COMPLIMENTARY COPY

Contents

Board Of DireCtOrs ............ ee eeeeeeeeesssneeeeeesseneeeeesssaceeeeessaeeeeeessaaeeeeessaaes 3
Corporate Structure Of NEA ........ccccccccccccccccceeeeeecceceeeeeeeeeeeeeeeeeeeeeeeeeeees 4
Chief Executives Of NEA... eee eeccceceessenceeeeeeeeeeeeeeeesaeeeeeeeeaeeeeeeeeaeeeeeees 5
Directors and Department Chiefs ................ccccsseesssssessssseseseeeeeeseeeeeeeees 6
Managing Director's REPOrt ..............:ceseessssesseeeseeeeesseseeeeseesseeeeeeeseees 10
Generation BUSINESS GrOUP .......ceeecccccceeseeccceeeseeecceeuceeceeseeseeeeesaesees 17
Middle Marsyangdi Hydroelectric Project .............ccccccseeeeeeeeeeeeeeeeeees 23
Transmission and System Operation Business Group ..........---------२२ 25
Distribution and Consumer Services Business Group ..........-----------० 34
Electrification BUSINESS GrOUP ..............csesesssssseeseessesseseesseeessesseeeeeeees 41
Engineering Services BUSINESS GrOUDP.........:ceeeceeeeseeeeeeeeaeeeeeeeeaeeeeennees 47
NEA's Subsidiary & Joint Venture COMPANIES .............. २२२२-77-7० 56
Planning, Monitoring and Information Technology .............cccccceeeeees 60
रा 64
कि 66
FINANCE oo. eeeeeeeeeereeceeeeenececeeceeceeeececeeeeeeeeeeeeeeceeeeeeceeeeeeeceeeeeeeeeeeeeeeeeeees 67
Highlights Of FY 2009/10 ..........ccccsssccccesssseecceesssseeeceesseeeceesssaeeeeeees 71
Balance Sheet as of July 16, 2010 20.0.0... ceeeeeeeeeseeessesesseeseseeeeees 72
Income Statement for the FY ending July 16, 2010 .............------7-7777 73
ACCOUNTING POLICIES .............cceeeesesssssssssssesssssssssssssssssssssssssssssssssssseeees 74
Tariff Rates oo... eecceeecsssceeeeessseeeeeessaneeeeesssaneeeeessaaeeeeessseaeeeesessaaeeeeeegs 76
Statistics, Schematics ANd Map5.............cccccccccccccccceeeeeeeeeeeeeeeeeeeeeeeeees 78

Nepal Electricity Authority
Head Office : Durbar Marg, Kathmandu, Nepal
Phone : +977-1-4153007

Fax > +977-1-4153009, 4153013
E-mail : neamd@mos.com.np

Webpage : wvww.nea.org.np

Construction of tunnel in progress, Upper Tamakoshi
Hydroelectric Project

Installation of Spacers, Khimti Dhalkebar 220 kV
Transmission Line

Message from the

Chairman

Despite internal challenges and_ external
obstacles, NEA has shown resilience to shoulder
immense responsibilities for past twenty
five years. On this occasion of completing
twenty five years of service to the nation in
its new incarnation,। must congratulate NEA
for its achievements and thank NEA staffs for
their commendable work. Government of
Nepal considers NEA as its main instrument
in harnessing the ample hydro potential of
the country and making it accessible to every
Nepali. An active role played by NEA will foster
investment opportunities that have potential
to significantly reduce the impact of current
economic downturns.

Global trend in power sector is pushing it more
and more in private domain and public utilities
ofthe sector arein phase of transformation. NEA
is also facing similar situation. A realization that
increasing energy demands can not be met by
public investment only and private enterprises
must be encouraged to invest in the sector for
better mobilization of resources and better
operational efficiency has laid the foundation
for private sector participation in Nepal. Today
about 26% of served energy comes from private
generators. NEA role is shifting more towards
trader from generator as about 37% of energy
supplied by NEA comes from domestic and cross
border purchases. This gives a clear indication
that NEA must be careful in system reliability
and reduction of losses otherwise it will spend
most of revenue in purchases. It is right time for
NEA for introspection and drafting a strategic
plan for its future operations. Consumers are
critical of NEA's plant maintenance activities.
People have the impression that load
shedding situation is result of unplanned and
mismanaged operations. NEA must plan the
maintenance works better way.

New policy for Q40 criterion of design for
source optimization shall result in serious
consequences to NEA if wet season surplus
is not traded and suitable seasonal storage
plants are not developed. Now NEA should
focus on developing seasonal storage plants
and strengthen its trading capacity. To prove
itself the market leader in changed context
NEA needs to generate capital and increase its
efficiency.

NEA is the executing agency for GON plans and
programs of the sector so it cannot ignore its
social role. Still half of the population of Nepal
is deprived of electricity. NEA has major role
to play to increase access of electricity. Even in
the context of deficit in electricity supply, rural
electrification and distribution expansion has
remained NEA's priority. NEA through Ministry
of Energy has already proposed governmental
support to address social role played by NEA on
the basis of report of the financial restructuring
committee.

NEA should play active role in the formulation of
policies, program and regulations of this sector.
Policy inputs from NEA can help governmental
policy formulation in the energy sector.

To conclude,। thank staffs of NEA for their
sincere and dedicated work and wish them all
the best in their quest for a brighter future of
NEA.

an aN

Dr Prakash Sharan Mahat
Minister for Energy
Chairman, Nepal Electricity Authority

Board of Directors

rhs rman
Dr. Prakash Sharan Mahat
Minister for Energy

53] i y
Member Member Member Member
Mr. Shankar Prasad Koirala Mr. Krishna Hari Banskota Mr. Lekh Man Singh Bhandari Mr. Ananda Raj Batas
Secretary, Ministry of Energy Secretary, Ministry of Finance

Member Member Member Secretary
Mr. Mukesh Raj Kafley Dr. Jivendra Jha

A YEAR IN REVIEW,

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Chief Executives of NEA

A YEAR IN REVIEW,

Nepal Electricity Authority FISCAL YEAR 2009/10

Directors and Department Chiefs

Mr. Upendra Dev Bhatta Mr. Tirtha Man Shakya
Director Project Coordinator
Information Technology Energy Access & Efficiency

Improvement Project

A
Mr. Ram Chandra Mandal Mr. Ram Chandra Pandey
Director Director
Central Office TL/SS Construction

Mr. Pradeep Lal Shrestha Mr. Ganesh Prasad Raj
Director Director
Demand Side Management Koshi-Mechi Regional Office

Mr. Birendra Kumar Pathak
Director
Generation Construction

Mr. Rajeswor Man Slupya
Director
Central Office

.
Mr. Chiranjibi Sharma Poudel
Director
Technical Services/Commercial

A YEAR IN REVIEW,

FISCAL YEAR 2009/10 Nepal Electricity Authority

2 and Department Chiefs

Mr. Mohan Krishna Upreti Mr. Keshab Raj Bhatta Mr. Anuj Ratna Shakya Mr. Vishnu Bahadur Singh
Director Director Director Director
System Planning Chameliya HEP Monitoring Project Development

Mr. Subhash Dahal Chhetri Mr. Puspa Raj Khadka Mr. Sher Singh Bhat Mr. Sunil Kumar Dhungel
Director Director Director Project Director
Bagmati Regional Office Operation & Maintenance Power Trade Middle Marsyangdi HEP

7
Mr. Buddha Krishna Manandhar Mr. Rishikesh Sharma Mr. Ram Ekwal Mandal Mr. Kanhaiya Manandhar
Director Director Director Director
Soil Rock, Concrete Laboratory Upper Trisuli 3A HEP Community Rural Electrification Transmission and System

Operation

A YEAR IN REVIEW,

Nepal Electricity Authority FISCAL YEAR 2009/10

Directors and Department Chiefs

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6

Mr. Jaya Narayan Thakur Mr. Surendra Rajbhandari Mr. Mahesh Prasad Acharya Mr. Dandapani Bashyal

Director Director Project Coordinator Director
Narayani Regional Office Corporate Planning Distribution & Transmission General Services
Project

4 4
Mr. Madhav Prasad Luitel Mr. Ishwori Prasad Khatiwada Mr. Badri Nath Roka Mr. Govinda Raj Kharel
Director Director Director Director
Training Center Human Resource Corporate Finance Legal & Grievances Handling

7 नी ी छ नी
Mr. Sudhir Prasad Singh Mr. Krishna Prasad Shrestha Mr. Bal Krishna Shrestha
Director Director Director
Tranmission and Engineering Services Engineering Services

System Operation

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

Nepal Electricity Authority

242) and Department Chiefs

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Mr. Yogendra Prasad Baidya
Act. Director
Internal Audit

Mr. Arjun Kumar Chauhal
Director
Finance DCS

Mr. Dev Sharma Poudel
Act. Director
Environmental & Social Studies

Mr. Lekh Nath Koirala
Act. Director
Finance & Account

Mr. Juju Kaji Ranjit
Officiating Director
SHP and Rural Electrification

Mr. Asta Ratna Shakya
Officiating Director
MD's Secretariat

खा

Mr. Shekhar Kumar Dutta
Chief
Janakpur Regional Office

Mr. Anil Kumar Shah
Chief
Mid Western Regional Office

Mr. Ram Chandra Gupta
Chief
Western Regional Office

Si dd

Mr. Hari Ram Shrestha
Act. Director
Grid Operation

S di

Mr. Ishwori Prasad Tiwari
Officiating Director
Kaligandaki 'A' HP, »
Mr. Badri Narayan Shah
Chief
Far Western Regional Office

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

Managing

Director's Report

It is a matter of pride to all of us that today
our organization has completed 25 years in
the service of the nation. On the Silver Jubilee
of the establishment of NEA,। welcome and
congratulate you all. With an association of
almost all 25 years with NEA,। am presenting
Annual Report as Managing Director on
the special occasion of Silver Jubilee of our
organization. It is difficult for me to express my
feelings as words shall not be able to translate
them.

NEA made a difficult journey during last 25
years but never stopped its services even for
a single day howsoever the situation be. Year
2009/10 was another year of dedication in the
series. At this moment, before my submission
of activities and performance of NEA during
fiscal year 2009/10,। pay my sincere tribute
to those of our employees who lost their lives
while performing their duty and contributing
for the achievements that। am reporting.

Our endeavors to maximize the utilization
of available resources including import from
Indian short term market could not offset
the imbalance between demand and supply
and we were compelled to enforce 12 hours
of unpleasant load shedding with a little
satisfaction that we were able to reduce the
load shedding by 4 hours compared to 16 hours
per day of preceding year.

As an attempt for better efficiency, improved
financial health as well as quality service
delivery, NEA worked on 9 three—front

\.

approach that included Financial restructuring,
Organizational restructuring and Revision of
retail tariff. Financial restructuring and revision
of retail tariff are beyond the control of NEA
whereas we are set to implement the report
on Organizational restructuring in its true
spirit. Our attempt to facelift the balance sheet
could not be successful during 2009/10 as the
financial restructuring and revision of retail
tariff remained undecided.

During the year 2009/10, NEA has continued its
development activities by investing on various
generation, transmission and_ distribution
projects in an attempt to meet the targets
of "Electricity Crisis Mitigation Program"
and rescued the country from long hours of
darkness. NEA has also been able to refute
the blame that it shows reluctance in signing
Power Purchase Agreements (PPAs). During the
year 2009/10, NEA signed 27 new PPAs worth
total capacity of 137.22 MW. In spite of difficult
situation, we have been able to maintain
growth in terms of volume of sales, number of
consumers and revenue collection.

System Performance

Year 2009/10 witnessed new records of power
and energy demand, generation and import.
Annual Peak Demand was recorded 885.28
MW registering 8.96 % growth over 812.5
MW figure of previous year. Similarly Annual
Energy Demand was recorded 4367.13 GWh
out of which 3076.69 GWh was contributed
by domestic generation, 612.58 GWh was
imported and rest 677.860 GWh was managed

गु 0

by load shedding. Commissioning of Middle
Marsyangdi Hydroelectric Power Plant in latter
half of year 2008/09 and few more IPPs during
2009/10 significantly increased the supply. As
a result, we had to implement a load shedding
of up to 12 hours per day per consumer exactly
what we had forecasted at the beginning of
the fiscal year. This year also, nature was not
very favorable to us as the Kulekhani reservoir
could not be fully replenished by water and dry
season inflow was noticed below normal.

System Load Factor during the year remained
57% compared to 54.22 % of previous year.
The estimated load curve during load shedding
periods is not the true replication of demand
pattern as the shifting of load generates
misleading information. However, there is
a tendency of flattening the peak and rise
in demand during off peak hours which is
favourable for the system. Increased load
factor, lower peak demand growth and higher
energy demand growth are impacts of our
demand side management initiatives.

Insufficient transmission capacity has violated
N-1 criterion and problem of poor system
voltage results in frequent and unusual system
collapses. Total of 28 system collapses were
recorded during the year.

Activities and Impressions of Operation

With 13.1% growth over previous year's
figure of 3859 GWh, annual energy demand
of the interconnected system during 2009/10
was estimated at 4367.13 GWh, of which
only 3689.27 GWh could be served. Of the
total served energy, NEA owned generation
contributed 2117.64 GWh, IPPs contributed
959.05 GWh and the rest 612.58 GWh came
from import. NEA owned generation increased
by 269.06 GWh i.e. 14.55 % compared to
1848.58 GWh of previous year. Out of the total
served energy of 3689.27 GWh, 83.4 % was

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

domestic generation while 16.6 % was import.
Domestic generation comprised 3064.05 GWh
hydro and 13.12 GWh thermal.

Against the served energy figure of 3689.27
GWh, sales figure totaled 2677.83 GWh
registering 473.24 GWh increase. Internal
sales within Nepal totaled 2603.35 GWh and
accounted for 97.22 % of the total sales and
91.5 % of total revenue. This year, we made
slight improvement in export against the trend
of decline by exporting 74.48 GWh compared
to 46.38 GWh of preceding year. Total number
of customers increased by 10.59 % and
reached 1854275 by the end of the year. Of the
total customers, 95.18 % domestic customers
accounted for 41.41 % sales and 41.1% revenue,
1.65% industrial customers accounted for 37.66
% sales and contributed 35.23 % revenue, 0.43
% commercial consumers accounted for 7.27 %
sales and contributed 9.95 % revenue, 0.70
% non commercial consumers accounted for
4.14% sales and 5.73 % revenue whereas other
2.04% consumers accounted for 9.52 % sales
and 7.99 % revenue.

Major overhauling of Generator and Turbine
set of Unit No. 2 of Kulekhani-Il Hydropower
Station was completed under the supervision of
Fuji Electric Systems Co. Ltd. (Japan). Similarly,
overhauling of turbine runners of Kulekhani-l
(Unit Nos. 1 and 2), Trishuli (Unit No. 3),
Sunkoshi (Unit No. 3), Puwakhola (Unit No. 2)
and Seti (Unit No. 2) Hydropower Stations was
performed. Repair of air drive system in 132kV
GIS and Generator No. 3, and various condition
monitoring tests in all single phase 11kV/132kV
step-up transformers and 3 Generators were
carried out in Marsyangdi Hydropower Station.
Under the Rehabilitation Project of Devighat
Hydropower Station, almost all the equipments
and machines have been delivered to site.
Middle Marsyangdi Power plant was inspected
by a team of contractor, consultant and donor
agency kfW after one year of its commercial

का 1

Nepal Electricity Authority

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

Operation. The contractor rectified the punch
list of defects.

Similarly, new power transformers were
installed at Butwal and Duhabi Grid Substation
and old transformers of these substations were
shifted to other locations. Similarly, to enhance
the capacity of data transmission for reliable
Operation, earth wire from Pathlaiya to Lahan
in the 132 kV transmission line was replaced
with Optical Ground Wire. Overall, availability
of transmission system remained above 99 %.
Estimated System Losses during the year
remained 26.58 % compared to actual loss
figure of 28.6 % of last year. Of course, misuse
of electricity in collective form and abnormal
law and order situation in many parts of the
country had dominant bearing on system
losses.

Financial Performance

In spite of encouraging figures on demand side,
NEA could not cash the opportunity so created
by converting the potential demand into
revenue due to lack of supply sources. NEA's
financial performance did not remain up to the
level of expectation and further slumped during
the year. NEA incurred a net loss of Rs 2.40 per
kWh which amounted to Rs 5,350.92 million
as total net loss of FY 2009/10. Accumulated
losses at the end of FY 2009/10 reached Rs
19,469.75 million.

NEA earned total revenue of Rs18,711.35 million
during 2009/10, of which Rs 17,586.91 million
came from main business i.e. sale of electricity
which is 22.08 % increase over last year's figure
of Rs 14,405.93 million. Similarly, NEA earned Rs
1,124.44 million under other incomes heading.
We could not generate budgeted revenue
due to only partial replenishment of water
in Kulekhani reservoir reducing the revenue
by about 600 million rupees. Similarly, year
2009/10 was recorded as below average year

from the point of view of dry season run off in
the rivers, which ultimately reduced electricity
generation below expectation.

High Cost of Service contributed by increased
internal purchase at relatively higher tariff at
generation point, annual escalation on purchase
tariff, operation of thermal plants, import of very
high cost seasonal energy from India, regular
import at relatively higher price, increased
staff cost, increased maintenance cost and hike
in prices of fuel and other commodities could
not be responded by proportionate increase in
volume of business and prevailing retail tariff.
This year, we purchased electricity from India
at a price of Rs 10.72 at delivery point in India
which effectively becomes Rs 13.40 per unit,
exactly half of per unit revenue return rate at
consumer point considering losses. Our cost
of service per kWh reached Rs 8.97 whereas
average sales tariff rate after rebate remained
only Rs 6.57 per kWh.

NEA's liability towards Government of Nepal
by the end of year 2009/10 has reached Rs
37,953.16 million as share capital, Rs 60,381.19
million as secured long term loan and Rs 693.21
million deferred taxes. Including the reserve and
accumulated loss of Rs 17,951.90 million, NEA's
liabilities by the end of FY 2009/10 reached Rs
81,075.66 million.

Similarly, by the end of FY 2009/10, NEA's net
property as plant and equipment at historical
cost reached Rs 84,740.24 million whereas Rs
19,511.07 million was recorded as expenditure
in capital work in progress. NEA has invested
Rs 3,189.92 million as equity shares in various
subsidiary companies including Chilime and
Upper Tamakoshi. Net current assets of NEA
remain amount Rs (26,335.68 million) i.e. that
is negative and grand total of assets reached Rs
81,075.66 million.

Government has shown its concern over

a 2

deteriorating financial health of NEA and a sub-
committee was formed to suggest the financial
restructuring of NEA. The subcommittee has
already submitted its report. We are eagerly
waiting for implementation of the report on
financial restructuring.

Major Development Works

Enhancement of the generation capacity and
expansion of the network have to be continued
even in the odd conditions, because about half
of the population is still deprived of electricity
and industrial sector has just started crawling.
NEA is aware that it has not only to take the
lead role in the development of the sector
but also to create turbulence by enhancing its
own development activities and facilitating the
private producers. NEA efforts in this dimension
were intensified during FY 2009/10. Though not
very satisfactory, progress has been attained at
Kulekhani-lll Hydroelectric Project (14 MW)
site. The construction of Adit 1-A and Adit 4
tunnels, headrace tunnel and penstock tunnel
has been completed. Similarly, the construction
of access road to Adit 3 tunnel has also been
completed and construction of portal at Adit 3
is nearing completion. The Project is scheduled
to be completed in Year 2011.

Chameliya Hydroelectric Project (30 MW)
has been making good site progress. The
excavation works for Adit No.1, 2 and 3,
diversion tunnel, connecting tunnel No. 1 and 2,
aeration tunnel and access tunnel to desander
have been completed. Excavation works for
headrace tunnel (HRT), desander and tailrace
are in progress. Dam foundation works and
concreting works up to EL. 852.00 m have been
completed. Likewise, powerhouse excavation
and slope stabilization of powerhouse support
installation works have been completed up to
EL 778.2m. The construction of civil works is
about 49% complete. The overall construction
of the project is now 52% complete, and is

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

scheduled to be completed in Year 2011.

China Gezhouba Group Corporation (CGGC), the
EPC Contractor for Major Construction Works
of the Upper Trishuli 3 'A' Hydroelectric Project
(60 MW) has already started preparatory work
at the site. The process for land acquisition for
the project has been initiated and currently
negotiation for land acquisition is in process.
North West Hydro Consult has been selected
for construction supervision of the project.
NEA is in the process of awarding the contract
for construction supervision. Tender has been
invited for the construction of 48 km long 220
kV Transmission line from the project site to
Matatirtha substation. Prequalification for
bidders of main civil construction works of
Rahughat Hydroelectric Project (32 MW) is
completed. Government of India line of credit
shall be used for Civil Works of this project.
ADB and Government of Japan have agreed
to finance the detailed engineering design of
Upper Seti Project (127 MW). The preparatory
work such as excavation of test adit is underway
to facilitate detailed engineering design. Upper
Trishuli 3B Hydroelectric project (37 MW)
is proposed to be developed under Public —
Private Model for which a draft document is
under preparation.

Lack of transmission facilities was identified as
main hurdle of generation capacity expansion in
National Electricity Crisis Declaration and GON
committed extensive support in developing
transmission sector in 38 point Electricity
Crisis Mitigation Program. As a result, there
are 13 transmission projects under execution
including Khimti - Dhalkebar 220 kV, Thankot
— Chapagaon - Bhaktapur 132 kV, Hetauda -
Bharatpur 220 kV, Bharatpur - Bardghat 220 kV,
Dumre - Damauli — Marsyangdi 132 kV, Butwal
- Kohalpur 132kV Second Circuit transmission
line, Kabeli 132 kV Transmission Corridor,
Singati-Lamosangu) 132 kV_ Transmission
Corridor, Chapali 132 kV Substation, Matatirtha

3 3

Nepal Electricity Authority

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

Substation Expansion, Pathlaiya 132 kV
Substation, Syangja 132 kV Substation and
Capacitor Banks at Grid Substations.

Similarly, 15 Transmission Projects are under
Initial Stage of Implementation and 15 other
Projects under Feasibility Study. Dhalkebar -
Mujaffarpur400kV crossborder।nterconnection
is at much advanced stage of implementation.
Realizing the potential of Cement Industries
in the country, 3 Projects are launched for
Power Supply to Cement Industries including
Kamane (Hetauda) 132kV Substation, Kusum -
Hapure 132kV Transmission Line and Mirchaiya
- Katari 132kV Transmission Line whereas
6 more such projects for supply to cement
industries are under feasibility study.

As part of system reinforcement and expansion
of distribution system program, many activities
were undertaken during the year to improve
the service delivery in various parts of the
country. Other initiatives in this direction
include Distribution System Rehabilitation
Project, Energy and Customer Accountability
Enhancement Project, Energy Access and
Efficiency Improvement Project, Project for
Energy Efficiency through Loss Reduction,
Project for Solar Powered Street Lighting,
Pilot Project for Public Private Partnership
in Distribution System, Separate Industrial
Feeders project and Project for Distribution of
quality Compact Fluorescent Lamps (CFLs) that
has distributed 765000 quality CFLs.

