Nepal signs landmark green bond deal to drive sustainable growth
KATHMANDU: In a groundbreaking milestone for sustainable finance in Nepal, IFC, as anchor investor, along with British International Investment (BII) and MetLife, announced an investment of $60 million in the country’s first-ever green bond issuance by NMB Bank.
This pioneering collaboration will support small and medium enterprises involved in sustainable financing projects, create around 8,000 jobs over the next five years, and help accelerate Nepal’s energy translation.
This investment was made possible by the strong collaboration between IFC and the Government of Nepal, to enhance the country’s capital markets through strategic policy developments and regulatory reforms. It marks two other firsts in the history of the country’s financial sector: the first thematic bond issuance in Nepal’s capital markets, and the first private placement of a local issuer’s bond by international investors, paving the way for future issuances.
The investment is set to drive significant economic growth by backing initiatives like the adoption of Electric Vehicles (EVs) and harnessing Nepal’s potential to develop solar energy, both supported by favorable government policies.
“The issuance of the first-ever Green Bond in Nepal, supported by our partners IFC, BII, and MetLife, marks a transformative shift in Nepal’s financial landscape, demonstrating that our nation can lead by example in climate finance, channeling global capital towards a greener and more resilient future,” said Mr. Manoj Kumar Goyal, Chairperson, NMB Bank.
“IFC is proud to support NMB Bank’s inaugural Green Bond. The transaction marks our largest local currency investment in Nepal, highlights our commitment to strengthening domestic capital markets and providing innovative long term financing solutions for private sector growth in emerging markets,” said Mr. Riccardo Puliti, Regional Vice President, IFC, Asia and the Pacific. “By financing sustainable projects, we aim to create more jobs, drive economic growth, and help build a more resilient economy,” he added.
This investment marks IFC’s first local currency Debt Securities Syndication globally and is the first transaction in Nepal’s financial sector supported by the IDA Private Sector Window for Local Currency Financing.
“We are delighted to support our long-term partners NMB Bank and IFC in this landmark investment, joined by MetLife. This is a significant deal for Nepal and provides the essential benchmark for mobilizing further international investment into the country.
Through our first green bond investment for BII in South Asia, we are not only delivering our promise to invest at least 30 per cent of our total new commitment to climate finance, but also unlocking the potential of Nepal,” said Leslie Maasdorp, Chief Executive Officer at British International Investment.
Baroness Chapman of Darlington, Minister of State for International Development, Latin America and the Caribbean, said, “Modernising our approach to international development means focusing on jobs, working with the private sector, and having the greatest possible impact with our money. Through British International Investment, this is a great example of that approach. It will support Nepal’s move to clean energy, as well as thousands of jobs, and draws on the UK’s financial expertise.”
“MetLife is honored to collaborate with IFC, BII and NMB Bank in this groundbreaking green bond initiative for Nepal,” said Nirmal Kajee Shrestha, General Manager, MetLife Nepal. “Our investment underscores our commitment to fostering sustainable development and clean energy solutions in Nepal. This initiative not only aligns with our global vision of building a more confident future but also supports the creation of thousands of quality jobs, promoting economic growth and environmental resilience in the country.”
