During a meeting with Finance Minister Ram Sharan Mahat in Brussels on Thursday on the sidelines of the Asia Programming Consultation Seminar, European Investment Bank (EIB) Director Francisco De Paula Coelho assured Rs 12 billion (US$120 million) for commissioning the Kali Gandaki corridor (220/400 kV double circuit) and Marsyangdi corridor (220kV double circuit).
The total estimated cost for these two projects is US$360 million. According to Energy Secretary Bishow Prakash Pandit, the remaining fund will be injected by the Asian Development Bank and the Norwegian government.
Transmission lines are crucial for the development of hydroelectricity projects both for domestic consumption and trade with neighbouring India.
The remaining three billion rupees will be invested in the upgradation and extension of transmission lines in Trishuli corridor.
In its five-year strategy plan for 2007-2013, the EU had been assisting Nepal in the sectors of education, peace-building, trade and economic capacity-building.
In an email response to the Post from Brussels, EU Commissioner for Development Andris Piebalgs said, â€œWe are pleased that after the successful Constituent Assembly elections, the peace process is now back on track and the constitution drafting process will resume, and possibly be completed within a year. I hope that this is the start of a new phase in the countryâ€™s political and economic development.â€
On Nepalâ€™s poverty reduction from 42 percent in 1990 to 24 percent in 2013 and the achievements on Millennium Development Goals, Piebalgs said, â€œThis is a remarkable achievement although I know that there is still a lot to be done. It is important not to neglect the economic agenda and to take adequate measures for inclusive growth.â€
The EIB has already agreed to chip in Rs 1.5 billion for Tanahun Hydropower Project. According to a Finance Ministry statement, the fund will be released soon for project execution. During the meeting, Minister Mahat sought more support in infrastructure sectors such as irrigation and road.
Prime Minister Sushil Koiralaâ€™s Economic Advisor Chiranjivi Nepal termed the commitment as a good gesture to the newly elected democratic government and said the support reassures that there will be no dearth of foreign assistance in Nepalâ€™s development endeavours.
EU to triple aid to Nepal
The European Commission has decided to triple its aid to Nepal, according to a communication received by the Post from the EU headquarters.
During its bilateral cooperation for 2014-2020, the EU plans to provide Rs 49.42 billion (360 million eu ros) to Nepal, said EUâ€™s formal communication from the Office of Spokesperson for Development Alexandre Polack. The EU provided around Rs 17 billion (120 million eu ros) to Nepal for 2007-2013 in education, human rights, conflict prevention, good governance, stability and peace building, trade facilitation and economic capability building.
â€œIn line with the EUâ€™s Agenda for Change, our policy blueprint to focus our aid where it is most needed and where it can make the greatest difference, we have applied a greater degree of differentiation [more funding to poorest countries, while phasing out support to mid-income countries]. As a result of this new approach, the Nepal allocation will be tripled,â€ Polack said.
The ECâ€™s development cooperation with Nepal for 2014-2020 will be aligned with the objective of Nepal governmentâ€™s next three-year development plan, approved in July 2013, it added. With extensive consultations with the Nepal government, the EU funding will focus on sustainable rural development, education, democracy and decentralisation and other support measures.
The EU will focus on food and nutrition security and agriculture will be EUâ€™s largest cooperation sector in the next programme period.