NMB Bank has received a USD 25 million climate finance facility from British International Investment (BII), the UK’s development finance institution and impact investor. The financing facility has been noted as a first-of-its-kind.
The loan facility will be utilised to support the development of the bank’s climate finance eligible assets, boosting NMB bank’s financing capacity for hydropower projects and other renewable energy projects.
A statement issued by NMB Bank says that this investment reasserts the bank’s commitment to explore diverse and novel fund sources for financing its primary focus areas of real economy sectors and renewable energy projects, including hydropower projects. The deal, which follows the DFI’s initial investment of USD 15 million in 2018, is the continuation of the enduring relationship between BII and NMB.
The investment from BII is in recognition of Nepal’s immense hydropower potential along with NMB Bank’s expertise and track record in successfully delivering on hydropower and renewable energy projects, the statement adds.
“NMB’s contribution towards Nepal’s total hydropower production stands at approximately 7 percent and it is further involved in the financing of projects in various stages with a total production capacity of approximately 600MW,” the bank claims.
The investment will also support the government’s long-term vision of independence from fossil fuels. This funding also marks another milestone in NMB Bank’s continued success in securing investment from foreign lenders to bolster real economy and renewable energy sectors.”
An event was organized for signing the deal.On the occasion, CEO of NMB Bank Sunil KC said that the deal with BII will be a milestone for the growth of hydropower and renewable energy sector, which is a prioritized area of Nepal Government to boost sustainable and real economic growth of the country. The successful closure of this deal comes at a very crucial time when domestic credit demand is not being able to be met by fund generation from internal sources, he added
Srini Nagarajan, managing director and head of Asia at British International Investment, commented that BII’s renewed partnership with NMB Bank strongly aligns with BII objective to increase climate finance. BII’s capital will support the bank’s climate assets by generating up to 50MW of clean energy, helping to limit greenhouse gas emissions and enhancing productive, inclusive and sustainable economic opportunities for local communities. ”Nepal remains a priority market for BII, and we are proud to deploy our capital to support the country’s growth trajectory and net-zero ambitions”, Nagarajan mentioned.