NEPAL ELECTRICITY AUTHORITY

Fiscal Year 2006/07 - A Year In Review

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2064 (August 2007), Durbar Marg, Kathmandu

Nepal Electricity Authority
Head Office : Durbar Marg, Kathmandu, Nepal

Phone  +977-1-4227725

Fax : +977-1-4227035, 4266673
E-mail : neamd@mos.com.np
Webpage =: www.nea.org.np

Designed and Printed at
Dolphin Offset Press

New Baneshwor, Kathmandu
Tel. : 4784452

Contents

Message from the Chairman...........cc:ccscccecceseeeeeeeeeeeeeeeeeeeesees 2
Board of Directors ...........::c:ccceeeceeeeeeeeeeaeeeeeeeeeeeeeeeeeeeeasaaaeeeeees 3
Corporate Structure Of NEA ..............cccccccseeeceeeeseeeeseeeeeeeseeeees 4
NEA Chief Executives ती 5
Directors & Department Heads ..................:...-:----77२277 7777 77०4 6
Managing Director's Report ............:cccceeececeeeeeeeeeeeeeeeeeeeeeeesees 9
Generation BUSINESS 6177 ती 16
Middle Marsyangdi Hydroelectric Project...............cccseeeeee 19
Chilime Hydropower Company Limited...............:::00ccccee 21
Transmission and System Operation Business Group ....... 22
Distribution and Consumer Services Business Group ........ 27
Electrification BUSINESS GrOUD) .............ceeceeeseeeeeeeseeeeeeeaeeeeees 31
Engineering Services BuSineSS Group .........:...-::--२२२००००००००० 36
Central Activities ...........0...cccceceeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeaeaaeeeeeees 41
Planning, Monitoring and Information Technology .............. 44
Internal कि 47
FINANCE oo... eee eee eee ede eres eddie eres ee aaaneeeee anaes 48
Highlights Of FY 2006/07 ...........ccccccssesseeeeeeeeseeeeeeeeeansseseeeeees 51
Balance Sheet as at July 16, 2007..............ccccceeceeeeeeeeeeeeeeees 52
Income Statement for the FY July 16, 2007 ..................---7:7 53
ACCOUNTING POIICIES ........... ccc cecececeeeeeeceeeeeeeeeeeeeeseaeeeesaaeeeeees 54
Tariff RAtes «0.0.0... ccc ceeeeeeee cece eeae ee eeeeeeeeeeeeeeeeeaeaaeaaceeeeeeeeeeeeeaes 57
Statistics, Schematics and 19105..............::...:----777२7 7777 २7 7772 59

Front Cover and Front Inside Photos :

@ Upper Tamakoshi Headwork Site
छ Signing Ceremony of INDO-Nepal Power Exchange
@ 132 kV Transmisson Line of Middle Marsyangdi HEP

Back Cover and Back Inside Photos :

@ Marsyangdi Power House

@ Seti Power House

@ Upstream View of Upper Trisuli 3A

छ Turbine overhauling of Kaligandaki 'A' HEP

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

FY 2006/07

Gyanendra Bahadur Karki
Minister of State
Ministry of Water Resources

Message from the

Chairman

It is a historic moment that Nepal Electricity
Authority, having served the country for twenty
two years, is now entering into twenty third year
of its operations.। feel privileged and honoured
as Chairman of NEA at this important juncture
when NEA has matured enough to bear
immense responsibilities towards its customers
and the nation. NEA deserves to be
congratulated for its achievements.

On this auspicious occasion of the twenty
second anniversary of Nepal Electricity Authority,। wish to share the jubilation with members of
Board of Directors, employees, customers and
business partners of NEA and thank all for their
support. Taking a stock of its progress,। believe
that NEA will not only institutionalize its
achievements but will also excel its services
and performance in future.

With an energy shortage situation last year,
NEA implemented load shedding as last resort.
A large shortfall cannot be covered overnight
but necessary action has been initiated to curb
this problem. To meet the continued growth in
power and energy demand, NEA plans to take
medium and large projects like Upper
Tamakoshi, Upper Trishuli 3A and 3B and Upper
Seti Hydroelectric Projects. Timely completion
of these Projects would relieve the costumers
from load shedding permanently. NEA's recent
initiative of the issuance of Power Bond for
funding some of the ongoing hydroelectric
projects will create new avenues for local
investors. It is timely to mention that Government
is also committed to develop additional 5,000
MW in next 10 years with participation both
from public and private sectors. NEA is at
advanced stage of action in creating additional
cross border links with India in cooperation with
Indian company IL&FS which will facilitate to
import power till the completion of these projects
and export thereafter. This would spin off large
economic growth in the country.

While NEA will sincerely put its efforts to contain
the load shedding imposed on consumers, it
should not forget the fact that about 60%
population have no access to electricity yet.
Bearing the responsibility to make electricity
accessible to every household, Government

has placed emphasis on continuity of rural
electrification program in sustainable manner.
NEA is expected to focus on improving the
customer services by implementing transparent,
time tagged and professional responses to its
customers.। am hopeful that NEA will meet the
expectations of urban consumers by employing
modern technology in customer and billing
services such as internet billing and bill payment
through banks. Similarly, NEA is also expected
to enhance service quality in rural areas.

Power Sector reforms will be enforced to
accelerate the development by providing
common criterion and level playing field for all.
Shortly an independent regulatory mechanism
will be in place and new Electricity Act will be
enacted to translate the policy into reality. NEA
will have to transform itself into a credible
commercial organization in the emerging
competitive environment.

Nepal has always foreseen its hydro potential
as the basis of its economy and hence
development of hydropower is connected with
country's economic development. Since NEA
is the biggest entity in the country in this sector,। always link future of power development with
NEA.

Power sector is going through changes and
innovations throughout the world. South Asia
is no exception. India is planning to enter into
a Power Exchange Market model by the end
of year 2007. We need to be proactive in
devising strategies and tuning our policies to
maximize benefits out of the emerging
opportunities.

At last, fiscal year 2006/07 though not
outstanding but remained above average year
for NEA.। wish NEA all the best in its quest for
a brighter future.

Sate:

(Gyanendra Bahadur Karki)

Minister of State

Ministry of Water Resources
Chairman, Nepal Electricity Authority

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Chairman
Mr. Gyanendra Bahadur Karki
Minister of State, Ministry of Water Resources
Secretary Secretary Mr. Lekh Man Singh Bhandari
Mr. Jitendra Ghimire Mr. Rameshwor Khanal
Ministry of Water Resources Ministry of Finance
* ४ ears,
Mr. Ananda Raj Batas Mr. Guru Prasad Neupane Mr. Mukesh Raj Kafle

Member Secretary
Mr. Arjun Kumar Karki
Managing Director, NEA

Corporate Structure of NEA

Public Relation & Grievance Handling Dept.
Level -11 (Admn.)

General Manager
Distribution &

Consumer

Service

Level-12

Director,
Mid-North
Regional
Office

Level -11 (T)

Director
Mid-South
Regional
Office

Level -11 (T)

Director
Eastern
Regional
Office
Level-11 (1)

Director
Western
Regional
Office

Level -11 (T)

Director
Tech.
Services/
Comm. Dept.
Level -11 (T)

Director
Distribution
& Consumer
Service
Level -11 (T)

Director

Finance Dept:

Level -11
(A/C)

Director

Mid & Far
Western
Regional
Office,

Level -11 (T)

BUSINESS GROUP

General Manager
Electrification
Level -12

Director

Community Dev.
& Rural Elect.

Dept.
Level -11 (T)

Director
Small
Hydropower
& Rural Elect.
Dept.

Level -11 (T)

Director

RE, Distribution
& Transmission
Project

Level -11 (T)

Director
Other

Elect.

Project

L-As
Required (T)

General Manager

Generation
Level -12

Director

Generation,
O &M Dept.
Level -11 (T)

Director
Generation
Construction
Dept.

Level -11 (T)

Director
Kaligandaki 'A'
HP Dept.
Level -11 (T)

Director
Upper
Tamakoshi
HEP

Level -11 01) !

Director
Chameliya
HEP

Level 11 (T)

Board of Directors

Managing Director

General Manager
Transmission &
System
Operation

Level -12

Director

TL and
Substation
Construction
Dept.

Level -11 (T)

Director

Grid
Operation
Dept.

Level -11 (T)

Director
System
Operation
Dept.

Level -11 (T)। Power Dev.
' Projects, Trans}

1 & Distribution।
1 Level -10 (1)
i]

Deputy
Managing
Director
Planning,
Monitoring &
IT

Level -12

General Manager
Engineering
Services

Level -12

Director Director

Project Dev. Corporate
Dept.

Level -11 (T
Level -11 (1) evel "11 (T)

Director

Director System

Environment/
Social Studies

Dept.
Level -11 (T)

Level -11 (T)

Director
Monitoring
Dept.

Level -11 (T)

Director
Training Center
Dept.

Level -11
(Admn.) Director
Power Trading

Director
Soil, Rock &
Concrete
Laboratory
Level -11 (T)

Dept.
Level -11 (T)

Director
Information
Technology
Dept.

Level -11 (1

Planning Dept.

Planning Dept.

MD's Secretariat
Level -11 (T)

CORPORATE OFFICES

Deputy
Managing
Director
Internal Audit
Level -12

Deputy
Managing
Director
Administration
Level -12

Deputy
Managing
Director
Finance
Level -12

Director
Human

Director
Internal Audit

Director
Finance &

Resource Account Dept. Dept.
Dept. Level -11 Level -11
Level L-11

(A/C) (A/C)

(Adm)

Director
Corporate
Finance Dept.
Level -11
(A/C)

Director
General
Services Dept.
Level -11
(Adm)

मर मम <== +

Project Director
I Middle। Marsyangdi
I HEP

Level -12

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Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

NEA Chief Executives

Mr. Shyam Bahadur Shrestha Mr. Uttar Kumar Shrestha
GM, Electrification DMD, Finance

Mr. Dipak Prasad Upadhyaya Dr. Jivendra Jha Mr. Bhojraj Regmi
GM, DCS GM, Generation GM, Engineering Service

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Mr. Yugal Kishor Shah Mr. Shiva Chandra Jha Mr. Madhav Pd. Khakurel
GM, Transmission & SystemOperation DMD, Planning, Monitoring & IT Project Director, MMHEP

Mr. Diwakar Poudel Mr. Binod Kumar Dhakal
Act. DMD, Internal Audit Act. DMD, Administration

FY 2006/07

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Directors & Department Chiefs

Mr. Shashi Raj Shrestha Mr. Chhatra Bdr. Bajracharya Mr. Upendra Dev Bhatta
Director, Central Office Director, Monitoring Director, Information Technology

Mr. Tirtha Man Shakya Mr. Harihar Man Palikhe Mr. Birendra Kumar Pathak

Director, RE, Distribution & Director, TLSS Construction Director, Generation Construction
Transmission Project

Mr. Rameshwar Yadav Mr. Mahendra Lal Shrestha Mr. Thakur Raj Pandey
Director, Corporate Planning Dirctor, Mid-North Regional Office Director, Training Centre

Mr. Ram Chandra Mandal Mr. Ram Chandra Pandey Mr. Govinda Sharma Pokharel
Director, Mid-South Regional Office। Director, Community Rural Electrification Director, SHP and Rural Electrification

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Mr. Tika Ram B.C. Mr. Sooryanath Neupane Mr. Lava Bahadur Ghimire
Director, Fianance Dept. DCS Director, Human Resource Director, Finance & Account
Mr. Sashi Sagar Rajbhandari Mr. Rajeshwar Man Sulpya Mr. Pradeep Lal Shrestha
Director, Generation, Operation Director, Power Trade Director, DCS
& Maintenance
Mr. Jayaiswar Man Pradhan Mr. Ganesh Prasad Raj Mr. Chiranjibi Sharma Poudel
Director, System Planning Director, Eastern Regional Office Director, Technical Service/Commercial

=

Mr. Mohan Krishna Upreti Mr. Vishnu Bahadur Singh Mr. Keshab Raj Bhatta
Director, Grid Operation Act. Director, Project Development Act. Director, Chameliya HEP

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

FY 2006/07

Directors & Department Chiefs

छ FA

Mr. Jaya Narayan Thakur Mr. Mrigendra Bahadur Shrestha Mr. Radesh Man Pradhananga
Act. Director, Mid & Far Western Act. Director, Upper Tamakoshi HEP Act. Director Soil. Rock &
Concrete Laboratory

Mr. Subhash Dahal Chhetri Mr. Rishikesh Sharma Mr. Dev Sharma Poudel
Act. Director, Western Act. Director, Environment/ Act. Director, MD's Secretariat
Regional Office Social Studies

Mr. Sher Singh Bhat Mr. Bimal Raj Joshi Mr. Danda Pani Bashyal

Act. Director, System Operation Act. Director, Internal Audit Act. Director, Public Relation &
Grievance Handling

Mr. Juju Kaji Ranjit Mr. Arjun Kumar Chauhan
Act. Director, Kaligandaki 'A' HP Officiating Director, Corporate Finance

Arjun Kumar Karki
Managing Director

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Managing

Director's Report

It gives me immense pleasure to report
on the performance and activities of
Nepal Electricity Authority on this historic
twenty second year of business i.e. fiscal
year 2006/07 (Bikram Sambat 2063/64).
This year was a record setting one for
NEA with respect to the power and
energy demand experienced, energy
served, energy generated and net
revenues. While these achievements
were linked to regular growth in power
and energy demand,। would like to
acknowledge the efforts of our
employees in maximizing the utilization
of the available resources. Significant
improvement in our financial
performance comparing previous years
may be taken as one single reflective
indicator of our efforts during the year
in spite of the challenges posed by the
transitional phase of the nation. The
achievement is, none the less,
encouraging.

Success, of course, is not measured
solely in terms of production figures or
financial performance. Customer
satisfaction through quality of service,
an ethical business process,
environment friendly operations and
contribution to the community by helping
them to better manage their energy
usage and subsequently reduction of
energy costs are other corners of the
performance pyramid. Our efforts to
achieve these dimensions of
performance continued throughout the
year. A 7.48% increase in peak power
demand and 8.60% increase in energy

demand over the previous year caused
a serious unbalance in demand and
supply during the dry months of the
year. We made the best possible,
efficient and planned use of the available
resources, increased energy import and
called on our consumers to make
efficient use of electricity. Although a
mere 4.43 MW of generation capacity
was added through two Independent
Power Producers, as a last resort, we
were forced to opt for load shedding.
As a process of reforms to attain
operational efficiency and better
customer services, we continued to
strengthen the unbundled Business
Groups and Distribution Centers for
commercially oriented operation. We
have noticed some visible positive
impacts of this reform process but owing
to the need of assimilating technical and
financial procedures as well as legal
frame work, the implementation process
has been gradual and relatively slow.

With an objective to start a better
practice of efficient use of scarce electric
energy, NEA is foreseeing a demand
side management program for its
consumers. Since consumers are the
main players of demand side
management, we organized an
interaction program and tried to create
awareness through an educational
campaign. These efforts will be
intensified now. We accept that despite
our efforts, we could not meet the
expectations of our valued customers
and stakeholders on some of these

FY 2006/07

FY 2006/07

fronts. Yet,। believe that our efforts during the year
to enhance supply by taking up projects like the
Upper Tamakoshi and Upper Trishuli, increasing
import by strengthening the existing links and
creating new cross border transmission links
combined with an efficient use of the available
power by the consumers shall definitely yield results
in the years to come. NEA still faces capital
constraint for its expansion program for which we
are in the process of issuing power bonds to mobilize
the liquidity of the domestic market as well as
exploring bilateral financial assistance from Japan,
South Korea, India and China as well as multilateral
agencies.। would also like to mention with
resentment that we could not reduce system losses
to the level of our commitment due to abnormal
situation in many parts of country. System losses
this year are provisioned 24.94% against 25.12%
actual (24.76% provisional) of last year. Thus,।
would assess it as the year of hard work, positive
direction and promising result amidst the
incongruous conditions bestowed by legacy.

Operational Performance

Integrated Nepal Power System (INPS) experienced
energy demand of 3,134 GWh in FY 2006/07
recording an increase of 8.60% compared to
previous year. NEA managed to serve 3,051.82
GWh of this demand through various sources. With
contribution of 1,747.42 GWh from hydropower and
13.31 GWh from thermal, NEA's own generation
reached a record of 1,760.73 GWh in FY 2006/07
registering 11.12% increase compared to previous
year. Power Purchase from private producers was
962.26 GWh and import from India amounted to
328.83 GWh. The import increased by nearly 24%
in FY 2006/07. Similarly, peak power demand
recorded in FY 2006/07 was 648.39 MW, which is
an increase of 7.48% compared to that of the
previous year. Generation capacity increased by
4.43 MW through 2 IPP projects in FY 2006/07.
NEA was forced to opt for load shedding as a last
resort to contain the demand that could not be met.

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

NEA has been endeavoring by all the means at its
disposal to increase the power supply in order to
reduce the load shedding.

With 2,258.14 GWh of energy sales in FY 2006/07,
11.10% increase in sales was recorded over the
previous year. Category-wise, Domestic customers
with a share of 96% of total customers, accounted
for 911.51 GWh, i.e., 40.37% of total sales. Similarly,
customers belonging to Industrial and Commercial
categories representing 2.19% of the total customers
accounted for 1,021.14 GWh, i.e., 45.22% of total
sales. The number of NEA's customers reached
1.39 million, which is an increase of 8.97% over
the previous year. Though not significant, the system
losses reduced to 24.94% in FY 2006/07 against
actual losses of 25.12% in the previous year.

