Kathmandu, December 12:

The Asian Development Bank (ADB) is extending $100 million grants to help reduce poverty in isolated areas of Nepal to ensure more inclusive and sustainable economic growth.

The Rural Reconstruction and Rehabilitation Sector Development Programme (RRRSD) will also receive a $10 million loan from the OPEC Fund for International Development, the multilateral financing facility of the Organisation of Petroleum Exporting Countries (OPEC) that channels aid to developing countries. The loan will be managed by ADB.

Through its support, ADB will provide much needed resources to promote good governance and poverty reduction by improving the policy environment for inclusive growth and reconstructing and rehabilitating rural infrastructure in remote areas of Nepal. The assistance package is made up of a $50 million programme grant from ADB, and a project grant, which will be funded by another $50 million grant from the Bank, the loan from OPEC Fund for International Development, $15.7 million from the government of Nepal and $2.7 million from beneficiaries, states a press release.

“We will focus on reducing rural poverty in hill, mountain and lowland districts in Nepal where isolation and hardship are common,” said Jiangfeng Zhang, Natural Resources Economist of ADB’s South Asia Department. “It will focus on immediate post-conflict development priorities for accelerating poverty reduction and inclusive development to enhance the delivery of public services and improve access of rural residents to economic opportunities and social services.”

Nepal has made progress in combating poverty and improving the standard of living even in a conflict environment. However, prog-ress has remained uneven.

Nepal, with a Gini coefficient of 47.3 per cent in 2003, has the highest rate of inequality in Asia. The programme grant will assist the government in achieving three key outputs — enhanced poverty reduction and inclusive development.