Contents

Message from the State Minister of Water Resources ......... 2

Board of Directors ........ 0.2... cccc ccc c cece cece cece eee eee eee neat eaeaees 3

Corporate Structure Of NEA ................नन ककन cence cece ee नन न न oceans 4

ESTD 1985 NEA Executives ........... 2... ccc cece cece ee eee eee ence eee eeeeeeeeaeaneees 5

Icry SS

Managing Director's Report कि 9

Generation BUSINESS GrOUP ती 15

Middle Marsyangdi Hydroelectric Project .............ccccseseeeesseeeees 17

Transmission and System Operation Business Group ........... 19

Distribution and Consumer Services Business Group ............ 23

Electrification BUSINESS GrOUP .......... २२:०२ ०२००००२ ०७० ५००० ०००० ०००० नन नन न नन नन 26

® oo।। ®

Engineering Services BUSINESS ८०५) .........:.... २5२२-२२-२२ ०००० ००० ०००० 30

Central ActiVitieS oo... eceececeeeeeeeeeeee eee eeeeeeeteeeeeeeeeeseeeeaanaaaeeees 34

Planning, Monitoring and Information Technology .................. 35

7AXo। aa) [als] (=। (0) 6 ere 37

Internal ािििििििििििििििििििििििििििििीिीििििििििििििििीीी 39
151 40

Highlights of FY 2005/06 ..................:....-.--722-- कनत ककन पपिनननलणकननननककननिनन 42

Nepal Electricity Authority Balance Sheet as at July 16, 2006 ou... eecccceeeeeeeeeeeeeees 43
उ ०8। ee cts apg mands. Nepal Income Statement for the FY July 16, 2006 .......scessseseeeeeeeen 44
x। वाक ACCOUNTING POIICICS  ...... eee cece cee cece ects eee e teen tees ea aaaeeeeeeeeanaaeeeeeeas 45
Webpage : www.nea.org.np Tariff RAtOS .......ccccccccccceseeseeesneeaeeeeeeeeeeeesseseessensaaeeeeeeeeeeeesssessseenas 49
Statistics, Schematics ANd MGS ............ २: २२२२ २००० ००० ७००० ०००७ ० नन ० मकनन नन 51

Front Cover Photos:
Desi ned and Printed at ¢ Parwanipur New Substation 132 kV
५ २ Headworks Site of Middle Marsyangdi Project,
fi * Core drilling at Upper Trisuli '3A' HEP

4 Back Cover Photos:

* Repair of turbine of KG 'A' HES
« Maintenance of turbine runner of Modi Khola Hydropower Station

Millennium Publiction (P) Ltd. "Repair of turbine of KG A HES.
. . + Maintenance o risuli-Balaju
Hattiban ; Lal 10५ if 5524 411 २ Transformer repair of Siuchatar S/S। NEA 2006 Annual Report.indd 1 ९ 8/12/2006 5:34:21 PM।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

a।
सी oe
«Ry on हा 63

0

ohne Ree 4240814
Hon bie Gyanendra Bahadur Karki २077 Res. 4376068
State Minister for Water Resources Fax: 4211510

Private Secretariato
Singh Durbar
Kathmandu, Nepal

Message from the Chairman

Rof. No.

It gives me immense pleasure and honor as the chairman of Nepal Electricity Authority (NEA), the country's
largest public sector utility, to put a few words into its annual issue of "A Year in Review 2005/06". NEA has
completed twenty-one year serving the country and I hope its service to the welfare of the nation will continue
with more dedication in the years to come. On the occasion of the twenty-first anniversary of NEA,। would
like to share the jubilation with members of Board of Directors, employees and the customers of NEA. This
occasion, on one hand is a moment of glory and joy for NEA for what it achieved in the past and on the other
hand an occasion to come out with pragmatic promises to continue to deliver and excel its services more
efficiently in coming days.

The country had been in a state of turmoil for the past few years. The political transformation brought by the
popular people's movement has revived the sign lasting peace in the country. This will certainly provide a
© conducive climate for NEA's business operation. The severe hydrological condition during the previous year ®
forced NEA to enforce the unpopular load shedding of up to 37 hrs a week and the load shedding seems to

persist for few more years to come. In the absence of any major addition to generation capabilities, NEA has

now no option but to improve the production efficiency of existing power system and explore the possibility of

developing small and medium plants in near future. The Demand Side Management on the other hand can

improve the efficiency of consumption and relieve some pressure of load shedding. The initiatives taken in the

areas of internal unbundling, development of by-laws and the indices based periodic performance appraisal

system for its business groups, staff performance management system, community participation in electricity

distribution at rural areas, public-private joint venture endeavors, program for issuance of power bonds, etc.

have been remarkable achievements in the past for which। must congratulate NEA staff at all levels.

Energy consumption is one of the indicators of a country's development. We therefore predict an increase in
the current trend of power consumption with the country's leap forward towards the path of development. This
growing need of energy has to be fulfilled through the addition of small, medium and large-scale hydropower
generation capacity to the existing power system on a regular basis. However the investment requirements,
especially for the implementation of medium and large hydropower projects are high which force us to
constantly rethink about the various alternatives of project financing. There is therefore a need for more
congenial environment for attracting domestic as well as foreign investments for these hydropower projects.
At the same time NEA has to continue encouraging private sector in the power development plans of the
country.

Further, there is an acute need to improve the reliability and quality of electricity supply in the country.
Implementation of various plans, including loss reduction to minimize load shedding will have to be given high
priority. NEA's continuing effort towards reaching out to the rural people in an attempt to uplift economic status
through rural electrification is appreciated. The work undertaken for the expansion of rural electrification
through community participation is also commendable. On this occasion,। would thank all NEA staff for the
valuable contribution they have made through their sincere work and dedication, and wish them a very bright
and prosperous future.

aya

Gyanendra Bahadur Karki
State Minister, Water Resources
Chairman, Nepal Electricity Authority।। NEA 2006 Annual Report.indd 2 @} 8/12/2006 5:35:50 PM।।

BOARD OF DIRECTORS

Chairman
Mr. Gyanendra Bahadur Karki
Minister of State, Water Resources

Secretary Secretary
© Mr. Tika Datta Niraula ®
Ministry of Water Resources Ministry of Finance

Mr. Guru Prasad Neupane Name

Member Secretary
Mr. Arjun Kumar Karki
Managing Director, NEA।। NEA 2006 Annual Report.indd 3 9 8/12/2006 5:35:51 PM।।

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NEA 2006 Annual Report.indd 4

Generation Business Group

Mr. S. P. Upadhyay
General Manager

Dr. J. Jha Mr. P. L. Shrestha

Mr. D. S. Poudel
Director Director Chief

Generation Construction Dept. Generation O & M Dept. KG 'A HE Dept.

Mr. B. R. Shrestha
General Manager

Mr. Y. K. Shah Mr. H. M. Palikhe

Director Director

Grid Operation Dept. TL/SS Construction Dept.।। NEA 2006 Annual Report.indd 5 @}

Middle
Marsyangdi
Hydro-Electric
Project

Mr. M. P. Khakurel
Project Director
Middle Marsyangdi HEP

Transmission and System Operation
Business Group

Mr. S. S. Bhat
Chief
System Operation Dept.

8/12/2006 5:35:54 PM।।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

Distribution and Consumer Services Business
Group

Mr. S. B. Shrestha
General Manager

Mr. S. B. Shrestha Mr. C. B. Bajracharya Mr. M. L. Shrestha Mr. T. M. Shakya
Director Director Director Director
Distribution & Consumer Mid-North Regional Office Eastern Regional Office Technical Services &
Services Commercial Dept.

Mr. R. Yadav Mr. T. रि. 8. ८. Mr. रि. C. Mandal Mr. G. P. Raj

Director Director Director Chief
Western Regional Office Finance Dept. Mid & Far Western Mid-South Regional Office

Regional Office

Electrification Group

Mr. R. C. Pandey Mr. S. K. Pradhan Mr. G. S. Pokharel
Director Director Director

Community Rural RE & Distribution System SHP & Rural

Electrification Dept. Reinforcement Project Electrification Dept.।। NEA 2006 Annual Report.indd 6 @} 8/12/2006 5:35:57 PM।।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

Engineering Services Business Group

Mr. B. R. Regmi
General Manager

Mr. S. C. Jha Mr. T. R. Pandey Mr. S. S. Rajbhandari Mr. B. B. Singh

Director Director Director Chief
Environment & Social Training Center Soil, Rock & Concrete Project Development Dept.
Studies Dept. Laboratory
@ @

Planning, Monitoring and Information Technology

Mr. D. P. Upadhyay
Deputy Managing Director

Mr. U. D. Bhatta Mr. B. K. Pathak Mr. S. B. Shrestha Mr. R. M. Sulpya Mr. J. M. Pradhan
Director Director Director Director Director
Information Technology Dept. Monitoring Dept. Corporate Planning Dept. Power Trade Dept. System Planning Dept.
7।। NEA 2006 Annual Report.indd 7 @} 8/12/2006 5:36:01 PM।।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

Central Activities

Mr. S. R. Shrestha Mr. D. P. Basyal Mr. R. K. Sharma
Director Chief Chief
Public Relation & Grievances MD's Secretariat
Dept

Finance

Mr. U. K. Shrestha Mr. D. Poudyal Mr. L. B. Ghimire

Deputy Managing Director Director Director
Corporate Finance Dept. Finance & Accounts Dept.

Administration ( Internal Audit

Mr. R. P. AGhikari Mr. B. K. Dhakal Mr. S. N. Neupane

Deputy Managing Director Director Director
Human Resources Dept. General Services Dept.

Mr. L. M. Maskey
Deputy Managing Director।। NEA 2006 Annual Report.indd 8 @} 8/12/2006 5:36:07 PM।।

Arjun Kumar Karki
Managing Director

Managing

Director's Report। feel privileged to present this annual
report on the activities of Nepal
Electricity Authority, NEA, for the fiscal
year 2005/06 corresponding to the year
2062/63 of the Bikram Sambat, on the
occasion of the twenty first anniversary
of the organization. The twenty first
year of business operation produced
mixed results. It was a year more of
despair than joy. Nonetheless, the year
also provided rays of hope. NEA faced
numerous difficulties in its operation
as well as development activities.
The last two months of the year finally
brought some hope of lasting peace,
as the people's movement paved the
way for democracy. The year proved
to be a time of trial and tribulation for
NEA as continuing insurgency posed
disturbances in development works.
The peak demand of the Integrated
Nepal Power System (INPS) increased
by over 8.21% while the demand for
energy grew by 7.71% in the past year
despite the fact that the performance
of the industrial and tourism sectors
was far from being satisfactory.

The past year also witnessed the driest
period for many years putting the entire
utility under stress. Discharge in the
rivers decreased to a new low heavily
curtailing the generating capacity of
our major hydro power stations. Faced
with generation deficit and restricted
transfer capacity of the transmission
line for energy import from India, NEA
was obliged to take the unpopular
step of load shedding. NEA made
every effort to minimize load shedding
but the chasm between supply and
demand widened so much that NEA
had to continue load shedding for up
to 37 hours a week until the discharge
in the rivers stabilized. The early
monsoon has provided a sigh of relief

but this,। presume, is a premonition of
even more difficult time awaiting for us
in meeting the energy demand of the
nation in the coming lean season.

It gives me a modicum of satisfaction
in' mentioning that Performance
Agreements, a new concept of
governance, implemented in the
three core businesses of Generation,
Transmission and Distribution earlier
have showed signs of improvement
in these areas. The system outages
have been reduced greatly and a slight
reduction in system loss has been
achieved. The various _ institutional
reforms together with this new
concept of governance will certainly
enhance the operational efficiency of
the staff and help in achieving better
results in coming years. However,
the improvement in the financial area
has not been commensurate with
the above reforms. NEA suffered a
net loss for the fourth consecutive
year. It was mainly due to factors
beyond NEA's control. Disturbances
in development works, closing down
of many manufacturing industries and
tourism activities, high cost of power
purchase from the Independent Power
Producers (IPP), high interest rate
on government lending, high cost of
capital and non adjustment of tariff
for the fifth consecutive year seriously
affected NEA's__ financial health.
However, the Government's recent
decision to reduce the interest rate on
government lending is a welcome step
in improving the financial health.

The biggest challenge facing NEA
in the present context is the lack of
capital for investment in its expansion
activities. There has been no significant
additional investment from donors as। NEA 2006 Annual Report.indd 9 @} 8/12/2006. 5:36:10 PM।।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

10। NEA 2006 Annual Report.indd 10

well as from the private sector for expansion of
generation and transmission facilities apart from
the financing by the Government for expansion
in rural electrification.

Organizational Restructuring
and Capacity Building within
NEA

NEA has continued executing its reform process
with the objective of enhancing operational
efficiency and developing a commercial culture
within the organization. The organization
structure was restructured to upgrade the
Internal Audit and Administration to Deputy
Managing Director level to provide strict cost
control, maintain fiscal discipline and develop
effective human resources required to operate
in a competitive business environment.। am
hopeful that the changes made will be helpful in
bringing about the desired improvement in NEA's
overall performance.

A staff Performance Management system based
on two part evaluation was developed inhouse
that will enhance staff performance and support
the employees to achieve their carrier goal.

The NEAGrid Code prepared by the Transmission
and System Operation (TSO) business group
has been implemented. The Code, though
enforced within NEA, has been helpful in
increasing the performance of the national grid
in addition to facilitating the evacuation of power
from IPPs and providing grid connection of high
voltage consumers. Similarly, the Preventive
Maintenance Schedule implemented by TSO
has helped to reduce the maintenance time and
identify the possible breakdown of the facilities.
This by and large has helped to increase the
reliability and availability of the national grid.

The installation of under frequency relays in the
grid has greatly reduced the system outages and
helped to reduce the restoration time after such
system collapse.

In the Distribution and Consumer Services, the
performance of most of the Distribution Centers
is satisfactory. Most of the Centers have recorded
a marginal reduction in losses, positive change in
differential surplus and reduction in the average

collection period despite the insecurity situation
prevailing in the country. The performance of the
DCS has exhibited that it has achieved significant
results with regard to consumer services. The
key achievements are:

a. Line connections to new consumers have
been completed within seven days from
the date of application.

0. Customer complaints and grievances
under nolight service have been addressed
within a maximum of two hours.

८. Transformer fuse has been replaced within
one hour from the receipt of complaint.

d. Clearance of bill has been made within
10 minutes of receipt on normal working
days and within 20 minutes on days
following a holiday in Kathmandu valley.
Clearance of bill outside the valley has
been made within 25 minutes.

e. The revenue collection has improved to
over 90%. The average collection period
has also come down.

f. Time of Day (TOD) energy meters
have been promoted for use by the big
consumers.

g. Queue management System (QMS)
introduced in five Distribution Centers
of Kathmandu valley, has _ provided
additional comfort to the customers lining
up for payment of energy bills.

NEA has continued the implementation of
computerization to enhance efficiency in its
operations. NEAis in the process of implementing
a system developed in-house by which the
customers can make payments of energy Dill
through any bank. In the first phase, this will be
implemented as a pilot project covering Lalitpur
and Bhaktapur Distribution Centers.

