World Bank to provide Nepal $7.61 million in grants, loan

Published On: January 31, 2019 09:59 PM NPT By: Republica


KATHMANDU, Feb 1: The World Bank has approved a grant of US$ 5.61 million, approximately Rs 637 million, and an additional $2 million, or nearly Rs 226.96 million, in loan from its Strategic Climate Fund (SCF) to help Nepal diversify its energy sources to renewables.

Issuing a statement, the World Bank said that the SCF grant and credit approved on Wednesday support the private sector-led Mini-grid Energy Access Project. The project aims at mobilizing energy service companies in selected regions of the country to increase capacity of renewable energy mini-grids. According to the World Bank, the project is aligned with the government’s efforts to address barriers to private sector participation in the renewable energy mini-grid sector. The project aims at addressing these barriers by successfully demonstrating new approaches that will promote public-private partnerships (PPPs), read the statement, adding that private entities and cooperatives will be mobilized to provide electricity services to rural areas as energy service companies (ESCOs).

“This project will tap into the vast business opportunities and technical potential for the private sector to provide more efficient and sustainable energy services in Nepal,” the statement quoted Faris Hadad-Zervos, World Bank Country Manager for Nepal, as saying. “It is directly linked to the Government of Nepal’s effort for greater private sector management and commercial financing through public-private partnerships, and the World Bank’s mission of maximizing all financial opportunities for development,” he added.

According to the World Bank, one component of the project will provide credit facility to the private sector to support renewable mini-grid sub-projects, and help this sector prosper and expand, while the second component will provide technical assistance to the mini-grid sector, energy-service companies and partner banks to ensure smooth and sustainable implementation.

“The project aims to improve the overall energy supply situation in Nepal by promoting renewable energy solutions, including the opportunities to capture private sector efficiencies through PPPs,” read the statement. The project will introduce conditions to gradually shift from subsidized model to a commercial business model in mini-grids, pushing for a vibrant and long-term energy market, according to the statement.


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