World Bank Group's new Country Partnership Framework prioritises jobs and resilience

The World Bank’s Board of Executive Directors discussed the new 7-year Country Partnership Framework (CPF) for Nepal on May 29, 2025. The CPF focuses on the fundamentals of job creation and building resilience to natural disasters, including those linked to climate change.

“Creating jobs is not just at the heart of our mission, it is also the lifeline that can drive Nepal’s sustainable and resilient growth,” said World Bank Country Division Director for Maldives, Nepal, and Sri Lanka David Sislen. “The CPF builds on more than 60 years of partnership between the World Bank Group and Nepal and will leverage development partner collaboration and private sector solutions to drive growth, job creation, and investments.”

Under the CPF, the World Bank Group aims to make available about $2.7 billion to achieve the CPF’s outcomes of helping create more and better jobs, strengthening connectivity and access to services, and enhancing resilience to natural disasters and climate risks.

In the immediate term, the World Bank Group will prioritize policy reform for growth, tourism, digital connectivity, and integrated urban development as engines of growth and job creation.

This will include creating a more investment-friendly environment with reforms that enable private sector-driven growth and investment; enhancing digital connectivity and access to digital government services for better productivity, governance, and service delivery; and improving the competitiveness and services of urban centers like the Kathmandu Valley and secondary cities to unlock their potential as tourist and investment destinations.

“We support Nepal in creating more and better jobs, bolstering disaster preparedness, and contributing to a sustainable future by mobilising domestic and international private capital, promoting public-private partnerships, and enhancing institutional capacity,” said regional director for South Asia at IFC Imad N Fakhoury. "The World Bank Group’s Country Partnership Framework will guide our efforts in advancing reforms that will unlock private sector investment and strengthen the business environment to make a meaningful difference in the lives of the people of Nepal."

As a cross-cutting priority, the World Bank Group will help strengthen the accountability and effectiveness of public sector institutions to improve the public sector’s capacity to deliver results for Nepal and its people.

“MIGA is committed to supporting Nepal’s development goals by providing political risk insurance and leveraging other guarantee instruments through the World Bank Group Guarantee Platform,” said director for Economics and Sustainability of MIGA Sebnem Erol Madan. “By mitigating investment risks, MIGA aims to attract private sector investments that are crucial for creating jobs and strengthening economic resilience," Madan said, adding that through the partnership with the World Bank and IFC under the new Country Partnership Framework, they aim to support Nepal to harness its assets and build a more sustainable and prosperous future.

The CPF is informed by a comprehensive analytical and evaluation program, broad-based consultations with stakeholders across all seven provinces, and the government's 16th Plan, which lays out its national development priorities.

Nepal's banking industry leads the region in female representation but significant barriers remain in having more women in leadership roles: IFC Report

With 46 per cent female representation in its entry-level workforce, the banking industry in Nepal is ahead of other countries in South Asia in achieving gender parity. However, only 23 per cent of senior management roles are held by women, according to a new IFC report that examines gender diversity at six leading banks in Nepal.

The study—among the first of its kind in the region— identifies opportunities that can enable more women to advance to senior roles in the banking industry in South Asia.

This multi-country study, Women’s Advancement in Banking in Emerging South Asian Countries, focuses on commercial banks in Bangladesh, Nepal, and Sri Lanka, where women constitute 30 per cent of the banking sector’s workforce compared to the global average of 52 per cent, the report reads, underlining how several barriers—inequitable hiring, inadequate professional development, lack of fair evaluations, sociocultural constraints, and others—curtail women’s career growth prospects across the region.

“Diversity, equity, and inclusion are central to IFC’s work values," IFC country manager for Nepal, Bangladesh, and Bhutan Martin Holtmann said, adding that through nuanced, data-driven insights emerging from this new report, it is hoped to deepen the industry discourse around steps that need to be taken to improve the status of women in the banking workforce across South Asia.

In Nepal, women hold 42 per cent of all positions in surveyed commercial banks. Comparable figures for  Sri Lanka and Bangladesh are at 38 per cent and 18 per cent respectively. In senior management roles, women hold 23 per cent of executive positions in Nepali banks, compared to 20 per cent in Sri Lanka and 12 per cent in Bangladesh, the report adds.

Past studies have shown that commercial banks that have 15 per cent or more women in senior manager or higher roles, command up to 33 per cent higher return on equity than banks that do not. A growing body of evidence further links an increase in women’s representation in organizations to better performance on business metrics.

Accordingly, IFC's key findings and recommendations intended to help industry actors—executive managers in commercial banks, policymakers, industry bodies, and investors—direct their efforts to boost women’s representation in leadership in the banking industry.

The report recommends targeted efforts in four areas by banks and industry actors. These include establishing clear organisational commitments for gender diversity, the support system for women to reach leadership positions, policy changes to ensure workplace safety, and initiatives to support women's professional development and work-life balance.

“Nepal has a strong legal framework to promote women’s economic participation in the country. And these provisions are more comprehensive than other countries in South Asia,” said Holtmann. “While these progressive policies have allowed Nepal to be a leader in the region, more needs to be done to increase the number of women in leadership positions and to reach gender parity.”

IFC’s $56 million loan to Global IME Bank in February 2024 earmarked 25 per cent towards supporting women-owned small and medium enterprises (SMEs). Additionally, IFC investment in various banking and financial sector clients such as NMB Bank, Sanima Bank, and Siddhartha Bank  have been able to provide economic opportunities, and financial services to SMEs including those led by women.

Development Finance Institutions commit increment in investments in Nepal

The Second Development Finance Institutions (DFI) Mission, that started on Tuesday in Nepal, concluded today with a commitment to explore investment opportunities in Class B Banks, Micro-Finance Institutions (MFIs), and Digital Financial Service Providers, following productive deal facilitation sessions held during the three-day mission.

During a meeting with finance minister Barsha Man Pun yesterday, DFI representatives received assurance of the government’s commitment to facilitating foreign investments. In this regard, the finance minister highlighted several amendments made earlier this week to laws aimed at simplifying foreign investments.

“The agendas linked to challenges to ease investments by Development Finance Institutions are gradually being addressed by the government, which is a positive sign to mobilise local saving and attract foreign investments," chairman of the Board of the Swiss Investment Fund for Emerging Markets (SIFEM) Jörg Frieden said, adding that the recognition of DFIs as development and economic growth partners by the government is very encouraging for our investments.

The DFI Mission, organised by Invest for Impact Nepal (IIN), was attended by 14 Development Finance Institutions and Impact Investors from the United States, Europe, and the United Kingdom and Multilateral Agencies such as the IFC.

The mission’s primary focus was on accelerating DFI investments in Nepal's financial service industry beyond Class A Banks. During the mission, DFIs delegates also had meetings with the finance secretary Madhu Kumar Marasini and Nepal Rastra Bank’s governor Maha Prasad Adhikari and the deputy governor Bam Bahadur Mishra, to discuss on the execution of the Memorandum of Understanding (MoU) between the Nepal Government and Development Finance Institutions signed in October 2023 and the issues related to easing entry and exits for DFI investments, respectively.

Representatives of the Nepal Bankers’ Association (NBA) and DFIs also explored opportunities to scale up Nepal’s Financial Service Industry and the role of DFIs to promote sustainable financing.

The First Development Finance Institutions (DFI) Mission in Nepal was held in April 2023.

The Government of Nepal, Finance Ministry and Development Finance Institutions (DFIs) signed a Memorandum of Understanding on October 31, 2023.

