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A YEAR IN REVIEWIFISCAL YEAR 2020/2021flood that led to number of power plantshaving to shut down, long duration of powerplant shutdown for maintenance and MiddleMarshyangdi power plant shutdown for 16days due to delay in installation of EmergencyRestoration System tower.The total power purchased from IndependentPower Producers (IPPs) within Nepal was 3,241GWh, an increase by 8.36 % from the figureof 2,991 GWh in the FY 2019/20. The totalenergy imported from India was 2,826.21 GWhin FY 2020/21 as compared to 1,729 GWhin FY 2019/20, an increase by 63.45 %. Thetotal energy in the system increased by 14.68% to 8,877.95 GWh over the correspondingfigure of 7,741 GWh in FY 2019/20. Out of thetotal available energy, NEA’s own generationcontributed 31.66%, whereas those importedfrom India and domestic IPPs accounted for31.83 % and 36.51 % respectively.Total energy consumption in FY 2020/21was 7,319 GWh, a slight increase over thecorresponding figure of 6,529 GWh in the FY2019/20. The Covid-19 pandemic played a majorrole in limiting the anticipated consumptiongrowth.Metering, Billing, Revenue collection and Lossreduction activities are still being seriouslyaffected due to Covid 19 pandemic. This hasbeen the case since the implementation of thefirst lockdown in March 2020.FINANCIAL PERFORMANCEThe net profit of NEA before tax in the FY 2020/21is NRs 6,007.56 million, a sudden decrease fromthe figures of FY 2019/20 of 13,270.23 million.The primary reasons behind such decreaseare the increase in system loss, restriction inthe mobility in the loss prone areas, reducedNEA generation, increased import, increase inoperating expenses etc.The gross revenue generated from energysales in the FY 2020/21 reached NRs 71,282.4910INepal Electricity Authoritymillion, with a decrease of 6.59 % over thefigure of NRs 76,312.31 million in the FY2019/20. NEA's operating expenses stood atNRs 68,453.4 million, an increase by 10.96%from NRs 61,872.98 million of the previousyear. Amount spent for power purchase alonewas NRs 41,460.79 million in FY 2020/21. Thisis an increase by NRs 6,340.52 million from NRs35,120.27 million of FY 2019/20.In FY 2020/21, total revised net revenue of NEAincluding other incomes stood at NRs 80,355.73million as against the operational expenses ofNRs 68,653.4 million resulting in an operationalsurplus of NRs 11,712.33 million, a decreaseby 102.78 % over the figure of NRs 23,743.07million in the FY 2019/20.Energy purchase amounted to 68.34% of thetotal available energy and NEA paid 58.83%of the net electricity sales revenue of NRs70,473.05 million for this purpose. The totalcost of purchased power increased by 18.05%in the FY 2020/21 as compared to the figure ofFY 2019/20.Interest cost on long term borrowing increasedby NRs. 508.36 million during FY 2020/21. Theinterest expenses in FY 2020/21 have beencalculated as NRs 5,000 million as against NRs4,491.64 million in the previous year. Similarly,depreciation expenses amounted to NRs 5,750million, an increase of 7.7% from NRs 5,338.52million. Foreign Exchange gain totaled NRs177.83 million against loss of NRs 228.06 millionin the previous year. Accumulated investmentin Capital Works in Progress (CWIP) reached toNRs. 140,940 million with net addition of NRs.26,641 million for the year 2020/21.NEA estimated a provision of NRs 4,000 milliontowards the long-term employee liabilities inrespect of gratuity, pension, medical facilitiesand accumulated leave facilities underemployees' benefit plan scheme.

