Development partners pledge over $4 billion aid for Nepal's reconstruction

Development partners – including both multilateral and bilateral – today pledged $4.4 billion in aid that is more than half the Post Disaster Need Assessment (PDNA) estimation for the reconstruction of Nepal.
According to preliminary estimation of PDNA, Nepal needs Rs 669 billion ($6.7 billion) – over the next five years – for the reconstruction of the damaged infrastructures due to the devastating earthquake on April 25, and subsequent aftershocks.
Of the pledge by Nepal's trusted development partners – during the International Conference on Nepal’s Reconstruction 2015 (ICNR 2015) here in the capital today – half of the aid is grant while the remaining half is loan.
In the conference, India announced the largest aid, Rs 100 billion ($1 billion), for post-earthquake reconstruction. "India has extended one fourth of the total amount as grant assistance," said Indian minister for Foreign Affairs Sushma Swaraj.
Following the southern neighbour, the northern neighbour, China also announced Rs 76 billion ($760 million) in the conference organised to raise fund for the rebuilding the country ravaged by the devastating earthquake of April 25. Chinese foreign minister Wang Yi, on the occasion, announced 4.7 billion RMB ($760 million) including both grant and loan. China has also offered a concessional loan from Silk Road Fund from China to Nepal’s reconstruction bid. "China will offer training opportunities for 1,500 Nepalis over the next year," Yi announced, quoting Chinese president Xi Jinping’s message, "The friendship between China and Nepal is as close as teeth and lips."
Likewise, Japan announced Rs 26 billion ($260 million) during the conference. Japan has also proposed to organise second donors' conference – in Japan – to support Build Back Better Nepal. "Japan will provide as much cooperation as possible in rebuilding Nepal including World Heritage sites," Japanese state foreign minister for Foreign Affairs Minoru Kiuchi said, on the occasion.
Addressing the conference, the US ambassador to Nepal Peter W Bodde announced the US aid of $130 million for Nepal’s bid to recover from the deadly earthquake and susbsequent aftershocks. Bodde also relayed US secretary of state John Kerry's message at the conference, pledging longstanding partnership and commitment for Nepal.
The 7.8-magnitude devastating earthquake that struck on April 25 and subsequent aftershocks and landslides killed over 8,600 people and damaged over 8,000 homes and buildings partially and completely, food stocks, livestock and farmland were destroyed impacting the people's liveleihood.
On the occasion, European Union Development Commissioner Neven Mimica pledged euro 100 million grant and technical assistance worth euro 5 million to Nepal reconstruction efforts. "EU is currently preparing a budget support operation worth euro 100 million and this is our pledge today," he said, adding that the assistance will hopefully create fiscal space helping the government to face the budgetary consequences of the disaster both in unforeseen expenditure and foregone revenue. "In parallel, EU will make available up to euro 5 million or technical assistance."
Likewise, Norway announced $30 million (Norwegian Kroner 100 million), the UK pledged $110 million, Canada announced $60 million, Switzerland $25 million, Australia $16 million and South Korea pledged $10 million for Nepal's reconstruction.
On the occasion, Pakistan pledged $1 million and Austria $1.2 million in financial assistance, Sri Lanka pledged $1.5million, Finland $2 million and Turkey announced $2 million for rebuilding Nepal. However, Brazil, Bangladesh, Kuwait and Saudi Arabia have also assured to support Nepal’s recovery bid but have not announced the amount.
Similarly, the multilateral development partners also announced support for Build Back Better Nepal. Asian Development Bank (ADB) pledged $600 million, whereas World Bank (WB) – earlier on Tuesday – has said that it would provide up to $500 million to finance the reconstruction of Nepal.
Meanwhile, UN secretary general Ban Ki-Moon and World Bank president Jim Yong Kim had sent video messages to the conference. In their video messages, Ki-Moon and Kim pledged their substantial support to Nepal reconstruction drive. Annette Dixon, WB vice president for South Asia, had presented introductory remarks on Kim’s message.
The International Conference on Nepal’s Reconstruction 2015 also saw some 300 delegates from 60 nations, development partners, and neighbours including Indian and Chinese foreign ministers.
Finance minister Dr Ram Sharan Mahat, speaking with media in the evening, termed the conference – organised to seek support from the development partners to rebuild the country devastated by the deadly earthquake of April 25 and its aftershocks – a grand success.
"The participation and announcement of support by the development partners were more than expected," Mahat said, adding that the challenge ahead lies in implementation of reconstruction plan effectively.
Likewise, chief secretary Leelamani Poudyal – after the end of business session – also hailed the conference as a success.
In the session chaired by finance minister Mahat National Planning Commission (NPC) vice chair Dr Govind Raj Pokharel presented the PDNA report.
Finance secretary Suman Sharma, on the occasion, apprised the participants of mobilisation of resources, post-quake scenario and implementation process.
Concluding the inaugural session, UN under secretary general Gyan Chandra Acharya said the the conference would become a strong foundation to build better Nepal's future.

