Print Edition - 2015-06-24 | MONEY
WB announces $500 million aid for earthquake recovery
Jun 23, 2015-
The World Bank Group (WB) on Tuesday announced financial assistance of $500 million (around Rs50 billion) for Nepal’s reconstruction and rehabilitation initiative.
According to the WB, the funds will be spent on rebuilding houses and helping the government budget. The global lender has explained that the aid plan is subject to approval by its board meeting scheduled to be held on June 29.
The WB has stated that the aid package will consist of $200 million (Rs20 billion) for housing reconstruction in poor rural areas and another $100 million (Rs10 billion) for the government’s budget and for strengthening the banking system.
Likewise, an additional $100-200 million (Rs10-20 billion) will be redirected from the existing WB projects in Nepal and invested in the reconstruction efforts. The redirected amount will be replaced with additional funds.
The $200 million for housing reconstruction is a loan from the International Development Association (IDA), the World Bank’s fund for the poorest countries., It will be used to provide grants to homeowners to rebuild about 55,000 houses for people in rural areas.
According to the Ministry of Home Affairs, 527,829 private homes were fully damaged while 277,841 homes were partially damaged by the earthquake. According to the WB, the loan will mature in 38 years and a nominal interest rate of 1.56 percent will be charged.
The grant amount to be provided for housing reconstruction will be disbursed after verifying whether or not the houses that have been constructed followed standards to resist natural disasters.
Likewise, the $100 million support for the government budget will be an IDA loan which is expected to support policy measures to strengthen the country’s financial sector.
“We are working with the government of Nepal and its international partners to help the country get resources it needs to build back better. We will do everything possible to help people who suffered from the earthquake, especially the poor, rebuild their homes and livelihoods,” the WB quoted its President Jim Yong Kim as saying. “The WB stands with the people of Nepal in their time of need.”
“An initial $40 million (Rs4 billion) is proposed for reallocation towards disaster response, of which $12 million (Rs1.2 billion) has been redirected to finance nutrition and rural water supply needs in the worst-hit districts.
Apart from financing, the WB is also planning to set up a Multi-Donor Trust Fund (MDTF) that will help Nepal’s partners coordinate their financing in the reconstruction effort.
According to Annette Dixon, World Bank Vice-President for the South Asia Region, the group’s financial support targets areas that are critical for the people of Nepal.
“Housing was heavily damaged by the earthquake, and we need to get people as quickly as possible out of temporary shelters and into more permanent buildings that can withstand Nepal’s weather conditions. Our budget support will help to get the government more rapidly back on its feet,” Dixon said.
The Post Disaster Needs Assessment (PDNA) prepared by the National Planning Commission (NPC) has stated that Nepal will require $6.7 billion to recover from the disaster.
Published: 24-06-2015 08:24