Green Buses Sustainable Transportation Through Electric Buses Rapid Transit Ebrt Kathmandu

GREEN BUSES: Sustainable Transportation through Electric Buses
Project/Programme Title:
Rapid Transit (eBRT) in Kathmandu Valley
Country(ies): Nepal
National Designated Ministry of Finance, International Economic Cooperation

Authority(ies) (NDA): Coordination Division
Accredited Entity(ies) (AE): Town Development Fund (TDF)
Date of first submission/

[2022-MM-DD] [V.1]
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[2022-MM-DD] [V.0]
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GREEN CLIMATE FUND | PAGE 1 OF 43
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A.8. Indicative total project Amount: USD 243 million A.9. Indicative GCF Amount: USD 164
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Brief summary of the problem statement and climate rationale, objective and selected
implementation approach, including the executing entity(ies) and other implementing
partners.
Kathmandu Valley is characterized by high and sustained urbanization, sprawling rapidly
at the city’s periphery. Road transportation is the predominant mode of transport,
accounting for over 90% of the passengers and goods movement. Fast population growth
rate, as well as rising incomes, caused the number of registered private vehicles in
Kathmandu Valley to increase substantially in recent years, 12% annually. In Nepal, total
CO2 emissions from the transport sector rose at an annual average rate of 11% during
1994 and 2013 but is in particular accelerating since 2015 based on increasing use of
A.19. Project/Programme imported diesel and petrol. The emission from transport reached 5.4 MtCO2/a in 2018,
rationale, objectives and which represents approx. 10% of country’s total GHGs emissions, 36% of the total
approach of energy-related CO2 emission (excl. LUCF)4.
programme/project (max
100 words) The Green Buses project supports public and private bus operators to finance and deploy
electric buses within a new electric bus rapid transit (eBRT) system in the Kathmandu
Valley. The required public investments in climate resilient infrastructure, incl. bus
corridors and charging stations, will be implemented though the Ministry of Physical
Infrastructure and Transport (MoPIT). The project establishes a transformational
financing mechanism and business model for bus operators that promote and strengthen
the widespread adoption of electric vehicles (EV) in the country. This will be accomplished
with technical assistance, policy reform, regulations and licensing in the public transport
sector. Finally, the project aims to improve the capacity of the public transport system
operators, incl. private bus operators and the government authorities.
4Many GHG emissions are caused by traditional energy production in the residential, commercial and agricultural sectors.
Because of burning large amount of biomass (in domestic stoves, heating furnaces and open fires), significant amounts of
CH4 and N2O are released (Third National Communication 2017).
B. Project/Programme Information (max. 8 pages)

B.1. Context and baseline (max. 2 pages)
Describe the climate vulnerabilities and impacts, GHG emissions profile, and mitigation and adaptation needs that the
prospective intervention is envisaged to address.
Please indicate how the project fits in with the country’s national priorities and its full ownership of the concept. Is the
project/programme directly contributing to the country’s INDC/NDC or national climate strategies or other plans such as
NAMAs, NAPs or equivalent? If so, please describe which priorities identified in these documents the proposed project
is aiming to address and/or improve.
Climate vulnerabilities and impacts
Nepal is among the fastest urbanizing countries in the world. Particularly Kathmandu Valley, located in the foothills of the
Himalayas, is one of the fastest-growing metropolitan regions in South Asia. In 2011, the population of Kathmandu Valley
was estimated to be 2.7 million according to a census, while in 2022 the population is assumed to reach 3.8 million. In
addition to the official estimates, the actual numbers are probably much higher. Experts believe that currently, the Valley
comprises about 4-5 million people. Kathmandu Valley is characterized by high and sustained population growth in the
urban core and fast urban sprawling at the periphery.56 Climate change vulnerability mapping for Nepal indicates that
districts in Kathmandu valley have high to very high human and ecological sensitivity to climate change.
Fast population growth rates, as well as rising incomes, caused the number of registered vehicles in Kathmandu Valley
to increase immensely in recent years, with an average annual growth rate of 11% for personal cars and 12% for two‐
wheelers.7 The increasing motorization in the Valley and Nepal is leading to a range of environmental challenges. A report
in 2015, authored by the Government of Nepal and United Nations Centre for Regional Development, on National
Sustainable Transport Strategy (NSTS) for Nepal emphasized that this rapid growth in motorization threatens energy
security, increases GHG emissions and other air pollutants, and negatively impact the ecosystem. Increasing serious
heightened congestion on metropolitan roads amplifies harmful air and noise pollution.
GHG emissions profile
Nepal’s Third National Communication states that the transportation sector emission has shown significant growth in
recent times, especially road transportation, which accounts for over 90% of the movement of passengers and goods
movement. The numbers of vehicles are increasing significantly, as shown in Figure 1. From the year 2001 to 2015/16
the registration per year of passenger cars, SUVs, and vans increased by about 6-7 times. During the same period, the
motorcycle registration increased to about 10 folds. Another study shows that the total number of fleets increase from
0.27 million in 2001 to 2.23 million in 2016. The transport sector consumed 45 PJ of Energy in 2016, which is 4.5 times
higher than in 2001.8
Diesel is the main fuel consumed by the transportation sector in Nepal followed by petrol and liquified petroleum gas
(LPG). In recent years, the consumption of petroleum products in the transport sector has increased by an average annual
growth rate of over 15% 9%. The sector consumes about 68% of total diesel consumption in the country. Total CO2
emissions from the transport sector rose at an annual average rate of 11% during 1994 and 2013 but is, in particular,
5Ishtiaque, A., Shrestha, M., & Chhetri, N. (2017). Rapid Urban Growth in the Kathmandu Valley, Nepal: Monitoring Land
Use Land Cover Dynamics of a Himalayan City with Landsat Imageries. Environments, 4 (4), 72.
https://doi.org/10.3390/environments4040072.
6 Guinery, R. (2019). Green Buses: Large-scale Deployment of Electric Buses in the Kathmandu Valley – The Way
Deteriorating air pollution quality has posed a serious public health risk to the urban population. Transport sector is one of
the major contributors to air pollution in Kathmandu Valley. Town Development Fund, Report of Pre-feasibility study.
7 UNITED NATIONS CENTRE FOR REGIONAL DEVELOPMENT (2015): National Sustainable Transport Strategy (NSTS)
for Nepal (2015~2040), Background Paper for Plenary Session 2 of the Programme, Final Draft, November 2015.
https://www.uncrd.or.jp/content/documents/3377Background%20Paper%20-
EST%20Plenary%20Session%202%20%28No.%201%29.pdf
8Sadavarte, P., Rupakheti, M., Bhave, P., Shakya, K. & Lawrence, M. (2019). Nepal emission inventory–Part I: Technologies
and combustion sources (NEEMI-Tech) for 2001–2016.Atmospheric Chemistry and Physics, 19,12953-12973.
accelerating since 2015 as shown in the following figures. The emission from transport reached 5.4 MtCO2/a in 2018.
This represents approx. 10% of the country’s total emissions (excl. LUCF)9.
Figure 1: Yearly vehicle registration since 2000/01 in Nepal

30000
Bus
Minibus/minitruck
25000
Heavy Equip/Truck
Car/SUV/Van
N umber of registration
20000
15000
10000
5000
0
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Year
Source: Third National Communication 2017, p. 27
Figure 2: CO2 emissions from the transport sector in Nepal
Source: Climate Watch, 202110
Mitigation needs
According to its Third National Communication, Nepal experienced a striking increase in direct CO2 emissions during the
last two decades. In this context, the expanding transportation sector represents one of the main drivers. About 50 % of
the national petrol consumption and 27 % of the national diesel consumption occurs in Kathmandu Valley. The majority
of CO2 emissions stem from the category of heavy commercial vehicles (truck, fuel tanker and lorry), followed by public
9Many GHG emissions are caused by traditional energy production in the residential, commercial and agricultural sectors.
Because of burning large amount of biomass (in domestic stoves, heating furnaces and open fires), significant amounts of
CH4 and N2O are released (Third National Communication 2017).
10 https://www.climatewatchdata.org/ghg-emissions
transportation vehicles (buses/minibuses/microbuses), passenger vehicles (cars, SUVs and pickups) and two wheelers.
36% of total registered vehicles in Nepal are registered in the Kathmandu Valley. Of these vehicles, 92% are private
motor vehicles (cars and motorbikes).
Against the background of rapid urbanization, a rising unmanaged transportation sector will result in continuesly
increasing in CO2 emissions. The GCF Green Buses Project can initiate a low-carbon transportation pathway by
promoting e-mobility solutions for public transportation services. Such a pathway will not only limit CO2 emissions but is
also associated with strong social and environmental co-benefits, including enhanced air quality and health effects for
millions of inhabitants. In addition, making use of Nepal’s clean power generation based on hydro (and other renewable
energies) the electrification of the public transport sector will be an important step towards sustainable mobility and
provide high potential for spill over effect to other transportation means, e.g., commercial and private vehicle fleets.
Project alignment with country’s national priorities and NDC and project ownership
Nepal has included transportation as one of the key sectors for climate mitigation in the second Nationally Determined
Contribution (NDC). The second NDC targets to increase sales of e-vehicles to cover 25% of all private passenger vehicle
sales (including two-wheelers) and 20% of all four-wheeler public passenger vehicle sales (excludes e-rickshaws and e-
tempos) by 2025, and 90% of all private passenger vehicle sales and 60% of all four-wheeler public passenger vehicle
sales by 2030. These targets are estimated to reduce emissions from a projected business as usual scenario of 3,640
Gg CO2 eq. in 2030 to 2,619 Gg CO2 eq., which is approximately a 28% decrease in emissions. The NDC also includes
plans to develop 200 km of the electric rail network by 2030 and to operate electric public transport in at least three
provinces. Also, one of the country’s goals is to reduce the dependency on imported fossil fuels and by thus reducing its
trade deficit, increasing its domestic electricity consumption (almost all comes from clean sources), and achieving net-
zero emissions by 2050. Thus, the Green Buses project is aligned with the country’s national priorities and contributes to
its NDC targets by supporting the deployment of electric buses replacing old diesel buses/minibuses/microbuses and
modal shift from fossil fuel private vehicles to clean zero-emission buses.
The new Constitution of Nepal 2015, clause 30, states that every citizen has the right to live in a clean and healthy
environment. The Federal Government aims to provide greater clarity with respect to governance over public passenger
transport in the Kathmandu Valley through the Kathmandu Valley Transport Authority (KVTA) Bill which, when enacted,
will empower the KVTA to take on the current functions of MoPIT’s Department of Transport Management. The Federal
Government has created a comprehensive and robust policy landscape for electric vehicles and buses. Key examples of
policies, which The Green Buses Project can address, include the National Transport Policy 2001, which aimes at
providing clean transport services; the Climate Change Policy 2011; the National Ambient Air Quality Standards revised
in 2012, which sets stricter standards for PM2.5 emissions; the Environment Friendly Vehicle and Transport Policy
2014/15, which sets specific targets for clean transport and encourages private sector investment in construction and
management of electric vehicle parking stations and service centres; the National Sustainable Transport Strategy 2015,
which specifies strategic actions pertaining to electric buses in urban areas; and the National Urban Development
Strategy 2017, which includes strategies for sustainable urban public transport systems for Nepal’s rising urban
population. The Green Buses Project can support Nepal to achieve its targets specific to each of the Sustainable
Development Goals 7, 11, and 13, which include: 50% electric vehicles in the public transport system by 2022 and 100%
by 2030, 25% availability of safe public transport system by 2022 and 50% by 2030, and a reduction of GHG emissions
by the transport sector from 12% in 2014 to 6% in 2030.
Describe the main root causes and barriers (social, gender, fiscal, regulatory, technological, financial, ecological,
institutional, etc.) that need to be addressed.
There are three main barriers to the transition towards sustainable passenger transport and deployment of electric mobility
(such as eBRT) solutions in Nepal, preventing their contribution to curbing GHG emissions from passenger road transport.
They are described below together with their respective root causes:
Weak policy enforcement and planning in public transport: In Nepal, there is a lack of coordination and consultation
between national government agencies, the private sector and civil society in the implementation of measures in the
(public) transport sectors. Nepal has adopted certain policies (see section B.2.3) that set first targets and provisions for
electric vehicles. However, the absence of directives, programmes, standards and legislation for electric mobility
constraints the realisation of targets. Policies are not enforced, and responsibilities and obligations are not set out.
Key root causes leading to this barrier are:

 No official programme and planning of public transport system; and structuring of routes
 Lack of institutional structure and capacity to plan and implement public transport projects, e.g., missing Public
Transport Management Authority
 Lack of coordination mechanism to engage all government agencies effectively
 Semi-formal operators, e.g., without service contracts, often individual operators/drivers
 The prevailing fare/finance structure is unable to allow sustainable and viable operation without adequate
government support
 Absence of policy to control usage of an appropriate type of vehicles for public transport
 Unclear distribution of roles and responsibilities among departments in ministries and the authorities (e.g.
municipalities and transport authorities)
 Existing transport plans do not contain a vision for sustainable mobility and do not take into account the potential
of electric mobility.
 Lack of awareness of benefits of EV among decision makers
Lack of climate-resilient infrastructure investments for enhancing public transport: In order to facilitate the
transition to a low-carbon transport sector, including the implementation of an eBRT public transport system, climate-
resilient infrastructure, e.g. pavement, road embankment, drainage structures, and bridges11, is a necessity. Kathmandu
Valley lacks investment in electric vehicle facilities like dedicated bus lanes, charging stations, investment in electric
infrastructure, and investments in general road infrastructure allowing efficient operation of public transportation.
 Missing financial resources and access to finance for public authorities
 Inability of public finance and investment in public transport: Long-term options involving borrowings and/or
guarantees are beyond the Nepal Governments’ fiscal capacity
 Deficiency in urban planning and management
 No bus depots and service stations for bus operators exist, instead vehicles are parked on streets
 Inadequate road space for public transport: Kathmandu Valley lacks rights of way for rail and/or suitable existing
road infrastructure for eBRT
 Uncertainty of electricity supply and cost
Lack of attractiveness of bus operation, investments and technical experiences and confidence: A well-functioning
market for electric vehicles in Nepal requires incentives for private actors as well as public-private partnerships— are key
for the sustainable electrification of the Nepalese transport sector and the establishment of an eBRT system. However,
the market for electric vehicles in Nepal remains uncompetitive and shows low demand. Upfront cost differences between
conventional vehicles and electric-powered ones remain high. Additionally, high risks for investors characterize the
electric mobility market. As a consequence of an absence of appropriate leadership, the public and potential consumer
have not been exposed to clear messaging.
 Initial high upfront costs for e- buses (5-6 times higher)
 High cost of financing, partly due to high inflation
 Under the current system (in the absence of regulation), the baseline situation in public transportation is financially
more attractive than the shift to electric mobility.
 There are no solid business models in place to demonstrate to the broader transport market what large public
bus electric mobility services might look like in Kathmandu
11 See further suggestions for the Kathmandu Valley in UNITED NATIONS CENTRE FOR REGIONAL DEVELOPMENT
(2015): Climate and Disaster Resilient Transport System and Infrastructure Development for Nepal, Background Paper for
Plenary Session 2 of the Programme, Final Draft, November 2015.
https://www.uncrd.or.jp/content/documents/3381Background%20Paper%20-
EST%20Plenary%20Session%202%20%28No.%202%29.pdf
 Limited business cases for investment and missing incentives: Giving the high upfront cost and the current
regulation, business cases for private bus operators are limited in the absence of incentives for electric vehicles
(e.g. in form of concessional loan, risk guarantee, tax rebates, relax in custom duty etc.)
Where relevant, and particularly for private sector project/programme, please describe the key characteristics and
dynamics of the sector or market in which the project/programme will operate.
As indicated above, the number of vehicles operating in Nepal has risen significantly since 1990, with annual growth rates
above 10%. Road transport is the predominant form of transportation and accounts for about 80% of all trips. Much of
the growth rates occurred in Kathmandu Valley. In 2016, 67.000 vehicles have been registered (a threefold increase
compared to 2000). In 1990 there were around 4,000 buses in Nepal, rising to more than 36,600 by 2015. Although the
number of public transport vehicles, especially bus, minibus, microbus and tempos, in the transport sector has increased
in absolute terms, their share decreased from 11% in 1990 to 3% in 2015.
The transportation sector leans towards the use of private vehicles (cars and motorcycles), but also the share of public
transportation as a mode of transportation stayed constant (at about 27%), despite the relative decrease of the share of
public buses. This indicates that there is generally a high acceptance and demand for public transportation. Walking and
cycling as a mode of transportation showed a significant relative decrease. In 2011, the number of total trips in Kathmandu
Valley amounted to about 3.5 million per day, while forecasts project an increase of 1.6 times by 2022. The public transport
service in Kathmandu Valley encompasses several thousands of individual operators on over 100 routes. The share of
low occupancy vehicles such as minibuses, microbuses and tempos operating within Kathmandu Valley accounts for
94% of total public transport vehicles, while the share of large buses accounts for only 6%. The quality of the public
transport service is poor and inefficient. There are no well-defined schedules, and the vehicles are generally poorly
maintained, lack cleanliness, and are overcrowded and uncomfortable. As vehicles compete with one another for
passengers, speeding is often a major concern for passenger safety and vehicles wait for a longer time at stops resulting
in vehicle stacking and congestion.
B.2. Project/Programme description (max. 3 pages)
Describe the expected set of components/outputs and subcomponents/activities to address the above barriers identified
that will lead to the expected outcomes.
The proposed project aims to promote an integrated, sustainable and zero emission public transport system in Nepal
reducing fossil fuel consumption, greenhouse gas emissions and air pollution within the transport sector in the Kathmandu
Valley. This means a transitioning from the current scenario of fossil fuel dependence to a future where low-carbon and
climate-resilient technologies are predominant for providing public transport services.
As a result, the project will comprise three components addressing the main existing barriers for this transition.
Component 1 will establish the required policy, regulatory and institutional framework for scaling-up low-carbon electric
mobility. It will focus on addressing institutional barriers related to capacity, coordination, consultation and awareness,
including integrated public transport planning. Component 2 will address the lack of climate-resilient public infrastructure
investments to ensure the successful establishment of an eBRT transport system and to facilitate long-term sustainable
transportation. Component 3 will establish a long-term financial mechanism to facilitate the affordability of electric
vehicles and operating assets by reducing capital requirements.
Component 1 (TA): Strengthen the policy, regulatory and institutional framework to promote, plan and coordinate
sustainable public transportation based on electric mobility
The component will address the lack of institutionalization, capacity, and awareness on eBRT by supporting a
coordination body, undertaking baseline and feasibility studies, and communication campaigns. Also, component 1 will
address the need for enhanced planning and the identification and alignment of required structures and political actions.
Moreover, as the proposed eBRT system fits well into certain existing visions and targets set by approved policies,
component 1 will also ensure better effectiveness of the implementation of policy. The component will be based on a
Technical Assistance grant for implementing necessary steps to build up institutional capacities and awareness via
training, workshops, consultation, and research.
Outcome 1: The Government of Nepal, Kathmandu Metropolitan City and municipalities take action to enhance
the sustainable, reliable and efficient public transport services
Output 1.1: Public transport system strategy and policy (including eBRT) to restructure the current public transport
industry for promoting sustainable transport solutions is delivered for adoption by the MoPIT’s Department of Transport
Management.
Activities within this output aim at creating various strategies for addressing the lack of coordination and consultation
between national government agencies, the private sector and civil society in the implementation of measures in the
transport sector, with a particular emphasis on eBRT. Moreover, an overall roadmap and action plan will be envisioned
as well as the elaboration on routes, bus services and complementary services.
Deliverables Output 1.1:
 Sustainable transportation eBRT master plan incl. alignment with other public transport systems, policy and
technology roadmap until 2030 / 2050 facilitating the transition to an environment-friendly, efficient, and affordable
public transport system
 Mobility plan for targeted section of the municipalities developed, including planning for other additional radial
routes to form a city-wide eBRT network, bus routes, feeder line and rerouting of private vehicles to enforce the
green mobility system
 Municipalities’ urban plans include an integrated transport plan that considered all modes of transport, with
particular emphasis placed on sustainable options for eBRT
 Strategies to integrate existing bus services and Green Buses to eBRT system, incl. feeder and complementary
services
Output 1.2: Proposed revision of Act and regulations delivered and enforcement of policies and regulations through
institutional support to the Kathmandu Valley Public Transport Authority strengthened.
This output aims at consulting and supporting the Kathmandu Valley Public Transport Authority (KVPTA) upon its
operationalization. When enacted, the KVPTA will take over responsibilities from the Ministry of Physical Infrastructure
and Transport and will work on routes for public transportation, regulations and management, as well as standards for
electric vehicles. KVPTA will engage municipalities to improve public transportation. Under this output, the responsible
authority (KVPTA or the Ministry of Physical Infrastructure and Transport) will be advised in terms of management,
operation and long-term financial sustainability of formal public transportation.
Deliverables Output 1.2
 Revision of Act, regulations and preparation of Act prepared for adoption by MoPIT’s Department of Transport
Management, later by KVPTA.
 Standards and procedures for operations, safety and maintenance exist for effective management of eBRT
system by KVPTA
 Public transport operation procedures exist with clear assignment of responsibilities to ensure affectivity of
sustainable urban transport services.
 Strategy for long-term financial sustainability of formal public transport sector incl. compensation mechanism for
non-participating operators and organizational and institutional development.
Output 1.3: A public entity / company to manage and operate the eBRT system is established.
Under output 1.3 a public eBRT system operating company will be created and implemented, in order to oversight the
eBRT system and operate the customer and service management. The newly established company will be regulated by
KVPTA and will be responsible for activities including tendering routes, monitoring, ticketing, customer rights and the
eBRT control centre. It is envisioned that the company will be financially self-sustaining and will ideally require no or
limited operation subsidies from the government.
 Terms, rules and procedures for new eBRT system operating company formulated for approval by KVPTA.
 eBRT operating company overseeing the system established
 New ticketing system exists allowing for distance-based fare collection and efficient operations, independently
operated and managed
 Centralised eBRT control centre and Intelligent Transport System (ITS) in operation
 eBRT system operating company oversees and ensures customer service and provision of key customer
amenities
Output 1.4: Marketing and information / public awareness campaign exist.

Under output 1.4 a public communication strategy and awareness campaign will be designed, including workshops for
government officials as well as local citizens. Output 1.4. will address a deficiency of awareness of electric mobility, due
to the lack of clear messaging to the public and potential customers concerning low-carbon climate-resilient eBRT system.
 Communication campaign and knowledge products prepared
Output 1.5: Technical capacity for KVPTA, eBRT system operating company and bus companies/operators on bus/eBRT
planning and regulations (incl. on business model, operation and maintenance etc.) strengthened.
Since the provided infrastructure for an effective and sustainable eBRT system will be used by private electric bus
companies, workshops and training will be arranged to educate on technical assistance and adequate skills to private
operators of the electric buses under this output.
 Capacity development workshops held for relevant local and national government officials and urban/transport
planners
 Trainings delivered to eBRT system operating company and KVPTA on planning, operation, and regulation.
 Hands-on training programme developed to provide adequate skills to the technicians and bus drivers from the
electric bus company
 Trainings and workshop delivered to bus operators, drivers, and technicians in charge of maintaining the buses.
Component 2: Investment in and construction of climate-resilient public eBRT infrastructure facilitating

