ADB approves $15 million grant to rebuild Nepal schools

Kathmandu, October 8

The Asian Development Bank (ADB) today approved a new $15 million grant to rebuild schools, provide microloans to help restore livelihoods, and to boost awareness of disasters in the 14 districts most severely affected by the recent earthquakes in Nepal.

The grant is provided by the Japan Fund for Poverty Reduction, a fund set up by the Japanese government in 2000 to support poverty reduction and social development in ADB projects. ADB will manage the grant.

"Destroyed homes, farmland, and business and lost livestock and harvests will push at least 700,000 additional Nepalis below poverty line, many of them in hard-hit rural central hill and mountain areas where poverty was already high,” a statement issued by ADB quoted Mayumi Ozaki, financial sector specialist with ADB’s South Asia Department, as saying.

On top of the $15 million grant, the Nepal government will provide an additional $1.3 million and the Small Farmers Development Bank, a Nepali umbrella microfinance bank, will provide $1.5 million.

Around $8.1 million of the overall funding will be used to rebuild at least 14 model disaster-resilient schools, $7 million will be mobilised to provide microcredit to at least 12,500 households in the affected districts, and a further $1.9 million will finance training to help people better understand how to prepare and cope with disasters. The remaining funds will be used for contingencies.

The devastating earthquake of April 25, followed by a major aftershock on May 12 affected the livelihoods of an estimated 2.3 million households and 5.6 million workers across 31 districts. This resulted in personal income losses of around $170 million in the fiscal year to July 15, 2015.

Most of these poor households have no access to the formal banking system, with many relying on microfinance institutions which cannot meet demand for credit from affected households due to their own limited funding. Schooling was also disrupted by the tremors which destroyed over 26,000 classrooms in public and private schools and damaged a further 26,000. Damage and losses in the education sector are estimated at around $310 million. Lengthy periods away from school are linked to poor education attainment and lower job prospects.

The $15 million grant adds to a $3 million disaster-response grant approved by ADB on May 27 and a $200 million emergency loan approved on June 24.