Kathmandu, November 7

The Asian Development Bank (ADB) has launched new South Asia Sub-regional Economic Cooperation (SASEC) Operational Plan 2016-25. This operational plan marks the programme’s first comprehensive long-term plan to promote greater economic cooperation among the member countries.

Established in 2001, SASEC programme is a project-based partnership to promote regional prosperity by improving cross-border connectivity, boosting trade among member countries, and strengthening regional economic cooperation. Nepal is one of the six member countries, along with Bangladesh, Bhutan, India, Maldives and Sri Lanka.

ADB is the secretariat and lead financier of the SASEC programme. Till date, ADB has approved 43 SASEC projects worth almost $9 billion in transport, energy, trade facilitation, and information and communications technology. Some of the transport and energy projects from Nepal have been included under SASEC programme.

The SASEC Operational Plan brings regional cooperation to a higher level. The special dimension of the plan is development of the economic corridor to promote synergies between economic corridors being developed in individual SASEC countries in order to maximise the development impacts of investment through improved cross-border links. The plan is to extend physical linkages not only within SASEC, but also with East and Southeast Asia over the next 10 years.

SASEC Operational Plan was formally launched here today jointly by Joint Secretary of the Ministry of Finance Baikuntha Aryal and ADB Nepal Resident Mission Country Director Kenichi Yokoyama.

In the programme, Joint Secretary Aryal highlighted the immense benefits that Nepal could reap from regional cooperation, which include improved connectivity with neighbours, and reduced border barriers to goods and service trade. The government’s policy reform efforts to integrate with the global market will receive a boost as the operational plan’s thrusts are realised, especially in transport, trade facilitation, energy and economic corridor development, according to Aryal.

Also speaking in the programme, Yokoyama said that SASEC investment in transport, energy, and urban infrastructure combined with trade facilitation and investment promotion programmes in manufacturing and other competitive industries would provide great opportunities for accelerating economic growth and job creation.

“The population in the adjacent states of India alone is around 400 million — this could be a vast market for Nepali products in the future,” he asserted.

The SASEC Operational Plan identifies regional road and rail links aligned closely with trade routes. Planned measures to streamline and harmonise trade procedures will cover both land-based and sea-based routes. This will open opportunities for the SASEC countries to participate more actively in regional value chains that are more advanced in Southeast Asia.

The plan also promotes the development of economic corridors within and between the member countries.

The energy strategy under the SASEC Operational Plan aims to diversify the energy mix in the SASEC countries to cope with the projected increase in demand. The immediate priority is to improve energy infrastructure to allow countries to access commercial sources of energy and diversify their fuel mix.

The plan has identified over 200 potential transport, trade facilitation and energy projects, which will require over $120 billion in investment over the next five years, out of which 37 projects have been identified in Nepal with an estimated project cost of over $30 billion. Majority of these projects are in transport (24 projects costing over $6 billion), although the 13 energy projects cost far more (over $24 billion).

Related to Nepal

Transportation projects in pipeline (2016-18)

• SASEC Roads Improvement Project (rehabilitation and upgradation of about 160 km of major highways for improving local and regional connectivity, linking remote areas with the market to neighbouring countries by enhancing the capacity of border roads and around the border access points); Estimated cost: $ 187 million
• SASEC Transport Project (improvement of strategic road network and last mile border connectivity for increased domestic and regional trade); Estimated cost: $300 million

Energy projects identified by SASEC

• Grid strengthening and unifying with India’s grid (i) Butwal-Kohalpur 400 KV, (ii) Surkhet-Upper Karnali 400 KV, (iii) Lapsiphedi-Hetauda 400 KV
• Some ongoing and in the pipeline hydroelectric projects (i) 140 MW Tanahu hydroelectric project (ii) 300 MW Dudh Koshi hydroelectric project (iii) 102 MW Middle Bhotekoshi hydroelectric project (iv) 410 MW Nalsing Gad hydroelectric project (v) 692 MW Tamor hydroelectric project
• Efforts to materialise 6,400 MW Pancheshwar hydroelectric project, the Nepal-India government-to-government project, by 2025

Source: SASEC Operational Plan 2016-25