KATHMANDU: The World Bank is demonstrating a favorable stance in securing a concessional loan of NPR 130 billion for the Upper Arun Hydropower Project.
In the upcoming week, a high-level Nepali delegation will engage in discussions in Washington, addressing the technical and financial aspects of increasing the share of concessional loans from the World Bank and boosting private sector self-investment in the strategically crucial Upper Arun Hydropower Project.
Moreover, the World Bank has responded positively to Finance Minister Dr. Prakash Sharan Mahat’s proposal to host the 21st replenishment meeting of the International Development Association (IDA) in Nepal.
During a review meeting with World Bank South Asia Vice President Martin Razor and Development Finance Vice President Akihiko Nisio on Saturday, Finance Minister Dr. Mahat presented the proposal.
During the discussion between Minister Mahat and the Vice President, an overview of the current project’s progress was conducted.
In this conversation, Minister Mahat stressed that only 9.2% of the loan was disbursed last year, emphasizing the need for advanced preparations to enhance loan disbursement.
Key topics of discussion included capacity building for site clearance and contract settlement, along with the focus on maximizing the spillover effect by concentrating project efforts in a few priority areas rather than scattering them across numerous locations.
In addition, both sides reached an agreement to prepare for the mobilization of budgetary aid amounting to 300 million US dollars, equivalent to NPR 39 billion, within the current fiscal year.
This initiative aims to drive policy reforms within the realms of public finance, the financial sector, and the development of a green, sustainable, and inclusive development grid.
Moreover, the Finance Minister proposed a novel model for program aid in the field of physical infrastructure. This model will ensure investments in smaller projects adhering to Nepal’s own social and environmental risk reduction standards.
Finance Minister Mahat expressed the view that Nepal is at the forefront of implementing the grid concept, fostering harmony between development partners, and enhancing Nepal’s efficiency in operating the climate fund.
The World Bank has pledged its support by offering the necessary coordination and cooperation.