Till date, NEA has signed 69 Power Purchase
Agreements of total 392 MW capacity. Out of
which, 27 projects of total 137.22 MW capacity
were signed during 2009/10. Out of 69 PPA
signed, 22 projects of total 164.8 MW capacity
are in operation. Three projects of total 6.491
MW capacity were commissioned during FY
2009/10. One hundred twenty PPA applications
of total 1600 MW capacity are under process.

NEA has always considered Independent Power
Producers trusted peers in meeting country's
growing electricity demand and hence new
initiatives are taken for faster processing of
PPA.

NEA's Subsidiary Companies and
Private Participation

NEA has created special purpose companies like
Chilime Hydropower Company Limited (CHPCL),
UpperTamakoshiHydropowerCompanyLimited
(UTHPCL) and Power Transmission Company of
Nepal (PTCN). CHPCL has been successful in
returning increasing profits for seventh year
in a run. Chilime's financial health is a pride
and security for NEA as NEA floated Power
Bonds with its share in CHPCL as security for
the bond. CHPCL has generated energy above
the design capacity and supported system
with excess energy during critical dry months
of the year. CHPCL is at different levels of
development in Upper Sanjen (11 MW), Sanjen
(35 MW), Rasuwagadi (75 MW) and Middle
Bhotekoshi (80 MW) hydropower projects that
will support the system by approximately 200
MW additional supply.

GON has been concerned and considerate
to jack up the development of UTHPCL by
committing remainder of finance which
proved to be stimulus. UTHPCL is ready to start
major civil works as contract award is already
signed, all financial arrangement completed,
shareholding agreements ready and PPA draft
is almost ready for which MOU is already signed
between NEA and UTHPCL. Power Transmission
Company of Nepal as special purpose vehicle
for cross border power transmission line
development and operation is aggressively
working on Dhalkebar- Muzaffarpur 400 kV
Transmission Line Project.

Capacity Building and Institutional

नु 4

Strengthening

For upgrading and enhancing 1016 skill,
knowledge and attitudes of human resources,
NEA Training Center (NEA, TC) conducted need-
based short term trainings covering 3 days to
23 days for NEA employees. A 90 day training
for 39 participants of Upper Tamakoshi project
affected area was also conducted by NEA
Training Center. Anumber of assistant level and
executive level staff of NEA have been benefited
through these trainings. Trainings related
to skill development and use of information
technology in day to day business operations
were very useful in improving our operational
efficiency. Personnel data bank has been
maintained to facilitate efficient management
of human resource. Various trainings and
executive peer exchange programs supported
by USAID/ SARIE have given exposure to our
managers.

Future Plan

Present power crisis can be resolved only
through augmentation of generation capacity
and NEA has concentrated its efforts in this
direction. In next five years, NEA is set to
commission Chameliya, Kulekhani -3, Upper
Trishuli- 3A, Upper Trishuli-3B and Rahughat
projects whereas Budhigandaki (600 MW),
Upper Seti (127 MW) and Nalsyaugad (400
MW) storage projects shall be launched during
that period. NEA shall be largest equity holder
in Upper Tamakoshi that will develop Upper
Tamakoshi Project in next five years. Similarly,
Chilime Power Company Limited, a subsdiary
of NEA, has its aggressive plan to complete
Sanjen, Upper Sanjen, Rasuwagadhi and Middle
Bhotekoshi Projects. In the mean time private
power producers are expected to induct at
least about 200 MW capacity in the system.

Efforts shall be intensified to develop internal
transmission system with its backbone at 400
kV. River basin corridor concept shall be adopted

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

while developing transmission network. Mechi
corridor, Koshi corridor, Solu corridor, Tamkoshi
corridor, Marsyangdi corridor, Kaligandaki
corridor, Trishuli corridor transmission network
are already in program. Separate export and
cross border transmission system to attract
investment in export oriented projects will
be developed at 400 kV. Topographic survey
for Dhalkebar — Bhittamod 400 kV has been
completed. It is expected that construction
works shall commence on Dhalkebar -
Bhittamod in year 2010/11. Despite the deficit
of supply sources, electrification works shall
be continued so that the remaining half of the
population deprived of electricity has access to
it.

With the rapid increase in customers, there is
simultaneous need to provide a better customer
care and service. Introduction of Computerized
Billing System, Queue Management System,
Computer Assisted Interactive Voice Response
Service and Customer Call Centre will facilitate
our customers.

Way Ahead

With its little capacity of generation, NEA has
to absorb the blame of not serving sufficient.
Proportion of purchased energy in the total
served volume is about to exceed half for
which average purchase price at generation
point is more than revenue return rate.
Purchase energy price escalates every year,
but NEA cannot address this escalation in its
retail tariff resulting in widening gap between
cost of service and revenue return rate. Thus
NEA is compelled to operate the business
for direct loss.। admit that there is scope for
improvement in NEA's operation, but it will
not be significant to improve the crippling
health of NEA. Revision of tariff for back—logs
and implementation of automatic annual tariff
revision contingent to consumer price index
must be introduced to make NEA continue its

gg 5

Nepal Electricity Authority

A YEAR IN REVIEW,

Nepal Electricity Authority FISCAL YEAR 2009/10

services. NEA cannot bring down the energy support in delivery of service.
purchase price, but it commits to take effective
initiatives to improve its own generation, Thanking You.

transmission and distribution costs.
NEA shall be least involved in developing small

size ROR projects, as private sector is capable of \

doing that. NEA has targeted regional storage

projects, firm power import and export of wet 5 पा Jha
season surplus. These initiatives will ensure dry Managing Director

season supply.

Acknowledgements

In conclusion,। wish to take this opportunity
to extend my sincere thanks to all associated
with the NEA's activities contributing to
performance and achievements attained
during the last twenty five years.। express my
deep gratitude to Chairman and members of
NEA Board of Directors for strategically guiding
us to meet our obligation and accountability.।
must acknowledge the continued and stimulus
support from Government of Nepal in our
regular operation and development pursuits to
meet our corporate goals.। am also indebted
to bilateral donors such as India, Germany,
Japan, Norway, Denmark, Sweden, China and
USA as well as the international development
banks such as World Bank, Asian Development
Bank and Kreditanstalt fur Wiederaufbau (kfW)
who have been our development partners.।
sincerely express my thanks to them for their
consistent support during FY2009/10 and also
for the last 25 years.। cannot restrain from expressing my thanks for
continuedsupportanddedication।receivedfrom
all levels of staff.। always enjoyed working with
the staff members at all levels and categories.। am thankful to representative Unions of staff
for their support and cooperation. To complete
this acknowledgement,। must apologize to our
valued customers for the inconvenience they
have been bearing and thank them for their

a 6

Generation Business Group

The Generation Business Group is entrusted
with the responsibility of constructing new
power projects and operation and maintenance
of NEA owned power stations. It is headed
by a General Manager and has Generation
Construction Department, Operation and
Maintenance Department and Kaligandaki "A"
Hydropower Department under it.

This Business Group is now overseeing the
construction of Chameliya Hydroelectric
Project (30 MW) and Kulekhani-lll Hydroelectric
Project (14 MW). Further, Upper Trishuli 3 A
Hydroelectric Project (60 MW) is also being
implemented. Currently, it is operating and
maintaining seventeen hydropower stations
with a total installed capacity of 468.39 MW
and two thermal power plants with a total
installed capacity of 53.41 MW.

Generation from NEA owned power stations
in FY 2009/10 was 2,106 GWh, an increase of

Installation of runner

—

12.55 % over the previous fiscal year's figure

Operation and Maintenance
Department

The Operation and Maintenance Department,
headed by a Director, is responsible for
operating and maintaining NEA owned power
stations with the exception of Kaligandaki 'A'
Hydropower Station. A total of 1345.77 GWh
of energy was generated from these power
stations in FY 2009/10.

In FY 2009/10, preventive maintenance works
were carried out on a regular basis in all the
power stations to ensure timely detection
of faults and their rectification. Overhauling
of turbine runners of Kulekhani-l (Unit Nos.
1 and 2), Trishuli (Unit No. 3), Sunkoshi (Unit
No. 3), Puwakhola (Unit No. 2) and Seti (Unit
No. 2) Hydropower Stations was performed.
Further, repair of air drive system in 132kV

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

GIS Siuchatar feeder and Generator No. 3, and
various condition monitoring tests in all single
phase 11kV/132kV step-up transformers and
3 Generators were carried out in Marsyangdi
Hydropower Station. Furthermore, repair and
major overhauling of Unit No. 2 Generator
and Turbine set of Kulekhani-Il Hydropower
Station were completed under the supervision
of experts from Fuji Electric Systems Co. Ltd.
(Japan). Likewise, installation, testing and
commissioning of 2 sets of 12 kV, 1600 A
vacuum circuit breakers and replacement of
110 V, 240 Ah batteries were carried out in
Chatara Hydropower Station.

The rehabilitation of Devighat Hydropower
Station started in April 2008 is nearing
completion. The stator of Unit No. 3 is
ready and almost all the equipments and
machines have been delivered to site. The
rehabilitation project is funded jointly by
Government of India (Gol), NEA and GoN. Gol
has agreed to provide IRs 150 million as grant
assistance and IRs 150 million as loan under
a line of credit. The balance of fund equaling
Rs. 37.80 million required for the rehabilitation
work will be managed by NEA and GON.

With the loan from the Asian Development
Bank (ADB), procurement for the rehabilitation
of excitation system and modernization of weir
control system at Marsyangdi Hydropower
Station, and installation of trash-rack cleaning
machine at Gandak Hydropower Station was
initiated in FY 2009/10. The work is scheduled
to be completed in FY 2010/11. Similarly, the
procurement of spare parts and overhauling
of Hetauda Diesel Plant and Multi fuel Power
Plant are scheduled to be carried out in FY
2010/11 with the loan from World Bank in
order to enhance their reduced outputs.

A Central Maintenance Division is being
proposed under this Department for the
purpose of regular preventive maintenance and
repair work at NEA owned stations. A mobile

team of this proposed maintenance division will
travel to different NEA power stations on an as-
and-when required basis and maintain them as
far as practicable. The Department also avails
the services of other experts or technicians
as the case may be in case such expertise is
not available within NEA for maintaining and
repairing power stations in NEA.

Kaligandaki-A Hydropower
Department

The Kaliganadaki-A Hydropower Department
oversees the operation and maintenance of
Kaligandaki A hydropower plant with installed
capacity of 144 MW, Nepal's largest hydropower
plant. It is headed by a Director. In FY 2009/10,
Kali Gandaki A Hydropower plant generated a
total of 760.241 GWh of energy, an increase of
0.91% over the previous year's figure.

In FY 2009/10, repair and maintenance of
the spillway gates, intake under-sluice gates,
desander flushing gates, trash rack cleaner
machine and internal communication system
were carried out. Further, the major overhauling
of Unit No.1 was carried out. Routine check-
up of the tap-changer, dielectric test of oil,
insulation test and ratio measurements of
Unit No. 1 power transformer were also
carried out. Similarly, the high voltage bushing
on one phase in power transformer of Unit
No. 3 was replaced. Installation, testing and
commissioning of repaired 132/11kV, 5 MVA
transformer including the installation of outdoor
CVT was also completed in FY 2009/10.

Generation Construction Department

The Generation Construction Department is
presently executing the construction of 14
MW Kulekhani-lll Hydroelectric Project The
Department is headed by a Director. The status
of the Project is outlined below.

छ 8

Kulekhani-lll Hydroelectric Project

The Kulekhani Ill Hydro- electric Project (14
MW) is under construction. It is located in
Bhaise Village Development Committee of
Makawanpur District. It is a cascade project,
which utilizes the regulated flow of the
Kulekhani reservoir. Further, the discharge
from Mandu river at the intake of Kulekhani II
and discharge from Khani khola at the tailrace
of Kulekhani II are added to it.

Main features of the project comprise of a
head pond, a 4293 m long headrace tunnel, an
underground forebay, a 370m long penstock
and a semi underground powerhouse. Two
units of vertical shaft Francis Turbines each
of 7.0 MW capacity shall be installed to
generate 40.85GWh of energy annually. Power
generated from the project will be evacuated
to Hetauda Substation through 0.5 km long 132
kV transmission line. The construction of Adit 1
A (308m) and Adit 4 (180m) tunnel, headrace
tunnel (891m), penstock tunnel (180m) has
been completed. Similarly the construction

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

of access road to Adit 3 tunnel has also been
completed.

Likewise, construction of portal at Adit 3 is
nearing completion. The selection of contractor
for the Electromechanical, Hydro-mechanical
and Transmission line works is in final stage. The
project has been accorded National Priority by
the Government of Nepal (GoN). The estimated
cost of the project is Rs 2.43 billion which is
jointly funded by GoN and NEA. The Project is
scheduled to be completed in Year 2011.

Chameliya Hydroelectric Project

Chameliya Hydroelectric Project (CHEP) is
headed by a Director reporting directly to the
General Manager, Generation. Designed as a
six-hour daily peaking run-of-river scheme with
an installed capacity of 30 MW, the project is
expected to generate 184.21 GWh of energy
annually. The project lies about 950 km west
of Kathmandu in the Chameliya valley, on a
tributary of Mahakali River in Darchula district
in the Far Western Development Region. The

Nepal Electricity Authority

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

main features of the project are 54m high
concrete dam with two 13.5m high radial
gates, underground desander with two basins,
4067m long headrace tunnel, 49.8m_ high
restricted orifice type surge tank, 461m long
penstock and semi-underground powerhouse
with two units of 15.3 MW vertical shaft
Francis turbines. Power generated from the
project will be evacuated to Attariya substation
at Kailali district through 131 km long 132 kV
transmission line.

In December 2001, detailed design and tender
document preparation work were completed
by Hyundai Engineering Co., Ltd. & Korea
Water Resources Corporation, a consortium
consulting agency with the grant assistance
of Korea International Co-operation Agency
(KOICA) in collaboration with NEA. The 18 km
long project access road with six bridges and
one causeway has been completed and local
transportation is in operation. Construction of

7 . Win eid a
a,

a भु,

1 Te
=। र te
ao

F
1

Foundation work of transmission line of CHEP in progress

oy

the camp facility has also been completed.

On December 21, 2006, China Gezhouba Water
and Power Group Company Limited (CGGC),
China was awarded the civil contract for the
construction of the civil works of the project.
The excavation works for 305.14 m long Adit
No. 1, 214 m long Adit No. 2, 283.61 m long
Adit No.3, 203.6 m long diversion tunnel, 127
m long connecting tunnel No. 1, 116 m long
connecting tunnel No. 2, 156m long aeration
tunnel and 139.60 m long access tunnel to
desander have been completed. Excavation
works for headrace tunnel (HRT), desander
and tailrace are in progress. Out of 4067 m
headrace tunnel, excavation for 2438.1 m is
complete. Similarly, 40% excavation work for
desanding basin and 34% excavation work for
tailrace are complete.

Dam foundation works and concreting works
up to EL. 852.00 m have been completed.
Likewise, powerhouse excavation and slope

ee ee

stabilization of powerhouse support installation
works have been completed up to EL 778.2m.
The construction of civil works is about 49%
complete.

EIA study of the project and 132 kV transmission
line has been approved by the Ministry of
Environment, Science and Technology (MoEST).
Land acquisition work of the project has been
completed. Environment and Social studies
Department of NEA has been carrying out
the environment monitoring and mitigation
measures as per the approved EIA study.

On October 2, 2007, Shah/Silt/Icon 1४ in
association with Project Development
Department, Engineering Services, NEA was
appointed Consultant for the Construction
Management and Construction Supervision of
the project.

As per the Loan Agreement made between
Government of Korea and Government of
Nepal, EDCF has provided a soft loan of U.S
5 45 million to finance the foreign currency
component towards the cost of Consulting
Hydro-

Services and_ Electro-Mechanical,

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

Mechanical and Transmission Line Works.

On April 30, 2009, KHNP Consortium which
includes Korea Hydro & Nuclear Power Co. Ltd,
(KHNP) Korea; Hwachon Plant Construction
Co. Ltd. (HWACHON) Korea; Sean Engineering
and Construction Co. Ltd. (SEAN) Korea and
Nepal Hydro & Electric Ltd., (NHE) Nepal was
awarded the contract for the construction
of E/M, H/M & 132 kV T/L works of the
project. Similarly, on May 11, 2009, Saman
Corporation, Korea was appointed Consultant
for the Electro-mechanical, Hydro-mechanical
& 132 kV Transmission line Works. The model
tests for turbines and tower destruction tests
have been witnessed and inspected, and
manufacturing process has 9066 started.
Soil investigation and detailed topographical
survey including foundation design have been
completed. The embedded parts for grounding
inthe powerhouse are also complete. Two draft
tubes with all accessories and embedded parts
for T/L towers have already arrived at site.

The overall construction of the project is now
52% complete, and the project is scheduled to
be completed in Year 2011.

DY,

Nepal Electricity Authority

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

Upper Trishuli 3 'A' Hydroelectric
Project

In order to enhance the generation capacity
of NEA at the earliest, this project is being
implemented on a priority basis. This run-
of-river scheme with a capacity of 60 MW
is located in Nuwakot and Rasuwa Districts.
Major components of this project are
headworks, intake, desander, 4.1 km _ long
tunnel, surge shaft, inclined shaft, underground
powerhouse, 48 km long 220 kV transmission
line and ancillary facilities. The project's annual
generation is 460.4 GWh and estimated total
cost excluding VAT is USS 125.75 Million . This
project will be executed using concessional
loan of USS 120 Million from the Government
of China through China Exim Bank. The whole
construction has been divided into the following
three packages:

A) EPC Contract for Major Construction
Works of the Project:

The contract for the major works (Civil, Electro-
mechanical, and Hydro-mechanical works)
was with China Gezhouba Group Corporation
(CGGC) on May 28, 2010. However the contract
will be effective once the loan agreement with
the Government of China is accomplished. The
contractor has already started preparatory work
at the site. The main construction work shall be
undertaken in Engineering, Procurement, and

Construction (EPC) mode, and estimated time
for the construction is 35 months from the date
of commencement. The construction includes
upgrading of 11.5 km long access road from
Betrawati to head -works site and construction
of 2.5 km new road. The contract price of major
work is US 5 89.177 Million.

The process for land acquisition for the project
has been initiated and currently negotiation for
land acquisition is in process.

B) Construction Supervision of the Project:
North West Hydro Consult has been selected
for construction supervision of the project.
NEA is in the process of awarding the contract
for construction supervision.

C) 220 kV Transmission Line from the
Project to Matatirtha Substation:

Tender has been invited for the construction of
48 km long 220 kV Transmission line from the
project site to Matatirtha substation. The bid
submission date is August 24, 2010. As part of
EIA of the project, public hearing was held near
the powerhouse site on February 24, 2010. Final
report of EIA has been prepared incorporating
the suggestions made by the stakeholders and
submitted to Ministry of Environment, Science
and Technology for approval.

> 2

Middle Marsyangdi
Hyd roelectric P roject (close out stage)

Background

Middle Marsyangdi Hydroelectric Project
located near Besishahar in Lamjung District,
Gandaki Zone, about 170 km. West of
Kathmandu, is a peaking Run-of-River Project
with an installed capacity of 70 MW and an
average annual energy generation of 398 GWh.
The consultant (Engineer) Fichtner JV (FJV)
was selected in the year 1999 after concluding
financial and project agreements between
Government of Germany, the Government of
Nepal (0014) and Nepal Electricity Authority
(NEA) for the grant of Euro 178.26 millions
through Kreditanstalt fur Wiederaufbau (KfW).
The procurement of Consulting service, Civil
Works and Electromechanical Equipment was
carried out through Limited Bidding system.
The initial estimated Project cost in year 2000
was USS 181.27 millions equivalent to Euro 212
millions at exchange rate USS1=Euro 1.17. But
due to various circumstances project could not
be completed within the original completion
period of 43 months and accordingly the
project cost and time has increased. As per the
Engineer's updated project cost of February
2010 (Magh 2066), the revised cost is Euro
274.72 million which 2 million less than earlier
estimate 276.5 million euro. These costs do not
include Interest During Construction (IDC).

Civil construction works of Middle Marsyangdi
Hydroelectric Project started from June 25, 2001
(Ashad 11, 2058) with the completion target of
39 months September 24, 2004 (Ashoj 8, 2061).
Apart from Civil Lot there were five other lots
for procurement of various equipment required
for the Project: Lot E Electrical Equipment, Lot
M Mechanical Equipment, Lot HSS: Hydraulic
Steel Structure, Lot TRL: Transmission Line, Lot

551: 132 kV Switchyard, Lot SS2: GIS Switchgear
Equipment. The civil works was completed only
on 7 November 2008 (Kartik 22, 2065) owing
to the various reasons such as design changes,
bandhs, and strikes. The Engineer issued taking
over certificate effecting from November
7, 2008 with the punch list of remaining
works. After impounding of the reservoir,
wet commissioning of 2 units started from
November 28, 2008 (Mangsir 13, 2065) and
subsequently, on December 14, 2008 (Mansir
29, 2065), the project was inaugurated and
synchronized with the National grid. As of July
15, 2010 (Asad 31, 2067), a total of 559 GWh of
energy has been successfully generated from
two units.

Status:

The project is now in closeout stage. The close
outs activities such as capitalization of assets,
preparation of operation maintenance manual,
finalization of completion reports, as built
drawings, processing of final statements of Civil
and other lots are going on. The closeout stage
is expected to be finished by the end of fiscal
year 2010-11.

KfW has provided Euro 3.0 million under
Neighborhood Support Program (NSP) to
support the development activities and to
improvetheinfrastructuresrelatedto Education,
Health, Water support & sanitation and Rural
Electrification of Eleven Village Development
Committees (VDCs) in Lamjung District, in the
vicinity of Project area. Most of the programs
have been successfully implemented.

Additionally, Environmental mitigations works
were carried out by NEA as per Environment

23 3

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

Mitigation Action Plan (EMAP). These works
were audited by TAEC/NESS JV-Environment
Consultant of MMHEP and have been accepted
for its compliance.

Contractor's Claim:

The Civil Contractor DDC-JV till date has
submitted the claim amounting to Euro
164.677 million and Rs 3,150.8 million. The
amount of Euro 26.55 million and NRs 735.16
million has been paid as on account basis as
per the Engineer's certification. With regard
to Electromechanical lots, the amount of Euro
5.82 million and Rs 2.36 million has been paid
as per the Engineer's certification.

Arbitration and Amicable Settlement:

As per the provision of the Contract, both
parties DDC-JV and NEA issued the Notice of
Intention to Commence Arbitration in March
2005 (Chaitra 2061) against Engineer's Decision.
Two attempts of amicable settlement were
made but settlement could not be reached.
As part of the first phase of the arbitration,
the Contractor has referred disputed claim
amount of Euro 38.4 million and Rs 527 million

Upstream reservoir of Middle Marsyangdi HPS

to the International Court of Arbitration (ICA)
of the International Chamber of Commerce
(ICC) for the commencement of the Arbitral
proceedings. Three Evidentiary Hearings and
two Post Hearing Briefs have been conducted
and the verdict is expected by September 2010.
In this regard, NEA also has made counter claim
amounting to Euro 37 million against DDC-JV.

Contractor has imitated proceeding for 2nd
Phase Arbitration for 49 million Euro. NEA is yet
to initiate the proceedings.