Charging of new Parwanipur Substation has relieved
to some extent the overloading problem of the 66
kV transmission line and has helped increase the
reliability and quality of electricity supply in the
Hetauda-Birgunj corridor. Works related with the
Khimti-Dhalkebar 220 kV transmission line, Thankot-
Chapagaun-Bhaktapur 132 kV transmission line,
Kawasoti Substation and Chandranigahapur
Substation are being undertaken at a fast pace.
The implementation of the NEA Grid Code has
been helpful in enhancing the performance of the
National Grid. Similarly, Preventive Maintenance
Scheme has helped reduce the partial and complete
system trippings. The refurbishment of the Grid has
greatly reduced the system outages and helped
reduce the restoration time. Several pairs of optical
fibers have been leased to Nepal Telecom and
other private companies thereby generating
additional revenue for NEA. NEA has emerged as
prominent stakeholder now in communication sector
of the country owing to its optic fiber network.

Financial Performance

NEA's financial performance showed a significant
improvement in FY 2006/07 as compared to the

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

last five years. Despite the various obstacles posed
by the transitional phase of the country, total revenue
increased by 12.20% to reach a figure of NRs
15,677.00 million. Total operating cost was NRs
13,766.90 million, which is an increase of 11.22%.
Although the operating surplus was NRs 1,910.10
million in FY 2006/07, NEA incurred a net loss of
NRs 329.60 million. The net loss decreased by
nearly 74.00% compared to the figure of
NRs.1,267.80 million of the previous year. The
increase in revenue, control in operational
expenditure, devaluation of Dollar were the factors
that contributed to cost saving. GoN has reduced
the interest rate from 10.25% to 8% on long term
loan, which resulted in a savings in FY 2006/07.
The fixed net assets increased by a marginal rate
and reached NRs. 62,121.30 million. However, the
investment in projects and regular capital work-in-
progress stood at NRs. 28,651.80 million, out of
which NRs.9,148.6 million was invested in FY
2006/07. NEA's total borrowing reached NRs.
51,672.70 million which is 62.11% of the total capital
structure.

The cost of service decreased from NRs. 7.50 per
kWh to NRs. 7.09 per kWh, registering a saving of
NRs 0.41 per kWh over the previous year. NEA
spent about 44% of the total revenue in purchasing
power from Independent Power Producers (IPPs)
and import, whereas almost 23% of the total revenue
were spent in paying the interest on loan and
royalties. NEA has requested the Government for
financial restructuring regarding debt service, royalty,
recovery of outstanding dues and in the treatment
of bilateral and multilateral grants and subsidies in
loss making rural electrification.

NEA has been undertaking different initiatives with
a view to improve its financial health and to establish
itself as a financially sound and credible commercial
organization. NEA has been facing challenge in its
financial management functions. In this context,
NEA needs to be more prudent and efficient not

only in arranging and managing the requirement of
funds for capital investment but also in the
management of debt service and the risk associated
with power purchase obligations. Given the changed
business environment, NEA needs to streamline its
functional responsibilities and to reengineer the
current practices/processes in financial management
focusing on effective cost management and control,
efficient revenue collection, appropriate fixed asset
and inventory management and sound investment
decisions. Considering this need, NEA has executed
a study for institutional strengthening under the
World Bank funded Power Development Project.
The study report has recommended various action
plans. Some of the recommendations will be
implemented immediately by mobilizing in-house
resources. At the same time, additional technical
support will be requested from donor agencies for
implementation of those recommended action plans
which could not be executed with in-house
resources, especially action regarding capacity
building and procurement and implementation of
new computerized financial accounting system.

Capacity Building

Distribution and Consumer Services business group
has conducted interaction programs in all the five
NEA regional offices participated by NEA staff and
representatives from employee union, different
political parties, the media and chamber of industry
and commerce. The program has had encouraging
results on the performance of the Distribution and
Consumer Services (DCS) offices which was
reflected in performance results such as positive
change in differential surplus, reduction in the
average collection period and marginal reduction
in losses except in the eastern and central Terai
where the law & order situation was far from normal.
The overall losses have marginally decreased from
25.12% (actual) to 24.94% (provisional). Improved
customer services in new connections, grievance

FY 2006/07

FY 2006/07

handling, improvement in no-light services and bill
payment and Queue Management System are the
highlights of DCS performance in FY 2006/07.

NEA has continued computerization in its business
operation in order to enhance efficiency and facilitate
quicker and quality decision making. New services
like Interactive Voice Response System have been
implemented in 6 DCS offices. Customized
Accounting and Inventory System (CAIS) has been
implemented in 111 budget centers which has
helped improve the accounting and inventory
management. The web based Computerized Billing
System has been implemented in five revenue
centers and will be gradually introduced in all
remaining revenue centers.

In view of the prevailing power crisis, there is a
urgent need for implementing generation projects
at faster pace. In this context, NEA has already
started construction of Chameliya (30 MW) and
Kulekhani Ill (14 MW) Hydroelectric Projects, while
preparations are underway for the implementation
of the Rahughat (27 MW), Upper Trisuli-3A (60
MW) and Upper Tamakoshi (309 MW) Projects. An
agreement has been signed with IL&FS
Infrastructure Development Corporation Limited of
India for construction of cross border transmission
links which is vital for enhancing power trading and
opening the future power market.

NEA is aware that proper employee training and
development is crucial for maximizing performance
from the staff, the living asset of any organization.
During FY 2006/07, NEA Training Centre imparted
on-the job training to 692 staff and, for the first time,
five foreign participants from Afghanistan were
trained as well. The training programs are
continuously modified and upgraded to include
emerging concepts and tools, and to fulfill changing
requirements. Under the Employee Development
Program, NEA executives, both technical and non-
technical, have had the opportunity to interact and

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

share views with professionals from various
countries. This has helped NEA executives in
broadening their knowledge and skills.

NEA personnel services regulations have been
amended with a view to consolidate equitable
working environment and promote the career
development of deserving staff. Personnel Data
Bank has been upgraded in order to facilitate the
efficient management of the available human
resources. Optimization of staff positions has been
completed in the Generation and Transmission &
System Operation business groups in the first
phase. Such work is being carried out in the
corporate office and remaining business groups.
The implementation of the Enhanced Performance
Reward (EPR) scheme has helped boost the
motivation and morale of the staff. In FY 2006/07,
regular staff promotion has been carried out for all
levels in NEA. Recruitment tasks are underway for
the vacant positions.

Private Sector Participation and
Cross border Trading

In order to encourage private sector participation
in the power sector, we will continue to facilitate
the purchase of power from IPPs to meet the
growing demand of electricity in the country. The
IPP owned 3.45 MW Khudi Khola and 980 kW
Baramchi Small Hydroelectric Projects have started
commercial operation from this FY 2006/07. NEA
has signed eight Power Purchase Agreements
(PPAs) with a total capacity of 11.434 MW in the
same period. In places where power evacuation
was constrained by the limited transmission capacity,
NEA is working out programs to build the required
infrastructure. Due to the larger number of run-of-
river projects being developed by IPPs and small
number of peaking run-of-river projects by NEA,
there will be surplus energy in the wet season.
There is, therefore, a need for seasonal storage

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

projects in the INPS in order to meet the
power/energy demand in an optimal manner.

Our relations with existing IPP as our business
partners have remained cordial throughout the year.
NEA and Chilime Hydro Power Company Limited
(CHPCL) have agreed to freeze the tariff escalation
for a period of five years keeping in view the greater
interest of customers. Similarly, negotiations have
been initiated with Bhote Kosi Power Company
(BKPC) and Himal Power Limited (HPL) to resolve
outstanding issues on good faith basis.

NEA has initiated the process to terminate the PPAs
of IPP projects where the Required Commercial
Operation Date has expired and project construction
has not started even after a long delay. This step
is expected to promote healthy environment for the
development of power sector.

The 8th Indo-Nepal Power Exchange Committee
(PEC) meeting was successfully held in Kathmandu
on June 7-8, 2007. The meeting took important
decisions and resolved various issues pending since
the last meeting in 2003. One major achievement
of the meeting was slashing of the annual escalation
rate of 8.5% that was agreed in the 3rd PEC meeting
in 1997 to 5% per annum effective from January
2004 to June 2008. It has now been decided that
Nepal can sell the unutilised energy out of her
entitlement from Tanakpur to India. It has also been
agreed that the seasonal surplus up to 40 MW could
be sold to India through Gandak-Ramnagar 132 kV
line. India has also agreed to grant two percent
rebate on timely monthly payment for import from
July 2007 onwards. NEA is working closely with
the Power Trading Corporation of India for the sale
of Surplus energy available during the period of
July to November.

The Way Ahead

NEA has identified several key measures that will

improve the quality of our service in the short and
medium term. Demand Side Management (DSM)
and loss reduction activities will be given top priority
in an effort to minimize the load shedding. The 70
MW Middle Marsyangdi Hydroelectric Project
(MMHEP) financed under the grant assistance of
KfW, Germany has most of the civil works nearing
completion. Its works have been disturbed in the
past due to labor strikes, difficult security situation,
dispute with the contractor and changes in design.
The construction of Middle Marsyangdi HEP is being
undertaken at a faster pace in order to make up for
the past delays. We are committed to complete this
project at the earliest so as to help alleviate the
power crisis.

There is an urgent need for augmentation in
generation capacity along with an improvement of
transmission lines not only to meet the domestic
demand but also to capitalize on the emerging cross
border trading opportunity. In this context, NEA, as
a key institution in the power sector, is endeavoring
to expand its generation capacity in the most
economical manner. NEA is focusing on medium
sized projects like the Upper Trishuli-3A, Trishuli-
3B and Rahughat which can be implemented at the
earliest to meet the growing demand in the short
term. A detailed project report has been prepared
for the 60 MW Upper Trishuli-3A in this FY 2006/07.
The Project is being proposed to be financed through
soft loan from China. Construction of the 30 MW
Chameliya HEP has already been commenced.
The detailed design of 14 MW Kulekhani III HEP
has also been completed and the tendering for civil
works is in progress.

Projects like the Upper Tamakoshi and Upper Seti
Storage are being promoted for the medium-term
generation expansion. Considering the financial
limitations with the private sector for investment in
large projects, NEA is adopting a policy to develop
such hydroelectric projects under public-private
partnership (PPP) modality. Upper Tamakosi HEP

FY 2006/07

FY 2006/07

is one Project which NEA plans to implement under
such modality. The objective is to open a new
avenue for investment which will lead to the
productive use of the liquidity existing in the market.
The recent policy announcement by Nepal Rastra
Bank, in the context of investment in hydropower,
could be instrumental in promoting investment in
hydroelectric projects. Upper Tamakosi HEP with
very attractive economic indicators is crucial for the
sustainable growth of the country. We firmly believe
that the Project can be built at the lowest cost to
the customers using funds from domestic financial
institutions and NEA as the leading executing
agency. NEA is also committed to develop Upper
Seti Storage Project to fulfill the need for peaking
power and energy.

Our sister organization, Chilime Hydropower
Company Limited (CHPCL) is promoting the medium
sized Middle Bhote Koshi HEP and Upper Chilime
HEP. The construction of these projects is expected
to begin in near future. GoN is endeavoring to
develop the West Seti Storage, Upper Karnali and
Arun Ill Projects, all of which have been studied at
various levels by NEA in the past.

In order to meet the growing energy demand, we
will continue to encourage private developers to
add generation capacity to the power system in a
sustainable manner. PPAs are being concluded for
project of various sizes. The tariff is declared for
projects up to 5 MW whereas tariff is fixed by
negotiation for projects of higher capacity. A study
is being carried out to fix the price offer for 5 to 10
MW. NEA is also preparing programs to develop
the transmission infrastructure to promote private
sector participation in hydropower.

NEA has been implementing transmission line
programs including 220 kV links. With an initiative
to facilitate cross border trade between Nepal and
India, a joint venture company is being incorporated
in partnership with Indian leading players in the
power sector. Two cross border transmission lines

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

at 400 kV voltage level are being proposed for
construction in the initial phase. A joint study by
NEA and Power Grid Corporation of India is being
completed in this regard.

The new computerized billing system will be
implemented gradually in all revenue centers in the
current fiscal year. Necessary measures will be
taken to improve the reliability of the distribution
network by implementing a Preventive Maintenance
Scheme. Various capacity augmentation works at
the 33/11 kV substations and other distribution
network components will be undertaken during this
fiscal year. The Queue Management System and
computer assisted Customer Service Delivery
System will be introduced in more Distribution
Centers to improve the quality of customer services.

We are working on a noble approach to raise the
necessary capital to meet part of investment
requirement through issuance of Power Bond in
the local market. The Power Bond initially will
amount to three billion Rupees and will be issued
in multiple series depending upon the cash flow
requirement of NEA for investment in generation
projects. NEA has already selected Nepal Merchant
Banking and Finance Limited as the issue manager
through a competitive bidding process. The
necessary documentation is being completed and
power bond will be offered in the market after
obtaining the necessary approval from the
concerned authorities. The Power Bond will be
used in funding Chamelia, Kulekhani III and Middle
Marsyangdi HEPs.

Since the rural communities are showing keen
interest and actively participating in the electrification
of their respective villages, NEA will continue to be
involved in the community based rural electrification
programs. Similarly, efforts will be made to complete
the ongoing rural electrification schemes in various
parts of the country.

NEA has been investing in rural electrification

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

programs with support from the government and
donor agencies. Construction of 400 kW Gamgad
and 500 kW Heldung Small Hydroelectric Projects
at Mugu and Humla districts respectively are nearing
completion. Extension of distribution lines and 33
kV sub-transmission line linking the remote districts
with the National Grid will be continued.

Engineering Services will provide advanced technical
input for project studies and provide ancillary services
in the area of the environment and material testing.
NEA Training Centre will be gradually developed
into a Regional Center for research and advanced
studies in hydropower development. The IT
Department within NEA will be promoted to enable
efficient data transfer and enhanced performance
leading to better customer services.

Although, GoN has reduced re-lending rate, it is
not up to NEA expectations considering the
significant investment in rural electrification and
high cost projects implemented under foreign grants.
Hence, NEA will continue to put efforts 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 urge the government for adaptation of
prudent policy in order to mobilize the liquidity
available in the domestic financial market for the
power sector development. NEA will continue its
persuasive efforts for achieving the rationalization
and readjustment of retail tariff.

NEA pledges to continue to strive for meeting the
physical targets of the country's electrification goals.
NEA also reaffirm the commitment to strive hard for
loss reduction.

Acknowledgements

For the achievements and progress that we have
been able to attain,। wish to thank all those

associated with NEA's activities during the year.।
wish to express my deep gratitude to the Chairman
and members of the NEA Board of Directors for
cautiously steering the course of NEA under such
trying circumstances.। wish to thank the Government
of Nepal for its 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,
India, China, South Korea and the 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 continued hard work and
determination. My appreciation also goes to all the
Trade Unions of NEA for their critical but constructive
support.। wish to express my special thanks to
those who have stood by me in times of trial.

This acknowledgement would be grossly incomplete
without thanking our valued customers for bearing
with us and sharing some turbulent times together.
We feel confident that with the conceived reforms
in place, NEA will be able to provide our customers
with a marked improvement in the quality and
reliability of supply and services.

Thank you.

८,0५५:

oe
Arjun Kumar Karki
Managing Director

FY 2006/07

FY 2006/07

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Generation
Business Group

Management of construction, operation and
maintenance activities of power generating stations
of NEA is the key responsibility of the Generation
business group headed by the General Manager.
Currently, sixteen hydropower stations and two
major thermal power plants with total installed
capacity of 398.39 MW and 53.41 MW respectively
are in operation under this business group. There
are three departments, namely, Operation and
Maintenance Department, Generation Construction
Department and Kaligandaki-A Hydropower
Department under this business group each of
which is headed by a Director.

Performance-wise, a total of 1,749.859 GWh of
energy was generated in FY 2006/07 which is an
increase of 11.26% compared to the generation of
previous FY. Annual Load Factor of 91%, annual
Plant Factor of 44.21% and Productivity Ratio of
1,301.01 MWh per employee were registered in
FY 2006/07.

Operation and Maintenance
Department

All the activities related to the operation and
maintenance of the power stations under the
business group excluding Kaligandaki-A hydropower
station are managed by this Department. Emphasis
is placed on timely detection and rectification of
problems so as to maximise the availability of power
stations.

In Gandak hydropower station, the problem of Stator
overheating in the Generator No. 1 was rectified
under the supervision of this Department. During
FY 2006/07, turbine runners of Trishuli, Modi,
Marsyangdi, Gandak and Sunkoshi hydropower
stations were overhauled. New circuit breakers
were installed in Devighat, Sunkoshi and Chatara
hydropower stations. Similarly, a 6.6/132 kV, 10
MVA power transformer was installed in Gandak

hydropower station to enable the evacuation of
available capacity to the Grid. Similarly, a 132/33
kV, 12/15 MVA power transformer was installed in
Modi hydropower station. This measure has solved
the overloading problem of transformer in the power
station and also improved the quality of power
supply to Parbat, Baglung and Myagdi districts.
The damaged Unit No. 2 of Kulekhani-ll
Hydroelectric Station is being refurbished.

The historic Pharping hydropower station was again
synchronized with national Grid on December 20,
2006 (2063/09/05 B.S.) after a gap of 24 years.
The power station could not be put into full-fledged
continuous operation owing to the reason that use
of water resource for drinking is assigned higher
priority than power generation according to the
state policy and as such the discharge in the
Sheshnarayan and Sat Mule rivulets is diverted for
supplying drinking water to part of Laltipur district.
At present, the power station is operated only for
about an hour each day primarily to keep the station
in working condition.

