Money

World Bank provides Rs44.8b in loan to Nepal

  • Funding Aid
- Post Report, Kathmandu

Jan 22, 2018-

The World Bank is providing a concessional loan of $440 million (approximately Rs44.8 billion) to the government to support the country’s post-earthquake housing reconstruction, promote innovation in the livestock sector and provide technical education and vocational training.

The government signed three different agreements in this regard with the Washington, DC-based multilateral lending institution on Sunday.

The agreements were signed by Finance Secretary Shankar Prasad Adhikari and World Bank Country Director for Nepal, Bangladesh and Bhutan Qimiao Fan in the presence of Finance Minister Gyanendra Bahadur Karki and World Bank Vice President for South Asia Annette Dixon.

Under the first agreement, the World Bank will provide $300 million in additional finance for the Earthquake Housing Reconstruction Project. This will supplement a $200 million credit approved in 2015 in the immediate aftermath of the devastating earthquakes of April and May, 2015.

This loan amount will be used for reconstruction of 96,000 earthquake-affected private houses in Nuwakot, Dhading and Dolakha districts, says a statement issued by the Ministry of Finance. The National Reconstruction Authority, the Ministry of Federal Affairs and Local Development, and the Ministry of Urban Development are the implementing agencies for the project.

The total number of eligible and enrolled beneficiaries for earthquake housing grant has increased to 650,000 households from the preliminary estimate of 500,000 households in 2015. The government has also increased the housing grant to Rs300,000 per household from the earlier Rs200,000 to reflect increased construction costs. With these revisions, the financing gap in the government’s housing reconstruction programme has widened to over $1.2 billion. The additional finance from the World Bank will help the government meet a slice of this gap, says a statement issued by the World Bank.

The second financing agreement will support a Livestock Sector Innovation Project with a credit of $80 million. The project will support the objectives of the government’s Agriculture Development Strategy and its emphasis on livestock for sustained agriculture and economic growth, poverty reduction, and improving food and nutrition security. Nearly 200,000 livestock producers across 271 municipalities will directly benefit from the project. At least 45 percent of the primary beneficiaries will be women. In addition, about 500 small and medium agro-enterprises will benefit from production and post production value chains, says the World Bank statement.

The expected outcomes of the project are: increased and resilient livestock productivity; better focused policy, regulatory and institutional environment for livestock producers and agro entrepreneurs; increased availability and access of modern marketing facilities; technical and advisory services and increased value addition, adds the Finance Ministry statement. The project will be implemented by the Ministry of Livestock Development.

The third agreement will finance the second phase of the Enhanced Vocational Education and Training Project with a $60 million credit. Between 450,000 and 500,000 Nepali youths come of working age every year, most of whom enter either the domestic or the foreign labour market with limited education and skills. Technical Education and Vocational Training, or TEVT, is an important intermediary between youth and the labour market, as it seeks to provide pre-employment skills to youths. While the number of formal and informal TEVT providers has grown over time, it continues to face the challenges of quality training for domestic and foreign labour markets, inclusion and cohesion. The project will help improve access to market relevant training programmes and strengthen the delivery of TEVT.

“These three agreements are important for Nepal because they boost job creation, including for many women,” said Fan, noting that Nepal fully absorbed its allocation of concessional resources from the World Bank during the previous three-year cycle. This amounted to about $900 million and an additional $300 million from the Bank’s Crisis Response Window.

The World Bank is developing a new Country Partnership Framework for the next four-year period beginning in July in consultation with Nepali authorities and a wide range of stakeholders.

Published: 22-01-2018 08:23

User's Feedback

Click here for your comments

Comment via Facebook

Don't have facebook account? Use this form to comment