World Bank approves $100 million budgetary assistance for Nepal
Kathmandu, August 8
A meeting of World Bank Group’s board of executive directors has approved budgetary assistance worth $100 million for Nepal, which is the last series of ‘Financial Sector Stability Development Policy Credit’ that was initiated in 2013.
The World Bank Group (WBG) has been extending budgetary support under two headings — ‘Financial Sector Stability Development Policy Credit’ and ‘Fiscal and Public Financial Management Development Policy Credit’. Recently, the multilateral bank added another sector — ‘Energy Efficiency’, under which the country can obtain the budgetary support from the WBG in the energy sector.
While this is the fourth phase of support under ‘Financial Sector Stability Development Policy Credit’, Nepal has availed $200 million as the first phase of support under ‘Fiscal and Public Financial Management Development Policy Credit’. The country is likely to received $100 million support under ‘Energy Efficiency’ in the future.
According to the officials of the Ministry of Finance, the World Bank’s board of executive directors also approved Nepal’s proposal and have committed to provide $100 million under energy efficiency development policy credit. To avail this assistance, the country has to develop the Environmental Impact Assessment Guidelines, action plan for the electricity development, set up electricity regulatory commission and initiate other numerous legal and procedural reforms in the energy sector.
During his visit to the World Bank headquarters in Washington, Finance Minister Yubaraj Khatiwada met with senior WBG directors for energy and finance. The directors held discussions on investment in energy sector in Nepal and potential areas for the private sector investment, according to Homkanta Bhandari, undersecretary at the Ministry of Finance.
In the discussion with the World Bank senior directors, Finance Minister Khatiwada sought support in large scale hydropower projects. The finance minister has pledged legal, administrative and procedural reforms in the energy sector.
The World Bank recently prepared a five-year country partnership framework (2019-23) as per the new dynamics of the country. The World Bank’s board of executive directors also discussed the new country partnership framework, which has been prepared to address the country’s need. The new country partnership framework of the World Bank pledges its support to strengthen institutions that are critical for effective implementation of federalism, as well as innovative pathways to faster, equitable growth and accountable service delivery.
It is reported that the country partnership framework notes that the federalism agenda will underpin the World Bank Group’s future programmes at the strategic, policy and operational levels. It also cautions that transitional vulnerabilities could heighten in the early days of federalism as development roles are adjusted and the new structures take root. Based on the new framework, the World Bank’s assistance for next five years will be focused on strengthening public institutions for economic management, service delivery and public investment; promoting private sector-led jobs and growth; and enhancing inclusion for the poor, vulnerable, and marginalised groups, with greater resilience against climate change, natural disasters, and other exogenous shocks.
During the discussion on country partnership framework in World Bank headquarters, Finance Minister Khatiwada highlighted that the World Bank’s strategy to support the country’s goal of giving every Nepali equal access to security, justice, good governance, basic services, and an opportunity to participate in future prosperity is commendable. The finance minister stressed that the new partnership strategy with the World Bank Group is focused on supporting Nepal’s transition to federalism, fits squarely within the country’s vision and underpins a Nepali-owned model.