World Bank to invest in 200-500MW hydro project

The World Bank, a multilateral donor agency, has expressed interest to invest in at least one large-scale hydropower project in Nepal, in a volte-face from its previous decision of discontinuing funding for big hydro projects. "The World Bank is interested in investing in a hydropower project with the capacity of 200 to 500 megawatts," Madhu Kumar Marasini, joint secretary at the Ministry of Finance (MoF), told Republica. This information was relayed to Marasini by Jack Stein, director, sustainable development, at the World Bank, and Salman Jaheer, director for regional integration, South Asia Region, at the World Bank. The high-ranking World Bank officials expressed interest to invest in Nepal´s hydropower sector at a meeting held in Dubai couple of weeks ago, according to Marasini, who heads International Economic Cooperation Coordination Division (IECCD) at the MoF. The World Bank had made a policy shift on investment in large-scale hydropower projects last May. "The World Bank is making a major push to develop large-scale hydropower projects around the globe, something it had abandoned a decade ago," The Washington Post, a US national daily, said quoting Rachel Kyte, the bank´s vice president for sustainable development and an influential top staff member. The focus will be development of major hydropower projects in Congo, Zambia, Nepal and elsewhere, the newspaper reported. The bank, which has already invested in the development of 400kV Dhalkewar-Majjafarpur transmission line, has indicated that it might invest in one of the most “bankable” hydropower projects. "The discussion on project selection has begun," Marasini said. "The bank´s Nepal office will be more engaged in identifying the project." The World Bank has not invested in any hydropower project in Nepal since the cancellation of 900MW Arun-III hydropower project in Shankhusawa district some 13 years ago. The Arun-III hydropower project was set to be developed by Nepal Electricity Authority (NEA) with loan assistance of the World Bank. The project was cancelled after launch of massive protests by anti-Arun-III groups, mainly led by ultra-leftist political cadres within the country. James Wolfensohn, the then president of the World Bank, had cancelled the project development in August 1995 following a telephone conversation with the then Prime Minister Manmohan Adhiakri, according to a World Bank statement. "The government is also not entirely prepared to give any specific project to the World Bank," Marasini said. "We will also do homework and discuss the issue with the bank."