US to train construction professionals

The US Government – through the US Agency for International Development (USAID) – today announced three initiatives to support Nepal’s model of owner-driven housing reconstruction following the devastating April 25 earthquake.
Building on previous investments, USAID programmes will train an estimated 13,500 local construction professionals and educate more than 285,000 affected homeowners on building earthquake-resistant homes over the next five years, reads a press note issued by the US Embassy in Kathmandu today.
Baliyo Ghar (Strong House) is a five-year, $8-million project that will train local masons, carpenters, engineers, and affected homeowners. Baliyo Ghar will also support the establishment of a National Reconstruction Technology Center and three training centers at the district and local levels in Dolakha, Dhading, and Nuwakot districts, it said, adding that Baliyo Ghar will be implemented by the National Society for Earthquake Technology (NSET) in cooperation with the Ministry of Urban Development, Ministry of Federal Affairs and Local Development, Council for Technical Education and Vocational Training, and National Planning Commission (NPC).
“This week, as Nepal marks six months since the April 25 earthquake, we are pleased to announce our new and expanded initiatives and pledge that we will continue to help rebuild a safer and stronger Nepal,” shared US ambassador to Nepal Alaina B Teplitz.
"These new projects and expansions of existing programs are valued at more than $20 million," she said, adding that they are part of the $130 million committed by the US government in response to the earthquake and demonstrate US continued commitment to Nepal.
According to the press note, USAID will also expand its ongoing resilience project, Sabal, to invest $2.7 million in training local masons in Sindhupalchok and Kavrepalanchok districts. In addition, USAID has made a $9.6 million contribution to the World Bank Nepal Earthquake Reconstruction Multi-Donor Trust Fund (MTDF). The contribution will directly support the government-led beneficiary survey in the 14 most-affected districts, as well as the provision of housing reconstruction cash grants to affected homeowners.

Shesh Ghale re-elected as NRNA president

Shesh Ghale has been today elected as the president of Non-Resident Nepalese Association (NRNA) with an overwhelming majority for the second term.
He secured 867 votes – out of the total 1,089 votes – while his contender TB Karki garnered just 226 votes.
Likewise, Bhawan Bhatta has been elected as the vice president securing 538 votes. His contender Kumar Pandey secured 513 votes. Dr Badri KC with 555 votes has been elected as the general secretary and Hitmat Thapa with 264 votes as treasurer of the NRNA for next two-year term.
The reelected president of the NRNA Ghale is constructing a five-star hotel in Kathmandu. Prime Minister Sushil Koirala had laid foundation stone of the 17-storey five-star Sheraton Kathmandu Hotel last October. The hotel is being built with an investment of Rs 8 billion. The hotel, which is expected to come into operation in February 2018, is being built by MIT Group Holdings Nepal, a member of the Ghale Group of Companies, which has diverse businesses in Australia and other countries too.
Ghale has also been appointed Nepal's special envoy for reconstruction in the aftermath of the devastating earthquakes of April 25 that floored down thousands of houses, infrastructures and heritage sites, apartfrom loss of lives.

NRNs failed Nepal in the time of crisis

The Non-Resident Nepalis (NRNs) from 71 countries, who have gathered in Kathmandu for 7th Global Conference, have committed to work for reconstruction.
It is praiseworthy. However, while they are preparing for global conference, Nepal is under India’s ‘unofficial blockade’. The lives of Nepalis have been hit hard by the shortage of essential goods, including petroleum products, and even medicine in some parts of the country. In the current situation of humanitarian crisis, the NRNs have failed their motherland, in their own words.
“We discussed Nepal’s current issues in the meeting of International Coordination Council (ICC),” said Non-Resident Nepalis Association (NRNA) vice president Bhawan Bhatta.
The NRNs, who have resources and network across the globe, apart from their formal institution in 71 countries, have failed to prove that they really care for their motherland. They have been repeatedly claiming that the country can use their expertise and network for the benefit of Nepal, if the government award them citizenship. The new constitution of the country – that has become the key reason for the current unofficial blockade by India – has given NRNs the right to get special citizenship. The NRNs have welcomed the provision, but failed to help the country at this critical juncture.
However, Bhatta said that the NRNs raised the issue of current crisis in the ICC meeting. “Majority of the NRNs feel that they have to internationalise the current crisis,” he said, adding that they had also planned a symbolic programme in all the 71 countries at the same time and on the same date. “But the ICC meeting did not endorse the agenda.”
However, Japan National Coordination Council (NCC) – in Bhatta's leadership – organised a symbolic programme in Tokyo.
After Nepal promulgated new constitution with 90 per cent majority on September 20, India has stopped movement of cargo trucks at its border points, blaming the protests Tarai-Madhesh districts. Nepal is not only landlocked, but also India-locked as the country is surrounded by India in the east, west and south. The behaviour of New Delhi with a small country like Nepal has not only affected lives of Nepalis but also left bordering Indian markets deserted.
Nepal Oil Corporation (NOC) – the state-owned oil monopoly – has been rationing petroleum products to manage the situation. Because of the Indian blockade and shortage of petroleum products, the country is going to lose more than what it lost from the devastating earthquake in April and May. Schools and industries have been shut down, and long queues have been formed at handful of pumps distributing fuel. The blockade has dealt severe blow on the already shattered Nepali economy.
Though NRNA has been involved in various activities under its charity programme, including the plan to rebuild 1,000 houses for earthquake victims within two years, it has to come up to help the country in situation like this.
The NRNA General Assembly and Global Conference that is being held in Kathmandu from October 14 to 17 is going to see around 1,500 delegates from various countries. The conference is also going to elect a new executive committee for a two-year term. But the conference will also have to come up with clear and concrete plans, apart from reconstruction and rebuilding, to help their motherland at this critical time. Because its their turn to help Nepal.

