Inaugural address by Ashok Lavasa, ADB Vice President for Private Sector Operations and Public–Private Partnerships, at the Nepal Infrastructure Summit (NIS) 2022, 8 September 2022
Right Honorable Prime Minister, Honorable Ministers, Excellencies, Distinguished Guests, Ladies and Gentlemen. Good afternoon. I am delighted to be with you here today at the Nepal Investment Summit 2022. I would like to acknowledge and thank the organizers of this Summit, the Confederation of Nepalese Industries, for hosting the fourth edition of this forum, which will not only allow participants to showcase investment opportunities, but also promote knowledge sharing.
The theme of this year’s summit – Infrastructure for Growth – is an opportune one. Evidence shows that infrastructure can create significant economic stimulus compared to other forms of spending. Pre-COVID, ADB estimated that Asia-Pacific will need $1.7 trillion per year to meet its climate resilient infrastructure needs. The public sector alone will be stretched to mobilize such resources and private sector resources will need to significantly increase to meet the infrastructure gap. PPPs, as an alternative procurement modality, have a significant role to play by bringing in private sector innovation, operational efficiency, and crowding in much needed capital – all of which contribute to delivering ‘value-for-money’ infrastructure to the public users.
ADB is a strong partner in Nepal’s development efforts, in both sovereign and nonsovereign support. Since its establishment, ADB has provided almost $7.3 billion in financial and technical assistance to Nepal as of 2021. ADB’s Country Partnership Strategy 2020-2024 for Nepal identifies three core developmental objectives: (i) improved infrastructure for private sector-led growth, (ii) improved access to devolved services, and (iii) environmental sustainability and resilience. To achieve the first objective, ADB will support renewable energy, road and air transport, logistics, and trade facilitation to strengthen domestic, regional, and international connectivity; reduce the costs of production and trade for businesses; and attract private investment.
On the nonsovereign side, ADB is seeking opportunities to expand its private-sector operations. Our non-sovereign operations currently include investments in hydropower projects, partnership on trade finance with financial institutions and support through venture capital for a firm. We aim to expand our engagement to support infrastructure development, support MSMEs, including women entrepreneurs, climate smart agriculture, and digitalization.
Nepal is one of the world’s most climate vulnerable populations, and the agriculture sector, which employs around two-thirds of the labor force and contributes to roughly one-fourth of the country’s GDP, is particularly vulnerable, affecting both farmers and agribusinesses. Recently, ADB elevated its ambition to deliver climate financing to its developing member countries to $100 billion from 2019-2030. ADB supports climate financing of projects in Nepal and our developing member countries through both mitigation and adaptation measures, as well as by using instruments such as blended finance and thematic bonds.
On public-private partnerships, we have begun to make inroads on this front. In the lowland southern region of Terai, Nepal, ADB is working on a mechanized irrigation innovation project that will provide long-term sustainable solutions to increase year-round access to irrigation water. This is the first Design-Build-Operate PPP irrigation project in Nepal that will help modernize the area’s irrigation system. This is significant as agriculture remains Nepal's principal economic activity, employing about 65% of the population and providing 26% of GDP.
I am also happy to note that we have an understanding with the Ministry of Finance covering a range of upstream capacity building initiatives including PPP training courses, PPP capacity building for wider government agencies and support with defining and screening projects and helping to identify a viable pilot PPP transaction for preparation.
We look forward to more opportunities with the Government of Nepal in many more sectors as multi-lateral agencies such as the Asian Development Bank facilitate viable public-private partnerships and private sector investment.
I extend my best wishes for the success of this Summit. Thank you.
Speaker