Payment: Till July 16, 2010 (Ashadh 32, 2067),
a sum of Rs. 23,810 million has been spent for
the services and works. With IDC amount of
Rs. 6,364 million, the total expenditure stands
at Rs 30,174 million.

Despite the increase in time and cost due
to difficult circumstances and geopolitical
situation prevailing during the construction
of the Project, MMHEP has been successfully
completed and commissioned. The Project has
been able to generate 559 GWh of energy till
date.

SY 4

Transmission and System
Operation Business Group

Transmission and System Operation (TSO)
Business Group is responsible for design,
construction, operation and maintenance of
66 kV and above voltage level transmission
system. These functions are entrusted to the
Transmission Line/Substation Construction
Department, Grid Operation Department and
System Operation department.

The issues and challenges facing NEA in
general and TSO business group in particular,
are funding constraints, hurdles in acquisition
of land for transmission line tower footing
and substation, acquisition of right-of —way
(RoW) for transmission line, congestion in
major transmission lines, inordinate time
taken in environmental studies (EIA/IEE). Other
challenges include implementation of 38-point
program of the government under National
Electricity Crisis Mitigation Program -2065 and
synchronization of INPS with Indian Grid etc.

Transmission Line / Substation
Construction Department

This Department is responsible for the
construction of new transmission lines and
substations of 66kV and above voltage levels
and various major transmission system
reinforcements. Construction of transmission
lines and substations are guided by the
Transmission Planning Studies carried out
by System Planning Department of NEA.
Transmission Planning Studies are part of
the overall system planning studies of NEA.
Different phases of transmission and substation
projects include feasibility study, survey license,
route survey, IEE/EIA studies, construction

license, land acquisition, design, tendering,
construction, testing/commissioning and
handing over for operation.

Recently Completed Projects
Chandranigahpur System Reinforcement

This project was started in 2004/05 with the
objectives of meeting growing electricity
demand of Rautahat and Sarlahi districts and
reducing the technical loss of transmission
system of the area. The project was completed
and commissioned in 2009/10. The scope of
the project included construction of 132/33
kV, 30 MVA and 33/11 kV, 8 MVA substation
at Chandranigahpur and 74 km of 33 kV
sub transmission line to connect the new
Chandranigahpur substation with the existing
33 kV substations at Harsha, Haripur, Gaur and
Nijgadh. This project was jointly financed by
the World Bank (WB), Government of Nepal
(GON) and Nepal Electricity Authority (NEA).
The project is in the final stage of handing
over of to the concerned units responsible for
operation and maintenance.

Projects under Execution

1. Khimti — Dhalkebar 220 kV Transmission
Line

This project was started in 2002/03 with the
objective of enhancing transmission capacity,
improving supply reliability, reducing losses
and voltage drops through construction of
220kV double circuit line and is scheduled to be
completed in 2010/11. The scope of the project
includes the construction of 75 km of 220 kV

25 9

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10। हु गजु Moe a be गा re i b छि
बुबा त -
Matatirtha Substation ;

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transmission line from Khimti to Dhalkebar
substation. The project cost is estimated at USS
22 Million and the project is jointly funded by
World Bank, GON and NEA.

2. Thankot — Chapagaon - Bhaktapur
132kV Transmission Line

The project was started in 1998/99 with the
objective of enhancing transmission capacity,
improving supply reliability in Kathmandu
Valley, reducing losses and voltage drops
through construction of 132kV ring main and
was scheduled to be completed in 2009/10. The
scope of the project includes the construction of
28 km of 132 kV transmission line from Thankot
to Bhaktapur via Harisidhhi, construction of
132 kV substations at Thankot and Harisidhhi
and reinforcement of substation capacity at
132 kV Bhaktapur and Balaju substations. The
project cost is estimated at USS 23 Million and
project is jointly financed by ADB and OPEC,
GON and NEA. Construction of transmission
line has been stopped because of right of way
issues raised by local inhabitants of few VDCs
of Lalitpur District.

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3. Hetauda - Bharatpur 220kV
Transmission Line

This project was started in 2009 with the
objective of easing out transmission congestion
in the Bardaghat- Hetauda 132 kV section of the
grid. The project will enhance the transmission
capacity and reliability of the Integrated Nepal
Power System (INPS), and will help to evacuate
the power to be generated by other hydro power
plants from western region of Nepal. The scope
of the project includes the construction of 73
km of 220 kV transmission line from Hetauda
to Bharatpur and the construction of 220 kV
substations at Hetauda and Bharatpur. Cost
of this project is estimated at USS 62 Million
and funded jointly by loan assistance of WB,
GON and NEA. The project is scheduled to be
completed in 2011/12.

4. Bharatpur - Bardghat 220kV
Transmission Line

The objective of this project is to enhance the
transmission capacity and reliability of the
Integrated Nepal Power System (INPS), and to
evacuate the power to be generated by other
hydro power plants from western region of
Nepal. The scope of the project includes the

construction of 75 km of 220 kV transmission
line from Bharatpur to Bardaghat. The project
is scheduled to be completed in 2011/12.

5. Syangja 132kV Substation

Objective of this project is to improve the
power supply in Syangja and its vicinity. The
project was started in 2009/10 and is scheduled
to be completed in 2011/12. The scope of the
project includes the construction of 132/11
kV substation at Syangja. The project cost is
estimated at USS6.6 Million which is jointly
financed by GON and NEA.

6. Dumre - Damauli — Marsyangdi 132kV
Transmission Line

The objective of this project is to evacuate power
generated by Middle Marsyangdi Hydroelectric
plant, and to facilitate the power evacuation
from potential hydro power projects along
the Marsyangdi Corridor. The objective also
includes enhancing the performance of INPS
and reducing outage frequencies of Bharatpur-
Pokhara 132kV transmission line. The scope
of the project includes the construcation of
132 kV line from Marsyangdi to Damauli via
Dumre. Cost of this project is estimated at USS
16.6 Million which is jointly funded by loan
assistance of ADB, GON and NEA. The project
was started in 2008/09 and is scheduled to be
completed in 2011/012 .

7. Butwal - Kohalpur 132kV Transmission
Line Second Circuit

The project started in 2008/09 (2065/066)
with USS13.8 million loan assistance from ADB
and Rs. 276.4 Million from GoN and NEA is
scheduled to be completed in 2011/012 .

The objectives of this project are to supply
increased power to Western Nepal, to meet
growing electricity demand in the area, to
supply electricity to upcoming cement factories
in the western part of Nepal and to evacuate
power from Chameliya Hydropower plant.

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

8. Capacitor Banks at Grid Substations

The objective of this project is to improve
the voltage profile and to reduce the losses
through installation of capacitor banks in Grid
substations. Estimated cost of this project is USS
2.2 Million. The cost is jointly funded by loan
assistance of ADB, GON and NEA. The project is
estimated to be completed by FY 2011/012.

9. Chapali 132kV Substation

The overall objective of the project is to cater to
the increased energy demand of northern part
of Kathmandu and to improve power supply
reliability. The project started in 2008/09 5
scheduled to be completed in 2011/012. The
scope of the project includes the construction
of of underground line and the associated
substations. The total cost of the project is
estimated at USS 16 Million jointly financed by
loan assistance of ADB, GON and NEA.

10. Matatirtha Substation Expansion

The objective of the project is to cater to the
increasing electricity demand of western part of
Kathmandu as well as to supply United Cement,
Naubise and Laxmi Cement, Lalitpur. This
substation will also help to relieve overloaded
Siuchatar, Teku and New-Patan substations
which feed the core areas of Kathmandu
Valley. The scope of the project includes the
construction of 132/33 kV, 30 MVA substation
at Matatirtha. Cost of this project is estimated
at USS 3.3 million and is jointly funded by
loan assistance of ADB, GoN and NEA. The
project started in 2008/09 is scheduled to be
completed in 2011/012.

11. Kabeli 132kV Transmission Corridor

Objectives of this project are to facilitate
evacuation of power generated from Kabeli-A
Hydro Power Project and power produced
from other IPP's in the region, to meet
increasing demand of Damak area, to relieve
Anarmani 132/33kV substation and to reduce
transmission losses of that area. The scope of
the project includes the construction of 65 km

गा 7

Nepal Electricity Authority

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

of 132 kV line from Kabeli to Damak and the
associated substations. Cost of this project is
estimated at USS 31 Million and is funded by
GON.

12. Pathlaiya 132kV Substation

Objective of this project is to provide adequate
supply tothe Birgunj industrial corridor, improve
quality of supply and reduce technical losses
in the area. The project started in 2008/09 is
scheduled to be completed in 2011/012. The
scope includes the construction of 132/33/11
kV substation at Pathlaiya. Cost of this project
is estimated at USS 5.4 Million and is jointly
funded by loan assistance from WB, GoN and
NEA.

13. Singati-Lamosangu 132 kV Transmission
Corridor

Objective of this project is to evacuate power
to be generated from different hydroelectric
projects undertaken by IPP's in the Tamakoshi-
Singati basin. The scope of the project includes
the construction of 40 km of 132 kV line from
Singati to Lamosangu. Total cost of the project
is estimated at USS 13 million. The project
was started in 2008/09 and is scheduled to be
completed in 2011/12.

Projects under Initial Stages of
Implementation

The projects under initial stages of

implementation are listed below:

1  Hetauda — Dhalkebar - Duhabi 400 kV
Transmission Line

2. Koshi 220 kV Transmission Corridor

3. Marshyangdi 132
Corridor

४ Transmission

4. Sunkoshi Dolakha Transmission Corridor

(Dana-Kusma-New Modi-
220/132 kV

Kaligandaki
New  Butwal-Bardghat)
Transmission Corridor

6. Middle Marshyangdi-Manang 132 kV

Transmission Line

7. Kaski-Bhurjung-Parbat-Kusma 132 kV
Transmission Line

8. Gulmi-Arghakhanchi-Chanauta 132 kV

Transmission Line

9. Modi - Lekhnath 132 kV Transmission
Line

10. Lekhnath-Damauli 220 V_ Transmission
Line

11. Samundratar-Naubise 132 kV Transmission
Line

12. Ramechap — Garjyang — Khimti 132 kV
Transmission Line

13. Marshyangdi - Kathmandu 220 kV

Transmission Line

14. Kohalpur-Surkhet 132 kV Transmission
Line

15. Koshi Corridor (Basantapur-Kusaha) 220
kV Transmission Line

Cross Border Transmission Line Projects

In order to facilitate the power exchange
between Nepal and India following three
cross border Indo-Nepal Transmission
Interconnections have been identified Under
Cross-Border Transmission Line interconnection
Projects.
७० Dhalkebar-Mujaffarpur
400 kV Transmission Interconnection
० Duhabi-Purnia 400k V Transmission
Interconnection
० Butwal-Gorkhapur 400 kV Transmission
Interconnection
Dhalkebar (Nepal)-Mujaffarpur (India) 400 kV
double circuit Transmission Interconnection
has been prioritized under phase-। and all the
efforts are underway to realize the project.
Approximately 45 km of transmission line
from Dhalkebar to Bitthamod near Indo-Nepal
border falls under the Nepalese territory and
around 100 km falls under Indian Territory.

सा - 8

This interconnection is envisaged to be initially
charged at 220 kV and would be operated in
synchronous mode between two grids. The
Nepalese portion of the project cost includes
Rs 1.28 billion (USD 20.0 million) out of which
USD 13.2 million is to be funded by government
of India through soft loan as a line of credit to
GON and for the remaining part government
of Nepal has approached the World Bank for
the financial assistance. The funding of Indian
portion would be through domestic sources by
Indian JV Company named "Cross Border Power
Transmission Company" in Indian rupees.

Projects under Feasibility Study Stage

Various transmission line projects identified

as part of the system reinforcements study

and projects aimed at evacuating the power

generated from hydro power plants to national

grid are listed below:

1. Transformer Upgrade Project

2. Karnali Corridor (Upper
Lamki)132kV Transmission Line

3. Bajhang-Deepayal-Attariya 132 kV
Transmission Line

4. Hapure — Tulsipur 132kV Transmission
Line

5.  Surkhet-Dailekh-Jumla 132 kV
Transmission Line

6. Solu Corridor (Katari-Okhaldhunga-Solu)
132 kV Transmission Line

7. Kaligandaki-Gulmi = (Jhimruk)
Transmission Line

8. — Chilime-Trishuli-Galchhi 132 kV
Transmission Line

9. Khimti (Tamakoshi)-Kathmandu 220 kV
Transmission Line

10. Hetauda-Butwal 400 (९४ Transmission

Karnali-

132 kV

Line
11. Butwal-Lamki 400 kV Transmission Line
12. Lamki-Mahendranagar 400 kV

Transmission Line
13. Duhabi-Anarmani 400 kV Transmission
Line

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

14. Dhalkebar-Loharpatti132 kVTransmission
Line Project

15. Butwal-Lumbini 132 kV Transmission Line
Project

Projects for Power Supply to Cement
Industries

In order to promote cement industries, the GoN
has taken policy of developing transmission line
and road networks up to the manufacturing site
of cement industries. In accordance with this
policy, GON allocated funds for such works in
the budget speech for the fiscal year 2008/09.
The transmission line projects identified for the
purpose are as follows:

1. Kamane, Hetauda 132kV Substation

The main objective of this project is to provide
power supply to Shivam Cement located at
Hetauda. This project started in 2008/09
is scheduled to be completed in 2011/12.
Estimated cost of the project is USS 3.5 Million
which is financed by GON.

2.Kusum - Hapure 132kV Transmission Line

The main objective of this project is to develop
transmission system up to the site of Dang
Cement to be established at Hapure of Dang.
Further extension of this line will benefit
Sonapur and Rolpa cements. The project
started in 2065/066 with estimated cost of Rs.
500 Million is scheduled to be completed in
2011/12. Total cost of the project is financed
by GON.

3. Mirchaiya-Katari 132kV Transmission Line

The objective of this project is to provide
power supply to Maruti Cement Industry to
be established at Katari. Cost of this project
is estimated at Rs. 675 Million and funded by
GON. The project is scheduled to be completed
by FY 2012/013.

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Nepal Electricity Authority

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

Feasibility study has been completed for the
following transmission line projects aimed to
supply different cement industries:

1. Matatirtha-Naubise 33kV Transmission
Line (United Cement Industry)

2. Matatirtha — Malta 33kV Transmission
Line (Laxmi Cement Industry)

3. Lamahi-Ghorahi 132 kV Transmission Line
Project (Ghorahi Cement Industry)

4.  Panchakule-Tulsipur-Dudhras 33kV Sub-
Transmission Line (Sonapur Cement
Industry)

5. Panchakule-Tulsipur-Koilachour 33kV
Sub-Transmission Line (Rolpa Cement
Industry)

6. Lamki-Gutu 132kV Transmission Line
(Surkhet Cement Industry)

Power Development Project

The NEA Transmission and _ Distribution,
the Power Development Project is being
implemented under the loan/grant assistance
of the World Bank. The initial allocation to this
project was about USD 31 million. As part of
the original scope, the following projects are
being implemented:

i. Khimti-Dhalkebar 220 kV Transmission Line
Project

ii. Distribution and Rural Electrification
Project

iii. Chandranigahapur System Reinforcement
Project

iv. NEA Institutional Strengthening Project

UndertheKhimti-Dhalkebar220kVTransmission
Line Project, a 75 km long 220 kV line is being
constructed. The Distribution and_ Rural
Electrification Project consists of reinforcement
of distribution systems and _ electrification
in Lalitpur, Bhaktapur, Kavre, Dhading and
Nuwakot districts. The Chandranigahpur System
Reinforcement Project involves construction of

a 132/33 kV substation at Chandranigahpur
and related 33 kV sub-transmission lines.
Finally, the Institutional Strengthening Project
focuses on improving the processes in finance,
accounts and internal audits within NEA.

The 220 kV Khimti-Dhalkebar Transmission
Line and the facilities under the Distribution
and Rural Electrification Projects are currently
under construction. Construction of the
132/33 kV substation at Chandranigahpur and
the related sub-transmission lines have been
completed. The scope under the Distribution
and Rural Electrification sub-component is
almost completed.

In February 2008, the Power Development
Project was restructured, whereby the
scope of work under the NEA Transmission
and Distribution component was increased
providing an additional allocation of about 36
million. Under this additional scope of work
the following projects are being implemented:

i.। Hetauda-Bharatpur 220 kV Transmission
Line Project

ii. Distribution System Reinforcement
Project

iii. NEA Institutional Strengthening (II)

Hetauda-Bharatpur 220 kV transmission line
project which consist of construction of about
73 km of 220 kV line and 132/11 kV substations
at Hetauda and Bharatpur are ongoing. The
Distribution and System Reinforcement Project
includes two major activities (a) Energy and
Customer Accountability Enhancement focusing
large customers in Kathmandu valley and in
major industrial corridors, and (b) distribution
system reinforcement 300 rehabilitation
of 33/11 kV substation in the following ten
locations are being implemented: (i) Khanar, (ii)
Inaruwa, (iii) Rupani, (iv) Jankpur, (v) Haripur,
(vi) Chanauli, (vii) Bhairahawa, (viii) Ghorahi,
(ix) Tikapur, and (x) Gularia.

The Energy and Customer Accountability
activity focuses on NEA's efforts (a) to enhance

0 0

accountability to its customers through (i)
the improvement of consumer services to
large customers, and all customers within the
Kathmandu valley by establishing effective
trouble call management systems for registering
complaints and for speedy resolution of
complaints, and by developing capability within
NEA to identify the areas of potential savings
in large customers' installations by performing
energy audits and advising customers on
implementation of energy-saving measures;
(ii) the improvement of customer interface
and responsiveness by establishing easy and
quick systems and processes for new service
registration to enhance customer satisfaction,
easy and convenient any-time access to
customer information over the Internet; and by
establishing easy and quick information access
for the maintenance of the distribution system;
(b) to build an energy accountability framework
(metering and billing, verification) and revenue
collection system for large customers receiving
supply at high voltage.

The technical proposals of the short listed
firms have been evaluated and the financial
proposals are expected to be opened soon.
The progress of implantation of distribution
system reinforcement is in various stages.
Contracts for the supply of equipment have
been awarded and contract agreements signed.
Tender for the rehabilitation of the 33/11 kV,
Lot 2 have been awarded, and that for Lot 1
is proposed for re-tendering, but pending the
World Bank's no-objection, the actual time line
of implementation could not be established.

In May 2009, the World Bank decided to provide
additional credit of about USD 74 million to
NEA primarily to address the energy crisis. The
loan agreement for this additional financing
was signed on August 21, 2009. The activities
being implemented as part of this additional
financing are:

i. Kali Gandaki 'A' HEP rehabilitation

ii. Duhabi Multifuel Plant rehabilitation

iii.। Hetauda Diesel Centre Rehabilitation

iv. Bharatpur-Bardaghat 220 kV
Transmission Line construction

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

V. Pathlaiya 132 kV substation construction
vi. Kathmandu Valley distribution network
strengthening

Consultants have been hired to design the
rehabilitation of Kali Gandaki 'A' HEP, and the
design activity is going on. For Duhabi Mulfituel
plant and for Hetauda Diesel Center, contracts
have been awarded to respective original
equipmentmanufacturersandtherehabilitation
works are going to begin soon. The award of
the contracts for Bharatpur-Bardaghat 220 kV
line, and Pathlaiya 132 kV sub-station are being
finalized soon. The procurement of materials
for the Kathmandu valley distribution network
strengthening is currently under progress.

Grid Operation Department

The Grid Operation Department under
Transmission and System Operation (TSO)
business group is responsible for performing

various activities related to operation,
maintenance, up-gradation, reinforcement,
reactive compensation and_ rehabilitation

works in Substations and Transmissions Lines.
This Department is headed by a Director. This
Department along with six offices (physically)
under it carried out the following major works
in fiscal year 2009/10.

a. Transformer Upgrading, Compensation and
Substation Reinforcement Works (Completed)

Apart from operation along with routine
and breakdown maintenance works this
department regularly carries out up-gradation,
extension and replacement works in Grid
Substations and Transmission Lines to meet
the growing demand for energy. Reshuffling
of Power Transformers is felt a cost effective
solution. Accordingly this department
executed numbers of Transformer reshuffling
works in FY 2009/10. Similarly reactive power
compensation works are regularly carried out
to improve the system voltage and overloading
problems of transformers and transmission

gg 1

Nepal Electricity Authority

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

lines. The Department also carried out
number of connection agreements to facilitate
evacuation of power from Independent Power
Producers (IPPs).

Various works executed by this department have
supported reduction of forced load shedding
caused by inadequate transformation capacity.
This Department carried out the following
major up-gradation and reinforcement works
in FY 2009/10.

1. Supply, Delivery & Commissioning of
132/33 kV, 40/51.5/63 MVA_ Power
Transformer at Duhabi Substation was
successfully completed. With this, the
total transformer capacity available at
132/33kV voltage level is now 126 MVA.

2. Supply, Delivery & Commissioning of
132/33 kV, 40/51.5/63 MVA_ Power
Transformer at  Butwal Substation
was successfully completed. The total
transformer capacity at 132/33kV voltage
level is now 93 MVA

3. Shifting, Overhauling, Installation, Testing
& Commissioning of 66/11 kV, 2x10
MVA Power Transformers from Balaju
Substation to Hetauda Substation was
duly completed.

4. 33 kV Single Zebra Conductor Bus System
of Duhabi Substation was upgraded to
Double Zebra Conductor Bus.

5. Shifting, Installation and Commissioning
of 132/33 kV, 5 MVA Power Transformer
at Chanauta Substation was completed
within shortest possible time to
replace the damaged 132/33 kV, 5 MVA
Transformer.

6. Replacement of old 36 kV Oil Circuit
Breakers and Current Transformers by
new Vacuum Circuit Breakers and Current
Transformers was completed.

7. Overhauling of 132/66 kV, 20 MVA Power
Transformer of Hetauda Substation and
66/11kV, 6MVA Transformer of Simara

Substation was successfully completed.
This will increase the performance and
prolong the life of these transformers.

8. Replacement of existing 110V Battery of

Simara and Bharatpur Substation, Battery
and Battery Charger of Birgunj Substation
has been completed.

9. Replacement of one set of 132kV Current

Transformer of Marshyangi Line at
Suichatar Substation was completed.

10. Supply, Delivery and commissioning of
33kV line Control and Relay Panel at
Damauli Substation was completed.

11. Procurementof Portable Type Transformer
Turns Ratio Test Kit was completed

b. Work in Progress

Following major up-gradation &
Reinforcement works for Substation were
initiated and are under progress

1 Supply, Delivery & Commissioning of 132/33
kV, 40/51.5/63 MVA Power Transformer at
Lahan Substation to replace the existing
10/12.5MVA Power Transformer.

2 Supply, Delivery & Commissioning of 132/33
kV, 40/51.5/63 MVA Power Transformer at
Butwal Substation to replace the existing
30 MVA Power Transformer. After the
implementation of this work, the total
transformer capacity at 132/33 kV Voltage
Level will increase to 126 MVA.

3 Supply, Delivery & Commissioning of
132/66 kV, 45 MVA Power Transformer
at New Parwanipur Substation to release
the load of 66 kV transmission line from
Hetauda to Parwanipur Section. After the
completion of this work, total transformer
Capacity at 132/33 kV voltage level will
increase to 126 MVA.

