The World Bank and International Monetary Fund (IMF) agreed to provide related monetary assistance to Nepal, during the WB annual meeting held at Bali, Indonesia.

Nepal Finance Ministry International Economic Cooperation Coordination (IECCD) Chief Shree Krishna Nepal and World Bank Nepal Country Director Qimiao Fan signed the agreement on October 10, 2018.

Nepal Finance Minister Dr Yubaraj Khatiwada and World Bank South Asia Region Vice Chairperson Hartwig Schafer were also present at the occasion.

Speaking at the occasion Nepal Finance Minister Dr Yubaraj Khatiwada appreciated WB’s support for the growth of various sectors such as infrastructure development, tourism development, education and health while hoping that WB would increase its support to Nepal in the future too.

World Bank South Asia Region Vice Chairperson Hartwig Schafer was also present at the occasion.

World Bank Aid for Nepal Aid
Recently, the World Bank approved a whooping Rs 100 million loan for the country’s energy sector. The grant aimed to support the energy sector for effective implementation of related policies and institutional measures. Additionally, it plays an important role in strengthening the financial viability of the Nepal Electrical Authority (NEA).

The post Nepal Finance, Energy Receive Rs 23 Billion Aid appeared first on Nepali Sansar.

The Board of Executive Directors of #WBG on August 07, 2018 enacted a new five-year Country Partnership Framework (CPF) for Nepal with an aim to support the country in its path of development driven by federalism.

CPF for Nepal also includes WB’s commitment to offering needed support to all Nepali institutions that are key to successful implementation of federalism and fast-paced development of the country.

According to the Chief of the International Economic Cooperation Coordination Division of the Finance Ministry, Shri Krishna Nepal, WBG also promised enhancement of its financial support to the Himalayan nation significantly over the next five years period.

Nepal’s transition to federalism unlocks opportunities for all citizens to participate in its development. This represents a window of opportunity for the country to further reduce poverty, increase the income of the bottom 40 percent, and pursue its ambitious agenda of inclusive growth and accountable service delivery.
– Qimiao Fan, World Bank Country Director for Bangladesh, Bhutan and Nepal

What CPF Envisages for Nepal?
CPF noted that #NepalFederalAgenda comes as a boost to WBG’s programmes at the operational and policy levels, while also cautioning the nation with supposed societal challenges that can arise in the federalism implementation process.

“Transitional vulnerabilities could heighten in the early days of federalism as development roles are adjusted and the new structures take root,” notes CPF.

According to an official release, CPF’s key areas of focus for Nepal include:

• Strengthening public institutions for economic management, service delivery and public investment
• Promoting private sector-led jobs and growth
• Enhancing inclusion for the poor, vulnerable, and marginalized groups, with greater resilience against climate change, natural disasters, and other exogenous shocks 

The new partnership strategy with the World Bank Group is focused on supporting our transition to federalism, fits squarely within our vision and underpins a Nepali-owned model, says Yuba Raj Khatiwada, Nepal Finance Minister.

Khatiwada feels that this partnership strategy with the World Bank is in line with Nepal’s goal of giving every Nepali equal access to security, justice, good governance, basic services and an opportunity to participate in the developmental process.

Need of the Hour!
According to World Bank, Nepal will need significant financing beyond currently-available public and development aid resources in order to achieve fast-paced growth and fight poverty in its transition to federalism.

In this regard, CPF states that the government’s growth strategy pitching for higher investment and productivity and effective participation by public institutions will need carefully-calibrated policies to draw required private investment in parallel with the federal process.

We will expand our investments — both debt as well as equity — and advisory services for private investment in Nepal. Our efforts will encourage high-quality private investors to support the government’s strategy of inclusive development – Wendy Werner, International Finance Corporation’s Country Head for Nepal, Bangladesh and Bhutan.

Behind CPF
CPF priorities under its developmental agenda for Nepal were formed after a wide range of consultations with the federal, state and local governments.

The results also included recommendations and opinions of Nepal’s related stakeholders and development partners including private sector, civil society, academia, community groups and media.

This includes hearing from over 200,000 citizens across Nepal through SMS and online surveys. The framework aligns with the government’s development priorities and Nepal’s goal to graduate to middle income country status by 2030, said the World Bank in its official release.

