KATHMANDU, June 11: Nepal Infrastructure Bank (NIFRA) on Tuesday launched a public green bond worth Rs 5 billion, aiming to finance green energy production.
The bond, first of its type in the country, will be spent to support hydropower projects with production capacity of less than 25 MW and solar energy development projects. The bond approved by the Securities Board of Nepal (SEBON) possesses a maturity period of seven years, while its interest rate has been fixed at six percent per annum. Out of the total worth of the bond, Rs 2 billion will be contributed by the general public and the remaining Rs 3 billion will be funded by private investors.
After finalizing the framework for green bond development in March, other necessary processes have been expedited. Speaking at a program, Chief Executive Officer of NIFRA Krishna Bahadur Adhikari said allotment of the bond will be finalized in the next few days. He informed that the bond has seen four-fold oversubscription compared to the issuance amount of Rs 5 billion.
Will Idris Elba be first black James Bond?
Investment through green bonds is made mainly in projects that ensure environmental and climate benefits. Adhikari said that this investment will be important to ensure a sustainable future.
At the program, Minister for Forests and Environment Ain Bahadur Shahi said this initiative is important to achieve climate goals.
Stating that the private sector had issued private bonds previously, Joint Secretary at the Ministry of Finance Dhaniram Sharma termed the initiative as historic in terms of public green bonds.
Nabaraj Adhikari, executive director of the SEBON, underlined the importance of green bonds to diversify instruments of the capital market. Adhikari added that the bond in its type is important for green economic growth and sustainable development.
At the event, South Korean Ambassador to Nepal Tae Yong Park mentioned that the Korean government has also contributed to this bond issuance and said that it will contribute to the development of clean energy and the development of the climate smart agriculture sector.
Similarly, Laura Jalasjoki, Country Representative of the Global Green Growth Institute and RP Bichha, member of the National Planning Commission, expressed their views that this new beginning will add a new chapter to Nepal's financial market and sustainable development campaign.
Korea International Cooperation Agency (KOICA), with the technical assistance from the Global Green Growth Institute (GGGI), has supported NIFRA in its initiative to issue the country's first-ever public Green Bond. For this process, Nepal Rastra Bank and SEBON have reviewed the bond documentation and granted the necessary approvals for the issuance of the Green Bond.
This initiative is being carried out under the Memorandum of Understanding signed between the GGGI, KOICA, and NIFRA on April 15, 2025. The GGGI provided technical advice and expertise to NIFRA to develop its Green Bond Framework.
