Kabeli Transmission Project-Rural Enhanced Energy Services (KTP-REES) Component


Development of power projects is always correlated with the power evacuation network available in the proposed power development areas. In Nepal, Integrated Nepal Power System (INPS) has 132 kV transmission network from Anarmani in the East to Mahendranagar on the Far-West region running through the Terai physiographic zone of the country. As most of the hydroelectric projects are located in the northern hilly region, the limiting factor for the hydropower development is pointed out to be the lack of north- south extending high voltage transmission lines in the existing INPS. In the context of the ever increasing electricity demand and annually spiraling load shedding, there is a need of the development of critically important north-south high voltage transmission line to facilitate the development of candidate hydropower projects to meet the energy demand and abolish ongoing load shedding. Despite of high potentiality for developing hydro power projects in Ilam, Panchthar and Taplejung districts in eastern development region of Nepal, most hydro projects are delayed for a simple reason that the area lacks an adequate capacity high voltage transmission line to evacuate the power from the area to the consumption centers. In order to address this issue, Nepal Government initiated Kabeli Transmission Project (KTP) in the technical and financial support of the World Bank in 2011. The project consists of three components: Component 1- Kabeli Corridor 132 kV Transmission Line, Component 2- Community-Based Rural Electrification-Grid Extension, and Component 3- Rural Enhanced Energy Services (REES). The KTP components 1 and 2 are being implemented by Nepal Electricity Authority (NEA). The KTP/component 3 is being implemented by Alternative Energy Promotion Centre (AEPC), has been designed for expansion of energy services to village communities in the Kabeli Transmission Corridor in Ilam Panchthar and Taplejung districts.

Project Description

The Kabeli Transmission Project is located in Nepal’s Eastern Development Region within Mechi and Koshi Zones and passes through four districts: Terhathum of Koshi Zone, and Panchthar, Ilam and Jhapa of Mechi Zone. The transmission line (TL) corridor is 83.74 km in length, crossing 25 VDCs in the four districts. They are (from north to south) one VDC in Terhathum District (Chattedhunga), 10 VDCs of Panchthar District (Amarpur, Subhang, Bharapa, Phidim, Chokmagu, Siwa, Nawamidanda, Imbung, Pauwasartap and Chilingden), 13 VDCs of Ilam District (Phakphok, Chamaita, Ektappa, Mangalbare, Sangarumba, Siddhithumka, Soyak, Godak, Chisapani, Danabari, Mahamai, Bajho and Chulachuli), and one VDC of Jhapa District (Lakhanpur). At Lakhanpur, near the city of Damak on the east-west highway, the transmission lines will link into the national electricity supply grid. Kabeli Transmission Project – Component 3 is to provide funding for off-grid rural electrification of communities for which grid extension is not a feasible option as well as for improved cooking fuel through biogas applications. The community-level energy schemes that are supported under this component are established programs at AEPC. The table below details the types of energy schemes that are supported at the community level under this component and the specific targets that have been agreed for each type of scheme..

Kabeli Transmission Project- Component 3 Targets

Energy Schemes Targets
Micro Hydro Power Plants 250kW of new micro hydro generation capacity to be installed to benefit 2000 HHs in the programme districts
Solar PV Home Systems 300 HHs to be electrified in the programme districts
Institutional Solar PV Systems 250kW of new micro hydro generation capacity to be installed to benefi
Improved Cooking Fuel
Biogas Plants 200 HHs to be provided with toilet-attached biogas stoves for cooking

Source: Kabeli Transmission Project Document, 2011


The main objective of the component 3 project is to support the Kabeli Transmission Project. The Project focuses on the community-driven implementation and management approach, conservation of the environment, community mobilization, productive use development and income generating activities developed under the RERL programme.

