The SAARC Development Fund (SDF), which was established by the heads of the eight SAARC member states in April 2010 as an umbrella financial institution for SAARC projects and programmes in the SAARC region, has approved the financing of two energy projects in Nepal.

The fund works for promoting the welfare of the people of SAARC region, improving their quality of life, and accelerating economic growth, social progress and poverty alleviation in South Asia.

Sunil Motiwal, chief executive officer of SDF, informed that during the 30th board of directors meeting held in New Delhi on December 19-20, the board approved the financing of the 220 kV transmission line project for Nepal Electricity Authority under sovereign lending to the government of Nepal with participation of India. It also approved financing for the 37-megawatt Upper Trishuli hydroelectric power plant for Hydroelectricity Investment and Development Company Ltd.

These projects are considered to be high-priority projects of the government of Nepal in the energy sector and extends participation of India. The Ministry of Finance has assured strong commitment for speedy implementation of these projects. The cumulative fund commitment for these two projects is $30 million. Overall, the SDF fund commitment under its three windows stands at $148 million.

Motiwal expressed confidence that the project will help Nepal in harnessing and transmitting hydropower in Nepal. The project will help to achieve economic development in the region and promote welfare and prosperity of the people in the SAARC region.

Motiwal also informed that for the development of a healthy credit portfolio, SDF will raise funds from various international financial institutions, multilateral development banks and commercial banks for lending to various projects and programmes in the SAARC member states as there is requirement of large quantum of fund to finance the infrastructure gap in the SAARC region. He emphasised on the need to create an integrated, poverty-free, and prosperous South Asian region through project funding and collaboration.

The fund has been working to promote regional cooperation and integration and envisages acting as a catalyst for infrastructure funding in the region by forming consortium of funding agencies and co-financing of such projects.