The way to build upper Arun was opened

The Ministry of Finance has informed that there is an agreement in principle regarding the financial management of the 1,63 MW Upper Arun semi-reservoir hydropower project to be built in Sankhuwasabha.

A theoretical agreement was reached in Washington DC between Finance Minister Varshman Pun and the World Bank senior leadership. Minister Pun and World Bank's Vice President for South Asia, Martin Razer, discussed the World Bank-funded projects in Nepal, including Upper Arun. Mr. Krishna Nepal, a member of the visiting team of Minister Pun and the head of the international financial assistance coordination division of the Ministry of Finance, informed through the minister's private secretariat that a theoretical conclusion has been reached about the World Bank leading the financial management in Upper Arun.

After the in-principle approval of the Government of Nepal, the agreement will be formalized as well as the financial management agreement. The financial management of Upper Arun will be led by the World Bank. Sources in the Ministry of Finance said that the government will ask other investors to invest in the hydropower project, which has a theoretical agreement to be built under the leadership of the World Bank, at the investment conference on May 16 and 17.

In the co-financing of the World Bank, there is a preparation to manage the financial management with 30 percent of the equity capital, in addition to raising 70 percent loan investment from international financial institutions and domestic banks and financial institutions. The cost of the construction of the project is yet to be decided. Before flying to the US, Minister Pun discussed with Energy Minister Shakti Bahadur Basnet, World Bank and Asian Development Bank Nepal directors about completing the financial management of Upper Arun as soon as possible and proceeding with the construction work.

The construction of 2 km tunnel road and 21 km access road has been progressed in preparation for upper Arun. Land acquisition and distribution of compensation is almost over. Upper Arun is a game changer project in Nepal which will be operated at full capacity for 6 hours a day during the 6 months of winter when the demand for electricity is high. The project will produce 4.53 billion units of energy annually. The generated electricity will be connected to the national transmission system through a new substation to be built at Haitar in Sankhuwasabha through a 6 km 400 KV transmission line. The government has included the 635 MW Dudhkoshi hydropower project to be built in Bhunwaghat as a project of national pride. In the

meeting, there was a discussion about speeding up the work of other development projects funded by the World Bank. According to the Ministry of Finance, there was also a discussion about increasing the facility of the International Development Association (IDA), which is traditionally used by Nepal, and diversifying the projects.

In that context, Minister Pun said that there is a need for foreign investment as internal resources are limited in building the development infrastructure of Nepal. Thanking the World Bank for the grants and subsidized loan assistance that the World Bank has been doing for Nepal since the time of malaria eradication, Minister Pun requested to increase more investment in the future.

Request to invest in Nepal

Finance Minister Pun, who attended the joint spring meeting of the World Bank and the International Monetary Fund in America, held continuous meetings in Washington DC. During his three-day visit to the US, Minister Pune met World Bank's Managing Director of Operations Ana Wierde, World Bank's Vice President for South Asia Martin Razer, World Bank's Development Finance (DFI) Vice President for Operations Akihiko Nisio, World Bank's Vice President for Infrastructure Sector Guangzhe Chen, International Finance Corporation (IFC) ) Vice President Ricardo Puliti and the Assistant Managing Director of the International Monetary Fund (IMF) met with Bo-Li.

Talking to American investors and businessmen, Finance Minister Pun urged them to come and invest in Nepal. Finance Minister Pun thanked Nepal for accepting the proposal of World Bank Vice President Akihiko to hold International Development Association (IDA)-21 meeting under the World Bank Group in Kathmandu next June. The Minister of Finance said that good preparations are being made for the AIDA meeting and for that he is coordinating with the country office of the World Bank in Kathmandu. He asked to find more areas of investment in Nepal through subsidized loans or grants. Stating that IDA can be made a reliable means for developing countries like Nepal, Finance Minister Pun mentioned that the achievements of Nepal in the fields of telecommunications, transportation, and clean energy in the last decade are worth seeing by the world community.

Finance Minister Pun informed that progress has been made in the direction of the Kathmandu Declaration, which includes a strategic action plan for green, sustainable and inclusive development (GRID) jointly approved by the Government of Nepal and 16 development partners in 2021. He said that according to the concept of the manifesto, the first Green Upliftment and Inclusive Development Program (Grid DPC) is going to be implemented next year.

Finance Minister Pun also appealed to American businessmen to come to Nepal for investment. In an interaction with the officials of the American (US) Chamber of Commerce, Minister Pun mentioned that Nepal is an attractive destination for international investors. Due to its landlocked location, Nepal is the only country that can connect India and China, which are becoming two emerging economic centers of the world, so it is a suitable destination for foreign investors.

Finance Minister Pun addressed the ministerial meeting of the V-20 group of countries that are at risk due to the effects of climate change. He said that the world community should be aware and serious about the problems faced by developing countries, including Nepal, which are at high risk of climate change. He also pointed out the need for global collective commitment to avoid the risk of climate change.

He says that due to the effects of climate change, especially the poor and marginalized people are being persecuted in Nepal. Finance Minister Pun stated that their contribution to Nepal being at high risk of climate is low. Addressing the United Nations Conference on Climate Change (COP-28) held in Dubai, United Arab Emirates last year, Prime Minister Pushpa Kamal Dahal drew the attention of the world community to the fact that even though Nepal's role was zero, it was at high risk due to the effects of climate change.