The MoU outlines an agreement to enhance the inflow of private capital investment from DFIs into Nepal, the need for transformative investments to achieve UN SDG goals, to foster favourable investment climate, and transfer of technical know-how and knowledge to enhance Nepal’s competitiveness.

Nepal Rastra Bank in its amendment to the Foreign Investment and Foreign Loan Management Bylaws -2080 (February 2024), has recognised DFIs as a category of investors (government/inter-government owned institutions).

The DFI Investments in Nepal from 2008-2023 has amounted to $1.1 billion with the financial sector comprising for 59 per cent of the total.

Remarkably, between 2021 and 2023, the financial sector attracted $629.9 million investments from DFIs.

Attendees of the second DFI Mission included Asian Development Bank (ADB), British International Investment plc (BII), Société Belge d’Investissement pour les Pays en Developpement (BIO), Nederlandse Financierings Maatschappij voor Ontwikkelingslanden nv (FMO), Swiss Investment Fund for Emerging Markets (SIFEM), Deutsche Investitions- und Entwicklungsgesellschaft (DEG), Finnish Fund for Industrial Cooperation (FINNFUND), International Finance Corporation (IFC), US International Development Finance Corporation (DFC), Japan International Cooperation Agency (JICA), MicroVest, DAI Capital, responsibility and Symbiotics, according to a press note issued by the IIN.

Private sector booms with over 30-fold growth in 30 years, contributing over 80 per cent to GDP and employment: Report

The private sector contributes significantly to the country's gross domestic product (GDP), with the service and agriculture sectors playing a dominant role, according to a new report by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the International Finance Corporation (IFC).

The report, titled 'State of Private Sector in Nepal: Contributions and Constraints,' analysed data from fiscal year 2011-12 to 2020-21, evaluating the private sector's contribution and current context in Nepal. The report is -- that is claimed to be the first such attempt to create a comprehensive baseline for the entire private sector in Nepal -- combines analysis of both published and unpublished secondary data to offer a snapshot of the private sector contributions to Nepali economy.

According to a comprehensive analysis of sectoral data published by the National Statistical Office (NSO), Finance Ministry (MoF), and various public and private enterprises, it has been estimated that the private sector, which includes households contributes, 81.55 per cent to the country's GDP, taking into account the value addition of all 18 sub-sectors that collectively drive Nepal's economy.

The number of private sector establishments has significantly increased over the past three decades, from 28,660 in 1983 to 923,356 in 2018. It is also the largest employer in Nepal, providing employment to 85.6 percent of the total labor force, the report claimes, adding that a substantial portion of the country’s labour force is employed in agriculture, forestry, and fisheries (57 per cent) and wholesale and retail trade, including vehicle repair (12.5 per cent). "Both industries are primarily driven by the private sector." In 2018, the private sector employed approximately 5.5 million people, while the public sector employed around 427,000 people.

"Based on solid evidence, this report further highlights the private sector’s vital contribution to the socio-economic development of Nepal," country representative for IFC in Nepal Babacar S Faye said, "Our hope is that it will also help better inform and encourage the dialogue between the public and private sectors in order to formulate the best policies that will unleash the full potential of Nepal’s dynamic entrepreneurs."

"The people of Nepal need jobs, products and services that can only come from a stronger and more productive private sector," she said, adding that as the first of its kind in Nepal, the report certainly does not pretend to be comprehensive,  and "we look forward to constructive feedback from all stakeholders in order to enrich the discussions and also improve future editions.”

The study revealed that the private sector has played a critical role in Nepal's growth since the restoration of democracy in the 1990s and the implementation of liberalisation, privatisation, and globalisation policies by the government. This has triggered remarkable progress in several industries, including finance, hospitality, tourism, education, and health.

However, the report highlighted certain areas that require improvement, such as simplifying bureaucratic processes, promoting transparency and accountability, improving the reliability and cost of transportation services, and reducing tariffs on crucial imported inputs.

"Nepal is currently going through a period of major social and economic changes and is having to deal with the challenges brought on by the Covid-19 pandemic," president of the FNCCI Chandra Dhakal said,  on the occasion. "To progress economically, it is vital that stakeholders come together for consultations and discussions," he said, adding that the report can act as a helpful aid to those looking to get the most out of the private sector's contribution to Nepal, and to foster cooperation between the public and private sectors. "We hope that future editions of this report will aggregate and analyse all private sector-related data in one place- creating a robust baseline for data-driven policy dialogue."

The report includes a survey of 517 Nepali firms to gauge the impact of Covid-19 and their awareness of sustainability and climate change. Half of the firms surveyed were in wholesale and retail trade, 13 per cent were in the hotel and accommodation sector, and 12 per cent were in manufacturing. Likewise, half of the firms had borrowed from commercial banks, and during Covid-19 restrictions, 87 per cent were affected, with 63 per cent fully closed. "Some 79 per cent experienced a loss of revenue during lockdown, but 50 per cent reported being profitable after it was lifted."

IFC report claims increase in financial inclusion

Nepal has seen significant progress in financial inclusion over the past decade, claims a new study.

The Nepal Financial Inclusion Report 2023 – prepared by the International Finance Corporation (IFC) and the UN Capital Development Fund (UNCDF) under the Access to Financial Services Nepal Project jointly implemented by Nepal Rastra Bank (NRB) and IFC – reveals that overall usage of financial services is strong in Nepal, with payments via banks being the most popular service, at 75 per cent. 

At a time, when majority of Terai Madhesh population – especially the women population – is suffering from loan-sharks, and forced to march on foot for 10 days to Federal capital Kathmandu in search of justice and security of their property, the report also indicates a decrease in the gender gap. The government was forced to sign agreement with the victims promising to criminalise the loan-sharks.

In 2022, the disparity between women and men with access to formal financial services had decreased to 1 per cent (89 per cent women versus 90 per cent men), compared to the 2014 figures of 57 per cent and 64 per cent, respectively, the report claims.

This is in line with the World Economic Forum’s Global Gender Gap Report, which shows that economic participation and opportunities for women in Nepal have consistently improved – from 116th in 2013 to 107th in 2021 and 98th in 2022, with an overall ranking of 96, which is second only to Bangladesh in South Asia.

However, there remains a disparity in the utilisation of banking services between women and men, with 79 per cent of women using the services compared to 83 per cent of men, the report reads, revealing that other formal financial service providers are strong competitors to banks, with comparative usage statistics across key services such as accounts and credit, and overtaking banks in terms of savings products.

"The report indicates that considerable progress has been made in extending financial inclusion to a larger segment of the Nepali people," central bank governor Maha Prasad Adhikari said after launching the report.

The survey also reveals a strong connection between the use of financial services and the target group and level of schooling, with salaried staff having the highest utilisation and those without any academic education having the least.

Possessing a bank account is seen as a pathway to financial inclusion, with significantly higher usage of both banking and other formal financial services being observed among those with a bank account compared to those without.

The study further explored the main impediments to the use of financial services. It was discovered that many people without a bank account either did not need one, had insufficient funds after expenditure, or did not have the necessary funds to open an account.

Additionally, a lack of awareness regarding the process of opening a mobile money account, the complexity of using a mobile money platform, and the lack of access to agents or points of service were all reported as barriers.

"Financial inclusion is essential for sustainable socio-economic development," country representative for IFC in Nepal Babacar S Faye said, adding that with the advancement of technology, access to finance can be made more inclusive and affordable, to the benefit of those who are unbanked or underserved, as well as the financial system as a whole.