Project Implementation Arrangement

In central level, AEPC is responsible to implement this component under the procedures established for the agency’s community-level programs such as the RERL (previously REDP) which received IDA funding under the PDP of the World Bank for implementing MHVEP in Nepal. In district level, community energy programs are implemented through the District Development Committees (DDCs), as per the Local Self Governance Act (2000). District Energy Environment and Climate Change Sections (DEECCS) established under the DDCs, with the mandate to support local-level capacity-building, planning and M&E, creation of District Energy Funds (DEF), and to undertake resource mobilization through supporting organizations, financial institutions and the private sector. Funds are channeled from AEPC to the DEF. The local staffs hired as a support staffs through a competitive selection process and work with participating communities to help them establish Community Functional Groups which oversee the implementation of the community-level energy project. The institutional arrangement for implementing the Kabeli Transmission project – component 3 is presented in below figures 3.

Institutional Arrangement for KTP Component 3 Implementation (for central level)

Institutional Arrangement for KTP Component 3 Implementation (for central level)

Project Costs

The Kabeli Transmission Project – Component 3 is funded by numerous partners, including the GoN, the World Bank, UNDP, DDCs, VDCs, the financial institutions, communities and the private sector. However, the project cost breakdown as the project document is considered as follows in the below table.

Kabeli Transmission Project – Component 3 Cost Breakdown

Activities Local in USD('000) Foreign in USD ('000) Total in USD('000)
Community Subprojects (including community contributions) 1760 0 1760
Technical assistance 213 0 213
Grid connection pilot 0 83 83
Incremental operating costs of AEPC/project management 260 0 260
Total (not including contingencies and IDC) 2233 83 2316

Source: Kabeli Transmission Project Document, 2011

Project Monitoring

AEPC is responsible for the regular monitoring of the implementation of project activities. AEPC submits trimester implementation progress reports in an agreed format to the World Bank and similarly DDC/DEECCS submits the progress report to AEPC accordingly. The trimester report covers the progress and expected completion dates for works and equipment supply contracts, and technical assistance activities funded under the project. The reports include the following analysis and data: (a) comparison of actual physical and financial outputs with forecasts, and updated 6-month project forecasts; (b) project financial statements, including sources and application of funds, expenditures by category statement, and special accounts reconciliation statement; (c) and a procurement management report, showing status and contract commitments.

Target Vs Achievements

The achievements of Kabeli Transmission Project- Component 3 are satisfying except the installation of micro hydro power plants in the project districts. Despite the low level of operations during the project period, the project has been able to produce impressive outputs in installing toilet attached biogas plants in Panchthar district. However, micro hydro power plants installation was constrained by the increased social and political disturbances at the projects areas despite of huge supports and efforts from the project side from conducting the pre-feasibility studies phase to project implementation phase. In installation of the toilet attached biogas plants, full credit goes to the community people who have taken full ownership and worked hard with the sense of commitment and determination in carrying out various works, specifically, the installation and operation of the plants. Similarly, the installation of solar PV home systems and institutional solar PV are another achievement except institutional solar PV systems installation in rural health posts/sub-health posts in the project districts. The major targets Vs achievements of the project are presented in the below table at a glance.

Targets Vs Achievements of Kabeli Transmission Project - Component 3

Energy scheme Targets Achievements Remarks
Micro Hydro Plants 250 kW 0 Site conflict/not feasible due to grid extension and private hydro power plants development Extended a Local Grid Project in Taplejung district
Solar PV Home System 300 no. 219 no. Demand collection ongoing 81 solar PV home systems collected
Institutional Solar PV for school and health post 10 schools 5 health posts 9 schools Demand collection on going for 6 ISPV
Toilet Attached Biogas Plants 200 no. 227 no. Still high demand received

