World Bank’s support to double: FinMin

Kathmandu, August 11

The World Bank Group’s support will increase substantially from 2019 as its board of executive directors have discussed and endorsed the new Country Partnership Framework (CPF) for the next five years (2019-23), according to Finance Minister Yubaraj Khatiwada.

“I cannot confirm the exact amount of increment, it would depend on the costing of the development needs based on the CPF, but the WBG board of executive directors has assured to double the financial assistance.”

Currently, World Bank’s annual lending portfolio for Nepal is around $200 million to $300 million and total portfolio in 22 projects under the concessional loan of International Development Association (IDA) hovers at $1.7 billion.

Talking to journalists upon his arrival at Tribhuvan International Airport from WBG headquarters in Washington DC, today, Finance Minister Khatiwada said that the CPF has been developed as per the inherent needs of the country in line with the government’s vision. Based on the CPF, the multilateral development partner will support not only through concessional financing via IDA but also facilitate private sector financing from International Finance Corporation (IFC), according to the finance minister. He also informed that he held discussions with the vice president of IFC regarding increasing financing to the private sector to spur growth.

“We can expect the support from the World Bank to double from 2019.”

Stating that the country requires huge resources for execution of the fundamental rights guaranteed by the new constitution and inclusive development, Khatiwada said that he has sought support from every window of the World Bank Group. “We have been providing grants to the quake-affected families to rebuild houses ravaged by the earthquake as the World Bank has assured us of its support for the purpose, which is appreciated,” said the finance minister. “I have asked for additional financing as the quake-hit families are still in vulnerable condition and the support we received for housing reconstruction is insufficient.”

He informed of discussions with IDA to raise the financing available for economically vulnerable countries. “Further, we are also moving ahead to utilise the window of MIGA (multilateral investment guarantee agency) of WBG, which promotes cross-border investment in developing countries by providing guarantees (political risk insurance and credit enhancement) to investors and lenders.” MIGA protects investments against non-commercial risks and can help investors obtain access to funding sources with improved financial terms and conditions.

The finance minister also urged the WBG to look into other potential areas of support for Nepal’s development. Nepal has also been obtaining budgetary support from the World Bank as reward for its reform in financial sector stability and public finance management. Nepal’s proposal for budgetary assistance of $100 million under energy sector reform will be submitted to the board of executive directors during their meeting in September, as per the finance minister.

Khatiwada stated that he had addressed the ‘Nepal Day’ event jointly hosted by the World Bank and the Embassy of Nepal in Washington. The event witnessed participation of the vice president of World Bank, IFC, and high-ranking officials of other development partners headquartered in Washington.

“During the Nepal Day event, we discussed development priorities of the country and the projects that are ready to be implemented,” said the finance minister. “Development partners are willing to support Nepal as we have presented our needs clearly to minimise the vertical and horizontal imbalances in the course of implementing federalism and want to develop prudent public finance management in the lower layers of administration.”

The finance minister also held discussions with the deputy managing director of International Monetary Fund and the CEO of Millennium Challenge Corporation (MCC) during his visit to Washington. MCC has pledged $500 million in grant for energy and road sector development.