MANAGING DIRECTOR'S REPORTONGOING PROJECTSThe devastating earthquake of 2015, itsaftershocks and the subsequent Terai Bandhdelayed the completion date of all underconstruction projects.There are several hydropower projects atvarious stages of development under theEngineering Services Directorate. They areChainpur Seti HEP, Aandhi Khola Storage HEP,Kulekhani Sisneri Pump Storage HEP and BegnasRupa Pump Storage HEP.There are several transmission lines that havebeen completed in the year under review. Thetotal length of transmission line of 132 kV andabove constructed in FY 2020/21 is 604.74circuit kilometer (ckt.km). Similarly, a total of2134.2 MVA substation capacity, includingup gradation of existing substations has beenadded to the system. This has been a dramaticincrement in the substation compared toprevious years. The total lengths of underconstruction transmission lines at 132 kV, 220kV and 400 kV levels are 1,031 ckt. km, 1,165 ckt.km and 756 ckt. km respectively, with the totalof 2,952 ckt. km. Similarly, the total capacity ofsubstations under construction is 9,200 MVA.These figures include for projects under boththe Transmission Directorate as well as ProjectManagement Directorate. A total of 1,340 ckt.km, 315 ckt.km and 3,010 ckt. Km of 132 kV, 220kV and 400 kV transmission lines respectivelyare planned and proposed. Similarly, 7,870MVA of additional substation capacity is alsoplanned to be built.NEA managed to substantially electrify 16additional districts in the year gone by. This isin addition to the 16 already electrified in theprevious years. Electrical access has reachedtwo more districts, namely Kalikot and Jumla.This number could have been more if not forthe continued effects of the pandemic. NEAcommissioned 10 new distribution substationsFISCAL YEAR 2020/2021of 33/11 kV corresponding to the capacityof 226.5 MVA in the FY 2020/21 to bring thetotal number to 161 corresponding to the totalcapacity of 1,928 MVA. Likewise, the total linelengths corresponding to 33 kV, 11 kV and0.4/0.23 kV voltage levels completed as of FY2020/21 were 6,019 ckt. km, 41,550 ckt. kmand 129,081 ckt. km respectively, whereas theline lengths commissioned in FY 2020/21 alonewere 709 ckt. km, 2,827 ckt. km and 8,716 ckt.km respectively. A total of 37,163 distributiontransformers with the capacity of 3,623 MVAhave been installed in the system up to the fiscalyear under review.212.2 MVA capacity of 33/11 kV substation,2066 km of 33/11 kV overhead line, 840 kmof 11 kV underground distribution line, 1,894km of 400 Volt overhead line and 1,117 km of400-volt underground line is being constructedin different parts of the country under ProjectManagement Directorate (PMD). One 33/11 kVsubstations with capacity of 8 MVA was addedin FY 2020/21 under PMD. Similarly total lengthscorresponding to 33 kV, 11 kV and 400 V voltagelevels completed under PMD in FY 2020/2021are 105 km, 172 km and 430 km respectively.Following Government of Nepal’s electricityroadmap, NEA’s commitment to light up everyhousehold of Nepal by the year 2023 throughadequate network expansion plans all overthe country, still remained at top priority.Enhancement of system reliability throughnetwork strengthening will continue unabated.Similarly, for safety, reliability as well as fromthe aesthetic point of view, undergroundcable laying works to upgrade the distributionsystem is already underway in different partsof Kathmandu, namely; under Ratnapark,Maharajgunj, Kuleshwor, Kirtipur and Baneshwordistribution centers. Similarly, contract has beensigned in FY 2020/21 and survey works hasbeen started for underground cable laying inLalitpur and Bhaktapur. Furthermore, contractwill be signed in first quarter of FY 2021/22 forNepal Electricity AuthorityI11

A YEAR IN REVIEWIFISCAL YEAR 2020/2021underground cable laying works in Pokhara andBharatpur.NEA has also started adopting modern digitaltechnology into its system to enhance itsoperational efficiency, reduce energy theft andenable itself to serve its consumers in a betterway. The implementation of Smart Grid andSmart Metering system will increase efficiencyand reduce losses. Smart Meter installationin areas under Ratnapark and MaharajgunjDistribution Centers has already begun andwill be accomplished in the first quarter of FY2021/22. Contracts will be signed within FY2020/21 for the supply and installation of smartmeters for the remaining consumers within thevalley.NEA has already initiated the use of Smartmeters, Enterprise Resource Planning (ERP)and Substation Automation System. Properimplementation of these system is only possiblewith a Distribution Command and ControlCenter and Data Centre. This DistributionCommand and Control Center and Data Centerconstructed in the Load Dispatch Centerpremises, Suichatar and the Contract for theconstruction has already been signed in FY2020/21.Automation of Grid substations will ensurecontrolled and systematic