4 Supply, Delivery & Commissioning of new

33/11kV, 2x10/13.3/16.6 MVA Power
Transformers at Duhabi Substation and
shifting, overhauling and installation of
existing 33/11kV, 2x10/13.3/16.6 MVA
Power Transformers from Duhabi to
Anarmani Substation.

9 2

595 Shifting, Installation and Commissioning
of 132/33 kV, 30 MVA Power Transformer
at Anarmani Substation with supply
and installation of On Load Tap Changer
(OLTC).

6 = Shifting, Installation and Commissioning
of 132/33 kV, 30 MVA Power Transformer
from Butwal to Dhalkebar Substation and
132/33 kV, 15 MVA Power Transformer
from Dhalkebar to Attaria Substation.

7 Shifting and Installation of 132/33 kV, 15
MVA Power Transformer from Anarmani to
Kohalpur Substation to replace damaged
10 MVA Transformer.

c. Transmission Line Maintenance Work
(Completed)

Re-routing, erection and stringing of Tower No.
35 of 132kV Lamosanghu-Khimti Transmission
Line was successfully completed.

d. Relay Testing and Energy Meter Testing
Works

Testing and calibration of more than 200
numbers of different types of relays and
100 numbers of energy meters were carried
out by the Relay and Meter Testing Group of
this Department in various Grid Substations
including Meters of IPPs.

e. Routine & Breakdown Maintenance Works

Routine Maintenance works were carried out as
per schedule for Substations and Transmission
Lines.

System Operation Department

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

System Operation Department is responsible
for the operational planning, dispatching and
contingency actions. The Department has been
working round the clock to keep the operation
of the Integrated Nepal Power System on the
right track through the use of computer based
Supervisory Control and Data Acquisition
(SCADA) system.

The availability of real time data and better
communication system have improved the
overall availability of power stations and
transmission lines and has helped to minimize
the time required for restoration of the power
system in case of black-outs, thereby reducing
loss of revenue.

For the continued smooth functioning of the
system, it is necessary that the data acquisition
from the power stations and substations be
updated according to the latest changes/
modifications in the respective stations. The
trained manpower in the LDC has been able to
keep the data up-to-date in the SCADA software
in the LDC. Besides the regular maintenance
works, new power station Middle Marshyangdi
has been integrated into the SCADA software.
Around Rs.55 million revenue is being received
annually by leasing (to Nepal Telecom and other
private companies) the fibers from the fiber
optics cables. In the sector Pathlaiya — Lahan
132kV Transmission Line (168 km) Optical fiber
with Ground Wire (OPGW) was installed by
replacing the existing earth wire.

gz 3

Nepal Electricity Authority

Distribution and Consumer
Services Business Group

The Distribution and Consumer Services
(DCS) Business Group is entrusted with the
key responsibility of overall management of
electricity distribution network of NEA. The
responsibilities of DCS include construction,
operation, maintenance, rehabilitation and
expansion of the network up to the 33 kV
voltage levels and consumer services such as
new consumer connections, meter reading,
billing, and revenue collection. It is the main
interface with the consumers It is the largest
among the four core business groups of NEA in
terms of number of employees and business
activities. Approximately 60% of the total staffs
of NEA are employed in DCS. Also, DCS is on
the forefront to earn revenue for sustaining
operation and maintenance and development
activities of NEA.

This Business Group provides service to about
98% of NEA's total consumers through 34
Distribution Centers and 37 Branch Offices
spread over 49 districts of the country. .

This Business Group is headed by a General
Manager and organized into three departments
at central level and seven regional offices each
headed by a Director.

Performance Highlights:

In FY 2009/10, total number of customers
under DCS reached 1,786,084, an increase of
10.91.% over the last fiscal year's figure.

No. of consumer Revenue
% of total
(% % %
consumers)

Domestic 95.11 41.25 39.88

Commercial

Customer
Category

Industrial

Similarly in FY 2009/10, a total of 2,640.79 GWh
of energy was sold earning a gross revenue of
Rs.18216.47 million, an increase of 21.17.% and
20.93% over the previous year's energy sales
and revenue respectively. Sales and revenue
contributions of different customer groups
under DCS in FY 2009/10 are depicted below:

Industrialand Commercial consumer categories
combined together represent only 2.12 % of the
total number of consumers but share 45.34%
of total sale. Similarly, the domestic consumer
category represents 95.12 % of total consumers
but contribute only 41.25 % to the total sale.

Operational Highlights

The gap in the investment required and
actual invested in distribution system has
imposed pressure on DCS for the extension
or rehabilitation of the system to meet the
growing demands and to improve the reliability
and quality of supply and service delivery.

As part of system reinforcement and expansion
of distribution system program, many activities
were undertaken in FY 2009/10 to improve the
service delivery. The main activities undertaken
are listed below:

Distribution System Rehabilitation
Project

This project jointly financed by World Bank

(WB), GoN and NEA is being implemented.

The project is scheduled to be completed in

2012 A.D. The scope of the project includes the

following:

1) Reinforcement of 33/11 kV substations at
Khanar, Inaruwa, Rupani, Janakpur,Haripur,
Chanauli, Bhairahawa,Ghorahi, Guleria
and Tikapur;

डक 4

2) Construction of 64 km of new 11 kV line,
rehabilitation of 131 km of existing 11 kV
distribution network, construction of 49
km of 0.4 kV new line using ABC Cable and
rehabilitation of 155 km of existing 0.4 kV
distribution network; and

3) Supply and delivery of computerized meter
testing bench (single phase and three
phase)and CT/PT testing equipments.

The reinforcement of 33/11 kV substations at
Chanauli, Bhairahava,Ghorahi, Guleria Tikapur
has already been started. Tender for the
reinforcement of the remaining substation is in
final stage. Supply and delivery of line materials
has been completed

The implementation of the will help to improve
quality and reliability of the power supply in
these area. In addition, the project will also
contribute to reduce technical losses of these
area.

Kathmandu Valley Distribution System
Rehabilitation Project

This project is jointly financed by World Bank
(WB), GoN and NEA. The project is under
construction. The project is scheduled to be
completed in 2013 A.D. The project targets at
improving the distribution system of Kathmandu
valley. The main scope of the project includes
addition and upgradation of distribution
transformers, extension and upgradation of
11 kV and 0.4/0.23 kV line and installation of
switches and replacement of poles.

The preparation of bidding documents for
the procurement of goods is in progress.
The current status of quality and reliability
of the power system in Kathmandu valley is
not satisfactory. The implementation of this
project will significantly improve the quality
and reliability of the distribution in the Valley.
In addition, the implementation of the project
will also help reduce the technical losses and

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

cater to the growing energy demand of future.

Energy and Customer Accountability
Enhancement Project

This project is jointly financed by World Bank
(WB), GON and NEA. The project activity mainly
focuses on (i) putting in place a system for
regular energy audit of large customer and
verification of the accuracy of the metering
system. (ii) setting up of the remote metering of
large consumers via GSM or other appropriate
communication network. (iii) implementation
of GIS-based distribution network management
(DNM) and Customer Relations Management
(CRM) system in five distribution centers in the
Kathmandu valley (iv) enhancing the features
of the existing billing system, and developing
necessary interface.

The selection of consultant is in progress. The
technical proposals of the short listed firms
have been evaluated and the financial proposals
are expected to be opened soon. The project is
targeted to be completed in FY 2011/12.

Energy Access and Efficiency
Improvement Project

This project is jointly financed by Asian
Development Bank (ADB), GoN and NEA is
under construction. The project is scheduled to
be completed in 2013. The scope of the project
includes:

(i) Construction of new 33/11,6/8 MVA
substation at Baniyani, Dhanusadham,
Parual, Barathawa, Baskot, Kusma,
Mainapokhar and 11 kV switching station
in Mirmi, Swoyambhu and Mulpani

(ii) Construction of 33 kV and 11 kV lines in
the substation area..

Contract for construction of substations
has been awarded. The bidding process for
procurement of line materials is in progress.

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Nepal Electricity Authority

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

Project for Energy Efficiency through
Loss Reduction

This project is jointly financed by Asian
Development Bank (ADB) and GoN. The
project activity focuses on adopting the best
international practice of distribution network
design right, construction and _ operation.
For the purpose, distribution feeders with
unacceptable level of loss in Kathmandu valley
and Birgunj will be identified and rehabilitated.
The selection of consultant is in progress.
The project is schedule to be completed in
2013/14. The technical losses of the project
area are expected to reduce significantly after
completion of the project.

Project for Solar Powered Street
Lighting

This project will facilitate the promotion of
solar-powered street lighting in urban areas
of Nepal. The project aims at installing solar
powered and solar wind hybrid powered street
lighting systems in some sections of Kathmandu
valley as a pilot project. For the successful
implementation of the project, an advisory
committee comprising of representatives from
Local Development Ministry and members
from other stakeholders has been set up. The
selection of consultant is in final stage. The
project is expected to be completed in 2013.

Pilot Project for Public Private
Partnership in Distribution System

The project aims at enhancing the quality of
service delivery and overall efficiency through
Public Private Partnership program in the
sector of electricity distribution. The scope
of the project includes procurement of the
consulting services for the implementation of
Public Private Partnership in three distribution
centers of NEA. The selection of the consultant
is in the final stage. This project is jointly
financed by ADB and GoN.

33/11 kV, 6/8 MVA Substation at
Dhulabari (Jhapa)

The construction of Dhulabari Substation was
started in FY 2009/10 to meet the growing
demand of Dhulabari and its vicinity. The
project will also help to improve the voltage
profile of supply and reduce the technical
loses of the area. The project funded by GON is
scheduled to be completed in 2012 The scope
of the project includes the construction of
33/11 kV, 6/8 MVA substation at Dhulabari.

33/11 kV,6/8 MVA Substation at
Ramghat (Surkhet)

The construction of Ramghat Substation was
started to cater to the growing demand for
electricity in Ramghat and its vicinity. The
scope of the project includes the construction
of 33/11 kV, 6/8 MVA substation at Ramghat
and the associated 11 kV distribution line.
The project financed by GON is expected to
be completed in 2012 . The contract for the
construction has been awarded.

Reinforcement of Ilam. Dhankuta,
Bhedetar, Nijgarh, Lumbini, Butwal and
Syangja Substations

This project financed by NEA was started to
improve the quality and reliability of supply
in lam. Dhankuta, Bhedetar, Nijgarh, Lumbini,
Butwal and Syangja. The project is expected
to be completed in 2011/12 The scope of the
projects includes supply 306 installation of
circuit breakers, control panel, battery and
battery charger, CT at substation of Ilam,
Dhankuta, Bhedetrar, Nijgadh, Lumbini, Butwal
and Syangja. The contract for the construction
has already been awarded.

Reinforcement of Damak and Janakpur
Substation:

This project financed by NEA is_ being
implemented to augment 106 substation

SS 6

capacity. The scope of the project includes the
replacement of the existing33/11 kV, 6/8 MVA
transformer by 33/11 kV, 10/13.3/16 MVA
capacity transformer at Damak and Janakpur
substations. The completion of the project
will help to cater to the future demands. The
project will also help to improve the quality of
supply and reduce the technical losses of the
area.

33/11 kV,1.5 MVA Substation at
Khayarmara

The construction of Khayarmara substation
was started in FY 2009/10 to meet the growing
demand of project area and to improve the
quality of supply. The project is scheduled to
be completed in 2011 The project is funded by
GON. The construction of major civil work and
delivery of major electrical equipment have
been completed.

Reinforcement of Birbas Substation

This project was initiated to improve the
reliability of the power supply in Gulmi and
Aargakhanchi area. The scope of this project
includes construction of 33 kV line and
installation of 33 kV breakers. The contract for
construction has already been awarded. The
project is expected to be complete in 2011

Chitwan Madi Electrification Project

This project jointly financed by the Govt. of
India (Gol) and Govt. of Nepal (GoN) is being
implemented for the electrification of Madi
and its vicinity in Chitwan district The main
scope of the project includes construction of
22 km of 33 kV overhead line and 8 km of 33 kV
underground line, construction of 3 MVA 33/11
kV substation, construction of 30 km of 11 kV
line and 50 km of 0.4 kV line and installation
of 30 distribution transformers. The project will
provide electricity to about 11,000 households
of the area. The contract for the procurement

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

of line materials has already been awarded.
The project is scheduled to be completed in
2013.

Computerized Billing Project

The objective of the this project is to implement
a common billing system in all the distribution
centers of NEA for improved billing and
revenue collection processes in a modern,
efficient and cost effective manner. The system
is in operation in 40 collection centers and
preliminary work for the implementation of
the system in 10 collection center is in final
stage. In the initial stage, the system will be
operated in a decentralized mode which will
ultimately be operated in a centralized mode in
future. For this purpose, the project envisages
to make use of fiber optics or other broadband
connection.

The project also targets to implement the
computer assisted interactive voice response
service, CAIVRS, in major distribution centers.
This will help the customers to have information
on payment dues and other service related
activities over telephone without delay. The
project is scheduled to be completed in FY
2011/12.

Rural Electrification through Indian
Grant Assistance

The Government of India, Gol and the
Government of Nepal, GoN has agreed in
the MOU for the electrification of Phulbari,
Bhagawanpur, Tharprek, Khajuri Mahuwa and
Kanchanari VDC of Dang, Rupandehi, Nuwakot,
Janakpur and Siraha districts respectively. The
main scope of the project includes construction
of 38 km of 11 kV line, construction of 65 km
of 0.4 kV line and installation of 20 distribution
transformers.

The preparation of bidding documents is in
progress.

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Nepal Electricity Authority

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

Ridi Electrification Project

Ridi electrification project financed by GON
is being implemented to electrify Riri area of
Gulmi district and to improve the reliability
and quality of supply in the area. The project
is expected to be completed in 2012. The
procurement of line materials, ACSR conductor
and insulators has been completed.

Annual Electrification Program

This program is jointly financed by GoN and
NEA. The program focuses on extensions of the
existing distribution system and on completion
of outstanding incomplete electrification
works on a priority basis. The activities of the
program are spread over all the areas under
the jurisdiction of the DCS business group. The
scope of the program includes construction of
808 km 11 of kV line, 1376 km of 0.4/23 kV line
and installation of 1260 number of distribution
transformers. The completion of the project
will significantly increase the accessibility to
electricity for the rural population.

Separate Industrial Feeders Project

As part of the government program to provide
reliable electric supply to industrial consumers,
this project is being implemented. The scope of
the project includes construction of dedicated
11 kV feeders for the industrial areas and
districts. This project is financed by GoN and
NEA.

Compact Fluorescent Lamps (CFLs)
Distribution Project

A pilot project financed jointly by GoN and NEA
was launched in 21 locations of the country
in order to promote the use of CFL lamps
and to increase the public awareness on the
use of energy efficient lamps and appliances
for reduction of system peak in the evening.
Under the program, about 765,000 quality CFL
lamps were distributed. An estimated 512,000

consumers participated in the program. The
success of the pilot program has encouraged
NEA to design and implement CFL distribution
program in other locations of the country.
Under this program, around one million CFL
lamps are planned to be distributed. The project
is financed by ADB and GON. The selection of
consultant for this purpose is in progress.

Bhadratar Talakhu Electrification
Project, Nuwakot

This electrification project is financed by GoN
to electrify Mahakali, Likhu,Talakhu, and Chhap
VDC of Nuwakot district. The scope of the
project includes construction of 12 km of 11 kV
line, 16 km of 0.4/23 kV line and installation of 5
number of distribution transformers. The pole
erection work of the 11 kV line and 0.4/0.230
kV distribution line has been completed. The
project is scheduled to be completed in FY
2010/11.

Belkot Kumari Chauthe Electrification
Project, Nuwakot

This electrification project is financed by GoN
to electrify Belkot, Kumari, Chauthe VDC of
Nuwakot district. The scope of the project
includes construction of 9 km of 11 kV line,

10 km of 0.4/23 kV line and installation of 4

number of distribution transformers. The pole
erection work of the 11 kV line and 0.4/0.230
kV distribution line has been completed. The
project is scheduled to be completed in FY

ली 8

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

2010/11.

Technical Services/Commercial
Department

The Technical Services/Commercial Department
is responsible for planning, preparation of
distribution system expansion programs and
supporting DCS Business group in the technical
and commercial matters. The Department
identifies potential RE projects and substation
rehabilitation projects for implementation
in phase wise manner. The Department also
carries out management of TOD energy
meter & metering equipment and develops
and implements programs for reduction of
distribution system losses. In addition, the
Department carries out impact studies for
evacuation of power from IPPs to distribution
substation.

Loss Reduction Activities

Loss reduction activities are conducted each
year in distribution centers and branches
identified as having high level of loss. The Loss
Reduction Committee was formed in many
distribution centers. The Committee is headed
by the concerned Chief District Officer.

Monitoring, data downloading and analysis
of the consumption of large industrial and
commercial consumers have been increased.
Use of Ariel Bundle Conductor, ABC has been
encouraged in high non technical loss prone
areas. Upgrading of overloaded conductors and
transformers has been carried out to reduce
the non technical losses.

In FY 2009/10, the activities carried for loss
reduction included the installation of 300 km
of ABC cable, up-gradation of 400 number of
overloaded transformer and removal of 5000
unauthorized tappings (direct hooking).

Despite continued efforts and measures taken
to control non technical losses, the desired
result could not be achieved. This is mainly
due to the adverse local work environment
especially in terai.

Demand Side Management Deparment

This Department established in FY 2009/10 is
responsible for formulating, developing and
implementing the DSM policies and programs.
The DSM activities envisage in order to slow
downtocontrol, influence and reduce electricity
demand. The Department is also responsible

Nepal Electricity Authority

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

for launching public awareness program for the
energy conservation and use of energy efficient
electrical equipments and lighting.

In FY 2009/10, about 765,000 CFL lamps
were distributed to the consumers. Public
awareness campaign was carried out through
advertisements in various news magazines and
other electronic media to encourage the use of
CFL lamps and efficient electrical appliances.
The program was concluded successfully.

The DCS has initiated the program to install
the capacitor bank on the secondary side of
transformer especially to areas where CFL
lamps has been distributed. This will improve
the power factor and voltage level. Upon the
results obtained from the field, this program
will be extended further to other areas. It is
also planned to install the capacitor bank on
the 11 kV feeders where there is voltage drop
far below than the prescribed level.

Improvement in Service Delivery

In FY 2009/10, two new regional offices and five
ne branch offices were created to improve the
service delivery. The two new regional offices
created are Janakpur-Sagarmatha Regional
Office and Mid-Far Western Regional Office.
Similarly, the Eastern Regional Office, Central
Regional Office and Mid-far Western Regional
offices have been renamed as Koshi-Mechi
Regional Office, and Nepalgunj Regional Office
respectively. The five branch offices created are
Belbari, Rangeli, Mahendranagar, Tulsipur and
Kathmandu East.

Queue Management System (QMS)

As a continuous effort to provide better service
and comfort to our valued consumers, QMS
has been implemented in 5 branches and
improvement in physical infrastructure at
these locations has also been made to provide
comfort to consumers.

E-biddingsystem

DCS continues to explore various modes
to utilize technological developments for
operational efficiency. This FY. DCS has
introduced e-bidding with co-ordination from
MIS Department of NEA. This will further
help in ensuring fair, transparent and more
competitive bidding procedure.

Human Resource Development

In FY 2009/10, about 153 technical and non-
technical staffs participated in various training
program and seminars organized by NEA and
other agencies to enhance the technical and
managerial skill of employees. The outcome of
such trainings will certainly help in increasing
the operational efficiency of employees.

Future Plans and Programs

NEA is planning to improve the quality of the
services through the use of new technologies
and capacity building to meet the challenges of
new environment of utility business. Consumer
complaints shall be addressed without delay
and the procedure for new connection related
works shall be made simple and user friendly.
Centralized customer care center shall be
established to ensure single point of contact for
all consumer related activities, timely service,
less processing time for new connection and
centralized control and monitoring over the
entire customer care process.

NEA is planning to implement Automatic Meter
Reading, AMR system. Payment and billing
information shall be made available in internet
so that consumer can access information online.
A system will be implemented for consumers
to pay the electricity bill either through bank
or in NEA's revenue collection center. Payment
KIOSK shall be installed in major branches to
facilitate bill payment outside office hours.

धा

Electrification
Business Group

The Government of Nepal (GoN) has an
objective of extending electricity services
to rural areas for the socio-economic
development. Electrification Business Group,
headed by the General Manager, is mainly
responsible for rural electrification in Nepal.
Rural electrification is one of the basic pre-
requisites for rural development. By promoting
ruralelectrification wecan stimulate agricultural
production; expedite rural economic growth
which yields in better living condition of the
rural population.

Besides rural electrification, the Business
Group also oversees distribution and consumer
service functions of 17 small/micro hydro plants
located at different districts. These centers
serve 80,860 consumers in total.

Small Hydro Plants and Branches under Small
Hydro and Rural Electrification Department

S.No. Name of Center No of Consumers
1 Achham 2385
2 Arughat 28
3 Baglung 17798
5 Baitadi 7153
6। Dolpa 1001
7 Doti 5697
8। Heldung 435
9। Helambu 783
10 Kalikot 837
11 Khandbari 8499
12 Myagdi 7114
13 Okhaldhunga 1200
14 Ramechhap 6325
15 Rupalgad 279
16 Tatopani 884
17 Terathum 4987
Total 66105

Small Hydro Plants Leased to Private and Communities

S.No Name of Center No of Consumers
1 Bajhang 1033
2 Bajura 803

3 Bhojpur 1183
4। Chame 218

5 Chaurjahari 611
6। Darchula 1320
7 Jomsom 1783
8। Jumla 1233
Fo। Manang 549
10 Phidim 1300
11 Syarpudaha 1850
12 Taplejung 790
13 Tehrathum 2082

Total 14755

The above mentioned centers and branches
sold 3,50,32,672 kWh of energy and earned
revenue of Rs. 210,338,185 during FY 2009/10.
Apart from these, 13 more small/micro hydro
plants located at various districts have been
leased to private companies or communities.
Presently, several projects १16 being
implemented under this Business Group.
The ongoing donor assisted projects are:
Rural Electrification, Distribution and
Transmission Project with loan assistance
from Asian Development Bank & Distribution
and Rural Electrification Project financed
by the World Bank. Apart from these, many
rural electrification projects are also under
implementation with financing from GoN. The
synopsis of the work accomplished under this
Business Group is presented below:

Small Hydropower and Rural
Electrification Department (SHPRED)

This Departmentis responsible for construction,

का 1

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

operation and maintenance of isolated small
hydropower plants, implementation of rural
electrification projects, and extension of the
National Grid to remote hilly regions to provide
electricity to rural population. Under this
Department, 26 small hydropower plants and
7 distribution branch offices carry out various
activities related to operation & maintenance
of power generation, distribution & consumer
service and so forth, covering 27 districts
in 12 zones of the country. Out of 26 Small
Hydropower Plants(SHP) in operation, 14 are
leased to private firms and 4 are leased to the
user communities, which operate under the
guidelines set forth by NEA. A number of 33
kV transmission lines and 33/11 kV substation
projects are under construction. The status of
projects carried out by SHPRED in FY 2009/10
is summarized below.

Gamgad Small Hydropower Project
(Mugu District)

The construction of Gamgad Small Hydro
Project (400 kW) was started in FY 2001/02.
Construction of most of the civil structures
has been completed. Electro-mechanical
equipment has already been transported to the
site. The Project is expected to be completed in
within FY 2010/11.

