World Bank commits $ 450 m. for Nepal

Posted on | oktober 20, 2011 | No Comments

Nepal will be receiving more than $450 million in the next two years from the World Bank, one of the country’s leading multilateral donors, under its new Interim Strategy Note (ISN).

Making public the ISN here on Tuesday, the WB pledged $400 million through its concessionary financing arm—International Development Association (IDA)—and annual aid of $25-30 million through its private sector arm—International Finance Corporation (IFC).

However, the WB has said the pledged aid would depend on good performance of planned projects and prudent economic management. It also said the fund to come through IFC is subjected to availability of viable investments and improvement in the business climate.

The new ISN is based on three pillars—enhancing connectivity and productivity for growth, reducing vulnerabilities and improving resilience and concentrating on promoting access to better quality services—which are also the pillars of the WB’s South Asian regional strategy.

The WB has also made it clear that the aid under the new ISN will based on clients’ demands, possibility to leverage results, particularly for millennium development goals, and opportunity for regional integration. Road, energy, rural finance, food security, private sector growth and reducing malnutrition are the priority sectors of the WB for 2012 and 2013.

The aid under IDA will go for power, road, agriculture, food security, education, health and urban services and climate change, while that under IFC will go to infrastructure and improving access to finance, addressing risk related to climate change, supporting regional and global integration through intra-regional trade facilitation, south-south investment, investment climate and inclusive business model, according to the WB.

WB Country Director for Nepal Ellen Goldstein said the bank would provide aid in 15 areas over the next two years.

“Given Nepal’s power problems, we will focus more on energy by rehabilitating 53MW of existing power generation capacity by lending to Kabeli ‘A’ hydroelectric project and constructing cross-border transmission line,” she said.

She also the made it clear that WB has special focus on food security and aims to increase the number of population getting sufficient food to 95 percent from the current 91 percent within next two years.

The WB has termed political risks as one of the biggest hazard to its programmes and also made it clear that if security risks increase in specific geographic areas, IDA would exit from there.

IDA will also engage with political leaders on regular basis about development challenges and engage in community-managed and community-driven projects to save programmes from possible conflict. However, Goldstein praised Nepal’s track record in better using its aid provided, saying that around 30 percent use of the pledged amount over the last three years was satisfactory.

Addressing the ISN lunching ceremony, Finance Minster Barshaman Pun urged the donor and the international community not to lose hope on Nepal’s political process as the peace and constitution writing processes were heading towards conclusion. He also stressed the importance of the foreign aid to Nepal given Nepal’s limited financial resources to finance development projects.

AUTHOR: Anil Giri
URL: http://www… the-kathmandu-post
E-MAIL: girianil [at] gmail.com