IFC trains bankers

The South Asia Enterprise Development Facility, managed by IFC, in partnership with United Kingdom's Department for International Development, Norwegian Agency for Development and Nepal Bankers' Association, organised a three-day training programme on 'Hydropower and Renewable Energy Financing' for bankers.

IFC -- a member of the World Bank Group -- is working with the Nepal Bankers' Association (NBA) to bring about awareness on financial risks and opportunities associated with hydropower and renewable energy projects. Given Nepal's current energy crisis, hydropower holds great potentials for the country as a clean alternative source of energy.

The bankers lack the experience of financing small hydropower projects. Such investments usually involve high risk with long repayment periods and complex technical aspects, said the IFC. The training programme helped bankers understand these projects better by exploring topics ranging from market potential in Nepal, credit assessment, financing structures, laws, licenses and policies, risk and mitigation, insurance to legal issues related to hydropower. Other renewable energy financing options were discussed and participants visited a hydropower plant to gain real on-site understanding of these projects.

"Nepal is strategically located to tap this resource, so this programme represents a great investment opportunity for bankers and businesses alike," said NBA president Sashin Joshi.

Ian Crosby, Head of SEDF, said, "This training was a critical step toward creating opportunities for financial institutions to build a sustainable energy finance portfolio that will address climate change issues, improve energy security and reduce pollution in Nepal, while increasing bank profits."

SEDF is working with financial institutions to develop strategies, products, services and marketing plans in order to enhance their sustainable energy finance portfolios. SEDF also is developing the capacity of energy auditors and providing the latest market information to assist banks in financing energy-efficient projects.

IFC is the only international financial institution focused exclusively on private sector, the engine of sustainable development in emerging markets. Along with IBRD, it is currently seeking to increase capital to strengthen its ability to create opportunity for the poor in developing countries. It plans to increase financing for renewable energy and other energy efficient projects.