Under strengthening of financial management,
Consolidated Accounting and Billing System
(CAIS) has been implemented in all the budget
centers to facilitate the decision making
process in the field of accounting and inventory
management. NEA has also initiated the process
of preparing its financial statement presentation
following the International Standards.

8/12/2006 5:36:10 PM।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

For any organization to succeed, it must have
trained and skilled manpower. Realizing this,
NEA has embarked on a corporate approach to
training. Emphasis has been focused both on
technical and management trainings for officer
as well as assistant level employees. Training
programs are being continuously modified
and upgraded to include new areas of training
requirements. Personnel Data Bank has been
upgraded to facilitate the efficient management
of the available human resources.

The role of the USAID funded South Asia Regional
Initiative /Energy (SARI/E) Program deserves a
special mention for its contribution in institutional
capacity building efforts of NEA. Under the
program, NEA executives, technical as well as
non -technical, have had the opportunity to interact
and share views with the professionals from the
US and the SAARC regions. This has helped our
executives to introduce innovative ideas for better
results. As a part of the capacity building process,
the NEA Institutional Strengthening Project has
been taken up to enhance the efficiency of the
finance executives.

Operational Performance

The fiscal year 2005/06 marked a remarkable
increase in NEA's system peak load. The system
peak of the interconnected system was recorded
on January 2, 2006 and reached a new high of
603.28 MW registering an increase of 8.21%
over the previous year. The cumulative electrical
energy available for use within the NEA system
totaled 2,777.42 GWh, an increase of 5.10% over
the previous year's available energy of 2,642.75
GWh. This comprised of 1,565.05 GWh obtained
from NEA's hydro generation, 16.1 GWh from
NEA's thermal generation. Import from Indian
State Electricity Boards in accordance with the
Power Exchange agreement stood at 266.22
GWh while the purchase from private generators
in the country totaled 930.04 GWh.

Electricity sales totaled 2,066.27 GWh, an
increase of 147.90.GWh (7.71%) over last
year's figure. Internal sales within Nepal totaled
1,965.3 GWh registering an increase of 159.4
GWh (8.83%) over the sales of last year and
accounted for 95.11% of the total sales. Exports। NEA 2006 Annual Report.indd 11

to India continued to decline and totaled 101
GWh, a decrease of 11.5 GWh (10.25%) over
last year's export. The sales, both internal and
export to India, were not up to expectation.
Moreover, the quality of sales did not turn out
to be adequate, as the proportional increase in
revenue is not satisfactory.

Over the past financial year, the number of
customers continued to increase. The total
number of customers at the end of the fiscal
year stood at 1,279,902 registering an increase
of 120,047 (10.35%). The domestic category
accounted for 96.08% of the total customers,
industrial category accounted for 1.80%,
commercial category accounted for 0.48%, and
the non-commercial category for 0.78%. The
domestic sector accounted for 39.21% of the
sales, industrial sector for 38.88%, commercial
sector for 5.97% and non commercial sector for
4.89% while the contribution to the total revenue
by these sectors were 38.28%, 36.12%, 8.12%,
and 6.63% respectively.

Financial Performance

NEA's financial position continued to slump
despite the various measures of control taken
during the fiscal year and remains seriously
challenged in terms of recovery. The past
financial year did not see any change in the
security situation prevailing in the country for
the first ten months of the year. This situation of
insecurity prevailing in the country further slowed
down the economic activities, seriously affecting
the manufacturing and tourism industries. The
tourism sector, a significant contributor to the
revenue in the commercial category, failed to
revive which dampened NEA's hopes of picking
up in revenue generation. This was reflected
in the electricity sales in the industrial and
commercial sectors. Further, the rising energy
purchase rate of the IPPs due to the escalation
factor contributed a great deal to the increase
in expenditures. The fear of insecurity looming
large in the rural areas made meter reading
extremely difficult, which resulted in poor revenue
collection. Meter reading in some 100 thousand
households could not be carried out due to the
adverse security situation. However, the overall
financial indicators in many other areas have

11

8/12/2006 5:36:11 PM।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

12। NEA 2006 Annual Report.indd 12

exhibited signs of improvement. The increase
in the number of customers and the subsequent
increase in revenue contributed by the internal
sales are signs of some relief even though
the expected sales fell short of expectation.

Total revenue increased by 5.98% over the
previous year's figure to reach Rs. 14,012.9
million. NEA's fixed assets, historical -net,
increased by 1.50% to reach an estimated
Rs. 52,974.9 million. NEA's total expenditures
totaled Rs. 16,485.2 million, an increase of
13.47% over last year's figures. Expenditure
in generation including cost of power purchase
increased by 15.57% over last year's expenses
to reach Rs. 8,374.8 million whereas the
expenditure in transmission increased by
7.69% to reach Rs. 232.5 million. Similarly,
distribution expenditures increased by 11.37%
to reach Rs. 1,652.9 million. The administrative
expenditures increased by 5.03% to reach Rs.
653.7 million. The increase in administrative cost
was due mainly to the Government's decision
to raise the salary of the employees by 20%.

In the fiscal year 2005/06, NEA invested Rs.
7,516.1 million in capital works and projects.
NEA's total borrowing stood at Rs. 51,955.5
million.

In the fiscal year 2005/06, NEA achieved an
operating surplus of Rs. 1,262.4.million but
registered a net loss after tax and interest of Rs.
2,472.6 million

Looking Ahead

The past financial year witnessed the biggest
achievement of the people, the restoration of
democracy. In the changed context, the nation
hopes to gather momentum for economic growth
and move towards the process of development.
The rebuilding of the economy and the nation as
a whole is about to begin. NEA will now have to
play a bigger and more constructive role than ever
to support the energy needs that will propel the
rebuilding process of the economy. At the same
time, NEA will have to establish accountability
and transparency in its operations, and set an
example of good governance. To accomplish
this, NEA needs to plan ahead. NEA will

continue to endeavor to expand the generation,
transmission and_ distribution infrastructure
to meet the energy demands. Load forecast
will be reviewed to incorporate the anticipated
economic growth in the new environment of
optimism and hope. Accordingly, generation,
transmission and distribution expansion plans
prepared earlier will also be reviewed to meet the
forecasted demand. The investment plan will be
revisited and scrutinized to arrive at the financial
resources required to finance such endeavors.

In the generation sector, the 70 MW Middle
Marsyangdi Hydroelectric Project (MMHEP)
financed under the grant assistance of
Kreditanstalt fur Wiederaufbau (KfW) of Germany
accelerating towards completion by December
2007. The detailed design of the Upper
Tamakoshi (309 MW) will be under taken. Process
will be initiated for the arrangement of finance
for the construction of the Upper Tamakoshi,
Chameliyagad (30 MW) and Kulekhani Ill (14
MW) projects. The feasibility of Upper Seti
Storage project (122 MW) undertaken with the
assistance of Japan International Cooperation
Agency (JICA) will be completed soon. Tender
will be invited for Kulekhani III. Hewa (10 MW),
Mewa (18 MW) and Tamur (83 MW) are other
projects being considered for development
by private sector solely or in joint venture with
public sector. The process of issuing Power
Bonds to arrange the finances required for the
development activities will be finalized soon.

In order to meet the energy demands, NEA will
continue to encourage Private Developers to
add generation capacity to the power system. A
Connection Agreement has been developed and
implemented for facilitating the interconnection
of IPPs with the NEA power system. NEA will
monitor the progress of the projects for which
PPAs have been signed. Since the hydropower
projects developed by the private sector are
essentially run-of-the river (ROR) type, a
storage plant is required to maintain the balance
between the supply and demand. In this regard,
NEA will direct its efforts towards developing a
storage plant of adequate capacity to bridge the
gap between supply and demand in the long run.
NEA will also look for arrangements with India to
meet the shortfall of power demand.

8/12/2006 5:36:11 PM।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

In the transmission and system operation
sector, staff of the Load Dispatch Center will be
exposed to training to help reduce the system
restoration time. The NEA Grid Code will be
enforced to facilitate integration of non-NEA Grid
Users into the national grid. Augmentation of
transformer capacities at various substations will
be given top priority. NEA will be introducing hot
line maintenance to reduce the shutdown time
required while carrying out the maintenance of the
transmission lines and substations. Emergency
Restoration System (ERS) will be procured
for quick restoration of transmission line. The
coordinated preventive maintenance schedule
as finalized by the Load Dispatch Center will
be followed strictly to take the necessary steps
to improve the availability of the transmission
facilities. The Grid Operation Department will
be equipped with high tech testing equipment
to detect early signs of potential breakdown so
that precautionary measures could be adopted
to prevent their occurrence. A mobile substation
of suitable capacity will also be procured to help
restore the partial system outage.

Likewise, NEAwill direct its efforts to complete the
Pathaliya-Parwanipur 132 kV transmission line
project in fiscal year 2006/07. NEA will also make
the necessary arrangement for interconnection
of 132 kV and 66 kV transmission network in
Parawanipur to relieve the overloading problem
of 66 kV transmission line in the area and to
increase the reliability and quality of electricity
supply in the Hetauda —Birgunj corridor. NEA
will also do what is required to expedite the
implementation of Khimti-Dhalkebar 220 kV
transmission line and Thankot-Chapagaon-
Bhakatapur 132 kV transmission line to improve
the reliability and quality of electricity supply
in the eastern part of Nepal and the capital
respectively. The construction of 132/33/11 kV,
30 MVA Chandranigahpur substation will be
accelerated to improve reliability and voltage
profile in Sarlahi, and Rautahat districts.

Similarly, NEA will take the necessary
steps for expediting the construction of the
Kawasoti Substation. Steps will be initiated for
strengthening the 66 kV ring in the Kathmandu
valley by constructing the Chapali substation
and linking it with Lainchaur, and New Chabel
Substations. Preliminary works of survey and। NEA 2006 Annual Report.indd 13

ElA will be initiated for the construction of Kabeli-
Duhabi 132 kV transmission line to facilitate the
interconnection of generating facilities expected
in this corridor with the national grid.

Likewise, NEA will also expedite the installation
of 5 MVA 33/132 kV, and 6.3 MVA 11/66 kV
transformer at Lamosanghu Substation to facilitate
the power evacuation of IPPs. Financial sources
will be sought for the construction of the Hetauda-
Bardaghat 220 kV transmission line, which is
critical for the operation of the national grid.

In the distribution sector, Demand Side
Management (DSM) and loss reduction activities
will be given top priority in an effort to minimize
the load shedding. A new computerized billing
system will be implemented in all the Distribution
Centers and branch offices in the current fiscal
year. Necessary measures will be taken to
improve the reliability of the distribution network
by implementing a preventive maintenance
scheme and capacity augmentation of the
distribution network components. Efforts will be
made to complete the capacity augmentation
started earlier in the current fiscal year. Queue
Management System will be introduced in more
Distribution Centers around the country to
improve the quality of consumer services.

In the rural electrification sector, NEA will
continue its engagement in rural electrification
programs for energy needs of the rural masses
to uplift their economic standards through the
Government of Nepal (GoN) as well as donor
assisted schemes. The construction activities
of the ADB funded Rural Electrification and
Distribution System Reinforcement Project will
be continued in the current fiscal year. Similarly,
efforts will be made to complete the ongoing rural
electrification schemes such as the World Bank
funded Distribution and Rural Electrification
Project in Bagmati Zone, DANIDA funded Kailali-
Kanchanpur RE Project in Mahakali Zone and
GoN funded Sindhu-Dolakha RE Project within
the stipulated time.

Similarly, rural electrification will be continued under
the new Japanese Non-Project Grant scheme.
The GoN funded community rural electrification
scheme will be expanded in several areas of the
Kingdom through people's participation.

13

8/12/2006 5:36:11 PM।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

14। NEA 2006 Annual Report.indd 14

Engineering Services will be made a subsidiary
company to provide the necessary consulting
services in hydropower development. The NEA
Training Center will be gradually developed into
a Regional Center for research and advanced
studies for hydropower development.

In the administrative front, a staff Performance
Management System (PMS) based on two part
evaluation will be implemented in the current
fiscal year.

NEA will continue to implement Consolidated
Accounting and Inventory System (CAIS)
in 24 additional cost centers. NEA will take
the necessary measures to comply with the
International Accounting Standards (IAS)
recommendations in order to make NEA's
accounts in line with internationally accepted
practices. The key findings and recommendations
of the Consultant appointed to carry out the task
of improving the financial management, auditing
and accounting will be implemented. Risk based
approach will be initiated while conducting
internal audit. NEA intranet site will be revamped
to include a discussion forum and other facilities
to provide easy access to information regarding
NEA activities.

Although the GoN has decided to reduce the
re-lending rate, it is not up to NEA expectations
considering the significant investment in rural
electrification like non profit generating projects.
Inthis respect NEAwill continue its effort to pursue
the concerned government ministries for the
rationalization and further reduction of re-lending
rates. NEA will also continue dialogue with the
GoN for redefining the capitalization policy for
grant projects to reflect realistic cost. Similarly,
NEA will continue to pursue the government to
do the needful in order to mobilize the liquidity
available in the domestic financial market for the
power sector development.

NEA will also continue its persuasive effort for
the rationalization and readjustment of retail
tariff with the Tariff Fixation Commission.

Acknowledgements

In conclusion,। take this opportunity to thank all
those who have contributed to NEA's activities

during the past year.। wish to express my
deep gratitude to the Chairman and members
of the NEA Board of Directors for continuously
steering the course of NEA under such trying
circumstances.। wish to thank GoN for continued
support in our operations and contribution
to our development efforts. Thanks are also
due to the bilateral donors such as Germany,
Japan, Norway, Denmark, Sweden and USA
and international development banks such as
the World Bank, Asian Development Bank,
Japan Bank for International Cooperation, and
Kreditanstalt fur Wiederaufbau (kfW) for their
contribution in our development and institutional
strengthening activities. Their support has been
instrumental for NEA to maintain its continuing
development process to meet the growing
energy needs of the nation.

My sincere thanks go to the entire staff of NEA
at all levels for their support and cooperation
although my affiliation with NEA is of a short
duration. My appreciation also goes to all
the Trade Unions of NEA for their critical but
supportive understanding. My thanks also go to
all the previous Managing Directors whose vision,
leadership and dedication helped NEA to arrive
at this stage of development.। firmly believe that
the staff members of NEA have the necessary
talent, capacity, enthusiasm and dedication to
develop and nurture NEA as a successful and
vibrant corporate entity that the nation can be
really proud of.

Last, but not least, our customers collectively
contribute and symbolize the pinnacle towards
which all of NEA's efforts are diverted.। wish to
thank our valued customers for bearing with us
during periods of adversities and for sharing some
turbulent times together.। also wish to assure
them that NEA will function in more competent,
transparent and accountable manner to further
improve the quality and reliability of supply and
services.

Thank you.

doth

Arjun Kumar Karki
Managing Director

8/12/2006 5:36:11 PM।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

Generation

Business Group

Generation Business group is a key core
business under NEA management responsible
for managing operation and maintenance
activities of 15 hydro power plants in operations
with total installed capacity of 397.89 MW and
three major thermal power plants with installed
capacity 55.66 MW.

With a yearly plant factor of 39.83% and
productivity ratio 1101.56 MWh/employee,
total generation of the powerhouse under this
business group reached 1574.485 GWh which
is 3.68% more than the previous year's figure.

