Beijing-based international development bank has already approved a total of $202.3 million in funding to two projects in Nepal
KATHMANDU, July 29: Nepal has urged the Asian Infrastructure Investment Bank (AIIB) to be more flexible on concessional finance to low income countries like Nepal.
Addressing a round table discussion held during the fifth annual meeting of the Board of Governors of the AIIB on Tuesday, Minister for Finance, Yuba Raj Khatiwada, said that such access to concessional finance for low-income countries like Nepal will make basic infrastructure projects financially viable, according to a statement issued by the Ministry of Finance.
Interview: Diversifying financing is critical for Nepal
“It implies further flexibility in lending terms, also from the debt sustainability perspectives,” read the statement.
Nepal is also a founding member of the Beijing-based international multilateral development bank that came into operation in January 2016. The AIIB, which is considered to be China’s answer to the World Bank, has so far approved a total of $19.6 billion in funding of 87 projects in its member countries, particularly in Asia. 103 countries have become members of the AIIB that aims to support the building of infrastructure in the Asia-Pacific region.
Nepal has been able to secure $202.3 million funding approval for two projects so far.
While the AIIB is providing $112.3 million for Power Distribution System Upgrade and Expansion Project (PDSUEP), it has also approved the funding of $90 million to Upper Trishuli-1 Hydropower Project. As a stand-alone project, AIIB is a sole lender to the government to implement the PDSUEP that aims to increase access to and improve quality and efficiency of electricity supply in selected areas of Western Nepal. On the other hand, the AIIB is co-financing the 216-MW Upper Trishuli-1 Hydropower Project along with the International Finance Corporation (IFC), Asian Development Bank (ADB) and other development financial institutions.
Nepal wants the AIIB’s further collaboration with other international financial institutions as highlighted by Finance Minister Khatiwada in his address as a lead speaker in the discussion during the annual meeting of the bank.
“AIIB should come forward to further extensive collaboration with other international financial institutions so as to create synergy in long term financing in infrastructure so that large financing gaps in low income countries could be met which is also so critical to achieve the sustainable development goals,” the statement quoted Finance Minister Khatiwada as saying.
Stating that climate financing is an urgent priority, Finance Minister Khatiwada said that the financing need for health infrastructure and economic recovery is even more urgent at the moment for low carbon and low income countries like Nepal that have been struggling to combat the COVID-19 and its economic fallout.