Likewise Global Programme Advisor at UNCDF Kameshnee Naidoo commented that financial inclusion is essential for Nepal to achieve its Sustainable Development Goals (SDGs). "Our report shows that while there has been progress, there is still much work to be done to ensure that all citizens can access the financial services they need to create a better future,” she said, adding that UNCDF remains committed to working with public and private sector partners to help build this future where no one is left behind in the digital era

“Financial inclusion is key to Nepal's SDGs attainment and LDC graduation as it can facilitate a larger variety of actors to serve the low-income market, allow people to meet their basic needs and enable government to generate additional flows of domestic capital towards sustainable investments,” UN Resident Coordinator to Nepal Hanaa Singer-Hamdy tweeted.

The study was conducted with the technical input of UNCDF, to provide indicators for the Nepal Rastra Bank’s Financial Inclusion Roadmap and Action Plan (2017-2022).

It focused on the usage of financial services and obtained data from a sample of 2,528 adults aged 16 or older. The findings of the survey and the 2021 Nepal Financial Inclusion Making Access Possible (MAP) Refresh study by UNCDF were utilised to assess financial inclusion through the World Bank Group’s three categories: Access, Usage, and Quality.

The Nepal Financial Inclusion Report also outlines measures to increase financial inclusion, including reforming the secured transaction registry system, enacting comprehensive legal and regulatory frameworks, improving consumer protection and financial literacy, and updating the Nepal Financial Inclusion Action Plan-2030.

The Nepal Financial Inclusion Report also outlines measures to increase financial inclusion, including reforming the secured transaction registry system, enacting comprehensive legal and regulatory frameworks, improving consumer protection and financial literacy, and updating the Nepal Financial Inclusion Action Plan-2030.

Governor Adhikari and Global Programme Advisor at UNCDF, Dr Kameshnee Naidoo, had jointly launched the Nepal Financial Inclusion Report on April 28.

Promoting accessible tourism can help Nepal drive recovery, boost economy

Investing in disability-friendly infrastructure and services can help hoteliers and entrepreneurs tap the accessible tourism market in Nepal, a growing segment globally, while driving economic growth and accelerating recovery, reveals a new IFC study.

The report -- 'Open to All: A Survey on Accessibility for Persons with Disabilities in Nepal’s Hotels' -- covers 90 starred hotels in major cities. While 95 per cent of the participating hoteliers are aware of accessible tourism as a concept, they have not invested in necessary measures to ensure accessibility for persons with disabilities.

With existing facilities limited to ramps and lifts in most hotels, only 17 per cent of the surveyed hotels put up signs to help visually-impaired guests and 74 per cent of the hotels did not have any Braille signage on door plaques and room directories, according to the survey. "Further, only about 9 per cent of the hotels had staff, who were trained in or had basic knowledge of sign language while only 33 per cent of the participating hotels had extra wheelchairs for guests."

The poor numbers were attributed to a range of factors including old structures, remote locations, and fewer guests with disabilities. Many of the surveyed hotels also cited extra cost as a key deterrent to building ramps, purchasing wheelchairs, or providing other accessible infrastructure and services.

"Globally, the concept of accessible or inclusive tourism has gained ground in recent times," IFC country manager for Nepal, Bangladesh, and Bhutan Wendy Werner said, ading that accessibility at tourism destinations is key to responsible and sustainable tourism to ensure everyone can be part of the tourism experience, regardless of physical limitations, disabilities, or age. "Accessible tourism is not only a human right, it also makes business sense."

According to the World Health Organisation (WHO), globally, around one billion people are affected by some form of disability. According to disability rights experts in Nepal, as more persons with physical limitations and disabilities travel around the world, a focus on accessible infrastructure in hotels as well as tourism destinations can boost the number of foreign tourists in the country.

"Currently, around 2,000 tourists with disabilities visit Nepal every year," president of the National Federation of the Disabled–Nepal Mitra Lal Sharma said. "But, with improved facilities and conditions that are more disability-friendly, the number could easily go up to over 10,000 tourists a year."

“Although accessible tourism is relatively new in Nepal, we are confident that with adequate support, we can push ourselves to explore and attract this growing segment of tourists to our country,” said president of Hotel Association of Nepal (HAN) Shreejana Rana.

The study also recommends, going forward, the government, the private sector, and deveelopment partners will need to work together to create a conducive environment by incorporating universal accessibility practices into relevant legal and policy provisions, with the involvement of persons with disabilities.

The study was conducted by the Society of Economic Journalists–Nepal, in collaboration with the National Federation of the Disabled–Nepal, with financial and technical assistance from IFC.

IFC ramps up impact investments in South Asia to protect jobs and livelihoods, drive green recovery

 In a bid to protect the most vulnerable people and help companies maintain operations and jobs, IFC's focused and sustained investments in South Asia continued to have strong impact in the fiscal year 2021, with support for medical facilities, vaccines and supplies, and to hard-hit micro, small, and medium enterprises (MSMEs) while also spurring investments in renewable energy, affordable housing, and distressed assets resolution.

In the midst of a difficult year with massive and ongoing social and economic disruptions caused by Covid-19, IFC committed over $3.8 billion, including mobilisation and short-term finance, in South Asia as of June 2021 — resulting in a record investment volume of over $14.9 billion in the last five years in the region, towards a green, inclusive, and resilient recovery.

In India, IFC’s largest client country globally, total commitments at the end of June stood at $1.7 billion representing an increase of over 51 per cent from last year, according to a press note issued by the IFC today. "Likewise, in Bangladesh, IFC made total commitments of $791 million, an increase of almost 33 per cent from last year."

"The Covid-19 crisis has drastically impacted the region’s private sector, which has severely affected the region’s most vulnerable people," IFC's vice president for Asia and the Pacific region Alfonso Garcia Mora said, adding that Covid-19 has laid bare the region’s existing vulnerabilities in the financial sector, disrupting businesses -- particularly micro, small, and medium enterprises -- and leaving so many people exposed. "That’s why we’ve focused our attention on supporting moves to improve resilience on multiple fronts, as all indications are that the road to recovery will be long."

IFC has committed $590 million in Covid-response deals in South Asia -- with additional deals worth over $100 million in the pipeline. IFC’s fast-track financial support has helped clients across sectors at a time when the economic fallouts of the pandemic have severely impacted market sentiment. Further, IFC committed $353 million in climate finance and $490 million in IDA/FCS (International Development Association/Fragile and Conflict-Affected Situations) countries in the region.

IFC already provided financing and advisory support for the production of critical pharmaceutical products and medical equipment such as personal protective equipment (PPE) and vaccines, the press note reads, adding that IFC will further focus on providing much needed liquidity to private sector companies in the region so they can maintain operations, preserve, and create jobs.

"The impact of the pandemic coupled with the region’s vulnerability to climate change, has highlighted the need for a collaborative, resilient and climate friendly recovery that can withstand future shocks,” IFC’s new regional director for South Asia Hector Gomez Ang said, adding that it is especially important for South Asia, which is home to three of the top five countries in terms of vulnerability to climate change globally.

While South Asia is one of the fastest growing regions in the world, estimates suggest that climate impacts could reduce its annual gross domestic product by an average of 1.8 per cent by 2050, rising to 8.8 per cent by 2100, if the countries fail to take adequate measures. The region is also estimated to have an untapped climate investment potential of $3.4 trillion by 2030.