Generation Operation and
Maintenance Department

This department is responsible for operation
and maintenance of all the power plants except
Kaligandaki 'A', isolated small hydro power plants
and few other small power plants operated under
Distribution and Consumer Service.

During the fiscal year turbine runner overhauling
was carried out in Marsyangdi, Trishuli, Gandak,
Sunkoshi, Puwakhola, Seti and Fewa hydro
power stations. Several other maintenance
works were undertaken in all of power stations
to keep the machine in operating conditions.

Maintenance of turbine runner of
Modi Khola Hydro Power Station।। NEA 2006 Annual Report.indd 15

Specially maintenance of turbine runner of Modi
Khola Hydroelectric Project.

The Pharping power plant, machines were
overhauled with the objective of bringing the first
power plant (95 Years old) of the country into
operation. This power plant was shutdown owing
to tapping of the penstock pipe for drinking water
supply to Lalitpur. Consultations are undergoing
with Water Supply Corporation for operating the
plant without sacrificing the water supply needs.

Kaligandaki "A" Hydropower
Department

Repair of turbine of KG 'A' HES

Turbine overhauling work of Unit No. 2 &
3 (from July 09, 2005 to September 25,
2005) was successfully carried out by JBIC
Funded Kaligandaki 'A' Hydroelectric Project
Rehabilitation works with supervision by
technical advisor from manufacturing company
M/S Toshiba Corporation of Japan.

Likewise, operation maintenance management
training for three persons (Director/Manager
Level) was conducted for 24 days in Japan,
Thailand and Vietnam from 12 March, 2006 to
04 April, 2006. Exchange of views to upgrade
Operation maintenance activities based on
the collection of technical data of the plant in

15

8/12/2006 5:36:11 PM।।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

operation in those countries was helpful and
note worthy for better plant operation and
maintenance in local environment.

Generation Construction
Department

This department is assigned to construct medium
size hydro power projects included in the least
cost generation expansion plan. Following
two projects are in the process of taking up
construction.

Kulekhani III Hydropower
Project

The Kulekhani Ill hydropower project is
proposed as cascade connection with Kulekhani
Il Hydropower Station. Its installed capacity is
14 MW. This project is being financed jointly
by Government of Nepal and Nepal Electricity
Authority.

The project cost is estimated at US$ 27.60
million. It will be commissioned to meet the peak
demand of dry season by 2009. The annual
energy output of the project will be 40.82 GWh.

Contract agreements for Construction of Steel

Trussed Bridge over Rapti River and Access
Road have been completed. The detailed
construction design and tender documents
are on the final stage of completion and the
services for this have been provided by Project
Development Department/Engineering Services.
By the end of Bhadra 2063 the Tender for Civil
works will be invited.

Chameliya Hydroelectric
Project

The estimated cost (January 2006) of the project
of 30 MW installed capacity is US$ 78.853
million including 131 Km transmission line of
132 kV. Evaluation of tender for the civil works is
being evaluated. As per the assurance received
from the Government of Republic of Korea,
Government of Nepal (GoN) has requested the
Government of Republic of Korea to provide soft
loan of US $ 25 million and is waiting for positive
response. Similarly, GoN has also requested the
Organization of Petroleum Exporting Countries
(OPEC) Fund for providing soft loan of US$
15 million. Thus the project is envisaged to be
implemented with co-financing of GoN/NEA and
some donor agencies. The project construction
is estimated to be completed within four years.

Generation from Major Power Stations

700.00 "

600.00

500.00

400.00

300.00

200.00

100.00

Energy in GWh

Contribution to the total energy in INPS

ai%

0.00 w23%
ke 5 £ = Ss ¥ 8S BES छ छ छु ERA DB
3 छ रु लै -ि & हट 8 5 डु 5 e o डु छ पे @ Kaligandaki "A" @ Marshyngdi। Kulekhani। Kulekhani # BTrisuli
5 छ 2 3 g क 3 a 38 ® Gandak @ Modi Khola L Devighat @ Sunkoshi @ Puwa Khola
डु 3 2 _ Chatara G Panauti B Seti BPhewa @ Sundarijal

@ Multituel-Ouhabi @ Hetauda Diesel

16।। NEA 2006 Annual Report.indd 16 @} 8/12/2006 5:36:13 PM।।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

Middle Marsyangdi
Hydroelectric Project

This is a 70 MW run-of-river type scheme
with daily pondage for five hours designed to
generate 398 GWh of average annual energy
and is located in Lamjung District, about 170 km
west of Kathmandu. The project is being jointly
funded by the Government of Germany through
Kreditanstalt fur Wiederaufbau (KfW), NEA and
Government of Nepal.

The construction activities were undertaken
in both day and night shifts this year except
for the period during bandhs, blockades,
embargoes, etc. The construction activities were
completely halted for more than a month during
March/April 2006 due to the National Strike.

The major milestones of the
Project

With the diversion of Marsyangdi River on 'st
March 2005, the excavation works at Headworks
has been completed this year andthe concreting of
Spillways and Piers along with the grouting works
at the gorge area is going on. The excavation of
Power Intake, Desanders, Valve Chamber and
Surge tank has also been completed. A major
milestone of the Project was reached with the
power tunnel excavation breakthrough, on 22
January 2006. The concreting of Desander is
about 95% complete. The lining of Power tunnel
has been started from 21 June 2005 and about
18% has been completed. The lining of Surge
tank has also been completed. Open cut Penstock
excavation is completed after the diversion of
Dumre-Besisahar road and the Penstock tunnel
part excavation was completed on 30 March
2006. The excavation of Powerhouse has been
completed. The concreting of substructure
and superstructure has also been completed
with the finishing works presently going on.
The backfilling of the Powerhouse has been।। NEA 2006 Annual Report.indd 17

completed up to Elevation 532 m and backfilling
above this level is in progress. The concreting
and riprap of Tailrace is also completed.

As for the status of the other lots, the contractor
of Electrical Equipment (Lot E) ALSTOM
Power Generation AG has completed 80%
of manufacturing works of Generators. The
Sub Contractor Nepal Hydro Electric (NHE)
is continuously carrying out the supervision
of the vertical uplinking of the Earthing straps

Work in progress inside the Powerhouse

at powerhouse. Mechanical Equipment (Lot
M) Contractor Voith Siemens Hydropower
Generation GmbH & Co. has_ completed
its manufacturing works of Turbines and

17

8/12/2006 5:36:14 PM।।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

18।। NEA 2006 Annual Report.indd 18

accessories. The installation and pressure testing
of two Spiral casings have been completed.
Recently, the turbines have been delivered
to site & preparation for grouting works in the
spiral casings is in progress. Lot HSS (Hydraulic
Steel Structure) Contractor VA-Tech Hydro is
in the process of fabrication and installation of
penstock at site. Installation and Pressure testing
of Manifold and Bifurcator were completed on
August 22, 2005 (7 Srawan 2062). Installation of
inclined penstock from Powerhouse to Dumre-
Besisahar road is almost complete. Similarly, the
Desander Equipments have also been delivered
at site and preparatory works for installation are
going on. Testing and commissioning of 132
kV GIS switchgear equipment (Lot SS2) at the
existing lower Marsyagndi power station was
completed by Alstom Energie-technik GmbH
in January 2004 (Paush 2060). The 132 kV
Substation/Switchyard (Lot-SS1) Contractor,
ALSTOM Energie-technik GmbH, has almost
completed manufacturing works. For the 132
kV Transmission line (Lot TRL), after contract
signing with SAG on 12 January 2006 (28 Paush
2062), line surveying and report preparation
works are in progress. Soil testing of foundation
is nearing completion and designing of towers is
in progress.

Overall progress of the project is about 76.4% (9
July, 2006), 77% of Civil Works (Lot C), 65% of
Electrical Equipment (Lot E), 90% of Mechanical
Equipment (Lot M) and 76% of Hydromechanical
Steel Structures have been completed so
far. Similarly, the progress on transmission
line, switchyard and switchgear are 20% of
transmission line and 90% of switchyard have
been completed whereas the switchgear works
have been completed.

Land and property acquisition for transmission
line will be carried out after the completion of
the transmission line survey. The Cadastral Map
Survey for Land Acquisition is completed up to
22 km. The resettlement at various construction
sites is on going. The project also carried out
income generation oriented training program
and community awareness program focusing
on public health and safety to the members
of the project affected families and the local
people of the Project area. The Neighborhood
Support Programme (NSP) of the project is
supporting the development activities of nine
Village Development Committees (VDCs) in
the vicinity of the project area by carrying out
various activities in five key areas of health,
education, water supply and sanitation, roads
and electrification.

8/12/2006 5:36:15 PM।।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

Transmission and System
Operation Business Group

Transmission and System Operation (TSO) is
a core business group within Nepal Electricity
Authority, responsible for design, construction,
operation and maintenance of 66 kV and higher
voltage level transmission system and managing
the operation of the Integrated Nepal Power
System. Accordingly, these tasks are entrusted
to three Departments: Transmission Line &
Substation Construction Department, Grid
Operation Department and System Operation
Department.

Transmission Line & Substation
Construction Department

This Department looks after the construction of
new transmission lines and substations of 66
kV and higher voltage level. Constructions are
carried out through turnkey contracts. Presently,
it is involved in following transmission line
projects:

Thankot-Chapagaon-Bhaktapur 132 kV
Transmission Line Project

The project, which comprises of a new
approximately 28 km long 132 kV transmission
line from Thankot (Matatirtha) to Bhaktapur via
Harisiddhi, will complete the 132 kV ring—main in
the Kathmandu Valley. This will not only augment
the transmission capacity necessary to cater the
increasing demand in the region but will also
help to reduce system losses and at the same
time improve quality and reliability of the power
supply in the Kathmandu Valley. About 26 km of
this line comprises of double-circuit towers while
the remaining 2 km is designed with four-circuit
towers. The scope of the project also includes
the construction of a new 132 kV switching
station at Matatirtha; a new 132/11 kV, 22.5
MVA substation at Harisiddhi and upgrading of
existing Bhaktapur and Balaju substations.।। NEA 2006 Annual Report.indd 19

The Project is estimated to cost US$ 17 million
and it is being financed by ADB, OPEC, GoN
and NEA. It is scheduled to be completed by the
end of 2008.

Birgunj Corridor 132 kV Transmission Line
Project

Birgunj corridor, as one of the Nepal's largest
industrial area, is one of the biggest electricity
consumers in the country. Unfortunately, it has
been facing a severe power supply crisis in terms
of both meeting the necessary demand as well
as the reliability and quality of supply due to the
overloading of the existing 66 kV transmission
line, which was erected in the early sixties. These
problems will be eliminated after completion of
the ongoing 132 kV transmission line, which is
scheduled for commissioning around the middle
of the coming fiscal year.

The Project comprises of a new 132/11 kV
substation with 2 x 22.5 MVA transformers and
2 x 10 MVAR Capacitor Bank at Parwanipur and
17 km of 132 kV double circuit transmission line
from Pathlaiya to Parwanipur, supplementing the

Transformer repair of Siuchatar Substation

19

8/12/2006 5:36:15 PM।।

existing 66 kV transmission line from Hetauda to
Birgunj. The estimated total Project cost is Rs.
320 million, which is borne entirely by the Nepal
Electricity Authority.

Butwal Sunauli 132 kV Transmission Line
Project

The proposed Transmission line is intended to
enhance the power exchange capacity between
India and Nepal. The transmission link is
proposed to connect Butwal substation in central
Nepal to Anandanagar substation situated in
Uttar Pradesh of India. The scope under the
project covers a 25 km long 132 kV double
circuit transmission line from Butwal substation
to Sunauli (the intermediary point at Indo-Nepal
border) along with the associated line bays
at Butwal substation. Nepal Government and
Nepal Electricity Authority are jointly funding the
project. The construction work has been delayed
due to contractual problems with the Contractor.

Grid Substations Reinforcement Project

Reinforcement of substations is necessary to
meet the increasing load growth. Due to limitation
of transformer capacity, NEA has to resort to
load shedding in some substations even when
surplus power is available in the system. The
objective of the Grid Substations Reinforcement
Project is to augment the transformer capacity
in three substations. The scope of this Project
comprises of the following:

a. Reinforcement of Anarmani substation
through installation of one unit of new 132/
33 kV, 30 MVA, 3-phase power transformer
with necessary bay extension at 132 kV and
33 kV voltage levels.

b. Reinforcement of Pokhara _ substation
through installation of one unit of new 132/
11 kV, 30 MVA, 3-phase power transformer
with necessary bay extension at 132 kV
voltage level and replacement of one
section of existing 11 kV switchgear panels
comprising of seven panels.

c. Reinforcement of Siuchatar substation
through installation of one unit of new

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

132/66 kV, 3x12.6 MVA power transformers
(bank of three single phase transformers)
with necessary bay extension at 132 kV and
66 kV voltage levels.

The Project is estimated to cost US$ 3.24 million
and is funded jointly by the Government of
Nepal, ADB, OPEC and NEA. Construction of
the Project has commenced and is expected to
be completed by mid 2007.

Chandranigahpur System Reinforcement
Project

The aim of the project is to meet the increasing
demand of Rautahat and Sarlahi districts. The
scope of this project covers construction of
132/33 kV, 30 MVA and 33/11 kV, 8 MVA new
substation at Chandranigahpur and 74 km of
33 kV sub-transmission line to connect the
new Chandranigahpur substation with 33 kV
substations at Harsaha, Haripur, Gaur and
Nijgadh. This will reduce system losses, improve
reliability and quality of supply in those areas
as well as in Birgunj area. The project is jointly
funded by GoN, IDA and NEA and is estimated
to cost US$ 6 million. The substation contract
has been awarded and the project is scheduled
to be completed by Feb. 2008.

Khimti-Dhalkebar 220 kV Transmission
Line Project

This is going to be the first 220 kV transmission
line project in Nepal. Its present aim is to improve
the reliability of power withdrawal from Khimti-1
HEP, facilitate a direct route for export of power
to India via Dhalkebar substation and improve
the voltage-drop problem at eastern Nepal. In
future, the line can also be utilized to evacuate
power from the 300 MW Upper Tamakoshi HEP
as well as other generations in the surrounding
region.

The scope of the project covers construction of
a 75 km long 220 kV transmission line on double
circuit towers from Khimti HEP to Dhalkebar
and 132 kV line bay extension at each end of
the line. Until Upper Tamakoshi or some other
large generating station is constructed in the

20। NEA 2006 Annual Report.indd 20 ९ 8/12/2006 5:36:16 PM।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

region, only single circuit ACSR, BISON duplex
conductor will be strung under the present scope
of the project and it will be energized at 132 kV
level.

Environment Impact Assessment for the project
has been completed and clearance from
concerned authorities of Government of Nepal
has been acquired. Tenders have been invited
for construction of the transmission line and
evaluation of the bids is in progress. Tenders
for the construction of line bay extensions are
expected to be invited soon.

The cost of the Project is estimated at US$ 22
million and it is funded jointly by International
Development Association of World Bank,
Government of Nepal and Nepal Electricity
Authority. The project is scheduled to be
completed by fiscal year 2007/08.

