GIBL, GCPF ink $25 million deal to boost climate financing

Kathmandu, Oct. 11

Global IME Bank Limited (GIBL) and the Global Climate Partnership Fund (GCPF) have recently inked a USD 25 million loan agreement with the aim of fostering climate-positive lending practices in Nepal.

This collaboration marks GCPF's maiden foray into climate-related financing in Nepal. The earmarked funds are dedicated to fueling energy efficiency and renewable energy projects within the country, said the GIBL in a statement on Wednesday.

"This financial infusion not only strengthens the bank's portfolio but also underscores its unwavering commitment to mitigating climate change," said the bank.

The GCPF operates as a blended partnership model, leveraging public funding to catalyse private sector investments and spur growth in developing markets.

Ratna Raj Bajracharya, Chief Executive Officer of GIBL, said that this facility extended by the GCPF will play a vital role in financing energy efficiency projects and reducing greenhouse gas emissions in Nepal. "We remain steadfast in our commitment to supporting energy projects in collaboration with GCPF to meet our strategic climate management objectives," he said.

Likewise, David Diaz Formidoni, Head of FI Investments and Climate Finance, expressed his happiness to extend their presence in Nepal, a nation highly susceptible to climate change, through the partnership with a dedicated and like-minded financial institution.

"We eagerly anticipate supporting the bank on its climate financing journey, harnessing the expertise of our in-house team of Climate Advisory Specialists and the fund's Technical Assistance Facility," he said.

The GCPF is a Luxembourg-based fund, working in an innovative public-private partnership dedicated to combating climate change by reducing greenhouse gas emissions in emerging and developing markets.

Its primary focus is on financing energy efficiency and renewable energy projects, either through local financial institutions or direct funding. Only projects that promise substantial energy savings and commit to reducing projected greenhouse gas emissions by at least 20 per cent are eligible for GCPF funding.

Established in 2009, GCPF was founded through a public-private partnership that included the German Federal Ministry for Economic Affairs and Climate Action (BMWK), KfW Entwicklungsbank, and the International Finance Corporation (IFC).

Junior catalytic capital is provided by BMWK, the Department for Energy Security and Net Zero (DZNEZ) of the UK, Denmark's development cooperation (Danida), alongside other private and public investors such as ASN Bank, Ärzteversorgung Westfalen-Lippe, FMO, OeEB, Sparkasse Bremen, the European Investment Bank (EIB), and Heilsarmee.

GIBL is the largest bank in Nepal in terms of total assets (US$ 4,049 million). "The bank boasts a substantial and stable deposit base, a favourable cost-to-income ratio, a significant retail asset portfolio, excellent asset quality, and commendable profitability," read the statement by the GIBL. It has loan book of US$ 2,845 million, net worth of US$ 451 million, and deposits of US$3,279 million.

It serves over 4.5 million customers in 77 districts through a vast network comprising more than 1,100 service centres, which include 350 branch offices, over 369 ATMs, 322 branchless banking services, and 66 extension and revenue collection counters. GIBL has three foreign representative offices as well.

Published in The Rising Nepal on 12 October 2023.