The World Bank and the Asian Development Bank (ADB) have forged a collaborative alliance aimed at fortifying Nepal's hydropower sector, with a special focus on the proposed Upper Arun and Dudh Koshi hydropower projects.
The memorandum of understanding (MOU) cementing this partnership for an initial period of five years was officially inked on 6 December on the sidelines of COP28. The signatories, Martin Raiser, World Bank Vice President for South Asia, and Fatima Yasmin, ADB Vice-President for Sectors and Themes, underscored the pivotal role this collaboration will play in propelling Nepal's sustainable energy development.
Martin Raiser emphasized: "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. 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."
Fatima Yasmin echoed the sentiment, stating: "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."
The MOU outlines three key areas of collaboration: enhancing country-level cooperation, strengthening co-financing, and intensifying joint action on climate change. This pilot approach between the two multilateral development banks provides a platform for shared knowledge and experience, ensuring a unified understanding of Nepal's hydropower sector. Joint analytical studies and consultations will further support the sector's development.
A critical aspect of the collaboration involves bolstering the institutional capacity of Nepal’s executing and implementing agencies in the realm of large hydropower projects. The World Bank and Asian Development Bank will work collaboratively on project preparation and financing in the energy sector, marking a significant stride toward Nepal's energy security.
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.