Under the World Bank Group’s Climate Change Action Plan (2021-2025), IFC has committed to aligning all new real sector operations with the objectives of the Paris Agreement by July 1, 2025 and set the target of reaching 35 per cent financing for climate on average over the next five years. In addition, IFC will intensify its effort to create bankable investment opportunities and to mobilize private financing towards decarbonising five key sectors as outlined in the CCAP.

More private-sector investment in the ACA can attract high-spending tourist

Increased private-sector investment in the Annapurna Conservation Area (ACA) could bring in more high-spending tourists to help boost the local economy in a post-Covid market, according to a new IFC report.

The report—'Architectural and Cultural Heritage Tourism Products in Nepal: An Assessment of New Private Sector Investment Opportunities in the Annapurna Conservation Area'—examines the opportunities for investors to capitalise on the area’s triple offering of landscape, architecture, and culture.

The Annapurna Conservation Area now caters to two main visitor groups:  Hindu and Buddhist pilgrims visiting Muktinath, an important site for both religions, and adventure tourists—hikers, trekkers, and mountaineers. The Annapurna Area has long been the most popular trekking destination in the country, accounting for roughly 60 per cent of all trekking holidays.

The report says that the area could attract higher value tourists who could spend about 20 per cent more, if there was greater action to boost accommodation. While there are over 1000 hotels, lodges, and tea shops, these cater to low-budget travelers, the report reads. In order to appeal to higher-value tourists, the report lays out four potential investment concepts: converting old, abandoned houses in a street in Tukuche village into boutique hotels; redeveloping an abandoned, heritage house in Jharkot into a boutique luxury hotel; establishing a network of lodges along the Seven-Passes trail in Manang; and setting up a coffee shop franchise in Lower Mustang and Manang.

“High spending tourists are willing to pay premium prices for comfortable accommodation in the Himalayan region, as has been the case in Bhutan,” said IFC’s resident representative in Nepal Babacar S Faye. “In view of the gigantic losses that Nepal’s tourism industry has suffered due to the pandemic, it should create a new roadmap to align with the new market reality," Faye said, adding that it has the opportunity to attract more high-end tourists, a move that will impact the supply chain, and have positive ripple effects on the country’s economy.

To attract higher spending tourists and sustain local communities engaged in tourism, the report makes it clear that more private sector investment is crucial. Tourism in Nepal has been the hardest hit sector by Covid-19 impacts. An estimated 230,000 jobs are at risk, 20,000 tour and trekking guides unemployed, and 2,600 trekking agencies closed, amounting to a loss of around $460 million to the country’s GDP.

The study is part of IFC's continued support to Nepal's tourism sector as it struggles to recover from the pandemic.

Nepal Invests launched to accelerate investment in Nepal

 CDC Group, the UK’s development finance institution, FMO, the Dutch development bank and Swiss Agency for Development and Cooperation SDC jointly launched a platform, Nepal Invests that will drive increased investment into the country.

The group comprising of Development Finance Institutions (DFIs) and a development partner, will complement existing efforts to attract more investments and advance the development of the country, by channelling efforts to unlock the possibilities of investing patient, flexible capital to support private sector growth and innovation – helping to solve the biggest development challenges in Nepal, accortding to a press note issued by the SDC.

The Covid-19 pandemic has challenged the world, it reads, adding that for Nepal, it is clear that there will be significant economic pressure as a result of potentially volatile remittance inflows, and a surge in demand for finance at a time when the crisis has significantly reduced access and option of capital for SMEs. "Nepal Invests will support the economic recovery from Covid-19 in multiple ways; partnering to address business environment challenges, exploring innovative ways to finance SMEs and increasing the skills and capacity of local investment professionals."

These measures are designed to better prepare Nepal’s market for increased investment from development finance institutions, frontier players, and intermediate vehicles in order to support the medium-term economic recovery, it adds.

Nepal Invests represents a ground-breaking collaboration between DFIs and development partners in the country, reflecting shared objectives to support business growth, strengthen investment and accelerate Nepal’s economic recovery from COVID-19. The platform intends to mobilise additional supporting projects and contributions from other DFIs and development partners, whilst engaging closely with the needs of the Nepali private sector.

"CDC is an active investor in Nepal, we want to encourage more foreign direct investment (FDI) into the prospering nation," managing director and head of Asia at the CDC Group Srini Nagarajan said, adding that they are delighted to partner with FMO and the Swiss government in the unique collaboration between DFIs and development partners in Nepal that aims to attract foreign capital into the country. "The role of DFIs has been important in Nepal and will remain important after Covid-19, to support green growth and economic transformation."

"We hope to play an even stronger role in the future, he added. "I am hopeful this initiative will help us deepen our contextual understanding, forge partnerships and enable us to do more."

"FMO has played a pioneering role for development finance in Nepal," manager capacity development officer at FMO Andrew Shaw said, adding, "With our support to Nepal Invests, we hope to accelerate investment in the country and to support foreign investors to increasingly focus on Nepal."

"As part of Nepal Invests, FMO is committed to support the Nepali private sector to raise its environmental and social standards together with local stakeholders, and to facilitate the adoption of international ESG practices to create a level playing field between companies and improve access to DFI funding in the country," Shaw added.

Likewise,  ambassador of Switzerland to Nepal Elisabeth von Capeller, on the occasion, said that Switzerland is a long-standing development partner of Nepal and is committed to supporting Nepali small and medium enterprises to grow and contribute to Nepal’s economic development. "Attracting and mobilising private investments will be key in achieving the economic transformation agenda that Nepal has set for itself and the Swiss Agency for Development and Cooperation SDC is delighted to partner with CDC Group and FMO to support the Nepal Invests platform which will contribute to preparing the Nepali market for greater investments," she said, adding that the initiative also sets a precedent for future collaborations of this nature between development partners and development finance institutions to contribute towards Nepal’s economic advancement.

The platform is managed by Nathan Associates, in Kathmandu, Nepal.

The partnership was formed following a joint-DFI stocktaking mission to Nepal in January 2020. This mission was coordinated by SDC and SIFEM, and is a part of a collective effort by IFC and CDC (the DFI Fragility Forum) aimed at promoting private investments and jobs creation in fragile or politically complex contexts. Participation included DFIs such as CDC, FMO, Proparco, SIFEM, and IFC; as well as Development Partners such as the ADB, EU, FCDO, SDC, and the World Bank.

IFC helps businesses in poorest countries fight Pandemic with $4 billion in Covid-19 financing

 IFC’s pandemic response is focused on reaching the most vulnerable people in developing countries.

Of the $8 billion in IFC Covid-19 fast-track financing approved by the IFC Board in March 2020, $4 billion has been committed to date, of which close to half is expected to benefit people in the poorest countries and fragile states, with the remainder helping to support the fight against Covid-19 across other developing countries and emerging markets.

“Supporting the private sector will be crucial to helping developing countries achieve an inclusive, sustainable and resilient recovery and stem the current rise in extreme poverty,” said World Bank Group president David Malpass. “Our goal with IFC’s fast-track Covid-19 facility is to provide needed liquidity for corporate and financial institution clients, which will provide working capital, support jobs and facilitate trade,” he added.

IFC’s Board in March approved $8 billion in financing to help companies affected by the outbreak. IFC –the largest global development institution focused on the private sector in emerging markets – has since fully deployed the $2 billion allocated under the trade-finance envelope of the fast-track facility. This support is helping client financial institutions keep liquidity flowing to businesses that depend on trade, especially micro, small and medium-sized enterprises (MSMEs), a major source of employment.

