL YEAR
[ Total m Domestic 0 Industrial 0 Others। Total @ Domestic O Industrial 5 Others J

(in GWh)
Category 1994 199 1996 10 OSes 1994 1995 1996 1997 1998 1 —$—$—$—$— ran ae 1959 2000 उगभा पण 2000 2001 2002*
Domestic 275.050 301.611 326.730 355.118 VR पाला पापा 275.050 301.611 328.730 355.118 378.778 410.566 467.049 518.360 576.500
Non-Commercial 47.148 53.225 53.404 57991 On eee 47.148 53.225 53.464 57.991 60.227 62.931 63.592 73.157 80.470
Commercial ब8१88 58.574 62.910 6606 eee 48.988 58.574 62.916 67.606 71.471 77.343 81.822 94.166 95.500
Industrial (303.991 328.316 358.672 370,782 ThA eee 303.991 328.316 358.672 376.742 413.738 440.996 508.357 520.634 597.000
Water Supply &
Irigation 1940 27.636 25.09) 27978 eee 19.401 27.636 25.091 27.978 29.045 22.831 15.742 28.600 31.200
Street Light 8857 12.173 16.720 20,929 Ar Light 8.857 12.173 16.720 20.929 26.585 29.405 31.741 36.981 38.600
Temporary Supply 056 4.225154 0 OSes Supply 0.561 1.225 1.154 0.844 0.711 0.766 0.927 0.826 0.300
Transpon गाउँछ पछ 1432 नि eee 1.338 1.455 1.432 1.483 1.663 2.598 2.678 5.892 6.000
Temple 0658 08१2 130 1601) यल पुरा 0.658 0.892 1.503 1.691 1.801 1.982 2.366 2.511 2.500
Community Sale Sale - - - - - - - - 3.495

TotaliinteralSales) 705.992 785.108 849.082 9101S नाना पा पाम 705.992 785.108 849.682 910.382 984.019 1.049.418 1174.274 1281.127 1.431.565
Bulk Supply (india) 50.514 3१47१ 87.014 100.218 OE नल 50.514 39.479 87.014 100.218 67.410 64.158 95.000 126.000 142.900

Grand Total 756.506 824.587 936 696 1010 0). पाला Total 756.506 824.587 936.696 1010.600 1051.429 1113.576 1269.274 1407.127 1574.465
Note :- * Provisional figures; subject to final audit.

REVENUE

12000-"

oe

8

=। y ye
0 lla a fi a li a i a i a i _ _
1994 1995 1996 1997 1998 1999 2000 2001 2002
FISCAL YEAR
छ Total @ DomesticO Industrial 0 Others। Total @ Domestic Industrial O Others
(in million Rs)

Category 1994 1995 1996 1997 1998 1999 2000 2001 2002*
Domestic 916.332 1,195.389 1,379.456 1769.839 1895.845 2056.045 2622.033 3161.376 3878.066
Non-Commercial 219.807 284.478 307.246 386.359 405.142 419.580 527.399 835.784 773.639
Commercial 235.781 310.911 349.628 446.964 477.044 515.722 661.578 555.619 908.122
Industrial 936.901 1,260.125 1,406.731 1801.576 1973.372 2093.878 2599.337 3086.098 3771.019
Water Supply &
Irrigation 39.526 70.091 68.400 95.701 100.277 78.144 95.654 120.899 151.181
Street Light 27.625 41.835 53.042 80.111 101.977. 111.369 = 149.945 176.054 204.250
Temporary Supply 3.699 6.886 11.840 7.991 7.170 7.057 13.393 6.765 4.049
Transport 2.985 3.993 4.198 6.090 6.511 9,457 18.311 27.734 31.149
Temple 1.480 3.320 4.556 6.208 6.711 7.416 9.704 11.447 12.692
Community Sale - - - - - - - - 12.233

न लाला
Total(IntemalSales) 2,384.136 3,177.028 3,585.097 4600.839 4974.049 5298.670 6697.354 7 981.776 9746.400
arr नन नाला
Bulk Supply (india) 91.364 97.566 206.720 249.292 199.915 198.151 327.804 396.056 574.493

गनन नाला
Gross Revenue 2,475.500 3,274.594 3,791.817 4850.131 5173.964 5496.821 7025.158 8377.832 1 0320.893

Note :- * Provisional figures; subject to final audit.
The Revenue figures do not include rebate and penalty

A YEAR

LOAD FORECAST
for Integrated Nepal Power System (INPS)

Year Energy (GWH) Growth (%) Peak (MW) Growth (%)
2002* 2087.61 426.0 -
2003 2149 472

2004 2354 517

2005 2598 570

2006 2850

2007 3094

2008 3343

2009 3591

2010 3855

2011 4135

2012 4434

2013 4753

2014 5093

2015 5456

2016 5843

2017 6255

2018 696 ज05 1420  जा06
2019 7166

2020 7668

Average Growth

ENERGY in GW

9000।

8000।

7000 '

6000 -

5000 -

4000 '

3000

2000

LOAD FORECAST

1000

t। t ' . १. + +

FISCAL YEAR

-।।। t। 1। '
2003 2004 2005 2006। wu Energy (GWH) —*— Peak (MW)

-: 1800

- 1600

- 1400

1200

1000

+ 800

600

= 400

PEAK LOAD in MW

IN REVIEW

1215). NI

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