Hetauda-Bhardaghat 220 kV Transmission
Line Project

The aim of the project is to improve the reliability
of the system in general and facilitate evacuation
of power from Kaligandaki 'A' hydropower station
and other generating stations being constructed
and proposed in this region. The proposed line
will also form a segment of the 220 kV grid that
is being envisaged under future generation
expansion plans. The project comprises of
construction of approximately 143 km long 220
kV double circuit transmission line from Hetauda
to Bardaghat using duplex ACSR "BISON"
conductors (initially only one circuit strung and
energized at 132 kV level) and construction of
one 132 kV line bay each at existing Hetauda and
Bardaghat substations. The Project is estimated
to cost US$ 32 million. The Government of
Japan has been requested for necessary funds
to construct the Project.

Kawasoti 132 kV Substation Project

This project is being undertaken to meet the
increasing demand for electricity in the eastern
part of Nawalparasi District. The main objective
of the project is to provide reliable and quality
electricity supply to the consumers of Kawasoti। NEA 2006 Annual Report.indd 21

and its vicinity and reduce system losses. In
addition, this substation will attract industrial
consumers and provide interconnection point
for Independent Power Producers (IPP) in
the area. Furthermore, this project will provide
opportunities for 33/11 kV sub-transmission /
distribution network expansion to cover a large
number of rural hilly communities living in the
northern part of the District.

Under this project the existing Bardghat-
Bharatpur 132 kV transmission line will be
looped-in-out in Pragatinagar to form a new
132/33/11 kV substation. The existing Bharatpur
— Kawasoti 33 kV line shall be isolated from
Bharatpur substation and fed from New-Kawasoti
substation. 11 kV overhead lines will be drawn
out from this substation to feed existing 11 kV
distribution network. Major components of the
project, consist of two 132 kV line bays, one
132 kV transformer bay with 30 MVA, 132/33 kV
power transformer; one 33 kV transformer bay
with 8 MVA, 33/11 kV power transformer and 11
kV cubicles.

Estimated cost of the project is US$ 9.6 million.
The project is expected to be funded jointly by the
Government of Nepal / Japanese International
Cooperation Agency (JICA) and NEA. The
project is scheduled to be completed by Fiscal
year 2007/08.

System Operation Department

Equipped with the state of the art load dispatch
center, the System Operation Department is
gradually assuming a dominant role in managing
the operation of the Integrated Nepal Power
System (INPS) as it begins to garner confidence
accumulated through experience over the years.
At the same time, it has begun to assert its
authority over parties operating within the INPS
to bring them to comply with the NEA Grid Code.
It hopes it will not have to resort to punitive
actions against those parties not working in line
according to the Grid Code guidelines.

Because of the dedication of its staffs, the
System Operation Department has been able to
bring down the total number of system tripping
to 21 (in 2005/06) from 24 (in 2004/05) and

21

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Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

22।। NEA 2006 Annual Report.indd 22

28 (in 2003/04). The installation of the under-
frequency relays in major feeders helped in
curtailing the demand at the time of power
system crisis — thereby minimizing the number
of system blackouts. The availability of real time
data and better communication system have
also 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 generating more revenue for NEA. The
Department also earns Rs. 14.8 million annually
through leasing of optical fibers to Nepal Telecom
and other private companies.

For the continued smooth functioning of the INPS,
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. In the past year, the
trained manpower in the LDC completed the
adaptation works in some of the substations
without the support from foreign experts.
Likewise, the in-house experts also integrated
new K3 substation in the SCADA system.

Grid Operation Department

The Department is responsible for operation
and maintenance of transmission system of
66 kV and higher voltage level. In addition to
operation and maintenance of transmission
system, the Department also focused on
upgrading and reinforcing grid substations and
associated rehabilitation works. The total grid
substation capacity in various substations has

\
\
rr
v Op.
(ih i
(Th

'

oS।

Maintenance of 66 kV Trishuli - Balaju
transmission line.

been increased by approximately 70 MVA during
the past one year. Under-frequency relays
were installed in various substations resulting
in reduced system outages. Testing of relays
and energy meters were also performed on
regular basis, old and faulty energy meters were
replaced for accurate recording of energy being
transferred to DCS business group. The 11 kV
switching station and 33 kV transmission lines
were also handed over to the concerned DCS
offices for operation and maintenance.

8/12/2006 5:36:17 PM।।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

Distribution and Consumer
Services Business Group

The Distribution and Consumer Services (DCS) 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. Since
all the consumer related activities, right from new
consumer connections to meter reading, billing,
revenue collection, and consumer services are
dealt by DCS, it has the very important role in
maintaining the good relationship with consumers.
Nevertheless, DCS is on the forefront to earn the
revenue for sustaining operation and maintenance
and development activities of NEA.

DCS is responsible for planning, design,
construction, operation and maintenance of the
power distribution system up to 33 kV voltage
level and consumer services. It is providing
services to the consumers through 34 Distribution
Centers and 30 Branch Offices spread over
five development regions of Nepal. It has three
departments at central level and five Regional
offices headed by Directors.

In the FY 2005/06, the total number of consumers
reached 1,279,902, an increase of 10.35% over
the last year. Similarly, total energy sales and gross
revenue from sales in the year were 2077 GWh
and Rs. 13,795 million, an increment of 5.75% and
7.58% over last year respectively. The following
table shows the category-wise contribution of
number of consumer sales and revenue.

No. of consumer
(% of total
consumers)

User Group

Distribution Centers

For commercialization of Distribution and
Consumer Services Business Group, Distribution
Center concept was implemented by Nepal
Electricity Authority since 2002 February.

The objectives behind the implementation of the
Distribution Centre concept are to reduce system
losses and average collection period, improve
stock utilization, provide effective services
to consumers without complication, improve
overall efficiency, increase sales, reduce costs
and thereby making the distribution centre a
profitable and sustainable entity.

The distribution centers are evaluated for
each Performance Audit period (PAP) on a
half-yearly basis. The evaluation is based on
six performance indicators i.e. loss reduction,
average collection period, stock turnover ratio,
capital works in progress, connection period and
reporting and data management. Performance
Audit of first, second and third PAP periods have
been completed. The critical performance result
of Distribution Centers seems to be encouraging
though some of the distribution Centers have
difficulty of achieving the benchmark. It has been
also observed that some of the indicators are
influenced by external factors. It is realized that
some performance indicator should be reviewed
for the effective implementation of this concept.

Sales (%) Revenue (%)

Domestic 96.08% 39.21% 38.28%

Commercial

0.48% 8.12%

Non- Commercial 0.78% 4.89% 6.63%
. 5.

Industrial 1.80% 38.88% 36.12%
Others 0.86% 10.92% 8.84%।। NEA 2006 Annual Report.indd 23

23

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Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

24। NEA 2006 Annual Report.indd 24

Technical Services and
Commercial Department

This Department is responsible for supporting
DCS Business group in the technical and
commercial matters related to the distribution
system and consumer services. It is involved
in distribution planning, system reinforcement
programs and power evacuation and impact
studies. It is also monitoring the power system
losses and energy consumption of large
consumers. This Department is also responsible
for programming of TOD energy meters also.
The Central Meter Testing Lab continued testing
the energy meters, current transformers and
sub-meters of the consumers. This department
is responsible for producing weekly broad
casting program "Bidyut Sewa'". This program is
aired from KATH 97.9 Image FM station every
Saturday from 7.30 PM to 8.00 PM. This program
helps to boost public awareness about electricity
pilferage, rules and regulation regarding power
transmission and distribution and safety

The Technical Services and Commercial
Department provided valuable support to the
consulting team for the project formulation of
Rural Electrification and Renewable Energy
Project (Ninth Power Project) under the Technical
Assistance of Asian Development Bank. The
final report has been already submitted and ADB
is expected to finance the project in near future.

This year, NEA has decided that the Independent
Power Producers (IPPs) need to conclude
Connection Agreement for connecting the power
plants of IPP's to the distribution system of NEA
before signing PPAwith them. So, this department
prepared the standard format for Connection
Agreement and after approval, circulated it to
the concerned offices for necessary connection
agreement with IPPs.

The Technical Services and Commercial
Department is also executing the reinforcement
of 16 distribution substations at Mahendranagar,

Dhangadhi, Guleria, Nepalgunj, Kalaiya,
Parsa, Harsha, Malangawa, Haripur, Jaleswar,
Chandragadhi, Damak, Rajbiraj, Dhankuta,

Syangja and Baglung. All the works are near
completion. In fact, Mahendranagar S/S and
Harsha S/S have been already energized and

other substations will also be commissioned very
soon. Altogether, 80 MVA power transformer
capacity has been added at various distribution
substations. It is relieving the existing overloaded
distribution substations, thereby withdrawing the
local load shedding caused by the overloading
of power transformers at various substations.
After completion of reinforcement works of
substations, the power system losses will be
reduced, supply voltage will be improved and
the reliability of power supply will be enhanced in
these areas and subsequently, it is expected to
boost revenue earning of NEA to some extent.

Moreover, since many. other distribution
substations are 5० getting overloaded,
this department is formulating plans for the
reinforcement of other distribution substations
for the coming years.

Distribution Profit Center Project

This project has been undertaken to further
improve the performance of distribution centers
to operate them in a commercial manner, to
improve financial sustainability with better
service quality and reliable power supply. This
project is a component of Rural Electrification,
Distribution and Transmission Project, which is
being implemented with the financial support
from the Asian Development Bank (ADB).

NEA conducted intervention program on the
report of the new performance indicators
suggested by the consultant COWLA.S.
Denmark. Test implemented in six distribution
centers and finally accepted the report on
June 30, 2005. This is to be implemented in
all Distribution Centers. The decision has been
made considering the following facts:

० All the proposed performance indicators
are acceptable to NEA.

७ No comments were received from the
implemented Distribution Centers.

० Satisfactory results were found by
applying these performance indicators in
all Distribution Centers.

The final report which has been sent to concerned
Offices for necessary action. The project has
been winded up.

8/12/2006 5:36:19 PM।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

Computerized Billing Project

The Computerized Billing Project is being
implemented to help maintain accurate records
of consumers, meters and revenue accounting,
reduce non-technical losses and account
receivables and expedite reporting. It will also
help in reducing operational expenses and
improve NEA's relationship with the consumers,
quality and transparent customer services.
Its objective is to introduce a common system
throughout the NEA for improved billing and
revenue collection processes in a modern,
efficient and cost effective manner. Under
this project, Computerized Billing System
has been installed in Kuleshwor Distribution
Centres. Test Installation is in progress in
Bharatpur and Kathmandu Mid Branch. The
Billing System is expected to be installed in
20 large Distribution Centers within July 2007.

Other Major System Reinforcement works

In Eastern region, a new 10/13.3/16.6 MVA
33/11 kV substation at Tanki Sinuwari has
been energized. The substation will be linked
with 132/33 kV Duhabi substation by a 6.5 km
long double circuit transmission line. Contract
agreement to construct 33 kV transmission line
with lattice structure towers has been signed
recently and the construction work shall be
completed in 15 months. The newly constructed
Tanki- Sinuwari 33 kV substation will relieve the
loading of existing 33/11 kV Duhabi S/S and
33 /11 kV Biratnagar S/S.। NEA 2006 Annual Report.indd 25

Similarly, under Tanahu Distribution Center,
a Power Transformer 6/8 MVA, 33/11 kV
Substation shall be installed at Dumre S/S and 12
kV Switchgear panels shall be installed at Anbu
Khaireni S/S. 33 kV VCBs, 33 kV Control and
Relay Panels have been delivered. Installation
work of 33/11 kV, 6/8 MVA power transformer
and all the work shall be completed in the fiscal
year 2006/007.

Other Initiatives

Apart from regular works DCS has undertaken
the following various measures to improve its
performance.

a) Computerized Billing System and
Computerized Accounting and Inventory
System (CAIS) are being implemented in
more and more distribution centers and
branch offices.

b) Use of ABC cables extensively to reduce
tripping and electricity by direct tapping.

८) Mobilization of vigilant teams in Regional
Offices, Distribution Centers and Branch
Offices to check electricity pilferage.

d) Promotion of CFL lamps for energy
conservation and demand side
management.

e) Multi-channel Queue Management

system at payment counters to facilitate
consumers for bill payment.

25

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Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

26।। NEA 2006 Annual Report.indd 26

Electrification
Business Group

The Electrification Group was established as a
separate business group within Nepal Electricity
Authority to coordinate the significant rise in
planned financial investment needs in the
expansion, reinforcement and management of
rural distribution systems across Nepal. Primarily,
this Group is responsible for the development of
distribution network (up to 33 kV); construction,
operation and maintenance of off-grid small hydro
generation plants and associated networks as
well as for the management of rural distribution
system through community participation.

The activities under the Group are managed
under three departments —

(i) Small Hydro Power and Rural Electrification
Department,

(ii) Community and Rural _ Electrification

Department, and

(iii) Rural Electrification and Distribution System
Reinforcement Project, each headed by a
Director.

Small Hydro Power and Rural
Electrification Department
(SHPRED)

This Department is responsible for the planning,
construction and operation of isolated small
hydropower plants and _ electrification, and
extension of grid to remote and difficult hilly
regions. A total of 26 isolated hydropower
plants and associated distribution network
are in operation of which 11 have been leased
out to private firms or communities. Currently,
Rupalgad small hydropower plant (Dadheldhura
district) and Dolpa small hydropower plants are

not in operation. The civil structure which was
swept away by heavy landslide is being repaired,
and the maintenance work is expected to be
completed soon. Most of the plants damaged in
the past as a result of conflict have been repaired
and put back into operation.

The pace of construction of two small hydropower
plants in Humla and Mugu districts, which was
significantly delayed in the past, have picked up
in the fiscal year 2005/06.

Community and Rural
Electrification Department (CRED)

This Department is responsible for the
implementation of community based rural
electrification in participation with local

communities wherein the communities contribute
20% of the project cost and the remaining 80%
met through the budgetary allocation of the
Government.

The community based approach of rural
electrification has adopted three models—
Community Based Operation and Maintenance
(CBOM), Community Based Rural Electrification
(CBRE), and Community Based Generation
(CBG). As of June 20, 2006, a total of 391
communities have applied for electrification and
distribution management. So far 176 proposals
have been approved and agreements with 137
community groups have been signed. Out of the
137 communities 107 RE schemes are already
in operation. Out of 107 RE schemes 28 CBO's
has already taken over the distribution system
for operation and maintenance. The summary of
implementation status of activities under CRED
is given in next page.

8/12/2006 5:36:19 PM।।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

CRED STATUS TILL JUNE 20, 2006

= 20% Participation recorded, 250 million Rs
a 80% Matching fund required 1000 million Rs
a No. of 33/11 kV substation: 2

= Total HT line 820 km

= Total LT line 2539 km

a Beneficiary house hold 135,000

No. of Applications। Agreement RE Implemented
Registered Approved Signed

CBRE

CBOM
CBLG ee ee
391 176 137 135

= Total no. of Distribution transformer 570
a No. of 11/0.4 kV Substation 2
a Coverage districts( CBRE and CBOM and CBG): 51*।। No. of Districts in which RE program is in implementation: 38
Note:
* : Based on the application Registered
® CBRE : Community Based Rural Electrification Program ®
CBOM: Community Based Operation and Maintenance
CBG : Community Based generation
RE : _ Rural Electrification
Rural Electrification, Distribution service area.
and Transmission Project ० to develop the transmission system in
Kathmandu valley.
Rural electrification, Distributionand Transmission, to reduce losses and improve overall

Project is being implemented with a loan

wa: efficiency of the system.
assistance of US $ 50 million from ADB and US$

10 million from OPEC fund. NEAand Government ~*~ tohelp Distribution enters runcommercially
of Nepal are funding the local component of US$ and maintain their onsumer records and
34.5 million. revenue accounting accurately.
० to update fixed assets record scientifically.