“IFC’s fast-track Covid-19 facility was designed to provide immediate liquidity to our financial institutions and real sector clients to preserve jobs and prevent short-term damage,” interim managing director, executive vice president and chief operating officer of IFC Stephanie von Friedeburg said. “By supporting private sector clients and interventions, we are hoping in the longer term to help reignite economic growth, paving the way for a better, more resilient and sustainable future once Covid-19 recedes.”

IFC has committed an additional $2 billion under the facility, benefiting every region in which IFC operates. This financing is being used for a range of purposes, from bolstering healthcare providers to helping the battered tourism sector and keeping viable businesses afloat, thus saving jobs. Another $623 million has been mobilised for these clients from private sector partners.

Additionally, the IDA Private Sector Window (PSW) – a tool developed by the World Bank Group to catalyze private-sector investment in the world’s poorest countries – has provided $281 million in guarantees supporting trade-finance and working-capital loans to small and medium-size enterprises (SMEs) in eligible countries since March.

IFC’s response is part of the World Bank Group’s effort to take broad, fast action to help developing countries strengthen their pandemic response, increase disease monitoring and improve public-health interventions, a press note issued by the IFC reads. “The World Bank Group has the financial capacity to deploy $160 billion over the next 15 months, including a potential $47 billion from IFC in overall support for the private sector.”

Looking ahead, IFC will work with its partners to help restructure and recapitalise viable businesses and set the stage for an inclusive, sustainable and resilient recovery. In August, IFC also launched the $4-billion Global Health Platform, which is helping developing countries expand access to medical supplies such as masks, ventilators, test-kits and, eventually, a Covid-19 vaccine.

World Bank approves $12 billion in financing to help developing countries

 The World Bank has approved $12 billion in financing to help developing countries buy and distribute coronavirus vaccines, tests, and treatments, aiming to support the vaccination of up to 1 billion people.

The $12 billion ‘envelop’ is part of a wider World Bank Group package of up to $160 billion to help developing countries fight the Covid-19 pandemic, a press note issued by the multilateral development partner reads.

The World Bank also said that its Covid-19 emergency response programs are already reaching 111 countries. Citizens in developing countries also need access to safe and effective Covid-19 vaccines,” the press note reads, adding that it is extending and expanding its fast-track approach to address the Covid emergency so that developing countries have fair and equal access to vaccines.

“Access to safe and effective vaccines and strengthened delivery systems is key to alter the course of the pandemic and help countries experiencing catastrophic economic and fiscal impacts move toward a resilient recovery,” World Bank president David Malpass is quoted in the press note.

The International Finance Corporation (IFC) – the private sector lending arm of the World Bank – is investing in vaccine manufacturers through a $4 billion Global Health Platform, the press note reads.

Development and deployment of vaccines is crucial to helping stem outbreaks of the coronavirus that has killed more than 1 million people and sickened more than 38 million, while devastating economies and leaving many millions jobless.

The World Bank will draw on expertise and experience from its involvement in many large-scale immunisation programmes and other public health efforts,” the press note reads, adding that the funding is meant to also help countries access tests and treatments and to support management of supply chains and other logistics for vaccinations in developing countries.

Covid-19 to add as many as 150 million extreme poor by 2021

 Global extreme poverty is expected to rise in 2020 for the first time in over 20 years as the disruption of the Covid-19 pandemic compounds the forces of conflict and climate change, which were already slowing poverty reduction progress, the World Bank said today.

The Covid-19 pandemic is estimated to push an additional 88 million to 115 million people into extreme poverty this year, with the total rising to as many as 150 million by 2021, depending on the severity of the economic contraction. Extreme poverty, defined as living on less than $1.90 a day, is likely to affect between 9.1 per cent and 9.4 per cent of the world’s population in 2020, according to the biennial Poverty and Shared Prosperity Report. “This would represent a regression to the rate of 9.2 per cent in 2017.” 

Had the pandemic not convulsed the globe, the poverty rate was expected to drop to 7.9 per cent in 2020, it reads.

“The pandemic and global recession may cause over 1.4 per cent of the world’s population to fall into extreme poverty,” World Bank Group president David Malpass said, adding that countries will need to prepare for a different economy post-Covid, by allowing capital, labour, skills, and innovation to move into new businesses and sectors, in order to reverse this serious setback to development progress and poverty reduction. “World Bank Group support – across IBRD, IDA, IFC and MIGA – will help developing countries resume growth and respond to the health, social, and economic impacts of Covid-19 as they work toward a sustainable and inclusive recovery.”

The report also finds that many of the new poor will be in countries that already have high poverty rates. A number of middle-income countries will see significant numbers of people slip below the extreme poverty line. About 82 per cent of the total will be in middle-income countries, the report estimates.

Foreign investor walks out of Nepse-listed Soaltee Hotel

 Though the stable government led by Prime Minister KP Sharma Oli is trying to lure foreign investors, one of the foreign investor walked out of the country selling its shares.

Soaltee Enterprises has bought all the shares from an international company InterContinental Hotels Group to make the Nepse-listed Soaltee Crowne Plaza hotel a complete Nepali entity. Soaltee Enterprises – owned by former King Gyanendra Shah and his family – bought some 8.43 million units of shares at Rs 56.06 per unit totaling Rs 472.34 million worth transaction, according to the Nepal Stock Exchange (Nepse) floor sheet. The shares of the Soaltee Hotels is being traded at Rs 190 per unit at the share market currently. According to the Nepse, the bulk shares transfer took place today through broker 33 and 34.

Along with this purchase of shares from InterContinental Hotels Group, the Soaltee Hotel is now totally owned by only Nepali investors, confirmed one of the oldest five-star hotel in Nepal. The Hong Kong-based InterContinental Hotels Group had 10 per cent stake in Soaltee Hotel.

The shares of Soaltee Hotel that were in the ownership of InterContinental Hotels Group (IHG) were transferred to Soaltee Enterprises. After the share transfer, Soaltee Enterprises now owns 50 per cent stake in Soaltee hotel, whereas Oberoi Hotels Pvt Ltd holds eight per cent shares, Nepal Airlines Corporation (NAC) holds 12 per cent shares while the remaining 30 per cent stake is held by the public, as Soaltee Hotel is one of the listed hotels at the Nepal Stock Exchange (Nepse).

Founded by late prince Himalaya Bir Bikram Shah Dev and late princess Rajya Laxmi Devi Shah in 1965, Soaltee Crowne Plaza was formally inaugurated by late king Mahendra Bir Bikram Shah in 1966 with 104 rooms. But today Soaltee Crowne Plaza hosts 282 luxurious guest rooms and seven regal VVIP suites, spread over 12 acres.

In 1969, the Soaltee hotel was incorporated as a private limited company. Oberoi Hotels (India) Pvt Ltd, with its investment in shares capital, was entrusted with operational management of the hotel and rebranded as ‘Hotel Soaltee Oberoi’ in 1969. 

However, the hotel was converted into a public limited company in 1975 with an investment in the shares capital of the company by Nepal Industrial Development Corporation (NIDC), International Finance Corporation (IFC), Oberoi Hotels (India) Pvt Ltd, Nepal Airlines Corporation (NAC), promoters and the public. The shares of the hotel was listed at the share market with a face value of Rs 10 per unit.

Likewise, in 1994 the hotel was again renamed Soaltee Holiday Inn Crowne Plaza Kathmandu and was operated by Holiday Inns China, a fully owned subsidiary of InterContinental Hotels (IHG).