ADB approves Japan-funded grant to rebuild schools, livelihoods

The Asian Development Bank (ADB) today approved a new $15 million grant to rebuild schools, provide microloans to help restore livelihoods, and to boost awareness of disasters in the 14 districts most severely affected by the recent earthquakes in Nepal.
 The grant is provided by the Japan Fund for Poverty Reduction (JFPR), a fund set up by the Japanese government in 2000 to support poverty reduction and social development in ADB projects. ADB will manage the grant.
“Destroyed homes, farmland, and business and lost livestock and harvests will push at least 700,000 additional Nepalis below the poverty line, many of them in the hard-hit rural central hill and mountain areas where poverty was already high,” said financial sector specialist with ADB’s South Asia Department Mayumi Ozaki. “We must help families get back on their feet as soon as possible so they can rebuild their lives.”
On top of the $15 million grant, the Nepal government will provide an additional $1.3 million and the Small Farmers Development Bank, a Nepali umbrella microfinance bank, will provide $1.5 million.
Around $8.1 million of the overall funding will be used to rebuild at least 14 model disaster-resilient schools, $7.0 will be mobilised to provide microcredit to at least 12,500 households in the affected districts, and a further $1.9 million will finance training to help people better understand how to prepare and cope with disasters. The remaining funds will be used for contingencies.
The 7.8 magnitude earthquake of April 25, followed by a major aftershock on May 12, affected the livelihoods of an estimated 2.3 million households and 5.6 million workers across 31 districts. This resulted in personal income losses of around $170 million in the fiscal year to July 15.
Most of these poor households have no access to the formal banking system, with many relying on microfinance institutions which cannot meet demand for credit from affected households due to their own limited funding. Schooling was also disrupted by the tremors which destroyed over 26,000 classrooms in public and private schools and damaged a further 26,000. Damage and losses in the education sector are estimated at around $310 million. Lengthy periods away from school are linked to poor education attainment and lower job prospects.
The $15 million grant adds to a $3 million disaster-response grant approved by ADB on 27 May and a $200 million emergency loan approved on June 24. ADB may also reassign funds from existing projects in Nepal to help the country recover.
ADB – based in Manila – is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members - 48 from the region. In 2014, ADB assistance totaled $22.9 billion, including cofinancing of $9.2 billion.