Five years down the line KKH Tunnel Road still a pipe dream

Nepal Government permitted Purbadhar Bikas Company Ltd (PBCL) to construct Kathmandu-Kulekhani-Hetauda (KKH) tunnel road in 2012. The private infrastructure company planned to complete the road in four years. But the road project has not been able to move forward.
Ministry of Physical Planning and Transport had permitted PBCL to start the mega project – the first project under the Build-Own-Operate-and Transfer (BOOT) Act in Nepal – that was supposed to be operational by the end of 2016.
The project that could have become the successful PPP was and still is commercially viable as it would save travel time and cost. Currently, the distance between Kathmandu – the Nepalese capital – and Hetauda through the existing Tribhuwan Highway is 133-km and through Prithvi Highway, it is 227-km with around a six-hour driving time. But the KKH tunnel road is expected to shorten the travel time to only one hour and distance to 58-km.
The KKH tunnel road could also bring socio-economic transformation as it would not only connect people to the market but also bring changes in their lifestyle. Likewise, the express way would also save around Rs 15 billion annually on fuel and spare parts.
The Asian Highway standard 58-km tunnel road with three tunnels is planned with a four-lane expressway that would not only save time and fuel but also create new economic hubs at the sides of roads, besides helping shift population pressure from the Kathmandu valley.
The PBCL was planning to mobilise funds from four parties — private sector, locals, government, Non Resident Nepalis (NRNs) and financial institution — with each party having 25 percent stake. It has also prepared Detailed Project Report and got good support from the government as the concessioner. The government has awarded the company the project licence for 30 year with five year extendable option. It also has the option to change the toll rate on the request of licence holder. The government has also agreed not to charge any royalty from the project during the construction period. It has promised to help acquire private land, guaranteed not to nationalise the land, buildings, investments and infrastructure of the project.
Initially, the project was estimated to cost Rs 20 billion but the delay in decision by both the parties has increased the cost to Rs 34.5 billion from the earlier estimation.
The tunnel road that has a payback period of eight to 12 years, as users will have to pay toll fee, would be transferred to the government in 30 years. The project with a commercial viability, reasonable return, and guaranteed traffic failed to kick start due to government's emotional decision to award to only one company that was pushing the project. The government did not bother to call for competitive bidding and awarded the contract to the one that was lobbying for it.