Kaligandaki-A Hydropower
Department

During FY 2006/07, a total of 707.7 GWh of energy
was generated from Kaligandaki-A hydropower
station which is an increase of 13.90 % over the
preceding year's generation from the power station.
In this fiscal year, various repair and maintenance
works in the spillway gates, intake, under-sluice
gate, desander flushing radial gates and trash rack
cleaner were carried out. Similarly, overhauling of
Unit No. 1 turbine was successfully completed
under the supervision of a technical advisor from
TOSHIBA Corporation (Japan). Generator, power
transformer and protective relays of the same Unit
were also tested in the period. The damaged power
transformer of Unit No. 3 was replaced on March
21, 2007 (2063/12/07 B.S.).

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Generation Construction
Department

In FY 2006/07, the Generation Construction
Department started construction work of two medium
sized Hydroelectric Projects (HEPs): 30 MW
Chameliya HEP and 14 MW Kulekhani - Ill HEP.

Chameliya Hydroelectric Project

Construction of Chameliya HEP, a daily peaking
run-off-river (PROR) scheme with an installed
capacity of 30 MW, was started in FY 2006/07. The
Project lies about 950 km west of Kathmandu on
Chameliya river, a tributary of Mahakali river in
Darchula district.

The Project will lead to balanced economic
development in the Far Western Development
Region. Main features of the Project are 54 m high
concrete dam with two 13.5m high radial gates,
underground desander with two basins, 4067 m
long headrace tunnel, 49.8m high restricted orifice
type surge tank, 461 m long penstock and semi-
underground powerhouse with two units of each
15.3 MW vertical shaft Francis turbine. The

generated power from the Project will be evacuated
through 131 km long 132 kV transmission line
connecting Attariya Substation at Kailali district.

Out of the 18 km long access road, earthwork and
structural works of 17 km length have been
completed. The construction of four of the seven
bridges has been completed. The EIA study of the
Project has been approved while that of the 132 kV
transmission line is underway for approval by the
Ministry of Environment, Science and Technology
(MOEST). The estimated cost of the Project is US$
78.9 million including the cost of the 132 kV
transmission line. China Gezhouba Water and Power
(Group) Co. Limited (CGGC) was awarded the Civil
Contract and construction works started from 10th
January 2007. Tenders for camp facility, 33 kV sub-
station and 33 kV transmission line are under
progress. Government of Nepal has requested the
Government of Republic of Korea and OPEC for
providing soft loans for electro-mechanical &
transmission line components.

As per a recent decision of NEA, this Project is now
headed by a Project Director who reports directly
to the General Manager of the business group.

Birds Eye View of Chameliya HEP Camp Site

FY 2006/07

FY 2006/07

Kulekhanr-Ill Hydroelectric Project

Kulekhani-lll (KL-III) HEP is the tailrace scheme
of KL-II HEP. As Kulekhani (I and II combined) is
the only storage scheme now available in the
Integrated Nepal Power System (INPS), KL-III HEP
with a capacity of 14 MW will help to add the much
needed peaking power to the system. Detailed
design of this Project was completed in FY 2006/07.
Good accessibility, short transmission line, minimal
environmental and social impacts are favorable
aspects of the Project. Estimated construction
period is about 44 months and the average annual
energy generation of the Project is estimated at
40.85 GWh.

The EIA study of the Project has already been
approved. The construction works of the access
road and the access bridge over the Rapti River
are in progress.

The Project has been found technically, financially

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

and environmentally viable. NEA plans to use
internal resources for the construction of the Project.

NEA has recently called for pre-qualification for
construction of the main civil works. The total
estimated cost of the Project is NRs. 2,216.00
million.

Bridge foundation work of Kulekhani - Ill HEP

Annual Energy Generation from different NEA Power Stations

800.00

707.746
700.00

600.00
500.00

401.568

400.00

Energy (in GWh)

300.00

138.048 129.026

200.00
100.00।
0.00

Kaligandaki "A'
Marshyngdi
Kulekhani।
Kulekhani Il
Trisuli
Gandak

Modi Khola
Devighat

92.549

67.349
56.604
30.602 32.473
5.220 2.899 19-705 2405 4.355 0.004 10-293 3,021

Sunkoshi
Puwa Khola
Chatara
Panauti
Seti
Phewa
Sundarijal
Pharping

Multifuel-Duhabi
Hetauda Diesel

Name of Powerstation

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Middle Marsyangdi
Hydroelectric Project

Middle Marsyangdi Hydroelectric Project, with an
installed capacity of 70 MW is 59 peaking run-of-
river project and is located in Lumjung district. It is
the major project being constructed by NEA at
present. It will have an average annual generation
of 398 GWh. The power generated from this Project
will be evacuated through a 41 km single circuit
132 kV transmission line to existing Marsyangdi
Power Station.

_

estimated the Project cost in year 2000 as US$
181.27 million equivalent to Euro 212 million at the
exchange rate of 1 US$ = Euro 1.17. After
agreements with the Contractors of all the Lots, the
base cost was Euro 149.90 million. But due to
changes in the design, provision for claims and
price escalations, the cost has been increased and
accordingly updated in January 2007 to Euro 273.41
million.

Upstream View of Diversion Weir -Middle Marsyangdi HEP

Project Cost

The Project is being jointly funded by the
Government of Germany through Kreditanstalt fiir
Wiederaufbau (KfW), the Government of Nepal
(GoN) and NEA. The Consultant Fichtner JV (FJV)

Progress Status

Dywidag-Dragados-CWE JV (DDC JV), the
Contractor for Civil Works (Lot-C), commenced the
civil work from June 25, 2001. To date most of the
underground works have been completed. The

FY 2006/07

FY 2006/07

tunnel excavation works have been completed and
89 % of concrete lining works has been
accomplished. Currently, concreting works at intake,
spillway piers, chutes and wing walls are under
progress. Concreting of surge tank and penstock
are being carried out. Most of the civil works of
power house has been completed. About 95% of
architectural finishing of powerhouse and 70% of
service building have been completed. Installation
of penstock steel lining has also been almost
completed. Construction of switchyard and hydro-
mechanical works are being carried out. Most of
installation works involving the turbine-generator
units and its alignment with shaft have been
completed. The concrete works of 132 kV
transmission line tower are in progress.

The resettlement works at various construction sites
are going on. The Project carried out various trainings
on income generating activities, as well as

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

awareness program on public health and safety to
the members of the project affected families and
local people. The Neighborhood Support Program
(NSP) is supporting the development activities of
ten Village Development Committees (VDC) in the
vicinity of the Project area.

The Project work was delayed due to security
reasons, dispute with the contractor, strikes and
changes in the design in the past. The work in
drainage gallery was delayed due to the issues
related with insurance coverage. Despite the
numerous challenges faced, construction of the
Project is being undertaken at faster pace in order
to make up for the past delays. NEA is committed
to complete the Project at the earliest so as to
augment the generation capacity of the Integrated
Nepal Power System (INPS) and give relief to its
valuable customers from the prevailing shortage of
power.

Middle Marsyangdi Power House nearing Completion

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Chilime Hydropower
Company Limited

Chilime Hydropower Company Limited (CHPCL) is
a subsidiary company of NEA with 51% equity
ownership. The Company was established in 1996
with the objective of promoting the utilization of
resources within the country for the development
of hydropower. Chilime Hydroelectric Project with
installed capacity of 22.1 MW and located at Rasuwa
district was built and commissioned by this Company
on August 25, 2003 (2060/5/8 BS). This Project is
now in fourth year of commercial operation. The
Project has delivered 528.63 GWh of electrical
energy to NEA since August 2003. In FY 2006/07,
the Project was successful in delivering 104.5% of
the Contract Energy to NEA. NEA has invested
NRs. 489.6 million in the Project and has received
the dividend of 10%, 20% and 35% of its equity
shares in the FY 2003/04, 2004/05 and 2005/06
respectively. In FY 2006/07, 25% of the equity
shares were distributed to NEA staff. The
shareholders received 35% dividend in that year.

CHPCL is now executing three more hydroelectric
projects which are at various stages of development.

The feasibility study of two projects, Upper Sanjen
Hydroelectric Project (11 MW) and Sanjen
Hydroelectric Project (35 MW) have been completed
and application has been submitted for the power
purchase agreement with NEA. Both of these
Projects are located upstream of the existing Chilime
HEP. Local people in the project area are very eager
to participate in the implementation of these Projects.
A Letter of Intent for financing in Upper Sanjen HEP
has already been received from Citizen Investment
Trust. Construction of these two Projects will be
started as soon as the construction license is issued
by the Ministry of Water Resources.

CHPCL has also completed the feasibility study of
Middle Bhotekoshi Hydroelectric Project (80 MW)
located in Sindhupalchok district. Local people of
Sindhupalchowk district and other organizations will
be participating in the development of this Project.
CHPCL is committed to develop more of medium
and large scale hydroelectric projects in future with
greater participation from various sector in the
country.

Switchyard and Adit to Powerhouse

FY 2006/07

FY 2006/07

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Transmission and System
Operation Business Group

Transmission and System Operation (TSO) business
group is headed by the General Manager and is
responsible for design, construction, operation and
maintenance of transmission system of voltage level
of 66 kV and above. Under this business group,
there are three departments, namely, Transmission
Line/Substation Construction Department, Grid
Operation Department and System Operation
Department each headed by a Director.

In FY 2006/07, NEA and IL&FS Infrastructure
Development Corporation Limited of India (IL&FS)
have concluded a deal according to which two joint
venture companies will be formed, one in Nepal
and the other in India. In JVC-Nepal, NEA will invest
50% equity while IL&FS will invest 26% equity. The
remaining shares will be offered to financial and
other institutions. NEA will own equity in JVC-India
as well. The joint venture companies will be
responsible for project development, construction,
operation and maintenance of the portion of cross-
border transmission system in respective countries.
Four projects, namely, Butwal—Gorakhpur,
Duhabi—Purnea, Dhalkebar—Muzaffarpur and
Anarmani-Siliguri Cross Border Transmission Line
Projects will be undertaken for development over
the time. Among these transmission lines, the first
two will be developed in the first phase within two
years. Once built, these cross-border lines will
facilitate greater volume of power trading between
Nepal and India.

Transmission Line / Substation
Construction Department

Transmission Line/Substation Construction
Department is responsible for the construction of
new transmission lines and substations of 66 kV
and higher voltage level. In this fiscal year, the
Department has completed Birganj Corridor 132 kV
Transmission Line Project, which consists of 17 km
long Pathalaiya-Parwanipur double circuit

transmission line and a 45 MVA, 132/11 kV
substation at Parwanipur. Completion of this project
has relieved the overloading of Hetauda-Birganj 66
kV transmission lines to some extent and has
enabled NEA to lift off-peak hour load shedding in
the area. This Department is also implementing two
220 kV transmission lines, three 132 kV transmission
lines and three reinforcement projects. A brief
description of these projects are given below.

Khimti-Dhalkebar 220 kV Transmission Line
Project:

Khimti-Dhalkebar 220 kV Transmission Line will
have the distinction of being the first ever 220 kV
transmission line in Nepal. Once completed this
transmission line will improve the reliability of power
evacuation from Khimti-1 Hydroelectric Project
(HEP), improve the voltage-drop problem in eastern
Nepal and provide a direct route for export of
available power to India via Dhalkebar Substation.
This line will also serve the purpose of evacuation
of power from planned Upper Tamakosi Hydroelectric
Project.

The Project comprises of a 75 km long 220 kV
transmission line on double circuit towers from
Khimti-1 HEP to Dhalkebar Substation and 132 kV
line bay extensions at each end of the line. Single
circuit duplex "BISON" conductor will be strung and
charged at 132 kV level till Upper Tamakoshi HEP
is built.

Contracts have already been awarded for the 220
kV transmission line including the 132 kV bay
extensions. Fabrication of towers has already begun.
Land acquisition for transmission line will be initiated
shortly. Environmental Impact Assessment (EIA)
and Social Impact Assessment (SIA) have been
completed. Power Grid Corporation of India Ltd. is
providing the consulting services for the Project.
The estimated cost of the Project is US$ 22 million

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

and is funded jointly by GoN, NEA and IDA. The
project is expected to be completed by 2008.

Hetauda-Bardaghat 220 kV Transmission Line
Project

INPS has major load centers at central and eastern
Nepal, whereas, the generating stations are located
mainly in western and central region. The present
network shows that there is a weak link from
Hetauda to Bardaghat. The connection of Hetauda
to Bardaghat is at 132 kV single circuit transmission
line with "PANTHER" conductor. A fault in either
Marsyhayngdi-Siuchatar or in Bharatpur-Hetauda
Transmission Line section will overload Hetauda-
Bardaghat Transmission Line resulting into the
collapse of the entire INPS system. The existing
Hetauda-Bardaghat transmission line will be further
overloaded if the generation capacity is increased
to meet the unconstrained/normal system load.
With the introduction of Middle Marsyangdi HEP
into the system, the situation will be even more
severe. Hence, upgradation of transmission capacity
between Hetauda and Bardaghat has been a task
of priority for NEA. Keeping in view of the above,
NEA has decided to implement Hetauda-Bardaghat
220 kV Transmission Line Project. The Project
comprises of approximately 143 km long double
circuit 220 kV transmission line connecting the

Tower Installation under Thankot-Chapagaon-
Bhaktapur 132 kV Transmission Line

existing Hetauda and Bardaghat Substations using
ACSR "BISON" duplex conductors. EIA study has
been completed, the report of which is under review
by the concerned governmental agency. The cost
of this Project is estimated at US$ 39.2 million.

Thankot-Chapagaon-Bhaktapur 132 kV
Transmission Line Project

Thankot-Chapagaon-Bhaktapur 132 kV
Transmission Line Project comprises of nearly 28
km long 132 kV transmission line from Thankot
(Matatirtha) to Bhaktapur via Harisiddhi. This Project
will complete the 132 kV ring-main system in
Kathmandu valley. The 132 kV ring main, on one
hand, will greatly assist in catering the increasing
demand in the valley and on the other hand, will
help to bring down system loss, improve the quality
and reliability of the power supply in the Valley.
About 26 km of this line will be double-circuit while
the rest will be four-circuit. The Project 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. Estimated cost of the
Project is US$ 20 million. The Project is being
financed by GoN, NEA, ADB and OPEC. So far
40% of the line construction work has been
completed. The design works of substations are
underway. The Project is planned to be completed
by 2008.

Middle Marsyangdi—-Dumre-Damauli-
Marsyangdi 132 Transmission Line Project:

Middle Marsyangdi-Dumre-Damauli-Marsyangdi
132 kV Transmission Line Project is envisaged to
improve security and reliability of the network and
to facilitate evacuation of power from the ongoing
Middle Marsyangdi Hydroelectric Project (MMHEP).
This Project will also open up the way for power
evacuation for future hydroelectric projects in
Marsyangdi basin. The Project component
comprises of stringing of second circuit from
MMHEP to Dumre, construction of double circuit

FY 2006/07

FY 2006/07

Substation

transmission line from Dumre to Damauli and
stringing of second circuit from Dumre to existing
Marsyandi HEP. Route alignment survey for the
Dumre-Damauli section of the transmission line has
been completed and EIA study is under way. This
project is estimated to cost US$ 6.8 million.

Kabeli Corridor 132 KV Transmission Line
Project:

Kabeli Corridor 132 KV Transmission Line Project
has been envisaged to evacuate power from
proposed 30 MW Kabeli-A HEP in Mechi zone of
the country. This line will also pave way for the
development of other hydroelectric projects in Kosi
basin. Survey works for the route alignment of the
transmission line is currently in progress. EIA study
will start from next fiscal year. This project is expected
to cost about US$ 18.4 million. The Project
comprises of construction of single circuit stringing
in double circuit towers for the first stage. Discussions
are underway with the World Bank for funding this
Project.

Chandranigahpur System Reinforcement
Project:

Chandranigahpur System Reinforcement Project
comprises of construction of 132/33/11 kV substation
at Chandranigahpur and 74 km long 33 kV sub-

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

transmission lines to connect the new
Chandranigahpur Substation and 33/11 kV
distribution substations at Harsha, Haripur, Gaur
and Nijgadh. These reinforcement will reduce the
losses and improve the reliability and quality of
supply in the area. The Project is estimated to cost
US$ 6 million and is funded jointly by ७०५, NEA
and IDA. About 50% of works of Chandranigahpur
Substation has already been completed. Equipment
required for the substation are scheduled to reach
site by the end of 2007. Contract for Supply and
construction of 33 kV sub-transmission line will be
awarded shortly. The Project is scheduled to be
completed by 2008.

Grid Substations Reinforcement Project

Grid Substations Reinforcement Project envisages
to reinforce the existing Grid substations with a view
to maintain the reliability of the supply by matching
the Grid substations' capacity with the growing
demand. The Project comprises of the following
components:

(a) Installation of one unit of 132/33 kV, 30 MVA,
3-phase power transformer along with
associated control and protection panel in
Anarmani Substation in Mechi zone.

(b) Installation of one unit of 132/11 kV, 30 MVA,
3-phase power transformer and associated
bay extension in Pokhara Substation.

(c) Installation of 132/66 kV, 3x12.6 MVA power
transformer (bank of three single-phase
transformers) along with associated control
and protection panel at Siuchatar Substation
in Kathmandu.