sustainable transportation
Under this component, core eBRT infrastructure will be financed, including road infrastructures and infrastructure for the
operation of electric buses. The component will address the lack of necessary public investments in climate-resilient
infrastructure for the establishment and sustainable operation of an eBRT system and the long-term transition to a low-
emission transport sector. Hereby Component 2 will be facilitated by activities under Component 1: once KVPTA is
established, KVPTA and the eBRT system operating company will procure and built the infrastructure with the support of
municipalities and MoPIT.12
The climate-resilient infrastructure itself is key for creating the basis of an enabling environment for private operators of
electric buses. Currently, Kathmandu Valley lacks urban planning and infrastructure to cope with the rising urbanization
and use of private vehicles. Infrastructure for an eBRT system will tackle the dense congestion on Kathmandu’s roads
while addressing the rising problem of air quality. Component 2 requires GCF concessional loans as well as a grant part,
complemented by grants from the Nepalese government and co-funding from TDF.
Outcome 2: KVPTA and the Department of Roads (DoR) in cooperation with the municipalities, incl. the
Kathmandu Metropolitan City, procure and construct the eBRT, and complementing core infrastructure.
Output 2.1: Technical preparations for public transport based on Green Buses investments finalised.
Activities under output 2.1 will facilitate the construction of eBRT infrastructure through preparing necessary steps,
including the formulation of requirements and the selecting process for eligible construction companies.
Deliverable Output 2.1
12The responsibility for major roads lies with MoPIT / Department of Roads (DoR); current institutional/policy structure do
not allow municipalities to undertake work on roads without the DoR.
 Final Detail Project Report and technical specification for eBRT system
 Tendering and procurement process for civil work on core eBRT infrastructure
Output 2.2: Engineering, procurement and construction of climate-resilient physical road infrastructure (main eBRT
corridor) by DoR in relevant municipalities completed.
Activities under this output will comprise relevant steps for the construction of physical road infrastructure. Envisaged, in
phase 1, is a 27 km Ring Road in Kathmandu Valley that is aligned with strategically efficient intersections of public
mobility.
In phase 2 (optional), the planning of a radial route of radial route connecting the central business district-CBD (19.5km )
potentially from Bhaktapur/Suryabinayak to Tundikhel/ Rantapark (see Figure 3). 13 The majority of is the road is
characterised by 6-8 lanes. The integrated radial route could bolster the Ring Road project in connecting the major
commercial and urbanized areas.
Likewise, for phase wise implementation of other key radial routes connecting CBD, following radial routes would be
considered for further study during preparation of detail funding proposal/
 Narayan Gopal Chowk – Satdobato ( 11.2 km) – KSUTP
 Koteshwoshore – Gongabu New Park via Lainchaur (11.4km)
 Along Ring Road River Corridor (JICA)
Figure 3: eBRT system corridors
Source: PRC, 2020
The travel pattern of the Kathmandu Valley is highly radial with the vast majority of trips starting or ending in Kathmandu
Municipality14. The Radial route(s) would connect to CBD of Kathmandu city, which will increase the eBRT ridership
significantly. The CBD (Newroad, Durbarmarga, Putalisadak, Thamel) is the destination of most trips in the Kathmandu
Valley and is also a key public transport hub connecting to all parts of the Valley. The optionally proposed radial routes
will also connect major commercial centres such as New Baneshwar, Tripureshwar, Teku, Maharajganj, as well as
Singhadurbar (the administrative centre of the government with all the ministries, departments, and supreme courts). The
eBRT coverage will increase significantly the connection of key points. Once the Ring Road and the optional radial
13Based on the Kathmandu Sustainable Urban Transport Project (KSUTP)’s Public Transport Restructuring Report, two
additional radial routes, potentially from Narayangopal Chowk to Satdobato via CBD (11.2 km) and Koteshwar to New
Buspark via Lainchour (11.4 km), are envisioned in a third phase.
14
JICA (2019). Data collection survey on urban transport in Kathmandu Valley. Japan International Cooperation Agency,
NP JR 19-001.
route(s) is completed, an eBRT network is formed. A network is important as it increases the ridership by folds and will
help to make the eBRT system successful, both financially and politically.
Figure 4 shows a map of the Kathmandu Valley and the proposed first route with major infrastructure measures at
important intersections of the Ring Road. The infrastructures will among others include segregated busways, pavement
intersections, stations, and if required flyovers and underpasses.15
Figure 4: Major infrastructure measures for eBRT routes of the Ring Road
Source: TDF, 2021
Additionally, Output 2.2 will encompass the construction of special stations and terminals for facilitating that passengers
can safely board the electric buses. The terminal constructions aim at establishing stations that are well-integrated into
existing transportation infrastructure.
 eBRT corridor Ring Road: 27 km necessary climate-resilient infrastructure (segregated median busways or bus-
only roadways, pavements, intersections improvements, stations, and flyovers/underpass, if required etc.) are
constructed at the Ring Road
 46 Special stations and terminals to facilitate easy physical integration between trunk routes, feeder services,
and other mass transit systems (if applicable) are installed at the Ring Road.
OPTIONAL phase 2: eBRT corridor on radial route connecting CBD: 19.5 km from Bhaktapur/Suryabinayak to Tundikhel/
Rantapark, including 34 additional special stations and terminals (the majority of the road section has 50 m ROW,
currently 6-8 lanes road).Output 2.3: Plans are delivered for integrating eBRT system with walking, cycling, and other
transport modes.
In order to ensure good integration of the eBRT infrastructure into existing systems, this output is dedicated to improving
pedestrian and cycling infrastructures around the eBRT stations. Output 2.3 includes the construction of bicycle parking,
streetlights and improved traffic lights, at-grade crossings, pedestrian overhead bridges, pavement improvements and
greeneries.
15 Flyovers and/or underpasses might be necessary in the north-eastern section of the ring road for about 500 m, because
of heritage sides; roads are not only 4-lane and expansion might affect the heritage lands.
 Improved pedestrian and cycling infrastructure along the eBRT corridor and in at least 250 m radius area around
the eBRT stations completed
 eBRT stations (approx. 46 without the optional phases) with existing cycle lanes integrated and bicycle parking
at the eBRT stations installed
Output 2.4: Construction of other eBRT infrastructure (depots and staging facility) by DoR completed
Additional to road infrastructure, a comprehensive eBRT system implementation requires infrastructure building for the
operating buses, including depots, parking, and charging arrangements. Under output 2.4 such eBRT specific
infrastructure will be constructed under the responsibility of the DoR.
 2 depots for night-time, off-peak parking and re-charging of the e-bus fleet are in place, including staging facility
or terminals along he eBRT corridor.
Output 2.5: Charging stations to supply power to e-buses from the national grid installed and operated by state-owned
Nepal Electricity Authority (NEA).
Activities under output 2.5 are dedicated to implement e-bus charging stations that are supplied with energy from the
national grid. 16 The electricity supply will be delivered by the state-owned Nepal Electricity Authority. Source of grid
electricity is hydropower to over 99%, ensuring that the e-buses mitigate CO2 emissions by replacing existing fuel-based
transportation modes. In addition, the tariff rates by NEA for bus companies/operators will be lowered, as needed and
applicable.
 40 fast-charging stations / powerlines in bus depot(s) and terminals, along the eBRT route on Ring Road installed
(additional 20-25 required for crossing route (phase 2))
 NEA operates charging stations and offers power supply tariffs for electric bus operators
Output 2.6: Operation of transportation system (BRT) under the management of the eBRT System Operating Company
commissioned.
Output 2.6 will build the necessary system related to the operation of the newly established public entity/company. This
output is related to the required software and infrastructure for fair collection and maintenance. Fair collection components
include readers, turnstiles, vending machines as well as a card system and the establishment of a central control system.
Keeping the system operational requires regular maintenance and upgrades of software systems to update security and
communication protocols.
 eBRT control centre and Intelligent Transport System (ITS) installed, incl. bus information system (BIS) and a
bus control system
 Building bust (cashless) ticketing system designed and in operation
 Effective management of the eBRT services by eBRT System Operating Company and KVPTA.
Component 3: Investments in and promotion of sustainable public transportation operating assets through a
long-term financial mechanism for private actors.
Private and public electric bus operators will be licenced to provide the eBRT services under the eBRT system operating
company. Component 3 aims at managing market incentives and facilitating the engagement of private and public
providers of public transportation. Thereby, Component 3 aims at implementing a long-term finance mechanism to
16The Feasibility Study for the project will also compare and investigate if powerline and trolley bus solution would be an
economic and technical complementary solution.
address the higher up-front cost by reducing the cost-differential between electric and conventional vehicles. In
combination with creating confidence in the technology, this mechanism will foster the market for e-mobility solutions.
Additionally, through public-private partnerships and further market incentives, private initiative will be facilitated. A
regulatory framework will address low transparency issues such that an enabling environment for investment and private
sector engagement is created.
Outcome 3: eBRT bus operators invest in vehicle fleet and facilitate public transportation services under
restructured privately-owned and operated public transport sector along the routes to be serviced by Green
Buses in Kathmandu Valley.
Output 3.1: Business models and operation system for licenced private and public bus operators under a reformed
business and administrative structure developed, e.g., municipal enterprises structure or public-private partnership (PPP)
model for operating e-buses.
Under output 3.1 a reliable transparent business model will be established for licenced private and public bus operators
under the management of the eBRT system operating company. Activities include the development of such a business
model, incl. contractual arrangements such as gross-cost-contract, establishment of a framework for public-private
partnerships, and the implementation of transparent tender processes.
 Business model developed and adopted for inclusive operation of existing and new private and public bus
operators of public transport
 Service-level contract(s) with bus operators developed for adoption and implementation
 Transparent tender processes for awarding all contracts and concessions finalised
Output 3.2: Procurement of high-quality bus fleet with zero emissions performance (electric buses) for implementation/
operationalization of eBRT bus fleet completed.
Output 3.2 deals with the procurement processes of the zero-emissions electric bus fleet. Quality standards will be
established, e.g., technical specifications and minimum requirements. The project includes the purchase of 100 new e-
buses (mixture of standard 12 m and articulated 18 m e-buses) for phase 1. Baseline buses currently operated minibuses
and vans units.
The following tables estimates the required number of busses for the operation at the Ring Road and the optional crossing
route.
Table 1: Tentative key data eBRT intervention at the Ring Road
Item Assumption Unit Comments

Length (L) 27.3 km
Average vehicle speed (S) 20.0 km/hr Ahemdabad BRT=25km/hr; Transmilineo=27 km/hr
Terminal Time (T) 15.0 minutes 10-15 mins terminal time
Total Cycle time (C=L/S+T) 97 minutes
Headway (H) 2.0 minutes might be lesser in peak hour and more in non-peak
hour
Number of bus stations required 46 stations According to the BRT standard guide, the distance
between two stations should not be less than 300 m
and should not exceed 800 m; here are 600 m
assumed on average.
Buses required (one direction) (B=C/H) 49 e-buses
Total Fleet size (both directions) Min. 100 e-buses Mixture of standard 12m and articulated 18m e-
buses; estimated 98 busses required for operation
plus reserve margin for continuous reliable
operation
Expected cost per e-bus 400,000 USD USD 340,000 – 400,000 in 2017; Source Pre-
feasibility study
Total cost / investments for e- 40 million USD
busses
Average passenger capacity per bus 120 pax Mixture of standard 12m and articulated 18m e-
buses
PPHPD 3,600 pax
Table 2: Tentative key data for Route 2: Suryabinayak/Bhaktapur-Tundikhel/Ratnapark (optional phase 2)
Item Assumption Unit Comments

Length (L) 19.5 km
Average vehicle speed (S) 20 km/hr Ahemdabad BRT=25km/hr; Transmilineo=27 km/hr
Terminal Time (T) 15 minutes 10-15 mins terminal time
Total Cycle time (C=L/S+T) 132 minutes
Headway (H) 1.7 minutes might be lesser in peak hour and more in non-peak
hour
Total Fleet size Min. 80 e-buses Mixture of standard 12m and articulated 18m e-
buses; estimated 78 busses required for operation
plus reserve margin for continuous reliable
operation
Expected cost per e-bus 400,000 USD USD 340,000 – 400,000 in 2017; Source Pre-
feasibility study
Total cost / investments for e- 32 million USD
busses
Average passenger capacity per bus 120 pax Mixture of standard 12m and articulated 18m e-
buses
PPHPD 4,235 pax

 Technical specification and minimum standards of e-buses developed and adopted by KVPTA
 Approx. 100 e-buses for the Ring Road financed, procured and in operation by private operators (for 2 minutes
headway and assuming average eBRT vehicle speed of 20 km/hr) for service on ring road17
 Private sector operators start providing sustainable and high-quality public transport services utilising e-buses in
Kathmandu Valley
Output 3.3: Implementation of bus restructuring compensation for some bus operators (to those who are included in bus
restructuring)
The project envisaged a restructuring of the public transport network and potentially scrapping program. Hence, a
compensation mechanism for current bus owners not benefitting from the restructuring will be established. Current bus
operators will also be engaged to fulfil feeder services to the eBRT system.
 Compensation of current bus operators not benefiting from the restructuring
In terms of rationale, please describe the theory of change and provide information on how it serves to shift the
development pathway toward a more low-emissions and/or climate resilient direction, in line with the Fund’s goals and
objectives.
Contribution to the regulatory framework and policies (Component 1)
Nepal already has in place a significant range of policies and incentives (exemptions from taxes and duties) to promote
electrically powered transport, including public transport and e-buses (see Section B1 above and pp12-14 of the attached
pre-feasibility Study Report). The primary contribution of Green Buses will therefore be to put these policies and incentives
to effect. The key legislative and institutional changes in the immediate future will be the passage of the Kathmandu
Valley Public Transport Authority Act, to be followed by the establishment of the KVPTA and the necessary regulations.
17 Additional 80 buses for optional crossing route in phase 2.