Buipa-Okhaldhunga 33 kV Transmission
Line Project (Khotang and Okhaldhunga
Districts)

The scope of this project includes the
construction of 32.5 km of 33 kV transmission
line, 35 km of 11 kV and 30 km of LV distribution
line and two 33/11 kV, 1.5 MVA substations
each at Okhaldhunga and Khotang districts.
Construction of 33/11 kV, 1.5 MVA substation
at Buipa is nearing completion. Overall, 30 km
of 33 kV transmission line, 6.5 km of 11 kV
transmission line and 7 km of LV distribution
line have been completed.

llam-Phidim-Taplejung 33 kV
Transmission Line Project (Panchthar
and Taplejung Districts)

The scope of this project includes the
construction of 90 km of 33 kV transmission
line and 33/11 kV, 1.5 MVA substation each
at Phidim and Taplejung districts. Out of 90
km long 33 kV transmission line, stringing of
conductor for 60 km & erection of poles for
80 km have been completed. The project is
scheduled to be completed by FY 2010/11.

Sitalpati-Musikot 33 kV Transmission
Line Project (Salyan and Rukum
Districts)

The project includes the construction of 50 km
of 33 kV transmission line, 50 km of 11 kV line,
40 km of LV distribution line and two 33/11 kV
substations of 1.5 MVA capacity one each at
Sitalpati and Musikot. Out of 50 km long 33 kV
transmission line, stringing of 32 km line & pole
erection has been completed. Construction of
33/11 kV, 1.5 MVA substation at Sitalpati and 33
kV bay extension at Tulsipur are in progress and
are expected to be completed by FY 2010/11.

Chhinchu-Rakam-Jajarkot 33 kV
Transmission Line Project (Surkhet and
Jajarkot Districts)

The scope of the project consists of the
construction of 70 km of 33 kV transmission
line, 100 km of 11 kV, 100 km of LV distribution
line and two 33/11 kV substations at Surkhet
and Jajarkot districts. Out of 70 km long 33 kV
transmission line, pole erection and stringing
of conductor for 40 km and 9 km of 11 kV line
has been completed. Construction of 33/11
kV, 750 KVA substation at Rakam is in progress
and expected to be completed by FY 2010/11.
Contract for procurement of 33 kV & 11 kV
Protection Scheme of Rakam substation has
been awarded.

> 2

Ghorahi-Holeri 33 kV Transmission Line
Project (Rolpa District)

Scope of this project consists of the construction
of 45 km of 33 kV transmission line, 50 km of
11 kV, 50 km of LV distribution line and two
33/11 kV substations at Holleri & Ghorahi.
Construction of 33 kV transmission line and
6 km of 11 kV line & 6 km of distribution line
has been completed. Construction of 33/11
kV, 750 KVA substation at Holleri and 33 kV
bay extension at Ghorahi are in progress and
expected to be completed by FY 2010/11.
Contract for procurement of 33 kV & 11 kV
Protection Scheme of Holleri substation has
been awarded.

Udipur-Besisahar-Manang 33 kV
Transmission Line Project (Lamjung and
Manang Districts)

The project includes the construction of 90
km of 33 kV transmission line, 53 km of 11 kV, 53 km of LV distribution line and one 33/11
kV, 1.5 MVA substation in Manang and 33 kV
bay extension in the existing Udipur substation.
Out of 70 km long 33 kV transmission line, pole
erection for 66 km and stringing of conductor
for 35 km have been completed.

Dadeldhura-Baitadi 33 kV Transmission
Line Project

The scope of the project includes the
construction of 14 km of 33 kV transmission
line, 15 km of 11 kV & LV distribution line, one
33/11 kV 3 MVA substation at Baitadi and 33
kV bay extension in the existing Dadeldhura
substation. Construction of 33/11 kV, 3 MVA
substation at Baitadi has been completed in FY
2009/10.

Dhankuta-Hile-Leguwa-Bhojpur 33 kV
Transmission Line Project

The project includes the construction of 35

A YEAR IN REVIEW,
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km of 33 kV transmission line, 52 km of 11 kV, 50 km of LV distribution line and one 33/11
kV substations in Bhojpur district. Out of 35
km long 33 kV transmission line, pole erection
for 34 km and stringing of conductor for 28
km have been completed. Construction of
33/11 kV, substation at Bhojpur is ongoing
and expected to be completed by FY 2010/11.
Contract for procurement of 33 kV & 11 kV
Protection Scheme of Bhojpur substation has
been awarded.

Tumlingtar-Dingla-Bhojpur 11 kV
Transmission Line Project

The project includes the construction of 30
km of 11 kV, 25 km of LV distribution line in
Sankhuwasabha and Bhojpur districts. Pole
erection for 27 km & stringing for conductor in
19 km have been completed. Similarly, 16 km of
LV distribution line has also been completed.

Rasuwaghat-Khotang 33 kV
Transmission Line Project

Major works to be performed under this
project include the construction of 14 km
of 33 kV transmission line, one 33/11 kV, 1.5
MVA capacity substation at Rasuwaghat of
Khotang district, 90 km of 11 kV and 90 km of
LV distribution lines in Khotang district. Out
of these, 6 km of 33 kV transmission line, 14
km of 11 kV line and 21 km of LV distribution
line construction have been completed.
Construction of 33 kV bay extension at Jaljale
substation is nearing completion.

Dipayal-Sanfebagar-Manma-Jumla 33
kV Transmission Line Project

Major components of the project include the
construction of 155 km of 33 kV, 15 km of 11 kV
& 3 nos. of 33/11 kV substations at Sanfebagar,
Manma and Jumla. Out of 155 km long 33 kV
transmission line, pole erection for 20 km has
been completed.

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A YEAR IN REVIEW,
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Dailekh Substation Project

The project includes the construction of 25 km
of 33 kV, 15 km of 11 kV, 10 km of LV distribution
line & one 33/11 kV, 1.5 MVA substation at
Dailekh and 33 kV Bay extension at Surkhet.
The project is expected to be completed in FY
2010/11.

Galkot Substation Project

This project is being implemented to provide
electric supply to Galkot area in Baglung
district. Bay extension at Baglung substation
has been completed.

Rake Ravi-Chisapani-Dashami Bazaar
33 kV Transmission Line Project

The project includes the construction of 25 km
of 33 kV, 40 km of 11 kV, 40 km of distribution
line in Panchthar district. Procurement of poles
for 12 km of 33 kV transmission line has been
completed.

Manthali-Sangutar 33 kV Transmission
Line Project

The Project includes the construction of
30 km of 33 kV, 40 km of 11 kV, 40 km of LV
distribution line in Ramechhap district. Line
survey is ongoing & procurement of poles for
10 km of 33 kV transmission line has been
completed. The construction of 10 km of line
was also completed.

Kapurkot-Koilachaur 33 kV
Transmission Line Project

The project includes the construction of
15 km of 33 kV, 25 km of 11 kV, 25 km of LV
distribution line in Salyan & Rolpa districts &
33/11 kV substation one each at Koilachaur &
Kapurkot, The procurement of poles for 12 km
of 33 kV transmission line was completed .

Furkot-Nepalthok 33 kV Transmission

Line Project

Major components of the project include
the construction of 25 km of 33 kV, 25 km
of 11 kV, 40 km of LV distribution line in
Kavrepalanchowk district & 33/11 kV, 1.5 MVA
substations at Nepalthok. The procurement of
poles for 12 km of 33 kV transmission line has
been completed.

Aathrai VDC-Sankranti Bazaar 33/11 kV
Substation Project

Major components of the project include the
construction of 25 km of 33 kV, 25 km of 11
kV, 40 km of LV distribution line in Tehrathum
district & one 33/11 kV substation at Sankranti
Bazaar. The procurement of poles for 12 km of
33 kV transmission line and construction has
been completed.

Saphebagar(Achham)-Martadi
(Bajura)33 kV Transmission Line Project

The project includes the construction of 48 km
of 33 kV, 40 km of 11 kV, 40 km of distribution
line in Achham and Bajura district, 33/11 kV
substations at Martadi and 33 kV Bay extension
at Saphebagar. Procurement of poles for 12 km
of 33 kV transmission line and its construction
has been completed

Martadi (Bajura)- Gamgadi(Mugu)33 kV
Transmission Line Project

The project includes the construction of 90 km
of 33 kV, 40 km of 11 kV, 40 km of LV distribution
line in Bajura and Mugu district, 33/11 kV
substations at Martadi and 33 kV Bay extension
at Saphebagar. Procurement of poles for 10 km
of 33 kV transmission line and construction of
10 km of line has been completed

Sanghutar-Okhaldhunga33 kV
Transmission Line Project

The Project includes the construction of 40 km

SY.

of 33 kV, 40 km of 11 kV, 40 km of LV distribution
line in Ranechhap and Okhaldhunga districts,
33 kV Bay extension at Sanghutar. Procurement
of poles for 10 km of 33 kV transmission line
has been complete. The construction of 10 km
of line construction has also been completed.

Khorpe (Baitadi)-Chainpur(Bhajang) 33
kV Transmission Line Project

The scope of this Project includes the
construction of 90 km of 33 kV, 40 km of 11
kV, 40 km of LV distribution line in Baitadi
and Bajura district, 33/11 kV substations at
Chainpur and 33 kV bay extension at Baitadi
Substation. Procurement of poles for 10 km of
33 kV transmission line and construction of 10
km of line were completed.

Okhaldhunga-Salleri 33 kV
Transmission Line Project

The project includes the construction of
40 km of 33 kV, 40 km of 11 kV, 40 km of LV
distribution line in Solukhumbu district, 33/11
kV substations at Salleri. The procurement of
poles for 10 km of 33 kV transmission line and
construction of 10 km of line were completed.

Khimti-Manthali 33 kV Transmission
Line Project

The project includes the construction of 15
km of 33 kV, 33 kV bay extension at Khimti.
Procurement of poles for 10 km of 33 kV
transmission line and construction of 10 km of
line were completed.

Bokhim Lekharka (Bhojpur)
Electrification Project

The project includes the construction of 70
km of 11 kV, 100 km of LV distribution line in
Bokhim, Khawa, Sidheswor, Gupteswor, Nagi,
Lekharka, Gogane, Timma, Kot, Chinamakhu,
and Annapurna VDC of Bhojpur district. The

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

procurement of poles for 22 km of 11 kV
transmission line and construction of 22 km of
11 kV line were completed.

Dhankuta-Hile-Ranibas-Bhojpur 33 kV
Transmission Line Project

The project includes the construction of 27 km
of 33 kV, 50 km of LV distribution line in different
V.D.C. of Bhojpur district. Procurement of
poles for 13 km of 33 kV transmission line and
construction of 13 km of line were completed.

Panchthar 33/11 kV Substation Project

The scope of this project includes the
construction of 11 kV line from 33/11 kV 1.5
MVA substation at Phidim to Panchthar district.
The route alignment survey is in progress.

Community Rural Electrification
Department

Community Rural Electrification Department
(CRED) was established in February 2003
following the enactment of the "Community
Distribution Regulation-2065"to carry out
community based electrification works in an
organized way. As part of the government
policy to promote community participation in
rural electrification, the government provides
80% of the capital cost of electrification, and
the remaining 20 percent of the capital cost is
borne by the Community. NEA is responsible for
maintenance of HT line where as Community/
Users' Group is responsible for maintenance of
LV distribution system.

The public response to this initiative of NEA has
been overwhelming. Altogether, about 185,000
households have been provided with electricity
by the end of FY 2009/10.

CRED Status as of July 16, 2010

त 9

Nepal Electricity Authority

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

Details of Works accomplished under CRED and
KKREP program from 2004/05 to 2009/10

HT Line length 1,781 km

LT Line Length 5,792 km
Distribution Transformer 2,905 Nos.
33/11 kV, 3 MVA Substation

Description CBOM। CBG। Total

Pa

268
241

Applications approved 220 48
Agreements signed 216 25

Currently in operation 107 25। =। 132

Note: CBRE: Community Based Rural Electrification
Program; CBOM: Community based Operation and
Maintenance, CBG: Community based generation

KKREP:Kailai Kanchanpur Rural Electrification Project

Rural Electrification and Distribution
System Reinforcement Project

This project is jointly funded by ADB, GoN and
NEA. The scope of this project includes rural
electrification (RE)in 22 districts anddistribution
system reinforcement (DSR) in additional 5
districts. For the purpose, altogether 35 number
of 33/11 kV substations were constructed which
included construction of 14 new construction,
up-gradation of 8 substations and rehabilitation
of 13 substations.

RE and DSR works executed under 14 contract
packages have been completed in FY 2009/10.
The construction of substations has also been
completed except for Phikkal substation in Ilam
district. The problem identified in 33/11 kV 3
MVA power transformer at Phikkal substation
has been rectified and the substation will be in
Operation within first quarter of FY 2010/11.

The project has been completed. As built
drawing/document preparation and

capitalization of assets is in progress.

Distribution and Rural Electrification

Project

The Distribution and Rural Electrification Project
is one of the component projects of the Power
Development Project, Part-C, NEA Transmission
and Distribution. The scope of project includes
reinforcement of distribution systems and
electrification in Lalitpur, Bhaktapur, Kavre,
Dhading and Nuwakot districts. The specific
scope includes electrification of 34 load centers
in Dhading, 24 load centers in Nuwakot and
36 load centers in Lalitpur districts, and the
construction of two numbers of 33/11 kV, 3
MVA substations in Dhading and one number
of 11 kV switching station in Lalitpur district.
The construction of Devighat substation has
been completed. The construction of other
substations is in the final stage of completion.
The electrification and distribution system
reinforcement work in Bhaktapur and
Kavre districts have been completed and
electrification works in Lalitpur, Dhading and
Nuwakot are nearing completion.

Sindhu Dolakha Distribution Line
Extension Project

Started in FY 1999/2000, this project is
under implementation with funding from the
Government of Nepal. The Project is expected
to benefit about 50,000 households, and some
small and medium industries in Dolakha and
Ramechhap districts. The scope of the project
includes the construction of 82 km of 33 kV line,
200 km of 11 kV line and 460 km of low voltage
line, installation of 278 number of distribution
transformers and construction of 4 number of
33/11 kV, 1.5 MVA substations at Makaibari,
Jiri, Kirnetar and Singati

The construction of 1.5 MVA substations at
Jiri, Makaibari & Kirnetar has been completed.
Likewise, construction of 60 km of 11 kV and 100
km of 400 volts lines has also been completed.

DS 6

Engineering Services

Business Group

The construction of Singati Substation is
in progress. The project is scheduled to be
completed by FY 2010/11

The mandate to carry out the consulting
and other engineering services within Nepal
Electricity Authority (NEA) is reserved with the
Engineering Services (ES) business group. This
business group, headed by a General Manager,
consists of four departments and a division
to look into services such as the preparation
of projects from their identification stage
up to its implementation phase including all
the environmental study requirements, field
investigations, manpower training and other
works related to electromechanical services.
With over several decades of sound experience
in these fields, Engineering Services also caters
to the private sector in providing services
related to numerous technical fields. These
services are provided by the following four
departments and one division.

७ Project Development Department

७ Environmental and Social Services
Department

¢ Soil, Rock and Concrete Laboratory

e NEA Training Centre

¢ Electromechanical Division

Ongoing Projects

Rahughat Hydroelectric Project

Rahughat Hydroelectric Project with an
installed capacity of 32 MW and located in
Myagdi District is entering the construction
phase. The project is being initiated with the
partial financial assistance (USS 31 Million)
from the EXIM Bank of India. PDD carried out

an Upgraded Feasibility Study for this project
in the Fiscal Year 2007/08 and increased the
installed capacity from 27 MW to 30 MW.
Subsequently, a Detailed Project Report was
prepared in the Fiscal Year 2008/09 by PDD,
using its indigenous resources of NEA and
increased the installed capacity from 30 MW to
32 MW.

The prequalification of bidders for construction
of main civil works of the project has already
been completed. Financial bid from the pre-
qualified bidders was invited on 9th July 2010
and pre-bid meeting was concluded on 25th
July 2010. The last date for submission of the
bids is on 5th September 2010.

Financial bid from the pre-qualified bidders
for the construction of the camp facilities was
invited on 1st July 2010 and the bids were
opened on 315 July 2010. Invitation for the
expression of interest (Eol) for the consulting
services of the project from local, international
or/and the joint venture of both from the
interested consulting firms was invited on 11th
February 2010. The evaluation for the short
listing of the consultants is in progress.

via gine ®

am गा बा

॥ _ न, नट न छ - Po।
Rahughat Hydroelectric Project - A view of Headworks थि

त 7

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

The acquisition of land required for the project
is in progress. As the capacity of the project is
less than 50 MW, only an IEE study needs to
be conducted for this project. This study has
already been completed and submitted for
approval. The construction period of the project
is estimated as 3.5 years after the start of its
construction. The project will generate annual
energy of 188.54 GWh with 6 hours of peaking
capacity energy. The estimated cost of the
project is 72 Million US S as per Detail Project
Report (July 2010). The EXIM bank of India has
provided a soft loan of USS 31 Million which
shall be used for the construction of main civil
works. For the remaining USS 41 Million deficit
fund, NEA has requested the Ministry of Energy
to arrange the deficit fund required for electro-
mechanical, hydro-mechanical, transmission
and engineering works for which the Korean
Government is known to have shown interest.

Upper Seti (Damuli) Storage Project

The proposed 127 MW Upper Seti (Damauli)
Storage Hydroelectric Project is located in
Tanahun District of Gandaki Zone. In order to
enhance the peaking capacity in the Nepal
power system and to minimize the seasonal
deficit in energy supply, Nepal Electricity
Authority had identified and carried out the
feasibility study of this project in the year 2001.
Subsequently, the Upgrading Feasibility Study
of this project was carried out by JICA. The JICA
study was completed in June 2007.

The project shall consist of a 140 m high dam
which will create a reservoir with a gross
storage capacity of 295 million cubic meters.
The water will be diverted to an underground
power house through a 1 km long headace
tunnel to generate 484 GWh of energy on an
annual basis. The project cost is estimated at
USD 341 million. A 220 kV, Damauli-Bharatpur
Transmission Line of 39 km length is planned

for power evacuation.

The survey and design of the project road,
bridges, camp facilities was initiated in the
year under review, and will continue into the
next fiscal year. Field investigation for detailed
engineering designed has also been initiated
and will be completed in FY 2010/11.

The detailed engineering design of the project
and other related studies for the preparation
of the project will be carried out with the
assistance of the Asian Development Bank. A
grant negotiation with ADB has been recently
concluded for the detailed engineering design
study of the project. The procurement of the
consulting services is currently underway, and
consultants for the detailed engineering design
are planned to be in place by October 2010.

Project Development Department

The Project Development Department (PDD)
looks into the identification and the subsequent
development of hydropower projects through
several levels of studies. This department has
had ample experience in identifying, carrying
out pre-feasibility studies, feasibility studies,
detailed engineering studies, preparation of EPC
(Engineering, Procurement and Construction)
and BOQ (Bill of Quantities) related tender
documents and also the supervision of the
construction activities of hydropower projects.
Construction supervision of Chameliya HEP,
preparation of detailed engineering design for
Kulekhani II] HEP, preparation of the feasibility
study for Upper Tamakoshi HEP, are some of
the works that have been carried out by PDD
in the past. PDD is currently involved with the
following projects.

Upper Trishuli 3 B Hydroelectric Project

Upper Trishuli 3 B Hydroelectric Project with
an installed capacity of 37 MW is a cascade
development of Upper Trishuli 3 A Hydroelectric

सा

Project. Project Development Department
recently completed the preparation of draft
Tender Documents and Tender Drawings for
the civil works of the project. The project is
estimated to cost 68 Million US Dollars and
will generate 296 GWh of annual energy. As
a cascade development to Upper Trishuli 3 A
Hydroelectric Project, it is envisaged that this is
a very attractive project.

In order to involve local people belonging to
areas within the vicinity of the project, the
NEA has decided to develop Upper Trishuli 3
B Hydroelectric Project, UT3B under Public-
Private-Partnership, PPP model. Several
rounds of talks have already been carried out
to decide the allotment of shares. Necessary
permissions from the NEA management as well
as the Government of Nepal have already been
received for the development of this project
in this manner. PDD is currently in the process
of forming an NEA Subsidiary Company along
with the involvement of the people from the
project area and other government bodies as
equity partners.

Tamakoshi-V HEP

Tamakoshi-V Hydroelectric Project is located
just downstream of the Upper Tamakoshi
Hydroelectric Project, being implemented by
Upper Tamakoshi Hydroelectric Company. This
project is conceptualized to operate in tandem
with Upper Tamakoshi HEP utilizing the design
discharge from the tailrace of Upper Tamakoshi
HEP.

This project is located approximately 170 km
north east of Kathmandu and approximately
42 km away from Charikot Bazar. Topographical
survey, hydrological study and_ surface
geological study were completed in the previous
fiscal year. In this fiscal year, a high flood level
measuring gauging station has been installed,
construction material survey, seismic refraction

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

study of 2000m and 90 m of core drilling has
been completed as a part of feasibility study.
Feasibility design of this project for the 87 MW
of installed capacity is expected to complete by
this fiscal year 2067/68.

Nalsyaugad Storage Project

Nalsyaugad Storage Hydropower Project
was conceived as one of the most attractive
storage projects among the 93 storage projects
screened and ranked during the "Identification
and Feasibility Study of Storage Projects-
2001". This project is located in Jajarkot District
in Mid Western Development Region of Nepal.
Nalsyaugad is a small tributary of Bheri River
in Karnali River Basin. An access road of
approximately 20 km is required to reach the
powerhouse site from the district headquarter
and additional 15 km of project road is required
before the construction of this project. An
alternative access, a seasonal motorable road,
from the Rukum airport to the powerhouse site
is available.

The present study has established the dam site
location approximately 9.25 km upstream from
the confluence of Nalsyaugad and Bheri River
towards Nalsyaugad River on the left bank of
Nalsyaugad River.

The topographical survey, reservoir mapping,
hydrological study and surface geological study
were completed. Similarly, seismic refraction
survey of 8050 m has been completed and
the drilling work is being initiated at the site.
The Reservoir Full Supply Level Optimization
has been completed which corresponds to the
installed capacity of 390 MW. The installed
capacity and FSL will again rectify during the
further study.

Budhi Gandaki Storage Hydropower
Project

ag Pe 9

Nepal Electricity Authority

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

Budhi Gandaki Storage Hydroelectric Project
is situated in Gorkha district of Western
Development. It is proposed to store the water
of Budhi Gandaki river by constructing a rockfill
dam at a distance of 2 Km from its confluence
with Trishuli River. Budhi Gandaki River is a
perennial river and flows from North to South
as a border river of Gorkha District (Western
Development Region) and Dhading District (
Central Development Region). The project has
been found very attractive as per prefeasibility
study completed in April 1984 due to closeness
to the load center and high potential of power.

Government of Nepal, as its initiative to
augment power generation and to end
the prevailing mismatch between demand
and supply tried to develop Budhi Gandaki
through private initiatives. For this, proposals
were invited through public notice but the
government failed to receive response. The
Government of Nepal decided and instructed
NEA to develop the project in association with
some appropriate/suitable partner.