Construction works in above three substations are
under progress. The Project is estimated to cost
US$ 3.24 million and is jointly funded by GoN, NEA,
ADB and OPEC. The Project is scheduled to be
completed by the end of 2007.

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Kawasoti 132 kV Substation Project

Kawasoti 132 kV Substation Project is being
undertaken to meet the growing electricity demand
in the eastern part of Nawalparasi District. This
Project will provide the infrastructure for the
expansion of 33/11kV sub-transmission/distribution
network to cover a large number of rural hilly area
in the northern part of the district.

Under this Project, the existing Bardghat-Bharatpur
132 kV transmission line will be looped-in-out at
Pragatinagar to form a new 132/33/11 kV substation.
The existing Bharatpur—Kawasoti 33 kV line will be
isolated from Bharatpur Substation and fed from
the new substation. Major components of the Project
consist of two 132 kV line bays, one 132 kV
transformer bay with a 132/33 kV, 30 MVA power
transformer, another 33 kV transformer bay with a
33/11 kV, 8 MVA power transformer and 11 kV
cubicles.

The project is jointly funded by the GoN, NEA and
the Government of Japan (GoJ). The Project is
estimated to cost NRs.615 million part of which will
be met by the Japanese grant of JP¥ 847 million.
EIA study and land acquisition works have been
completed. Consultant has been appointed and
detail design work of control building and substation
is under progress. The Project is scheduled for
completion in FY 2008/09.

Grid Operation Department

Grid Operation Department is responsible for the
operation and maintenance of transmission system
of Integrated Nepal Power System (INPS). In
addition to the operation and maintenance of
transmission system, it has also the responsibility
of upgrading, reinforcing and rehabilitation of
transmission system. Major activities of this
Department are described below.

Transformer Upgrading, Reinforcement and
Voltage Improvement Works

The overloaded 10 MVA, 132/33kV Transformer at
Lahan Substation was replaced with 20 MVA
Transformer. A 6.3 MVA, 66/11kV Power
Transformer has been added at Simara Substation.
Reactive compensation measures was implemented
at Anarmani Substation by installing a 2x7.5 MVAR,
33 kV capacitor bank to resolve the severe low
voltage problem at eastern Nepal.

Other Reinforcement Works

Existing 16 sets of 11kKV Minimum Oil Circuit
Breakers (MOCB) were replaced with Vacuum
Circuit Breakers (VCB) at Balaju Substation. The
damaged 6 MVA, 66/11kV Power Transformer at
Siuchatar Substation was repaired and put into
operation.

Following major works are under progress:

- Installation and construction of 6.3 MVA,
66/11 kV transformer and bay at Sunkoshi
Power Station and 15 MVA, 132/33 kV
transformer and bay at Lamosanghu
Substation for evacuating the power from
IPPs projects in Sunkoshi corridor;

- Installation and construction of bay for 10
MVA, 132/33 kV power transformer and bay,
3 MVA, 33/11 kV_ transformer and bay at
Damauli Substation;

- Shifting and installation of 8/10 MVA, 132/33
kV power transformer from Lahan Substation
to Kohalpur Substation;

- Installation of 45 MVA, 132/66 kV power
transformer and bay at Parwanipur
Substation;

- Construction of 132 kV double busbar system
at Butwal and Chanauta Substations;

- Upgradation of protection system at Lahan
Substation;

FY 2006/07

FY 2006/07

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

- Replacement of 8 MVA, 33/11 kV transformer
by new 16.6 MVA transformer and
replacement of old circuit breakers with new
VCB at Butwal Substation.

Testing and Maintenance works

Altogether 853 numbers of relays and 226 numbers
of energy meters were tested in various Grid
substations including energy meters of IPP and
NEA owned Power Stations. Routine maintenance
works were carried out as per schedule in different
substations and transmission lines.

System Operation Department

Load Dispatch Centre (LDC) under System
Operation Department provides the real time
supervision and control of the Integrated Nepal
Power System (INPS) using state of art Supervisory
Control and Data Acquisition (SCADA) system. FY
2006/07 was a challenging year for system
operation. The gap between the supply and demand
both in terms of capacity and energy was so huge
that NEA had no option but to enforce system wide
Load shedding. However, diligent efforts were
made to minimise load shedding to the extent

possible.

Performance-wise, total number of system trippings
was reduced to 19 from 21 in FY 2005/06, 24 in
FY 2004/05 and 28 in FY 2003/04. The availability
of real time data and better communication system
have improved the overall availability of power
stations and transmission lines and has helped to
minimize the time required for restoration of the
power system in case of black-outs. This has
contributed in the reduction of financial losses of
NEA.

For the efficient operation of INPS, it is necessary
to obtain real time data from the power stations
and substations. The trained manpower of LDC
completed the computerization in the substations
using in-house capability. Several fibers optic lines
have been leased to Nepal Telecom and other
private companies thereby generating additional
revenue for NEA.

System Operation Department also launched the
yearly system operation report "A Year in Retrospect
2062/063" in presence of Honorable Minister of
State for Water Reassures and other dignitaries.

LDC Building at Siuchatar, Kathmandu

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Distribution and Consumer
Services Business Group

The Distribution and Consumer Services (DCS)
business group is the largest among the nine
business groups of NEA in terms of number of
employees and business activities. About 60% of
the total staff of NEA are employed in DCS catering
to 97% of NEA customers.

This business group is entrusted with the key
responsibility of overall management of electricity
distribution network of NEA including operation,
maintenance, rehabilitation and expansion of the
network up to the 33 kV voltage level, together with
customer service activities like new connection,
meter reading, billing, revenue collection, customer
grievance handling and so forth. Control of
commercial and technical loss in the distribution
network is another area of responsibility of this
business group.

This business group is headed by the General
Manager and organized into three departments at
central level and five regional offices each headed
by a Director. DCS is providing service to NEA
customers through 34 Distribution Centers and 32
branch offices spread over 49 districts in the country.

In FY 2006/07, total number of customers under
DCS reached 1,367,556, an increase of 10.18%
over that of the last fiscal year. Similarly, a total of
2,233 GWh of energy was sold earning a gross
revenue of Rs. 14,973 million in the fiscal year by
this business group. Compared to the last fiscal
year, energy sales and gross revenue of this
business group increased by 10.86% and 10.58%
respectively. Sales and revenue contribution of
different customer groups under DCS for the period
is depicted in the following table.

27

No. of consumer
(% of total Revenue
consumers)

95.92% 40.20%। 40.30%
ara। 450%) 625। vseroroup ser Group

0.44% 6.13%] 8.33%
Industrial 1.77%। 39.23%। 36.33%
1.13% 9.94%। 8.79%

Regional Interaction:

A two day interactive workshop was organized in
all five development regions in November-December,
2007 with a view to improve the performance of
DCS. The participating NEA executives were
encouraged to put forth their views on different
facets of state of affairs of DCS and moot action
plans to deal with various challenges faced by the
business group. The workshop was followed by an
interaction program participated by the
representatives of employee union, local political
parties, the media and chamber of industry and
commerce. The program was immensely successful
in meeting its purpose as numerous invaluable
ideas and suggestions came to the fore in course
of the discussions. Hon. Minister of State for Water
Resources Mr. Gyanendra Bahadur Karki also
provided valuable input in the concluding session
held at NEA Training Center, Kharipati.

DCS Mail Club

Communication plays a crucial role in enhancing
the effectiveness of the management. Giving due
consideration to this fact, a noble idea named 'DCS
Mail Club' was launched to facilitate exchange of
ideas and information on the pertinent issues and

FY 2006/07

FY 2006/07

assignments using the available IT facilities. This
scheme has accelerated the speed of information
sharing and reduced the usage of paper. All activity
reports are now received at General Manager (GM)
Secretariat through the email and responded by the
GM immediately. This mechanism has greatly helped
the club members in finding out what others are
doing to solve the problems similar to what they
face from time to time and also in curtailing
communication barriers in the different hierarchy of
management. At present, about seventy DCS offices
and individuals are registered as club members.
The scheme is already showing promising results.
DCS is planning to further strengthen this scheme
by developing the network facilities in coordination
with the IT Department of NEA.

Electrification of Maoist Camps

After the historic comprehensive peace agreement
between GON and CPN Maoist, GoN assigned NEA
to electrify 35 camps of the CPN Maoist
cantonments. Despite several difficulties, all the
camps were electrified in record time.

Customer Service Reforms

To provide better service to valuable customers,
DCS has introduced Queue Management System
(QMS) in its cash collection operations in Pardi,
Malepatan, Baneswor, Chabel, Kuleswor, Ratnapark,
Basundhara, Rajbiraj, Biratnagar, Bhairahawa and
Tandi Revenue Centers. One window Service
Delivery System has been introduced at Pokhara,
Baneshwar and Lalitpur Distribution Centers.
Computer assisted Interactive Voice Response
Service has also been implemented in Lalitpur and
Rajbiraj Distribution Centers. The customers in
these areas can now know their payment dues over
telephone without delay. Besides, computer assisted
Office Management System developed by NEA IT

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Department has been implemented in Lagankhel
on experimental basis. Computer assisted Grievance
Management System has been implemented in
some offices. As part of the commitment to provide
better service to the customers, NEA is exploring
newer ideas and a new collection solution is on the
offing.

Distribution Centers

As a part of the drive to strengthen customer focus
and commercial orientation in its operations, NEA
had launched the Distribution Center concept in
February, 2002, whereby the Distribution Centers
were required to operate as distinct profit centers
and the Center chief made accountable in achieving
specified performance targets. Reduction of system
losses and average collection period, improvement
in stock utilization, enhancement of quality of
customer services, improvement of overall efficiency,
increase in sales and reduction of costs were defined
as the major performance areas. 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, reporting and data
management and connection period. The consultants
employed under ADB Technical Assistance have
submitted a set of recommendations regarding
Distribution Centers management. Apart from this,
NEA has also observed the need of some revision
in the Distribution Center model and business by-
laws. A committee is at present working to
recommend the necessary amendments in the by-
laws.

Major System Reinforcement Works

DCS has completed the reinforcement of 33/11 kV
substations at Mahendranagar, Dhangadhi, Guleriya,

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Nepalgunj, Kalaiya, Parsa, Harsha, Malangawa,
Haripur, Jaleswar, Chandragadhi, Damak, Rajbiraj,
Dhankuta, Syangja and Baglung. Altogether, power
transformer capacities have been added by 80 MVA
and most of the aged switchgears have been
replaced in these substations. This measure has
relieved the capacity constraints of the local
distribution network enabling NEA to withdraw the
load shedding prevalent at local level.

One 2x16 MVA, 33/11 kV new substation has been
commissioned at Tankisinuwari, Morang. With this
development, electricity supply could now be
extended to more areas in the district and reliability
of supply around Duhabi and Biratnagar area will
be enhanced.

DCS has produced the revised version of 'NEA
Distribution Construction Standard'. The standard
is being reviewed by a committee. Once finalized,
this standard would be applicable for all construction
works for voltage level up to 33 kV. The business
group also plans to review the 'Distribution
Maintenance Standard' in the near future.

Work are in progress to reinforce and expand the
distribution networks at various places. Under
Tanahu Distribution Center, A 6/8 MVA, 33/11 kV
Power Transformer is being installed at Dumre
Substation. Switchgear panels (33 and 12 kV) are
being installed at Dumre and Anbu Khaireni
Substations. Installation and commissioning works
in these substations are expected to be completed
in the FY 2007/08.

Computerized Billing Project

Computerized Billing Project is under implementation
with a view to facilitate better record keeping of
customer accounts and to make the billing and
revenue collection process uniform throughout NEA.

The Project also aims at expediting reporting of
non-technical losses and account receivables.
Procurement of computer hardware for 20 branches
has been completed. New Computerized Billing
System has been installed and in operation in
Kuleshwor, Ratnapark, and Luvu revenue centers
in Kathmandu Valley. Similarly, new Computerised
Billing System has been in operation in Bharatpur
and Dharan Distribution Centers outside Kathmandu
Valley. The new billing system is expected to be
installed in additional 36 main revenue centers
within July 2008.

Effect of Terai Turmoil

The turmoil in Terai that started from
January/February 2007 have created numerous
hurdles on the way of smooth functioning of
distribution and customer services works in the
area as the DCS offices in the central and eastern
Terai were pad locked by the agitating groups for
several days. The blockades and road blocks
imposed from time to time by the agitators restricted
the movement of men and materials thereby
severely constraining the ability of local offices to
continue functioning normally. The disturbances
had cascading effects on the overall performance
of DCS.

Other Initiatives

This business group took the initiative to complete
rural electrification works which were held up
because of budgetary problems. To support this
initiative, GON supported this initiative by releasing
fund to the extent of NRs. 1 billion.

Apart from regular works, DCS has undertaken
various measures to improve its performance. Some
of these measures are listed below.

FY 2006/07

FY 2006/07

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

a)

b)

९)

Implementation of Computerized Billing
System and Customized Accounting and
Inventory System (CAIS) in almost all
Distribution Centers and branch offices.

Extensive use of ABC cables to reduce
tripping and theft of electricity by direct

tapping.

Mobilization of vigilant teams in regional
offices, Distribution Centers and branch
offices to check electricity theft.

d) Promotion of CFL lamps for energy
conservation and Demand Side
Management.

Interactive approach in office as well as public
relation management: Interactions were organized
at hundreds of rural locations to exchange views
on improvement of services, payment of outstanding
dues and loss control.

HFR ४ 7001

Regional Interaction

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Electrification

Business Group

Electrification Business Group is primarily
responsible for rural electrification in the country.
All the major rural electrification projects funded by
GoN, NEA and other donor agencies are
implemented by this business group. Construction,
operation and maintenance of small hydropower
plants are the other responsibilities of this business
group. It is headed by the General Manager and is
organized into two departments, namely, Small
Hydropower and Rural Electrification Department
and Community Rural Electrification Department,
each headed by a Director. Furthermore, Rural
Electrification, Distribution and Transmission Project,
Distribution and Rural Electrification Project, llam
Rural Electrification Project, Dhankuta Rural
Electrification Project, Kailali-Kanchanpur Rural
Electrification Project and Sindhu Dolkha Distribution
Line Extension Project are being implemented under
this business group. The activities of the Departments
and Projects under the business group are
highlighted below.

Small Hydropower and Rural
Electrification Department

Small Hydropower and Rural Electrification
Department is responsible for the construction,
operation and maintenance of small hydropower
plants and implementation of rural electrification
programs in the remote hilly regions. Presently, this
Department is overseeing the management of 26
small hydropower plants, 2 solar plants and 5
distribution branch offices spread over 27 districts
in 12 zones of the country. Out of 26 small
hydropower plants, 8 have been leased out to private
firms and 3 have been leased out to the consumer
communities. A number of 33 kV substation and
transmission line projects are under construction.
A 1.5 MVA, 33/11 kV substation at Jiri-Khimti VDC
of Terhathum district has been commissioned
recently.

A number of projects as listed below are being
implemented under this Department.

(a)। Heldung Small Hydroelectric Project (500
kW) in Humla district, scheduled to be
completed in FY 2007/08;

(b) Gamgad Small Hydroelectric Project (400
kW) in Mugu district, scheduled to be
completed in FY 2007/08;

(८)। Buipa-Okhaldhunga 33 kV Transmission Line
Project in Khotang and Okhaldhunga districts;

(0) —llam-Phidim-Taplejung 33 kV Transmission
Line Project in Panchthar and Taplejung
districts;

(6)  Sitalpati-Musikot 33 kV Transmission Line
Project in Salyan and Rukum districts;

(f) Chhinchu-Rukum- Jajarkot 33 kV
Transmission Line Project in SurkhetE and
Jajarkot districts;

(g)। Ghorahi-Holeri 33 kV Transmission Line
Project in Dang and Rolpa districts;

(1) Udipur-Besisahar-Manang 33 kV
Transmission Line Project in Lamjung and
Manang districts;

(i) Dadeldhura-Baitadi 33 kV Transmission Line
Project;

(j) Dhankuta-Hile-Leguwa-Bhojpur 33 kV
Transmission Line Project;

(९) Tumlingtar-Dingla-Bhojpur 11 kV
Transmission Line Project;

(l) Rasuwaghat-Khotang 33 kV Transmission
Line Project; and

(11) Dipayal-Sanfebagar-Manma-Jumla 33 kV
Transmission Line Project;

FY 2006/07

FY 2006/07

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Community Rural Electrification
Department

In order to increase the coverage of electricity supply
in the rural areas and promote local participation
for sustainable growth, GoN has adopted a policy
in FY 2003/04, which call for sale of power to rural
electricity consumer groups after setting up the
requisite distribution infrastructure. Under this
program,

consumer associations, typically in the form of
cooperatives and user groups, take the responsibility
of managing, maintaining, and expanding the rural
distribution of electricity. Communities raise 20% of
the investment cost for distribution system extension
in their area and 80% of the fund is provided by the
government. The primary objectives of the program
is to reduce the cost of distribution, make distribution
system effective, accelerate the pace of expansion
of distribution lines in the rural areas and check the
pilferage of electricity.

Initial response to this new initiative has been
overwhelming. This is reflected in large number of
agreements signed between NEA and local
consumer groups. Altogether, 38 consumer groups
have already started operating out of 165
communities which have signed the agreement.
Further 190 rural electricity communities are
expected to operate under this model. The following
depicts the status of implementation status of the
program till June 30, 2007:

No. of Application

Registered RE Implemented

Note: CBRE-Community Based Rural Electrification
Program; CBOM-Community based Operation and
Maintenance

32

Rural Electrification, Distribution
and Transmission Project (REDTP)

REDTP is being implemented with loan assistance
from ADB and OFID (OPEC fund for International
Development). GoN and NEA are funding the local
component of the Project. The Project consists of
the following components.