The Green Buses project can provide a stimulus to the development and approval of the regulations, and implementation
of the Authority, for all three tiers of Government and the stakeholders which will be engaged.
The establishment of KVPTA and a public operating company (see activity 1.3), with the engagement of municipalities
as advocates of public transport, will ensure a long-term enabling environment and institutional backing for public
transport. Regulation can ensure such matters as standards and selection of source of power (electric).
Establish resilient and sustainable infrastructure (Component 2)
The support infrastructure (e.g., roads, depots and charging stations) can be permanently available. The charging stations
themselves are to be developed by the NEA according to financially-sustainable business principles for the bus operators.
Green Buses may lead to a long-term restructuring of public demand such that public transport is the preferred option,
over individual private. There is a sustainable lock-in effect if travellers decide not to purchase cars and motorbikes, which
obviates the risk that household will always travel privately once they have purchased one. The establishment of a
ticketing system, which can be used not only by Green Buses but also by other operators and new public transport
systems, potentially including eBRT, Metrorail and monorail, will mean an important enhancement for the public transport
system in Kathmandu and Nepal.
Contribution to the creation of an enabling environment (Component 3)
Under business model (e.g., PPP) after CAPEX has been subsidised, the operation can be financially sustainable,
provided positive FIRR is achieved. Positive FIRR may be achievable, even with the replacement of the fleet, based on
the declining cost of (battery-powered) electric buses. The e-bus fleet will have an expected life of 10-20 years, before
requiring replacement. The e-buses are financially sustainable for the duration, given much lower OPEX compared to
diesel. If the introduction of the e-bus fleet is phased according to scaling up of bus routes, a fleet replacement can also
be phased and will possibly not need funding by the government of donors;
The following graphic presents a simplified theory of change that summarises key aspects of annex 2.
Figure 5: Simplified theory of change
Component 1
Strengthen the policy, regulation The Government of Nepal, city of

and institutional framework to Kathmandu and municipalities
promote, plan and coordinate take action to enhance the
sustainable public transportation sustainable, reliable and efficient
based on electric mobility public transport services
Foster sustainable,
reliable and efficient GHG emissions
public transport and other
Component 2
Municipalities, incl. the city of

Investment in and construction of services based on pollutants from
Kathmandu, procure and
climate resilient public eBRT clean eBRT mobility transportation
construct the eBRT and
infrastructure facilitating solutions enhancing the are reduced,
complementing core
sustainable transportation environmental, social while public
infrastructure
and economic benefits transport services
for the citizens in the are enhanced
Kathmandu Valley
eBRT operators invest in vehicle
Component 3
Investments in and promotion of fleet and facilitate public

sustainable public transportation transportation services under
operating assets through long- restructured privately-owned and
term financial mechanism for operated public transport sector
private actors. along the routes to be serviced by
Green Buses in Kathmandu Valley.
PROJECT COMPONENTS OUTCOME PROJECT OBJECTIVE IMPACT
Describe how activities in the proposal are consistent with national regulatory and legal framework, if applicable.
The public policy environment in Nepal is already highly supportive of the transfer from fossil-powered to electric-powered
transport vehicles, including electric buses. The need to shift to environmentally friendly transport services is a key aspect
of the political agenda. This can be seen in the new Federal Constitution (clause 30 states that every citizen shall have
the right to live in a clean and healthy environment), the policies of the Federal Government, Federal budget
commitments, and the policies of the newly established Province 3 government which encompasses the Kathmandu
Valley. According to a pre-feasibility study of GGGI, the objective of a low-carbon transportation pathway has been
translated into several concrete policy and regulatory measures, creating a wide, comprehensive and increasingly robust
policy landscape for electric vehicles that includes targets for transportation sector as well as air quality standard targets.
The following lists related policies:
 National Transport Policy: the policy aims at providing clean public passenger transport services (powered by
gas, electricity and solar) in order to manage air and noise pollution levels.
 Environment Friendly Vehicle and Transport Policy: The policy sets specific targets related to clean
transportation. These include building up critical infrastructure, setting private-sector investment incentives and
increasing the share of “environment friendly vehicles” to a minimum of 20% of the total vehicle fleet by 2020 (the
policy was formulated in 2014/15).
 National Sustainable Transport Strategy: The strategy sets an overall direction to strengthen the economic,
social and environmental indicators in providing sustainable transport solutions in Nepal. The strategy includes
the introduction of trolleybuses or electric buses in urban areas and the provision of electric vehicles in tourist
areas. Moreover, the document highlight that hydropower generation will provide numerous opportunities to
integrate electric vehicles.
 National Urban Development Strategy: The strategy recognizes the growing concern about air pollution and
the need for sustainable urban public transport systems to cater to the demand of Nepal’s rising urban population.
Furthermore, the need to enhance inter‐urban connectivity through route planning to introduce Bus Rapid Transit
(BRT), Light Rail Transit (LRT) and Mass Rapid Transit (MRT) in metropolitan cities and improving institutional
mechanisms to regulate public transport is emphasized.
 National Climate Change Policy: The policy envisions to promote low carbon emission development and
include the strategy to promote electric vehicles.
 The Fifteenth Plan (Fiscal Year 2019/20 – 2023/24) says to emphasize the use of sustainable and environment-
friendly vehicles. Policies include prioritizing a bus rapid transit system and use of the electric vehicles.
 National Ambient Air Quality Standards: The target states that PM2.5 concentration can only exceed 40 μg/m3
for 18 days per year. However, in Kathmandu PM2.5 exceeds this level on an estimated 90% of days (with the
transport sector as the largest contributor).
Describe in what way the Accredited Entity(ies) is well placed to undertake the planned activities and what will be the
implementation arrangements with the executing entity(ies) and implementing partners.
TDF is a financial intermediary institution with a corporate vision leading towards it being an urban development bank.
The TDF was created to strengthen the technical, managerial and financial capabilities of the municipalities for the
formulation, implementation, operation and maintenance of urban development projects and programs, as set out in the
TDF Act and rules in 1997. The TDF Act empowers TDF to mobilise loans and grants from government and non-
government organisations, and national and international financial institutions, and to participate in consortia with other
financial institutions. Although the TDF Act is broad-ranging and provides significant scope and flexibility, TDF has not
yet taken advantage of all the options available to it under the Act. Since its establishment in 1989, TDF has received
loans and grants from the GoN, often originating from international donor projects.
TDF has been selected as direct access entity (DAE) applicant of the GCF by the national designated authority (NDA),
Ministry of Finance (MoF), Government of Nepal (GoN) to access climate financing.
Implementation Arrangement:
 TDF will serve as the Accredited Entity for this project, responsible for the overall implementation including
reporting to the GCF (Annual progress reports, midterm evaluation etc.)
 Executing Entity: Ministry of Physical Infrastructure and Transportation (MoPIT) will be responsible to plan,
develop, implement public transport/eBRT infrastructure. Under the Ministry’s Department of Transport
Management (DoTM) the KVPTA will be established to oversee and regulate the transport sector incl. the eBRT
operation. The KVPTA will be responsible for collecting, aggregating, and disseminating the results indicators of
the project. For the operation of the eBRT system, a new company, the eBRT System Operating Company will
be formed under the supervision of the KVPTA.
 The eBRT System Operating Company will also be in charge of tracking the performance of the eBRT system,
including the performance of the eBRT buses, usage evaluation, and GHG mission reductions determination.
 Implementing partners: 2 Metropolitan Cities of Kathmandu Valley (Kathmandu and Lalitpur) will participate in
the implementation of the project.
 Public and private operators will operate the eBRT fleet under special agreements (e.g., in service contracts such
as gross-cost-contract or Public Private Partnership (PPP) with the eBRT System Operating Company.
All implementing partners and stakeholders will be further engaged during the full funding proposal development. A list
of relevant stakeholders is attached in the Annex.
Please provide a brief overview of the key financial and operational risks and any mitigation measures identified at this
stage.
The following table summarises the key financial and operational risks and potential mitigation measures.
Table 3: Financial and operational risks and potential mitigation measures
Level of
Risk description Probability* Mitigation Measure
Impact*
Governance Risks
The MoPIT’s responsible department is not Medium High KVPTA bill will be enacted, which grants
empowered to manage public transport in Nepal legal authority to the newly established
– governance gap KVPTA
Other institutions may support alternative mass High Medium The eBRT services will be planed
transit models (e.g., Metrorail, Monorail on the complementary and supplementary to
inner ring road), and potentially block the alternative models; provide short-to-
proposed Green Buses model medium term solutions; flexibility of
routing; advocacy by TDF and other
stakeholders
Given high levels of investment by multiple High High Inclusion and engagement of existing
providers in the current privately-operated public private operators in new PPP/PSP model
transport system, and potential clashes of and; phased approach to the introduction
interest between the proposed Green Buses of a new model, e.g. from primary to
model and the current private operators. Hence, secondary to tertiary routes or by zones
current private transport providers could disrupt
the eBRT services
Lack of institutional and/or governmental support High Low Link the eBRT model to governments’
commitments, e.g., international
commitment to CO2 reduction, carbon
credits, Province 3 policy of no fossil-
fuelled vehicles by 2030, National Action
Plan for e-Mobility 2018. (Additionally,
stakeholder consultations showed highly
positive feedback from institutional side
so far)
Emergence of a monopoly provider of passenger Medium Low Use of multiple zone-based or route-
bus services, undermining negotiation positions based concessions / PPPs, commencing
of KVPTA in the procurement process
Political instability, change of administration Medium Medium Establishment of KVPTA and eBRT
company, which will work independently
from federal government, will be affected
less by political instability at federal level.
Technical Risks
Slow implementation of climate-resilient road Low High In the short-term, the eBRT busses do not
infrastructure, as estimates show that certain depend on the implementation of major
road infrastructure improvements might require road infrastructure projects and uses the
5-10 years of time. existing infrastructure.
For eBRT project in the selected routes technical Medium High In case of bottlenecks, elevated BRT
challenge may exist on Ring Road expansion in lanes will be constructed.
southern sides (due to available space).
Electricity supply may be unreliable in short, High Medium Use night-time, off-peak power; do not
medium and long term, leading to disruption of depend on immediate top-up
services technologies; specify buses for all-day
use; priority contract with NEA for
dedicated feeder; multiple charging
locations based on multiple sub-stations;
hub and spoke charging stations.
Other option could be installing solar
power in BRT stations and depots.
Financial and Commercial Risks
High up-front cost of battery-powered buses High High Gain green finance to address the short-
makes business model unviable and term funding viability gap between diesel
unsustainable and electric
Alternative mass transit initiatives may cherry- Medium High Financial modelling should take into
pick most profitable, high-volume options, e.g. account worst-case scenarios in earlier
the inner ring road period. Develop models for integrated
feeder routes. Maintain close consultation
with proponents with other projects
Competing mass transit initiatives may lead to Medium High The eBRT system will be an important
uncoordinated routing, scheduling, pricing and complementary element to the overall
ticketing, thereby confusing users and future public transport systems, e.g., to
undermining the effectiveness of the total public the planned metro, rather than a
transport system competitor. KVPTA will use its mandate
and power to coordinate routing,
scheduling, pricing, and ticketing
sufficiently.
Increases in price of electricity charged by NEA High Medium Prices to be set by the Nepal Electricity
Regulatory Commission; proposed
business model should not rely on special
concessional rates, rather the standard
industrial off-peak rate
Revenue leakage (e.g. fare evasion) relate to the High High The proposed ticketing system will
limited enforceability of payment for the use of minimise risks of revenue losses
public transport.
Failure to develop bankable financial and High High Identification and analysis of PPP options
operating model for the proposed system based on realistic costings and scenarios
eBRT system will not be used at projected levels Medium Low Estimations and evaluation will be based
of utilisation. on detailed surveys and a sophisticated
model; Good quality of operation and
campaign
Social and Environmental Risks
Failure to improve significantly passenger Medium Medium Ensure business model and private
comfort, disability access and women’s partner(s) follow specified standards –
protection from harassment regulation by KVPTA; Requirements
included in the PPP agreement
The eBRT system replaces small private Medium High Inclusion of existing private operators in
operators and their staff, undermines their new PPP/PSP model; phased approach
businesses and threatens their livelihoods to introduction of new model; good
communication by authorities
Missed opportunity to reduce CO2 and other High High Gap finance (CAPEX) from green funding
GHG emissions. High up-front cost of battery- sources; long payback period;
powered buses leads to use of diesel etc. concessional terms
Supplied electricity from the grid may not be High Medium Charge buses in off-peak periods only
green at all times. The hydropower sources (highest risk of non-green energy is in
could not be sufficient in times of dry season, peak periods, when NEA supply may be
periods of peak consumption and in light of a overstretched)
fast-growing demand for energy
Unsafe e-battery technology leads to accidents High Medium Select tried-and-tested e-battery
(fatality, injury, damage, inconvenience); toxic technology with good safety record; the
waste from e-batteries choice of technology should also be
based on long-term security of supply;
consider already in advance solutions for
e-battery disposal
* Without mitigation measure; Source: Green Busses Pre-feasibility study, 2019, Section 4 (pp. 31-43)
B.3. Expected project results aligned with the GCF investment criteria (max. 3 pages)
The GCF is directed to make a significant and ambitious contribution to the global efforts towards attaining the goals set
by the international community to combat climate change, and promoting the paradigm shift towards low-emission and
climate-resilient development pathways by limiting or reducing greenhouse gas emissions and adapting to the impacts of
climate change.
Provide an estimate of the expected impacts aligned with the GCF investment criteria: impact potential, paradigm shift,
sustainable development, needs of recipients, country ownership, and efficiency and effectiveness.
Impact potential:
CO2 emissions from the transportation sector grew at an average rate of 11% annually between 1994-2013 and have
continued to grow recently. Over the last years, the share of public transportation of all modes of transportation has been
stable at around 27%. In order to estimate the impact potential of the Green Buses project, CO2 emission of a baseline
scenario have been calculated, based on the number of conventional petrol-powered minibuses the project can potentially
replace by e-buses. The Green Buses fleet might comprise 100 electric buses (Ring Road, phase 1 of eBRT system),
while each bus covers an approximate distance of 88,000 km per year. An e-bus has an average passenger capacity of
120 passengers. Taking differences in the average capacity utilization into account, the eBRT bus fleet could replace
about 1920 conventional minibuses with an average passenger capacity of 9-14 passengers. Considering an average
fuel economy of 20 litres per 100 km and an emission factor of petrol of 2.32 kg CO2 per litre, the baseline scenario
inherits CO2 emissions of about 80.000 tons CO2 every year. The emissions reduction estimation is summarised in Table
4.
The electric bus fleet, however, would be powered by electricity from Nepal’s grid, which is based on over 99%
hydropower. In 2017, Nepal imported around 30% of its electricity from India.18 Since the electricity being imported is
predominantly generated from coal-based power plants, any end-use technology, including electric buses, using this
electricity will effectively be contributing to global emissions. However, Nepal has targeted to increase its hydropower
capacity to 10,000 MW by 2025. Gradually, as supply in the country increases, import from India will decrease. In the
long-run, since more than 95% of electricity generated in Nepal is expected to come from hydropower, it can be safely
assumed that electric vehicles will have no greenhouse gas emissions if fuelled from the national grid.
Moreover, Nepal has a high potential to extend the production of hydropower, facilitated by the country’s geographical
landscape. The hydropower potential of Nepal is estimated at 83,000 MW.19 Thus, Nepal can also cope with growing
electricity demand in the population and industrial sector. Currently, a new hydropower plant is under construction, the
Upper Tamakoshi hydropower plant in Dolakha, with a capacity of 453 MW. The commissioning is planned for 202120. In
this context, a grid emission factor for the electric bus fleet of zero can be considered. Hence, the project can mitigate a
18 GGGI, 2018
19 ibidem
20 https://www.nepal.com/blog/new-hydro-power-plant-for-nepal/
total of about 870,000 tCO2 within a project lifetime of 20 years (tank-to-wheel). The estimation considers rather
conservative assumptions. Additionally, it has not been considered that a comprehensive eBRT system might lead to a
decrease of traffic congestion in Kathmandu Valley and to a rise in the share of passengers in the Green Buses public
transportation, including passengers that switch from private vehicles to public transport as a mode of transportation.
Consequently, the total annual emission reduction is likely to be higher than the estimation suggests.
Table 4: Emissions reduction (tank-to-wheel) compared to baseline scenario
Emission
Number of e- Number of Annual driving Total annual
Proposed Routes reduction over
buses in Minibuses distance per emissions
20 years time
fleet replaced bus reduction
span
Ring Road 100 1,070 88,000 km 45,000 tCO2/a 870,000 tCO2
Optional radial route

