KATHMANDU: The OPEC Fund for International Development has agreed to provide a loan of US$25 million to Global IME Bank Limited. Issuing a statement on Wednesday, Global IME Bank confirmed that it signed an agreement in this regard with the OPEC Fund.

As per the agreement, the bank will utilize the loan to increase access to financing for micro, small, and medium enterprises (MSMEs), including women-owned enterprises, as well as climate-smart projects.

OPEC Fund’s loan will help to address significant financing gaps for MSMEs, which make up 95 percent of Nepal's registered businesses and account for 45 percent of all jobs, said the bank.

Despite their importance, MSMEs struggle to receive funds and the financing gap for these enterprises is estimated at US$3.6 billion. Additionally, the bank said that the loan will enhance GIBL’s climate finance portfolio, vital for Nepal's efforts to mitigate climate change impacts.

OPEC Fund President Abdulhamid Alkhalifa expressed happiness to partner with Global IME Bank to bolster support for MSMEs and climate-smart projects in Nepal.

“These sectors are crucial for sustainable economic growth and resilience against climate change. Our loan will help address the significant financing gaps and promote inclusive development,” the statement quoted Alkhalifa as saying.

Similarly, Chief Executive Officer of Global IME Bank, Ratna Raj Bajracharya, said this loan agreement reinforces the bank’s commitment to finding local solutions through climate and gender financing to achieve global sustainability and inclusivity goals.

“We aim to bridge the resource gap in Nepal's green energy sector and address gender disparity by empowering women economically through accessible financing," said Bajracharya, adding, "We are grateful to partner with the OPEC Fund in this endeavor. This collaboration will enhance our support for MSMEs, vital to Nepal's economy, and strengthen our efforts in promoting climate resilience and sustainable development. Together, we can significantly impact Nepal's journey towards a greener and more inclusive future."

According to the statement issued by the bank, Nepal ranks 94th globally in CO2 emissions, with half of its greenhouse gas emissions coming from the agriculture sector.

The country is highly vulnerable to climate change impacts, which disproportionately affect vulnerable communities, added the statement.

“Increasing access to climate finance is essential for Nepal’s sustainable development, supporting initiatives such as clean transportation, climate-smart agriculture, and solar projects.”

The statement added that the OPEC Fund and Nepal have a long-standing partnership focused on driving sustainable development. The OPEC Fund has committed funding to various sectors including banking, energy, agriculture, transportation, and education, it added.