(a) Rural Electrification and Distribution System
Reinforcement Project

(9) Transmission Development
(i) Thankot-Chapagaon-Bhaktapur 132
kV Transmission Line Project
(ii) Grid Substation Reinforcement Project
(c) Computerized Billing Project
(0) Institutional Strengthening:
(i) Distribution District Profit Center
Project
(ii) Fixed Assets Revaluation Project

The Distribution Profit Center Project and Fixed
Assets Revaluation Project have already been
completed. Rural Electrification and Distribution
System Reinforcement Project, Grid Substation
Reinforcement Project and Computerized Billing
Project will be completed in FY 2007/08. Thankot-
Chapagaon-Bhaktapur 132 kV Transmission Line
Project will be completed in FY 2008/09.

Rural Electrification and Distribution
System Reinforcement Project

The main scope of Rural Electrification and
Distribution System Reinforcement Project includes
electrification in 277 VDC covering 22 districts of
the eastern, central and western development
regions. The Project comprises of Rural

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Electrification (RE) and Distribution System
Reinforcement (DSR) components.

Substation Construction works in progress in
Mukundapur

Under the RE component, eight new 33/11 kV
substations with total capacity of 34.5 MVA and 553
numbers of 11/0.4 kV distribution transformers with
total capacity of 34.55 MVA will be installed. Similarly,
45 km of 33 kV lines, 807 km of 11 kV lines, 495
km of 11/0.4 kV lines and 1,425 km of 0.4 kV lines
will be built under this Project.

Under DSR component, six new 33/11 kV
substations construction and augmentation works
in existing nine 33/11 kV substations will be carried
out resulting in the capacity addition of 77 MVA.
Similarly, 566 numbers of 11/0.4 kV distribution
transformers with total capacity of 71.32 MVA will
be installed. Moreover, 57 km of 33 kV lines, 867
km 11 kV lines and 583 km of 0.4 kV lines will be

added to distribution system of NEA.

The Project is estimated to cost US$ 37.3 million
and is jointly funded by ADB, GoN and NEA. Nearly
85% of works under the Project have been
completed so far. The Project is expected to be
completed by FY 2007/08.

Distribution and Rural Electrification
Project

Distribution and Rural Electrification Project is being
implemented in the five districts, namely, Dhading,
Nuwakot, Lalitpur, Bhaktapur and Kavrepalanchok
with funding from International Development
Association (IDA) of the World Bank under Power
Development Project. Power Development Project
intends to help meet the government objectives of
expanding electricity coverage in the rural areas to
substitute the use of kerosene and fire-wood by
electricity and spur economic activities. There are
two components under this Project, namely, Rural
Electrification Scheme and Distribution System
Reinforcement Scheme. Rural Electrification
Scheme focuses at construction and extension of
distribution lines, whereas, the other scheme aims
at reinforcing the existing distribution network and
increase quality

of electricity supply to the consumers. The scope
of works under these schemes are depicted in the
following tables:

Scope of works under Rural Electrification Scheme:
कालका लाल लात्ल्यालल लल
Construction of 33/11 kV substation /
switching station

Construction of 33 kV Line (km

3.। Construction of 11 kV Line (km

Installation of new 11/0.4 kV Transformer। 6.। New consumers to be added 5,960 5,954 3,960 1,300। 17,174

FY 2006/07

FY 2006/07

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Scope of works under Distribution System Reinforcement Scheme:

Description

41 KV Line (km)

11/0.4 kV transformer (set

Lalitpur

Bhaktapur

Consumers to be benefited 4,100 7,200 5,620 16,920

Supply and delivery of distribution line materials for
RE and DSR have been completed. Tender for
construction works for RE and DSR has been
evaluated and the evaluation report has been
submitted to the World Bank for concurrence. The
contract for the construction of substation has been
awarded and detail design work is in progress. All
the works under the Project will be completed by
December 2008.

lam Rural Electrification Project

llam Rural Electrification Project is being
implemented with Non-project Grant from the
Government of Japan. The Project plans to provide
electricity to 10,659 households in 17 VDC. The
total cost of the project is NRs. 115 million. The
Project works comprise of construction of 316 km
of 11 kV lines, 284 km of 400/230 volts lines and
installation of 6OEdistribution transformers. Most of
the distribution line materials have been delivered
and contract for construction has been awarded for
the first stage of works. For the second stage of
works, evaluation of tenders for the supply and
delivery of distribution line materials and construction
is in progress. All the works under the Project will
be completed by FY 2007/08

Line erection in llam

Dhankuta Rural Electrification
Project

Dhankuta Rural Electrification Project was started
in FY 2005/06 and completed in FY 2006/07. The
Project was completed at a cost of NRs. 600 million,
funded by Government of Japan. Under the Project,
74 km. of 11 kV lines and 85 km of 400/230 V lines
were constructed and 39 distribution transformers
were installed in five VDC, namely, Aankhisalla,
Khoku, Chhintang, Aahale and Mahabharat.

Line Erection in Dhankuta

Kailali-Kanchanpur Rural
Elctrification Project

Kailali-Kanchanpur Rural Elctrification Project was
started in 1999 (2056/057 B.S.) with a grant
assistance of Danish Government of DKK 66.3
million and GoN/NEA funding of NRs. 668 miliion.
The Project will be completed in FY 2007/08. The
Project was revised and upgraded in May 2006 to
include construction of additional four new
substations (10.5 MVA) through extension of 75 km
of 33 kV line, upgrading of distribution transformers
and conversion of two phase distribution system to
three phase in several load centers. This revision

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

in Project scope required additional funding of DKK
17.5 million, which Danida has committed to provide.
About 70,000 consumers of 33 VDC and one
municipality of Kailali and Kanchanpur districts will
be benefited from this Project

झ का कृ

न हा

SE _ ee

—— 5

33 kV double pole structure at Khutia River

crossing (213 m span)
So far three numbers of 3 MVA, 33/11 kV substations
have been constructed and commissioned at Lamki,
Attariya and Lalpur. Similarly, construction of 24 km
of 33 kV, 443 km of 11 kV and 1,448 km of 400/230
V lines have been completed. These works have
contributed in improving the voltage profile of the
network in the districts. Around 26,000 new
consumers are already supplied with electricity from
the newly built lines.

The ownership and responsibility of operation/
maintenance of the substations and high voltage
lines will remain within NEA, while the low voltage
distribution lines and distribution transformers will
be handed over to electricity user's groups. The
groups will own, operate and maintain the distribution
system and promote and facilitate productive end-
use. The cooperatives will get a subsidy of NRs
7,200 per household while the balance of investment
in low voltage distribution lines, transformers and
service connections will be provided as an index
loan at 2% real rate of interest over 20 years to be
collected along with payment for NEA's wholesale
supply of electricity. Distribution lines have already
been handed over to 31 user groups thereby
supplying electricity to 6,100 consumers. About
80% of the total project works have been completed
till date.

Sindhu Dolkha Distribution Line
Extension Project

Sindhu Dolkha Distribution Line Extension Project
was started in FY 1999/2000 and is being
implemented in three phases. After completion of
the Project, 50,000 households and small-scale
industries in the project area of Dolkha and
Ramechhap districts will be directly benefited. The
major scope of the Project includes:E

construction of 82 km of 33 kV, 200 km of
11kV and 460 km of low voltage line.

installation of 278 distribution transformers.

construction of 4 numbers of 1.5 MVA,
33/11kV sub-station (Makaibari, Jiri, Kirnetar
& Singati)

Currently, the Project is in the second phase and
construction of two numbers of 33/11 kV sub-station
at Jiri and Makaibari have been completed and will
be commissioned shortly. The construction of 52
km of 33 kV line, 172 km of 11 kV line, 356 km of
low voltage lines have been completed and 156
nos. of transformers have been installed. The total
cost of the Project is estimated at NRs. 450 million
and is funded by GoN. The Project is expected to
be completed by FY 2008/09.

Meter Test Bench installed by REDSRP
at NEA Hetauda

FY 2006/07

FY 2006/07

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Engineering Services

Business Group

Engineering Services Business Group provides
technical support on all aspects of hydropower
development ranging from project identification
studies to detailed design and construction
supervision of hydroelectric projects. It has two
decades of experience in design and construction
supervision of hydroelectric projects with capacities
up to 144 MW. The business group is headed by
the General Manager. The four departments, under
this business group are Project Development
Department, Environment and Social Studies
Department, NEA Training Center and Soil, Rock
and Concrete Laboratory. The field of services
offered by this business group also includes Electro-
Mechanical design, operation and maintenance of
two concrete pole plants and a central workshop.
Activities carried out by the business group during
FY 2006/07 are as follows:

Project Development Department

Upper Trishuli -3A Hydroelectric Project

NEA has recently completed Detailed Project Report
of Upper Trishuli-3A Hydroelectric Project with
installed capacity of 60 MW. The Project is located
in Rasuwa and Nuwakot districts. The headworks
lies nearly 15 km north of the existing Trishuli
Hydropower Station diversion weir and the
powerhouse is at Simle which is about 5 km south
of the proposed headworks.

Only 2 km of new road will have to be built along
with the upgrading of 14 km of road between
Betrawati and headworks site. NEA has carried out
detailed hydrological studies at the site. The river
is characterized by high firm flow as much of the
discharge is fed from snow. NEA has also carried
out 353 m of drilling and 3 km of seismic survey as
part of the geological investigation.

The headworks comprises of a 10 m high diversion
weir with 4 radial gates. It will also have a fish

passage cum downstream release channel. The
waterways comprises of intake channel, twin
desander, 4.1 km long headrace tunnel with a
diameter of 5.4 m, inclined shaft, pressure tunnel
and ancillary structures. The headrace tunnel passes
through quartzite and phyllite.

The underground powerhouse will have two units
of Turbine generators. Power evacuation will be
made through a 54 km long 220 kV transmission
line connecting the Project to Matatirtha substation

in Kathmandu. Annual energy generation is
estimated to be 488 GWh.

Estimated cost of the Project is US$ 109 million
and the Project economics study shows an EIRR
of 20%. The Project is to be commissioned by 2011
if preparatory works are carried out accordingly.
NEA is currently undertaking Environmental Impact
Study of the Project. This Project is to be built by
GoN and NEA through soft loan from Government
of China.

Upstream View of Upper Trishuli - 3A
Headworks Site

Upper Trishuli-3B Hydroelectric Project

Upper Trishuli -3B Hydroelectric Project is the tailrace
scheme of Upper Trishuli-3A. This Project will have
an installed capacity of 44 MW. NEA is currently

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

conducting feasibility study with the aim of completing
the Project by FY 2011/12. This Project comprises
of a 3.1 km long headrace tunnel, inclined shaft,
surface powerhouse with two units and ancillary
structures. Power evacuation will be made through
the proposed 220 KV line of Upper Trishuli -3A.
Topograhic survey and geological investigation have
been carried out and layout of the structure have
been accomplished. This study will be completed
in the FY 2007/08. Since separate headwork and
transmission line is not required, this Project can
be built in a much economical manner.

Upper Seti (Damauli) Storage Project

NEA has completed Upgrading Feasibility Study of
Upper Seti (Damauli) Storage Project under the
technical assistance from Japanese Government
through JICA. It has an installed capacity of 128
MW and will be able to generate 476 GWh of annual
energy. This scheme, upon completion, will be able
to provide six hours of daily peaking capacity in
winter which is much valuable to the present power
system. The Project will comprise of a 140 m high
concrete dam, 195m long penstock, underground
powerhouse and ancillary structures. Power
evacuation will be made through 40 km long 220
kV line connecting the Project to the new Bharatpur
substation. Estimated cost of the Project is US$
328 million. The Project has a construction period
of six years and can be commissioned by FY
2014/15.

Cred Sbtikehoboer: लिट२१।

Awe  " Pi rey
[pe 101 Toon pe न "॥ज sey 20 न 1

Upper Seti Storage Project Stakeholder's
Meeting

37

Project Identification Study

In FY 2006/07, project identification studies of two
projects namely Tamakoshi-V and Tila-3 were carried
out.

Tamakoshi —V Hydroelectric Project with a capacity
of 28 MW is located in Dolakha District approximately
170 km north-east of Kathmandu. The road
connecting Singati Bazaar and Lamabagar which
is being built for Upper Tamakoshi Hydropower
Project (UTKHEP) passes through both powerhouse
and headworks sites of Tamakoshi-V Project. This
Project is conceptualized as a cascade project with
UTKHEP. The headrace tunnel has a length of 2.5
km. Estimated annual generation is 158.80 GWh
per year. Power evacuation from this scheme will
be made through 6.0 km long 220 kV Transmission
Line connected with the nearest substation at
Gongar. Total project cost is estimated at US$ 45
million.

Tila-3 Hydroelectric Project is located in Kalikot
District, Karnali Zone approximately 190 km North
of Surkhet. It is a high head run of river project with
a capacity of 116 MW. Karnali highway passes along
the powerhouse and the headwork area of this
Project. The headrace tunnel will be about 7.25 km
long. Annual generation is estimated to be 680.20
GWh. A 144 Km long 132 kV double circuit
transmission line is required to evacuate power to
Kohalpur substation. Total project cost is estimated
at US$ 204 million.

Other Activities

Engineering Services Business Group is also
involved in providing technical support to various
projects. The commercial activities carried out by
Engineering Services include construction design
and supervision of Chamelia HEP and detailed
design of Kulekhani Ill HEP etc. This business group
has also carried out detailed survey of Duhabi
—Jogbani and Butwal-Sunauli 400 kV Transmission
Line. It has also completed detail survey of Kabeli

FY 2006/07

FY 2006/07

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Corridor 132 kV Transmission Line in FY 2006/07.

In FY 2006/07, study on Kulekhani reservoir
sedimentation and study on slope stabilization work
of Puwa Khola HEP were also carried out. Project
Development Department also operates two
concrete pole plants at Kotre and Amlekhgunj. These
pole manufacturing plants have greatly helped in
supplying the materials required for various rural
electrification projects. It also runs central workshop
at Hetauda where transformer repair works are
carried out.

Upper Tamakoshi Hydroelectric Project
(UTKHEP)

The detailed design of Upper Tamakoshi HEP with
an installed capacity of 309 MW is being carried
out in FY 2006/07. This is a peaking run-of-river
type project with an annual average energy of

1,737.7 GWh. The gross head and design discharge
of this Project are 820 m and 44 m3/s respectively.

Major structures of this Project comprise of a
concrete dam of height 22.5 m, intake, twin
desanding basins, headrace tunnel of length 7.2
km, 2.5 km long pressure shaft, underground
powerhouse, 2.5 km long tailrace tunnel and 47
km long 220 kV Transmission Line.

Based on the present generating capacity and peak
demand, it is estimated that in 2013 the power deficit
will be 483 MW. Therefore, NEA has placed high
priority to start the construction of the project by the
end of 2008 so as to complete it by FY 2012/13.
The Project cost is estimated at US$ 340 millions
(excluding IDC and other financial costs). Its levelised
unit cost is US Cent 2.6/kWh and benefit-cost ratio
is 2.2. The Project will have a construction period
of 4.5 years.

Upper Tama Koshi Project Site

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Detailed engineering design and preparation of
tender documents has been commenced from
February 2007 by Norconsult-Lahmeyer International
J/V. The detailed design works is scheduled to be
complete by November 2008. Out of 61.5 km
access road, 33 km fair-weathered road from
Dolakha to Singati is in operation whereas the
remaining 28.5 km up to Lamabagar is under
construction. Construction of three steel truss bridges
along the access road will be commenced soon.
Environmental Impact Assessment (EIA) report for
generation has been approved by Ministry of
Environment, Science and Technology (MoEST)
while EIA Report for Transmission Line is under
final stage of the approval. Construction of a test
adit of 500 m length has been started under the
Detailed Design Program. Land acquisition for 28.5
km access road is nearly completed. Two office
buildings have been constructed, one each in
headworks and powerhouse sites. Communication
facilities have also been established in both places.
In order to implement the Project by mobilizing
funding from within the country, NEA is negotiating
with Karmachari Sanchaya Kosh and other domestic
financial institutions.

Soil, Rock and Concrete Laboratory

Soil, Rock and Concrete Laboratory has been
providing quality services relating to material testing,
geological and geotechnical engineering fields for
hydroelectric project study.

Geological mapping, geophysical survey and core
drilling are the major activities carried out by this
Department. It also provides services like
construction material investigation, both in-site and
laboratory testing. The state of art laboratory provides
services on a regular basis to NEA and other clients.
The Department also carries out geotechnical design
including rock support pattern for underground and
surface structures.

The followings works were undertaken by the
laboratory in FY 2006/07.

39

Surface geological mapping, core drilling,
geophysical survey and construction
materials investigation carried out for Upper
Trishuli-3B Hydrelectric Project.

Additional core drilling at downstream weir
option of Upper Trishuli — 3A HEP.

Core drilling at option-3B powerhouse of
Upper Seti (Damauli) Storage HEP.

Core drilling at Middle Bhote Koshi HEP.

Drilling was carried out in Sunkoshi River at
three alternative dam sites of Sun Koshi
Storage-Cum-Diversion Scheme in
Okhaldhunga District.

Topographical survey work at Upper
Tamakoshi HEP.

Sediment Analysis of Upper Seti (Damauli)
Storage HEP

Concrete quality test at Bhiman Sub-station
of Sindhuli.

a

er. अन
a भा बा ७ =

म, हान हनन हना

Drilling at Proposed Sunkoshi Diversion

Headwork Site

Concrete Mix Design and various tests on
rock, soil and concrete for different private
party.

