The devasting phase of the economy is currently going on in Nepal and at the same time, the cases of Coronavirus is rising like never before. There are severe problems going on in Nation, however, to elevate Nepalese economy and to boost covid 19 recoveries, on June 2, 2020, World Bank has approved $100 million as Development Policy Credit (DPC) to improved Nepalese financial viability, to provide support in the electricity sector and to recover Nepal from the COVID-19 crisis. WHO Board of Executive Directors announced the credit from Washington. The approved amount is the second in a series of three DPC operations to support key policy, regulatory and institutional reforms to unlock the economic potential of Nepal’s electricity sector.
Before that on 2015, as the first series of three DPC operations, World Bank has provided $137 million to increase the distribution of electricity throughout the nation. And out of the total amount $37 million has been used in the Nuwakot district to produce 25MW electricity from solar plants which are also considered as one of the largest solar plantations in the Nation. But so far only 10 MW has been generated and a year project took two years to generate 10 MW.
Talking about the World Bank’s $100 million support, according to Faris Hadad-Zervos, World Bank Country Manager for Nepal;
“This operation will help refocus investment priorities and support the government’s commitment to developing a reliable, affordable, and sustainable electricity sector that supports poverty reduction and shared It’s clear that prosperity in the country.”
It’s clear that the World Bank is concerned to promote the production of electricity through renewable energy. Meanwhile, considering the coronavirus outbreak, World Bank support, are helping the developing nations to recover from the covid-19 crisis.
Furthermore, the allocation of $100 milion is not public yet and the Nepalese government has made no statement on that note so far. However, on a surface level, Nepal seems to use the funds in reforming its economy, at the same time some portion of credit supposes to use in the production of electricity too. Moreover, if we look at the stat, in recent years, Nepal’s energy sector made has great strides with increased electricity generation, reduced system losses, and enhanced cross-border transmission capacity while putting an end to the nationwide load shedding.
On the basis of the world bank report, The World Bank credit include measures to improve the financial viability of the Nepal Electricity Authority as the sole off-taker; establish a regulatory framework that is autonomous, transparent, and accountable; achieve greater integration with the regional electricity market to ensure the optimal use of Nepal’s hydropower resource; and restructure the power utility to empower provincial and local governments under the federal structure.
According to the report, currently, in Nepal, 88% of Nepalese people have full access of electricity now. But in 2020 to make things worse, the coronavirus crisis has crunched the cash flow and more than half of a constructional activities of Nepal Electricity board has been stopped. Therefore $100 million credit from World bank perhaps helps Nepal in some areas to elevate it’s economy as well as to produce more electricity.