EIB, Nepal sign accord to improve economic conditions, energy supply

The EIB — the European Union's long-term financing institution — and the government signed a Framework Agreement under which the Bank may start financing capital investments in Nepal.
"The Framework Agreement is key in the very significant moment in Nepal's recent history," she said during the signing ceremony. "I am confident that the first milestone in the cooperation between Nepal and the EIB will soon result into the implementation of projects, especially in the area of renewable energy and energy infrastructure," she said, adding that it will help Nepal develop further its huge hydropower potential and improve economic prosperity and quality of life for the people.
Hailing the agreement, ambassador and head of the European Union (EU) Delegation to Nepal Dr Alexander Spachis expressed optimism that it would open up additional avenues for Nepal to acquire funds for further pursuing development initiatives on important social, economic and development sectors. He also underlined that the agreement was in line with the EU's recent initiatives designed to assist developing countries in achieving inclusive economic growth, including providing access to sustainable energy to their populations.
The agreement was signed by the EIB vice president with special responsibility for the Bank’s activities in Asia, Magdalena Álvarez Arza and finance secretary Krishna Hari Baskota on behalf of their respective institutions.
Similarly, Baskota opined that the agreement will provide Nepal a basis for sufficient financing at low cost and create conducive environment for foreign investment in different projects like infrastructure development, energy, and sustainable environment. "We are confident that the venture will support Nepal to achieve sustainable and inclusive economic development," he said, adding that the collaboration will grow further in the days to come.
After the signing ceremony, the EIB vice-president called on Prime Minister Dr Baburam Bhattarai at his office in Singhadurbar, where they discussed the future role of the bank in supporting sustainable development.
The EIB is the long-term lending institution of the EU owned by its member states. It makes a long-term finance available for sound investment to contribute towards EU policy goals. Outside the EU, the bank supports projects that contribute to economic development in countries that have signed association or cooperation agreements with the EU or its member states. "Of Euro61 billion lent in 2011, some Euro7 billion went for projects outside the EU," according to the EIB that finances projects in countries which have concluded cooperation agreements with the European Union.
In Asia, the bank has so far signed Framework Agreements with Bangladesh, China, India, Indonesia, Laos, Maldives, Mongolia, Pakistan, the Philippines, Sri Lanka, Thailand, Vietnam and Yemen.
At the request of the European Council, the EIB’s Board of Governors authorised lending of up to Euro750 million for a period of three years (1993-1996) for projects of mutual interest located in Asia and Latin America. This mandate has been successfully renewed Euor275 million (1997), Euro900 million (1997-1999), Euro2 480 million (2000-2006). Under the current mandate (2007-2013) the EIB is authorised to lend up to Euro5.8 billion for financing operations that contribute to climate change mitigation and adaptation or the development of sustainable economic infrastructure. In addition to the mandate, it is managing a Facility for Energy Sustainability and Security of Supply (ESF), a multi-annual (2007-2013) Euro4.5 billion facility designed to reinforce the EIB’s contribution to renewable energy and energy efficiency in non-member countries. Under the authorisations, from 1993 until 2011, the EIB has already provided Euro4.3 billion for projects in Asia.