April 18, 2024, Thursday
Nepal 1:37:26 pm

NMB, AEPC agree for loan loss guarantee under sustainable energy challenge fund, the bank leads consortium to finance Kabeli-3

The Nepal Weekly
June 7, 2022

NMB Bank Limited has signed an agreement with Alternative Energy Promotion Centre (AEPC) / Central Renewable Energy Fund (CREF) for Loan Loss Guarantee under Sustainable Energy Challenge Fund for financing in Renewable Energy sector in Madhesh, Lumbini and Karnali Provinces. The fund is established with support of British Government funded Nepal Renewable Energy Program. The arrangement is expected to scale up renewable energy financing in the country with the bank able to secure 20% of the losses with the guarantee support.

Sustainable Banking forms the cornerstone of NMB Bank’s vision for growth and prosperity in the nation with focus on the real economy segments of SME, MSME, Agriculture, Infrastructure and Energy. Furthermore, the bank supports the initiative of the Government of Nepal (GoN) to transform Nepal’s Renewable Energy infrastructure and supply system in a sustainable manner, in an effort to reduce the reliance of the country on electricity and fossil fuel imports. The bank has also developed its Green Financing Framework, and Environmental and Social Risk Management System incorporating IFC Performance Standards, further strengthening its claim as the leading bank in Sustainable Banking.

NMB is also the Handling Bank of CREF since January 2018.

NMB Bank leads consortium for financing Kabeli 3

NMB Bank Limited also had agreed to lead the consortium of commercial banks for financing Kabeli – 3 Hydroelectric Project having installed capacity of 21.93 MW.

The project is located at Sirijangha Rural Municipality, Taplejung. The Financial Closure Agreement of project has been signed on 23rd May, 2022 with lead financing from NMB Bank Limited and Century Commercial Bank Limited as Member Bank. Nepal Electricity Authority (NEA) has already facilitated for the construction of project by signing Power Purchase Agreement (PPA) with the company. The total estimated cost of project stands at NPR 4,285 Million. Out of total estimated cost, NPR 3,213 Million shall be financed by Consortium Banks for the development of project. As NMB Bank Limited heads the signing agreement as a lead facilitator of debt package in hydro power project financing, it now rests with total number of 43 projects in its hydro portfolio.

NMB Bank Ltd. has already adopted Environmental and Social Policy and started implementing Environmental and Social Management System within its business portfolio as directed by Nepal Rastra Bank guidelines on Environmental and Social Risk Management. In addition, Bank is committed to apply international good practices such as IFC performance standards in project financing including hydropower sectors. 

‘The Banker Magazine’ of The Financial Times, London, has awarded NMB Bank with the prestigious Bank of the Year Asia 2021. The bank has also been awarded with Bank of the Year in 2017, 2018, 2020 & 2021. NMB Bank is currently providing its services through 201 branches, 138 ATMs and 11 extension counters.

“NMB is the leading bank of Nepal for financing in renewable energy sector. The partnership will provide much needed support for scaling renewable energy financing in the country. It will secure a part of the bank’s default and encourage NMB to finance business institution for energy production and for energy access to the last mile population while also mainstreaming the renewable energy sector. This will also be another stepping stone in the growth of green lending portfolio of the bank.” said Sunil KC, Chief Executive Officer, NMB Bank.