NEA immediately took up the task seriously to
prepare Feasibility Report and to come up with
latest updated cost of the Project. NEA started
the Feasibility Study in the fiscal year 2066/067
with following targets:

1. To prepare a report to go for viability of
PPP finance model

2. To conduct topographic survey of the
area.

3. To conduct hydrological studies

4. To conduct geological drilling and geological
studies

5. To conduct environmental studies

6. To proceed with the activities of selecting
foreign consultant for detailed design and
feasibility
studies

7. To conduct survey works for the access
road and bridge.

8. To conduct detailed study of the project
by the consult.

Due to resource constraints and limitations
of finance, item no.1, no.6 and no.8 are on-
hold. The selection of a suitable partner for
association is in progress.

In FY 2009/10; Project Development
Department (PDD) of Engineering services (ES)
concentrated on following activities:

1. Topographical survey: Topographical
survey works altogether 41 ha has been
completed and maps prepared for the Dam
site, powerhouse site and camp area.

2. Hydrological studies: Since there was
no gauging station at the dam site so,
hydrological studies of the project has
been done during its prefeasibility studies
by simulation with other gauging stations
and studies. To be realistic and to make
more detailed hydrological studies a
gauging station has been established in
the vicinity of the Dam in January 2010
and studies are continued to take staff
readings, to measure the discharge and to
take samples to find the sediment loads.

3. Environmental studies: Preliminary
studies has been made during fiscal year
2009/10 by Environmental and _ social
Studies Department, NEA, according
to which, 21 VDCs (11 VDC in Gorkha
District and 10 VDC in Dhading district),
42 settlement, 3242 households (nearly
17000 population), 67 infrastructures
will be affected by the construction of
project components and formation of
reservoir.

Transmission Line Projects

Asinthe past, Project Development Department

0 0

has been extending its consulting services,
especially in the survey of transmission line
alignment surveys. During the Fiscal Year
2009/10, PDD was involved with the study of
16 transmission line projects. Most of these

A YEAR IN REVIEW,

FISCAL YEAR 2009/10 Nepal Electricity Authority

have already been completed. The status of
these projects is as follows.

Other Activities

S.No। Name of the Project Project Status
1। Syagnja Substation Work completed
2 New Marsyangdi-Kathmandu 220 kV T/L Final report is in progress.
3। Singati-Lamasangu 132 kV T/L Completed
4 Sunkoshi -Dolkha 132 kV T/L Completed
5। Kabeli -Damak 132 k/V T/L Completed
6 Phidim Hub in the proposed Kabeli -Damak 132 kV T/L Completed
7। Kaligandaki 220/132 kV T/L Final report is in progress.
38 Dhankuta- Tirtire T/L Completed
9। Marsyangdi Transmission Line corridor Final report is in progress.
10। Hetauda-Dhalkebar-Duhabi 400 kV T/L Final report is in progress.
11। Kohalpur- Surkhet 132 kV T/L Completed
12। Maruwa- Katari Cement Industry Desk study and walkover survey has been completed
13। Mamane -Laxmipur 33 kV T/L Detailed survey has been finished and the final

report has been submitted to TLSCD.

14। Raxual- Parwanipur 132 kV T/L

Completed

15। Singti 132 kV Sub-station

Completed

16। Pathlaiya 132 kV Substation

Completed

17। Hetauda-Dhalkebar 400kV, 400 km long Transmission Line

Final report is in progress.

18। Dhalkebar-Duhabi 400 kV, 160 km long Transmission Line

Final report is in progress.

19। Raxaul-Parwanipur 132 kV, 20 km long Transmission Line

Completed

20। Gulmi-Argakhanchi-Chanauta 132 kV, 60 km long Transmission Line

Completed

21। Modi-Lekhnath 132 kV, 45 km long Transmission Line

Final report is in progress.

22। Madi-Lekhnath 132 kV, 22 km long Transmission Line

Final report is in progress.

23। Samundratar-Naubise 132 kV, 50 km long Transmission Line

Final report is in progress.

24। Ramechhap-Garlyang-Khimti 132 kV, 50 km long Transmission Line

Completed

25। Middle Marshyangdi-Manang 132 kV, 60 km long Transmission Line। Final report is in progress.
26। Kohalpur-Surkhet 132 kV, 50 km long Transmission Line Completed
27। Kaski-Bhurjung-Parbat-Kusma 132 kV, 45 km long Transmission Line। Final report is in progress.

Apart from the regular works of carrying out
studies at different levels for different projects,
PDD has involved itself in various other
activities which have been very instrumental in
developing the institutional strength of Nepal
Electricity Authority in the field of consulting
services. Other activities that were carried out
during the Fiscal Year 2009/10 are as follows.

० Continuation of the construction
supervision of Chameliya Hydroelectric
Project in association with the Joint
Venture of three local consulting firms (

Shah Consult. SILT and ICON ).

"० Conduction of the annual sediment survey
at Kulekhani Reservoir.

e Initiation for the design of three new
NEA Office Complexes based on the new
master plan within the premises in Ratna
Park.

० Construction supervision of the following

substation buildings

०  Unichaur substation building in
Lalitpur District ( 11kV-33kV)

०  Salyantartar substation building in
Dhading District (33kV-66kV)

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Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

० Chaughada substation building in
Nuwakot District (33kV-66kV)

Environmental and Social Studies
Department

The Environmental and _ Social Studies
Department (ESSD) of Nepal Electricity
Authority is one of the integral Departments
of Engineering Services. This Department
executes activities related to all aspects of
environmental studies of hydropower and
transmission line projects being planned,
designed, constructed or operated by NEA.
This Department is a commercial unit of NEA
with more than a decade of experience in
conducting Environmental Impact Assessment
(EIA), Initial Environmental Examination (IEE),
SIA, ACRP, VCDP studies and monitoring and
auditing of hydroelectric, transmission line and
distribution line projects.

During this fiscal year 2009/2010, ESSD
completed three cross border 400 kV T/L
projects of National Priority which was
approved by Ministry of Energy. The IEE report
of Dumre-Damauli 132 kV T/L project was
also approved this year. Similarly, the EIA/IEEs
of two hydroelectric and a sub-distribution
project of National importance namely Upper
Trishuli 3 "A" HEP, Rahughat HEP and Madi-
Jagtapur 33 kV T/L project are at the last stage
of approval.

Currently, the Department is carrying out the
following assignments and their status is as
follows::

1. The IEE study of Hetauda-Dhalkebar-
Duhabi 400 kV 1 project has
commenced.

2. The IEE study Upper Seti (Damauli)-
Bharatpur 220 kV Transmission Line
Project is at the last stage of approval.

3. The ToR and Scoping Document of Upper-

Trishuli HEP (3A)-Matatirtha 220 kV T/L
project is at the last stage of approval

4. 116 Environmental Monitoring and
Mitigation work in Khimti- Dhalkebar 220
kV Transmission Line Project is on-going

5. Environmental Monitoring and Mitigation
work in Chameliya Hydroelectric Project
is on going

6. The IEE of Sunkoshi 132 kV Transmission
Line Corridor has commenced

7. The IEE of Koshi Corridor T/L project has
commenced

8. The Scoping Document and Terms of

reference of Upper Trishuli Hydropower
Project (UT-3B) is in the process of

approval.

9. The EIA study of Tamakoshi V HEP is on
going.

10. ThelEEstudyofRahughat—Modi132kVison
going.

11. The IEE study Marsyandhi-Kathmandu
132 T/L Project.

Soil Rock and Concrete Laboratory

Soil, Rock and Concrete Laboratory (SRCL)
provides services in material testing, geological
and geotechnical investigations for the
different phases of a hydroelectric project
development.

It provides services like geological mapping,
various types of geophysical surveys, core
drilling and construction material investigation
at different levels to the different departments
of NEA and the private sector. In the field of soil
and rock engineering, it also provides services
of carrying out in-situ tests and laboratory
tests viz. determination of index properties,
tri-axial tests, consolidation tests, point load
tests, direct shear tests, uniaxial compressive
strength tests etc. on a regular basis for clients

5 2

inside and outside NEA. SRCL also provides
drilling machines and their accessories for hire
on acommercial basis.

The following works were undertaken by this
laboratory during the FY 2066/067

1. Core Drilling Works
¢ Core drilling works for Bheri Babai
Diversion Project has been completed.
० Core drilling works for
Storage Project is ongoing.

Nalsyaugad

० Core drilling works for Rasuwagadi
Project has been completed.

० Core drilling works for Tamakoshi V
Project has been completed.

¢ Core drilling works for Tamakoshi III
Project is ongoing.

2. Similarly, seismic refraction works for
Bheri Babai Project, Nalsyaugad Storage
Project and Tamakoshi V project has been
completed.

3. Construction material survey works for
Nalsyaugad and Tamakoshi V Projects are
ongoing.

4. Laboratory tests of soil samples for Kabeli
Damak 132 kV Transmission Line Project
has been completed.

5. Similarly, SRCL has completed the
laboratory tests on soil samples for many
projects from the private sector.

NEA Training Center

The term training refers to the acquisition
of knowledge, skills, and competencies as a
result of the teaching of vocational or practical
skills and knowledge that relate to specific
useful competencies. As Human Resource is
one of the most important ingredients of any

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

Organization, its development is indispensable
for the survival
Organization. So, investment in training is
treated as corporate assets of organization.

and advancement of the

For upgrading and enhancing the © skill,
knowledge and attitudes of human resources,
NEA Training Center (NEA TC) is another
important department under the Engineering
Services business group, which
providing need-based short term trainings
covering 3 days to 23 days for NEA employees
with an objective to upgrade their professional
knowledge, skills and attitudes of manpower
at operational and managerial levels involved
in the power sector. In addition, NEATC also
provided three months (90 days) training for
39 participants from the project affected area
of Dolkha district on the request of Upper
Tamakoshi HEP. The training types involve
induction, in-services or refreshers and custom
designed as per request/requirement. The
training programs are designed as per training
needs assessment (TNA) of an organization and
at the personnel level after discussion has been
held with the management and as feedbacks
provided by trainees respectively.

has been

These trainings are conducted on contract with
corporate and GM office levels of NEA. Since
last year, with the view to expand its training
programs for clients outside of NEA, upon
their request, NEATC has conducted various
programs to non NEA staff. Altogether 31
training programs were conducted during the
fiscal year 2009/10 as given below.

S.N. Types of Training

Nepal Electricity Authority

Officer

त

53 3

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

Nepal Electricity Authority

No. of Participants in On the job Training
according to contract with business group

- 412
and private hydropower Company
(Short-term courses)
No. of Participants in Induction training for 159
the newly recruited employees of NEA.
Upper Tamakoshi HEP 39
Total number of Participants 18 29 188 215 450

These training were conducted according to
the contract agreement with the different
corporate and business offices of NEA.

was earned from these activities in FY
In addition to regular training programs, the 2009/10.
NEATC facilitated the following programs in FY 3 A

training program on_ General
2009/10.

Electrical and General Mechanical
Training (3months) was provided to 39
participants from the project affected area
of Dolakha District on request of Upper
Tamakoshi HEP. This was conducted on
etc on their request. Engineering colleges, the basis of rechargeable work through

scout, political parties . and Varlous joint agreement and amounted (0 Rs.
organizations used the facilities available 4.774.344.22

in the training center for various purposes.

The total income generated from these
activities amounted to Rs 2,240,000.00 Following table provides the details of trainees

from different corporate offices and business
2. Assisted and Provided space to Human groups in the F/Y 2009/10.

Resource Department for collection of No. of Trai
. . . ०. OT Iralne
examination forms, reports preparation S.N. Name of DMD,GM or Other offices
etc. A total sum of Rs. 10,370,700 Contracted f
Distribution & Consumers Services

2 [Generation = —"'(L 176। गह उ
छ [Transmission & Sytem Operation =। 86st)

1. Provided Seminar Halls, class rooms,
hostel and ground space on rental facilities
to different users, groups/organizations

Administration, Finance and Internal Audit। 8। Upper Tamakoshi HEP। 9। Induction (Human Resource Department)।

Apart from regular training program, various
training programs on Time, Chang and Stress

छक 4

Allocated

Management were also conducted in FY
2009/10.

In the last 16 years, NEA Training Center
has trained a total of 11,183 employees
form different business groups within Nepal
Electricity Authority and other organizations as
well.

Electromechanical Design Division

This Division handlesallofthe electromechanical
issues arising within Engineering Services.
These issues range from the design of
electromechanical equipment of projects

that are under various stages of study to the

transmission line and evacuation studies for

private sector projects. The jobs that have been

completed or are currently being undertaken

by this division are as follows.

e System Study required for power evacuation
of Tama Koshi Sub Basin Projects.

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

e System study required for power evacuation
of Nyadi and Marshyangdi II] Hydropower
Projects

e Study of
projects.

different transmission line

Apart from the above mandate, this Division
also runs and maintains a central workshop in
Hetauda and manufactures concrete poles from
its two concrete pole manufacturing plants,
one in Kotre and another one in Amalekhgunj.
During FY 2009/10, a total of 11348 concrete
poles were manufactured at the Concrete Pole
Plant in Amalekhgunj. Similarly, a total of 1704
concrete poles were produced from Kotre Pole
Plant in Tanahun. Likewise, approximately one
hundred power and distribution transformers
were repaired and tested at the Central
Workshop in Hetauda.

eee

(33/11 kV, 1.5 MVA Substation at Bhiman of Sindhuli Distric) हिल =

Nepal Electricity Authority

NEA's Subsidiary and
Joint Venture Companies

Upper Tamakoshi Hydropower Limited

Upper Tamakoshi Hydropower Limited(UTKHPL)
was formed as a subsidiary company of NEA
on March 9, 2007 (Falgun 25, 2063) with the
primary aim of developing and managing 456
MW Upper Tamakoshi Hydroelectric Project
(UTKHEP) utilizing the financial and the technical
resources from within the country. NEA is the
major shareholder of the Company with 40%
stake. Employees' Provident Fund (EPF) will
contribute 18%, Nepal Telecom (NT) 6%, Citizen
Investment Trust (CIT) 2% and Rastriya Beema
Sanathan ( RBS) 2% of the equity. The rest of
the equity capital will be raised from general
public (15%), natives of Dolakha District (10%),
NEA and Company staff (4%), and staff of
financial institutions providing the debt for the
Project (3%). NEA Board has constituted a five-
member Board of Directors for the Company
on March 12, 2008 (Falgun 29, 2064). A
shareholder agreement between UTKHPL and
NEA, NT, CIT and RBS was signed on 26 July, 2010
(Shravan 10, 2067). Arepatriate loan agreement
between NEA, EPF and UTKHPL was signed
on 30 July, 2010 ( Shravan 14, 2067) for Rs 10
billion. The new Board with representatives
from all the shareholders will be constituted
after shareholder agreement with all the other
stake holders. The Company also has plans to
develop other hydropower projects in Nepal.

Project Features

Upper Tamakoshi Hydroelectric Project
(UTKHEP) is located in Lamabagar Village
Development Committee of Dolakha District
and is a peaking run-of-river type of project with
820 m gross head, design discharge of 66 m3/s

and Installed capacity of 456 MW. The Project
will generate about 2,281.2 GWh of energy
annually. The major components of this Project
are: an intake, a 22.0 m high concrete dam,
twin desanding basins, 7.86 km long headrace
tunnel, 360 m high surge shaft, 495 m long
penstock pipe, underground powerhouse with
six units of pelton turbines, 2.9 km long tailrace
tunnel and 47 km long 220 kV transmission line
to Khimti substation.

Project Status

A Memorandum of Understanding, MoU was
signed between NEA and EPF on January 29,
2008 (Magh 15, 2064) where the latter pledged
to provide NRs. 12 billion for the project; NRs.
10 billion will be as debt and Rs. 2 billion as
debenture, In another MoU signed on July
16, 2008 (Shravan 1, 2065) between NEA and
Himalayan Bank Ltd. (HBL), the lead bank for
the consortium of commercial banks of Nepal,
the latter has pledged to provided Rs. 6 billion
as debt for the Project. A MoU between NEA
and the Citizen Investment Trust was signed on
December 5, 2008 (Mangsir 20,2065) for aloan
investment of Rs. 2 billion. Siomilarly, Rastriya
Beema Sansthan has pledge to arrange Rs. 2
billion loan. The Government of Nepal has also
pledged to invest upto Rs. 11.8 Billion in case
of shortfall of the fund required. The Project is
estimated to cost USS 441 Million without IDC,
70% of which is structured as debt and the rest
as equity.

Detailed engineering design for Tender
Document preparation of the Project has been
completed on December, 2008 (Mangsir/Poush,

eS 6

8

oO gfe * -

न a ee - लै =.। (Access Road construction in progress, Upper Tamakoshi HEP)

. 4०७7

2065). International Contractor Sino Hydro
Corporation Limited, China has been awarded
LOT-1 Civil works and the contract was signed
with Sino Hydro Corporation Limited, China
on August 1, 2010 ( Sravan 16, 2067) for LOT-1
Civil works. A contract negotiation meeting
with the International Consultant Norcosult /
Lahmeyer JV for the Consultancy services for
Construction supervision works is underway.
The Company has pre-qualified 3 contractors
for LOT-2 Hydro-mechanical and 7 contractors
for LOT-3 Electromechanical works. Evaluation
of the LOT-4 Transmission line and Substation
works is in progress. The last 28.5 km stretch of
the 68 km long access road and upgrading of 35
km long Dolakha-Singati section of access road
are underway and at final stage. As the contract
for LOT-1 Civil Works has been awarded to Sino
Hydro Corporation, the remaining works of
access road construction and upgrading works
will be handed over to selected civil contractor.
A MoU was signed between NEA and UTKHPL
on 26 April,2010 ( Baisakh 13, 2067) for Power
Purchase Agreement with NEA. Regarding
funding of the project discussion with CIT,
NT and RBS are underway and at final stage.
Local Construction Company Himal Hydro was
awarded the contract for the construction of

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

the 700 m long access tunnel and the work has
been completed recently.

Chilime Hydropower Company Limited

Chilime Hydropower Company _ Limited
(CHPCL), a subsidiary company of NEA with
51% equity ownership was established in
1996 with an objective of promoting the
utilization of resources within the country for
the development of hydropower. As a first step
towards its objective Chilime hydropower plant
(CHPP) located in Rasuwa district with installed
capacity 22.1MW was built and commissioned
on August 25, 2003. The plant is now in the
seventh year of commercial operation and has
delivered 792.171 GWh of electrical energy
to NEA till date. In FY 2008/09 the project
had successfully delivered 108.8% of Contract
energy to NEA. CHPCL has distributed 10%,
20%, 35%, 30%, 35% and 45% dividend to its
shareholders from FY 2003/04 to FY 2008/09
respectively.

CHPCL is equally devoted towards fulfilling
the social obligations part of Corporate Social
Responsibility. The company provides Rs. 2.5
million annually to the affected VDCs of Rasuwa
district through Sarokar Samiti for development
in the sectors like education, health, drinking
water, irrigation and_ electrification. The
support is not only limited to the Sarokar
Samiti as the company has also been involved
in the development activities of the affected
and other remote VDCs of Rasuwa district
independently.

Now striving towards the goal and objective,
CHPCL has four projects in pipeline which
are in various stages of development. Two
projects namely, Sanjen (Upper) and Sanjen
Hydroelectric Project located in Rasuwa
district in the upstream of existing CHPP with
installed capacity of 14.6MW and 42.5 MW

छन 7

Nepal Electricity Authority

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

respectively are planned to be developed in
cascade. The other projects in the pipeline
are Middle Bhotekoshi HEP in Sindupalchowk
district and Rasuwagadhi HEP in Rasuwa district
with installed capacity 96MW and 100MW
respectively.

Sanjen and Sanjen (Upper) HEP

For successful construction and operation
of hydropower projects, it is essential to
maximize the participation of local people

in the project's ownership. So with this
objective a new subsidiary company of
CHPCL, named Sanjen Jalvidyut Company
Limited has been established on 2010/02/01.
The promoters of this company are CHPCL
(53%), Nepal Electricity Authority (14%) and
District Development Committees (DDC)
and all 18 Village Development Committees
(VDC) of Rasuwa (3%). A Memorandum of
Understanding (MoU) ) has been signed with
NEA for Power Purchase Agreement, PPA for
the sale of enrgy to be generated from Sanjen
and Sanjen (Upper) HEPs. Land acquisition,
access road construction, infrastructure works
and finalization of major civil contracts of
the projects are planned for the FY.2010/11.
Upper Sanjen and Sanjen HEPs are scheduled
to be completed on FY.2013/14, FY 2014/15
respectively.

Middle Bhotekoshi HEP

For the development of Middle Bhotekoshi
HEP, Madhya Bhotekoshi Jalvidyut Company

Limited has been formed on 2010/07/29.
The promoters of this company are CHPCL
(50%), Nepal Araniko Hydropower Pvt. Ltd
(10%), Sindhu Investment Private Ltd (5%) and
Sindhupalchowk Hydropower Company Limited
(5%). The feasibility study of the project has
been completed and Scoping Document and
Terms of Reference (ToR) of EIA are in the stage
of approval. Detail Engineering Design, 100
m Test Adit, land acquisition and access road
construction for construction adit, process for
PPA and EIA and Public hearing are scheduled
to be carried out in FY 2010/11. The project is
scheduled to be completed on FY 2015/16.

Rasuwagadhi HEP

Rasuwagadhi HEP project is located in Rasuwa
district in the Bhote Koshi (Trishuli) river which
enters Nepal at Rasuwagadhi flowing down
from Tibet, China and ultimately converges into
Trishuli in Rasuwa district. The feasibility study
of this project has been completed and the EIA
is in the process of approval. The formation of
a separate company for the development of
this project is in progress. Detail Engineering
Design, Test Adit construction and finalization
of EPC contract prequalification are planned
for the FY 2010/11. The project is scheduled to
be completed in FY 2015/16.

Power Transmission Company Nepal
Limited

The need for development of cross border
transmission lines has been felt for some time
as a link to facilitate power exchange and trade
between Nepal and India. With increased
interest shown by Indian IPPs to develop
hydropower projects in Nepal in the last few
years, there has been renewed interest to
implement such interconnections. Considering
this fact, NEA and IL&FS has formed a joint
venture company under the name "Power
Transmission Company Nepal Limited (PTCN)"
on September 16, 2007 for taking up the

SS 8

development of transmission projects in Nepal
including cross border transmission links.
The investors in PTCN are NEA (50%), IL & FS
(26%) and Banks/ IPPs of Nepal 24%. Similarly,
"Cross Border Power Transmission Company
Limited (CPTC) has been incorporated in India
on December 19, 2006 to undertake line
construction activities in India.

Under Cross-Border transmission Line Project,
following three cross border Indo_Nepal
transmission interconnections have been
identified.

० Dhalkebar-Mujaffarpur 400kV Transmission
Interconnection

० Duhabi-Purnia 400kV Transmission
Interconnection

० Butwal-Gorkhapur 400kV Transmission
Interconnection

The Dhalkebar (Nepal)-Mujaffarpur (India)
A00kV Transmission Interconnection has been
prioritized under phase-l and all the efforts are
underway to realize the project. Approximately
45 km of transmission line from Dhalkebar to
Bitthamod near Indo-Nepal border falls under
the Nepalese territory and around 100 km falls
under Indian Territory. This interconnection

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

is envisaged to be initially energized at 220kV
and would be operated in synchronous mode
between the Nepalese and Indian grids. The
Nepalese portion of the project cost includes
NRs 1.28 billion (USD 20.0 million) out of which
USD 13.2 million is to be funded by government
of India through soft loan as a line of credit to
GON and for the remaining part government
of Nepal has approached the World Bank for
the financial assistance. The funding of Indian
portion would be through domestic sources by
Indian JV Company named "Cross Border Power
Transmission Company" in Indian rupees.

