British International Investment plc (BII), the UK’s development finance institution and impact investor, and Sanima Bank Ltd. on Tuesday, February 18, entered into a trade loan agreement of $15 million.
The credit line will strengthen Sanima Bank’s trade finance offering, funding the import of capital goods for renewable energy projects with a focus on hydropower, as well as manufacturing, food and agriculture goods, according to the statement released following the agreement.
“Hydropower plays a crucial role in Nepal’s electricity supply, contributing to over 90% of the country’s total electricity generation capacity,” read the statement. “Leveraging on the country’s abundant resources, the government plans to develop 15GW of electricity by 2035.”
The facility from BII is expected to contribute to the government’s goal to boost clean energy supply in Nepal and increase export of surplus energy to neighboring countries in South Asia, including India and Bangladesh.
It will provide finance to support the construction of renewable energy plants, import of hydromechanical and electro-mechanical equipment and solar energy equipment along with procurement of raw materials for manufacturing process and agriculture goods, among others, the statement added.
British Ambassador to Nepal, Rob Fenn, said: “This facility from British International Investment underscores the UK’s commitment to sustainable economic development in Nepal which will benefit households and businesses throughout the region.”
Commenting on the partnership, Habib Yousuf, Regional Director for South Asia, BII said: “BII is thrilled to partner with Sanima Bank to enhance its climate finance lending. This facility will help to improve access to affordable, reliable, and clean energy for businesses and households in Nepal. The positive impact of this will be far-reaching, contributing to sustainable development and improving the quality of life for countless individuals.”
Pawan Kumar Acharya, Deputy Chief Executive Officer, Sanima Bank added: “This partnership marks a significant step towards accelerating Nepal’s transition to sustainable energy sources while addressing the country’s growing energy needs. This endeavor also aligns with global efforts to reduce reliance on fossil fuels and combat climate change. Sanima Bank envisions to promote low-carbon energy projects that foster economic growth and create long-term positive impacts for local communities.”