The main objectives of the project are. ; The project has the following components.
० to enhance 1705 distribution and

transmission system capacity toevacuate a) Rural Electrification and Distribution

power from the existing and upcoming System Reinforcement (RE/DSR)

hydro power plants. b) Thankot-—Chapagaon—Bhaktapur 132 kV
७ to extend the distribution system in Transmission Line Project

rural areas to supply electricity to rural ८) Grid Sub-station Reinforcement Project

communities and improve economic i

conditions and living standards. d) Computerized Billing Project
ङ् to meet the increased load growth and ९) Distribution Profit Center Project

supply new consumers within existing _f) Fixed Assets Revaluation Project

27।। NEA 2006 Annual Report.indd 27 @} 8/12/2006 5:36:19 PM।।

Rural Electrification
and Distribution System
Reinforcement (RE/DSR)

Eight Power Project - Distribution
line construction, Dhading.

The scope of the project includes electrification
of around 123,382 rural households in 277
Village Development Committees (VDCs) in
22 districts of Eastern, Central and Western
regions of Nepal. The project consists of Rural
Electrification (RE) and Distribution System
Reinforcement (DSR) activity. While the RE
will provide access to electricity to new rural
consumers, the DSR program will improve the
distribution system and hence reduce losses,
enhance reliability and serve the expected load
growth for the next four to five years.

The project status is as follows:

° Planning, economic analysis and detail
engineering survey works for previously

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

western regions are being executed on
turnkey basis.

Most of the line materials for RE and DSR have
been delivered. In respect of ACSR conductors,
concentric cables, MCBs and PSC Poles the
delivery is in progress.

Funded by the Asian Development Bank, the
Government of Nepal and Nepal Electricity
Authority, the project is expected to be completed
by FY 2007/08 at an estimated cost of US$ 52.3
million.

Distribution and Rural Electrification
Project

This project includes rural electrification and
distribution system reinforcement activity in
Dhading, Nuwakot, Lalitpur, Bhaktapur and
Kavrepalanchowk districts. Funded by the
International Development Association (IDA), the
project scope consists of construction of 35 km
of 33 kV line, 250 km of 11 kV line and 450 km of
400 V line benefiting about 170,000 people.

The procurement actions for the distribution line
materials are underway with most of the contracts
awarded and in some case the material already
delivered. In respect of the turnkey construction
of substations to feed the planned distribution
networks, the tenders are under evaluation. The
project will soon float tenders for the construction
of distribution line. The project is scheduled to be
completed by FY 2008/09 at a cost of about US$
10 million.

Kailali Kanchanpur Rural Electrification
Project

Started in 1999 (2056/057) with 66.3 million DKK

ane 37 districts have been grant assistance of Danish Government and Rs
P 669 million of GoN and NEA, the project will supply
० The contracts of all 14 packages for  @lectricity to 33 VDCs and two municipalities of

the rural electrification and distribution
system reinforcement works have been
signed and the works are in progress.

० Supply and Construction of 33 kV
substations which include 14 numbers
of new substations, up-gradation of
8 substations and rehabilitation of 13
substations in the eastern, central and

Kailali and Kanchnapur districts. Around 64,000
households will benefit from this project, which is
expected to be completed in 2007 (2064/65).

Now Danish Embassy in Kathmandu through
Energy Sector Assistance Program (ESAP)
has taken over the responsibility of completing
the remaining works suspended by the Danish
Contractor citing securing reasons.

28। NEA 2006 Annual Report.indd 28 ९ 8/12/2006 5:36:19 PM।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

Sindhu Dolakha Distribution Line Extension Project

So far, three numbers of 3 MVA, 33/11 kV
substations at Lamki, Attariya and Lalpur; 20
km of 33 kV, 343 km of 11 kV and 1,055 km of
400/230 V lines have been constructed. The
substations are already in operation and have
contributed to improve the voltage drop problem
and supply situation in the districts. So far around
10,000 new consumers have been supplied with
electricity from the completed lines.

One of the objectives of the project is to
establish load centre based electricity user's
cooperative capable of owning, operating and
maintaining distribution systems including
promoting and facilitating productive end-uses
and establishment of a union of cooperatives to
provide technical, managerial and administrative
services to the load centre cooperatives. During
course of cooperative formation, it was found
that more number of consumers than expected
will have electricity connection resulting in
redesigning of 106 distribution networks.
The redesigning required four new 33/11 kV
substations with total capacity of 10.5 MVA to be
established in the project area in order to provide
quality supply. This required additional funding of
17.4 m DKK for which request has been made to
Danish Government.

Now major works remaining for completion
are cooperative formation works, service line
connection works and Danida funded distribution
line and additional substation construction works.
Approximately 77% of the total project works has
been completed so far.।। NEA 2006 Annual Report.indd 29

Sindhu Dolakha Distribution Line
Extension Project

Started in FY 1999/2000, the project is being
implemented in three phases. The project is
expected to benefit about 39,500 households,
and some small and medium industries in the
districts of Dolkha and Ramechhap. The scope
of work consists of construction of 52 km of 33 kV
line, 270 km of 11 kV line, 280 km of LT line, four
numbers of 33/11 kV substations and installation
of 278 number of distribution transformers,

Currently running in the second phase, the first
phase completed construction of 60 km of 11 kV
line; 120 km of low voltage line; two number of
33/11 kV, 1.5 MVA substation; and installation of
53 distribution transformers.

Funded by the Government of Nepal, the second
phase of the project is estimated to cost NRs
170 million, and is expected to be completed by
FY 2007/08.

Dhankuta Rural Electrification Project

The project plans to provide electricity to
3000 households in five VDCs (Ankhisalla,
Khoku, Chhintang, Mahabharat and Ahale) of
Dhankuta district. The project was started on
September 8, 2005 with Rs 60 million grant aid
of Japan Government. Scope of work consists of
construction of 48 km of 11 kV line, and 60 km of
400/230 V line and installation of 39 numbers of
distribution transformers.

Rural Electrification and Renewable
Energy Project

Asian Development Bank has provided a TA to
formulate a Rural Electrification and Renewable
Energy Project. The consultants, Mounsell Ltd.,
has already submitted the Final report on April
2006.

The envisaged plan includes two components—
(i) on-grid electrification to be executed by NEA
and (ii) on-grid electrification to be implemented
by AEPC. Apart from rural electrification, the plan
also includes distribution system reinforcement,
stringing of second circuit of the 132 kV
transmission line between Butwal and Kohalpur,
loss reduction, and demand side management,
and institutional strengthening of NEA.

29

8/12/2006 5:36:20 PM।।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

30।। NEA 2006 Annual Report.indd 30

Engineering Services
Business Group

The Engineering services Business Group
provides the technical support for project
development. The services provided by this
business groupincludedallaspects ofhydropower
development ranging form project investigation
and master plan studies to construction
supervision and management of hydropower
projects including detailed engineering studies. It
has nearly two decades of experience in design
and construction supervision of a number of
hydropower plants with capacities up to 144 MW.
The four departments, under this service are
Environment & Social Studies Department, Soil
Rock and Concrete Laboratory, NEA Training
Center and Project development Department.
The field of expertise offered by this business
group also included Electro-Mechanical services
which include a concrete pole plant and a central
workshop. This business group has a steering
committee headed by the General Manager
Engineering Services Business group. The
directors from all of the four departments are
members of the committee.

Activities carried out by the business group
during the fiscal year 2005/06 are as follows.

Environment/ Social Studies
Department

The Environment Social Studies Department
has the experience and capability of conducting
all aspects of environmental and social studies.
This department has now developed into a full-
fledged commercial unit, working in association
with other international consulting companies,
conducting EIA, IEE and ACRP studies of
hydropower projects, transmission line and
distribution line projects.

During the fiscal year 2005/06, Department has
completed a number of assignments:

1. Ministry of Environment, Science and
Technology (MoEST) has already approved

Scoping Document and Terms of Reference
(ToR) and the draft EIA report of Kulekhani-
3, 132 kV transmission line including Public
Hearing as per the Environmental Protection
Rules.

2. The EIA report of Upper Tamakoshi
Hydropower Project is in the process of
approval.

3. The preparation of the Scoping Document
and ToR of Seti-Trishuli Hydropower Project
has been completed and submitted for
approval.

4. Scoping Document and 10२ has _ been
already approved and the draft ElA report of
Gongor-Khimti 220 kV transmission line has
been completed and submitted to MoEST
for approval.

5. The EIA report of Kawaswati -132/33
kV Substation Project has been already
completed including the Public Hearing and
submitted for approval.

6. Post-construction monitoring work of Kali-
Gandaki HEP is ongoing.

7. The quarterly monitoring of air, noise
and water quality of Middle Marsyangdi
Hydropower Project is being carried out.

8. The EIA report of Chameliya Hydropower
Project has been already approved.

9. Scoping Document and Terms of Reference
(ToR) has been already approved and
the EIA report of Dumre-Damauli 132 kV
transmission line is under preparation.

A number of IEE for 33 kV transmission lines
have also been completed including Nayapul-
Manthali, Dhading-Nuwakot, Chandranigahapur
projects. Social Impact Assessment (SIA) of the
above 33 kV projects have also been prepared.

8/12/2006 5:36:21 PM।।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

Soil, Rock and Concrete
Laboratory (SRCL)

This business group has been providing services
related to the geological and geotechnical field
investigation. The services provided by SRCL
are detailed engineering geological mapping,
geophysical survey (mainly seismic refraction
and electrical resistively), core drilling with in-situ
tests such construction material investigation.
The laboratory has provided services for NEAand
the private sector. Following are the highlights
of major works performed by SRCL during fiscal
year 2005/06:

1. Upper Trishuli- 3A Hydroelectric Project:
Atotal of 303.40 m of core drilling, surface
geological mapping, construction material
investigation and laboratory tests. A total
of 21 test pits have been excavated and
construction material investigation has
been carried out. Seismic Refraction
Survey with total of 3 km long seismic
profiles has been conducted.

2. Kulekhani-3 Hydroelectric Project: A total
of 120 m of core drilling works along with
in-situ tests have been conducted.

3. Upper Seti (Damauli) Storage
Hydroelectric Project: A total of 100
11 inclined drilling at underground
powerhouse site with lugeon tests on
bedrock has been carried out.

4. Chanddranigahapur 132 kV Sub-station:
Soil Investigation work including 30 m of
core drilling with various laboratory tests
on soil samples had been conducted.

SRCL has also been involved in a number of
other project studies like Upper Tama Koshi,
Upper Seti, Seti Trishuli, etc.

Officer

S.No. Type of Training

On the job training
(Short-term course)

echnical

2 Induction Training
Recruited in NEA)।। NEA 2006 Annual Report.indd 31

NEA Training Center

NEA Training Center located at Kharipati,
Bhaktapur is envisaged for upgrading the
professional knowledge and skills of manpower
involved in the power sector. There were 70 on
the job training programs and three induction
training programs conducted in the fiscal year
2005/06. The table at the bottom of this page
shows the list of trainings conducted in this year.

These training were conducted according to the
contract agreement with the different corporate
offices and business groups of NEA. In addition
to the employees of NEA, participants from other
business organizations of power industry such
as Butwal Power Company (BPC) and Himal
Power Limited (HPL) have also participated in
the training programs. Similarly, on the demand
of Department of Electricity Development
(DOED), NEA training center conducted two
weeks on the job training program on Power
System Planning and Design for engineers.
In addition to regular training programs, NEA
Training Center conducted different requested
training programs in the areas of Distribution,
Transmission, Generation, Management and
Information Technology.

Newly requested training programs conducted
by NEA Training Center are Distribution System
Planning, Transmission System Planning, Design
and Construction, Training on LDC Generation
Maintenance, Electrical Protection System,
Hydropower Generation, operation maintenance
of Hydropower stations, etc. NEA training center
has been able to increase the number of both
the short term courses and participants in 2005/
06. The number of short term training programs
has been increased to 67 and the number of
participants in short term training programs has

Assistant

Non-Tech Technical Non-Tec

31

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Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

32।। NEA 2006 Annual Report.indd 32

been increased to 871. The training programs
that are felt more useful and those need based
short term programs have been prioritized.

Project Development Department

This department is responsible for the project
studies and design. The various project studies
undertaken by this department in 2005/06 are as
follows.

Upper Tama Koshi Hydroelectric Project
(UTKHEP)

'

Public hearing of Upper Tamakoshi
Hydroelectric Project.
This is a peaking run-of-river project with a
capacity 309 MW and annual energy of 1737.7
GWh. The present power/energy deficit can be
largely met by commissioning this project which
is attractive from technical, economical and
environmental point of view. The project cost as
per the final feasibility report is US$ 340 millions
including access road and transmission line but
excluding IDC and other financial costs. The
project with a construction period of 4.5 years
can be completed by 2012. Its gross head and
design discharge are 820 m and 44 cumecs
respectively. The overall layout and design of its
project components have been made in order to
reduce its vulnerability to the effects of a GLOF.
220 kVA Transmission line of 47 km length is
required in order to connect UTKHEP power to
the national grid via Khimti. Construction of 28.5
km long access road from Singati to Lamabagar
has been initiated by dividing the road stretch into
four different packages. The track construction is
targeted for completion by February 2008. The
Environmental Impact Assessment (EIA) of the
project has been carried out for generation and

transmission separately. EIA reports are under
final stage of approval. The tender notice has
been published in order to carry out Detailed
Engineering Design and Preparation of Tender
documents from international consulting firms
Two joint venture firms have submitted the
proposals. The detailed engineering is planned
to be completed by February 2008.

Upper Seti (Damauli) Storage
Hydroelectric Project

a. VY ee _
Public hearing of Upper Seti Hydroelectric Project.

Nepal is facing peak power deficit in dry
season so there is need for development of
storage projects. Upper Seti (Damauli) Storage
Hydroelectric Project with a capacity of 122 MW
is located near Damauli in Tanahu District. The
feasibility study of this project was conducted in
2001/02 by NEA. Currently NEA and JICA team
have been undertaking the upgrading feasibility
study. The upgrading feasibility will be completed
in June 2007. For the power evacuation of this
project, detailed survey of 220 kV transmission
line up to New Bharatpur substation has been
carried out.

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Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

Upper Trishuli 3 A Hydropower Project

NEA is currently undertaking detailed project
report (DPR) study of this run of river scheme
with a capacity of 61 MW. The headworks of this
project is located in Rasuwa district whereas
powerhouse is located in Nuwakot district. The
headworks is about 11 km north of Betrawati and
only 3 km of project road is required to be built.
This project has a good combination of discharge,
head and eases access. The design discharge
is 50 cumecs based on 70% exceedance
flow while the gross head available is 149 m.
The project features comprise of a 15 m high
gated overflow weir, intake conduit, desander,
4.14 km long headrace tunnel, inclined shaft,
underground powerhouse, tailrace, 54 km long
220 kV line. The sub surface geology comprises
of gneiss and schist which are considered to
be favorable for the underground structures. As
this scheme is located near major load center of
Kathmandu valley, this project is quite attractive
from power systems perspective. NEA carried
out topographic mapping, geological survey
including drilling, hydrological investigation and
prepared project layout and preliminary design।। NEA 2006 Annual Report.indd 33

in 2005/06. Estimated cost of this project is
106 million US $ and average annual energy
generation is about 480 GWh.