The Duhabi-Purnia 400 (९४ Transmission
Interconnection consists of about 22 km of
transmission line section from Duhabi in
Nepal to Jogani near Indo-Nepal border in the
Nepalese territory and the remaining section
of about 99 km in the Indian territory.

The Butwal- Gorakhpur 400 kV Transmission
Interconnection consists of about 25 km of
transmission line section from Butwal in Nepal
to Sunauli near Indo-Nepal border in the
Nepalese territory and remaining section of
about 100 km in the Indian territory.

59 9

Nepal Electricity Authority

Planning, Monitoring
and Information Technology

The Planning, Monitoring and Information
Technology, a corporate wing of NEA is
responsible for power purchase agreements,
coordination of cross border power exchange
and trading, load forecast, generation and
transmission systems plans, grid impact
studies and periodical monitoring, evaluation
of NEA projects, coordination of development
project works. This wing is headed by a Deputy

Managing Director.

Power Trade Department

Power Trade Department is responsible for
coordinating the trading of power both within
the country and across the border. It is the single
window interface of NEA with Independent
Power Producers (IPPs) for processing their
application for Power Purchase Agreement
(PPA). Power Trade Department performs its

responsibilities in three broad functions:

a. PPA Processing and Execution function:

This function includees following activities:
i. Verification of documents submitted by
applicant IPP.

ii.। Review of technical and financial aspects
of the project

iii. Coordination for execution of Connection
Agreement of applicant IPP with
concerned department of NEA

iv. Negotiation of energy prices (in case of
projects with capacity above 25 MW)

v. Preparing and getting approval of draft
PPA with terms and conditions acceptable
to both NEA and IPP

vi. Executing the PPA

b. PPA Implementation Monitoring Function

The activities under this function include:
i. Monitoring timely achievement of
financial closure and necessary action

li. Monitoring timely achievement of
Generation License and necessary action

iii. Monitoring actual physical progress at site
and necessary action

iv. Monitoring validity of performance
guarantee and necessary action

४. Handling complains and claims by IPPs
during construction

vi. Coordinating commissioning of project by
commissioning committee

vii. Monitoring test operation of project and
declaring commercial operation

c. PPA Operational Administration Function

This function covers activities after the

commercial operation of project and includes:

i. Facilitation for snooth operation of power
plant

ii. Facilitation for any issues during operation

iii. Facilitation for processing monthly
invoices and their payments

iv. Facilitation during force majeure or any
other kind of disturbance.

During FY 2009/10, apart from 50 MW import
under Power Exchange Agreement, additional
20 MW power was imported under short
term trading agreement with PTC India for the
months of January, February, March and April,
2010.

Three new projects with total capacity of
6.491 MW were successfully commissioned
during FY 2009/10. Such newly commissioned
projects include Ridikhola, Gulmi (2400 k W);

=o 0

Upper Handkhola, Sindhupalchowk (991 kW)
and Mardikhola, Kaski (3100 k W). With the
inclusion of these three projects, the number
of IPPs in operation has reached 22 and the
installed capacity of IPP owned hydropower
plants has reached 166.801. Similarly, 8 IPPs
projects with installed capacity of 47.308 MW
are under construction.

During FY 2009/10, the Department has
concluded 20 Power Purchase Agreements with
installed capacity of 126.84 MW and amended
PPAs of 7 projects to accommodate the capacity
increase of these projects by a total of 10.38
MW. The PPA for 3 projects is ready for signing
while draft agreements for 11 projects worth
589.05 MW are in progress.

System Planning Department

The System Planning Department, SPD _ is
responsible for planning of system expansion
in the generation and transmission sectors of
Nepal Electricity Authority. In the environment
of anational utility, itis responsible for preparing
the generation expansion plan that will deliver
the energy demand as forecast in the planning
horizon and prepare the transmission network
plan that will be necessary to evacuate power
from those generating stations to the load
centers. However, in the context of increased
private sector participation in the generation
sector, and the government's policy and plan
of 10,000 MW in 10 years and 25,000 MW in
20 years made public in recent years, the role
of centralized generation planning by NEA has
become minimal. Hence, a reassessment of
the planning criteria and adjustment in the
Least Cost Generation Expansion Plan for the
purposes of NEA is needed in the emerging
scenario. Similarly, a program for national grid
expansion and power evacuation has been
decided by NEA in this F.Y.2066/67 which is
in line with the government's earlier decision
to build 29 transmission lines as part of the

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

National Power Crisis Mitigation Action Plan on
March 3, 2009. Under this program, there are
now 52 sub-stations and transmission lines and
corridors planned for construction, which will
cater to the power evacuation and transmission
needs in the coming years. In this context, the
criteria for another transmission line expansion
plan also need to be reassessed.

The SPD has focused on carrying out the
Grid Impact Studies (GIS) of Power projects
applying for Grid connection. This study
seeks to ensure that all applicants to Grid
connection for eventual Grid use will adhere
to the requirements of Grid Code and there
is NO adverse impact on the Grid and system
Operation with their entry. In the year under
review, GIS of 31 projects with a total capacity
of 509.38MW were accomplished, out of which
three projects were of size SOMW or larger
requiring Stability analysis.

In addition to the GIS, the Department also
assists other line agencies of NEA in providing
necessary data and recommendations
regarding planned generation, transmission
and load-forecasts as well as providing power
system information and necessary support in
planning to the NEA management. Notable
amongst the inter-departmental supports
provided, the SPD carried out the transmission
line studies of Dhalkebar-Muzaffarpur (DM
line) and Duhabi-Dhalkebar-Hetauda (DDH
line) transmission lines for Transmission and
System Operation and power evacuation and
transmission line study of Tamakoshi-V project
for the Engineering Business.

System Planning Department (SPD) completed
Grid Impact Study of following projects in FY
2009/10.

6 1

Nepal Electricity Authority

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

Name of Projects

Capacity (MW)

1।Radhi Kh ola 4.40 Proposed Udipur Hub

2।Baramchi (Upgraded)

Lamosanghu s/s

Naugarh Gad 8.50 Chamelia। 4।Andhikhola

Proposed Syangja s/s

Midim Khola 3.00 Damauli S/S। 6।Mristi Khola

42.00 Proposed Dana Hub
20.00 Proposed Khudi Hub

Mai Hydropower (Upgraded) 15.60 Proposed Ilam (Godak)। 8।Nyadi Hydropower

Upper Khmiti HEP 12.00 Proposed Gorjang S/S

Khani Khola

25.00 Proposed Singati S/S

Khani Khola (Dolakha) 30.00 Proposed Singati S/S

Chaku Upgraded

Lamosangu

Middle Chaku 1.80 Lamosangu

Tadi Khola

Samundratar

Bhairab Kunda 3.00 Lamosangu

Hewa Khola
Rudi Khola-A
Rudi Khola

12.00 Proposed Phidim S/S

6.00। Lekhnath s/s

Lekhnath s/s

Sardi Khola 3.50 Proposed Bhurjung

Upper Ingwa

Upper Mailung-A 5.00 Proposed Upper Trishuli 3B Hub

Tungun-Thosne

Kabeli S/S
Kulekhani-।

Khani Khola 2.00 Kulekhani-।

Madi Bhorletar

10.00 Damauli S/S

Bagmati SHEP 17.00 Kulekhani-l

Handi Khola

Indrawati

50.00 Lamosangu

27।Balephi
28।Pakhar Khola

Likhu-IV 120.00 Proposed 220/132 kV Khimti S/S

Upper Marsyangdi

0.98 Lamosangu

50.00 Proposed Khudi Hub

Dordi Upgraded 27.00 Proposed Udipur Hub।

Information Technology Department

The Information Technology Department
headed by a Director has completed a fruitful
year with the introduction of new, innovative IT
services, continuous ICT maintenance / support
and further enhancements and expansions
of its network infrastructure and server
systems.

Despite many challenges, the Department
has achieved to implement E-bidding system,
within a short span; NEA has floated more than

509.38

Connection S/S

20 tenders using this service and has received
a significant number of e-submissions. With
the introduction of this service, procurement
process of NEA can now be considered as
transparent, trustworthy and up-to-date.

IT Department this year was able to establish
itself as a service provider and has signed a
service contract with Chillime Hydropower Ltd.
for providing email, e-bidding and computer
server / network based services.

6 2

The Department has also made significant
progress in the area of Intranet expansion
with the laying of fiber optics cable to
newer locations. The intranet reach is now
expanded upto Hetauda Regional Office
and central workshop. Within Kathmandu
valley, Bagmati grid- Minbhawan, Kathmandu
East Distribution Center and  Chahabil
DCS office were added to 106 intranet
network.

During this fiscal year, accounting system of
NEA was also revamped; this was necessitated
by the change in the organizational structure.
The accounting system now is capable of
consolidating its data on regional office and
business unit wise. Several changes and
enhancements were also made to Payroll
system to accommodate the changes in the
taxation regulation.

The Department has also made a contributing
role towards the implementation of
computerized billing systems. A team of
engineers was assigned this year to take up
the task of implementing the billing system
at several billing locations. This has greatly
assisted the computerized billing project in its
stride to computerize more and more revenue
accounting units. The team of engineers and
computer operators from the department
has successfully completed the billing system
installation at six revenue accounting units.

Monitoring Department

The Monitoring Department is responsible for
periodical monitoring and evaluation of projects
implemented by NEA. The Department collects
and evaluates monthly, quarterly and annual
progress reports of the projects implemented
by NEA and conducts internal review. The
Department also participates in the ministry-
level quarterly progress review meeting.

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

During FY 2009/10, this Department reviewed
the progress of a total of 133 (80 priority 1
and 53 priority 2) projects being implemented
under various business groups of NEA. The
Department also furnishes required data
and reports to Ministry of Energy (MoEn),
National Planning Commission (NPC) and other
concerned authorities of Nepal Government.

Corporate Planning Department

Corporate Planning Department undertakes
various tasks involving plans and programs
at corporate level. The Department assists
the National Planning Commission, Ministry
of Energy and Ministry of Finance in the
preparation of national budget by providing
data related to projects undertaken by NEA.
Besides, the Department 3150 provides
necessary support to NEA management and
data input for studies undertaken by various
organizations on topics related to NEA. The
Department provided the necessary input for
preparing the country's second three year Plan
(2010/11-2012/13) for electricity sector.

This Department also assists in obtaining new
licenses and any extension there of as required
of for development of power projects. During
the year under review, NEA obtained 2 survey
licenses for transmission and renewed one
survey license for distribution.

The Department also plays coordinating role
in the development of hydropower projects
under different financing modes. Recently, NEA
decided to develop 600 MW Budhi Gandaki
storage hydroelectric project in joint venture
with a suitable associate for which request
for proposal was issued to 6 companies and
evaluation of proposals received is in final
stage.

6 3

Nepal Electricity Authority

Administration

Administration wing of NEA is responsible for
management of human resources, logistic
support, legal advice and arbitration, property
management and promotion of public relations
functions. Timely amendment of Personnel
Administration Regulation and_ Financial
Administration regulation also falls under the
purview of this wing. This wing is headed by
a Deputy Managing Director and supported by
three departments, namely, Human resources
Department, General Services Department and
Legal and Grievances Handling Department
each headed by a Director.

Human Resource Department

This Department is responsible for executing
manpower planning, recruitment, employees
training and development, disciplinary actions,
implementation of staff welfare activities and
other human resources related functions.

By the end of FY 2009/10, there are 10,314
approved positions. However the total number
of staff persons employed is 9168. During
the year under review, 152 employees were
retired while 14 employees took voluntary
retirement. Similarly, 14 employees resigned
and 38 staff passed way During the year under
review, 498 employees of different levels
were promoted to higher levels based on
performance evaluations and 181 employees
were promoted to higher level under 12 year
time bound promotion scheme. Further, the
162 employees were promoted to higher level
under internal competition scheme. During the
year, the Department invited applications for
657 vacant posts. These vacant posts included
151 posts for officer level and 506 posts for
non-officer level. In the year under review,

4 staff persons were cautioned and 2 staff
persons were suspended under disciplinary
action. Similarly, the promotion of 3 staff was
halted and yearly increment in the salary of 2
staff was decresed.

As part of staff welfare activities, financial
support was provided to 14 employees for
different causes. Similarly, under the staff
welfare loan, a total sum of Rs 164,878,196.80
was disbursed as loan to employees for
purchase, construction and maintenance
of house/land, social event/ rituals and so
forth. Similarly, a sum of Rs 11,294,371.00.
was disbursed to various employees under
the accidental insurance and medical facility
scheme and a sum of Rs 13,0432,382.85 was
disbursed to different employees under the life
insurance scheme.

In fiscal year 2009/10, as part of human
resource development activities, arrangements
were made for 256 staff persons of various
levels to participate in trainings, seminars,
workshops, and study and inspection tours
abroad. Similarly, 112 staff persons received
training in NEA Training center while 11 staff
persons participated in study tours and 163
staff persons participated in workshops in the
country.

At the end of the fiscal year 2009/10, the status
of manpower employed was as given below in
the table.

<7.

A YEAR IN REVIEW,

FISCAL YEAR 2009/10 Nepal Electricity Authority

Employees Status FY 2009/2010
July 16, 2010

Approved Position

Service

Managing Diretor
GM/DMD (Level-12)

Officer Level (Leve।6-11)

Co।
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हन.
र
हँ
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०
उमा भन]

General Services Department

Assistant Level (Level 1-5)

General Services Department is entrusted with
theresponsibility of vehicle management, repair
and maintenance works of NEA's corporate
office buildings, property management, logistic
support for corporate offices and security
management of NEA's corporate offices. During
the year under review, the Department has
completed the recording of land owned by NEA
for various uses and submitted the records to
Managing Director. The Department also deals
with the media, organizes press conferences
and releases and various ceremonial activities.
The Department also brings out "Vidhyut", a
biennial magazine, covering a wide spectrum
of activities. The Department has also been
entrusted with the responsibility of providing
conducive environment for staff to develop
and excel in sports activities. This has yielded a
plethora of medals in various sports. NEA came
first in the recently concluded Inter Corporation
Badminton Tournament .

Legal and Grievances Handling
Department

Legal and Grievance Handling Department
deals with all legal matters of NEA. The
Department defends court cases for NEA in
different courts of the country. Generally,

०]

cases to be resolved are related to theft of
electricity, land acquisition, employees' service
termination, staff promotion and so forth.
The department defends cases of dispute
resolution in the courts in Nepal and abroad
also. The Department also provides legal
advice to the different departments of NEA
and the top management on various issues and
participates in negotiations for power purchase
agreements.

During the fiscal year under review, 108
cases were registered in different courts and
arbitration tribunals, out of which the courts
have given verdict in favor of NEA in 29 cases
and against NEA in 3 cases. The rest of the cases
remained sub judice. Some cases of disputes
were resolved through arbitration.

In FY 2009/10, the Department also provided
legal advice to various departments and top
management on 148 cases. The Department
also organized legal workshops in the branch
and regional offices of Distribution & Consumer
Services in Hetauda, Pokhara, Butwal &
Biratnagar.

6 9

Internal Audit

Internal Audit, headed by the Deputy Managing
Director (DMD) is responsible for carrying out
the function of internal control using the tools
of audit observation and field visit. The Deputy
Managing Director is supported by a Director
with four Divisions namely Financial Audit
Division, Management Audit Division, Technical
Audit Division and Energy Audit Division.

The internal audit has the annual audit plan
covering the areas of revenue, expenditure and
project accounting. It performs the auditing
of various budget centers on quarterly and

half- yearly basis. It also audits management
activities, energy balance and technical aspects
carried out by various business groups. As part
of internal control, it discloses non compliance
to the rules and regulations, circulars and
directives issued by the corporate office. It also
brings to the notice of the Managing Director the
issues raised in auditing and recommendations
for appropriate rectification and reforms.

Activities of Internal Audit with respect to
financial audit coverage during the FY 2009/10
(B.S.2066/2067) are listed below:

S.N. Business group and Audit plan Audit coverage Audit Coverage %age
corporate office (Quarterly/half yearly) (Quarterly/half yearly)

1 Corporate Office 5 3 60.00%

2 Distribution& Consumer Service 85 75 88.23%

3 Rural Electrification 29 23 79.31%

4 Engineering 9 PB 88.88%

5 Transmission 14 8। 57.14%

6। Generation 15 14 93.33%

7 Project 5 3 60.00%
Total 162 134 82.71%

Financial Audit was carried out in 134 budget
centers out of 162 budget centers and
Annual Internal Audit of 127 budget centers
is scheduled to be completed by November,
2010.

Shortage of adequate technical _ staffs
constrained the coverage of technical audit

function. To enhance the professional skill
for internal audit officers, intensive training
programmed was conducted for 24 audit
officers in association with Indian Costs and
works Accountants Association (ICWA) in New
Delhi from 6-12 July 2010.

=) 6

Finance

Finance, a corporate wing of NEA is responsible
for the overall finance and accounting functions.
This office is headed by a Deputy Managing
Director and is supported by Corporate
Finance Department and Finance & Accounts
Department, each headed by a Director.

Corporate Financial Performance

FY 2009/10, remained a mixed year in terms of
achievement and difficulties for NEA. On one
hand, the conclusion of the complete framework
for financial closure and confirmation of the
same by its lenders and investors from within
the country for Upper Tamakoshi Hydroelectric
Project (the largest project in Nepal in terms of
its capacity and energy) with a capacity of 456
MW is aremarkable achievement. On the other
hand, the financial health of NEA continues to
deteriorate. The year under review has proved
to be yet another year of weakening financial
health for NEA.

Given the deteriorating financial health, NEA
encountered severe difficulty in managing
deficit budget and power shortage problem in
FY 2009/10. Not withstanding these challenges,
NEA registered a growth of 21.47% in total
sales over previous year's figures. Internal sales
increased by 20.63% to reach 2,603.35 GWh.
Similarly export also increased from 46.38
GWh to 74.48 GWh, an increase of 60.59% over
previous year's export.

Net Income from sale of electricity amounted
to Rs. 17,586.91 million in FY 2009/10 as
against Rs. 14,405.93 million in the previous
year thereby registering an increase of 22.08%.
Income from other services such as surcharge,
dividend, interest income, lease rent etc.
amounted to Rs. 1,124.44 million, a decrease
of 29.80% over previous year's figure. The

contribution of income from other services to
the total income was 6.01%. Rebate given to the
consumer for early payment of bill amounted to
Rs. 383.55 million, with an increase of 14.42%
over the previous year's figure. Total income
after rebate stood at Rs. 18,711.35 million, an
increase of 16.89% over the total income of FY
2008/09.

Power purchase expense is 106 largest
component of the total expenditure and is
equivalent to 37.81% of the total expenditure
and 50.52% of the total sales revenue. Power
purchase expenses increased by 18.04% toreach
Rs. 9,078.76 million in FY 2009/10. Additional
power import from India at higher commercial
rate and annual escalation provisions in PPA
rates have resulted in an increase in power
purchase cost.

Interest expenditure, the second largest
component of total expenditure increased
by 28.54% over the previous year's figure to
register a total amount of Rs.3,204 million.
Interest on loan of Middle Marsyangdi Hydro
Electric Project (MMHEP) contributed Rs
711.45 million to the increment in the interest
expenses.

Staff cost standing at 12.91% of the total
expenditure amounted to Rs. 3,099.23
million in FY 2009/10, an increase of 15.38%
over previous year's staff cost. Main reasons
behind this increase are raise in staff salary,
annual increment in grade and recruitment of
additional employees.

Operation and maintenance expenses stood at
Rs. 2,386.10 million, an increment of 40.87%
over the figure of previous year. The O & M cost
is 9.94% of the total expenditure. Necessary
preventive and corrective maintenance of
machines, equipment and plant of generation,

6 7

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

transmission and _ distribution facilities as
well as general rise in market price of various
construction materials contributed to increase
in the operation and maintenance expenses.
Depreciation expense amounted to Rs. 2,498.26
million, an increase of 5.80 % over the previous
year's figure.

In FY 2009/10, royalty stood at Rs.888.08
million, an increase of 11.55% over previous
FY figure, The royalty expense represents
3.70% of the total expenditure in FY 2009/10.
This increase in the royalty expanse is mainly
contributed by the addition of MMHEP in
the INPS. At the end of FY 2009/10, Nepalese
currency weakened against Japanese Yen. As
a result, translation loss on foreign exchange
loan in Japanese Yen for the Kulekhani Disaster
Prevention Project further added a loss of Rs.
809.23 million. Based on actuarial valuation
report, a sum of Rs.1,550 million was provided
to cover up the expenses for future liabilities
for the retirement benefits to employees on
account of gratuity, pension, medical facilities
and accumulated leave for the FY 2009/10.

Revenue collection in FY 2009/10 was 90.45
% of the total sales as against 94.07% in the
previous year. The public sector dues and VDCs
dues still remain a serious problem in revenue
collection. The outstanding receivable against
municipalities, government offices and public
Institutions stood at approximately Rs. 1930
million at the end of FY 2009/10. This is about
29.54% of the amount of total receivables. Total
receivable in FY 2009/10 stood at Rs. 6,533.13
million, which is equivalent to 3.94 months'
sales revenue.

There has been no adjustment in electricity
tariff rates since 2001. This has compelled NEA
to conduct its business at loss for past few years.
In this context, NEA has filed a petition with
Electricity Tariff Fixation Commission (ETFC) for
upward adjustment in electricity tariff to adjust
mismatch between sales revenue and cost of

service. Currently, this tariff petition is under
consideration in ETFC.

In FY 2009/10, the cost of service for providing
electricity to consumers reached Rs. 8.97 per
kWh whereas average sales tariff rate realized
after rebate remained only Rs.6.57 per kWh.
NEA incurred a net loss of Rs.2.40 on every
kWh of energy sold. The net loss incurred in
FY 2009/10 amounted to Rs. 5,350.92 million.
At the end of FY 2009/10, accumulated loss
reached Rs. 19,469.75 million.

Despite the difficult cash flow situation and
the financial losses, NEA continued to invest
in generation, transmission and distribution
projects in order to improve the supply
situation and provide quality service. Necessary
arrangement for funding of Upper Tamakoshi
HEP has been made. Under the arrangement
made, Employees Provident Fund, Nepal
Telecom, Rastriya Beema Sansthan, Citizen
Investment Trust and consortium of banks lead
by Himalyan bank Limited will provide loan.
Similarly, funding for Upper Trishuli-3A (6OMW)
and Rahughat (30MW) has been arranged from
Exim Bank of China and Exim Bank of India
respectively. Exim Bank of India, ADB, the World
Bank and Exim Bank of Korea are extending
their support in other areas of distribution,
generation, transmission and_ institutional
strengthening.

