KATHMANDU, July 31: The MCA-Nepal on Wednesday announced the signing of a contract with Techno Electric and Engineering Company Ltd (TEECL) of India to construct a 400 kV substation in Damauli, Tanahun district. According to the MCA-Nepal, which is responsible for implementing the projects under the grant assistance of the USA government’s Millennium Challenge Corporation (MCC), the estimated cost of constructing the substation is US$38.89 million and the contract was signed accordingly.

With this, MCA-Nepal has completed awarding contracts for the construction of all three 400 kV substations as part of implementing the Millennium Challenge Corporation (MCC) Nepal Compact, reads a statement issued by MCA-Nepal on Wednesday.

Once completed, the New Damauli Substation will have a capacity of 1000 Mega Volt Ampere, making it one of the largest substations in the country. The contract for the construction of the Ratmate Substation was signed with the same company in June 2024, the statement added.

The MCA-Nepal further said that the New Damauli Substation will serve as a critical point of connection for power flow with the Ratmate, Lekhnath and New Butwal Substations.

Khadga Bahadur Bisht, executive director of MCA-Nepal, and Rajiv Agarwal, director (commercial) at TEECL, India signed and exchanged the contract on Wednesday. Minister for Energy, Water Resources and Irrigation Deepak Khadka, US Ambassador to Nepal Dean R. Thompson, MCA-Nepal board members, TEECL Managing Director Padam Prakash Gupta and officials from NEA along with MCC and MCA-Nepal officials were present on the occasion.

Addressing the event, Minister for Energy, Water Resources and Irrigation Dipak Khadka expressed his belief that the substations would significantly contribute in strengthening the electricity distribution system in Nepal and pave the way for economic prosperity. He also urged all stakeholders to strengthen efforts for the timely completion of the project.

Dr. Ram Prasad Ghimire, secretary at the Ministry of Finance, who is also the chair of the MCA-Nepal Board said, “The progress is a good indication of MCA-Nepal’s ongoing efforts to implement the MCC Nepal Compact. The three substations are essential to Nepal’s growing energy sector and will help ensure a reliable power sector to enhance industrial and commercial activities for the economic growth in Nepal.”

Speaking at the event US Ambassador to Nepal, Thompson, acknowledged the important role each stakeholder played in the progress of this project and shaping a brighter future for Nepal. He further added, “The MCC Nepal Compact is going to be an important part of our shared success story, working with Nepal to power Nepali homes, power the Nepali economy, create jobs, and reduce poverty through inclusive and sustainable economic growth."

MCA-Nepal Executive Director Khadga Bahadur Bisht termed it a remarkable milestone to sign all three substation contracts while approaching the one-year anniversary of the launch of the Compact.

“I would like to acknowledge the support of the Government of Nepal and our key stakeholders – Ministry of Finance, the MCA Nepal Board, NEA and MCC for their continued support,” he said.

Along with the three substations, the MCC Nepal Compact will fund the construction of up to 315 km of transmission line from Lapsiphedi, Kathmandu to the Nepal-India border in Nawalparasi (Bardaghat Susta West) under the Electricity Transmission Project.

MCA Nepal said that the bids for the 18 km cross-border transmission line have been received for evaluation. MCA-Nepal aims to award the contract in August. Likewise, preparations are on track to ensure the bids for the remaining 297 km of transmission lines are relaunched at the earliest possible date this year. As far as the the Roads Maintenance Project under the MCC is concerned, MCA-Nepal is preparing to launch the Full Depth Reclamation procurement in August, the statement added.