FY 2006/07

FY 2006/07

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Environmental And Social Studies
Department

Environmental and Social Studies Department
provide services related to all aspects of
environmental studies of projects in the planning,
construction and operational phase. NEA has been
carrying out Environmental studies since 1987.
The Environmental Unit of those days has evolved
into ESSD with a wealth of experience in conducting
Environmental Impact Assessment (EIA), Initial
Environmental Examination (IEE), Strategic Impact
Assessment (SIA) and Acquisition Compensation
Rehabilitation Program (ACRP). This Department
also conducts environmental monitoring and auditing
of hydroelectric, transmission line and distribution
line projects.

The Department accomplished the following
assignments during the fiscal year 2006/07:

(a) The EIA report of Upper Tamakoshi
Hydroelectric Project has been approved.

(0) The EIA report of Kawasati 132/33 kV
Substation Project has already been
approved.

(c) The IEE of Chandranighapur 33 kV
Transmission Line Network has been
approved.

(0) The updated EIA of Hetauda-Bardaghat 220
kV Transmission Line is in the final stage of
approval.

(e) The Department is conducting quarterly
monitoring of air, noise and water quality of
Middle Marsyandhi Hydroelectric Project
under construction.

(f) The EIA of Upper Trishuli-3A Hydroelectric
Project (UT-3A) is being carried out.

(g) The Scoping Document and Terms of
Reference of Upper Trishuli-3B Hydroelectric

Project (UT-3B) is in the process of approval.

(1)।The Department is in the process of awarding
the EIA study of Cross-Border Butwal-Sunauli
and Duhabi-Jogbani 400 kV Transmission
Line to the local consultant under its
supervision.

(i) The Scoping Document and Terms of
Reference of Damauli-Bharatpur 220 kV
Transmission Line is in the process of
approval.

(j) The IEE of Dolakha-Nayapul 33 kV
Transmission Line and EIA report of Gongor
Khimti 220 kV Transmission Line is in the
process of approval.

NEA Training Center

NEA Training Center (NEA-TC) has been providing
need-based short term trainings to NEA employees
with an aim to upgrade their professional knowledge
and skills at operational and managerial levels. The
training programs are designed as per training
needs assessment (TNA) at organization and
personnel level after discussion with the corporate
executives and general managers level. Since the
last two years, NEA-TC has expanded its services
to include the clients outside of NEA. It has
conducted various training programs to clients on
their request which include Department of Electricity
Development, Chilime Hydropower Co., Butwal
Power Co. Ltd. and consumer community. For the
first time, NEA-TC has conducted training program
for foreign participants. In FY 2006/07, five persons
from Afganistan took part in powerhouse operation
and maintenance training at Panauti Powerhouse.
On the request of Small Hydropower Promotion
Project of GTZ, training was imparted to the
consumer community of Goplingtar lift irrigation
scheme. A total of 692 staff were trained in FY
2006/07 which included 270 officers and 422 non
officers. A total of 61 training programs were
conducted in this period.

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Central Activities

NEA Board Matters

Mr. Gyanendra Bahadur Karki, Honorable Minister
of State for Water Resources (MoWR) has been
the Chairman of NEA Board since Jestha 29, 2063
following the historic peoples uprising which heralded
unprecedented political change in Nepal.

After the retirement of Mr. Tikadutta Niraula, the
Secretary of Ministry of Water Resources (MoWR),
Mr. Jitendra Ghimire, officiating secretary of MoWR
has been representing from Ministry of Water
Resources as an ex-officio member in the NEA
Board.

This is the second year as Managing Director and
Member Secretary of the Board for Mr. Arjun Kumar
Karki, who was appointed to the post in July 17,
2006 (2063/04/01 BS) by the Government of Nepal.

Mr. Lekh Man Singh Bhandari, Mr. Guru Prasad
Neupane and Mr. Ananda Raj Batas have been
appointed as Board Members by the decision of
Government of Nepal in August 8, 2006 (2063/4/23
BS). Similarly, Mr. Rameshwor Prasad Khanal,
Acting Secretary, Ministry of Finance (Revenue) is
representing Ministry of Finance as an ex-officio
member in NEA Board since August 28, 2006
(2063/5/12 BS). With the appointment of Mr. Mukesh
Raj Kafle as a Board Member in August 28, 2006
(2063/5/14 BS), NEA Board took the complete
shape.

In a policy decision, NEA Board has decided to
include an invitee from the Employee Union in Board
meetings so that employees' stakes could be
represented in the Board deliberations. Accordingly,
Mr. Kumar Prasad Ojha, has been participating as
an invitee in the Board meetings since August 21,
2006 (2063/5/5 BS). From the same day, Mr. Anup
Kumar Upadhaya, Joint Secretary, Ministry of Water

of Resources and Mr. Rajendra Kishor Kshatri, Joint
Secretary (legal), Water and Energy Commission
Secretariat have also been inducted into NEA Board
as invitees.

During FY 2006/07, a total of twenty-eight Board
meetings were convened. The Board made various
far-reaching decisions with a view to move forward
in fulfilling aspirations of stakeholders. The Board
decisions paved way for the launching of Upper
Tamakoshi, Kulekhani Ill, Upper Trishuli 3 A and
Chameliya Hydroelectric Projects. In this year, the
inking of a deal between NEA and IL&FS (India) to
construct cross border transmission lines is an
another landmark development, which hold immense
prospects in boosting up the power trading between
Nepal and India. Various by-laws relating to
personnel and financial management were amended
to impart a greater degree of efficiency and
effectiveness in the functioning of NEA. With a view
to mobilize capital resources from within the country
for the development of hydropower, NEA is in the
process of issuing Power Bonds to institutional and
individual investors.

Public Relation and Grievance
Management Department

The main responsibility of this Department is to
handle all promotional and publicity related matters
on behalf of NEA including issuing of press releases
on periodic basis. The Department is also
responsible for collecting public grievances and
forwarding them to concerned business groups for
necessary action.

In FY 2006/07, the Department has conducted
several press conferences. It has published "Vidyut",
a half yearly journal, in the same period. It has
appointed advertising agency to carry out the
publication of advertisements and notices of NEA

FY 2006/07

FY 2006/07

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

with 46.6 % discount rate in publication and 15.6%
discount in transmission. The Department has also
arranged various press meet to appraise the media
and concerned people about NEA's plans and
programs.

Administration

Administration headed by the Deputy General
Manager, is responsible for formulation and
implementation of administrative rules and
regulations of NEA and overall management of
human resources. There are two departments, under
Administration, namely, Human Resource
Department and General Services Department,
each headed by a Director.

Human Resources Department

Human Resource Department is entrusted with all
the functions of human resource in NEA. During
FY 2006/07, 164 staffs were retired, 23 staffs took
voluntary retirement, 24 resigned and 41 staffs
passed away. The total approved positions at the
end of FY 2006/07 is 10,314, of which a total of
9,272 positions are filled. The recruitment process
for appointing new staffs in vacant positions is under
process. Written examinations for close competition
for level 4 and 5 technical and non-technical positions
have been completed. Interview for all technical
and non-technical 1, 2 and 3 levels is under process.

Promotion of employees is being carried out on a
regular basis. In FY2006/07, 4 officers and 15
assistants were automatically promoted based on
time bound promotion scheme, 88 officers and 156
assistants were promoted to different levels under
the performance evaluation criteria. Promotion
through internal competition criteria is also in due
process. Written examinations have been completed
for officer level promotion.

Anew Personnel Management Software has been

developed for efficient record keeping of employees
and enhancing the existing Personnel Data Bank
(PDB). Personnel Services Regulation-2062 has
been amended and implemented from April 14,
2007 (2064/1/1 BS).

Under disciplinary actions, 16 staff has been
cautioned, promotion of 1 staff withheld, 17 staff
have been suspended and 10 staff have been
dismissed of which four dismissals were for duplicate
certificates. With the view to support the corporate
goal of making NEA a commercially oriented efficient
organization, various measures such as formulation
of performance standards for improvement of quality
of service, implementation of performance based
incentive system and revision of approved positions
are being carried. Based on the prevailing
organization structure, Job Descriptions for the
levels up to 8 have been revised.

During the fiscal year, total of 221 staff participated
in training, seminar, workshop, conference, higher
studies and inspections abroad. 280 staff participated
in training, seminar, workshop and higher studies
within Nepal and 260 officer level and 417 assistant
level staff received training from NEA Training
Center.

Financial supports have been provided to 16
employees under Staff Welfare Program for the
treatment of serious illness like Cancer, Kidney
Transplant and Cardiac Surgery.

Similarly, house/land purchase and construction
loan, house maintenance loan, social activities loan,
3 months loan natural disaster loan have been
granted to 496,108,184,172 and 2 staff respectively.

During the FY, 23 staff were injured and 6 staff
passed away in different accidents. NEA pays its
highest respect to the deceased staff for their
dedicated work.

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

FY 2006/07

Staffing Status - FY 2006/07

Approved Position Existing Situation
Level Service

Monthly Daily
Regular। Pool। Total।Permanent Wages Wage Total
Managing Director

GM/DMD। 1553] 3३। 1556। 1260।। 4। 1272। Technical 5210 5383 3932 4968
Assistant Level

(Level 1-5) Non Tech. 3084 3375 2374 3032।। Grand Total 9847 } 10314। 7566 1008 9272

EMPLOYEE SITUATION (FISCAL YEAR 2053/054-2063/064)

" ally HUE
" HUEREREL
" SLREHEEREL
8000 ॥

7500
1997/98 1998/99 1999/00 2000/01 2001/02 = 2002/03 2003/04 2004/05 2005/06 2006/07

O Employee No. Year

General Services Department recording of the land owned by NEA in Kathmandu
valley.

General Services Department conducts general
repair and maintenance works of NEA buildings Law and Arbitration Division
and other civil, electrical, communication and other
structures. At present the Department is working
for the replacement of old communication network
by a new one in coordination with IT department.

Law and Arbitration Division is under the General
Services Department and handles the legal matters
of NEA. It has defended for 87 litigation cases in
FY 2006/07. NEA has defended 24 cases relating
NEA procured 21 pickups to replace the vehicles to electricity pilferage which amounted to NRs. 54
that were burned or damaged during the insurgency. million. Different courts have given verdict on 30
Property Management Section under the cases till date, of which NEA has won in 18 cases.
Department conducts the proper recording of land The cases handled by this Division include employee

owned and used by NEA. It has completed the service and civil cases, other than electricity
pilferage.

FY 2006/07

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Planning, Monitoring and
Information Technology

Planning, Monitoring and Information Technology,
headed by the Deputy Managing Director is
responsible for the formulation of Generation,
Transmission and Distribution expansion plans of
NEA. It periodically evaluates and monitors the
development projects executed by NEA and provides
feedback needed for successful completion. It also
plays coordinating role in cross-border power
exchange and power trading activities. Concluding
Power Purchase Agreements (PPA) with the
Independent Power Producers (IPP) and facilitating
PPA administration is another area of its
responsibility. It has five departments, namely,
Corporate Planning Department, System Planning
Department, Monitoring Department, Power Trade
Department and Information Technology
Department, each headed by a Director.

Monitoring Department

Monitoring Department organizes internal quarterly
and annual progress review meetings of different
projects and programs and submits the progress
reports to the Ministry of Water Resources (MOWR).
The Department furnishes required data and reports
to MOWR, National Planning Commission (NPC),
Peace Secretariat and NEA itself for its internal use.

During FY 2006/07, the Department compiled and
furnished data on the damage of equipments and
structures during insurgency to the Office of the
Prime Minister and the Peace Secretariat. The
Department has also been providing technical
support to Petition Committee of NEA for Loss
Control and formulation of Electricity Distribution
by-laws.

Corporate Planning Department

Corporate Planning Department undertook various
tasks involving plans and programs at corporate

level. It also provided data input for studies and
various other organizations. NEA also obtained 14
new licenses from GoN for development works of
Generation and Transmission. Two of them were
survey licenses of hydropower projects and ten
were survey licenses for transmission line projects
including three for cross border transmission lines.
Similarly Generation License for Chameliya
Hydroelectric Project and Construction License for
Khimti-Dhalkebar 220 kV Transmission Line were
also obtained.

System Planning Department

System Planning Department is responsible for
formulating NEA's generation and transmission
expansion plans. During the year under review, the
Department accomplished various studies and
brought forth reports on Load Forecast, Generation
Expansion Plan and Transmission Expansion Plan.

Load Forecast Study projects Nepal's long-term
electricity needs. 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 requirement
in the NEA's transmission network.

The Transmission Line Infrastructure Development
Report was also brought out by the Department to
highlight the reinforcement required to accommodate
the development of various hydroelectric projects
under the private sector.

The Department also undertook the Grid Impact
Studies for the integration of Upper Marsyangdi 'A'
and Mai Khola Hydro Power Projects to the national
Grid. These projects are being promoted under the
private sector.

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

In collaboration with the Power Grid Corporation of
India, the Department also carried out the system
studies for developing cross border transmission
links to facilitate power trading between Nepal and
India.

Power Trade Department

Power Trade Department has been entrusted with
the responsibility of processing applications for PPA,
technical review of the proposals, negotiation and
conclusion of PPA with the IPP, and also of
coordinating the activities related to the cross border
power exchange and trade with India.

During FY 2006/07, the Department has concluded
8 PPA with a total capacity of 11.434 MW which are
as follows:

SN] WPPProjects। RW
1। Phawa Khola (Taplejung 2,079

2। रिता Khola (Gulmi 2,400

commissioned. With this, 13 IPP Projects with a
total capacity of 152.713 MW are now in operation.
Four projects (Thoppal Khola- 1650 kW, Sisne
Khola- 750 kW, Pheme Khola- 995 kW and Sali
Nadi-232 kW) are under the process of
commissioning.

The Department has concluded technical evaluation
of two medium sized projects: Upper Marsyangdi-
A Hydropower Project (50 MW) and Mai Hydropower
Project (14.5 MW) in FY 2006/07. AMemorandum
of Understanding has been signed with Upper
Marsyangdi-A Hydropower Project for PPA, while
price negotiation is being carried out with Mai
Hydropower Project. Six IPP Projects for which
Connection Agreements have been concluded
between the IPP and concerned departments of
NEA are being processed for PPA.

This Department is also involved in monitoring and
helping in the administration of IPP Projects in
operation. It provides necessary support to NEA's
Corporate Finance Department in processing the
power purchase invoices of the IPP and facilitates

FY 2006/07

Narayani Shankar Biomass

(Rupandehi

Mai Khola (Ilam 2,400
5। Belkhu Khola (Dhading 320

the meetings of the coordinating committees
constituted for operating the IPP projects in
integration with INPS and as per the provisions of
the PPA.। 6। Seti-ll (Kaski) 979

Lower Chaku (Sindhupalchok) 1.765

Upper Hadi Khola
(Sindhupalchok

Total Capacity

Total number of PPA concluded IPP Projects have
now reached 35 amounting to a total of 228.94 MW.
In FY 2006/07, two IPP Projects, namely, Khudi
Khola Small Hydropower Project (3,450 kW) located
in Lumjung district, and Baramchi Khola Small
Hydropower Project (980 kW) located in
Sindhupalchok district were successfully

The Department has been coordinating the power
exchange and trading activities with India. The 8th
Indo-Nepal Power Exchange Committee (PEC)
meeting, long overdue since 2003, was held in
Kathmandu on June 7-8, 2007. The PEC meeting
took important decisions to resolve different issues
and to move forward for mutual benefit of both
countries. One major outcome of this event was the
revision of the annual escalation rate of 8.5% that
was agreed to in 3rd PEC meeting in 1997 to 5%
per annum from January 2004 to June 2008 and
5.5% from July 2008 to June 2009.

FY 2006/07

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Statement of Tariff for Power exchange between Nepal and India

Tariff for System Voltage
33 kV 132 kV 11 kV Koshi Supply

Note :

Rate fixed for 33 kV System excluding Koshi Supply

For 132 kV System a Rebate of 7.5% on 33 kV rate

1.
2.
3. For11kV System a Surcharge of 7.5% on 33 kV rate
4.

For Koshi Supply Tariff is fixed on 14:10 Ratio

A model PPA document has been drafted during
FY 2006/07 and is conducting a power purchase
price study and policy for power purchase from IPP
Projects up to 10 MW.

Information Technology Department

Information Technology Department has developed
and implemented a number of new application
softwares in FY 2006/07. It has also conducted
training on Customized Accounting and Inventory
System (CAIS) to the concerned staffs from various
NEA offices.

The Department has expanded its network nodes
and implemented CAIS in various budget centers.

Now 111 centers are equipped with the CAIS. Payroll
system was updated with additional facilities and
was implemented at fifteen centers.

The new application that was developed in 2006/07
includes Interactive Voice Response System (IVR),
Office Management System, Power Station
Maintenance System with Enhanced Performance
Reward Calculations (PMSEPR) and No-light
Management System. IVR System is implemented
at six of the DCS Centers and PMSEPR has been
tested and ready to be delivered to all the power
stations. Most of the information about NEA activities
can be downloaded from the NEA website:
www.nea.org.

Group Photograph of Delegates for Power
Exchange Committee Meeting

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Internal Audit

During FY 2006/07, the office of Deputy Managing
Director (DMD), Internal Audit carried out 281 audits
of accounts and various activities in all core business
units and corporate offices in NEA. This is nearly
25 percent more than 225 audits carried in FY
2005/06. These audits include financial audit,
management audit, technical audit and energy audit.