But in 1998, Soaltee Holiday Inn Crowne Plaza was again rebranded as Soaltee Crowne Plaza Kathmandu.

New IFC report urges companies to take action to boost women’s contribution in the hydropower sector

 Companies and women in Nepal would stand to benefit, if greater action were taken to improve women's participation in and contribution to the hydropower sector, a study carried out by the International Finance Corporation (IFC) – a member of the World Bank Group – reads.

The study of 20 companies is part of the Powered by Women initiative — a time-bound commitment by companies to build the business case for improved gender equality and diversity in renewable energy companies in Nepal. 

The study – released today – was conducted between 2019 and 2020. Over two dozen executives and almost 250 employees working in 20 companies within Nepal's hydropower industry contributed to the research. “Women make up more than half of Nepal's population, yet the study reveals only 10 per cent of all employees in the country's hydropower sector are women," IFC country manager for Nepal, Bangladesh and Bhutan Wendy Werner has been quoted by the IFC in a press note. “Companies need to seize the opportunity to embark on more gender-sensitive and family-friendly policies to help boost staff productivity and attract and retain talent which will ultimately boost their businesses.

“We recognise the need to make conscious efforts to increase the number of women in the power sector,” vice president of Independent Power Producers' Association of Nepal (IPPAN) Ashish Garg said, adding that his organisation has already taken a forward step by making women participation in the executive committee mandatory. “By partnering with IFC on this important initiative, we are committing to championing this cause.”

The study also recommended that companies need to develop and enforce gender-sensitive policies, including mechanisms to address cases of bullying, sexual harassment, abuse and exploitation. More tailored programmes to support professional development opportunities for women, such as more robust recruiting efforts directed at women's advancement into leadership positions and targets for diversity in board representation, are also encouraged.

Meanwhile, at the community level, the study has urged increased support from companies to women-led businesses, including improving their access to finance, and efforts to train women in non-traditional roles within the sector.

The study – spearheaded by IFC's Hydro Environmental and Social Advisory team in partnership with the governments of Australia, Norway and Japan – has shown very few of those employed are in leadership positions, included in corporate boards or occupy non-traditional roles in the hydropower sector.

Despite the considerable scope for women to take up non-traditional roles in the hydropower sector, we found that most companies in Nepal have not yet initiated adequate efforts to realise this,” Asia Environment and Social Governance Team Leader for IFC Kate Lazarus has been quoted in the press release as saying. “While some companies, particularly those led by women entrepreneurs, do show willingness in this regard, there are still challenges in transforming that intent into action on the ground.”

The report has identified gender stereotyping, remoteness of hydropower project sites and a lack of women in science; technology, engineering, and math education as key constraints for women's participation in this sector.

Concerns around initial investment costs and uncertainty over whether there will be a payoff in the short- to medium-term were also inhibiting factors, according to the study. Nepal ranks 105 out of 149 countries on the Global Gender Gap Index 2018 conducted by the World Economic Forum (WEF), indicating that there is still a critical need to focus on gender equality across various spheres.

KEY TAKEAWAYS:

At present from a study of 20 companies, only 10 per cent of total employees in Nepal’s hydropower sector are women, and very few of those employed are in leadership positions, included in corporate boards or occupy non-traditional roles in the industry;

• Various constraints continue to impede women’s entrance into this traditionally male-dominated sector – gender stereotyping, lack of gender-sensitive policies and practices, remoteness of hydropower project sites and a general lack of women in science, technology, engineering, and math education

• Adopting targeted and tailored interventions to advance gender diversity and equality have demonstrated net positive impacts in terms of business growth, efficiency and sustainability around the world

• At the corporate level, companies are recommended to: adopt policies to improve gender equality and equal treatment for all staff, create more career development opportunities targeted at women, build awareness on gender bias and set targets for diversity in board representation and leadership

• These corporate policies should also extend to the project level, where more gender specialists and female staff should be deployed to the field, more emphasis on collection of gender-aggregated data, and investment in opportunities for women to develop skills in non-traditional roles

• At the community level, companies should incorporate gender-responsive facilitation and techniques and gender equality tools, strengthen GBV-related reporting mechanisms, support women-led businesses and explore partnerships to train women in non-traditional roles

MSMEs and farmers benefit from more than half a billion dollars in Covid-19 support in Asia-Pacific Region

 Thousands of micro, small, and medium enterprises (MSMEs), and millions of farmers across Asia and the Pacific stand to benefit from the first phase of Covid-19 crisis response funding from IFC, a member of the World Bank Group.

As the pandemic continues to send shockwaves through the global economy, IFC supported 13 companies in the region – over 190,000 employees in the manufacturing, agriculture, services and energy sectors – with $554 million in Covid-19 related funding in the fiscal year ending June 30. Also, IFC deployed $492 million in Covid-19 related trade finance lines in the region. This has helped financial institutions provide liquidity to businesses dependent on trade, especially small and medium enterprises (SMEs).

About 17,500 MSMEs and corporates in the region are also expected to be among the beneficiaries of IFC’s $2 billion Working Capital Solutions (WCS) programme in the fiscal year 2020. The aim of the programme is to help emerging-market banks extend credit so that businesses can continue to operate, stemming job losses. IFC’s first Covid-19 WCS programme in Asia-Pacific was signed in Sri Lanka with the Commercial Bank of Ceylon to help over 1,200 SMEs – nearly 790 of them women led – deal with the crisis. 

“The economic and social impact of Covid-19 will continue to exact a toll on people and businesses, leaving an indelible mark on the region’s economies and private sector” said IFC’s newly appointed regional vice president for Asia and the Pacific Alfonso Garcia Mora. “To address this, we are stepping up efforts to support companies strengthening also our support to the financial sector so that businesses and firms can build resilience on the road to recovery,” he added.

The WCS programme is part of IFC’s $8 billion global Covid-19 fast-track financing facility developed to help businesses cope with the ongoing global slowdown, marked by a collapse in tourism, plunging trade, disruptions to supply chains, and diminished foreign direct investment.

As an early rapid response when Covid-19 first began impacting Asia, IFC expanded trade financing limits for four banks in Vietnam by $294 million to address, in advance, potential trade finance challenges. The move resulted in over 330 export and import transactions by local SMEs valued at over $200 million. 

Since the outbreak, IFC has made efforts to help both small and large businesses in Bangladesh, Pakistan, Sri Lanka, India, and Vietnam. The support to companies focused on agriculture – between 15,000 and five million farmers and SMEs in their supply chain networks – will help boost farmers’ incomes, strengthening agribusiness and contributing to food security.

IFC is now working on the second phase of its Covid-19 response to help financial institutions and companies in the region on their path to recovery, Garcia Mora, who is a Spanish national. Mora has moved to IFC after eight years with the World Bank. Before that, he worked in the private sector for over 12 years, including as Partner-Managing Director at Analistas Financieros Internacionales Consulting Group.

“As part of our bid to advance workable development solutions to the challenges posed by COVID-19, IFC will also step up its engagement with the World Bank in the Asia-Pacific region,” he said, adding that the IFC will focus on its strategy to create markets by working upstream, tackling barriers to spurring the private sector and creating jobs. “This approach is critical to attract investors in the most vulnerable markets.”

The fiscal year 2020 also saw IFC work upstream and with the World Bank on complex projects with potentially transformative impact to deliver power to millions of people in Afghanistan, Nepal, and Pakistan. IFC also advised governments and the private sector in a range of areas from green sustainable finance and gender issues to helping companies and institutions through webinars to cope with Covid-19 impacts.

