World Bank to provide about $400 million over two years period

The World Bank has brought an interim strategy — based on three pillars — to support Nepal’s determination to cement the peace through development and poverty reduction for the next two years.
Welcoming the impressive progress the country has made in social development indicators, notwithstanding the challenging political environment, the World Bank’s Board of Directors that discussed today on strategy paper proposed the new strategy focusing on development programmes in line with the government's Three Year Interim Plan.
"Many of the Millennium Development Goals' (MDGs) indicators have improved and poverty levels are declining,” observes the Interim Strategy Note (ISN). "Inclusion and representation received increased policy attention but capacity building of marginalised communities remains challenging."
Given the transitional nature of the country, with a new constitution being drafted and elections to follow, the World Bank Group has prepared an Interim Strategy Note for fiscal years 2012-2013. "The interim strategy sets out some basic parameters of the World Bank Group programme but still retains the flexibility to deal with the birth of a new republic,” it noted.
In Nepal, the World Bank Group includes the International Development Association (IDA), the concessionary lending arm and the International Finance Corporation (IFC), the private sector arm.
Two more World Bank Group organisations, the Multilateral Investment Guarantee Agency (MIGA) and the World Bank Institute (WBI) also provide investment insurance and capacity building services respectively.
"IDA’s assistance programme will help improve food security, reduce malnutrition, especially among pregnant women, improve the immunisation coverage of children and enhance the access to and the quality of education," World Bank country director for Nepal and Bangladesh Ellen Goldstein, said, adding that it will also assist in removing key bottlenecks to higher economic growth and more jobs through investments in roads and bridges, and the energy sector.
"IFC programme, which is complementary and closely coordinated, aims at creating a positive impact on private sector growth and poverty reduction through investments in infrastructure, projects that promote inclusive and clean growth, and advisory interventions that enhance trade and support building a better business environment for private sector," said IFC Director for South Asia Thomas Davenport.
The strategy reflects considerable continuity, building on programmes with successful track records that are adapted to local conditions. It also emphasises greater selectivity, focusing on areas considered vital to Nepal’s development and complementing programmes supported by other development partners.
Supporting government's overarching goal to build a peaceful, prosperous and just Nepal, the strategy is organised around three ‘pillars’ that emerged during consultations within the Bank Group and with the Government, donor partners and key stakeholders.
The first pillar intends to enhance connectivity and productivity for growth. The second focuses on reducing vulnerabilities and improving resilience. The third pillar concentrates on promoting access to better quality services.
Governance, accountability, gender equality and social inclusion are themes that run across all three pillars. Within each of these pillars, the strategy identifies specific areas where it can make a difference.
The IDA includes roads, food security and livelihood vulnerability, education, health, urban services, and disaster management. IFC includes improving access to finance and investment climate, trade facilitation, lending to Small and Medium Enterprises (SMEs) and trade finance facilities for local banks.
IDA and IFC expect to work together on power development, agriculture and climate change. Over the next two years Nepal can potentially benefit from an allocation of about $400 million from the IDA, subject to performance and economic management. These funds could finance four to five new operations per year.
The IFC can potentially commit $25-30 million on average annually, depending on the availability of viable investments and improvements in the business climate.