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ADB Approves $200 Million Loan to Modernize Power Supply, Distribution System in Nepal

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The Asian Development Bank (ADB) has approved a $200 million concessional loan to improve power supply and distribution systems in Nepal.

Nepal has made significant progress in electricity supply after years of chronic power shortages. However, its power transmission and distribution systems need further strengthening to increase network capacity, improve quality and reliability, and remove delays between generation hubs and load centers.

The project will finance, among others, the reinforcement and modernization of the power supply system in Kathmandu Valley, Bharatpur metropolitan area of Chitwan district in Bagmati Province and Pokhara of Kaski district in Gandaki Province, where supply interruptions are frequent and prolonged. The project also aims to support Province 2, where the quality of electricity supply is poor and about 20% of households are still without access to the national grid.

“The project will help sustain Nepal’s improved electricity supply momentum over the past two years. This will facilitate meeting future demand from commercial and industrial activities as well as from communities, particularly women, who can now benefit from electricity-based enterprises and focus on productive economic and social activities,” said ADB Principal Energy Specialist Jiwan Acharya. “It is also very timely because the project will create employment opportunities for skilled and unskilled labor during the construction phase as the country adopts measures to mitigate the socioeconomic impact of the coronavirus disease (COVID-19) pandemic.”

Complementing ADB’s loan, the Government of Norway is providing a $35 million cofinancing grant for the installation and upgrading of power distribution networks in Province 2 and various substations to evacuate hydropower in the country. In addition, it is providing a $5 million technical assistance grant for capacity development of the Nepal Electricity Authority to ensure that gender equality and social inclusion are strengthened, and new technologies are used to make electricity infrastructure resilient.

The project is aligned with the South Asia Subregional Economic Cooperation program on intraregional power trade through cross-border power exchange. The upgrading of substations in Khimti, Barhabise, and Lapsiphedi to 400 kilovolts will facilitate cross-border power exchange with India.

ADB and other development partners have been engaged in Nepal’s power system reform efforts, including the approval of the Nepal Electricity Regulatory Commission Act of 2017, which created the Electricity Regulatory Commission as an independent regulatory body with respect to tariff-setting and consumer protection.

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REPowerEU: New industrial Alliance to boost the EU’s solar power and energy security

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Commission together with industrial actors, research institutes, associations and other relevant parties launched the European Solar PV Industry Alliance.

The alliance will help mitigating supply risk by securing diversification of supplies through more diverse imports and scaled up solar PV manufacturing of innovative and sustainable solar PVs in the EU. In a joint statement, the Commission and signatories of the Alliance set out the immediate priorities for 2023.

Boosting domestic manufacturing capacity will be key for the EU to reach the REPowerEU objectives of over 320 GW of newly installed solar photovoltaic capacity by 2025, and almost 600 GW by 2030.

The new Alliance has endorsed the objective of reaching 30 GW of European manufacturing capacity by 2025, across the entire value chain. Reaching this objective would deliver €60 billion of new GDP per year in Europe and the creation of more than 400,000 new jobs.

The Alliance will also offer policy inputs to reduce Europe’s risk of supply and support domestic industry.

It will focus its work on:

  • Ensuring investment opportunities for European solar PVs: by mapping investment opportunities and creating project pipelines of bankable projects. It aims to attract private investments to develop and commercialise innovative and competitive PV products made in Europe. As a priority, it will work on aligning EU, national and private investments, including the National Recovery and Resilience Plans.
  • An enabling environment for European solar PVs: by addressing barriers such as the need for simplified permitting procedures for new manufacturing sites or securing the supply of raw materials and components needed in production. The Alliance will also support sustainability and circularity across the value chain, identify leading innovations, including through EU-funded research as well as work on tackling labour and skills shortages in the sector. Finally, it will help to stimulate demand by encouraging the use of non-price criteria in public actions.  
  • Diversifying supplies and building resilience in the supply chain: by finding alternative suppliers, partners and off-takers via existing and future partnerships, dialogues and trade fora to further reduce Europe’s current dependencies.

The Commission has political leadership on the Alliance. It supervises and acts as facilitator of its work.  The secretariat is run by EIT InnoEnergy, following the successful track record of the Batteries Alliance.

Background

The Commission endorsed the creation of a new European Solar PV Industry Alliance in October 2022, to support the objectives of the EU’s Solar Energy Strategy. The Strategy is an essential component of the REPowerEU plan, which set out how to massively scale-up and speed-up the production of renewable energy in Europe to regain our independence from Russian fossil fuels, and make our energy system more resilient.

