IFC's initiative supports 67 hydel projects

Kathmandu, June 13

IFC’s Nepal Environmental and Social (E&S) Hydropower Programme (2016-2023) benefitted 67 hydropower projects producing 3919 MW, including projects in the pipeline, the subsidiary of the World Bank said in a statement on Tuesday.

The programme included training of local experts to replicate global practices to potentially influence an additional 17 projects generating 2382 MW electricity.

Recognizing Nepal's over 83,000 MW of hydroelectric potential, the IFC supported the Ministry of Forests and Environment (MoFE) in 2018 to develop a Hydropower Environmental Impact Assessment (EIA) Manual to align Nepal with international policies and practices along with innovative approaches in line with its climate goals, read the statement.

"IFC’s efforts have had a significant impact on promoting sustainable practices and fostering a more inclusive industry,” said Ashish Garg, Vice President of the Independent Power Producers' Association, Nepal (IPPAN).

As part of the programme—supported by the governments of Norway, Australia, and Japan—around 150 local officials underwent training to strengthen their understanding of the EIA evaluation and monitoring process. The trainings were key to implementing the manual in Nepal, now mandatory for all hydropower projects that require an EIA.

Maheshwor Dhakal, Joint Secretary at the MoFE, said, “The manual is in line with the Environmental Protection Act, 2019, and introduces international good practices to Nepal’s hydropower sector.”

In 2018, IFC supported the development of the Environmental and Social Risk Management Guideline under Nepal Rastra Bank’s leadership. Updated in 2022 to include climate risks and sector-specific guidance for hydropower, it is mandatory for all loan disbursements from commercial, development, and microfinance banking institutions.

For effective implementation, the National Banking Institute and IFC jointly conducted two Training of Trainers programmes for the updated guideline, enabling 45 trainers to pass on the knowledge to 403 participants.

IFC also conducted a basin-wide cumulative impact assessment and management plan of the Trishuli River Basin to analyze the total environmental and social risks of multiple hydropower projects, including IFC’s flagship 216 MW Upper Trishuli-1 hydropower project.

According to the IFC, following this, the Trishuli Assessment Tool Field Manual was created to help practitioners, developers, and others adopt a replicable approach to monitor biodiversity using innovations, such as environmental DNA.

“IFC’s project contributed toward a strong and sustainable hydropower industry in Nepal,” said Babacar Faye, IFC Country Representative in Nepal. 

 Published in The Rising Nepal daily on 14 June 2023.