connecting CBD
(Suryabinayak/
80 850 88,000 km 35,000 tCO2/a 690,000 tCO2
Bhaktapur-
Tundikhel/Ratnapar
k)
Total 180 1,920 88,000 km 80,000 tCO2/a 1,560,000 tCO2
Source: own estimation
Paradigm shift:
The Green Buses project has the potential to provide a long-term strategic benefit to Nepal. The transformative potential
of the initiative will provide an opportunity for public and private operators to apply electric buses in routes beyond the
Kathmandu area. Through Component 1, it will also provide policymakers and institutional bodies with the knowledge to
implement policies and regulations that can support a further upscaling of electric vehicle use in Nepal.
There is broad potential for scaling up and replication of e-buses beyond the project scale. First, an expansion from
principal routes to secondary routes in Kathmandu Valley including coverage of the Kathmandu city centre as well as the
neighbouring valley, potentially with the municipalities of Banepa and Dhulikhel, would be possible with smaller e-buses
able to operate on narrower, winding roads. Second, exists the potential to expand and replicate services in second-
tier cities beyond Kathmandu Valley. Such cities outside the Valley might include Pokhara-Lekhnath, Biratnagar,
Bharatpur, Birgunj, and Butwal-Siddharthanagar.
The integrated ticketing system, which is designed to minimise revenue leakage, may be applicable to all public transport
and modes in Kathmandu Valley, including Metrorail and Monorail besides eBRT. It can be viewed as replicable if the
model is used by other public transport operations, or scalable if other operations use the same ticketing system.
With regards to the potential for knowledge and learning, the support of KVPTA will include testing of regulations,
policies and procedures based on the Green Buses initiative. Further activities will be assisted through capacity building
activities under Component 1. TDF will build its capacity as an Accredited Entity for GCF with responsibility for large-
scale projects. Since M&E will be an essential aspect of regulation, data collection represents to be a requirement for the
operators imposed by KVPTA. The private sector learning can be achieved through transparent communication of tracked
indicators (e.g., passenger data) to potential investors, made available by KVPTA.
Sustainable Development Potential – Co-Benefits:

The project’s main target is to provide access to sustainable transportation, provide climate-resilient infrastructure and
the reduction of GHG emissions. It contributes significantly to sustainable development goals (SDG) 3 (“good health and
well-being”), SDG goal 7 (“affordable and clean energy”), SDG goal 9 (“industry, innovation and infrastructure”), SDG
goal 11 (“sustainable cities and communities”), and SDG 13 (“climate action”). The economic, environmental and social
impacts are summarised below.
Economic co-benefits
All fossil fuel being consumed in the transport and residential sectors is imported into the country. This dependence on
foreign energy supply and fuel imports have contributed significantly to energy insecurity in Nepal. The country already
experienced blockades of fuel imports as a political means of pressure and high volatility of fossil fuel prices negatively
affects public transport operators, as bus fares are controlled by the federal government. The implementation of electric
public transport will help to diversify the energy mix. This it would not only ease Nepal’s import dependence but also
potentially reduce the countries net trade deficit, which is dominated by the imports of petrochemicals.
Furthermore, the transformative potential of the project towards sustainable transportation and electrification could shift
the political and financial focus towards the further development of hydropower, other renewable power and grid
connectivity. The sustainable development of the energy sector will significantly contribute to a more resilient, future-
oriented economy.
Additionally, the implementation of an electric public transport system can have positive effects across the industrial
sector. Electrification of the transport sector can give rise to vehicle manufacturers, development of batteries, charging
stations and other EV related accessories, resulting in the creation of a vast amount of job opportunities. In general,
enhanced mobility is associated with an overall higher economic activity.21
Social co-benefits
The major social benefit of the project is improved air quality and reduced noise in urban areas. Air pollution is a major
problem in Kathmandu Valley, and the transportation sector is thereby a major source of urban air pollution. Hence, the
project will increase the well-being of people in Kathmandu and Nepal.
The current stock of public transport vehicles is often in bad shape and poorly maintained. Passengers’ safety in the
vehicles is usually poor and, due to competition among operators, fast driving is no exception and barely regulated by
the police. With the Green Buses project, safety standards can be significantly improved for passengers, other vehicle
users and pedestrians. Additionally, enhanced cleanliness, space and reliable schedules (operating on a fix timetable
and fix routes) are contributing majorly to passengers’ comfort and ease of access. eBRT buses are also equipped with
ACs and have higher quality seats. Comfort and easier access to low-floor electric buses particularly benefit elderly,
people with disabilities, passengers in wheelchairs, pregnant women, or parents with buggies. Safer, reliable mobility that
is available throughout the day, instead of rather at peak times, can also positively affect people’s access to education,
family visitations and engagement in sports and various social activities. The project will help in creating more inclusive,
equitable and safer city, and enhance the quality of life of the residents.
The Green Buses project should increase the number of formal jobs which will replace the informal employment
associated with current private contractor provision, which will also enhance the safety and security of employees in the
public transport sector. Key outcomes will be to facilitate access to work and develop an economically efficient,
consolidated and integrated job market in the Valley, particularly for outer urban areas and peri-urban communities.
Climate-resilient urban development

The road and transport infrastructures and services are not designed climate-resilient so far. In this Green Buses project,
all the eBRT infrastructures will be designed climate resilient, especially to withstand and mitigate urban flooding and
increasing greenery. These infrastructures will help to reduce the exposure to climate hazards, to safely transport people
and act as a refugee during climatic calamities, and ensure that adequate services are provided during the extreme
weather conditions. Thus, the project will help to support to enhance the climate resiliency of Kathmandu’s urban
settlements and as well as become a model project for the country on building climate resilient infrastructures.
Environmental and public health co-benefits

Major environmental co-benefits are reduced emissions of pollutants and reduced noise emissions. The major concern
for air pollution in the cities is PM2.5 and NOx emissions. Kathmandu Valley is among the most polluted areas in the
world. Annual average exposure to fine particulate matter (PM2.5) in Kathmandu Valley was three times higher than the
21Kathmandu Vally has already more than 4 million commuters, according to the Transport Sector Profile by the Investment
Board Nepal (IBN) (2017).
WHO standard and much higher than the average of the rest of the country. The concentration of PM2.5 has almost
doubled within the past three decades. Additionally, PM10 is a growing issue, as emissions in certain locations in
Kathmandu Valley (e.g., Putalisadak, Sohrakhutte, and Maharajgunj) are three to seven times higher at rush hour times
than the National Ambient Air Quality Standard. About 63% of the total PM10 in Kathmandu Valley has been estimated
to come from vehicles and road dust.
The projected increase in air pollution will have a substantial effect on the economy, as healthcare cost will increase, lost
working days will affect labour productivity, and crop yields will decline. In 2013, more than 22,000 deaths in Nepal were
attributed to air pollution and air pollution‐induced loss of welfare amounted $2.8 billion or 5% of Nepal’s GDP.
Moreover, black carbon emissions, which also are a by-product of the immense traffic volume in the Valley, are viewed
as accelerating retreat of Himalaya glaciers and ice coverage with consequences for water supply as well as direct global
warming through a reduced reflection of light. Reduction of black carbon can be expected to yield rapid benefits.
At normal travel speed in the city area (up to 40 km/h) there is a significant difference between the noise pollution of
diesel-powered buses and e-buses, as the latter one is only half as loud as a conventional bus. Noise pollution is linked
to several health issues, including stroke, hypertension, dementia and coronary heart disease. In addition to these
concerns are the less serious but more prevalent issues of annoyance and sleep disturbance, which in itself can have an
added cost in the workplace or classroom the next day.
Gender co-benefits
In 2015, Nepal’s gender gap score was 0.658, ranked 110 out of 145 countries. In Nepal, gender inequality and
discrimination are major barriers to development, likewise, there is a lack of gender-safe public transport. Conventional
public transport buses are overcrowded and under-policed, which afford opportunities for sexual harassment and abuse
by men. As discrimination and abuse is a serious issue in Kathmandu’s current public transport, women are forced to
travel by private vehicles or deciding not to travel at all. The Green Buses will be managed to reduce crowding, include
supervision on the buses and potentially include women-only seating. Particularly women – as well as underrepresented
castes and indigenous groups – would benefit from accessing work and services through improved, safe public transport,
hence the green buses project can contribute to enhancing gender inequality, women’s safety, and rebalancing the
workforce in the direction of women in the Kathmandu Valley. In addition, the project will also provide employment to
large numbers of women, targeting that one-third of the workforce of the eBRT system will be women.
Needs of the Recipients:

Nepal is a least developed country (LDC) with ambitions to graduate from the LDC category by 2022 and achieve middle-
income-country status by 2030. Also, WEF’s Global Competitiveness Report 2015-2016 shows that Nepal’s
competitiveness had improved in the last decade in the areas of education, infrastructure, macroeconomic environment
and institutions. However, the devastating earthquake of 2015, a seven-month economic blockade at the Nepal-India
border and most recently the impacts of COVID-19 severely undermined economic growth and subsequently led to highly
limited financial and institutional capacities of the government, private sector, and local population.
The Green Buses project will support the strengthening of institutions and their implementation capacity as follows:
 Through the institutional development of the KVPTA following the empowerment of the KVPTA under the KVPTA
Act. The Green Buses project will assist the implementation of KVPTA in Component 1, supported by multiple
stakeholders, including the key municipalities;
 The implementation of a new public operating entity is a core element of Component 1;
 Cooperation processes between Federal Government, Provincial Government and Municipal Governments
regarding public transport are strengthened, overseen by KVPTA through its Public Transportation Council; and
 Development of the capacity of TDF as a newly accredited entity of GCF to manage projects of scale in
accordance with best practice.
Country Ownership:
In response to the rapid increase in emissions and air pollution caused by the transport sector, the Prime Minister of
Nepal launched the National Action Plan for Electric Mobility to accelerate the transition towards clean and sustainable
transport using electric vehicles in 2017.
The second NDC 2020 envisions achieving socio-economic prosperity by building a climate-resilient society and aims to
accomplish net-zero greenhouse gas emission by 2050. The electric mobility is one of the high priority areas where the
NDC defines interventions for mitigation measures. This is outlined through the following targets:
 The share of electric vehicles (e-vehicles) in 2025 shall represent 25% of all private passenger vehicles sales,
including two-wheelers and 20% of all four-wheeler public passenger vehicle sales (this public passenger
target does not take into account electric- rickshaws and electric-tempos). This target would reduce GHG
emissions by about 8%compared to BAU.
 By 2030, the share of e-vehicles aims to represent 90% of all private passenger vehicle sales, including two-
wheelers and 60% of all four-wheeler public passenger vehicle sales (the public passenger target does not
take into account electric-rickshaws and electric-tempos). These targets would reduce emissions by about 28%
compared to BAU.
 Promote public electric mobility through policy incentives, including subsidy policies and other financial
mechanisms.
 Ensure at least three provinces operate electric public transport by 2025.
Furthermore, the Third National Communication Report of Nepal considers several scenarios for GHG emissions
projections, including a policy intervention scenario. This scenario envisages the promotion of mass transportation
systems and the introduction of new electric and bio-fuel transportation technologies.
Additional to the policies outlined in section B.2, The Nepal Investment Board has selected Bus Rapid Transit system as
a priority for the foreign investment project portfolio.22 The government of Nepal announced to introduce 300 EV buses
for public transport and both public and private sectors plan to install charging stations across Kathmandu. Additionally,
the provincial government of the Kathmandu Valley is committed to operate public electric buses in the core city areas,
as a key component of achieving its policy goal of no fossil-fuel vehicles in the Province by 2030.8 Also, the recent National
Urban Road Standard (2020), published by the Ministry of Urban Development, includes road standards for BRT system
and the Kathmandu Valley Air Quality Management Action Plan includes plan to build 18 km BRT in the KV. In addition,
the JICA Transport plan as well as the Kathmandu Valley Sustainable Urban Transport Project proposed Bus Rapid
Transit system in some of the routes of Kathmandu Valley.
The Ministry of Physical Infrastructure and Transport (MoPIT) has formulated a Five-year Transport Strategy (2016-2021)
that includes the plan to build a Bus Rapid Transit system in the Kathmandu Valley in five years. In a bid to reduce the
air pollution of the Kathmandu Valley, the Ministry of Forest and Environment has devised the Kathmandu Valley Air
Quality Action Plan (2020) that proposes to introduce an 18-km Bus Rapid Transit pilot project by 2023 to reduce air
pollution in the transport sector.
Also, the Kathmandu Valley Public Transport Authority (KVPTA) Bill was brought to Parliament in August 2019. When
enacted, it will establish the KVPTA to take on the current functions of the Ministry of Physical Infrastructure and Transport
to oversee the development and management of public transport systems in the Kathmandu Valley. The new KVPTA will
be responsible for making public transportation in the valley accessible, easy, reliable and safe. According to the bill, the
KVPTA will fix the routes for public transportation and set standards for vehicles. The KVPTA will formulate policies and
short and long-term plans and strategies for improving the public transport system; it will also introduce electronic payment
systems and information systems. The Bill requires a Public Transportation Council for operation, supervision, and
management of the public transportation system while engaging with municipalities
For supporting the achievement of its goals in the transport sector, a strategy for the establishment of an eBRT system
is included in the country’s draft country programme with GCF.
In 2021, Ministry of Physical Infrastructure and Transport (MoPIT), Ministry of Forests and Environment (MOFE), Ministry
of Finance (MOF) supported by GIZ have been awarded by the NAMA Facility for the implementation of the NAMA
Support Project (NSP) on Electric Transportation.23 The NSP aims to systematically remove existing barriers holding back
the electrification of the transport sector and promote electric transport technologies with special focus on electric
minibuses. The NSP will deliver a blend of financial mechanisms and technical assistance for the minibus segment in the
Kathmandu Valley and beyond. The project will support public transport operators to finance and deploy 3,020 electric
minibuses (EMB) and charging stations nationally, as well as promote and strengthen widespread adoption of EVs
through reforms to policy, regulation and permitting and an improvement of capacity. As a result of the NSP, a projected
22 See: https://nepalindata.com/resource/bus-rapid-transit-brt-ring-road-kathmandu-273-km/ and https://ibn.gov.np/

23 https://www.nama-facility.org/projects/nepal-electric-transportation/
85% of all new minibuses purchased in Nepal will be electric by 2030. TDC and the GCF project will closely coordinate
the activities with the NSP, as both activities are strategically complementary, with minibuses serving as feeder to the
eBRT system in future.
The capacity and track record of the involved accredited and executing entities is summarised as follows:
 Based on a Government-only model of public bus transport in Kathmandu Valley, MoPIT would be the executing
entity. However, the Ministry is neither structured nor resourced for executing such a model. Green Buses would
therefore be operated under a newly founded public operating entity in combination with a PPP model. The latter
would require regulation by Government rather than execution.
 TDF is a financial intermediary institution with a corporate vision leading towards it being an urban development
bank. TDF was created to strengthen the technical, managerial and financial capabilities of the municipalities for
the formulation, implementation, operations and maintenance of urban development projects and programs, as
set out in the TDF Act and Rules, 1997. The TDF Act empowers TDF to mobilise loans and grants from
government and non-government organisations, and national and international financial institutions, and to
participate in consortia with other financial institutions. Recently, TDF has been selected as direct AE of GCF by
the NDA, Ministry of Finance, Government of Nepal to access climate financing, and is currently in the process
finalising GCF accreditation. In this context, TDF has developed this project concept note well-aligned with the
NDC.
Efficiency and effectiveness:
The estimated cost of the proposed GCF intervention is USD$190 per tCO2e. This is based on GCF funding of USD 164
million divided by the estimated approx. 870,000 tCO2e over the course of 20 years.
 Emission reduction estimates are based on the impact description above.
 The GCF funding is based on technical assistance costs, construction costs for infrastructure measures, and
procurement costs per vehicle. Costs may decline as e-bus cost decline.
The further development of the financial model may show that less conditionality is required from the GCF to ensure the
financial sustainability of the model, given that e-buses need less expenditure on fuel and maintenance. The level of co-
financing or co-resourcing depends on the final definition of the scope of the project. Variables include:
 Provision of land by the relevant governments for depots and charging stations. This could be viewed as having
financial value but is not included in the indicator until further information is provided by the Full Feasibility Study.
 The development of charging stations which will be the responsibility of the Nepal Electricity Authority (NEA), and
will be available to Green Buses on a fee-for-service basis. NEA will incur an unknown capital cost for installing
the charging stations, which could later be included in the indicator. As stated above, GCF may not need to
provide the full difference in CAPEX between the e-buses and equivalent diesel buses to ensure appropriate
rates of return for the investors and/or operators.
B.4. Engagement among the NDA, AE, and/or other relevant stakeholders in the country (max ½ page)
Please describe how engagement among the NDA, AE and/or other relevant stakeholders in the country has taken place
and what further engagement will be undertaken as the concept is developed into a funding proposal.
During the preparation of the Pre-Feasibility Study key stakeholders – supporters and detractors – were identified to
understand their expected positions, priorities and recommendations. Based on the consultation (a series of meetings
and engagements with key leaders and personnel within each of the stakeholder organisations and groups have been
conducted in 2019) a barrier analysis with regard to institutional, governance, policies and regulations and recommend
solutions for the implementation of the proposed Green Buses system has been prepared.
TDF in coordination with the NDA endeavoured to engage with the full spectrum of affected parties and will continue this
process during the full funding proposal development. This was viewed as essential for ensuring the relevance and
success of the proposed Green Buses project. Face-to-face meetings were held with the following stakeholders already:
Federal Government Stakeholders
 International Economic Cooperation Coordination Division, Ministry of Finance (MoF)
 Ministry of Urban Development (MoUD)
 Ministry of Physical Infrastructure and Transport (MoPIT)
 Department of Transport Management, MoPIT
 Department of Railways, MoPIT
 Department of Roads, Development Co-operation Implementation Division, MoPIT

 Kathmandu Valley Development Authority
 Department of the Environment, Ministry of Forests and Environment (MoFE)
 Designated National Authority for Clean Development Mechanism, MoFE
 Investment Board of Nepal
 National Planning Commission
Provincial and Municipal Government Stakeholders
 Province 3, incl.
o Kathmandu Metropolitan City
o Lalitpur Metropolitan City
 Town Development Fund
Private Sector and Utilities
 Electric Vehicle Association of Nepal
 Federation of National Nepalese Transport Entrepreneurs
 CIMEX / BYD
 Nepal Electricity Authority (NEA)
 Mahanagar Yatayat
 Dolma Investment Fund
International Organisations
 Global Green Growth Institute (GGGI)
 Green Climate Fund
The following graphic displays the implementation arrangement of key stakeholders.
Figure 6: Implementation arrangement
MoUD
Town Development Fund
Direct Access Entity
C. Indicative Financing/Cost Information (max. 3 pages)

C.1. Financing by components (max ½ page)
Please provide an estimate of the total cost per component/output and disaggregate by source of financing.
The following table provides an estimate of the cost per component for the eBRT system on the Ring Road in Kathmandu
Valley.
Component/Output Indicative cost GCF financing Co-financing

(million USD) Amount Financial Amount Financial Name of
(USD) Instrument (USD) Instrument Institutions
Component 1 3 3 Grants
Component 2 168 53 Grants 50 Grant GoN
64 Concessional
loans
Component 3 45 22 Concessional 10 Loans TDF
loans 8 Equity24 Bus
operators
1 Grants 4 Grant GoN
Subtotal 215 143 72
Management / AE 7 7
fee25
Contingencies (10% 21 9 Concessional 1 Loans TDF
of subtotal) loans
6 Grants 6 Grant GoN
Indicative total 243 164 79

cost (million USD)
The Green Buses model will promote business models for municipal enterprises and private sector bus operators, e.g.,
under a gross-cost-contract agreement or PPP model, with the principal funding source being revenues from passenger
fares. However, the project will require significant funding of CAPEX for the eBRT complementing infrastructure (grants
and concessional loans) and bus fleet (concessional loans), particularly in the event that the fleet is electric battery
powered. Notwithstanding the lower lifecycle cost of such buses, up-front capital financing will be a serious obstacle.
A major cost component are the infrastructure investments and acquisition costs of vehicles. While fuel and maintenance
savings are significant, the capital cost of electric buses remains high. Hence, the acquisition and use of electric vehicles
is unlikely to be financially viable even though the life-cycle cost (total cost of ownership) of such vehicles seems to be
lower than diesel. Current business models for public transport bus operators would not be financially viable or sustainable
(insufficient FIRR) without CAPEX support. On the other hand, the lower operation (fuel and maintenance) costs of electric
buses can provide confidence as to the sustainability of the business model in the case that the CAPEX cost of the buses
is substantially covered by external funding sources. In this case FIRR can be attractive for prospective private investors
and operators.
The following table summarises the costs break down by component (for eBRT system at the Ring Road only).
Table 5: Cost break-down by components
Project Main Component Total (million
USD)
Component 1: Strengthen the policy, regulation and institutional framework to promote, plan 3
and coordinate sustainable public transportation based on electric mobility
Component 2: Investment in and construction of climate resilient public eBRT infrastructure 168
24 Assuming 20% equity on bus procurements cost.