Earthquake assessment shows need for major recovery efforts

An assessment of the impact of a recent earthquake and major aftershocks shows that Nepal’s recovery needs amount to the equivalent of a third of its economy, according to a development partner. The damage to the economy will require sustained financial support and effective recovery programmes to create a more resilient Nepal and to target support at those most in need," the World Bank said, reacting to the government’s announcement of the key results of its Post-Disaster Needs Assessment (PDNA). The also Bank said a donor conference on June 25 must provide Nepal with sustained support to repair the economic damage and to prevent more people from falling into poverty.
The PDNA prices the damage at $5.15 billion, losses at $1.9 billion and recovery needs at $ 6.6 billion, roughly a third of the economy. Early estimates suggest that an additional three per cent of the population has been pushed into poverty as a direct result of the earthquakes.  This translates into as many as a million more poor people.
“The economy of Nepal took a huge hit from these earthquakes and there is a danger that many of the country’s impressive gains in overcoming poverty could be reversed unless this challenge is addressed in a decisive way,” said vice president for the South Asia Region at the World Bank, Annette Dixon. "The country needs resources to pay for the recovery that can be channeled through credible programmes to make itself more resilient to the next natural disaster and ensure that those most in need receive the help they deserve."
The conference slated on June 25 is organised by the government of Nepal to coordinate efforts among its partner governments and organisations involved in the reconstruction effort. The PDNA, led by the government and supported jointly by the Asian Development Bank (ADB), European Union (EU), Government of Japan, United Nations (UN) and the World Bank (WB), will inform the discussion by highlighting the extent of the damage to the economy - and suggesting how to help the country recover.
Given the short time within which the PDNA was completed, it provides rough estimates of the damages, losses and needs in each of the 23 sectors and themes it covers. This is sufficient to show the approximate overall damages, losses and needs, as well as the relative impact between sectors. The most heavily-impacted sector by far is housing, which accounts for about three-fifths of damages and half of needs. As the government and its development partners transition from relief to reconstruction, more detailed assessments will be completed at the sectoral levels, the multilateral donor said.
“The results of the Post-Disaster Needs Assessment show that reconstruction will be costly and time-consuming,” said World Bank country director for Nepal Johannes Zutt. “To raise the money needed, there must first be clear plans on how it will be spent," he said,
adding, "To this end, the World Bank is working with the government to develop credible recovery programmes that will be implemented with transparency and accountability for the benefit of those, who lost the most from the earthquake disaster."
The World Bank plans soon to announce a comprehensive package of support for Nepal. Subject to Board approval, the package will consist of budget and financial sector support and finance for housing reconstruction in poor rural areas. The bank is also planning to redirect money from existing projects and to set up a Multi-Donor Trust Fund (MDTF). The fund will help Nepal’s partners coordinate their financing in the reconstruction effort.
“As we prepare to extend the support to the areas of Nepal damaged by the earthquake, we will ensure that the development needs in other parts of the country continue to be met,” said World Bank country manager for Nepal Takuya Kamata. “We also need to remember that for many people in Nepal the disaster is far from over," he said, adding that humanitarian relief efforts remain critical and must continue with reconstruction.

PDNA estimates Rs 666 billion for reconstruction

The preliminary report of Post Disaster Needs Assessment (PDNA) has estimated around Rs 666 billion to reconstruct the partially and completely damaged properties by the devastating earthquake of April 25 and repeated aftershocks.
Submitting the PDNA report to the Prime Minister Sushil Koirala, here today evening, National Planning Commission (NPC) vice chair Dr Govind Raj Pokharel said that the earthquake has hit public and private houses the most. "Tourism, education, agriculture, and health sectors suffer huge losses following the private and public buildings."
Led by the planning commission, experts from multilateral and bilateral development partners including World Bank (WB), Asian Development Bank (ADB), Japan and India were involved in preparation of the preliminary PDNA report that took three weeks to prepare.
The report that has assessed some 23 sectors' damage, loss and cost to reconstruct damaged infrastructure wil be helpful in planning reconstruction, during the international donors' conference that is going to be held on June 25 in Kathmandu, apart from estimating the reconstruction cost in the budget for the next fiscal year 2015-16.
Finance Minister Dr Ram Sharan Mahat is currently in India to invite Indian Prime Minister Narendra Modi. Likewise, the highlevel participation from northern neighbour China, Japan, the US, the UK and all the development partners is expected.
The development partners have so far committed $500 million , according to Foreign Aid Coordination and Cooperation Division under the Finance Ministry. However, the government is going to hold another international donors' conference in September in Japan as proposed by Japan government to following the June 25 conference in Kathmandu.