During FY 2009/10, GoN invested Rs.4,293.70
million in generation, transmission and
distribution projects as equity. At the end of
FY 2009/10, GoN investment as equity has
reached Rs. 37,953.16 million. The balance of
accumulated reserve and surplus stood at a
negative figure of Rs. 17,951.90 million. This
has eroded the net worth of NEA. Total long
term borrowing stood at Rs. 60,381.19 million
at the end of FY 2009/10. In FY 2009/10, NEA
paid Rs. 372.78 million for interest, Rs. 648.95
million for repayment of loan to government

=; 8

and Rs. 581.69 million for royalty.

During FY 2009/10, property, plant and
equipment worth about Rs 6,000 million was
capitalized. At the end of 2009/10, property,
plant and equipment valued at historical cost
reached Rs. 84,740.24 million in comparison to
Rs 81,238.50 million at the end of FY 2008/09.

In FY 2009/10, NEA invested Rs. 11,900.61
million in projects out of which Rs. 10,726.16
million was received as Government equity and
Rs. 1,174.45 million was mobilized from NEA's
internal sources.

NEA has adopted the policy of developing new
projects on Private Public Partnership (PPP)
model. Chilime Hydropower Plant, already in
operation and Upper Tamakoshi Hydroelectric
Project under construction provide good
examples of PPP model. At the end of FY
2009/10, NEA's total investment in subsidiaries
and other companies reached Rs 3,189.92
million. Of the total investment, Rs. 2,122.01
million has been invested in Upper Tamakoshi
Hydro Power Limited (UTKHPL), and Rs. 489.60
million has been invested as equity investment
in Chilime Hydro Power Co. Limited (CHPCL).
Other investments of NEA include equity
investment in Nepal Engineering Consultancy
(Rs. 2.28 million), Khumbu_ Bijuli Company
(Rs. 20.65 million), Salleri Chaylsa Hydro Electric
Company (Rs. 11.63 million) and Butwal Power
Company (Rs. 8.86 million). In addition to
the above investment, NEA deposited Rs. 50
million in Citizen Investment Trust (CIT) towards
gratuity and pension liabilities. Total amount
invested in CIT reached Rs. 534.89 million at
the end of FY 2009/10. In FY 2009/10, NEA
received dividend from CHPCL (45 % cash) and
BPCL (20% cash and 10% bonus share).

The significant gap between average revenue
rate and cost of service had adverse impact
on NEA's payment obligations towards GON.
Consequently, about Rs. 4,743.25 million on

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

account of interest and royalty payable to GoN,
and payment to creditors for goods and services
remained outstanding in FY 2009/10. During
the fiscal year under review, NEA borrowed
short term loan from local banks amounting to
Rs. 1,280 million at prevailing market interest
rate to meet working capital requirement.

In the review period, a high level committee
was formed by the Ministry of Energy following
the Energy Crisis Mitigating Action Plan 2008
approved by GON to study and recommend the
financial restructuring of NEA to improve its
weakening financial health. The committee has
recommended the financial restructuring plan
along with Action Plan. Major recommendations
proposed in the Action Plan include writing
off accumulated losses, conversion of IDC
and interest payable to GoN into equity,
treatment of grants as grants to NEA instead
of loan, reduction of interest rate to 5% and
automatic tariff adjustment. NEA Board and
Ministry of Energy has endorsed this report
and recommended to Ministry of Finance
for approval. This report is currently under
consideration in the Ministry of Finance.

In FY 2009/10, remarkable success was achieved
in settling the pending audit remarks related to
very old projects. During FY 2009/10, out of the
total outstanding Rs.21.14million of pending
audit remarks for the period FY 1973/74 to
FY 1993/94, Rs.16.56 million was settled. The
statutory audit for the FY 2008/09 carried
out by the office of the Auditor General was
completed within 9 months of the FY 2009/10.
Tax return for the Income year 2008/09 under
self assessment procedure was also filed with
the relevant Tax Authority at the end of FY
2009/10.

NEA has to achieve a number of covenants in
respect of borrowing from the donor agencies.
Major covenants related to finance include
Rate of Return (RoR), Self Financing Ratio

6 9

Nepal Electricity Authority

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

(SFR), Debt Service Coverage Ratio (DSCR),
Average Collection Period (ACP) and Average
Payment Period (APP). NEA has not been able
to achieve the above loan covenants due to the
weakening financial health. Considering the
declining financial position of NEA, the World
Bank revised these covenants while granting
the additional financing to Power Development
Project. Accordingly, NEA has to comply with
only ACP and APP for World Bank financing. The
Bank has agreed to revise benchmark target for
RoR(2.5%) and DSCR(1 time) and removed SFR
for the time being. However, there is no revision
in financial covenants for ADB financing. In
FY2009/10, NEA achieved (2.53)%, 0.52 times,
3.94 months and 6.02 months in respect of
RoR, DSCR, ACP and APP respectively.

NEA has successfully computerized its financial
accounts and inventory in the platform of
Oracle Based Customized Accounting and
Inventory System (CAIS) in major budget
centers. In FY 2009/10, Oracle based payroll

NEA Board Matters

software developed by NEA, was installed at
more than 55 budget centers to automate
Payroll computation. By the end of FY 2009/10,
financial module has been used by most of
the budget centers while inventory module
has been used only by 110 budget centers.
NEA is planning to adopt ERP module from
the financial assistance of International
Development Association under Institutional
Strengthening Program.

A Technical Assistance (TA) has been approved
by the World Bank 10 strengthen the
accounting system and internal audit system as
recommended in the study under the first phase
of NEA Institutional Strengthening Project. The
main activities under this TA include reforming
accounting framework, design, development,
procurement, installation and rolling out of a
new Financial Accounting System (FAS) along
with required capacity building. The selection
of consultant is in progress.

Dr. Prakash Shararn Mahat, Honorable Minister, Ministry of Energy has been the Chairman of
Board of Directors of NEA since July 1, 2009. Likewise, Mr. Shankar Prasad Koirala, Secretary,
Ministry of Energy; Mr. Krishna Hari Banskota, Secretary, Ministry of Finance, Mr. Lekh Man Singh
Bhandari, and Mr. Ananda Raj Batas continued as Board Member. Dr. Jivendra Jha, Managing
Director, NEA serves as Member Secretary of the Board. In the fiscal year under review, Mr.
Mukesh Raj Kafle has been appointed as Board Member by the decision of Government of
Nepal.

During the year under review, altogether twenty nine Board meetings were convened to
deliberate and decide on various agenda. Scores of important and far reaching decisions were
made. Furthermore, various by-laws relating to personnel, financial and consumer management
were amended to impart greater degree of efficiency and effectiveness on the functioning of
NEA.

(0 0

A YEAR IN REVIEW,

FISCAL YEAR 2009/10 Nepal Electricity Authority

Nepal Electricity Authority

Highlights of FY 2009/10

ar . Increase (Decrease)
Fy 2070"। FY 2009 amount _।।
a es ee ee। 15,619.93।___2,829.11
perating Surplus (M.Rs.)। 262.31 (125.36)
nterest on Long-Term Loans (M.Rs.) 28.5
oreign exchange translation losses 809.23 (0.58
Municipalities street light dues written off PF जु (100.00
rovision for Employee benefits 24.4
ther Exps. (income) including prior year's Adj. 50.00 (23.52
et Income/(Loss) (M.Rs.)। (5,350.92)
ongterm Loans (M.Rs.) 12.2
et Property, Plant & Equipment (M.Rs.) 4.3
umber of Consumers 10.9
otal Sales of Electricity (GWh) 21.4

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otal Available Electric Energy (GWh) 3,689.27 3,130.77 558.50 17.8
EA Hydro Generation (GWh) 2,104.52 1,839.52 265.00 14.4

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urchased Energy (GWh)-India 612.58 71.8

-Nepal(Internal) 959.05 3.6
xported Energy (GWh) 74.48 60.5
elf Consumption (GWh) 30.90 0.6
et System Losses (Percentage)। 26.58 28.60 (2.02) (7.06

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ति 3

Accounting Policies

1. Basis of Preparation of Financial
Statements

The financial statements have been prepared on the
basis of historical cost convention in accordance with
the generally accepted accounting principles The
financial statements comply with Nepal Accounting
Standards (NAS) and presentational requirement of
the Companies Act 2063.

2. Revenue from Sale of Electricity

(i)। Revenue from sale of electricity is recognized at
the time of raising of bills on the customers as
per the billing cycle. Revenue from the billing
cycle date up to 32 Ashad (16 July) has been
accrued taking average rate. Revenue from
sale of electricity is shown net of rebate.

(ii) Rebate and surcharge for delayed payments
are accounted on cash basis.

3. Income from Other Services

(i) Interest on investments and lease rent are
recognized on accrual basis.

(ii)। Dividend on investment in shares is
recognized when received.

(iii) Revenue from other services is recognized on
cash basis.

(iv Revenue from services provided by
Engineering Services are accounted for on

cash basis on the completion of the relevant
job.

4. Property, Plant and Equipment
Property plant and equipment are stated at cost of
acquisition or cost of construction less accumulated
depreciation. The cost of acquisition, construction/
erection include interest on loans related to the
period of construction/erection up to the date
of completion of the project, along with other
incidental costs and charges attributable to bringing
the asset to its working condition for its intended
use. The incidental costs include proportionate
overheads relating to the following offices at the
rates given below:

(a) Planning 50%
(b) Distribution and Consumer 10%
(८) Engineering 50%
(d) Finance and Administration 10%

5. Foreign Currency Loans

Liabilities on foreign currency loans which remained
unpaid at the year end are converted at the year
end exchange rates. The profit/loss arising there
from is recognized as income or expenses in the

Income Statement.

6. Depreciation
Depreciation is provided on all categories of

S.N Assets Depreciation Rate (p.a)
(a) Land ee

(b) Buildings 2.00%

(c) Hydro Electric Structures 2.00%-3.00%

(d) Hydro Electric Plant & Machinery 3.00%

(e) Internal Combustion on plant & machinery 2.50%

(f) Transmission lines

(66 KV, 132 KV and above) 3.00%

(g) Transmission lines (33 KV) 3.00%

(h) Transmission Substations 3.00%

(i) Distribution system (including below 11 KV Transmission lines) 3.00%-4.00%

(j) Solar Power 3.00%

(k) Meter & metering equipment 10.00%

(I) Consumer Services 7.00%

(m) Public lighting 3.00%

(n) Vehicles, tools and instruments, furniture and fixtures. 20.00%

(o) Office Equipment 15.00%

(p) Miscellaneous properties 50.00%

(q) Additions during the year At applicable rates

7

property, plant and equipment on straight line basis
which reflects the estimated useful lives of the
assets.

The rate of depreciation on property, plant and
equipment is given above in the Table.

7. Grant —in- Aid, Contribution from
Customer / Local Authority

Grants-in-Aid received from the GoN or other
authorities towards capital expenditure as well
as consumers' contribution to capital work
are treated initially as Capital Reserve and
subsequently adjusted as income in the same
proportion as the depreciation written off on
the assets acquired out of the grants/ consumer
contribution.

8. Investments in Shares
Investment in the shares of subsidiary and other
companies held for long term are stated at cost.

9. Inventories
Inventories are valued at cost, using the weighted
average method.

10. Accounts Receivable

Accounts receivable are stated at book values, less
provision as may be considered appropriate by the
management.

11. Deferred Revenue Expenditure
Certain expenditure incurred 00 training,
investigation, survey, software development,
feasibility studies of infrastructure projects and
major overhauling etc. which are expected to
generate benefits over a period of time, are treated
as deferred revenue expenditures and written off
over a period of five years, including the year in
which the said expenditures are incurred.

12. Employees Benefits

The employee benefits are accounted for as per the
provisions of NAS 14 on the basis of categories in
which the employees are covered namely defined
contribution plan & defined benefits plan. In respect

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

of benefits covered under the defined contribution
plan namely the provident fund, the employer
contribution paid with the PF is recognized as the
expenditure of the year. In respect of the benefits
covered under the defined benefit plan namely
pension, gratuity, leave encashment and medical
facilities etc, the expenditure is recognized on the
basis of present value of obligations as on the date

of balance sheet as per the actuarial valuation.

13. Insurance Fund

Insurance fund is created by setting aside a sum of
Rs. 20 million every year irrespective of profit/loss
for the year to cover any loss of property, plant and
equipment, in case of any eventuality.

14. Prior year's figures/ Regrouping
Previous year's figures have been reclassified/
regrouped, where necessary, to make them
comparable with current year's figures.

15. Taxes on income

Current tax is determined as the amount of tax
payable in respect of taxable income for the year.
Deferred tax is recognized on temporary difference;
being the difference between tax base of assets
and liability and carrying amount thereto. Where
there is carry forward losses, deferred tax asset
are recognized only if there is virtual certainty of
realization of such assets. Other deferred tax assets
are recognized only to the extent there is reasonable

certainty of realization in future.

16. Provisions

Provisions involving substantial degree of reliable
estimation in measurement are recognized when
there is a present obligation as a result of past events
and it is probable that there will be an outflow of
resources to settle the obligations. Provisions are
determined based on the best estimate required
to settle the obligation at the year end date. These
are reviewed at each year end date and adjusted to
reflect the best current estimate.

पछ 9

Nepal Electricity Authority

A YEAR IN REVIEW,

Nepal Electricity Authority FISCAL YEAR 2009/10

TARIFF RATES

(Billing Effective since September 17, 2001)

1:। :।DOMESTIC CONSUMERS

[5
5000

a पण म
a
a।B leneraycname: SSSC~=<~rSSC"CS~"~*~s~sé~dCSCtsCS
a कामा
दा लिड लल
ममा ङममाणाा।

TEMPLES
Energy Charge Rs. 5.10 per unit

3:। STREET LIGHTS।। With Energy Meter Rs. 5.10 per unit।।।। B [Without Energy Meter Rs.1860.00perkVA।

TEMPORARY SUPPLY
Energy Charge Rs. 13.50 per unit

5:। COMMUNITY WHOLESALE CONSUMER।।

Energy Charge Rs. 3.50 per unit

INDUSTRIAL Monthly Demand
Charge

ब्राको
a
aa
ac
—
—
ee
ac
—

NON-COMMERCIAL
Low Voltage (400/230 Volt) . 8.25
Medium Voltage (11 kV) . 7.90
C।Medium Voltage (33 kV) . 7.80

Energy Charge

Sy 6

A YEAR IN REVIEW,

FISCAL YEAR 2009/10 Nepal Electricity Authority

IRRIGATION

Low Voltage (400/230 Volt। [8 {Medium Voltage (11 kV) 47.00।।c Medium Voltage (33 kV 47.00

थि।Low Voltage (400/230 Volt) 140.00 4.30
Medium Voltage (11 kV) 150.00 4.15। ८ Medium Voltage (33 kV 150.00

TRANSPORTATION। [A।Medium Voltage (11 kV) 480.00। 8 {Medium Voltage (33 kV) 180.00

TIME OF DAY (TOD) TARIFF RATES

Monthly Energy Charge (Rs./unit

Consumer Category & Supply Level Demand Off-Peak

Charge
s_/ 18:00-23:00। 23:00-6:00। 6:00 - 18:00

CC
हा [Medium vonage GK) SCS
C
-
—
Te 180.00
-
[1
2
mE
mc
-
Te
-

Note:
a) If demand meter reads kilowatts (kW) then kVA = kW/0.8
b) 10% discount in the total bill amount will be given to the Government of Nepal approved Industrial District

c) 25% discount in the total bill amount will be given to the Nepal Government Hospital and Health Centers
(except residential complex)

YT 7

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

Statistics, Schematics and Maps

AVAILABILITY FY 2009/10

O26. =D
57.04%

0 16.60%

@ Hydro @ Thermal 0 Purchase India 0 Purchase Nepal

SALES FY 2009/10
2.78% 6.79%

41.42%

37. of 6%

7.21% 4.14%

छि Non-Commercial 0 Commercial
@ Export O Others

छ Domestic
O Industrial

EXPENDITURE FY 2009/10

HB 3.36% 0 12.46% M 12.88%

03.69%

@ 10.38%

O13. ताकि
हा 37.73%

06.18%

B Staff Cost

@ Power Purchase

O Operation & Maintenance
O Interest

@ Depreciation

O Royalty

M@ Foreign Exchange Translation Loss
O Others

UTILIZATION FY 2009/10
@ 70.57%

00.84% — 2.02%

O 26.58%

हि Internal Sale HM Export O SystemLoss O Self Consumption

(— REVENUE FY 2009/10
2.78% 5.21%

85.23% 41.09%

9.95% 5.73%

& Domestic # Non-Commercial
O Industrial

O Others

O Commercial
@ Export

NO. OF CONSUMERS

00.43% 0 1.65%

a> 2.03%
छ 0.70%

@ 95.18%

छ Domestic हि Non-Conmercial
11 Comrercial O Industrial
छ Others

ली 8

A YEAR IN REVIEW, ctrici दि
FISCAL YEAR 2009/10 Nepal Electricity Authority

Total Energy Available
& Peak Demand

4000 1000
3500 पा Pee 4 + 900।। 800
3000।
॥। 700
2500 जज जु... ॥ पाता। 1 600
<=
= 2000 i। 500 =
1500 _] 400।। 300
1000।
1 4 200
500 [. L। i 100
0 T 7। T T T 7। T 1। T 1। T T T 0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010*

FISCAL YEAR
C1 Available Energy (GWh) C11. NEA Hydro C1 2. NEA Thermal
Ml Nepal (IPP) ("1 India (Purchase) —?— Peak Demand (MW)। Particulars। rticulars

asta] छाल

3.Purchase (Total) 727.93। 936.31} 778.69] 1025.519] 1106.184) 1196.27] 1291.09) 1383.64] 1282.20] 1571.63
India (Purchase) 226.54] 238.29) 149.88) 186.675] 241.389) 266.23) 328.83] 425.22] 356.46] 612.58
Nepal (IPP) 501.38] 698.02) 628.81) 838.844] 864.795) 930.04) 962.26] 958.42] 925.74] 959.05

Note :- Peak demand is for all areas covered by integrated system including supply to India
* Provisional figures; Subject to final audit

ति 9

Nepal Electricity Authority

A YEAR IN REVIEW,
FISCAL YEAR 2009/10

Growth of Consumers

2,000,000 -
1,800,000 -
1,600,000 -

@ 1,400,000 -

®O

E 1,200,000 -

"

56 1,000,000 -

O

6  g00,000 -

८०)

z

~ 600,000 -

400,000 -
200,000 -

2001
FISCAL YEAR

2002 2003 2004 2005 2006 2007 2008 2009 2010*

O Domestic & Grand Total O Others। Particulars। articulars

713,307] 848,540} 930,554। 1,010,719] 1,113,740। 1,227,295। 1,339,253। 1,450,254
7,643 8,629 9,722 9,865 9,950 10,010 10,215 10,556

6,052

17,701 18,789 19,833 21,374 22,500 23,020 24,089 25,548

1,083 1,353 1,721 2,557 3,400 6,450 13,183 18,614
Street Light 1,012 1,048 1,229 1,500 1,550 1,608 1,961

1,441 1,800 1,738 1,959 2,150 2,290 2,628 2,746
) 745,987। 884,530} 970,606} 1,053,930। 1,159,850। 1,277,442। 1,397,808। 1,516,878

Total (Internal Sales

(

Bulk Supply (India 5

745,992। 884,535; 970,611 1,053,935। 1,159,855। 1,277,447। 1,397,813

Note : * Provisional figures; subject to final audit.

Grand Total

5
1,516,883

1,595,015

10,518

7,305

28,559

1,764,954
13,025
8,063
30,567
584

22,335

2,339

42

665
30,003

2,256

40
61
3

2,911 1
594 935
1,670,605। 1,854,270

) 5 5५ 5 5 छ् 5 5

5 5
1,670,610। 1,854,275

(0 0

Electricity Sales

FISCAL YEAR 2009/10। Nepa। Electricity Authority।।। लि. लि. लि ee ee ee

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

3000.00 -

Energy (In GWh)

FISCAL YEAR
= Domestic Olndustrial OGrand Total OOthers

(in GWh)

20572 1109.20
05.20 078
120.30 193.12
785.55 100837

63.24 68.04

Category

Domestic 758.19
Non-Commercial 100.54
Commercial 109.31
Industrial 764.00

Street Light 54.86
Temporary Supply 0.39
Transport 5.80
Community Sales - 6.03 9.18 45.75
Total (Internal Sales) 1853.69। 1936.07 2603.35
Bulk Supply (India) 110.70 96.55 .

Note : * Provisional figures; subject to final audit.

N oi
कि क ता = N
चुर ८ es] ८ ८
ee) lee) 1५) oa oa

Water Supply &

N
o
N
N
60
oo

gg 1

A YEAR IN REVIEW,

Nepal Electricity Authority FISCAL YEAR 2009/10

20000.00।
18000.00 5
16000.00 5
14000.00 5
12000.00 5
10000.00।
8000.00 +
6000.00 +
4000.00 +

Revenue

जब छ
दया -4 1 1

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

(Million NRs)

FISCAL YEAR

L] Domestic O Industrial O Total Revenue 0 Others

(in million Rs)

Category

ला लाला लाला लाल ला
nonconmacai म समा सभा महर ममा माल waa] orzo] अह Tomer
लाह लाल ालााल लाल हल
लाला ताला लाह

गुडन पण पा हम सा हा लस मा अभ समा शरण
हा हाहाहा
veer Sipav। हल] उन मा 940] soo] जा गक vost] सम समा
rane anew] mo] towel ware evra vias] aro] ला
sas] 216] 42x] asso] _r017] अन मम मग आभा पाउ
conmiysaes त जम 2005] 2400] सभा जग् _onaa] तमा vo
neal aes)। 700179] 173. oan] se 3575. os. 10.2550। Ta708
pan suey ra)। 0606] मका भु मम eoesi] oso] मु asta] rosa] won

Gross Revenue 8377.83। 9687.65। 11237.49 2121.2 12885.97। 13635.76। 14777.26। 15391 .97। 14741.13। 17970.45

Net Income from 376.09] 248.17] 287.64] 424.75] 336.70] 336.09] 689.08] 584.18] 1601.66] 1124.44
Other Services
Total Revenue 8753.92। 9935.82 11525.13 12546.07। 13222.67। 13971.85। 15466.34। 15976.15। 16342.79। 19094.89

Note : * Provisional figures; subject to final audit.

<> 2

Energy(GWh)

A YEAR IN REVIEW,

FISCAL YEAR 2009/10 Nepal Electricity Authority

Load Forecast

20,000.00

18,000.00

16,000.00

14,000.00

12,000.00

10,000.00

8,000.00

6,000.00

4,000.00

2,000.00
टु डट डे 38 ४ ४ ४ B&B & & & Be Beez
$4243 छै te छै ASS BRBRBR।
5 छ छै कै छ छे छै छै छ छै? छै छ भै BD

का Energy (GWh) -—+—System Peak Load (MW) Fiscal Year

Fiscal Year MW

4,200.00

3,600.00

3,000.00

2,400.00

1,800.00

1,200.00

600.00

Peak Load (MW)

83 3

A YEAR IN REVIEW,

FISCAL YEAR 2009/10

Nepal Electricity Authority

(OTOZ '6T Avenues) 9902 "५ yseW

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A YEAR IN REVIEW,
FISCAL YEAR 2009/10

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A YEAR IN REVIEW,
FISCAL YEAR 2009/10

Nepal Electricity Authority

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