Mini and Micro Hydro Power Development

Hydro power plant having up to 100 kW installed capacity is termed as micro hydro and 100-1000kW is termed as mini hydro. The potential capacity of mini and micro hydro power plants installation is huge in Panchthar district. Before commencing the Kabeli Transmission Project – Component 3, the total capacity of micro hydro power plants was 304 kW. Similarly, Pheme Khola Small Hydro of 1 MW, Pheme Khola-II Mini hydro of 240 and Middle Pheme Khola Mini Hydro of 150 kW was operational in Panchthar district. Likewise, survey licenses have been granted to the eleven proposed hydropower projects for 77.44 MW in the district. During the project implementation phase, first of all, Nibu Khola MHP- 8 and Nibu Khola MHP-9 at Nawami Danda VDC in Panchthar district were initiated. However, the community rejected the projects even after completing all the necessary project appraisal stages due to national grid extension near by the VDC. Similarly, in considering for the development of mini hydro power project, Pheme Khola mini hydro power plant of 250 kW in Bharapa VDC was explored in consultation with local community of Bharappa and Phidim Thapatar for generating electricity to Bharappa, Subhnag and Pancha VDC. Like in the micro hydro project rejected story, this proposed mini hydro was also abandoned due to already site occupied by the private hydro power developers who generally holds the license of the Department of Electricity Development. Hence, the mini and micro hydropower projects identified for development during the period of KTP Component 3 could not be developed despite of huge supports and efforts from the project side in the district. When the AEPC appraised the World Bank about the difficulties in identifying potential sites for micro and mini hydro hydro, the WB agreed to extend the project area to Taplejung district adjoin the affected areas. The project team identified potential sites for local mini grid development in close coordination with District Development Committee of Taplejung. A feasibility study was undertaken to develop a local mini grid development in Taplejung.

Toilet Attached Bio Gas Plants Installation

Ilam and Panchthar districts have a potentiality for biogas installation as most of the residential areas are below 2100m altitude and animal husbandry, mostly cow and buffalo rearing as one of the major occupations of the districts. The following table depicts the potential capacity of bio gas plants in the districts.

Biogas Potentiality in Ilam and Panchthar Districts

Districts Biogas Plant Potentiality (No.) Biogas Plants Installed (No.) Remarks
Ilam 20175 5473
Panchthar 14987 902 227 toilet attached bio gas supported by KTP
Total 35162 6375

In the project districts, bio gas is one of effective means to replace biomass fuel. It brings improvement in health, economy and environment of households and individuals. Based on RERL’s approach, the project is supporting households to attach their toilets to the biogas plant which to improve the sanitation condition at the household level.

Solar PV Home Systems Installation

Solar Home System is the household electricity supply system with Solar Photo Voltaic Panel of capacity 10 Wp or more and bundled with battery, battery charge controller, and appropriate number of lights. The VDCs ,which are far away from the national grid, have very less possibility of grid extension in the next 5 years as well as possess no hydro potential are prioritized for solar home systems development. In addition, households in the VDCs which are unfeasible for hydro development are also prioritized for SHS dissemination. For effective implementation of SHS development, the following measures are adopted.

  • Create awareness on the technology especially regarding the myth of solar energy in the rural areas and also on the technical aspects
  • Proper monitoring of installation and after-sales service provision of the solar companies
  • Easy availablility of solar components during operation and maintenance

Institutional Solar PV Systems Installation

Institutional Solar System is stand alone system of solar photovoltaic to be used institutionally for the purpose of lighting, education, communication, health etc. AEPC provides technical support as well as subsidy for PV Systems used by public institutions such as for operating computers in remote schools, vaccine refrigerators in remote health posts, FM radio equipments in remote and remote tele-centers and providing lighting to the monasteries, temples, churches, Mosque and other religious places in the remote areas without electrification by any other means. Under the support of Kabeli Transmission Project- Component 3, total 9 ISPV systems, out of 10 ISPV systems installation targets, have been installed at schools in Panchthar and Ilam districts. Despite of many attempts for ISPV systems installation, especially in the rural health posts/sub-health, none ISPV systems has been installed due to non capacity of the rural health posts/sub-health posts for mobilizing 25% cost.

Supports for Capacity Development

While implementing any community energy systems, the capacity development of the community is always prerequisite which may be are the technological, institutional, managerial, coordination, etc aspects for the smooth operation of the systems functionality. During the period of the KTP- component 3, the following major supports were delivered to the community.