Earthquake pulls economic growth down by 1.54 percentage points to 3.04 per cent

The devastating earthquake of 7.8-magnitude on April 25 and repeated aftershocks hit the economy hard as it pulled the economic growth – for the current fisal year – down by 1.54 per centage points to 3.04 per cent from pre-earthquake projection. Before April 25, the Central Bureau of Statics (CBS) has projected the economic growth of 4.58 per cent for the current fiscal year 2014-15.
The government had targeted to achieve six per cent economic growth in the budget for thee current fiscal year 2014-15. But the government – during the mid-term budgetary review – itself revised the economic growth target downwards to five per cent due to poor rain that is expected to bring the agriculture output down.
The CBS has projected the economic growth for the current fiscal year at 4.58 per cent due to expected low agriculture output on lower rain.
However, the April 25 devastating earthquake has slowed down the economic activities – including consumption and production both – pulling the economy further down to 3.04 per cent, said deputy director general of the CBS Suman Raj Aryal.
The sharp drop is also due to slowdown in almost all the 15 sectors on which the GDP is calculated.
 “The growth of just three per cent is disappointing but it is not unexpected,” said National Planning Commission (NPC) member Dr Swarnim Wagle. "The decline of GDP by 1.5 percentage point in the economic activities of less than three months suggests a huge impact on economy," he said, adding that the biggest impact – after April 25 – will be seen in construction, real-estate, hotel and restaurants, agriculture, mining, manufacturing, financial sector, and education sectors. " Wholesale and retail, fishery, transportation and electricity sectors will also see a downward curve."
The banks and financial institutions have Rs 116 billion exposure in residential houses, Wagle said, adding that the banks and financial institutions will feel the heat in the next fiscal year too.
But health and social services sector is expected to grow despite the devastating earthquake due to increased activities in the hospitals and clinics, he said, adding, "The GDP is such a thing where we have to count even sick people as it amounts to growth of health sector. "The growth projection for public administration and defence has been kept unchanged as the government staffers are not expected to get reduced salaries and facilities."

IFC disburses $3.8 million to Probiotech to accelerate post-earthquake recovery, boost farmer incomes

IFC – a member of the World Bank Group – and Private Sector Window of the Global Agriculture and Food Security Programme have disbursed $3.8 million to Probiotech Industries, a commitment announced last year, reaffirming IFC’s and Nepali private sector’s commitment to support the country as it rebuilds itself after the devastating earthquake.
This is IFC’s first investment in Nepal’s agribusiness sector. Probiotech is one of the early organised poultry feed manufacturers that set up the first pellet feed mill in the country.  The company will use the funding to finance manufacturing capacity for high-margin value-added products such as soya flour nuggets, and refined oil, and streamline the food supply chain.
“In the backdrop of the earthquake that devastated the Himalayan country weeks ago, this financing package reaffirms that investors are not shying away from Nepal,” said managing director of Probiotech Anand Bagaria. "Through IFC’s investment and advice, we seek to rebuild this important sector and adopt best practices for production efficiency, environmental and social standards, and to upgrade technology," he added.
The financing will also enable Probiotech to expand its procurement and distribution networks. Currently, the company distributes its products through 100 registered dealers and 500 sub-dealers across 70 districts of Nepal. As a result the company will increase sourcing from over 8,000 farmers and food suppliers, improving food safety standards, and boosting their incomes.
"The project will increase the supply of quality soy-based protein, especially for the low-income people of Nepal where malnutrition is prevalent, and promote food security," said head of Industry, Manufacturing, Agribusiness and Services, IFC Asia Pacific Patrick Leahy.
"IFC remains committed to supporting Nepal as it rebuilds its agribusiness sector that employs 70 per cent of the workforce,” said IFC’s director for Asia-Pacific Vivek Pathak. "This investment will help create jobs, both at the plant and farm level, and have a direct positive impact on farmers’ incomes."
As of March 2015, IFC has a committed portfolio of $3.3 billion across the agricultural value chain globally. IFC‘s agribusiness strategy aims to promote inclusive growth and environmental and social sustainability in agricultural supply chains. A past advisory project of IFC helped small poultry farmers in Nepal make their businesses more productive through better farm management practices that reduce costs, and improve poultry quality.
Likewise, the Global Agriculture and Food Security Programme is a worldwide effort that pools donor resources to fund programs focused on increasing agricultural productivity as a way to reduce poverty and increase food and nutrition security. The programme targets countries with the highest rates of poverty and hunger. The public sector window helps governments with national agriculture and food security plans. The private sector window, managed by IFC, provides long- and short-term loans, credit guarantees, and equity to private sector companies to improve productivity, deepen farmers' links to markets, and increase capacity and technical skills.
Likewise, IFC – a member of the World Bank Group – is the largest global development institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity. In the fiscal year 2014, IFC provided more than $22 billion in financing to improve lives in developing countries and tackle the most urgent challenges of development.

