ADB to provide $1b in loans over three years

- POST REPORT, Kathmandu
ADB to provide $1b in loans over three years

Feb 3, 2015-

The Asian Development Bank (ADB) has planned to provide $1 billion in concessional loans and another $13 million in technical assistance grants to Nepal over the next three years, ADB President Takehiko Nakao said Tuesday.

He added that the credit was intended to be spent on improving Nepal’s poor infrastructure sector, human capital development and agriculture sector. The ADB’s new Country Partnership Strategy has given the number one priority to energy followed by transport, water and urban infrastructure, education and agriculture, natural resources and rural development.

According to the ADB, more than 80 percent of its financial support was earmarked for major infrastructure projects in hydropower generation and transmission, international airport expansion, road transport and trade facilitation, urban development in key municipalities, education and skills development and agriculture productivity growth.

Considering the longstanding energy deficit in Nepal, Nakao has pledged to help it reduce power related problems by supporting tariff reforms, improving the institutional capacity and financial health of the Nepal Electricity Authority and strengthening the sector’s regulatory framework.

“The ADB will help the government attract private sector investment and public private partnership for large scale hydropower and transmission projects,” Nakao said. He added that the ADB had targeted providing more support to human development, in particular, in recent years.

Lauding Nepal’s achievement in poverty alleviation during the last one decade, the ADB president praised the government for according priority to the improvement of the social sectors. He also stressed the need to improve the quality of education in the country. “Nepal has to focus on improving the quality of secondary education besides enhancing vocational and technical training,” he said.

Nakao also stressed the need to increase capital expenditure saying that in recent years it has been as low as 3.3 percent of the gross domestic product (GDP) when it should be 8.5 percent to be able to fill the infrastructure gap within a decade.  Nakao assured the ADB’s support in capacity building, mechanism to prepare better project plans, improvement in the public procurement system and proper financial management to resolve problems related with low capital expenditure.

Nakao said that the country should focus on eight areas to achieve economic development. He identified investment infrastructure, investing in people (mainly in health and education), macro-economic stability, good investment climate, governance, inclusiveness, vision at the policy level and political stability and security as being necessary for economic development.

ADB projects 4.8pc growth in 2014-15

The Asian Development Bank has forecast that Nepal’s economic growth rate will remain at 4.8 percent in the fiscal year 2014-15, lower than what the government has aimed to achieve. While the country needs to attain a growth rate of more than 8 percent to graduate to developing country status by 2022, the ADB said that the economy would grow by 5.2 percent in 2016. It has also projected inflation to remain at 8 percent this year.

Published: 04-02-2015 09:25

User's Feedback

Click here for your comments

Comment via Facebook

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