KATHMANDU: The Asian Development Bank (ADB) and the World Bank announced a collaboration to strengthen Nepal’s hydropower sector, specifically in the context of the proposed Upper Arun and Dudh Koshi hydropower projects.

A memorandum of understanding (MOU) stipulating cooperation between the two institutions for an initial period of 5 years was signed today on the sidelines of COP28 by ADB Vice-President for Sectors and Themes Fatima Yasmin and World Bank Vice-President for South Asia Martin Raiser.

“This agreement between ADB and the World Bank is a significant step in strengthening Nepal’s energy security amid rising demands from population growth and urbanization. It also fosters power trade with neighboring countries, promoting regional cooperation, economic growth, and green and inclusive development,” said Yasmin.

“ADB is committed to promoting clean energy solutions that align with climate action goals. Our commitment goes beyond generating power; it’s also about creating positive impacts on communities, livelihoods, and the environment and contributing to a more sustainable future for all.”

“The full potential of Nepal’s enormous hydropower resources cannot be realized without close partnership between the Nepalese government, development partners and the private sector,” said Raiser.

“With this MOU, ADB and the World Bank are laying the foundations for closer collaboration in financing and policy advice in Nepal’s hydropower sector, with the aim to support the country’s green, sustainable and inclusive development for decades to come.”

The pilot approach between the two multilateral development banks (MDBs) provides opportunities for collaboration in knowledge and experience sharing to ensure common understanding of the hydropower sector in Nepal, joint analytical studies, and consultation in support of the development of the hydropower sector.

Under the MOU, ADB and the World Bank will also work together on strengthening the institutional capacity of Nepal’s executing and implementing agencies in the development of large hydropower projects, and the preparation and financing of projects in the energy sector.

This is the first MOU signed between ADB and the World Bank following the joint statement on strengthening collaboration for greater impact issued by the heads of MDBs at the World Bank–International Monetary Fund Annual Meetings in Marrakesh in October 2023.

ADB said it is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.