December 10: The World Bank (WB) and the Asian Development Bank (ADB) have announced collaboration to strengthen Nepal’s hydropower sector specifically in the context of the proposed Upper Arun and Dudh Koshi hydropower projects.
The two development partners of Nepal recently signed a memorandum of understanding (MOU) stipulating cooperation between them for an initial period of five years.
World Bank’s Vice President for South Asia Martin Raiser and ADB’s Vice-President for Sectors and Themes Fatima Yasmin signed the agreement on the sidelines of COP28 on December 6, reads a statement issued by WB.
“The full potential of Nepal’s enormous hydropower resources cannot be realized without close partnership between the Nepalese government, development partners and the private sector,” the statement quoted Martin Raiser as saying.
“With this MOU, the ADB and the World Bank are laying the foundations for closer collaboration in financing and policy advice in Nepal’s hydropower sector, with the aim to support the country’s green, sustainable and inclusive development for decades to come.”
Meanwhile, Yasmin said this agreement between ADB and the World Bank is a significant step in strengthening Nepal's energy security amid rising demands from population growth and urbanization.
“It also fosters power trade with neighboring countries, promoting regional cooperation, economic growth, and green and inclusive development," said Yasmin, adding, "ADB is committed to promoting clean energy solutions that align with climate action goals. Our commitment goes beyond generating power; it's also about creating positive impacts on communities, livelihoods, and the environment and contributing to a more sustainable future for all.”
According to the World Bank, the MOU specifically targets three critical areas for collaboration: enhancing country-level collaboration, strengthening co-financing, and boosting joint action on climate change.
The pilot approach between the two multilateral development banks provides opportunities for collaboration in knowledge and experience sharing to ensure common understanding of the hydropower sector in Nepal, joint analytical studies, and consultation in support of the development of the hydropower sector, added the statement.
Under the MOU, the World Bank and Asian Development Bank will also work together on strengthening the institutional capacity of Nepal’s executing and implementing agencies in the development of large hydropower projects, and the preparation and financing of projects in the energy sector.
World Bank added that this is the first MOU signed between ADB and the World Bank following the joint statement on strengthening collaboration for greater impact issued by the heads of multilateral development banks at the World Bank-IMF Annual Meetings in Marrakech in October, 2023.