World Bank Commits $8.5 Million Concessional Loan for Arun Hydropower Project: Finance Minister Pun

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KATHMANDU, April 21: Finance Minister Barshaman Pun, who returned from a visit to the US on Saturday, announced that the US government, private sector, and development partners are eager to enhance their collaboration with Nepal.

Speaking to journalists at the Tribhuvan International Airport (TIA) upon his return from the 2024 Spring Joint Meetings of the World Bank Group and the International Monetary Fund in Washington DC, Finance Minister Pun described his visit as successful.

He stated that the US government, private sector, and development partners are keen to increase their support and investment in development projects in Nepal. “Overall, the visit was successful. Discussions were held with US government officials and officials of the Millennium Challenge Corporation (MCC). They have expressed their willingness to collaborate more closely with the Nepal government,” he said.

There is significant interest among industrialists and businesspersons in the investment summit scheduled to take place in Nepal later this month.

Finance Minister Pun revealed that discussions were held with several US private sector entities, including Coca-Cola, Meta, Disneyland, and others.

He also expressed confidence that the Millennium Challenge Nepal Account Development Committee (MCA-Nepal) is making progress in constructing power transmission lines and road projects with the grant assistance provided by the MCC.

According to him, the MCC grant assistance will be utilized initially during the construction of the projects under MCA-Nepal, while Nepal will cover the remaining costs.

Accompanied by a four-member Nepali delegation, Finance Minister Pun departed for the US last Monday. During the visit, he participated in 19 formal and informal programs.

He attended meetings of the World Bank and the International Monetary Fund, as well as the ministerial meeting of the Group V-20 of countries threatened by the impact of climate change. He also participated in sessions on clean energy transition in South Asia, along with various high-level bilateral and multilateral meetings.

Finance Minister Pun stated that significant discussions were held on mitigating the impact of climate change and compensating low carbon emitting countries like Nepal.

“Nepal has made no contributions to carbon emissions and climate change. However, the issue of compensation to Nepal for the role of developed countries in climate change has been raised seriously. The agendas raised by Nepal during COP-28 are still a high priority and were emphatically discussed,” he said, adding, “Discussions related to the energy sector of South Asia highlighted Nepal’s production of clean energy and its potential for exporting clean and green energy.”

Finance Minister Pun and top officials of the World Bank reached an important agreement on the financial structure of the 1,063 MW Upper Arun Hydropower Project to be constructed in Sankhuwasabha.

He announced that the World Bank has agreed in principle to provide a concessional loan of about $8.5 million for this project.

Additionally, discussions were held regarding co-financing for the 635 MW Dudhkoshi Reservoir Hydropower Project, he added.

During an interaction with the office-bearers of the US Chamber of Commerce, the Finance Minister emphasized that Nepal is an attractive destination for international investors and called for investment.

Minister Pun held separate meetings with high-level officials and representatives of the World Bank, International Finance Corporation, IMF, USAID, US International Development Finance Corporation, US Chamber of Commerce, and the Non-resident Nepali Association during his stay in America.