25 5% of GCF funding (medium sized projects <250 mill. USD)
Component 3: Investments in and promotion of sustainable public transportation operating 45

assets through long-term financial mechanism for private actors.
Subtotal 215
Management / AE fee (5% of GCF funding) 7
Contingencies (10% on subtotal) 21
TOTAL 243
For private sector proposal, provide an overview (diagram) of the proposed financing structure.
The following figure provides and overview of the financial structure and agreements under the project.
Figure 7: Proposed financing structure
Provision of TA TA beneficiary
Implementing partners,
Ex: municipalities, MoPIT
incl. consultants
etc.
Service
contract Support in project design
and project preparation eBRT bus operators
Public bus operators

Ex: Municipality, public
transport operator
Loans /
grants
Financing
GCF TDF Agreement
Funded
Loans
Activity
Agreement Private bus operators
Ex: private transport
operator
C.2. Justification of GCF funding request (max. 1 page)

Explain why the Project/ Programme requires GCF funding, i.e. explaining why this is not financed by the public and/ or
private sector(s) of the country. Describe alternative funding options for the same activities being proposed in the Conce
pt Note, including an analysis of the barriers for the potential beneficiaries to access to finance and the constraints of pu
blic and private sources of funding.
Rationale for and Additionality of GCF Funding
Although total costs of ownership of e-buses may be lower due to lower OPEX compared to diesel fuelled buses, the
investment in new infrastructure and a new e-bus fleet is associated with high, incremental costs that occur mainly in
international currencies. Since potential revenues from ticketing are limited due to Nepal’s low-income status, this limits
the potential to substantially upgrade the public transport fleet to the Government, large investors or operators.
However, also those actors will not be capable to source sufficient funds for the Green Buses project in the upcoming
years. In 2015, an earthquake left almost 9,000 people dead, 800,000 homes destroyed and resulted in economic costs
of an estimated USD 10 billion26. Also, the 2020 COVID-19 pandemic impacted Nepal significantly, particularly due to its
dependence on tourism and workers’ remittances. As a result, it is estimated that GDP growth is likely to decline from 7.1
per cent in 2019 to 0 per cent in 2020. Impacted by the COVID-19 crisis, fiscal revenues are projected to decline by 2 per
cent of GDP (USD 707 million) in 2020. Public debt levels are set to increase from 30.1 to 43.8% of GDP between 2019
and 2023. In absolute terms, this represents an increase of USD 7.2 billion. As a result, debt service will further limit the
capacity of the Nepalese government to respond to the needs of its population, including public investments in
transportation. The IMF expects primary expenditures to decline permanently below pre-crisis levels, from 30 to 28.6 per
26 European network on debt and development (2021): Nepal, Covid-19 and debt, URL:
https://www.eurodad.org/nepal_covid19_and_debt
cent of GDP between 2019 and 2023. Thus, it is currently impossible for the Government to source the required
investments for the Green Buses project domestically.
Additionally, the impact of the COVID-19 pandemic on employment has been devastating. A local survey found that 77%
of firms did not have enough cashflow to pay employees’ salaries, rental fees and interest on bank loans. More than 2
million people are expected to lose their jobs in a context where only one out of five workers is employed in the formal
sector. Therefore, large investors and potential private operators will not be able to source sufficient funds for the Green
Buses project on international financial markets during the pandemic situation.
Justify the rationale and level of concessionality of the GCF financial instrument(s) as well as how this will be passed on
to the end-users and beneficiaries. Justify why this is the minimum required to make the investment viable and most effi
cient considering the incremental cost or risk premium of the Project/ Programme (refer to Decisions B.12/17; B.10/03;
and B.09/04 for more details). The justification for grants and reimbursable grants is mandatory.
Justification of Concessionality of GCF Funding
GCF concessional finance including grants are used for technical (TA) and financial assistance (FA). The Project will
provide project financing worth USD 234 million. The concessional finance from the GCF is up to USD 86 million in
concessional loans, USD 54 millions in grants for FA, USD 3 millions in grants for TA, and USD 7 million for project
management (plus 10% contingency).
The FA concessional finance elements including grants are critical to implement infrastructure measures that represent
a precondition for a successful implementation of the Green Buses approach. Since those infrastructure investments do
not lead to direct revenues, only a GCF grant share will enable those investments due to the limited financial capacities
of Nepal (see above). Concessional loans will reduce upfront CAPEX of e-bus purchases, making investments
commercially viable and compensating for risks from new technologies. GCF’s ability to offer concessional terms in
investments enables prospective clients to invest in e-mobility which would otherwise not be able to do alone. Best-
practice examples from other countries with large fleets of commercial e-vehicles show that, at least initially, financial
support instruments in the form of grants have been used to kick-start mass EV deployment. Incremental investment
costs of e-buses were grant financed by countries by up to 80-100% plus subsidizing the establishment of dedicated
urban fast-charging infrastructure. The experience of countries is also that once a large fleet is established subsidies can
be reduced gradually and even be eliminated within 5-10 years due to spill-over effects leading to more competitive prices
of e-vehicles combined with the experience of mass operations. GCF concessional finance is critical for such a
sustainable market uptake with initial pilot projects leading to commercially self-sustaining e-vehicle viability.
Since investments alone are insufficient to achieve the transformation in climate action needed by the transport sector,
strategic sectoral planning and policy reforms are critical aspects to enable a country-wide transformation towards electric
mobility. Thus, the Green Buses project also depends on technical assistance that serves to enhance the viability of the
projects and leads to long-term transformational impacts. Again, TDF and Nepal would not be able to source the required
funds by its own. Thus, the GCF, with the goal of supporting paradigm shifts in climate action, is critical for sufficient
funding in form of grants for a successful implementation of the required TA activities.
Since Nepal is a Least Development Country currently facing various economic challenges due to the COVID-19
pandemic, high concessional terms are required. Concessional loans for infrastructure investments will be repaid by the
respective governmental authorities and a 40-year maturity period for GCF concessional loans is applicable. The
repayment period for concessional loans for e-bus investments is following the average bus lifetime of 20 years and is
provided by the respective public or private bus operators.
C.3. Sustainability and replicability of the project (exit strategy) (max. 1 page)
Please explain how the project/programme sustainability will be ensured in the long run and how this will be monitored,
after the project/programme is implemented with support from the GCF and other sources.
The technical assistance provided to enhance sustainable, reliable and efficient public transport services will address
policy gaps and deliver valuable information for a more detailed planning of the sectoral transformation, the required
investment volume and potential risks to consider (Component 1). The support for the analysis, development and
implementation of a political and administrative framework to guide the transformation of the transport sector will ensure
the meaningful application of the results of the project activities (e.g., data, technical capacity) in processes going beyond
the project lifetime. These activities will not only enrich planning processes within the public administration, but also
significantly increase chances for spill-over effects, i.e., mobilize additional private sector investment for further e-mobility
transportation activities in the long run. Hereby, the new policies will set a framework to start further private investment
into e-transport based on clear tariff structures and regulations. In addition, integration into the national policy landscape
will ensure monitoring and evaluation of further developments (e.g., investment projects with private sector participation)
triggered by the project activities, including continuous stakeholder participation. The capacity development envisaged
for KVPTA and the potential new eBRT System Operating Company agency is key to ensure the country’s ability to plan,
sustainably implement, and monitor the development of sustainable public transport.
The Green Buses project can be considered scalable and replicable in Nepal due to the underlying business model. With
a revenue-based commercial operation by PPP investors / operators, the use of existing fixed infrastructure and
potentially falling prices of battery-powered buses in the long term, there are several options for expansion of the services:
 More primary radial routes will be developed that will provide a high quality, efficient, and affordable public
transport access to more percentage of the city’s population and also make the eBRT system more financially
viable.
 Secondary and tertiary routes within Kathmandu Valley which will make services more comprehensive, and
increase usage of primary routes, on the feeder principle. This could be possible by procurement and
operation of smaller-size buses which can use narrower roads, particularly in dense urban areas;
 Provision of services on the periphery and sides of Kathmandu Valley, and in adjoining urbanised valleys,
including Banepa and Dhulikhel;
 Other urban areas in Nepal, including Pokhara-Leknath, Biratnagar, Butwal-Bhairahawa-Siddhartanagar
Corridor, Birganj and Nepalganj. These represent options for replicability, rather than scalability, potentially
involving new PPPs.
Regarding the project’s replicability beyond Nepal, it has the potential to become a role model for other cities that are
also pursuing a low-emission transportation pathway. It may inform about relevant processes for successfully embedding
such a strategy within the national policy framework. In addition, the underlying financing and business model applied
(may also be of benefit to the case of other cities. Knowledge exchange and learning shall be facilitated through
appropriate outreach activities as specified in Output 1.4.
D. Supporting documents submitted (OPTIONAL)
☒ Map indicating the location of the project/programme (Annex 1)

☒ Diagram of the theory of change and problem tree (Annex 2)
☐ Economic and financial model with key assumptions and potential stressed scenarios
☒ Pre-feasibility study (Annex 4)
☐ Evaluation report of previous project
☒ Results of environmental and social risk screening
☒ List of identified stakeholders (Annex 3)
Self-awareness check boxes

Are you aware that the full Funding Proposal and Annexes will require these documents? Yes ☒ No ☐
• Feasibility Study
• Environmental and social impact assessment or environmental and social management framework
• Stakeholder consultations at national and project level implementation including with indigenous
people if relevant
• Gender assessment and action plan
• Operations and maintenance plan if relevant
• Loan or grant operation manual as appropriate
• Co-financing commitment letters
Are you aware that a funding proposal from an accredited entity without a signed AMA will be reviewed but
not sent to the Board for consideration? Yes ☐ No ☐
Annex 1: Map indicating the location of the project/programme

Figure 8: Map indicating the location of eBRT measures
Annex 2: Diagram of the theory of change and problem tree

Figure 9: Problem Tree
Figure 10: Theory of change
Table 6: Logframe
Project objective: Foster sustainable, reliable and efficient public transport services based on clean eBRT mobility solutions enhancing the environmental,
social and economic benefits for the citizens in the Kathmandu Valley
Project Component Component Project Outcomes Project Outputs Deliverables

Type
Component 1: Technical Outcome 1: The Government Output 1.1: Public transport system 1.1.1 Sustainable transportation
Strengthen the policy, Assistance of Nepal, city of Kathmandu and strategy and policy (including eBRT) to eBRT master plan incl. alignment with
regulatory and municipalities take action to restructure the current public transport other public transport systems, policy
(GCF Grants)
institutional enhance the sustainable, industry for promoting sustainable and technology roadmap until 2030 /
framework to reliable and efficient public transport solutions is delivered for 2050 facilitating a bus industry
promote, plan and transport services adoption by the MoPIT’s Department of transition
coordinate Transport Management. 1.1.2 Mobility plan for targeted
sustainable public section of the municipalities developed,
transportation based including planning for other additional
on electric mobility radial routes to form a city-wide eBRT
network, bus routes, feeder line and
rerouting of private vehicles to enforce
the green mobility system
1.1.3 Municipalities’ urban plans
include an integrated transport plan
that considered all modes of transport,
with particular emphasis placed on
sustainable options for eBRT27
1.1.4 Strategy to integrate existing
bus services and Green Buses to eBRT
system, incl. feeder and
27 The plans include inputs from the community to integrate the needs of the local citizens and understand the traffic flows and movement of people better

Type
complementary services (see also
related infrastructure include in 2.2.2)
Output 1.2: Proposed revision of Act 1.2.1 Revision of Act, regulations
and regulations delivered and and preparation of Act prepared for
enforcement of policies and regulations adoption by MoPIT’s Department of
through institutional support to KVPTA Transport Management, later by
strengthened KVPTA
1.2.2 Standards and procedures for
operations, safety and maintenance
exist for effective management of eBRT
system by KVPTA
1.2.3 Public transport operation
procedures exist with clear assignment
of responsibilities to ensure affectivity
of sustainable urban transport services
1.2.4 Strategy for long-term financial
sustainability of formal public transport
sector incl. compensation mechanism
for nonparticipating operators and
organizational and institutional
development
Output 1.3: A public operating company 1.3.1 Terms, rules and procedures
to manage and operate the eBRT for new operating company formulated
system28 is established for approval by KVPTA.
1.3.2 eBRT operating company
overseeing the system established
1.3.3 New ticketing system exists
allowing for distance-based fare
28 KVPTA will act as regulatory body and supervise the eBRT System Operating Company that will manage and operate the eBRT system including service contracts.