NOC calls bids from international fuel suppliers

After India refused to send the petroleum products to Nepal – since the last two weeks – Nepal Oil Corporation (NOC) has called global tender to supply fuel to Nepal.
A board meeting of NOC today evening decided to issue a public notice tomorrow calling for global bids from fuel suppliers for 15 days, a source at the state oil monopoly said requesting anonymity.
It is the first time in history that NOC has called global bids from international fuel companies for petroleum supply.
Despite four decades of commercial association and agreement with the Indian Oil Corporation (IOC) – the sole petroleum supplier to the NOC – the latter has failed to supply fuel to Nepal citing security reasons – due to protests in the Tarai-Madhesh – since the past two weeks. While responding to the NOC official's request, the IOC officials said that they have been told not to supply petroleum products to Nepal, though India claims to have not been imposed blockade on Nepal.
IOC has slashed the fuel supply to Nepal by over 90 per cent compared to normal times though NOC has not violated the contract with IOC. NOC and IOC had renewed agreement in 2012. It is valid till 2017. According to the commercial agreement between NOC and IOC, the latter will supply as much as petroleum products NOC needs.
Following the unofficial India-imposed economic blockade, the IOC has refused to supply fuel – including cooking gas – to Nepali tankers and bullets reached in the Indian depots.
Likewise, the Indian customs officials have also been preventing loaded fuel tankers from entering Nepal.
Reeling under acute shortage of petroleum products – after IOC's failure in maintaining smooth supply – NOC has been left with no option other than to call global bids. After the IOC's reluctance to supply fuel that has not only paralysed normal life but has also crippled the economy, the NOC has no option to call global tender, the official said, adding that the NOC is expected to select the fuel supplier to Nepal through a competitive bidding process."
An unofficial blockade by India restricting the flow of oil tankers and trucks into the country has also caused disruptions in transportation and made schools to shut down. Hospitals are also running low on medicine. There could soon be humanitarian crisis, if India does not lift its embargo.
The cabinet had this week directed, the Ministry of Commerce and Supplies, to explore the alternative, in case the IOC does not cooperate. The cabinet had asked the ministry to ease the supply of petroleum products – including aviation fuel, petrol, diesel, kerosene and LPG (cooking gas) for 15 days – as a temporary measure. However, it is high time, Nepal should think of long-term option as the political arm twisting of India through IOC has made the Nepalis suffer a lot. NOC took long time to come to conclusion and look for alternative also due to non-cooperation of the ministry that has never thought of easing supply during the crisis in the past too.
The state-owned oil monopoly has asked the interested bidders to submit their Expression of Interest (EoI) within three days. "NOC wants 200 kilolitre of diesel, 100 kilolitre of petrol, 200 kilolitre of ATF, 200 kilolitre of kerosene and 100 metric tonnes of LPG immediately for 15 days either through land or air route," the bid read.
Earlier this week, NOC had even sent a letter to IOC requesting immediate resumption of regular supply. But the IOC did not heed NOC's request forcing the latter to call for gloal tender to maintain fuel supply.

Some 286 branchless banking points to open in underserved regions

Seven banks are opening 173 branchless banking points in 14 districts affected by the devastating earthquake of April 25.
Seven commercial banks and Sakchyam Access to Finance Program signed an agreement today to open 173 Branchless Banking (BLB) outlets in 14 districts affected most severely by the earthquake. "As part of the partnership, Citizens Bank, Global IME Bank, Nepal Investment Bank, NMB Bank, Rastriya Banijya Bank, Sanima Bank and Siddhartha Bank have already setup 55 branchless banking points with the remaining to be established by the end of November," a statement read.
The launch of these crucial financial services comes at a point when the financial sector is under pressure to provide quick access to financial services in far-flung areas of the 14 districts.
The central bank is moving aggressively to expand branchless banking outlets throughout the country in line with its monetary policy, Nepal Rastra Bank governor Dr Chiranjibi Nepal said, addressing the signing ceremony. "The central bank is committed to working with banks and the government to provide a sustainable basis for expanding its goals of financial inclusion and expediting government to people (G2P) payments in an efficient manner," he added.
"The establishment of delivery points and making them sustainable holds key in achieving financial inclusion," joint secretary at the Finance Ministry Suresh Acharya. "The government intends to establish the right incentives for banks working with the central bank to rollout G2P and other cash transfer programmes, through networks such as the ones created by banks with Sakchyam support," he added.
Likewise, director general at the Department of Civil Registration Basanta Raj Gautam said that the government was finalising pricing structure for its implementation. "We have had presentations from Sakchyam on the basis for pricing and been looking at international as well as our own experiences to date," he said, adding that government would work closely with the banks to develop a sustainable model for delivery of G2P services.
Likewsie, reiterating the Government of UK's commitment to accelerate the deepening of access to financial services in rural Nepal, Economic Development Team Leader at DfID Gareth Weir, said that the active deliberation will enable retail finance and G2P payments through the banking sector.
On the occasion, Sakchyam Team Leader Baljit Vohra briefed about Sakchyam's achievements. "Sakchyam is supporting opening of 286 branchless banking outlets in mid and far-west and in quake-affected districts," he said, adding that the transformational BLB strategy includes the use of Point of Sale (PoS) machines, mobile phones and tablets enabled through agents, extensions counter and physical branches to rollout micro-banking products, G2P payments and value chain financing models that will further deepen financial-service penetration for households and enterprises in the remotest areas of the country.

