FMO, the Dutch development bank, has increased its stake in NMB Bank in Nepal. FMO increased its equity investment in the company from 3% to 20%. The investment will contribute to the strengthening of the financial sector in Nepal.
In October 2015, NMB merged via a share swap with FMO‘s investee Clean Energy Development Bank Limited (CEBDL) and two smaller banks Bhrikutee Development Bank Limited and Pathibara Bikas Bank Limited and Prudential Finance Company Limited. The merger was strongly driven and supported (for more than 4 years) by FMO through intensive and persuasive guidance by its nominee board directors and shareholders‘ representatives with the intention to create a bigger platform for strengthening the financial support for the renewable energy sector in Nepal. After the merger FMO‘s stake diluted from 14% to 3%. This transaction entails an additional equity investment increasing FMO‘s stake to 20%.
This is an investment of strategic importance as it allows FMO to further contribute and strengthen the financial sector (rural and urban) and indirectly continue to support the renewable energy in Nepal. FMO will continue to create value to NMB by providing guidance in the challenging integration progress and with further fine-tuning its new strategy. Also FMO will assist NMB to become market leader in managing environmental and social risks and will continue to strengthen NMB‘s corporate governance through a substantial technical assistance programme.
Linda Broekhuizen, Chief Investment Officer of FMO said: “FMO is proud to be a pioneer FDI investor to actively support the financial sector in Nepal, thereby enabling much needed investments in the renewable energy sector decreasing CO2 emissions, while helping this beautiful country grows its economyâ€.
Speaking on the occasion, Pawan Kumar Golyan, Chairman, NMB Bank said “This is an important milestone for NMB Bank, which positions the Bank with stronger foothold in supporting projects that will not only impact the industry segments that we invest in, but will also be a catalyst in shaping economic growth in the country,â€
FMO has been active in Nepal for many years and has been building on its reputation, network and relation with the Central Bank of Nepal (NRB) since it invested in Clean Energy Development Bank in 2008. NMB recently became member of the Global Alliance for Banking on Values and is very eager to reap the benefits of FMO‘s international network.