Type
collection and efficient operations,
independently operated and managed
1.3.4 Centralised eBRT control
centre and Intelligent Transport System
(ITS) in operation
1.3.5 KVPTA oversees and ensures
customer service and provision of key
customer amenities
Output 1.4: Marketing and information / 1.4.1 Communication campaign and
public awareness campaign exist knowledge products prepared
1.4.2 Capacity development
workshops held to inform local citizens,
urban planners and relevant local and
national government officials
Output 1.5: Technical capacity for 1.5.1 Hands-on training programme
KVPTA, eBRT system operator and bus developed to provide adequate skills to
companies on bus/eBRT planning and the technicians and bus drivers from
regulations (incl. on business model, the electric bus company
operation and maintenance etc.) 1.5.2 Trainings and workshop
strengthened. delivered to bus operators, drivers and
technicians in charge of maintaining the
buses.
1.5.3 Trainings on the job delivered
to eBRT operating company and
KVPTA on planning, operation and
regulation.

Type
Component 2: Investments Outcome 2: Municipalities, incl. Output 2.1: Technical preparations for 2.1.1 Final technical specification for
Investment in and (GCF Grants / the city of Kathmandu, procure public transport based on Green Buses eBRT system
construction of Concessional and construct the eBRT and investments finalised29 2.1.2 Tendering and procurement
climate resilient loan; Grants complementing core process finalised for civil work on core
public eBRT GoN) infrastructure eBRT infrastructure finalised
infrastructure
Output 2.2: Engineering, procurement 2.2.1 27.3 km necessary climate
facilitating
and construction of climate resilient resilient infrastructure (segregated bus
sustainable
physical road infrastructure (main eBRT ways or bus-only roadways,
transportation
corridor) in relevant municipalities pavements, intersections
completed improvements, stations, flyovers,
underpass etc.) are constructed at Ring
Road and radial route crisscrossing
Ring Road
2.2.2 Special stations and terminals
to facilitate easy physical integration
between trunk routes, feeder services,
and other mass transit systems (if
applicable) are installed.
Output 2.3: Plans are delivered for 2.3.1 Improved pedestrian
integrating eBRT system with walking, infrastructures in at least 250 m radius
cycling and other transport modes area around the eBRT stations
completed
2.3.2 eBRT stations with existing
cycle lanes integrated and bicycle
parking at the eBRT stations installed
29The technical design of the eBRT system will be determined through Technical and Financial Feasibility Study during the preparation of the GCF full funding
proposal technology. The study will analyse the pros and cons of different e-technologies, BEB, trolley buses or hydrogen buses etc.

Type
Output 2.4: Construction of eBRT 2.4.1 2 depots for night-time, off-
infrastructure (depots and staging peak parking and re-charging of the e-
facility) completed bus fleet are in place
Output 2.5: Electricity infrastructure 2.5.1 Electricity infrastructure (40

(charging stations and/or overhead charging stations / powerlines in bus
powerlines to supply power to e-buses depot(s) and along the eBRT route
from the national grid installed and 2.5.2 NEA operates charging
operated by state-owned Nepal stations and offers power supply tariffs
Electricity Authority (NEA) provided for electric bus operators
Output 2.6: Operation of transportation 2.6.1 eBRT control centre and
system (BRT) under the management Intelligent Transport System (ITS)
of the eBRT System Operating installed incl. bus information system
Company commissioned (BIS) and a bus control system
2.6.2 Building bust (cashless)
ticketing system designed and in
operation
Component 3: Investments Outcome 3: Public and private Output 3.1: Business models and 3.1.1 Business model developed
Investments in and (Equity of bus operators invest in vehicle operation system for licenced private and adopted for inclusive operation of
promotion of private sector, fleet and facilitate public and public bus operators under a existing and new private and public bus
sustainable public GCF transportation services under reformed business and administrative operators of public transport
transportation Concessional restructured privately-owned structure developed, e.g., municipal 3.1.2 Service-level contract with
operating assets loans, TDF and operated public transport enterprises structure, gross-cost- private bus operators / companies
through long-term loans) sector along the routes to be contract or public-private partnership developed for adoption and
financial mechanism (PPP) model for operating e-buses.30 implementation
30 The aim will be to include existing private operators of public transport in a new business model.

Type
for public and private serviced by Green Buses in 3.1.2 Transparent tender processes
actors. Kathmandu Valley. for awarding all contracts and
concessions finalised
Output 3.2: Procurement of high-quality 3.2.1 Technical specification and
bus fleet with zero emissions minimum standards of buses
performance (electric buses) for developed and adopted by Kathmandu
implementation/ operationalization of Valley Transport Authority
eBRT bus fleet completed 3.2.2 Approx. 100 buses financed,
procured and in operation by private
operators (for 6 minutes headway and
assuming average eBRT vehicle speed
of 15 km/hr) for service on Ring Road.
3.2.3 Private sector operators start
providing sustainable and high-quality
public transport services utilising
electric bus in Kathmandu Valley
Output 3.3: Implementation of bus 3.3.1 Compensation of current bus
restructuring compensation for some operators not benefiting from the
bus operators (to those who are restructuring
included in bus restructuring)
Annex 3: List of identified stakeholders
Table 7: List of identified stakeholders

No. Stakeholder Role / Relevancy
1 Ministry of Urban Development Key ministry on urban development, set urban planning
policies and guidelines
3 Town Development Fund (TDF) Lead initiator, intend to access GCF for project financing as
Accredited Entity (AE), in process of obtaining status as a
Direct Access Entity of GCF
3 Ministry of Physical Infrastructure Key ministry that formulates policies, plans and programs of
and Transportation (MoPIT) transport sector.
Federal Government Executing Entity: Implementation of roads, fly overs,
intersection (infrastructure)
Formulated Environment-friendly Vehicle and Transport
Policy (2013)
VGF provider for necessary infrastructure development
(road, flyover and under passes in given intersections),
Provision of Right-of-Way, land for terminals, facilitation and
project security
4 Department of Roads (DoR) Under the Ministry of Physical Infrastructure and Transport,
its key agency on road development
All the main roads within the Kathmandu Valley are currently
under Department of Road.
Eight-lane ring road circling around the cities
of Kathmandu and Lalitpur with total length of 27.3 Km
regulated by the DoR, hence, required DoR approval for
eBRT dedicated lanes from DoR
5 Department of Transport Under the Ministry of Physical Infrastructure and Transport,
Management (DoTM) its key role is registration of motor-vehicles, driver licensing,
The Kathmandu Valley Public and regulation of public transportation (mainly providing
Transport Management Authority route permit and fixing public transport fare)
(KVPTMA) bill in the parliament for The Kathmandu Valley Public Transport Authority bill has
endorsement been tabled and in now currently under discussion. If the bill
is passed, this authority will be powerful autonomous body to
build, operate, manage and regulate public transport system
in the Kathmandu Valley.
City governments of the Kathmandu Valley are opposing the
bill and wanted to make it under the city governments.
eBRT System Operating Company: Facilitating legal
approvals/permits, Service-level Contract with bus operators
to ensure improved and reliable PT services and review &
monitoring
7 Ministry of Forests and Environment Key institutions for environment and climate change policy,
plans, and programs.
Focal Ministry for UNFCCC process
8 Ministry of Finance NDA for GCF
Any foreign assistance goes through the Ministry.
9 Office of Investment Board Nepal High-level government body to develop, manage and fast-
(OIBN) track large foreign investment project.
They have identified Bus Rapid Transit System (for the
Kathmandu Valley) as one of the potential investment
projects on transport sector.
11 Provincial Government: Main city governments of the Kathmandu Valley there are a
 Bagmati Province total of 18 municipality in the Kathmandu Valley). They are
autonomous local body led by elected Mayor.
 Kathmandu Metropolitan City Kathmandu and Lalitpur Metropolitan cities have invested in
 Lalitpur Metropolitan City public transport company, Sajha Yatayat.
 Bhaktapur Municipality In current legislation, the city government has little
jurisdiction over transport sector. Transport and road
development (except narrow urban roads) are done by the
central government: either Department of Road or
Kathmandu Valley Development Authority.
12 Kathmandu Valley Development An autonomous government body that looks after physical
Authority development of Kathmandu Valley; largely focuses on
widening roads, developing new towns in the valley.
13 Sajha Yatayat A public transport cooperative providing urban bus service or
also long-distance inter-city bus service.
From beginning, they have supported the concept of BRT
system in the city.
14 Private Bus Operators / To be converted into Special Purpose Vehicle (SPV)
Entrepreneurs - Private Sector Company for operating PT services, operate the facilities,
collection of revenues, repayment to TDF
15 Additional participating municipalities The municipalities where the Ring Road falls under their
jurisdiction, co-financing and VGF, providing land for bus
depot / terminal
16 Nepal Electricity Authority (NEA) Sole institution for the electricity development and
distribution in Nepal
17 Electric Vehicle Association Nepal Association of three-wheeler electric public transport (safe
tempo) operators.
They are advocating for electric transportation in the city.
18 Transport Association Association of public transport operators, which influences
the public transport routes and numbers of public transport
vehicles.
19 Metropolitan Traffic Police Division Institution responsible for all the traffic management in the
Kathmandu Valley---implementation of traffic regulations.
20 Beneficiaries: Citizens and local
community
21 Beneficiaries: Differently able
population
22 Beneficiaries: Women and Children
23 Other donors or Bilateral and Other activities on transport / energy and infrastructure in
Multilateral financial institutions Nepal on-going / planned?
24 Other NGOs

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GREEN BUSES: Sustainable Transportation through Electric Buses

National Designated Ministry of Finance, International Economic Cooperation

Accredited Entity(ies) (AE): Town Development Fund (TDF)

Date of first submission/

Date of current submission/

Please submit the completed form to fundingproposal@gcfund.org,

A. Project/Programme Summary (max. 1 page)

Mitigation: Reduced emissions from:

A.10. Mark the type of

A.15. Is the CN aligned

B. Project/Programme Information (max. 8 pages)

Figure 1: Yearly vehicle registration since 2000/01 in Nepal

Source: Third National Communication 2017, p. 27

Figure 2: CO2 emissions from the transport sector in Nepal

Source: Climate Watch, 202110

Key root causes leading to this barrier are:

Output 1.4: Marketing and information / public awareness campaign exist.

Component 2: Investment in and construction of climate-resilient public eBRT infrastructure facilitating

Figure 3: eBRT system corridors

Source: PRC, 2020

Source: TDF, 2021

Item Assumption Unit Comments

Table 2: Tentative key data for Route 2: Suryabinayak/Bhaktapur-Tundikhel/Ratnapark (optional phase 2)

Item Assumption Unit Comments

Deliverables Output 3.2

17 Additional 80 buses for optional crossing route in phase 2.

Strengthen the policy, regulation The Government of Nepal, city of

Municipalities, incl. the city of

Investments in and promotion of fleet and facilitate public

PROJECT COMPONENTS OUTCOME PROJECT OBJECTIVE IMPACT

Ring Road 100 1,070 88,000 km 45,000 tCO2/a 870,000 tCO2

Optional radial route

Total 180 1,920 88,000 km 80,000 tCO2/a 1,560,000 tCO2

Source: own estimation

Sustainable Development Potential – Co-Benefits:

Climate-resilient urban development

Environmental and public health co-benefits

Needs of the Recipients:

22 See: https://nepalindata.com/resource/bus-rapid-transit-brt-ring-road-kathmandu-273-km/ and https://ibn.gov.np/

 Department of Roads, Development Co-operation Implementation Division, MoPIT

C. Indicative Financing/Cost Information (max. 3 pages)

Component/Output Indicative cost GCF financing Co-financing

6 Grants 6 Grant GoN

Indicative total 243 164 79

24 Assuming 20% equity on bus procurements cost.

Component 3: Investments in and promotion of sustainable public transportation operating 45

Public bus operators

C.2. Justification of GCF funding request (max. 1 page)

D. Supporting documents submitted (OPTIONAL)

☒ Map indicating the location of the project/programme (Annex 1)

Self-awareness check boxes

Annex 1: Map indicating the location of the project/programme

Annex 2: Diagram of the theory of change and problem tree

Project Component Component Project Outcomes Project Outputs Deliverables

Project Component Component Project Outcomes Project Outputs Deliverables

Project Component Component Project Outcomes Project Outputs Deliverables

Project Component Component Project Outcomes Project Outputs Deliverables

Project Component Component Project Outcomes Project Outputs Deliverables