The World Bank and the government signed agreements today for a combined value of $75 million towards financing the implementation of two projects -- Enhanced Vocational Education and Training Project, and Urban Governance and Development Programme: Emerging Towns Project.
Finance Secretary Krishna Hari Banskota and World Bank Country Director for Nepal Susan Goldmark signed the agreement here today.
Financing for Enhanced Vocational Education and Training project will comprise $20.25 million in grant and $29.75 million in credit, whereas financing for Urban Governance and Development Programme: Emerging Towns Project will comprise $13.75 million in IDA credit and $11.25 million in IDA grant. The credit carries a 0.75 per cent service charge, a 10 year grace period and a maturity of 40 years.
"An inclusive and accessible Technical Education and Vocational Training system can contribute to making Nepali workers more competitive in a globalised market,” said Goldmark. The Enhanced Vocational Education and Training project will help improve access to Technical Education and Vocational Training programmes for disadvantaged youth.
While Nepal has a vibrant workforce, nearly half of the workers have never attended school. The project will help approximately 75,000 Nepali youth get access to short-term skills training, technical education, and opportunities for certifying their existing skills, paying special attention to lagging regions, poor youth, women, and youth belonging to Dalit, Janajati and other marginalised communities, as well as differently abled persons.
Similarly, Urban Governance and Development Programme: Emerging Towns Project will channel municipal grants and provide capital financing for the construction and rehabilitation of socio-economic infrastructure in six participating municipalities – Mechinagar, Dhankuta, Itahari, Lekhnath, Baglung and Tansen.
"Financing will assist municipalities in developing infrastructure that will lead to improved services and greater socio-economic benefits for residents and businesses,” she said, adding that the assistance package signed today will be a blend of credit and grant from the International Development Association (IDA), the World Bank’s concessionary lending arm.
Additional municipalities may be added at a later stage with the expansion of the project. The project will also support institutional development activities in the six municipalities as well as three key central agencies – Ministry of Local Development, Town Development Fund and Department of Urban Development and Building Construction.
The municipal grants will help the participating municipalities achieve immediate service delivery improvements and support community development initiatives while capital financing will address infrastructure backlogs in these municipalities. It will also help develop a rational and transparent system of fiscal transfers to municipalities, as well as for capital financing of urban infrastructure, embedded within the overall intergovernmental fiscal framework.