CDC Group (soon to become British International Investment), the UK’s development finance institution, has announced a US $25 million loans to Global IME Bank Ltd (“GIME”), one of the largest commercial banks in Nepal. CDC’s commitment will enhance GIME’s ability to provide credit to businesses across key economic priority sectors and stimulate economic opportunities throughout the country.
The facility will also help address funding gaps in the market by strengthening GIME’s capacity to increase lending to businesses in key economic sectors, such as infrastructure, construction, manufacturing, agriculture, and tourism. This much-needed capital will enable the Bank to offer financial support to more businesses, enhancing their ability to navigate post-COVID recovery and create jobs that will facilitate sustained inclusive growth across all segments of society in Nepal.
Moreover, the loan will amplify GIME’s plans to broaden its offer to key sectors, including renewable energy and tourism sectors, classified by the Government of Nepal as priority sectors for the country. The Bank’s goal to provide local and foreign currency longer-term lending to businesses within these sectors and others aligns with CDC’s ambition to increase green finance and help scale clean energy and infrastructure projects across its markets, including in key countries like Nepal.
The DFI’s commitment to GIME forms part of its strategy to bring the best of British finance to help accelerate productive, sustainable, and inclusive opportunities in market-shaping sectors that create jobs and usher in a transformative positive impact in Nepal and throughout the wider region. CDC’s commitment to Nepal is demonstrated by its investment in the country’s leading internet provider WorldLink, as well as its commitment to NMB Bank and the Upper Trishuli-1 Hydroelectric Project. This year, the DFI invested in Nepal-focussed Dolma Fund II and partnered to launch the Nepal Invests market building platform, aimed at accelerating foreign direct investment into the country.
Srini Nagarajan, Managing Director, Head of Asia, at CDC Group, commented: “Nepal is a high priority country for CDC, and we’re pleased to partner with GIME, one of Nepal’s leading banks with deep sectoral expertise and extensive geographical footprint across the country. As our second direct financial services investment in the country, this facility reiterates our commitment to continue to support economic recovery and sustainable growth in Nepal.
Flexible and long-term capital is greatly needed to help drive the country’s green post-pandemic recovery, and it will ensure that local businesses have access to the finance they need to thrive. Amidst slowdown in global capital flows due to the pandemic, particularly in countries like Nepal, we are confident that our partnership with GIME will serve as a strong signal to other investors, highlighting the vast investment opportunities in Nepal, and attract higher volumes of capital to support the country’s economic transformation.”
Ratna Raj Bajracharya, Chief Executive Officer at Global IME Bank Ltd, commented: “We are pleased to announce our relationship with CDC Group PLC, UK Government’s international impact investor with over 70 years of experience of successfully supporting the sustainable, long-term growth of businesses in Asia and Africa. As CDC Group has sanctioned a US $25 million loans to Global IME Bank Ltd, our partnership and CDC’s commitment to us will enhance and bolster our lending capacity to businesses across key economic priority sectors, such as infrastructure, construction, manufacturing, agriculture, and tourism of the country.
This facility will stimulate economic opportunities across the nation in various sectors and address the much-needed funding demand in the country. We, Global IME Bank, are in line with CDC’s ambition to increase green finance and help scale clean energy and infrastructure projects across its markets. We are again thankful and pleased for the commitment of CDC to continue to support economic recovery and sustainable growth in Nepal. We hope our partnership will further grow in days to come.”
Nicola Pollitt, British Ambassador to Nepal, said: “The UK has been supporting Nepal’s transition to renewable energy as well as its efforts to build resilience to the impacts of climate change and on post-Covid recovery. CDC investment in Nepal’s financial institutions sits side by side with our efforts to build institutional capacity to receive climate finance and offer financial products that address market gaps, particularly for SMEs.”
CDC’s investment in GIME will increase domestic businesses’ access to finance, leading to increased economic opportunities and improved the availability of domestic goods and services. As such, these benefits will go toward contributing to the United Nation’s SDGs 8.5, 8.9, and 9.3.