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Korea Exim News

Korea Eximbank to Fund Nepal’s Hydropower Project with ‘Economic Development Promotion Facility(EDPF)' for the First Time

Date 2019.08.19 View 16745

The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman EUN, Sung-soo, “Korea Eximbank”) announced August 19 that it will provide USD 50 million in the Economic Development Promotion Facility (“EDPF”) to support the Nepalese government’s project to build a hydroelectric power plant.

 

This is the first time that Korea Eximbank will provide funds through EDPF.

 

The Economic Development Promotion Facility (EDPF) is a financial instrument created by Korea Eximbank in 2016 to support major projects in developing countries that are expected to contribute to their industrial development and promote economic exchanges with Korea.

 

The source of the funds is the proceeds from the sale of bonds in capital markets by Korea Eximbank. This facility is provided to more effectively support large-scale infrastructure projects in developing countries as long-term low-interest loans.

 

As part of its state project, the Nepalese government is planning to build a 216-MW hydroelectric power plant on the Trishuli River, north of the capital Kathmandu.

 

This project is a large-scale infrastructure project aimed at increasing Nepal's total power generation capacity by about 20 percent from the current 1,074 MW level, to which Korea Eximbank will provide USD 50 million in EDPF.

 

Upon completion, it is expected to greatly contribute to Nepal's economic development by easing a chronic electricity shortage problem as well as improving its current account balance and creating more jobs.

 

Korea Eximbank’s EDPF loan will be co-financed with funds from other international financial institutions including the Asian Development Bank (ADB), the International Finance Corporation (IFC), and the Asian Infrastructure Investment Bank (AIIB), which will also apply international environmental and social standards throughout the construction and operation of the plant.

 

A Korean Eximbank official said "This project does not only fulfill the long pressing requests of the Nepalese government and international organizations to construct a hydroelectric power plant in Nepal since the 2015 earthquake, but  it will also help expand economic exchanges between Korea and Nepal.” He added “We hope this business model will act as a catalyst for the active use of EDPF loans of Korea Eximbank in a number of other developing countries in the future."