ADB registered record disbursement for Nepal in 2019

Kathmandu, February 17

The Asian Development Bank (ADB) has said it achieved a record disbursement of $323.7 million for various development projects in Nepal in 2019.

Some of the projects contributing to last year’s record disbursement include the Earthquake Emergency Assistance Project ($38.5 million), the South Asia Sub-regional Economic Cooperation’s Power System Expansion Project ($28.7 million), Food Safety and Agriculture Commercialisation Programme ($25 million), Regional Urban Development Project ($22.1 million), Rural Connectivity Improvement Project ($20.2 million), and Supporting School Sector Development Programme ($20 million).

Speaking at a country portfolio review meeting jointly organised by ADB and the Ministry of Finance (MoF) here today, Mukhtor Khamudkhanov, ADB country director for Nepal, said the support in the infrastructure sector has increased in the recent years with larger but fewer projects.

“But while disbursement has picked up pace, challenges remain and the overall performance of ADB operations in Nepal could be much better,” he added.

Khamudkhanov added that for better and quicker results on the ground, higher lending needs to be matched with improved implementation and enhanced technical capacity of implementing agencies. “Difficult terrain and remoteness of project sites, addressing safeguards issues, and the country’s ongoing transition to federalism that takes time have also posed challenges in effective implementation of development programmes.”

Khamudkhanov identified five major issued that need to be addressed — strengthening teamwork, ensuring sufficient human resources, inter-agency coordination, timely reporting and continuous capacity enhancement — to accelerate the portfolio performance.

“The performance of last year paints a mixed picture.

On the positive side, for the first time Nepal’s disbursement exceeded a critical threshold of $300 million, reaching $323.7 million,”

Khamudkhanov added, “In terms of disbursement ratio, Nepal’s portfolio is lagging behind most other countries in South Asia. The disbursement needs to be substantially increased to nearly $400 million per year for ADB to consider further increasing or even maintaining its commitment level.”

Finance Secretary Sishir Kumar Dhungana also said that projects were being delayed due to the country’s transition to federalism.

“Human resources constraints, complexities in implementing federalism and impractical public procurement law are hindering the pace of development works.”

Dhungana further claimed that some contractors and consultant firms were deliberately lingering certain projects, which had resulted in cost and time overruns. “We have started amending the existing Public Procurement Act to introduce necessary changes for timely execution of development works. The government will reform all the existing laws that are obstructing the development works.”

Since the start of its operations in Nepal in 1969, ADB has provided about $6 billion in financial and technical assistance to the country.

The assistance provided by ADB to date has focused on energy, transport, urban development, water supply and sanitation, agriculture and irrigation, education sectors, among others.