World Bank provides $35m grant

Kathmandu, August 1:

The World Bank (WB) has agreed to provide grant assistance worth $35 million to Nepal for two different projects. The grant includes the Rural Access Improvement and Decentralisation Project worth $32 million and the Economic Reforms Technical Assistance Project worth three million dollars. According to WB Nepal office, the first grant of $32 million will finance essential road infrastructure in rural areas. The Rural Access Improvement and Decentralisation Project intends to address one of Nepal’s main constraints to economic growth and poverty reduction — poor access to markets and services needed by residents in remote, rural and hilly areas of the country. The project will be implemented in 20 districts across the country through two components — rural transport infrastructure improvement in participating districts and capacity building and advisory services to the department of local infrastructure and agriculture roads (DOLIDAR) and the participating district development committees.

The first component comprises of rehabilitation and upgradation of the about 800 km of existing dry-season rural roads to all-season standard roads, upgrading of about 200 km of rural trails and tracks to dry-season standard, maintenance of about 3,500 km rural roads and covering routine and recurrent maintenance. Likewise, the construction of about 350 suspension trail bridges and the development of small, community infrastructure, including construction of markets. The second component comprises of implementation of training-related activities, provision of technical assistance and advisory services and undertaking of a study to assess the mobility and transport needs and travel patterns of rural people. The second grant of three million dollars signed today will help finance technical assistance needs of Nepal’s comprehensive reform agenda. The Economic Reforms Technical Assistance Project is structured to provide flexibility in the use of the funds, and can be used to finance hiring of skilled professionals, consultants and training, says the WB.

“The World Bank believes that these two new projects are consistent with the innovative development approach Nepal has pursued in the last few years and hence it believes that providing financial support to them is appropriate,” said Ken Ohashi, WB country director for Nepal. “Whether the bank can continue to provide strong financial support in the coming months will depend heavily on the demonstration of political leadership in reinvigorating the pace of reform,” he said. “Unfortunately, as the bank sees it, the overall pace of reform implementation has slowed over the past year,” Ohashi concerned, adding, “It may be worthwhile here to revisit a fundamental principle of the bank’s engagement in Nepal. The bank’s longstanding position has been that as long as reforms continue and development activities can be implemented, there will be a basis for the bank to continue providing financial assistance. Another way to understand this principle is that if the government is unable to bring focused efforts on sustaining and deepening reforms, continuing to provide large volumes of funding would unlikely have beneficial impacts.” For Nepal to achieve a faster economic growth and poverty reduction, it is absolutely necessary to resolve conflict and to restore political stability. This, however, is likely to take time,” Ohashi said.