Overall, IFC committed $6.7 billion in private sector investments in Asia and the Pacific in the fiscal year ending June 30. This includes the $554 million in IFC financing in response to Covid-19 under the new Covid-19 fast-track facility. Just under half of this was for countries classified as poor and fragile and conflict affected. In addition, IFC supported around $ 1.1 billion of cross-border trade in the region through its Global Trade Finance Programme (GTFP). 

Some other examples of IFC’s support in the fiscal year 2020 in Nepal includes the Upper Trishuli-1 (UT-1) project, a 216 MW run-of-river hydropower project, one of the largest foreign direct investments in Nepal’s history, set to deliver improved power to millions of people.

IFC awards Nepal Investment Bank

Nepal Investment Bank Limited (NIBL) – one of the largest private sector bank in Nepal – bagged an ‘Award of Recognition’ from International Financial Corporation (IFC) – a member of the World Bank Group – for ‘2019 Best Partner in Low Income IDA Countries, South Asia’, for maximum volume of trade finance from Nepal under Global Trade Finance Programme (GTFP).
IFC partnered with Nepal Investment Bank to promote Trade Finance in Nepal to enable the bank to enhance its support for local enterprises and help boost international trade opportunities. IFC’s Trade Finance support enabled the country’s corporate and small and medium enterprise sector to increase their share of global trade and get recognised by a wider range of correspondent banks globally. The network facilitates transactions in challenging markets, promotes competitive financing, and builds correspondent bank relationships with new institutions at low risk.
International Development Association (IDA) – involved on ending extreme poverty and boosting shared prosperity – is critical for South Asia, world’s fastest growing region to deliver sustained and inclusive growth, human capital development and resilience.
Nepal Investment Bank has been catering to its customer from 82 branches, 124 ATMs, 17 extension counters, 10 revenue collection counters and 56 branchless banking counters, according to a press note issued by the bank. The bank, being the recipient of five Financial Times Bank of the Year awards for exemplary service and business, was accredited with Euromoney awards for ‘Best Bank 2018’ from the international publication – Euromoney. Further, International Credit Rating Agency- Nepal (ICRA Nepal) has also given the bank a credit rating of ‘A’.

Nepal has high potential to be the next regional powerhouse: IFC

Nepal has the potential to be the next regional powerhouse, according to a higher official at the International Finance Corporation (IFC).
“The importance of hydropower for Nepal cannot be overstated and the country truly has the potential to be the next regional powerhouse,” a press note quoted IFC’s country manager for Nepal, Bhutan and Bangladesh Wendy Werner as saying. “But to exploit the natural endowments without taking a bird’s-eye view of the potential negative consequences throughout the entire river basin could do more harm than good in the long-run,” he said, adding that everyone has to work together to understand and mitigate cumulative impacts from multiple projects to ensure a sustainable development pathway for the energy sectors in Nepal.
A new study conducted by the IFC also calls for cooperative action through a Developers’ Forum to safeguard the environment and people’s livelihoods with all hydropower development on the Trishuli River Basin (TRB).
The year-long study, ‘Cumulative Impact Assessment and Management: Hydropower Development in Trishuli River Basin in Nepal’, which was supported by the governments of Australia, Norway and Japan, recommends a holistic and basin-wide approach to address the environmental and social challenges associated with infrastructure development. There are over 36 hydropower projects in various stages of development or planning in the Trishuli River Basin (TRB), which covers an area of 32,000 square kilometers.
The study found the Trishuli River Basin (TRB) is already impacted by hydropower and other development projects, with the effects compounded by other stresses such as climate change, slope instability, sand mining and urbanisation. It shows that, without action, the river and its fish could be seriously, to critically, affected, with adverse impacts on people’s livelihoods and the future of the already globally endangered Golden Mahseer.
The study also warns that there is also likely to be an increase in sand-mining activities while exacerbating the displacement impacts associated with land-acquisition, if no management measures at Trishuli River Basin are implemented. It would require at least 640 hectares of land should all the projects currently planned for the Trishuli River Basin be implemented.
“In the absence of a basin-wide environmental and social approach, individual efforts at the project-level to mitigate impacts will likely fall short and as a result biodiversity, people’s livelihoods and ecosystem services could be significantly impacted,” the press note quoted Global Environmental and Social Hydropower Lead of IFC Pablo Cardinale as saying. “This assessment is part of IFC’s deep commitment to promote a holistic, beyond-individual-projects’, approach to environmental and social risk management practices in Nepal, with the clear aim to minimise any accumulated harm to the environment and communities through multiple development projects in the same river basin.”
The study recommends the proposed Trishuli Hydropower Developers’ Forum to include developers, lenders, the Nepal Electricity Authority (NEA), environmental and social regulators, and other relevant government agencies. Under the recommended high management scenario, hydropower developers across the basin would need to sign on to a cumulative impacts management charter that goes beyond the usual compliance requirements of environmental and social management plans of individual hydropower projects.
According to the press note, the study was an integral part of the World Bank Group Board of Directors’ approval of the $650 million for the 216-MW Upper Trishuli-1 Hydropower Project (UT-1), located in the upstream of the Trishuli basin. The IFC is leading a consortium of eight international lenders in financing UT-1. High environmental and social standards have been put in place for UT-1 and it is the first project in Nepal to undertake a consent process with affected indigenous communities.

IFC’s $25 million support to NMB Bank to boost green financing and access to credit

The International Finance Corporation (IFC) – a member of the World Bank Group – is providing a $25 million loan to NMB Bank to boost financing for green projects and small and medium enterprises (SMEs).
The investment is expected to help expand NMB’s SME portfolio to over $1 billion by 2025, creating up to 50,000 jobs over the next five years, according to a press note issued by IFC. SMEs have been a key engine of growth in Nepal, contributing 20 per cent of GDP and creating over 60 per cent of jobs in the country. The project is expected to see a doubling in the amount of loans available for SMEs from NMB, creating more jobs in the economy.
The loan marks IFC’s first climate focused lending to a financial institution in Nepal, incorporating the internationally recognised green loan principles. Overall the support for green financing, excluding hydro financing, is expected to contribute towards reducing CO2 emissions in the country. IFC expects the project will also build up NMB’s capacity to identify and evaluate green lending opportunities and increase access to green financing in Nepal over the next five years – trebling the amount of loans available for ‘going green’.
“NMB is focused on financing of sustainable projects in the real sector in alignment with the Government of Nepal's growth plans,” NMB Bank chief executive officer Sunil KC said, adding that the bank’s investments comprise of a balanced mix of real sector exposures which includes hydro power, agriculture, microfinance, infrastructure, tourism, SMEs and green projects that are key drivers of economic growth and sustainability. “In the current Covid -19 scenario, the new investment from IFC adds considerable value in helping us significantly increase our current portfolio and widen the scope for investment in sustainable and green projects.”
Additionally, access to climate finance is limited in Nepal, which is expected to face a further setback due to the reduction in the flow of credit, in the wake of the impacts of the Covid-19 pandemic.
“This investment is supporting SMEs and Nepal’s sustainable development during this economic downtown,” IFC country manager for Nepal, Bangladesh and Bhutan Wendy Werner said, adding that IFC believes in the tremendous opportunity for green growth through mobilising the private sector. “The project will help boost access to finance for small and medium sized enterprises, which have been highly affected by the impacts of the pandemic.”
SMEs will contribute to Nepal’s recovery in the aftermath of the pandemic.
Based on the government commitment to the Paris Climate Agreement, IFC estimates the country’s has climate-smart investment opportunities of $46 billion by 2030. IFC’s own Climate Implementation Plan of April 2016 has an overall target of scaling up climate investments to reach 28 per cent of IFC’s annual financing and catalysing $13 billion in private sector capital annually by 2020. “IFC has invested in NMB since 2015 through a Global Trade Finance Programme (GTFP) facility and in 2018, IFC extended a working capital solution (WCS) loan.”
Since 1956, IFC has invested over $150 million in Nepal in the country’s priority sectors. By the end of June 2020, IFC’s committed portfolio in Nepal is expected to be approximately $500 million – a significant increase from previous year – where it stood at $75 million.

