Greater Mekong Subregion - Nam Theun 2 Hydroelectric Project

IFI collaboration can yield a major developmental contribution with a high-risk project in a limited-capacity country. The close and effective collaboration of ADB, the World Bank, and other IFIs from an early stage provided the necessary confidence for the private sector to undertake a pioneering, complex, and large-scale project in a limited-capacity country. Although the total IFI loans and guarantees were modest in scale, the independent evaluation team established that they had been a necessary requirement for the international dollar financiers to extend loans to NTPC. The involvement of the IFIs clearly provided the initial comfort and confidence needed to extend financing with the assurance that the government will honor its obligations under the project. In addition, the government’s consistent honoring of its obligations to date under NT2 HP has made a major impact in stimulating subsequent private sector investment in the power sector and power trade in the Greater Mekong Subregion.