European Investment Bank (EIB) today pledged Rs 16 billion aid to Nepal for hydropower projects and transmission lines.

European Investment Bank’s director Francisco De Paula Coelho assured finance minister Dr Ram Sharan Mahat that European Investment Bank is ready to release Rs 1.5 billion for completion of 140-MW reservoir-based Tanahun Hydropower hydro project immediately.

Dr Mahat and De Paula Coelho met in Brussels during the Asia Programming Consultation Seminar.

Coelho also reaffirmed the bank’s financial support worth Rs 12 billion for transmission lines in Kaligandaki corridor (220/400 kV double circuit) and Marsyangdi corridors (220kV double circuit). Transmission lines are crucial for the development of hydroelectricity projects both for domestic consumption and trade with neighbouring India.

“The bank will provide financing worth Rs 3 billion to upgrade existing transmission lines in Trishuli corridor,” he said.

Dr Mahat on the occasion, urged the bank to support Nepal in irrigation, roads and other infrastructure projects, apart from hydro projects.

Meanwhile, Dr Mahat also called on called on chief operating officer at European External Action Service Daid O’Sullevan in Brussels, today.

On the occasion, they discussed on political developments in Nepal, constitution drafting and local body election.

During the discussion, Sullevan said that he was concerned about the constitution drafting and local polls in Nepal. In response, Dr Mahat remarked that the government is committed to promulgate the constitution within a year and hold local polls within six months.

EU to triple aid to Nepal

The European Commission has also decided to triple its aid to Nepal.

During its bilateral cooperation for 2014-2020, the EU plans to provide Rs 49.42 billion (360 million euros) to Nepal. The EU provided around Rs 17 billion (120 million euros) to Nepal for 2007-2013 in education, human rights, conflict prevention, good governance, stability and peace building, trade facilitation and economic capability building. The EC’s development cooperation with Nepal for 2014-2020 will be aligned with the objective of Nepal government’s next three-year development plan, approved in July 2013. With extensive consultations with the Nepal government, the EU funding will focus on sustainable rural development, education, democracy and decentralisation and other support measures. The EU will focus on food and nutrition security and agriculture will be EU’s largest cooperation sector in the next programme period.

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