New study finds strong momentum for Green Finance in Nepal

A new report by the IFC-facilitated Sustainable Banking Network (SBN) shows Nepal, Bangladesh and Mongolia have identified green finance as a top priority for sustainably developing their financial sectors.
The report, ‘Necessary Ambition: How Low-Income Countries Are Adopting Sustainable Finance to Address Poverty, Climate Change, and Other Urgent Challenges”, reads these countries face immediate and significant impacts from climate change, pollution, biodiversity loss, and social inequality that require urgent responses.
In the wake of the challenges, the report says in Asia, promoting green finance, such as green bonds and green loans, is particularly a focus in Bangladesh and Mongolia. The two countries, along with Nepal, are also working on developing national sustainable finance roadmaps as part of efforts to reduce market risk and incentivise green finance flows.
Likewise, executive director at the Nepal Rastra Bank (NRB) – the central bank of Nepal – Dev Kumar Dhakal said that the country should develop and implement sustainable finance related policies for a better and safer financial system. “These policies should not be detrimental to development activities, rather should guide the initiatives taken.”
“At a time when low-income countries across Asia and the Pacific are being adversely impacted by Covid-19, it’s all the more vital for countries to embrace sustainable financial development to build resilience for the future,” said IFC’s vice president for Asia and Pacific Nena Stoiljkovic. “The report highlights these Asian countries are resolute in their commitment to promoting sustainable finance and going green in planning for the future.”
Chief executive officer (CEO) and a board member of the Mongolian Sustainable Finance Bankers Association and co-chair of the SBN IDA Task Force, Naidalaa Badrakh said that there is positive evidence of changes in the way banks are managing environmental and social risks, compared to five years ago. In addition to green finance, the report shows the three Asian countries are also exploring ways to expand sustainable finance to other areas such as financing for small and medium sized enterprises and agriculture.
“In the context of a circular economy, resource efficiency is key,” joint director at the Sustainable Finance Department at Bangladesh Bank – the country's central bank – Asif Iqbal said, adding that sustainable finance has a larger role to play in poverty reduction.
Last year, IFC’s green bonds issuance in Asia-Pacific crossed $1 billion, addressing environmental and social challenges in some of the world’s most vulnerable and poorest countries. Last month, Mongolia’s Financial Regulatory Commission and IFC signed an MoU to further develop the market for green finance in Mongolia.

Unprecedented crisis could push up to 60 million into extreme poverty

Covid-19 (coronavirus) pandemic and shutdown of advanced economies could push as many as 60 million people into extreme poverty, according to the World Bank.
“The pandemic and shutdown of advanced economies could push as many as 60 million people into extreme poverty, erasing much of the recent progress made in poverty alleviation,” said World Bank Group President David Malpass. “The World Bank Group has moved quickly and decisively to establish emergency response operations in 100 countries, with mechanisms that allow other development partners to rapidly expand the programmes,” he said, adding that to return to growth, the multilateral agency’s goal must be rapid, flexible responses to tackle the health emergency, provide cash and other expandable support to protect the poor, maintain the private sector, and strengthen economic resilience and recovery.
In line with its rapid response, the World Bank Group today announced its emergency operations to fight Covid-19 (coronavirus) have reached 100 developing countries, home to 70 per cent of the world’s population. Since March, the Group has rapidly delivered record levels of support in order to help countries protect the poor and vulnerable, reinforce health systems, maintain the private sector, and bolster economic recovery, according to a press note issued by the Bank Group.
This assistance, the largest and fastest crisis response in the Bank Group’s history, marks a milestone in implementing the Bank Group’s pledge to make available $160 billion in grants and financial support over a 15-month period to help developing countries respond to the health, social and economic impacts of Covid-19 and the economic shutdown in advanced countries, the press note reads.
Of the 100 countries, some 39 are in Sub-Saharan Africa. Nearly one-third of the total projects are in fragile and conflict-affected situations, such as Afghanistan, Chad, Haiti, and Niger. The International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) have also fast-tracked support to businesses in developing countries, including trade finance and working capital to maintain private sectors, jobs and livelihoods.
The Bank Group’s support through grants, loans and equity investments will be supplemented by the suspension of bilateral debt service, as endorsed by the Bank’s governors. IDA-eligible countries that request forbearance on their official bilateral debt payments will have more financial resources to respond to the Covid-19 pandemic and fund critical, lifesaving emergency responses.
“The bilateral debt-service suspension being offered will free up crucial resources for IDA countries to fund emergency responses to Covid-19,” Malpass said, adding that nations should move quickly to substantially increase the transparency of all their governments’ financial commitments. “This will increase the confidence in the investment climate and encourage more beneficial debt and investment in the future.”
The Bank Group’s operational response will strengthen health systems, support the poorest households, and create supportive conditions to maintain livelihoods and jobs for those hit hardest. Country operations will deliver help to the poorest families through cash transfers and job support; maintain food security, nutrition and continuity of essential services such as clean water and education; target the most vulnerable groups, including women and forcibly displaced communities, who are most likely to be hit hard; and engage communities to support vulnerable households and foster social cohesion. The scale and speed of the Bank Group’s response is critical in helping countries mitigate the adverse impacts of this crisis and prioritise the human capital investments that can accelerate recovery.
The Bank Group’s operations in 100 countries aim to save lives, protect livelihoods, build resilience, and boost recovery by:
•       Strengthening health systems, monitoring, and prevention, particularly in low-income countries and in fragile and conflict-affected situations. The Bank Group’s health response addresses emergency containment and mitigation needs for Covid-19, including strengthening countries’ health systems to treat severe cases and save lives. Establishing and supporting efforts in fragile and conflict-affected situations is a priority, given the rapidly growing number of cases in some of these countries.
•       Scaling up social protection: The Bank Group is leveraging countries’ existing social protection systems to help families and businesses restore income, preserve livelihoods, and compensate for increasing prices and unexpected medical expenses. These safety nets will need to be augmented with safe, direct food distribution, accompanied by key information on nutrition, social distancing, and hygiene.
•       Supporting businesses and preserving jobs: The International Finance Corporation (IFC) continues to implement its $8 billion fast-track financing facility, which aims to keep companies in business and preserve jobs. Close to 300 clients have requested support, and the facility may be oversubscribed. Building on this effort and market demand, IFC aims to provide $47 billion in financing to developing countries over 15 months. Cumulative Covid-19 related commitments under IFC’s Global Trade Finance Program, which supports small and medium-sized enterprises involved in global supply chains, have totaled 1,200 transactions across 33 countries for $1.4 billion, with 51 per cent of this volume in low-income and fragile countries.
•       Procuring medical equipment and supplies: Many developing countries import most, and in some cases all, of the medical supplies critical for fighting Covid-19, leaving them extremely vulnerable to supply disruptions and export restrictions.