IFC provides $25million to NMB bank

Kathmandu, June 30

The International Finance Corporation (IFC), a member of the World Bank Group, is providing a US$25 million loan to NMB Bank to boost financing for green projects and small and medium enterprises (SMEs).

The investment is expected to help expand NMB’s SME portfolio to over US$1 billion by 2025 -creating up to 50,000 jobs over the next five years, said the IFC.

“SMEs have been a key engine of growth in Nepal, contributing 20 per cent of GDP and creating over 60 per cent of jobs in the country. The project is expected to see a doubling in the amount of loans available for SMEs from NMB, creating more jobs in the economy,” it said.

The loan marks IFC’s first climate focused lending to a financial institution in Nepal, incorporating the internationally recognised green loan principles.

The support for green financing, excluding hydro financing, is expected to contribute towards reducing CO2 emissions in the country. “IFC expects the project will also build up NMB’s capacity to identify and evaluate green lending opportunities and increase access to green financing in Nepal over the next five years – trebling the amount of loans available for ‘going green’,” read a statement from the IFC.

"Our investments comprise of a balanced mix of real sector exposures which includes hydropower, agriculture, microfinance, infrastructure, tourism, SMEs and green projects that are key drivers of economic growth and sustainability,” said Chief Executive Officer of the bank Sunil KC.

He also said that in the current COVID -19 scenario, the new investment from IFC added considerable value in helping the company significantly increase its current portfolio and widen the scope for investment in sustainable and green projects.

“This investment is supporting SMEs and Nepal’s sustainable development during this economic downtown. IFC believes in the tremendous opportunity for green growth through mobilising the private sector,” said Wendy Werner, IFC Country Manager for Nepal, Bangladesh and Bhutan.

Based on Nepal’s commitment to the Paris Climate Agreement, IFC estimates the country has climate-smart investment opportunities of US$46 billion by 2030. IFC’s own Climate Implementation Plan of April 2016 has an overall target of scaling up climate investments to reach 28 percent of IFC’s annual financing and catalyzing US$13 billion in private sector capital annually by 2020.

Published in The Rising Nepal daily on 1 July 2020.