World Bank and ADB join for sustainable development of Nepal’s hydropower sector


The World Bank and the Asian Development Bank (ADB) have announced a collaboration to strengthen Nepal’s hydropower sector, specifically in the context of the proposed Upper Arun and Dudh Koshi hydropower projects.

A memorandum of understanding (MOU) stipulating cooperation between the two institutions for an initial period of five years was signed on the sidelines of COP28 by Martin Raiser, World Bank Vice President for South Asia and Fatima Yasmin, ADB Vice-President for Sectors and Themes.

The MOU 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.

Under the MOU, the World Bank and ADB 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.

“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,” said Raiser. “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.

“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. “ADB is committed to promoting clean energy solutions that align with climate action goals.”

This is the first MOU signed between ADB and the World Bank after 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 October 2023.

In Fiscal Year 2023, hydroelectric generation in Nepal increased significantly for the second year in a row, adding close to 500 MW to the national grid, according to Nepal Development Update published by the World Bank.

Source: Hydro Review