As the country is reeling under scheduled and unscheduled power cuts, development partners have started shifting their focus to energy and infrastructure, apart from private sector development and commercialisation of agriculture.
"Energy is the backbone of economic growth," said World Bank country manager for Nepal Tahseen Sayed, justifying the policy shift in the proposed Country Assistance Strategy for the next four years (2013-2017), during a joint consultation meeting with the Asian Development Bank (ADB) and World Bank Group here today.
World Bank has taken a conscious policy shift, despite the uncertainty, she said, adding that the current International Development Association (IDA) has contributed some 15 per cent to the energy sector, out of the total $1.35 billion IDA commitments for 17 projects. "The share of energy could go up to 30 per cent in the new Country Assistance Strategy."
The proposed Country Assistance Strategy that is also a shift to a more long term engagement from the current interim one will come into effect from July after the current strategy ends in June.
The World Bank Group has prepared the four-year Country Assistance Strategy with a focus on three pillars after discussions with stakeholders who suggested it to focus on infrastructure — roads and power — education and commercialisation of agriculture but it needs to get approval from the board of the World Bank Group before being implemented.
"We have also held a series of consultation meetings with stakeholders across the country before preparing the Country Partnership Strategy (2013-2017) for ADB," said ADB country director for Nepal Kenichi Yokoyama on the occasion.
According to the current ADB portfolio in Nepal, it has invested $1.32 billion in seven sectors that has 33 investment projects. "Of which, energy sector's share stands at 11 per cent," he said, adding that the proposed Country Partnership Strategy has reduced its strategic pillars to three from the current strategy's four pillars, apart from reducing sectors to five from the current seven and 15 sub-sectors from the current 24 to concentrate more on focused areas to get maximum output than the earlier one.
"With key focus on infrastructure and energy, the proposed strategy will streamline more operations programme, and focus on private sector development," he said, adding that the key aim of the strategy will, however, remain accelerated economic growth and poverty reduction.
The International Finance Corporation — the private sector lending arm of the World Bank Group — has also started actively supporting the private sector to strengthen its hand in economic development after reopening its office in 2008.
The World Bank is currently involved in the 40MW Kabeli project, apart from cross-border and domestic transmission lines, and ADB is involved in the 140MW Tanahun hydropower project, apart from transmission lines, according to development partners.
Though the country is passing through political uncertainty, weak accountability, and infrastructure constraints, Nepal has shown good development progress especially in social sectors. The nominal gross domestic product has doubled from $350 in 2006 to $735 in 2011, the percentage of poor people earning less than $1.25 per day has halved in the last seven years from 53 per cent in 2003-04 to 25 per cent in 2010-11, and net primary enrollment has increased from 81 per cent in 2002 to 94.5 per cent in 2010, they claimed, sharing their happiness in being partners in the development process of Nepal.