ADB to increase grants to $583 million

The Asian Development Bank (ADB) has increased its grant allocation to Nepal to $538 million for 2009-2010, from $258 million during 2007-2008.
The allocation is a blend of concessional loans and grants, said vice-president of Operations, Zhao Xiaoyu, at the end his four-day long visit – today -- to Nepal.
"This scaling up of ADB's assistance to Nepal testifies to ADB's strong commitment to Nepal's development and poverty reduction efforts," Zhao said adding that sustaining this level of assistance in the future will largely depend on Nepal's performance in the areas of macroeconomic management, governance and portfolio management.
During his meetings with Prime Minister Madhav Kumar Nepal and other senior government officials, Zhao stressed the importance of staying the course on economic reforms to reduce poverty, addressing other development challenges and working to achieve sustainable economic growth crucial for ongoing peace and stability.
During his visit, he also participated in the foundation-laying ceremony of the diversion tunnel of the Melamchi Water Supply Project that will ease water shortages in the Kathmandu Valley. Speaking at the ceremony, Zhao congratulated the government for its commitment to the completion of the Project and to the institutional reforms required under the project and for achieving substantial progress under challenging circumstances.
The vice-president also signed a grant agreement with the government for ADB's emergency support for the country. The $25.6 million Emergency Flood Damage Rehabilitation Project will help restore economic activity in eastern and far western Nepal, areas which were devastated by last year's monsoon floods.
During his visit to Nepal, Zhao also met with the Deputy Prime Minister, Minister of Finance, the Governor of the Central Bank, the Vice Chairperson of the National Planning Commission and with development partners. He also visited other ADB-assisted project sites.
ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region. In 2008, it approved $10.5 billion of loans, $811.4 million of grant projects, and technical assistance amounting to $274.5 million.