Nepal's economic growth to drop to 3.4 per cent: World Bank

Nepal is expected to see drop in economic growth to 3.4 per cent from expected 5 per cent in the current fiscal year, though the country has begun to recover after the loss of life and economic devastation from the April 25 and May 12 earthquakes, according to the World Bank.
"From an expected 5 per cent, Gross Domestic Product (GDP) growth is expected to drop to 3.4 percent this year," it said. "But the economic growth will tick up to 3.7 per cent in 2016," the multilateral institution said in its twice-a-year 'South Asia Economic Focus' published today. "Although macroeconomic fundamentals remain strong, weak execution of public investment slows down both infrastructure development and post-disaster reconstruction."
However, the World Bank is hopeful that many South Asian countries show potential for accelerated growth in the short to medium term. The transition in Afghanistan, the earthquakes in Nepal, and revisions to national accounts in Sri Lanka, has resulted in all three countries experiencing slower growth than previously expected, it added. "Led by a resilient India, South Asia is expected to maintain its lead as the fastest-growing region in the world, with economic growth forecasted to accelerate from 7 per cent in 2015 to 7.4 per cent in 2016," the report stated.
But the positive performance hinges on solid growth in services, domestic consumption, and a gradual rise of investments. Limited exposure to the financial turmoil and an improved external position have given most South Asian countries important policy space, it added.
Given India's weight in the region, its performance greatly influences the projections for South Asia as a whole. Improved investor sentiment and resilience to external shocks are expected to increase India's growth rate to 7.5 per cent in fiscal year 2015 and further to 7.8 per cent in the fiscal year 2016.
"While the region is now in a position of strength, structural constraints holding back export and investment growth do persist," World Bank South Asia chief economist Martin Rama said, adding that to keep the momentum and accelerate job creation, governments should enact reforms easing infrastructure bottlenecks and paving the way to greater competitiveness. "Fiscal space remains limited while financial sector vulnerabilities persist."
Thanks to low food and commodity prices, as well as a slowdown in the growth of administered prices, inflationary pressures have eased markedly in South Asia, it added. "Yet the pace of disinflation varies depending on the price index considered. Revisions to national accounts, together with new comparable data on purchasing power around the world, also raise questions regarding the measurement of prices in the region."
According to the report, South Asia could actually have cheaper prices, faster growth and bigger economies than previously thought.
Rapid growth has not yet translated into significantly higher government revenue generation and improved fiscal balances. Budget deficits are expected to remain at 6.5 percent of GDP in 2015, the highest among all developing regions. Tax collection remains well below estimates, and has even deteriorated across major South Asian economies."
"Mobilising revenue is critical for the region to develop its infrastructure and deliver better social services, while creating a financial cushion to address potential shocks in the
future," World Bank South Asia vice president Annette Dixon said, adding that in some cases introducing and rolling out modern tax instruments holds the key to higher revenue, but containing exemptions and special regimes are crucial across most of the region.

IFC appoints White Lotus as fund manager of Business Oxygen

IFC, a member of the World Bank Group, has appointed White Lotus Centre as fund manager for Business Oxygen, its SME ventures fund in Nepal.
White Lotus will make equity investments in Nepal's high-growth small and medium enterprises (SMEs), helping them achieve their potential and create more jobs.
Business Oxygen is Nepal's first private-equity fund. IFC has committed $7 million to this $14 million sector-agnostic fund. The fund combines risk capital financing with advisory support to help investee small and medium enterprises develop fundamental financial systems, quality-assurance standards, and corporate governance frameworks.
Chairman of White Lotus, Siddhant Raj Pandey, after signing the agreement said, "Despite the challenges posed by this year's earthquake, there is significant potential for SMEs in Nepal. White Lotus will develop a robust portfolio of investee firms that will become a strong contributor to Nepal's commercial growth."
SMEs are a vital component of Nepal's economy. They employ 1.75 million people and account for 22 per cent of the country's GDP. There are an estimated 111,442 operational SMEs, out of which 63 per cent were registered over the last decade.
Improved access to finance is essential for growth of these SMEs. Only 39 per cent of firms in the micro, small, and medium enterprise segment have adequate access to finance, compared to 78 per cent of large enterprises. Business Oxygen is designed to address this challenge.
"Business Oxygen's ability to provide risk capital to SMEs in Nepal provides a vital solution for firms too small or too new for traditional commercial bank financing," said IFC's country manager for Bangladesh, Nepal, and Bhutan Wendy Jo Werner. "The fund is unique because it provides equity and also advisory to catalyze the growth of small businesses."
Similarly, Tracy Washington, SME Ventures' programme manager, on the ocaasion, said that White Lotus will play an important role in developing the private equity sector in Nepal. "We look forward to supporting the team as it demonstrates that new funds, even in challenging markets, can achieve promising results," she added.
Business Oxygen is part of IFC's SME Ventures programme, which supports the creation of risk capital funds in fragile, frontier, and post-conflict markets. With four funds covering six countries, SME Ventures is expanding to new markets where the need for risk capital remains high and potential for growth makes private equity an effective market solution.