International Finance Corporation (IFC), the private sector arm of the World Bank, has signed an agreement with Independent Power Producers´ Association, Nepal (IPPAN), for capacity development of hydropower producers, developers and contractors from both the private and public sectors.
As per the agreement, various programs, including sector-level workshops and trainings, for hydropower developers on sector-related topics will be conducted.
The two-year program will foster sustainability and bankability of the private sector hydropower projects in the country. It consists of three sessions or workshops each year highlighting essential topics for the growth of the sector, including technical, financial, environmental and social aspects. The workshops will also cover other issues like climate change resilience, projects bankability, quality management and environmental and social aspects.
IPPAN officials said they aim to provide technical support to hydropower project officials so that they can meet the requirements of lenders or bank and financial institutions and complete project financing. Several hydropower projects being developed by the private sector have been facing problems in achieving financial closure often resulting in the scrapping of their license.
Speaking at the signing program, Valentino S Bagatsing, IFC Resident Representative for Nepal, said that the partnership was for helping to unlock sector which has long remained underdeveloped. “IFC´s performance standards and sustainability guidelines will play a key role in ensuring that hydropower developers and contractors adopt global best practices in the development of hydropower projects,” Khadga Bahadur Bisht, president of IPPAN, said.
IPPAN will determine the agenda and topics of the workshops jointly with IFC. Bisht said the assistance for the two-year program is worth around US$ 100,000.
“Through its extensive sector networks, IPPAN will also identify relevant hydropower developers and other stakeholders who may benefit from sector events," a joint statement issued by IFC and IPPAN said.
This is the first time that IFC, which has already expressed commitment to make equity investments in different hydropower projects, has come forward with a program for capacity development of hydropower projects.
The World Bank Group has started financing in the hydropower sector -- one of the priority sectors of the government -- in Nepal after a hiatus of two years.