Infrastructure Bank in offing

Kathmandu, September 16:

Infrastructure Development Finance Co (IDFC), India, along with Asian Development Bank (ADB), DEG-KfW and the International Finance Corp (IFC) signed a Memorandum of Understanding today with a Private Equity Group and a consortium of all the leading Nepali banks and financial institutions to jointly establish an Infrastructure Development Bank (IDB) in Nepal.

“Infrastructure is a key to development, economic growth and prosperity of any country,” said finance minister Dr Ram Sharan Mahat at the signing ceremony, adding that Nepal has vast possibilities in the fields like cement, hydropower, healthcare and transportation infrastructure. “The government is aware of the infrastructure needs and keen to encourage the private sector to take part in this process,” he added.

“The traditional concept of government being solely responsible for the development of infrastructure should be changed and the private sector must be involved,” he said.

“NRB is committed to help in making this project a success,” said Krishna Bahadur Manandhar, acting governor of the Nepal Rastra Bank.

Prithivi Bahadur Pande, chairman and chief executive director of Nepal Investment Bank, representing the Private Equity Group, said that the Nepali bankers have long felt a need to have such a bank. “It is encouraging to have leading developmental and financial institutions come forward in addressing such an acute gap.”

On the occasion, Rajiv B Lal, MD and chief executive officer of IDFC, India said that IDB would be successful in fostering infrastructure development in Nepal. “IDFC is delighted to be working with Nepali banks to encourage private capital to help meet the infrastructure demands,” he added.

IDFC will be taking the lead in supporting the Nepali Private Equity Group and consortium of Nepali financial institutions with requisite managerial, technical, legal and financial resources.

Radhesh Pant, CEO of Bank of Kathmandu and president of Nepal Banker’s Association, representing the consortium of Nepali financial institutions, said that the venture will contribute radically to Nepal’s development.

Similarly, William Willms, director of Capital Markets and Financial Sector Division, ADB; Turan Caglayan, head of Asia Department of DEG KFW Bankengruppe; Per Kjellerhaug, IFC country manager Nepal, Bhutan and Bangladesh also spoke on the occasion.

ADB, DEG-KfW and IFC are planning to conduct a feasibility study. The conclusions of the study will help determine the kind of support that will be offered to the IDB.

IDB will help develop and provide a comprehensive ra-nge of financial products and services for the development of infrastructure projects and facilities, engage with and support government on policies to facilitate private and public sector investment in infrastructure.