The European solar PV Industry Alliance will be led by a Steering Committee, composed of the Commission, the secretariat, as well as SolarPowerEurope and the European Solar Manufacturing Council, in their capacity as key industry stakeholders. The Steering Committee will guide and monitor overall progress of the work of the Alliance and provide high-level policy direction. It will ensure consistency and coherence between the different Alliance work streams and with the overall objectives of the Alliance.

The Commission’s industrial alliances are the best tool to accelerate activities that would not develop otherwise. For instance, the Battery Alliance has played an essential role in ensuring that Europe can meet up to 90% of its demand with batteries produced in Europe by 2030. The European Clean Hydrogen Alliance is also ensuring industrial leadership and accelerate the decarbonisation of industry in line with its climate change objectives.

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Greek shipowners do not care about the boycott of Russian oil

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European sanctions against Russian oil will only lead to higher prices, it will hit the pocket of the end consumer, says Nicolas A. Vernicos, the largest Greek ship owner and president of the International Chamber of Commerce. He made this statement in connection with the decision of the European Union to impose a price cap on Russian oil.

The French ‘Liberation’ published an interview with N. Vernicos under the title “Russian oil: Greek shipowners, in whose hands half of the world’s  tankers, do not care about the boycott.”

Vernicos says: “Transportation costs, which are already skyrocketing, will rise even faster, but the embargo on the transportation of Russian oil by sea will have a positive effect on shipowners, because we will become richer.”

At the same time, he warns that Greece will comply with the new conditions. The European decision on sanctions will bring a net benefit only to maritime carriers. Nicolas A. Vernicos recalls: “The Greek shipping community is the strongest in the world… Nothing can be done without it, and the Greeks will definitely find a way around the sanctions.”

And on the fact that prices will rise, Russia will also earn.

‘Liberation’ writes that in the hands of the Greeks 21% of the world’s shipping tonnage and 40% of the world’s tonnage in the transportation of oil, their trade cooperation with Russia has existed since the 19th century, and they do not intend to stop it.

The EU countries have already agreed on the issue. An agreement was reached to set the price limit at $60 per barrel. The decision came into force on 5 December.

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OPEC+ agrees to stick to its existing policy of reducing oil production

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Led by Saudi Arabia and Russia, OPEC+ agreed in early October to reduce production by 2 million barrels per day from November, – informs CNBC.

An influential alliance of oil producers on Sunday agreed to stay the course on output policy ahead of a pending ban from the European Union on Russian crude.

OPEC and non-OPEC producers, a group of  23 oil-producing nations known as OPEC+, decided to stick to its existing policy of reducing oil production by 2 million barrels per day, or about 2% of world demand, from November until the end of 2023.

The European Union is poised to ban all imports of Russian seaborne crude from Monday, while the U.S. and other members of the G-7 will impose a price cap on the oil Russia sells to countries around the world.

The Kremlin has previously warned that any attempt to impose a price cap on Russian oil will cause more harm than good.

Led by Saudi Arabia and Russia, OPEC+ agreed in early October to reduce production by 2 million barrels per day from November. It came despite calls from the U.S. for the group to pump more to lower fuel prices and help the global economy…

The looming Russian oil price “cap” has all the hallmarks of a historic debacle in the making, – notes “The Hill”.

For months, the United States and the G-7 have haggled over a complex plan to constrain the money that the Kremlin makes from some of its oil exports.

Despite Russian war against Ukraine and subsequent Western sanctions on his regime, Russia is swimming in petrol dollars. By the end of the year, the Russian Economy Ministry estimates that the country will have made a record $338 billion from its energy exports.

Together with America’s existing embargo on Russian crude, when the European Union’s oil embargo comes into full force on Dec. 5, policymakers fear that the move will constrain global petroleum supplies and push prices upward.

Assuming that EU and G-7 leaders can sort out their current price puzzle and fix Russian crude below what the international market would prefer to pay, who will pick winners and losers in the subsequent scramble for cheap Kremlin oil: Putin and his energy cronies?  

The Russian oil “cap” would not be necessary if the Biden White House had been making it easier to open the spigots of American oil from the start. The president’s pledge of “no more drilling” in America continues to undercut his economic and foreign policy against Russia.

If the Russian oil price cap fails to materialize or work as officials intend, the United States and its allies should drop the scheme, – stresses “The Hill”.

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