  • Co-operative sensitization training to the Upper Pheme Khola Mini Hydro functional group
  • Skill development training to 14 biogas plant masons in coordination with Nepal Biogas Promotion Association (NBPA)
  • Institutional Solar PV systems operation and maintenance training to respective ISPV users
  • Coordination workshop for strengthen the Rural Energy Service Center(RESC)
  • Improved Cooking Stove (ICS) training for promoting the ICS in the Kabeli Corridor VDCs

Taplejung Local Grid Project

Taplejung is one of the few districts in Nepal that is yet to be served by the national electricity grid. There is a Nepal Electricity Authority owned mini hydropower plant of 125 kW capacities in Sobuwa Khola, which is currently generating only about 80 kW and provides electricity to Phungling Bazaar. There is still demand of more than 500 kW during peak hours and more than 300 kW during off peak hours. Besides, a 250 kVA diesel generator (DG) was supplementing and now closed due to high operation cost.

However, VDCs in the periphery of Phungling Bazar have access to electricity from Micro Hydro Plants (MHPs), installed in the support of AEPC through the various energy programme like REDP, RERL, ESAPand NRREP.Hence, in order to tackle the issues, DDC Taplejung has formulated a policy, endorsed by 22th DDC Council held on 24 February 2015, envisaged parallel operation of isolated micro mini hydro power plants forming a local grid. Further, the local grid would also provide a better platform to its interconnection with national grid, by rendering the local grid as a single entity, rather than dealing many MHPs individually. As a pioneering work, AEPC had conducted the feasibility study of Taplejung local grid project to interconnect eight micro and mini hydro power plants through the seventeen kilo meter 11kV line, with total generation capacity of 901 kW.

After the World Bank approval for extending the project areas to Taplejung district for implementing Taplejung local grid project, the following major activities have been accopmlpihsed:

  • MoU signed between AEPC and DDC Taplejung for implementing Taplejung local grid project under the support of Kabeli Transmission Project – Component 3
  • Agreement made between AEPC and DDC Taplejung for supporting to Special Purpose Vehicle (SPV) formation to Taplejung local grid project under the support of RERL
  • Conducted district level orientation cum consultative workshop on Taplejung local project
  • Observation visit to Sobuwa khola mini hydro of 125 kW and Chimal micro hydro of 90 kw which both are proposed for synchronizing into Taplejung local grid project

Results and Impacts

It is very earlier to assess the impact of the Kabeli Transmission Project – Component 3 without accomplishing all targets (as per the project document) mainly not installing the micro hydro power projects of 250 kW in the project areas. However, it cannot be ignored that already installed 227 toilet attached biogas plants, 219 solar home systems and 9 institutional solar PV systems have definitely supported to enhancing the livelihood of the rural community of the project areas. Following are the results and impacts based on the semi-accomplished activities during the project period.