operation of theGrid system. This will ultimately lead to reliablepower supply and remarkable savings in theoperation of the Grid substations. At presentSubstation Automation System (SAS) are beinginstalled in 13 Grid Substation within the valleyand these will be completed by FY 2021/22.Similarly Bid Document preparation for theautomation of an additional 40 grid substationsin different parts of the country is underway.The demand side management with energyefficiency program implemented in the past toreduce peak and energy demands of the systemas a whole will be continued in the coming years.Capacitor Bank installation project for different12INepal Electricity Authoritysubstations and distribution transformers,which has helped improve voltage profile andreduce technical loss will be implemented in allGrid and Distribution Substations as required.Consumer awareness campaign for usingefficient electrical appliances will be conductedeffectively all over Nepal.With the view to keep in track the future need ofinfrastructures, PMD has been involved in detailengineering and environmental study of morethan 1900 ckt km of 400 kV transmission lineand associated substations, 290 ckt km of 132kV transmission line and associated substations.Moreover, in order to ensure adequatetransmission capacity to deliver required powerin major cities of Nepal for the next 30 years,Consultant has been recruited.SUBSIDIARY COMPANIESThe successful implementation of ChilimeHydropower Project as a subsidiary companyof NEA encouraged the development of moreprojects under the company mode to ensureearly decision making, public participation andmobilizing domestic fund. The major projectsoperating under the Company mode and theprogresses achieved so far are as follows;1.Chilime Hydropower Company Limited(CHCL): CHCL was formed as a subsidiaryof NEA and owns the Chilime HEP (22.1MW). It has formed three subsidiarycompanies,namely;RashuwagadhiHydropower Company Limited (RGHCL)to develop Rashuwagadhi HEP (111 MW),Madhya Bhotekoshi Jalvidyut CompanyLimited (MBJCL) to develop MiddleBhotekoshi HEP (102 MW) and SanjenJalvidyut Company Limited (SJCL) todevelop Sanjen HEP (42.5 MW) and UpperSanjen HEP (14.8 MW). All four projectsare in different stages of construction.Rasuwagadhi’s civil construction wasshaping up pretty well even though its

MANAGING DIRECTOR'S REPORTelectromechanical contractor has notbeen fully mobilized after their unilateraldemobilization in March 2020. Themore than 1 in 100-year flood of 15thJune, 2021 flooded the undergroundpowerhouse through the tailrace tunnelas well as washed out most of the accessroad within the project area. This and thecontinued pandemic restrictions are likelyto cause more delay in its completion.Upper Sanjen has also been delayed asits equipments were stuck due to theKerung border closure because of thepandemic. These projects are part of theGoN’s programme, “Nepal ko Pani Janatako Lagani: Harek Nepali Bidyut ko ShareDhani”. Madhya Bhotekoshi after thedevastating flooding of 8th July, 2020, isslowly picking pace.Similarly, CHCL has established ChilimeEngineering and Services Company Ltd(ChesCo) to provide consultancy services forthe development of Hydropower projects.There are three different hydropowerprojects in different phases of study for futuredevelopment.2.Upper Tamakoshi Hydropower Limited(UTKHPL): Upper Tamakoshi HEP (456MW), a national pride project, has beenconstructed in the company mode underUTKHPL utilizing domestic financialresources. After facing many hindrances,especially after the devastating earthquakeof 2015, the first unit synchronization wasrecently inaugurated.UTKHPL is also moving ahead for thefinancial closure for the construction ofRolwaling Khola HEP (22 MW) under EPCmode.3.Tanahu Hydropower Limited (THL):Tanahu Hydropower Project (140MW) is being developed under THL, asubsidiary company of NEA, under theFISCAL YEAR 2020/2021co-financing from ADB, JICA and EIB.Following the commencement of theWorks and the subsequent completionof the site establishment works, thePackage 2 Contractor is currently engagedin the excavation of the undergroundpowerhouse and the tailrace tunnel.The Package 3 Contractor is undertakingtower foundation works of 220 kV doublecircuit transmission line from Damauli toNew Bharatpur Sub-station. The Companyalso concluded the contract agreementfor Package 1- Headworks with the SongDa- Kalika JV on 22 March 2021.THL further envisages to develop Lower SetiHydropower Project with an installed capacityof 126 MW in the downstream reaches of SetiRiver. The Consultant, JV of WAPCOS Limited,India and Nippon Koei Co. Ltd, Japan havesubmitted the draft Detail Engineering DesignReport along with the bidding documents inMarch 2021 and is under review by the Panelof Experts.4.Trishuli Jal Vidhyut Company Limited(TJVCL): This Company was establishedwith NEA and Nepal Doorsanchar CompanyLimited as promoters, to develop UpperTrishuli 3B HEP (37 MW) as a cascade ofUpper Trishuli 3A. GoN has included thisproject into its programme, “Nepal ko PaniJanata ko Lagani: Harek Nepali Bidyut koShare Dhani”. Construction works underthe EPC contract with Shuifa ANHE GroupCompany Ltd., China started in March,2018. The Covid-19 has had a devastatingeffect in its progress. The Constructionwhich was stalled in March 2020 due tothe lockdown, resumed after more than ayear in April 2021. The encountered verypoor geological condition than anticipatedis also likely to push the completion dateto March 2023.Nepal Electricity AuthorityI13