A tailrace scheme of this project with a capacity
of 44 MW has also been identified. NEA will
be carrying out feasibility study of this tailrace
scheme named as Upper Trishuli 3 B.

Other activities which are being carried out by
this business group are

a) Detailed design of Kulekhani-Ill
hydropower project including tender
document preparation is in advanced
stage.

b) Project Identification study which
comprises of preliminary study of Tila (73
MW) and Upper Dudh Koshi (89 MW)
projects.

C) Review study of Thuligad hydropower
project.

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Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

34।। NEA 2006 Annual Report.indd 34

Central Activities

NEA Board Matters

Mr. Gyanendra Bahadur Karki has been
appointed to the post of Minister of State for
Water Resources (MOWR), and he is also the
ex-officio Chairman of NEA's Board of Directors
(BoD). Before his Chairmanship of BoD, Dr. Tulsi
Giri, Vice-chairman of the Council of Ministers
was NEA's BoD Chairman.

Secretary of MoWR, Mr. Tika Datta Niraula is
an ex-officio member of the BoD since 2063/
01/27 (2006/05/10) after retirement of the then
Secretary Mr. Mahendra Nath Aryal. Mr. Arjun
Kumar Karki, Joint-secretary of MoWR, has
been appointed to the post of Managing Director
(MD) of NEA since 2063/04/01 (2006/07/17).
Prior to Mr. Karki, Mr. Harish Chandra Shah was
MD. The appointment of other members to the
remaining posts of BoD is expected soon.

During this fiscal year 2005/06 Board meetings
were held 14 times. During this fiscal year,
Personnel Administration 00 Financial
Administration By-laws were amended. NEA's
corporate organizational structure was also
modified with the addition of two Deputy
Managing Directors: Administration and Internal
Audit with a view to strengthening the structure.

Public Relation and Grievances
Management Department

This department collects public grievances
and complaints and forwards them to NEA's
concerned business units for necessary action.
The department also makes arrangement for
production of Radio and TV programs regarding
energy pilferage, leakage, conservation and
other issues as part of NEA's public awareness
campaign. In addition, the department also brings
out Vidyut, a half yearly magazine, highlighting
the various issues related to NEA.

During FY 2005/06, the Department received
a total of 19 complaints from the public. All the
complaints were forwarded to the concerned
business units for necessary action. All the
complaints have been addressed by the
concerned business units.

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Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

Planning, Monitoring and
Information Technology

Technology wing prepares short and

long term generation and transmission
expansion plans to cater to the nation's growing
dement for electricity. In addition, the wing also
periodically evaluates and monitors the progress
of the development projects executed by NEA
for their timely completion.

[Te Planning, Monitoring and Information

This wing is headed by the Deputy Managing
Director and supported by five departments;
system planning department, information
technology department, monitoring department,
corporate planning department and power trade
department.

Information Technology
Department

The Information Technology Department in FY
2005/2006 developed a number of application
software such as payroll system, employee
promotion system and employee darbandi
system for enhancing organizational efficiency.

The Department imparted training on Linux
operating system and CISCO network system
to its engineers which will help to maintain and
enhance NEA country wide network using VPN.
NEA corporate/office complex now has more
than 200 nodes connected through Ethernet in
addition to remote connections using VPN and
regular dialup connections from remote sites
where VPN is not available.

NEAintranet site www.nea.org site was revamped
in this fiscal year with improved interface
updates and inclusion of discussion forum. NEA
intranet site now includes important facilities like
telephone inquiry system, library book inquiry
system, Document Dispatch System, etc. and
internal mailing system; inventory stock inquiry
system and other utilities. The shared Internet
bandwidth was increased from 64 kbps to 256
kbps this year.

The Department continued the implementation
of CAIS in 24 new locations. The Department
completed procurement of hardware for the
same. The Department also provided training on।। NEA 2006 Annual Report.indd 35

CAIS to 64 staff members.

Most of the information about NEA activities
can be downloaded from the NEA website:
www.nea.org.

Corporate Planning Department

The Corporate Planning Department, undertook
the following major works during the fiscal year
2005/06:।। Formulation of Annual Development
Budget.
a Preparation of proposals for foreign

assistance.

= Obtaining licenses from GoN for its
development initiatives.।। Preparation of Action Plan for ७०५5
Budget Policies related to NEA.।। Preparation of Medium Term Expenditure
Framework (MTEF) paper for the fifth
MTEF (FY 2006/07 - 2008/09).।। Preparation of Demand Side Management
Policy.।। Policy for the micro hydro plants
participation in the overall grid power
exchange.

In addition, NEA also obtained four new licenses
from Government for development of networks.
Out of the four new licenses; two are for the
transmission survey, one for the distribution
survey, and the remaining one for the generation
survey.

Some of the following policies initiated but could
not take shape due to the time constraints were
in the sector of:

a) Leasing / Disinvestment of loss making
hydro plants and amenities

b) Joint venture works of major power plants
to be undertaken by NEA.

35

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Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

36। NEA 2006 Annual Report.indd 36

८) Formulation of Acts in the favor of NEA.

In the capacity building measures for NEA staffs,
12 senior NEA officials took part in various
trainings, workshops, seminars and partnership
programs under the USAID sponsored SouthAsia
Regional Initiative/Energy (SARI/E) program.

Monitoring Department

This Department collects and evaluates monthly,
quarterly and annual progress reports of different
projects implemented by NEA. It conducts
internal review meeting of different projects
and participates in the Ministry level quarterly
progress review meeting.

It also acts as the Secretariat to the Petition
Committee of NEAas provisioned in the Electricity
Loss control and Electricity Distribution by-laws.
As the nodal officer of NEA, the Department also
takes responsibility for collecting the progress
report from the concerned departments as per
requirement and report to GoN's concerned
authorities regarding delivery of quality service.

Apart from the above tasks, this Department
also co-ordinates with and reports to various
Government Agencies, such as the Ministry of
Water Resources, Ministry of Finance (MOF),
National Planning Commission, etc. regarding
the progress of NEA executed projects.

Power Trade Department

The major function of the Power Trade Department
is to process applications for Power Purchase
Agreement (PPA) and conclude PPAwith the IPPs.
Besides this, the Department also coordinates the
power exchange and trade with India, monitors
and provides support in administration of the PPA
including invoice processing and Coordinating
Committee meetings.

As of July 2006, a total of 28 PPAs have been
signed with a total installed capacity of 217.175
MW. Out of these, 11 projects with total installed
capacity of 148.283 MW are in operation and 8
projects with total installed capacity of 16.826
MW are under construction. Out of the 8 projects
under construction, Baramchi (999 kW), Khudi
(3,450 kW), Thoppal Khola (1400 kW) and Sisne
Khola (750 kW) are expected to be commissioned
in the coming fiscal year of 2006/07.

During FY 2005/06,the Department concluded
PPA's with Kathmandu Small Hydropower
Systems (Pvt.) Ltd. and Unified Hydropower
(Pvt.) Ltd. for the purchase of power from Sali
Nadi Small Hydropower Project (232 kW) and

Pati Khola Small Hydropower Project (996 kW)
respectively.

Total of 43 applications for PPA are under
various stages of study. Power evacuation has
emerged as the most important issue, impeding
speedy conclusion of PPA. It is imperative that
all possible obstacles and difficulties regarding
evacuation of power from the proposed projects
be identified and their optimum solutions
worked out before entering into a long-term
contract like PPA. To meet this objective, a
study on power evacuation aspects is required
to be undertaken involving concerted effort from
both the NEA and the developer. Considering
this need and relevant provision in NEA Grid
Code, Connection Agreement between the
grid/distribution network owner and user has
been made a prerequisite for PPA. Accordingly,
six projects have already been forwarded for
Connection Agreement after technical review.

Besides the routine activities, this Department
also reviewed the Model PPA both for BOOT
(Build Own Operate and Transfer) and BOO
(Build Own and Operate) projects under the
private sector. Furthermore, this Department
also engaged in power purchase pricing study
to recommend pricing policies for projects up to
10 MW capacity.

System Planning Department

The System Planning Department is mandated
by the NEA Board to formulate NEA's long-term
investment plans on generation and transmission.
During the year under review, the Department
brought forth three important documents on:

a Load Forecast।। Generation Expansion Plan and।। Transmission Expansion Plan.

The Load Forecast projects Nepal's long-
term electricity demand. Based on this, the
Generation Expansion Plan devises a sequence
of probable projects to meet this demand. Based
on both the Load Forecast and the Generation
Expansion Plan, the Transmission Expansion
Plan is devised to determine augmentation and
expansion required in the NEA's transmission
network.

The Department, in conjunction with NEA's other
departments, also conducted power evacuation
study for Upper Trisuli Hydropower Project,
Transmission Line study in the Sunkoshi Corridor
and impact study for Bulk consumer load.

8/12/2006 5:36:26 PM।

। NEA 2006 Annual Report.indd 37

Administration

dministration wing is responsible for
र,implementationandamendment

of various rules and regulations of NEAand
overall development of human resources. This
office is also responsible for providing logistic
support, legal advice and arbitration, property
management, security arrangement of central
office and for promoting public relations. The
office is headed by Deputy Managing Director
and supported by three departments namely
Human Resource Department, General Services
Department and Publication Relation and
Grievances Management Department.

Human Resources Department

The Human Resources' Department is
responsible for man power planning recruitment,
training, staff welfare and disciplinary actions.

The total approved position at the end of FY
2005/06 is 10,314 out of which 9,540 positions
are filled, During the year under review, 297
new staffs were recruited, 96 staffs retired, 35
resigned and 41 died due to natural causes.

Under disciplinary actions, six staffs were
cautioned, three staffs have been debarred
promotion, seven suspended and twelve staffs
were dismissed from the service.

During the year under review, 61 officers and
236 assistant levels new staff were recruited.

As regards promotion, nine officers and 1,072
assistant levels employees were promoted under
twelve year time bound automatic promotion
system. Similarly, three managers were
promoted to director level based on performance
evaluation. The promotion process for different
levels based on performance evaluation and
internal competition was started and is in
progress.

A total of 251 staffs participated in training,
seminar, workshop, conference, higher study
and inspections abroad whereas 222 staffs
participated in training, seminar, workshop
and higher studies conducted by different

organizations within the country. Similarly,
400 officer level staffs and 553 assistant level
staffs participated in various training programs
conducted by NEA Training Center.

Under the staff welfare program, additional
financial support was provided to eight staff for
the treatment of serious illness. similarly, under
the staff welfare loan, 380 staffs received house/
land purchase and construction loan, 138 staffs
received house maintenance loan, 268 staffs
received social activities loan, 95 received three
months salary loan and three received natural
disaster loan.

General Services Department

The General Services Department is responsible
of the following function under corporate structure
of NEA.

1. General administration of the central
office

2. Legal and arbitration affairs of NEA.

3. Security management of the central
office.

4. General repair and maintenance of the
central office building and Balaju guest
house.

5. Logistic support of the central office.

6. Necessary arrangement of the Annual

Anniversary and Bishwokarma Puja.

7. Vehicle
office.

management of the central

8. Auction of the beyond repairable vehicles
of the central office.

There were all together 117 legal cases involving
NEA in FY 2005/06 out of this, NEA won 42
cases, lost 16 cases and remaining 59 cases
are sub-judice. Most of these cases involved
electricity theft and land acquisition.

37

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Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

A new vehicle service centre has been established for vehicle servicing and minor maintenance.

The total number of the vehicles at the end of the fiscal year is as follows:

S. No. Types of Vehicle Numbers
202
6.।

ss
se
भा
773

38।। NEA 2006 Annual Report.indd 38 @} 8/12/2006 5:36:26 PM।।

।। NEA 2006 Annual Report.indd 39

Internal Audit

for carrying out the financial, management,
technical and energy audits of NEA's business
groups and corporate offices.

[== Audit wing of NEA is responsible

The organizational status of Internal Audit
has been upgraded during the fiscal year in
the course of strengthening the internal audit
function. It is now headed by Deputy Managing
Director who reports to the Managing Director.
These audits are conducted in conformity with
Standard Auditing Practices, provisions relating
to Internal Audit in Financial Administration
Regulations, 2062 and Internal Audit Manuals
by the respective regional offices established in
the previous fiscal year under the Department
and Office of the Deputy Managing Director of
Internal Audit. It has also started initiation to
adopt the risk based approach for conducting
internal audit.

During the fiscal year financial audit for the
F/Y 2061/62 were conducted for 122 offices
and for the F/Y 2005/06 periodical audits i.e.
quarterly, half yearly, annual audit were initiated
and are in progress as per the audit plan. A
total of 94 audits has been completed. Similarly
management, technical and energy audit of 7, 21
and 28 offices respectively has been completed.
In addition to field audits, the monthly and
periodical information furnished to internal audit
were reviewed by the divisions for conducting
desk audit and findings were communicated to
concerned offices for comments.

Annual Internal Audit Report for the year 2061/
62, quarterly report for the period Shrawan-
Kartik, 2062 and Marg-Falgun, 2062 have also
been submitted to the Managing Director as per
the provisions of the Financial Administration
Regulation for necessary action.

थि International Consulting firm has been
appointed for providing consultancy services to
strengthen the internal audit practices in NEA (as
well as financial management and accounting
system of NEA) under the NEA Institutional
Strengthening Project financed by the World
Bank. Management Audit Manual was prepared
with the help of local consultant for conducting
management audit in an effective manner. With
the initiation of internal audit, a committee for
study and the basis for computation of system
loss was formed. The committee submitted
the report outlining the basis for calculation of
system loss.

The Department also provided training on
various courses for enhancement of knowledge
and skills. Internal audit imparted training in
the ever changing environment for continuous
enhancement of knowledge and _ 5015 of
audit officials and staffs. During the year, the
Department also deputed many officers to
various training programs organized abroad and
in house to enhance their professional capacity.

39

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Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

40। NEA 2006 Annual Report.indd 40

Finance

The Finance wing of NEA is responsible for
overall corporate financial activities. This office
is headed by Deputy Managing Director and
supported by Corporate Finance and Finance &
Accounts Departments

Corporate Finance Department

Despite the various obstacles faced during the
fiscal year 2005/06, NEA registered a growth
of 7.71% in total sales. However, this growth in
sales is less than the projected target by 3.68%.
Internal sales increased by 8.83% to reach the
figure of 1965.27 GWh whereas exports (sales
to India) decreased by 10.25% compared to
last fiscal year. Export to India stood at 101
GWh. Internal sales net revenue amounted to
Rs. 12,851 million for the fiscal year 2005/06
as against Rs. 11,995 million in the previous
year thereby registering an increase of 7.13%.
Export sales revenue stood at Rs. 565.6 million
as against Rs. 609.5 million in the previous fiscal
year registering a decrease of 7.2%. Total rebate
given to the consumers amounted to Rs. 305.08
million, an increase of 8.66% over the previous
fiscal year's figure.