  • Despite of high potentiality of biogas plants of 14,987 no. in Panchthar district , total 902 no. biogas plants have been installed till now in the support of government subsidy and the energy consumption of the district is still largely dominated by the traditional energy sources (98.11%) i.e. fuel wood. The biogas plants installation trend of last 10 years (2004-2014) in Panchthar district ( below figure clearly shows that year 2014 is the highly encouraging year in installing biogas plants installation and 227 biogas plants with toilet attached in the support of Kabeli Transmission Project – Component 3 in the district during the project period since 2011.
  • Out of 227 toilet attached biogas plants, 114 plant owners (50%) are from Janajati, 3 plants owners (1 %) are from Dalit and 110 plant owners (49%) are from Brahman/Chhetri.Similarly, 59 plant owners are female from different ethnicity.
  • In rural project areas of Panchthar district, fuel wood is the most commonly used energy source for household consumption. The development of biogas energy could be an alternative to it. The saving of fuel wood consumption after installation of biogas installation amounts 2.5 ton/year/household as normally a 4-6 cu.m. Biogas plant saves 208 kg fuel wood per months based on the various study of the biogas users' survey and impact study of the biogas plants, conducted by the AEPC. In rural areas trees are cut down from the forest regularly to meet fuel wood requirements. Therefore, introduction of 227 toilets attached biogas plants contributed significantly to preserve the forest eco-system, environment and bio-diversity.
  • Lack of awareness to develop health and sanitation condition in the rural project areas of Panchthar district is a fundamental problem. This may be primarily due to low literacy level. Efforts were made to raise in rural communities. The toilet attached biogas plant at individual level is a major breakthrough not only to improve living environment but to enhance energy output as well. Number of families using toilets is increasing in the projects areas. As a result, open defecation is decreasing and thereby reducing medical expense, drudgery and health hazard due to water- related diseases and eventually reducing death rates. This, therefore, has improved health condition amongst the rural communities as a whole.
  • Before installing the toilet attached biogas plants, most rural women and children had to go to forest areas for collecting the firewood which took the time of 2-6 hours depends on the local condition. However, this time for collecting the firewood has been totally reduced and the women and children have the opportunity to utilize this saved time in other productive activities for women specially and education support especially for the children.
  • It was observed that the biogas movement has a strong effect on non-biogas households because of the health benefits being enjoyed by their neighboring biogas owners. More importantly, the non toilets households are motivated to have toilets even before the installation of biogas plant. They now understand the benefits of having toilets in their homes, has become a matter of higher social status in the project areas.
  • The need of additional water due to biogas plant seems to have promoted the self-help initiatives of local people. It was observed that some of the households had managed to bring water near homes at their own financial expenses the sole reason was to meet water requirements of biogas related activities. Some communities are showing interest to contribute labor and some financial contributions if funding agencies are available for drinking water scheme. This tendency of local people strongly indicates the promotion of their self-help initiatives in water supply.
  • Normally total construction cost for toilet attached biogas plants installation is not an easy job and government subsidy generally supports for less than 50 % of the total cost. In Panchthar district, the total construction cost of the biogas plants lies in the range of NRs 57,000- 67,000 depending on the plant capacity of 4-6 cu.m. The government subsidy for NRs. 30,000/ biogas plant has been mobilsed through the subsidy delivery mechanism procedure and NRs.4, 000/biogas plants for toilet attached has been provided from the Kabeli Transmission Project- Component 3.Hence, the small inputs of the project influenced high outputs not only in the resource mobilization part but also in supporting the toilet attached biogas plants development trends in the project district.
  • Despite of high potentiality of hydro power and solar energy resources in Panchthar district, still 40 % of total households depend on kerosene and 27% of the households on solar PV systems for domestic lighting purpose. Before commencing the project in 2011, total 2968 solar PV home systems was installed in Panchthar district and now its development trends is highly encouraging. During the period of 4 years, the total no. of households having the solar PV home systems have been reached 11028 which main causes are the favorable government subsidy policy, improving economic condition of the rural people and motivation towards the solar energy technology as alternative source of modern clean energy. In comparison with highly increasing trend of solar PV home systems, only 219 solar PV home systems and 9 institutional solar PV systems installation are not highly motivating progress in the district, however, it takes own sense of importance in the project areas which results and impacts are briefly discussed below.
  • It is instructive to measure the impact of SHS on household’s monthly expenditure. Although installation of solar home system entails a one-time lump sum cost, it reduces household’s monthly expenses by reducing its expenditure on alternative sources of fuel for lighting.
  • After installation of SHS, study hours for the children increased and the children are more keen and interested in doing their homework. Women in rural areas are unable to join literacy classes during the day because they are occupied with household work. After installation of SHS in some households of the project areas, literacy classes could be run at night which helped women to fulfill their dreams of being literate. In some villages, after school coaching classes for students could be organized after the installation of SHS.This helped academically weak students to improve their performance in school. Similarly, institutional solar PV systems have provided the opportunity not only to run the computer classes but also official works like typing, information management, photo coping facilities in the schools.
  • SHS installation had, in general, positive impact in rural health status because there is no longer exposed to smoke from kerosene. It is observed that the incidence of acute respiratory infection (ARI) and eye related infection has decreased. However, some felt that solar home system alone cannot do much to reduce incidences of ARI and eye infection as long as the main source of fuel for cooking is firewood as all solar PV home system users are toilet attached biogas plant users in the project areas.
  • Access to information has increased significantly after installation of SHS. This has in turn helped the rural community to stay updated on current national and international political situations as well as to learn new farming techniques. The most common sources of information are radio, television and mobile phone in the project areas.