Adventure TravelNews asks tourist to visit Nepal

Despite damage to historical and cultural monuments due to devastating earthquakes on April 25 and May 12, Nepal is still able to welcome tourists with open arms, according to Adventure TravelNews.
Roads and air transport links remain intact across the country; the majority of hotels and restaurants are already back in operation; and apart from the regions of Manaslu and Langtang, most trekking areas have escaped widespread damage, it wrote in its site today.
Tourism is one of the mainstays of Nepali economy, and Nepal will certainly need the income that tourism brings as it attempts to recover from this disaster.
Asking the tourists to travel to Nepal, Adventure TravelNews suggested to visit Nepal in October and November, the peak season for tourism, and the best time of year to visit Nepal. "Trekking in Langtang region has, sadly, been highly impacted, so it will probably not be until the end of the September that tourism resumes here in earnest," it said, adding that the people of these areas have lost everything as a result of the earthquake; the best way to support them is by helping to restore their former way of life. "Most of the people of the area depend highly on the income generated from tourists visiting the region; it is only really this income that will help the people recover from the tragedy."
The majestic Himalayan mountains and lush countryside still await the more intrepid visitor, while the people of the region busily rebuild so they can welcome visitors with the friendliness and generosity that the Nepalis are famous for. Travelling to these areas will help the local economy enormously, and will function as a primary source of ongoing sustainable aid, the Adventure TravelNews wrote further. "And one needs have no fear for one's own safety – Nepali architecture from now on will tend more towards stronger and safer structures."
It also assured that other than the highly affected areas of Manaslu and Langtang, trekking in most other regions can be undertaken at any time; Manaslu will start by end of September and probably Langtang too. "Pokhara is very safe, and still captivates with its magnificent mountain views and serene lakes," it read, adding that Chitwan and Bardia also escaped widespread damage, and are thus ready to showcase their abundance of natural life. "The birthplace of the Buddha, Lumbini, did not incur much damage and is thankfully all set to welcome visitors back to its sacred soil."
Inviting tourists to visit magnificent and bustling country of Nepal, and support as she attempts to stand proudly on her feet once again, the Adventure TravelNews suggested to walk the beautiful trails in the shadow of the most magnificent mountains on earth and help Nepalis reset their course on the path to prosperity.
The Adventure TravelNews has also asked the visitors to show the rest of the world that Nepal is once again a safe place to visit and explore; that there is nothing to fear and everything to be gained by witnessing first-hand the indomitable spirit of its people as they set about constructing a new identity, a new architecture, a new legacy on top of the still living and breathing vestiges of the old identity, the old architecture, and the old legacy.
Nepal is now embarking upon the most fascinating period in all of its ancient history, and one could be right there to see it happen.
The devastating earthquake of 7.8-magnitude hit the country on April 25. The earthquake was followed by a number of severe aftershocks that were felt as far away as India, Bangladesh, and Tibet. As a result, more than 8,600 people died and thousands more injured, not to mention the wholesale destruction of buildings throughout the whole of the country. The earthquake also leveled some of the nation’s historic monuments including centuries-old palaces and temples listed as UNESCO World Heritage Sites.
Likewise, the earthquake triggered an avalanche on Mt Everest in the famous trekking regions of Manaslu and Langtang sending the mountaineers back home for the season.
However, the devastating earthquake and subsequent aftershocks has shaken Nepal but it has been unable to shake the courage, strength, and spirit of the people as they are ready to welcome the tourists as always.
The Kathmandu Valley is alive and kicking and striving to get back on its feet.
Relief is slowly reaching the earthquake-affected villages, with local government and various NGO’s and INGO’s joining forces in an effort to bring life back to normal. Heritage sites like Swayambhu, the Kathmandu, Lalitpur and Bhaktapur Durbar Squares, and many other ancient settlements and monuments will not be fully reconstructed for some time, but the locals together with local authorities have at least initiated plans for their renovation. In time, all of these magnificent structures will be repaired and brought back to life, it added.