A YEAR IN REVIEW5.6.14IFISCAL YEAR 2020/2021RaghugangaHydropowerLimited(RGHPL): RGHPL was established as asubsidiary company of NEA to developRahughat Hydroelectric Project (40 MW).Contract Agreement, on EPC mode, for theconstruction of Civil and Hydro-mechanicalworks with Jaiprakash Associates Limited,India was approved by EXIM Bank of Indiaand Notice to Proceed (NTP) was issued on24th May, 2018. Similarly, after approvalfrom EXIM Bank of India, NTP was issuedfor Electro-mechanical works to BharatHeavy Electrical Limited, India underPDB mode on 4th December, 2019. Eventhough the ongoing pandemic has had itseffects and the completion date is likelyto extend beyond the planned December2022, both Contractors have started theirworks.Upper Arun Hydroelectric Ltd (UAHEL):UAHEL was formed as a subsidiarycompany of NEA for the development ofUpper Arun Hydroelectric Project (1,040MW) and Ikhuwa Khola HydroelectricProject (30 MW). The Consultant (CSPDR,China and Sinotech, Taiwan JV) for DetailedEngineering Design and Preparation ofBidding Document of UAHEP and IKHPPsubmitted the Updated Feasibility Study(UFS) Report in May 2019 and this hasbeen accepted by NEA after approval byDam Safety POE. Additional investigationrecommended by DSPOE has beencompleted by SRCL and an InceptionReport was submitted in March 2021. TheConsultant will submit the Final Reportincorporating all the comments by July2021. Similarly, the World Transport teamhas reviewed the Draft Design Reportsubmitted by the Consultant for DetailedEngineering Design, Tender DocumentPreparation and Construction Supervisionand Contract Management of AccessINepal Electricity AuthorityRoad construction and recommendedadditional investigation. EIA study for theProject is being carried out in parallelwith the Detailed Engineering Design.GoN and NEA have taken up this Projectas the priority project for developmentconstruction of the project is planned tostart from February 2024.7.Tamakoshi Jalvidyut Company Limited:Tamakoshi Jalvidyut Company Limitedhas been registered for the developmentof Tamakoshi V HEP (99.8 MW) whichis a cascade development of the UpperTamakoshi HEP. Tractable EngineeringGmbH submitted the Detailed DesignReport and Tender Documents in August2019. Permanent Camp Facility is expectedto be completed within this fiscal year. Asrequested by the company, Ministry ofEnergy, Water resources and Irrigationhad made a formal request to the Ministryof Finance in managing Project Financingwith Asian Infrastructure Investment Bank(AIIB) as the lead agency as they hadbeen showing a keen interest in the debtfinancing of the project.EPF recently committed for the complete debtfunding for the construction of Tamakoshi –VHEP therefore a tripartite Memorandum ofUnderstanding (MoU) was signed betweenNepal Electricity Authority, Tamakoshi JalVidhyut Company Ltd and Employers ProvidentFund.8.Dudhkoshi Jalvidyut Company Limited:This Company, as a subsidiary of NEA, hasbeen established for the implementationof Dudhkoshi Storage HEP. The FeasibilityStudy has recommended 635 MW to befinancially viable. The Consultant hassubmitted the Detailed Design Reportand is working on the comments/suggestions of the Client in consultationwith Panel of Experts (PoE). The Asian

MANAGING DIRECTOR'S REPORTDevelopment Bank (ADB) has committedto lead the financing for DudhkoshiStorage Hydroelectric Project with otherco-partners from multi-lateral financialinstitutions and has allocated 550 millionUSD loan and 20 million grants in theCountry Operation Business Plan (20212023). GoN has already requested ADB,European Investment Bank (EIB), AsianInfrastructure Investment Bank (AIIB) andKorean Exim Bank for financing the project.GoN has plans to start the constructionof the project within this Fiscal Year. ADBconducted the Reconnaissance Missionfor the project and Modality of ProjectFinancing was discussed between theauthorities of the Ministry of Finance,Ministry of Energy, Water Resources andIrrigation and Nepal Electricity Author

NEA's Subsidiary & Associate Companies 161 Central Activities 197 Administrative Directorate 205 Finance Directorate 211 NEPAL ELECTRICITY AUTHORITY Head Office: Durbar Marg, Kathmandu, Nepal Phone 977-1-4153007/4153193, Fax: 977-1-4153009 Email: neamd@nea.org.np Website : www.nea.org.np