WBG Support to Nepal
The World Bank Group has been actively supporting Nepal through its three main arms:

• International Development Association (IDA): Under this concessionary lending arm, WB is currently supporting 21 active Nepali projects at a USD 2.5 billion investment promised under IDA. Under IDA18, WB has indicative resources worth USD 300 million for Nepal for FY 2018-2020 through the IDA Risk Mitigation Regime.
• International Finance Corporation (IFC): This is WBG’s private sector arm in Nepal, which is committed to infuse about USD 800 million-USD 1.2 billion investment in Nepal over the coming five-year period.
• Multilateral Investment Guarantee Agency (MIGA): This is WBG’s investment risk insurance arm in Nepal, which is actively finding opportunities to pump in foreign private investment into Nepal. IFC and MIGA use IDA IFC/MIGA Private Sector Window (PSW) and the MIGA Guarantee Facility to underwrite eligible projects.

WBG’s first economic mission to Nepal arrived in 1963 to assess the country’s development prospects and challenges. Following this, the country received its first WB credit in 1969 for a telecommunications project.

Since then, the World Bank continued its support to Nepal and provided USD 4.75 billion in assistance (USD 3.48 billion in credits and USD 1.27 billion in grants), so far.

Hope the World Bank’s country-wise development strategy will offer more benefits to the development of Nepal in the years to come!

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Out of this aid, the USD 200 million (~ Rs 20.9 billion) allocated for public financial management will enable the Government of Nepal to implement the Intergovernmental Fiscal Management Act, draft the Fiscal Responsibility and Budget Management Bill and improve budget execution, among others.

The other USD 66 million (~ Rs 6.9 billion) credit will be utilized for modernizing Phase 2 of the Rani Jamara Kulariya Irrigation Scheme.

Support from the WB Board

The WB Board of Executive Directors underlined their strategic shift towards supporting federalism, and promoting accountability and transparency. The officials reiterated their full support to Nepal’s efforts in achieving inclusive development in coordination with other development partners.

“Nepal today is at a historic juncture as it transitions from a unitary to a federal democratic republic. Expectations are high that the new structure will deliver on greater equity and accountability. This operation will help establish a fiscal framework that will ensure that the newly elected governments can deliver better services to all Nepali citizens.” said Qimiao Fan, World Bank Country Director for Bangladesh, Bhutan and Nepal.

Ongoing Contribution to the Country’s Development

The WB Group has been supporting Nepal’s developmental efforts ever since the first economic mission was fielded to Nepal in 1963. Till date, the Group provided an assistance of USD 4.75 billion which includes USD 3.48 billion in credits and USD 1.27 billion in grants.

Currently, 22 WB projects amounting to a total of USD 2.32 billion are in active status, including five projects in the energy sector and four each in the agriculture and education sectors.

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The three agreements are focused on investment in livestock innovation, post-earthquake housing reconstruction, technical education and vocational training in Nepal.

“These three agreements are important for Nepal because they boost job creation, including for many women, by investing more money in the country’s successful post-earthquake housing reconstruction as well as providing resources for the livestock sector and for youth skills training,” says Qimiao Fan, World Bank Country Director for Bangladesh, Nepal and Bhutan.

For Earthquake Reconstruction Project

Under the first agreement, USD 300 million will be dedicated for the Earthquake Housing Reconstruction Project as an addition to USD 200 million credit approved in 2015 post the earthquake.

With this, a preliminary estimate of 500,000 households in 2015 has been increased to 650,000 households.

For Livestock Development

The second finance of USD 80 million will address the Livestock Sector Innovation Project while supporting the government’s objectives towards the Agriculture Development Strategy and livestock development for sustained agriculture, food security, poverty reduction and economic growth.

The investment on livestock is expected to benefit nearly 200,000 livestock producers across 271 municipalities of Nepal.

For Education and Training

The third agreement involving a credit of USD 60 million will finance the second phase of Nepal’s Enhanced Vocational Education and Training Project.

This training program aims at providing training large number of youth who lack necessary skill set. This program aims to fill the gaps that Nepali workers are facing in the labor market, both locally and globally.

The second phase of the project will focus on improving access to market-relevant training programs and strengthen the delivery of Technical Education and Vocational Training (TEVT).

Nepal Gets Allocated Resources

Speaking on the occasion, Fan informed that Nepal has fully received its allocated resources from the World Bank over the previous three-year cycle, including USD 900 million support and an additional USD 300 million from the Bank’s Crisis Response Window.

He further said that Nepal will be receiving an additional benefit with a significant rise in resource allocation to about USD 1.4 billion in the current three-year cycle that began in July 2017.

Fan also informed that the Bank is currently preparing a new Country Partnership Framework for the next four-year cycle beginning in July 2018.

The three agreements were signed between Nepal Finance Secretary Shankar Prasad Adhikari and Fan in the presence of Nepal Finance Minister Gyanendra Bahadur Karki and World Bank Vice-President for South Asia Annette Dixon. Other government officials were also present at the ceremony.

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