In the year 2005/06 NEA's income from other
services such as surcharge, interest, lease rent,
service charge, dividend, etc. was Rs. 596.57
million which is less by 9.5% as compared to
the previous year's figures. The contribution of
income from other services to the total income
is 4.26%. Total income after rebate stood at Rs.
14,012.9 million showing an increase of 5.98%
over the total income of 2004/05.

NEA's total expenditure amounted to Rs. 16,485.2
million, an increase of 13.47% over the previous
year's expenditure. Power purchase increased
by 14.7% to reach a total amount of Rs. 6,575
million. This is 39.9% of the total expenditure.
Additional power import and annual escalation
provisions in rates contributed to increase in
power purchase cost.

Interest expenditure, the second largest
component of the total expenditure increased
by 6.5% over previous year's figure to register a

total amount of Rs. 3,281.5 million. NEA's cost of
debt is high because of combined impact of high
interest charges by the Government (10.25% in
2005/06 in most of the cases) and involuntary
injection of funds in projects. The Government
has recently decided to reduce the interest rate
to 8%. This will help to improve financial heath of
NEA in the coming years.

Staff cost standing at around 10% of the total
expenditure amounted to Rs. 1,749 million in
2005/06, an increase of 17.15% over previous
year's staff cost. This increase in staff cost
was due to the Government's decision to raise
the salary scale by 20% in 2005/06. Like wise,
Operation & Maintenance expenses increased
by 15.93% to reach a figure of Rs. 1,441 million.
Additional thermal generation, necessary
maintenance to maintain system operation and
rise in price of various construction materials
contributed to this increase in costs.

Depreciation, royalty, prior years' adjustment
and other expenditure which include deferred
revenue expenditure, loss on forex, loss of other
assets and provisions amounted to Rs. 1,751
million, Rs. 906 million, Rs. 325 million and Rs.
455 million respectively.

NEA's cost of service is in rise mainly because of
escalation in power purchase rates, inflation and
expansion of service in rural areas. However,
there is no mechanism to recover/adjust these
costs. In view of the above, NEA has applied for
automatic tariff adjustment. The application is
pending in the Tariff Fixation Commission. NEA
considers tariff increase as the last resort to look
for. In this fiscal year also NEA carried on its
business without increasing electricity tariff for
the fourth consecutive year although it suffered
a loss of about Rs. 1.2 for each kWh supplied to
the consumers.

NEA's cash situation worsened during the fiscal
year despite more than 95% collection rate of
individual and private sector. Public sector dues
still remains a serious problem. The outstanding
receivable balances from municipalities and
Government offices and _ public institutions

8/12/2006 5:36:26 PM।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

stood at approximately Rs. 2 billion at the end
of the fiscal year. Additional fund requirement
for various projects including Middle Marsyangdi
further worsened the problem. In fiscal year
2005/06, NEA spent over Rs. 1 billion as
additional disbursement to various projects. To
cope with the problem of cash shortage, NEA
has already initiated the process for issuance
of Power Bonds in the market. The selection
of Issue Manager is in the process and will be
finalized very soon.

Institutional strengthening process has been
introduced through Institutional Strengthening
Project, a sub component of Nepal Power
Development Project under the _ financial
assistance of the World Bank assistance. The
consultant has been appointed. The consultant
has started carrying out the task of enhancing
present capabilities in finance, accounts, and
internal audit through training, process mapping,
selection of appropriate system, introduction of
FMIS, IFRS and other useful tools.

Finance and Accounts Department

NEA's fixed asset (historical-net) at the end of
the fiscal year 2005/06 reached Rs. 52,974.9
million as compared to Rs. 52,192.7 million at
the end of previous fiscal year. Total revenue
in F/IY 2005/06 was Rs. 14,013.6 million as
compared to Rs. 13, 222.7 million in F/Y 2004/
05, an increase of 5.98%.

Total operating expenses under generation,
transmission, distribution and administration in
the fiscal year 2005/06 stood at Rs. 8,374.8,
Rs. 232.5, Rs. 1,652.9 and Rs. 653.7 million
respectively. As compared to last fiscal year's
figures the expenses under the above headings
increased by 15.57%, 7.69%, 11.37% and
5.03% respectively whereas the total expenses
increased by 11.08%. NEA suffered a net loss
of Rs. 2,473.1 million in this fiscal year. NEA's
financial performance has not been encouraging.
NEA suffered a loss for the sixth year in a row
due to various reasons cited in this report.

In F/Y 2005/06, NEA invested Rs. 7,516.1 million
in capital works and projects. Out of this, Rs.
2,101 million comprised of Government equity,
Rs. 3,269.1 million came as Government loan। NEA 2006 Annual Report.indd 41

and Rs. 2,145 million was borne from NEA's
internal source.

14८8 5 total borrowing stood at Rs. 51,955.5
as of end of F/Y 2005/06. In F/Y 2004/05, NEA
contributed a total sum of Rs. 2,776 million to the
national treasury. Out of this, Rs. 588.3 million
was for interest payment, Rs. 825.1 million for
loan repayment Rs. 896.2 million as royalty and
Rs. 470 million in respect of Middle Marsyangdi
funding. In F/Y 2005/06 NEA borrowed Rs. 700
million as short term loan.

The financial audit for F/Y 2004/05, carried out by
M/S CSC and Co., Chartered Accountants was
completed within nine months of the fiscal year.
Finalization of Final Audit is pending approval by
Board of Directors. Tax audit for F/Y 2004/05 has
also been completed.

NEA appointed auditors to conduct the
performance audit of General Manager's Office
of the core business units and the distribution
centers for the first and third performance audit
periods respectively.

NEA has successfully computerized its financial
accounts and inventory management system
in all major centers of NEA. This will facilitate
to complete the financial and tax audit at
stipulated time. This will help to improve the
financial reporting system of NEA and will also
help to comply with the loan covenants of donor
agencies.

The audit qualifications of the period F/Y 1973/
74 to 1993/94 of the then Electricity Department,
Development Projects and Development
Committees, have been cleared by 41.2% out
of the total outstanding Rs. 97.6 million audit
qualifications in F/Y 2005/06.

NEAis required to achieve a number of covenants
in respect of borrowing from the donor agencies.
Major covenants related to finance are Rate of
Return (6%), Self Financing Ratio (23%), Debt
Service Coverage Ratio (1.2 times) and Average
Collection Period (3 months). In F/Y 2005/06
NEA achieved 2.2%, -2.6%, 0.65 times and 3.7
months in respect of ROR, SFR, DSCR, and
ACP respectively.

41

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42

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

NEPAL ELECTRICITY AUTHORITY
Highlights of FY 2005/06

(NRs. in million)

INCREASE/DECREASE

DESCRIPTION 2006* 2005

AMOUNT PERCENT

Revenue:
Net Sale of Electricity (M.NRs.) 810.8
(20.9)

789.9

6.43
-3.38
5.97

13,416.0
596.6

12,605.2
617.5
13,222.7

Income from Other Services (M.NRs.
Total Revenue (M.NRs.)

—

Operating Expenses:
8,374.8
232.5
1,652.9
653.7
1,751.3
85.0
12,750.2

7,246.5
215.9
1,484.2
622.4
1,733.5
123.3

1,128.3
16.6
168.7
31.3
17.8
(38.3)

15.57
7.69
11.37
5.03
1.03
-31.06

Generation Exps. (incl. Power Purchase) (M.NRs.)
Transmission Expenses (M.NRs.)
Distribution Expenses (M.NRs.)
Administration Expenses (M.NRs.)
Depreciation Expenses (M.NRs.)++
Deferred Revenue Expenditure (M.NRs.)
Total Operating Expenses (M.NRs.)
1,796.9
3,079.8
29.9
(1,312.8)
48686.4
61286.8
1,159,855
1,918.4
1,805.8
1,556.94
6.57
557.53
2,642.75
1,522.90
241.39
864.79
112.53
13.67
22.20
24.83%

-29.75
6.55
1416.72
88.35
6.71
1.85
10.35
7.71
8.83
-1.38
-1.19
8.21
5.10
2.33
10.29
7,55
-10.25
17.78
12.61

Operating Surplus (M.NRs.)
3,281.5
453.5
(2,472.6)
51955.5
62422.5
1,279,902
2,066.3
1,965.3
1,535.48
6.49
603.28
2,777.42
1,558.38
266.23
930.04
101.00
16.10
25.00
24.70%

201.7
423.6

Interest on Long-Term Loans (M.NRs.)
Other Exps./Income including prior year's Adj.
Net Income/(Loss) (M.NRs.)
3,269.1
1,135.7
120,047.0
147.9
159.5
(21.5)
(0.08)
45.8
134.7
35.5
24.8
65.3
(11.5)
2.4
2.8
(0.1

Longterm Loans (M.NRs.)
Net Fixed assets (M.NRs.)
Number of Consumers
Total Sales of Electricity (GWh)
Internal Sale (GWh)
Annual Average Consumer's Consumption (kWh)+
Average price (NRs./kWh)+
Peak Load Interconnected System (MW)
Total Available Electric Energy (GWh)
Hydro Generation (GWh)
Purchased Energy (GWh)-India
-Nepal (Internal)
Exported Energy (GWh)
Thermal Generation (GWh)
Self Consumption (GWh)

Net System Losses

Note:

* Provisional figures; Subject to final audit.
+ Internal.

++ On Historical Assets.। NEA 2006 Annual Report.indd 42 @} 8/12/2006 5:36:27 PM।

NEPAL ELECTRICITY AUTHORITY
Balance Sheet as at July 16, 2006

(Fig. in million)

Particular * 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997

Capital and Liabilities पाका
Capital and रि a a
Reserve and Accumulated Profit
Grand Total 62560.5। 56479.3। 49230.4। 46637.2। 43102.5।
Asset
Com

Sundry Debtors and Other 4064.6। 3697.7। 3735.7। 3380.2। 2284.9। 1678.5। 1525.5। 1530.9। 1435.4। 1209.1
@® Receivable ®

Cash and Bank Balance 1296.2 1322.6 1036.4 1076.2 664.6 1039.3 1321.3 1148.1 1632.3 1526.5

Denote Loan and 2120.5। 2098.6। 2063.3। 2216.9। 3314.4। 2634.9। 1932.0। 1634.2। 1709.6। 1329.0

Total Currents Asset 8826.5। 8491.6। 7883.4। 7690.5। 7322.0 5761.1 4868.6

Less: Current Liabilities and
Provision

Sundry Creditors and Payables 12933.2। 12619.8। 9707.7। 7444.8। 4703.9। 5070.80। 4488.5। 4349.7। 3555.7। 2512.1
Provision 732.6 697.7 681.5 753.3 1244.2। 1042.90। 988.9 436.8 449.3 413.1

peal Currrent Liabilities and। 43665.8। 13317.5। 10389.2। 8198.1। 5948.1। 6113.7। 5477.4। 4786.5। 4005.0 तत

Net Currents Assets -4839.3। -4825.9 -507.6 1373.9 283.7 266.7 1687.2

Deferred Expenditures (To be 126.7। 250.0। 5068। 9165। 978.6। 1302.8। 615.0। 443.3। 267.3
Written Off

[ सम। s7e0। माउ। sara। महा। 09७5। 15015। oro। co20। «00s
तान उहाक। coors [anne। o52z06। 8605। seara.s [०304। 486572। o102 5
कममा

* Budgeted

43। NEA 2006 Annual Report.indd 43 ९ 8/12/2006 5:36:27 PM।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

NEPAL ELECTRICITY AUTHORITY
Income Statement for the FY July 16, 2006

(Fig. in million)
Particulars **2006 2005 2004 2003 2002 2001 2000 1999 1998 1997

13416। 12,605.2। 11,874.7। 11,012.6 4,767.50
8,607.3। 7,462.4। 6,765.4। 5,348.0। 2,190.30। 1,950.50। 4,176.20
8374.8। 7,246.5। 6,565.9। 5,169.4 1,098.82

411.1 512.5 426.90। 440.80। 236.80। 270.10 188.70 ®

5,232.7। 3,636.7। 2,734.40। 2,633.90। 2,354.40। 2,284.00

617.5
1,484.2
622.4
3,653.7
3,079.8
1,733.5
-230.0
40.0

671.4
1,376.1
489.1

@® Deferred revenue expenditure
writen off

Profit/ loss from operation
including interest+Dep.

Prior years adjustment (net) 325
f :

2,991.5
1,686.0
59.1

85 123.3 320.1

4,746.6। 5,056.7

-2,147.6। -1,092.9। -1,141.2

-900.3। -1,209.4 तत 973.20। 247.00। 294.20। 1,030.50

-1,674.9। 298.9। 1,179.60। 1,250.60। 1,085.50। 1,201.80। 1,047.80

219.9 344.9
-1,486.1
-274.2
-1,760.3

-1,694.9

Total profit Available for -7,280.6। -4,788.0
appropriation

Insurance fund 0.0

Profit /loss transferred to
balance sheet

-3,455.2

1५)

0.0

No

0

fo)

-7,300.6। -4,808.0। -3,475.2

9०
©
टे
fo)
(०
=>
zg
(०
=
[on
0)
५)
हु"
पे
ioe 7
o
n
=
0)
oO
oO।»
5
=
i
कि
[es]
[22
[oe]
fo)

kK

Budgeted

44। NEA 2006 Annual Report.indd 44 ९ 8/12/2006 5:36:27 PM।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

Accounting Policies

Basis of Accounting

The financial statements have been prepared on
the basis of historical cost convention, modified to
include the effect of revaluation of fixed assets as
per the generally accepted accounting principles
which are compatible with certain International
Accounting Standards, to the extent applicable.
The financial statements are prepared as per
Nepal Accounting Standards except where
stated otherwise and presentational requirement
of the Company Act- 2053.

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 31 Ashad has been accrued taking
average rates. Revenue from sale of
electricity is shown net of rebate.

(ii) Accounting of rebate, surcharge for
delayed payments and __ liquidated
damages, obligations been done on cash
basis.

Income from Other Services

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

(ii) Interest on investments in call and time
deposits is recognized on accrual basis.

(iii) Dividend on investment in shares is
recognized at the time of receipts.

(iv) Revenue from services provided by
Engineering Services is accounted for
on cash basis on the completion of the
relevant job.

Fixed Asset

i) Fixed assets (other than those identified
in paragraph (ii) below, which continue।। NEA 2006 Annual Report.indd 45

(ii)

(iii)

to be stated at their historical cost) are
stated at their revalued figures less
accumulated depreciation. However,
transmission lines below 33 kV have
been considered for annual revaluation
only from 2048-49 (1991-92) by applying
the multiplying factor as applied to other
revalued assets.

The following assets are stated at
their historical cost less accumulated
depreciation

a) Solar Power Plant
b) Meter and Metering Equipment
८) Consumer Service

d) Public Lighting

f) Vehicle and Mobile Plant
g) Furniture and Fixtures

(

(

(

(

(e) Tools and Instruments
(

(

(h) Office Equipment

(

i) Miscellaneous Properties

Thecostofacquisition, construction/erection
includes 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%
(c) Development 50%

(d) Finance and Administration 10%

45

8/12/2006 5:36:27 PM।।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

46। NEA 2006 Annual Report.indd 46

(iv) Liabilities in foreign currencies relating
to acquisition of fixed assets are carried
in the books at the exchange rates
prevailing as on the date of incurring the
said liabilities and exchange loss/gain
arising there from, is adjusted to the
cost of respective fixed assets on actual
disbursement of the respective loans.

