In New Delhi:    
Minakshi Seth
Phone: +91 11 4111 1000
E-mail: mseth@ifc.org


Kathmandu, Nepal/New Delhi, India, August 18, 2008—IFC, a member of the World Bank Group, is supporting Nepal’s Buddha Air Private Limited, as the airline expands capacity and adopts new fuel efficiency methods that will reduce operating costs significantly. IFC is providing a $10 million long-term loan to help finance the expansion.

“With IFC’s support, Buddha Air can focus on optimizing growth opportunities to strengthen our operations in the face of rising oil prices and a rapidly evolving competitive landscape,” said Birendra Basnet, Managing Director of Buddha Air.

“Infrastructure investments are a priority for Nepal’s economic growth. We are pleased to support the development of the aviation sector, which is vital for the country,” said Anita George, IFC Infrastructure Director. “This project fits well with IFC’s strategy for Nepal and the wider region. It is heartening to see that Buddha Air has transitioned from a start-up to a profitable airline over the past decade.”

Air travel is the most reliable source of domestic transportation in Nepal, because the country’s mountainous terrain makes building roads difficult and expensive. It is also the lifeline of the tourism sector.

According to the World Travel and Tourism Council, Nepal’s GDP growth is expected to rise from 6.8 percent in 2008 to 7.9 percent by 2018. Given the increasing contribution of travel and tourism to the economy, the aviation sector will become more important and grow exponentially. There is also high potential for growth in the mountain-flight segment that caters to about 10 percent of international tourists arriving in the country. Buddha Air plans will focus on expanding this key segment.  

IFC has previously invested $62.7 million in four Nepali projects—two in hydropower generation, one in tourism, and one in a leasing company. IFC’s investments in the transportation sector amount to $500 million. Airlines that have received IFC loans include India’s Jet Airways, Kenya Airways, and Russia’s Siberia Airlines.        

About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that people should have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit www.ifc.org.