This is a remarkable day for Kirne. For a few hours the periphery has become the centre of attention. For a few hours Kirne is the place that matters. Because of a power plant that in many ways is unique.

It is a remarkable day for all the different partners that have contributed to this achievement. Because it highlights how a unique partnership has represented value added for all involved.

It is a remarkable day for our two countries. This project has built visible and significant bridges on a foundation of common efforts and shared interest. Bridges are meant for getting across – in order to continue the walk on the other side. This is a day that affirms the deepening relations between our two governments and between our two peoples. We have more work to do, together.

The Khimti hydropower project is itself unique:

• It is the first practical application of Nepal’s new hydropower policy opening for private investment in the power sector.
• It is the first commercial power producer financed by private foreign investors and using international loan financing channels.
• It is the first hydropower project that Statkraft has undertaken in a developing country.

But the history of the project and the partnership are also unique. Khimti is a prime example of how development can serve as platform for commercial enterprise. Khimti has benefited from 35 years of slow but steady building up of national capacity. It really started with the Butwal Power Company, which was set up in 1966 to build and operate Nepal’s first underground hydropower project, a 1 MW Tinau power plant in Butwal. Then followed the 5 MW Andhikhola and the 12 MW Jhimruk projects. Khimti did not start from scratch.

Khimti is the story of remarkable synergies, which have evolved together with the emerging challenges. After Jhimruk, the Butwal Power Company and its several daughter companies needed the challenge of going to scale. The local companies needed the inputs of finance, professional management and updated technology and skills. The Norwegian commercial partners benefited from the local skills and networks that had been built up in Nepal over the years. The Khimti model allowed local and international expertise to grow together, both coming out better equipped to engage in the new enterprise.

Khimti is not a foreign aid-funded project, but a regular commercial enterprise that has to earn sufficient income to meet its financial obligations. In this way the project definitely represents something new. A signal that in the power sector Nepal is about to graduate from dependency on foreign aid, testing the ground as it embarks on a new era of economic independence.

This is a tough and difficult transition. It may not be pleasant to pay what it costs. Perhaps it may seem unfair that a country that is still poor and economically vulnerable should have to face the harsh realities of the international business world. Yet these same realities are what in this case helped a young power sector mature. Nepal has no other choice but to continue to make the most of its resources, improve efficiency and maximise results.

Privatising the power industry is an important step. Ensuring an effective management system and the necessary capacity in the public sector to provide a sound framework for investment is another. The challenge is to find the balance between efficient and profit-seeking private entrepreneurs on the one hand and a competent and honest government administration on the other. Public-private partnerships must be open and predictable, subject to laws and regulations designed to protect public interest while at the same time encouraging private initiative.

For Nepal, the challenge lies in the fact that it must not only foster economic growth but also ensure that economic growth benefits the poor. This is where development interests and private sector interests must find common ground. In the collaboration between our two countries, this is what we are seeking.

The Norwegian Government is proud to have been a partner in Khimti, through 35 years of support for the United Mission to Nepal, the Butwal Power Company and its sister companies. And through small contributions such as the feasibility study, guarantees for soft loan financing for equipment, and some grant financing for the construction of the long access road to the site. We are also proud that Norwegian companies have demonstrated their ability to perform. The hydropower sector is one where we believe we can offer particular competence and know-how for the challenges ahead here in Nepal.

Norway and Nepal have many common features, values and perspectives and many shared hopes. We see this project as a result of a broad-based partnership between our governments and our peoples, as evidence that what we do and how we do it matter and as a reminder that although we have many miles ahead of us, we will walk them together.

Thank you.