(v) 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 charged to the Income Statement.
During the year, Rs. 229.56 million of
gain on foreign exchange is credited to
Income Statement.

Revaluation of Fixed Assets

(i) A major portion of fixed assets was
revalued during the financial year 1988/89
and 1989/90, using the 'net replacement
cost approach' on the basis of reports
of independent valuers. The assets
revalued, together with subsequent
additions made thereon, are subject
to an annual revaluation by adopting a
single multiplying factor computed by
using the average index numbers of
inflation provided by the World Bank for
the financial years 2004 and 2005 for
foreign and local component in the ratio
80:20. Independent valuers are not used
for annual revaluation of fixed assets.

(ii) The multiplying factor computed for the
year and applied to the assets for annual
revaluation is 4.20% (previous year
2.85%).

(iil) Revaluation factor is not applied in the
case of fixed assets whose value has
already been reduced to Rs. 1 under
the historical cost convention to the

extent identified. However, assets under
distribution lines have been revalued
irrespective of the net book value.

Contributions from Customer/Local
Authorities

Contributions received from the customers/
local authorities against fixed assets installed/
commissioned by NEA, were treated as capital
reserve and these were not deducted from the
cost of respective fixed assets up to 2053-54
(1996/97). With effect from 2054-55 (1997/
98) such contributions are netted off from the
respective fixed assets. An amount aggregating
to Rs. 179.38 million on account of consumer
contribution pertaining to earlier years has not
been adjusted and disclosed in the financial
statements as Capital Reserve.

Depreciation

(i) Depreciation is provided on straight-line
method on all fixed assets, at the stated
rates in the table.

(ii) The applicable depreciation rate on
building on revaluation basis is applied
on 90% of the value of the building.

(iii) On assets sold/scrapped etc. during the
year, depreciation is not provided up to
the date of sale/discard/disposal.

(iv)। Depreciation on changes in value of fixed
assets due to impact of revaluation is
provided retrospectively.

(v) An amount of Rs. 950.242 million
(previous year Rs. 930.152 million)
equivalent to the additional charge for
depreciation, arising due to revaluation
of fixed assets is transferred from the
Revaluation Reserve to the Income
Statement and not adjusted against
retained earnings as per IAS 16.

8/12/2006 5:36:27 PM।।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

Revalued Cost
Basis

(a)
Buildings 1.00%-2.00% 2.00%

८)।Hydro Electric Structures
d)।Hydro Electric Plant & Machinery

2.00%-2.90% 2.00%-3.00%

3.35%-5.00% 3.00%

4.00% 2.50%

(e)।Internal Combustion on Plant & Machinery

(f)। Transmission lines (66 kV, 132 kV and above)।3.35% 3.00%

—

— oo। जा
— a> }ca

Transmission lines (33 kV)
)। Transmission Substations, Distribution System (including below 11 kV
Transmission lines)

(j)।Solar Power
k)

Meter & Metering Equipment
Consumer Services

(m)। Public Lighting

Vehicles, tools and instruments, furniture and

fixtures.
(0)। Office Equipment

00)
(q)।Additions during the year

बा
न्यु
 )

—

Miscellaneous Properties

Investments

Investments are valued at cost.

Inventories

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

Accounts Receivable

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

Deferred Revenue Expenditure

Certain expenditure incurred on_ training,
investigation, survey, feasibility studies, of
infrastructure projects and major overhauling
etc., which are expected to generate benefits
over a period of time, are treated as deferred।। NEA 2006 Annual Report.indd 47

oo। ला
—। झ

5.00% 3.00%

4.00% 3.00%

4.00%-5.00% 3.00%-4.00%

3.00%
10.00%
7.00%
3.00%

20.00%

15.00%
50.00%

At applicable rates। At applicable rates
for full year for half year

revenue expenditure and written off over a period
of five years, including the year in which the said
expenditure are incurred.

Employees Benefits

Provision for Pension and Gratuity is made on
an ad hoc basis. Such expenses are accounted
for on cash basis and provisions made in earlier
years against the above expenses heads are
being retained in the accounts. However, Rs
1.96 million (cumulative up to previous year Rs.
475.80 million) is provided by the management
on an estimated basis.

Liability on account of accumulated home and
sick leave aggregating to Rs. 14.27 million
(cumulative up to previous year Rs. 142.21) has
been provided for on an estimated basis to cover
the liability as at Ashad 32, 2062. Liability on

47

8/12/2006 5:36:27 PM।।

account of medical reimbursement continues to
be accounted for on cash basis which is not in
accordance with Nepal Accounting Standards.

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 the any loss of fixed
assets, in case of any eventuality. However,
interest accruing on the above Fund is credited
to Income Statement, as per consistent practice.

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

Rs. 280 million (previous year Rs. 260 million)
earmarked in lieu of insurance fund has been
utilized by NEA during the year and the amount
set aside every year is not funded on the balance
sheet date. This fund is not created in the current
year as NEA has incurred loss.

Prior year's figures/ Regrouping

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

48।। NEA 2006 Annual Report.indd 48 @} 8/12/2006 5:36:28 PM।।

TARIFF RATES
(Billing Effective since September 17, 2001)

1:। : DOMESTIC CONSUMERS

[। [Minin Monty Chas METER CAPACITY। imum Caras। xem NH)
फिड
ना
लमा
ला
ललल
साग
लल
ललल
म लल
लम लल
म निल
लल तलका
ES
तलतल
ुकलमलानकानणा। (Ramone डु
. Cc मम
निकाला उमा
5 lcomunrywiouesatcconsumer।
काला मनमा
जि

(Rs./kKVA) (Rs./unit)
A। Low Voltage (400/230 Volt)

ct
जिका जा जा
डक।
ललल
पो
ला।
o 70

NON-COMMERCIAL
Low Voltage (400/230 Volt 160.00 8.25

8 Medium Voltage (11 kV) 180.00 7.90
Medium Voltage (33 kV 180.00 7.80

49। NEA 2006 Annual Report.indd 49 8/12/2006 5:36:28 PM।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

IRRIGATION

(9:। :

हाट तल f
जाला
एज सग
हिल ला
तलतल
जाट लल
एला मग म
माला
बाट लो 2

TIME OF DAY (TOD) TARIFF RATES

Consumer Category & Monthly Demand Energy Charge (Rs./unit)।।। Supply Level Charge (Rs./kVA) Peak Time

Off-Peak Normal

6:00 -

23:00-6:00 18:00

High Voltage (66 kV and Above)
[ 8:। Medium Voltage (33 kV)
—।
—।

is 00
—
_
is
es कमा हमा।]

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

छा। क। क]61]6%]6।5
७। ७। on oO oO on on
Oo Oo oO oO oO Oo oO

८) 25% discount in the total bill amount will be given to the Nepal Government Hospital and Health Centers (except
residential complex)

50। NEA 2006 Annual Report.indd 50 ९ 8/12/2006 5:36:28 PM।

STATISTICS, SCHEMATICS AND MAPS

AVAILABILITY FY 2006 UTILIZATION FY 2006
— 70.76%

s. पे 6.35%

33.49%।।
9.59% ' 0.58% 24.70% ©
. 0

BHydro & 1121715। O Purchase India O Purchase Nepal Minternal Sale MExport OSystem Loss OSelf Consumption

SALES FY 2006 REVENUE FY 2006

९
4.89% 6.16% 4.04% 6.82%

39 — 21%
38.28%

36.12%
38.88% 8.12% 6.63%

5.97% 4.89% छि Domestic छि Non-Commercial 0 Commercial
O Industrial @ Export छा Others

@ Domestic @ Non-Commercial O Commercial
O Industrial @ Export @ Others

EXPENDITURE FY 2006 NO. OF CONSUMERS

5.50% 2.65% 0.48% 1.80%
. -- -- os ला

10.62% =)। =i 10.61% ~ 3 = 0.86%
> —y,
19.91% 39.88%

8.74%

'Staff Cost @ Power Purchase

O Operation & Maintenance O Interest

छ Depreciation 6 Royalty 96.08%

@ Prior Years Expenses Olnsurance Fund

@ Others @ Domestic Non-Commercial

1.97% 0.12%

O Commercial O Industrial
@ Others

51।। NEA 2006 Annual Report.indd 51 @} 8/12/2006 5:36:28 PM।।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

TOTAL ENERGY AVAILABLE AND PEAK DEMAND

3000 700

2500 + 600

+ 500
2000

g + 400
1500

=

°। 300
1000

+ 200

500 - 100

04 - 0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006"
FISCAL YEAR
4 Co TAvailable Energy [1 Hydro (1 Thermal SM Nepal (IPP) [1 India{ Purchase) —@®— Peak Demand (MW)*

Particulars 2001 2002 2003 2004 2005

Peak Demand (MW)* 470.33 515.24 557.53
Available Energy 1368.58। 1773.17 1475 1701.45। 1868.42। 2066.45। 2261.13। 2380.89। 2642.75। 2777.41

1345.46। 1522.9

3. Purchase from 232.21 293.76 309.67 401.5 727.93 936.31 778.69। 1025.519। 1106.184
india। 153.98। 210.29 232.39 232.2 226.54। 238.29 149.88 86.675। 241.389
78.23 83.47 77.28 169.3 501.38 698.02 628.81। 838.844। 864.795

Note:

Hydro 1096.64। 971.96। 1046.51। 1233.22। 1113.36। 1113.13। 1478.04

39.73 107.45 118.82 66.73 27.14 17.01 13.669
186.

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

52।। NEA 2006 Annual Report.indd 52 @}

2006*
603.28

1565.05

16.10

1196.26

266.22

930.04

8/12/2006 5:36:29 PM।।

=
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or
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=z

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ows

हट ६८ 66 A 02 61 8h 21 OL SL vib eb 61 bb OL 6 8 Z

(T1WWS
''WMNd "X09 'IGOW 105 'Aad 151 'SYN 590)
4०० IWLOL

उवा...
(YAHLO

'Od 'LLOMVUYGNI 'AWITIHS 'IHSOMS.LOHG 'ILWIH»)

ddl 1VLOL

(YNdAVNVL YA)
LYOdWI TIVLOL

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39YOLS IVLOL

SONIGG3SHS
avol

(04 "4/W)
- 1395310 1४101

2५ 0६8, 3९ MIN 8Z°C09 Peo] १९००। AepsinuL (9002 'Zp 'uer) ८90८ 8८ ५5००५

JAUND ५४०1 WALSAS २4३11453.2 HOLVdSIC GVO

®

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0989
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8/12/2006 5:36:29 PM

NEA 2006 Annual Report.indd 53

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

GROWTH OF CONSUMERS

1400000 -
1200000 - ga
छ 1000000 - y, T-
- छ।
E ' a,
3 800000 - छ"
[ छ - छ
= 600000- oa 7,
०६ +
= 400000 -
200000 -
0 cas a a a m oz: 7 rm po [ '
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006"
@ FISCAL YEAR ®

O Domestic OGrand Total ® Others

Particulars 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006*

Non-
6338 7192 7654 7815 7643 8629 9722 9865 9950 10010

8] छा भा का अन] 4

Community

Sales 1 1 15 35 58
Total (Internal

Sales) 527452। 574844। 622358। 673974। 745987। 884530। 970606। 1053930। 1159850। 1279897

Bulk Supply
(India) 5 5 5 5 5 5 5 5 5 5

Note : * Provisional figures; subject to final audit.

54.।। NEA 2006 Annual Report.indd 54 @} 8/12/2006 5:36:30 PM।।

ELECTRICITY SALES

2500
2000 :
1500 »

1000 '

Energy (GWh)

V/A

छ ॥ 11 111 iil

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006"
FISCAL YEAR
DOomestic industrial Grand Total_m Others। Oomestic Cindustrial छ Grand Total ™ Others।

(In GWh)

Category 997 1998 1999 2000 2004 2005 2006"
Domestic। 355.118। 378.778। 410.566। 467.049। 518.36। 557.94। 617.11। 676.365। 730.829। 810.19

Non- . 57.991 60.227 62.931 63.592 73.157 78.22 80.736 83.012 91.342 101.03
Commercial

ae 27.978 29.045 22.831 15.742 29.283 29.983 31.671 36.115 42.73
& Irrigation

o
—
©
im J
w
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creel 0.844 0.711 0.766 0.927 0.826 0.282 0.348 0.251 0.394 0.73

0.73

Transport। 1.483 1.663 2.598 2.678 5.892 5.635 5.471 5.715
Temple 1.691 1.801 1.982 2.366 2.511 2.476 2.811 4.111 4.204

Community 5.717 4.74 5.581 8.172 8.02
Sales

sales) 910.382। 984.019। 1049.418। 1174.274। 1281.127। 1400.456। 1504.567। 1653.998। 1805.821। 1965.27

eM india) 100.218। 67.41 64.158 133.857। 192.249। 141.235। 112.529

Note : * Provisional figures; subject to final audit.

55।। NEA 2006 Annual Report.indd 55 @} 8/12/2006 5:36:30 PM।।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

REVENUE

16000.00
14000.00
12000.00
10000.00

8000.00

(Million Rs)

6000.00

4000.00

2000.00 if rf
0.00
4997 1998 1999 2000 2001 2002 2003 2004 2005 2006"
FISCAL YEAR

[] Domestic O Industrial D Total Revenue Mi Others

(in million Rs)

® Category 2004 2005 ®

Domestic। 1769.84। 1895.85। 2056.05। 2622.03। 3161.38। 3641.43। 4249.81 4578.99। 4987.04। 5363.46

Non-
386.36 405.14 419.58 527.40 835.78 722.12 783.99 816.01 862.37 929.48

Water Supply
& Irrigation 95.70 100.28 78.14 95.65 120.90 138.68 148.53 154.80 211.57 196.63

=<

Community
Sales 16.59 20.09 24.04 28.47
Total (Internal
Sales) 4600.84। 4974.05 5298.67 6697.35 7981.78 9173.53। 10428.53। 11318.92। 12276.46। 13155.81
Bulk Supply
(India 249.29 199.92 198.15 327.80 396.06 514.12 808.96 673.69 609.51 565.60
Gross
Revenue 4850.13। 5173.96 5496.82 7025.16 8377.83 9687.65। 11237.49। 11992.61। 12885.97। 13721.41

Net Income
from Other
Services 659.16 596.57
Total Revenue} 4850.13। 5173.96 5496.82 7025.16 8377.83 9687.65 11237.49। 11992.61। 13264.36। 14012.90

Note : * Provisional figures; subject to final audit.।

56।। NEA 2006 Annual Report.indd 56 @} 8/12/2006 5:36:31 PM।।

Nepal Electricity Authority, Fiscal Year 2005/06 - A Year in Review

LOAD FORECAST

LOAD FORECAST

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ENERGY (GWh)
PEAK LOAD (MW)

छै

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कृ झै तु

FISCAL YEAR
@ mma Energy (GWh) Peak (MW) @)

Energy (GWh
2777.40

57।। NEA 2006 Annual Report.indd 57 @} 8/12/2006 5:36:32 PM।।

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NEA 2006 Annual Report.indd 58

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NEA 2006 Annual Report.indd 60