Urja Nepal Year One Annual Report

The project aims to establish effective sector policy and regulation, and sound technical and operational procedures and practices. Urja Nepal is building on the accomplishments and lessons of USAID's Nepal Hydropower Development Project (NHDP). During its inaugural year, Urja Nepal achieved several key results. The project supported the Ministry of Energy, Water Resources, and Irrigation (MoEWRI) in forming the committee for Integrated Resource and Resilience Planning (IRRP). The IRRP committee will form the foundation for all government-wide electricity sector planning activities. Urja Nepal also supported the development of the MoEWRI's Cross-Border Electricity Trade (CBET) Guidelines, which will guide the development of institutional, legal, and regulatory frameworks for all CBET. Urja Nepal facilitated a virtual workshop on electric vehicles for key government stakeholders, including the Nepal Electricity Authority (NEA) and the IRRP committee members. The project conducted an International Competitive Bidding Consultation Workshop in August 2021, supporting the Office of the Investment Board of Nepal (OIBN). Urja Nepal provided technical assistance to update NEA's corporate development plan and implementation strategy and the regulatory roadmap for the Electricity Regulatory Commission (ERC). Urja Nepal also provided technical support to MoEWRI and OIBN for the award of the Manang Marsyangdi and the Lower Arun Hydropower projects (HPPs). A web-based Project Monitoring Unit (PMU) Dashboard is in the final stages of completion. The project assisted the GoN to make progress on several fronts, including the development of a Regulatory Roadmap for ERC and hosting a workshop on financial market issues for the ERC. Under Objective 2, the project began the process of familiarizing and implementing principal IRRP activities. One-on-one virtual discussions were organized with key stakeholders to plan and execute the IRRP. Urja Nepal successfully assisted the MoEWRI in beginning the process of institutionalizing IRRP by forming the IRRP committee, comprised of high-level representatives from NEA, AEPC, Department of Electricity Development (DoED), and the Water and Energy Commission Secretariat (WECS). The project also coordinated with the World Bank on the continuation of capacity building activities at NEA. Under Objective 3, Urja Nepal received multiple requests from government counterparts related to transactional support, project monitoring, and the implementation of competitive procurement practices. These activities lay a strong foundation for the tendering of international projects, project monitoring, technical assistance for project transactions, and additions of new renewable energy projects. Finally, under Objective 4, the project delivered draft CBET Guidelines in both English and Nepali to the CBET Committee formed by the MoEWRI. The Guidelines are currently under review by the CBET Committee. An agreement to construct the Indian portion of the 400 kV Butwal-Gorakhpur cross-border transmission line through joint venture investment (50-50 share) was signed by Nepal (NEA) and India (Power Grid Corporation) on September 8, 2021. Urja Nepal will build on the achievements of Year One to accelerate progress for Nepal's power sector. Under Objective 1, Urja Nepal will provide operational and restructuring support to NEA and support to ERC in the continuing development of its legal and regulatory frameworks. At NEA, this work will be comprised of multiple activities, including workshops to share a Political Economy Analysis report for the decentralization of the electricity sector. Urja Nepal will continue to support NEA to develop, deploy, and re-configure NEA's Project Monitoring Dashboard based on the Key Performance Indicators set out in its Corporate Development Plan. A final priority for the Objective 1 team in Year Two is the development of NEA's industrial, domestic, seasonal, and time-of-day tariffs, which will be carried out in collaboration with ERC, Nepal's electricity sector tariff setting body. At ERC, building on the joint efforts of Urja Nepal and the Commission during Year One to develop a regulatory roadmap, the Urja Nepal team will focus on the roadmap's implementation in Year Two. Under Objective 2, the Urja Nepal team will assist the MoEWRI in implementing the IRRP activities, including the development of a comprehensive electricity sector plan. The project will also support the development of a renewable energy policy and the implementation of a grid code. The Urja Nepal team will also provide technical assistance to NEA for the development of a smart grid system. Urja Nepal will also support the development of a cross-border electricity trade policy and the implementation of a cross-border electricity trade agreement between Nepal and its neighboring countries. The project will also provide technical assistance to the MoEWRI for the development of a energy efficiency policy and the implementation of energy efficiency measures in the electricity sector. Urja Nepal will also support the development of a private sector engagement policy and the implementation of private sector engagement initiatives in the electricity sector. The project will also provide