In FY 2006/07, a total of 253 financial audits were
carried out all over the country to ensure compliance,
effectiveness of internal control system, integrity,
reliability and efficiency. In previous year, the no. of
financial audits was only 225. This can be seen as
improvement over the past despite limited mobility
due to security problems in Terai.

Technical audit division conducted 13 technical
audits in FY 2006/07 which cover especially
distribution, transmission and generation, that
primarily include performance evaluation, compliance
with norms and standards and cost effectiveness.

During the review period, energy audits in 11
Distribution Centers were carried out. Field
inspections were conducted during audit process
in order to ensure application of adequate control
measures by the Distribution Centers. Similarly, on

sample basis, management audit in 4 units were
conducted during the fiscal year. Necessary
corrective actions are being taken by respective
units on audit observations.

In FY 2006/07, various need-based trainings were
provided to internal audit staff within and outside of
the country. A group of internal audit staff were sent
to India for training in coordination with Institute of
Cost and Works Accountants of India (ICWAI).
Likewise various trainings that include computerized
auditing were also organized by NEA Training
Center. These trainings are highly valuable as these
provide the management tools essential for
increasing competency and efficiency in the
changing business environment.

The office of DMD, Internal Audit prepared and
submitted annual internal audit report for FY 2005/06.
An energy audit manual was prepared and finalized
by the consultant SNV Lavalin, Canada, in
coordination with the Institutional Strengthening
Project of NEA. Also, Internal Audit Manual was
revised and Risk Based Audit Guideline and
Information System Audit Guidelines were prepared
with the assistance of local consultants.

tear geaewhe eS बर हा-
el os जाग

Senha een

An Interaction Programme

47

FY 2006/07

FY 2006/07

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Finance

The corporate level Finance of NEA is responsible
for overall corporate financial activities. It is headed
by the Deputy Managing Director and is organized
into two Departments, namely, Corporate Finance
Department and Finance & Accounts Department,
each headed by a Director.

Corporate Finance Department

In FY 2006/07, NEA registered a growth of 11.10%
in total sales despite transitional situation in the country.
This growth in sales is less than the projected target
by 4.41%. Internal sales were increased by 12.59%
to reach 2179.89 GWh whereas exports (sales to
India) were decreased by 18.95% compared to FY
2005/06. Export to India stood at 78.25 GWh. Net
revenue from Internal sales amounted to NRs.
14,309.21 million for FY 2006/07 as against NRs.
12,789.55 million in the previous year, thereby,
registering an increase of 11.89%. Export sales
revenue was NRs. 489.04 million compared to NRs.
579.33 million in the previous fiscal year registering
a decrease of 15.58%. Total rebate given to the
customers amounted to NRs. 322.40 million, an
increase of 6.11% over that of the previous fiscal year.

In the year under review, NEA's income from other
services such as surcharge, interest, lease rent,
service charge, dividend etc. was NRs 878.70 million
which is higher by 37.32% as compared to the previous
year's figures. The contribution of income from other
services to the total income is 5.61%. Total income
after rebate stood at NRs. 15,677.00 million showing
an increase of 12.20% over the total income of FY
2005/06.

NEA's total operation and maintenance expenditure
amounted to NRs. 13,766.90 million, an increase of

11.22% over the previous year's expenditure of NRs
12,378.20 million. Power purchase increased by
10.72% to reach a total amount of NRs. 7,077.70
million. This is 44.22% of the total expenditure.

Interest expenditure, the second largest component
of the total expenditure was decreased by 14.79%
over previous year's figure to register a total amount
of NRs. 2,599.70 million. NEA's cost of debt has been
reduced due to the reduction of interest rate of
government loan from 10.25% to 8% from FY 2006/07.

Staff cost amounted to NRs. 1,810.30 million in FY
2006/07 which is an increase of 4.00% over previous
year's cost. This increase was due to the increment
in dearness allowance by 10% and regular increment
of grade by 2%. Staff cost amounted to about 11.31%
of the total cost. Likewise, Operation & Maintenance
expenses increased by 12.90% to reach a figure of
NRs. 1,694.04 million. Major civil repair and
maintenance of Trishuli Hydroelectric Project dam,
vehicles maintenance, cost increase due to natural
calamities like snowfall, storm and flood at various
places and rise in price of various construction
materials contributed to this increase in costs.

Depreciation, royalty, prior years' adjustments and
other expenditure which included deferred revenue
expenditure, loss of other assets and provisions
amounted to NRs. 1,880 million, NRs. 969.38 million,
NRs. 500 million and NRs. 455.40 million respectively.

NEA's total cost of sales has been decreased
compared to FY 2005/06 but direct operating cost
has increased mainly because of inflation and
expansion of service in rural areas. However, there
is no mechanism to recover/adjust those costs at
present. Hence NEA has applied for automatic tariff

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

adjustment which is yet to be approved by the Tariff
Fixation Commission. NEA considers tariff increase
as the measure of last resort. FY 2006/07 was the
sixth in the sequence of years for which NEA has to
operate its business without bonafide tariff adjustment,
which resulted a loss of NRs 0.54 for each KWh sold
to the customers. This figure is less by 43% in
comparison to FY 2005/06.

Despite more than 94.20% collection rate of internal
sales, NEA's cash situation was still not satisfactory
in the year. Public sector and street light dues still
remains a serious problem. The outstanding receivable
balances from municipalities and government offices
and public institutions stood at approximately NRs. 2
billion at the end of the fiscal year. Additional fund
requirement for various projects including Middle
Marsyangdi HEP further exacerbated the cash crunch.
In FY 2006/07, NEA spent over NRs.1 billion as
additional disbursement to Middle Marsyangdi HEP.
In order to overcome the problem of cash shortage,
NEA has already initiated the process for issuance of
Power Bonds, which is the first of its kind in Nepalese
capital market.

Institutional strengthening process has been introduced
through Institutional Strengthening Project, a
subcomponent of Power Development Project under
the financial assistance of the World Bank. The
consultant has submitted the final report which stressed
the need for enhancement of the present capabilities
in finance, accounts, and internal audit through training
and process mapping by NEA and introduction of new
computerised financial accounting system. NEA has
requested donor agencies for funding the institutional
strengthening of NEA.

Finance and Accounts Department

1420 5 revalued fixed asset at the end of the FY

2006/07 reached NRs. 62,121.30 million as compared
to NRs. 61,573.00 million at the end of previous fiscal
year. Total revenue in FY 2006/07 was NRs. 15,677.00
million in comparison to NRs. 13,971.80 million in FY
2005/06, which was an increase of 12.20% over the
figures of previous year.

Total operating expenses under generation,
transmission, distribution and administration in the
FY 2006/07 stood at NRs. 8,958.50, NRs. 276.10,
NRs. 1,938.20 and NRs. 564.10 million respectively.
As compared to previous fiscal year's figures, the
expenses under the above headings increased by
10.59%, 18.96%, 13.76% and 34.47 % respectively,
whereas the total expenses increased by 11.22%.
Although the operating surplus was registered from
NRs 1593.60 million to NRs 1,910.10 million in FY
2006/07, NEA suffered a net loss of NRs. 329.60
million which is 74.00% lower than that of previous
year's loss figure of NRs. 1,267.80 million. The main
reason for this improvement was the substantial
savings in power purchase cost due to the devaluation
of US Dollar exchange rate and profit in the account
of interest and loan repayable in Japanese Yen.
Furthermore, the government has reduced interest
rate from 10.25% to 8.0% on long term loan. These
developments have helped in improving financial
performance of NEA as compared to earlier years.
However, NEA continued to suffer loss for the seventh
year in a row due to various reasons.

In FY 2006/07, NEA invested NRs. 9,148.60 million
in capital works and projects of which NRs. 4,461.50.1
million comprised of government equity, NRs. 2,106.68
million came as government loan and NRs.2,580.42

million was borne from NEA's internal source.

NEA has invested NRs 883.49 million in subsidiary
and others till FY 2006/07 of which NRs 489.60 million

FY 2006/07

FY 2006/07

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

has been invested in equity of Chilime Hydro Power
Co. Ltd. (CHPCL), a subsidiary of NEA. In FY 2006/07,
NEA collected 35% (NRs 171.36 million) dividend
from CHPCL. It is expected that CHPCL's financial
performance will be even better in future, which will
influence the share price. NEA also benefited from
the growth of assets because of large increase in
CHPCL investment values in the market. Other
investments of NEA include equity investment in Nepal
Engineering Consultancy (NRs 2.28 million), Knumbu
Bijuli Co (NRs 20.65 million), Salleri Chaylsa Hydro
Electric Co (NRs 11.63million) and Butwal Power Co
(NRs 8.86 million) NEA has not realized any gain
from the above companies except Butwal power Co.
In FY 2006/07, NEA received NRs 2.57 million as
dividend (30%) from BPC. NRs 350.47 million have
been invested till the end of FY 2006/07 in Citizen
Investment Trust (CIT) for equalization of gratuity and
pension liability.

NEA's total borrowing stood at NRs. 51,672.70 million
as of end of FY 2006/07..In FY 2006/07, NEA paid
NRs. 733.20 million for interest, NRs. 940.40 million
for royalty and NRs. 600.80 million for repayment of
loan to government. Likewise, NRs.1,697.50 million
was provided for Middle Marsyangdi HEP funding.

The financial audit for FY 2005/06 was completed
and approved. In the past fiscal year the financial
statements together with auditor's report were filed
with the concerned authorities. Similarly, tax Audit for
the above period was finalized and tax return (loss
return) was also submitted to Inland Revenue
Department by claiming previous year's forwarded
losses as per the provision of Income Tax Act 2058.

In order to achieve better financial discipline,
accountability and control in executing the Business
Group's financial transaction and activities, interaction

programs have been conducted in regional and central
level focusing on accounting, financial and major audit
issues. As a result of this program, positive symptoms
have been noticed in the area of inter unit reconciliation,
identification and verification of assets and compliance
with financial delegations and disciplines.

NEA has initiated conversion of its manual accounting
system by replacing computerized system in a phased
manner. Oracle based Customized Accounting and
Inventory System (CAIS) was introduced and to date
100 budget centers are using financial accounting
module. Out of 111 budget centers, inventory module
is used only in 75 budget centers. NEA is planning
to go into full automation covering Small Hydro and
projects .This will facilitate to consolidate the accounts
and 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.

During the FY 2006/07, pending audit qualification
out of the total outstanding NRs 767.97 million of the
period FY 1973/74 to FY 1993/94, NRs 622.00 million
has been settled down and rest is in process. This
achievement is remarkable.

NEA is required to achieve a number of covenants in
respect of borrowing from the donor agencies. Major
covenants related to finance are Rate of Return (ROR)
(6%), Self Financing Ratio (SFR) (23%), Debt Service
Coverage Ratio (DSCR) (1.2 times) and Average
Collection Period (ACP) (3 months). In FY 2006/07,
NEA achieved 4.41%,25.26 %, 1.07 times and 3.96
months in respect of ROR, SFR, DSCR, and ACP
respectively.

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Nepal Electricity Authority
Highlights of FY 2006/07

DESCRIPTION 2006/07* 2005/06

Percent।
क म मम
Total Revenue (million.NRs.) 15,677.00
Generation Exps. (incl. Power Purchase) (million.NRs.) 10.59

Transmission Expenses (million.NRs.) 276.10 232.10 44.00 18.96

Distribution Expenses (million.NRs.) 1,938.20 1,703.70 234.50 13.76

Administration Expenses (million.NRs.) 564.10 419.50 144.60 34.47,050.90)

Deferred Revenue Expenditure (million.NRs.)
Total Operating Expenses (million.NRs.)
Operating Surplus (million.NRs.)। 4,910.10] 41,593.60] 316.50। 19.86
Interest on Long-Term Loans (million.NRs.) (14.79

Other Exp/Income including prior year's adj. (million.NRs.) 360.00 189.50 170.50

Net Income/(Loss) (million.NRs.) (329.60) (1,267.80) 938.20 (74.00)

Depreciation Expenses (million.NRs.)++ 1,880.00 1,816.90 63.10 3.47

Longterm Loans (million.NRs.) 51,672.70 50,636.80 1,035.90 2.05
Net Revalued Fixed assets (million.NRs.) 62,121.30 61,573.00 548.30 0.89

Internal Sale (GWh) 12.59
Annual Average Consumer's Consumption (kWh)+ 3.32
Average price (NRs./kWh)+ (0.09)
Peak Load Interconnected System (MW)
Total Available Electric Energy (GWh) 9.74
Hydro Generation (GWh) 11.40
Purchased Energy (GWh)-India 23.51
-Nepal(Internal -GWh) 930.04 3.46

८०
Ke)
पप)
ज्यु
च्या

Number of Consumers 1,392,055.00। 1,277,447.00 114,608.00 8.97
Total Sales of Electricity (GWh) 2,258.14 2,032.62 225.52 11.10

Average Power Purchase Rate(NRs./KWh)+++ 2.62

Exported Energy (GWh) (18.95)
Thermal Generation (GWh) (17.33)
soe का]

Note:

* Provisional figures; Subject to final audit.
+ on total sales

++ On Historical Assets.

+++ Internal & Import

FY 2006/07

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

FY 2006/07

Nepal Electricity Authority
Balance Sheet as at July 16, 2007

(Fig. in million)
Particular *2007। 2006। 2005,। 2004। 2003। 2002,। 2001। 2000,। 1999 1998

27574.6। 23113.1) 20161.8) 18215.9] 16976.9। 16601.3] 15360.3) 14634.0) 13365.8

3954.7) 4284.3) 4826.1) 4550.6) 5584.3) 8153.8) 10492.7) 11689.6] 12040.3 .

83202.0। 78034.2)। 73674.3) 68018.5। 66347.2। 66229.6

62121.3) 61573.0] 61286.8) 58963.4) 56949.0) 58538.2] 37104.0} 35196.0) 31223.0) 29891.3
28651.8} 21991.5) 16060.4] 10619.6} 8655.5) 4837.8] 23640.0) 18947.0) 16542.7 .

883.4 819.9 777.0 713.0 613.0 553.0 517.1 521.1 326.1 247.7

84384.4। 78124.2) 70296.0। 66217.4। 63929.0। 612611 54664.1। 48091.8) 44318.0

1130.3} 1354.8) 1372.7) 1048.0) 1017.2) 1058.1 960.9 982.3 740.0 914.9

4765.7} 4088.0} 3697.7) 3735.7) 3380.2) 2284.9) 1678.5) 1525.5} 1530.9 -

1006.7] 1258.6] 1322.6] 1036.4) 1076.2 664.6} 1039.3) 1321.3) 1148.1 .

2489.1} 2293.9) 2098.6) 2063.3) 2216.9) 3314.4) 2634.9) 1932.0} 1634.2 .

9391.8) 8995.3} 8491.6) 7883.4) 7690.5) 7322.0 5761.1

17211.9। 14995.5। 12619.8} 9707.7) 7444.8) 4703.9] 5070.80} 4488.5) 4349.7 .
1015.2 709.8 697.7 681.5 753.3) 1244.2) 1042.90 988.9 436.8 .

18227.1। 15705.3) 13317.5) 10389.2} 8198.1) 5948.1) 6113.7} 5477.4) 4786.5 .

-8835.3। -6710.0। -4825.9 -507.6। 1373.9 283.7। 266.7

* Provisional

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Grand Total

Fixed Assets (Net)

Sub Total

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Total Currents Asset

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Total Currrent Liabilities and

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Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

FY 2006/07

Nepal Electricity Authority

Income Statement for the FY July 16, 2007

(Fig. in million)। Particulars। lars **2007। 2006।। 2005।। 2004।। 2003।। 2002।। 2001। 1। 2000।। 1999। 999 1998

हालमा
कममा जल arma] कमा कालाउ
[sens

Depreciation 1880.0 1816.9) 1,733.5} 1,686.0] 1,656.7} 1,420.1] 1,119.30 948.80 976.40 696.70
Exchange
Loss on fixed assets 191.5
Deferred revenue 150.01 105.44 123.3} 320.1) 411.11 512.5 426.90। 440.80] 236.80] 270.10
expenditure writen off

4219.7। 5,080.9} 4,746.6] 5,056.7) 5,232.7) 3,636.7] 2,734.40] 2,633.90 2,284.00

Profit/ loss from operation। 279,6। -1,565.0। -1,092.9। -1,141.2। -900.3। -1,209.4। -293.50। 973.20। 247.00। 294.20
including interest+Dep.
Prior years adjustment (net -297.2 219.9 344.9 444.4 492.0 291.60) -216.70 -79.40 -91.70

Net profit/ loss before tax -329.6। -1,267.8। -1,312.8। -1,486.1। 455» -717.4। 90] 756.50 167.6। 202.50
अब पा 23 पल मल 20200) 280

Net profit/ loss after tax -329.6। -1,267.8। -1,312.8) -1,760.3) -1,953.7 -860.7। 96.0 173.70

Balance of profit asperlast। _gy95 8) 4,808.0] -3,475.2। -1,694.9। 278.9] 1,159.6] 1,230.60। 1,065.30] 1,181.50 1,027.80
Total profit Available for 6425.4] -6,075.8। -4,788.0। -3,455.2। -1,674.9। 298.9] 1,179.60। 1,250.60] 1,085.50] 1,201.80
appropriation

Insurance fund 20.00 20.00 20.20 20.00

Profit /loss transferred to 6445.4। -6,095.8। -4,808.0। -3,475.2। -1,694.9। 278.9 1,230.60। 1,065.30
balance sheet

* Provisional

FY 2006/07

Nepal Electricity Authority, Fiscal Year 2006/07 - 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- 2063

Revenue from Sale of Electricity

(a)। Revenue from sale of electricity is recognized
at the time of rising of bills on the customers,
as per the billing cycle. Revenue from the
billing cycle date up to 16 July has been
accrued taking average rates. Revenue from
sale of electricity is shown net of rebate.

