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Parties in Nepal Transmission Project Case Agree to Pursue Dispute Resolution

World Bank Accountability Mechanism (AM) Secretary Orsolya Székely on April 12, 2022, informed the World Bank Board of Executive Directors, the Inspection Panel and World Bank management that the parties involved in the Nepal-India Electricity Transmission and Trade Project and its additional financing in Nepal have agreed to voluntarily engage in a dispute resolution process to try to find a mutually acceptable solution to the issues raised in a Request for Inspection of the project.

The World Bank Board of Executive Directors on March 3, 2022, had approved an Inspection Panel recommendation to investigate the project. Under the updated Inspection Panel resolution and the resolution creating the AM, following that Board approval the AM Secretary, acting as head of the Dispute Resolution Service (DRS), offered the option of dispute resolution to the complainants and borrower and was required to report on their decision within 30 business days.

Now that the parties have agreed to engage in dispute resolution, the Panel will hold its investigation in abeyance until the process is concluded. If, at the end of the dispute resolution process, the parties reach agreement, the Panel will issue a memorandum closing the case and take no further action. However, if the parties do not eventually reach an agreement, the Panel will commence its investigation.

The maximum length of the DR process is one year from when the AM Secretary reports on the parties’ willingness to pursue dispute resolution. If both parties agree, the process may be extended for up to an additional six months. Like the Panel, the DRS, which facilitates the dispute resolution process, honors requests for confidentiality from the complainants.

The Request relates to the construction of a 74-kilometer-long transmission line financed by the project between Bharatpur and Bardaghat, in particular its section in the Binayi Triveni Rural Municipality Ward No. 2, approximately 200 kilometers west of Kathmandu. The Requesters state that a transmission line was rerouted and now passes through their densely populated community, which includes indigenous and non-indigenous residents. They claim that they were neither meaningfully consulted nor provided any information about the project and allege that the current alignment of the transmission line causes adverse impact on community members’ homes, schools, cultural and religious sites, agricultural lands, environment and economic activities, and threatens their health and safety.
This Nepal case marks the second time since the Board approved the resolutions in September 2020 that the complainants and borrower involved in a Request for Inspection to the Panel were given the option of dispute resolution. The parties to the earlier case, related to the Second Kampala Institutional and Infrastructure Development Project case in Uganda, are currently involved in the dispute resolution process. More