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

Income from Other Services

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

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

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

(d) Revenue from services provided by
Engineering Services is accounted for on

cash basis on the completion of the relevant
job.

Fixed Asset

(a) Fixed assets (other than those identified in
paragraph (ii) below, which continue 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 FY1991/92 by applying
the multiplying factor as applied to other
revalued assets.

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

(i) Solar Power Plant

(ii) Meter and Metering Equipment
(iii) © Consumer Service

(iv)। Public Lighting

(४) Tools and Instruments

(vi)। Vehicle and Mobile Plant

(vii) Furniture and Fixtures

(viii) Office Equipment

(ix)। Miscellaneous Properties

(c)। Thecost of acquisition, 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

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

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%
(9) Distribution and Consumer 10%
(c) Development 50%
(0) Finance and Administration 10%

(0) — 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,
NRs. 470.0 million of gain on foreign
exchange is credited to Income Statement.

Revaluation of Fixed Assets

(9)। Amajor portion of fixed assets was revalued
during the FY 1988/89 and FY1989/90, 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 FY 2005/06 for foreign
and local component in the ratio 80:20.
Independent valuers are not used for annual
revaluation of fixed assets.

(b) The multiplying factor computed for the FY
2005/06 and applied to the assets for annual
revaluation was 3.17%.As the multiplying
factor is under process of determination for
FY 2006/07, fixed assets are presented at

previous revalued costs plus addition made
in FY2006/07.

(c) Revaluation factor is not applied in the case
of fixed assets whose value has already been
reduced to NRs. 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 FY1996/97.
With effect from FY1997/98 such contributions are
netted off from the respective fixed assets. An
amount aggregating to NRs. 196.05 million on
account of consumer contribution pertaining to
earlier years has not been adjusted but disclosed
in the financial statements as Capital Reserve.

Depreciation

(a) Depreciation is provided on straight-line
method on all fixed assets, at the following
rates:

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

(८)। Onassets sold/scrapped etc. during the year,
depreciation is not provided up to the date
of sale/discard/disposal.

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

FY 2006/07

FY 2006/07

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Revalued Cost Historical Cost
asis asis

a

Internal Combustion on plant & machinery
[8]
छ
हि
=
__
-
हा
-ा

Assets

Vehicles, tools and instruments, furniture and fixtures.। -।
Office Equipment। -।
Miscellaneous properties। -।

20.00%
15.00%
50.00%

17। Additions during the year At applicable। At applicable rates
rates for full yea for half year

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 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. The additional provision
of gratuity and pension is made at 15% of the total
salary less actual amount paid during the year .If
any short fall appears then additional provision will
be made.

Liability on account of accumulated home and sick
leave has been provided for on an estimated basis
to cover the liability as at July 16, 2007.

Insurance Fund

Insurance fund is created by setting aside a sum
of NRs. 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. NRs. 320 million
(previous year NRs.300 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.

Prior year's figures/ Regrouping

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

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Tariff Rates

(Billing Effective since Septermber 17,

4:। :
mz
CI
TI
CI
CI
CI।।।।।। 8]।]।।]।।।।। ee
2:।
Energy Charge
अः ]
]
[5]
क]

Energy Charge

2001)

Minimum Charge (NRs.)। Exempt (kWh)।
Rs. 4.00 per unit।।
Rs. 7.30 per unit।।
Rs. 9.90 per unit।।
Rs. 5.10 per unit।।
Rs. 5.10 per unit।।
Rs. 1860.00 per kVA।।
Rs. 13.50 per unit।।

fe [communrry wHOLESALE CONSUMER —SSC~dSSSSSCSCSC"~"'"dSSC"'CSSC
__
न JNousTRIAL __
]
जता ला माला
अठाला लाल तका
कता लाल कामा 7
जाल ताका
[Fe [esium तामाा
भि
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किताप
जाल ताका
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का
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[या

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[_

FY 2006/07

FY 2006/07

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

9:।IRRIGATION

कामा
हल ता माड
कामा
A _
_
८ ा
_
[8 [Medium माड

TIME OF DAY (TOD) TARIFF RATES

Consumer Category & Monthly Demand

a
i
fz [Righ Votage @Wand Abo) [sd म मम
=
खाडलमा मम
=
—
=
=
=
Te गा

काडा कामा
कामा काम
=
=
Te
_

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

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

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

FY 2006/07

Statistics, Schematics and Maps

AVAILABILITY FY 2006/07 UTILIZATION FY 2006/07
24.94% 1.06%

57.26%

31.53%। 1.43%

9 0.44%
10.77% 0 हल Internal Sale @ Export

O Self Consumption O System Loss
@ Hydro @ Thermal O Purchase India O Purchase Nepal

SALES FY 2006/07 REVENUE FY 2006/07
3.46% 8.48%

23% 5.40%
40.36% 3.23%00""

35.97%

6.37% 4.48% 8.66% 6.22%

O Domestic छि Non-Commercial 0 Commercial

QO Industrial @ Export QO Others

0 Domestic छि Non-Commercial O Commercial

O Industrial @ Export O Others

EXPENDITURE FY 2006/07 NO. OF CONSUMERS

0.47% . 1.72%

a 11%
0.75%

O Staff Cost i Power Purchase
[1 Operation & Maintenance 0 Interest
हि Depreciation [1 Royalty
Mi Prior Years Expenses [] Insurance Fund
& Others OQ Industrial छि Others

O Domestic छि Non-Commercial O Commercial

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

FY 2006/07

Total Energy Available
& Peak Demand

3500
3000
2500

2000

चट
oS
Oo
MW

5 1500
© 1000

500 100

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007*
FISCAL YEAR

BE Available Energy C-—11.Hydro C12. Thermal ME Nepal C1 India —®— Peak Demand (MW)*

Particulars

326.4। 3519] 391 648.39
1475। 1701.45। 1868.42 3051.82
1046.51। 1233.22। 1113.36 1747.42
118.82। 66.73। 27.14 13.31
309.67} 401.5। 727.93 1291.09
232.30] 232.2। 226.54 328.83
77.28] 169.3। 501.38 962.26

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

17

MW

Load Dispatch Center

System Load Curve of Peak Day of the Year

Poush 6, 2063 (December 2 1, 2006) T hursday Peak load 648.39 MW at 18.20 hr
660.00 i
४०0 [ला OTAL DIESEL HJ f$ ~ Load } DIESEL
600.00 (M/F, H/D)
580.00 z
560.00 -९
540.00 क
520.00
500.00 छु
480.00 0
460.00 छ
440.00 3
420.00 ag
380.00 — TOTAL STORGE >
360.00 [न (KL-1, KL-Il) छः
34000। उ हौ 5
32000 ] ही 21
300.00 J त प्र
[डि "
280.00 7 TOTAL IMPORT 7
740.00 बि. (With TANAKPUR) w
220.00 TOTAL IPP 5
200.00 (KHIMTI, BHOTEKOSHI, CHILIME, INDRAWOTI, BPC, <
180.00 PILUWA, OTHER) 0
160.00 ©
140.00 8
120.00 5
100.00 ---------- 5
80.00 TOTAL ROR 5
60.00 (KG-A, MRS, TRI, DEV, SUN, MODI, GDK, PUWA, SMALL) N
40.00 ॥
20.00 >
0.00 x
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2
=
Time त्र
0
<.
©
=

20/9002 AS

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Growth Of Consumers
1400000 WT
४।

1200000
— 1000000
४?
5 800000।।
"
5
© 600000।।
शुभक
6
© 400000
=

200000

0 om on निहित A A छ।। we

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007*

FISCAL YEAR

Ol Domestic O Grand Total O Others

[Paricuiars [Taos। तमा] प्रक] गला] 2002 [2005। 2008 [2005। रका]

Street Light। हू 82] 932] गर्या 048] 122 बरु 150] 1550] 1622
- [या

Note : * Provisional figures; subject to final audit.

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

FY 2006/07

Electricity Sales

2500
2000।
हँ nigel हि
oO 1500
: aattt ॥ ॥॥ 1?
>, 1000 y छ
5?। a) oo)! लि A VA we
eri ft
i tO A Ml

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007*

FISCAL YEAR

[] Domestic Industrial [Grand Total gg Others

(in GWh)

617.11 805.72
80.736 95.29
92.741 120.3
629.505 785.55
29.983 49
1504.567 1936.07

557.94

378.778 518.36
60.227 73.157
413.738 520.634] 596.677
29.045 28.6 29.283
26.585 36.981 39.517
1.663 5.892
1.801 2.511
po।
984.019 1281.127। 1400.456

Note : * Provisional figures; subject to final audit.

Non-Commercial 78.22

Commercial 90.426

Industrial

69.48

43
0.282 .28
56
tT
57

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5

2.476

45.5
0.87
5.65
Temple 4.77
9.18

८

Total (Internal Sales)
Bulk Supply (India)

Grand Total

oi oi
NI 5)
= a)
N ठा

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

FY 2006/07

Revenue

16000.00
14000.00
12000.00
10000.00

8000.00

6000.00 44

(Million NRs)

7
4

ig A
4000.00 p 7। a 7
छ _
का. 1, 1 1 ॥॥।
0.00 ff ॥-। P हि L छ] ४] छ। ४] छ। y
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007*

FISCAL YEAR

O Domestic 11 Industrial 11 Total Revenue O Others

(in million NRs)

1998। 1999। 999। 2000। 2001। 2002।। 2003।। 2004।। 2005।

Domestic 1895.85। 2056.05] 2622.03) 3161.38] 3641.43) 4249.81) 4578.99) 5079.87) 5405.12

see हि

Note : * Provisional figures; subject to final audit.

Nepal Electricity Authority, Fiscal Year 2006/07 - A Year in Review

Load Forecast

14000.0 3000
12000.0 2500
10000.0
2000 _
ङ् 8000.0
० 1500 पे
>
9 6000.0 3
न 1000 र
Ww 4000.0 h
2000.0 500
0.0 0
% QD WO NY 0 bk © © A % Oo op १? oy o> त) k १?
9 9g N 1७ 1 MUN 1, N \ १५, १५
फु कु EPP PHL क FFF SF PKK HY HY H
MMMM Energy (GWh) —d~ Peak Load (MW) FISCAL YEAR

Peak Load (MW)
:
2779.4

MAJOR HYDRO POWER
Existing:

=

1. Trisuli

. Sunkosi

. Gandak

. Kulekhani No. 1
. Devighat
Kulekhani No. 2
. Marsyangdi

. Puwa Khola

. Modi Khola

. Kali Gandaki "A"

८ ७ 6 -५७? छा क ६७ 19

Total

Under Construction:

1. Middle Marsyangdi
2. Chamelia
3. Kulekhani III

Planned and Proposed:

1
1
1
1
1
1
1
1
1
1

1. Seti (West)

2. Arun 3

3. Budhi Gandaki

4 Kali Gandaki No. 2

. Lower Arun

. Upper Arun

. Karnali (Chisapani)

. Upper Karnali

. Pancheswor

0. Thulo Dhunga

1. Tamur/Mewa
2.Upper Trisuli

3. Dudh Kosi (Storage)
4. Budhi Ganga

5. Rahughat Khola

6. Likhu-4

7. Kabeli "A"

8. Upper Marsyangdi "A"
9. Kulekhani No. 3

OND

©o

20. Andhi Khola (Storage)
21. Khimti Il

22. Upper Modi

23. Langtang Khola (Storage)
24. Madi Ishaneswor (Storage)
25. Upper Seti (Storage)

26. Kankai (Storage)

27. Upper Tama Kosi

28. Upper Modi 'A'

29. Hewa Khola

30. Upper Trisuli 3 B

Total:

24,000
10,050
15,000
60,000
14,100
32,000
69,000
6,200
14,800
144,000
389,150

70,000
30,000
14,000

750,000
402,000
600,000
660,000
308,000
335,000
10,80,000
300,000
6,480,000
25,000
101,000
61,000
300,000
20,000
27,000
40,000
30,000
121,000
14,000
180,000
27,000
14,000
218,000
86,000
122,000
60,000
309,000
42,000
10,000
44,000
12,76,6000

kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw

kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw

Power Development Of Nepal

THERMAL POWER STATIONS
Existing:

1. Biratnagar***

2. Hetauda

3. Marsyangdi

4. Duhabi Multifuel-1

5. Duhabi Multifuel-2

Total

SMALL HYDRO POWER
Existing (Grid Connected)
1. Pharping
2. Panauti
3. Sundarijal
4. Phewa (Pokhara)
5. Seti (Pokhara)
6. Tinau (Butwal)
7. Baglung
8. Tatopani/Myagdi (नी)
9. Jomsom**
10. Chatara
Total

Existing (Isolated):
1. Dhankuta
2. JHhupra (Surkhet)
3. Doti
4. Phidim**
5. Gorkhe (वा)
6. Jumla**
7. Dhading
8. Syangja***
9. Helambu
10. Salleri* (Sceco)
11. Darchula (i) & (ii) **
12. Chame
13. Taplejung**
14. Manang
15. Chaurjhari** (Rukum)
16. Syarpudaha** (Rukum)
17. Khandbari**
18. Terhathum**
19. Bhojpur**
20. Ramechhap
21. Bajura
22. Bajhang**
23. Arughat Gorkha
24. Okhaldhunga**

1,028
12,750
2,250
26,000
13,000
55,028

500
2400
640
1,088
1,500
1,024
200
2,000
240
3,200
12,792

240
345
200
240

64
200

32

80

50
400
300

45
125

80
150
200
250
100
250
150
200
200
150
125

kw
kW
kW
kw
kw
kw

kW
kw
kw
kW
kw
kw
kw
kw
kw
kw
kw

kW
kw
kw
kw
kW
kw
kw
kW
kw
kW
kw
kw
kW
kW
kW
kW
kw
kW
kW
kW
kW
kw
kW
kw

25. Rupalgad (Dadeldhura)
26. Surnaiyagad (Baitadi)
27. Namche

28. Achham

29. Dolpa

30. Kalikot

Under Construction:
1. Gamgad
2. Heldung

PRIVATE SECTOR PLANTS
Existing:

1. Andhi Khola (BPC)

2. Jhimruk (BPC)

3. Khimtikhola (HPL)

4. Bhotekosi (BKPC)

5. Sange Khola (SHP)
6. Indrawati (NHPC)

7. Chilime (CPC)

8. Piluwa Khola (AVHP)
9. Chakukhola (APCo)
10. Sunkosi Small (SHP)
11. Rairang (RHPD)
12.Khudi Khola (KHP)
13.Baramchi (UHC)

100

200

600

400

200

500

Total 6,176
400
500
Total 900

5,100
12,000
60,000
36,000

183

7,500
20,000

3,000

1,500

2,500

500
3450
980

Total 152,713

ONLY POWER PURCFHAGE AGREEMENT(PPA)CONCLUDED

. Mailung Khola (MKHP)

. Daram Khola (GHP)

. Tadi Khola (ASHP)

. Upper Mai Khola (ENDE)

. Lower Indrawati (SHP)

. Lower Nyadi (BHP)

. Madi-1 (AGP)

. Upper Modi Khola (GITEC)

. Seti-2 (THP)

10. Lower Chaku (LBPN)

11. Phawa Khola (SHC)

12. Mai Khola(HDHC)

13. Belkhu Khola (MFIC)

14. Upper Handi Khola (CPDS)
15. Siuri Khola (NGPL)

16. Narayani Sankar Biomass (TMB)

OOnN 6) छा क wONM =

5,000
5,000
970
3,100
4,500
4,500
10,000
14,000
979
1,765
2,079
2,400
320
991
990
500

Total 57,094

kw
kw
kw
kw
kw
kw
kw

kw
kw
kw

kW
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw
kw

kw
kW
kw
kW
kw
kw
kw
kW
kw
kW
kw
kw
kW
kW
kw
kw
kw

Under Construction:

1. Sisne Khola (GBHP) 750
2. Pheme Khola (KHP) 995
3. Sali Nadi (KSHPS) 232
4. Thoppal Khola (THP) 1,650
5. Mardi Khola (GHP) 3,100

6. Pati Khola (UHP) 996
7. Ridi Knola (RHPD) 2,400
Total 10,123
SOLAR POWER
1. Simikot 50
2. Gamgadhi 50
Total 100
OUTRANSMISSION LINE LENGTH
1. 132 kV Transmission Line 2076 ckt km
2. 66 kV Transmission Line 586 ckt km
3. 66 kV Underground Cable 7.0 ckt km
4. 33 kV Single Circuit 2485.0 km
O10 SUBSTATION CAPACITY
132/11 kV 71 MVA
132/33 kV 358 MVA
132/66 kV 211 MVA
6611 kV 424 MVA
66/33 kV 25 MVA
Total 1089 MVA
NOTE

* Private & Others
** Leased to the Private Sector
*** Not in normal Operation

0 _sIPPs lines not included

OO These capacities are within the Grid Substations
only. Transformers within Distribution Substation,

kW
kW
kW
kW
kw
kW
kw

kW
kW
kw

Powerhouses and Local Distributions are not included.

Installed Capacity in
Nepal Electricity Authority
(including Private and

Others): 617.478 MW

20/9002 AS

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