Nepal, ADB sign loan and grant agreements amounting to Rs 105.59 billion

The government and the Asian Development Bank (ADB) today signed loan and grant agreements amounting to $777.6 million (equivalent to Rs 105.59 billion), at the Finance Ministry, for the implementation of three projects and a programme.

The Financing agreement for the implementation of Kathmandu Valley Water Supply Improvement Project (phase 2), South Asia Subregional Economic Cooperation (SASEC) Electricity Transmission and Distribution Strengthening Project and Green, Resilient and Inclusive Development (GRID) Programme were signed, according to a press note issued by the Finance Ministry.

Finance secretary Dr Ram Prasad Ghimire and Country Director of the Nepal Resident Mission ADB, Arnaud Cauchois signed the agreement on the behalf of the government and ADB, respectively.

The project—Kathmandu Valley Water Supply Improvement Project (phase 2) aims to secure safe and reliable water supply services for people in the Kathmandu Valley, the press note reads, adding that tt includes the relocation and construction of the Melamchi intake, construction of long tunnel and the expansion of the Sundarijal Water Treatment Plant.

The project cost of Kathmandu Valley Water Supply Improvement Project (Phase 2) will be $240 million (equivalent to Rs 32.59 billion). The ADB will support $15 million (equivalent to Rs 2.03 billion) grant and $170 million (equivalent to Rs 23,08 billion) concessional loan, Japan Fund for Prosperous and Resilient Asia and Pacific (JFPR) will support $3 million (equivalent to Rs 407.46 million) grant and the government contributes $52 million (equivalent to Rs 7.06 billion) for it, it adds.

Similarly, the project—SASEC Electricity Transmission and Distribution Strengthening Project focuses on meeting Nepal's growing energy demands while supporting green electricity exports. It will be $537 million (equivalent to Rs 72.93 billion). ADB will support $30 million (equivalent to Rs 4.07 billion) grant and $311 million (equivalent to Rs 42.24 billion) concessional loan, EU will support $22.6 million (equivalent to Rs 3.06 billion) grant, Norway will support $31 million (equivalent to Rs 4.21 billion) grant, Strategic Climate Fund will support $10 million (equivalent to Rs 1.35 billion) and the government contributes $132.4 million (equivalent to Rs 17.98 billion) for the execution of this project.

The construction of 290 kilometers of transmission lines, five new substations, and the upgrading of two existing ones are key components of this project, the press note adds.

Likewise, the GRID programme aims to assist in implementing the Green, Resilient and Inclusive Development approach by addressing policy, regulatory and institutional barriers to unlock sustainable investment opportunities across various sectors. The programme's objective is to ensure that development activities are environmentally sustainable, resilient and inclusive.

The ADB will support $100 million (equivalent to Rs 13.58 billion) for GRID Programme as a budget support.

The Irrigation Modernization Enhancement Project (IMEP) focuses on modernising surface water irrigation systems of Nepal and piloting hill lift irrigation. It will directly benefit families of project area enhancing agricultural productivity and climate resilience.

After signing the agreement, finance secretary Ghimire expressed his heartfelt appreciation to ADB for its consistent support and partnership. He emphasised that these initiatives would not only improve irrigation system, water security and agriculture but also strengthen climate resilience in Nepal's most affected communities and contribute to achieving sustainable development goals.

Country Director of ABD Arnaud Cauchois, on the occasion, emphasised the key features of these projects, including their financing structures and significance for Nepal's economy.

He reiterated ADB's strong commitment to supporting Nepal's development priorities, particularly in climate adaptation, agricultural productivity and water resources management and support to achieve SDGs.

World Bank approves $100 million to support policy framework for GRID and Growth

The World Bank’s Board of Executive Directors today approved a $100 million development policy operation (DPO) to help Nepal strengthen its ongoing efforts to implement green, resilient, and inclusive development (GRID). This is the second in a programmatic series of three DPOs which aims to improve the enabling environment for Nepal's sustainability pathway, according to the World Bank.

“This programmatic DPO series is a catalyst for Nepal to build greater resilience and sustainability, and drive and protect the basis for long-term growth for all Nepalis,” World Bank Regional Country Director for Maldives, Nepal, and Sri Lanka David Sislen said, adding that this operation supports Nepal’s policy programme in a variety of sectors including green fiscal instruments, water security, irrigation, land use and management, sustainable forest management, and climate and disaster information systems.

Since 2021, the government has laid out an ambitious programme of action in the area of environmental sustainability, resilience, and inclusive development. This approach recognises the need for a development model to address the intertwined challenges of joblessness, pandemics, expanding economic opportunities for vulnerable groups, and climate and other environmental risks that impact Nepal’s people, prosperity, and environment.

The World Bank DPO series anchors Nepal’s ongoing shift to a more sustainable development path. Nepal’s policies supported by the DPO series arose from stakeholder dialogues and Nepal’s own development priority programmes and plans. These policies aim to improve air quality, expand hydro-meteorological services to better disaster risk reduction, improve water security by boosting year-round irrigation and safe water supply, strengthen community forest management, and enhance land use planning.

“Nepal continues to put in place a strong policy programme that recognises that resilience is best achieved when sustainability and inclusion are also pursued in an integrated way,” World Bank Programme Leader for Maldives, Nepal, and Sri Lanka and Task Team Leader for the operation Stephen Danyo, said adding that it is at the heart of Nepal’s approach to sustainability, resilience, and inclusion.

Nepal’s policy programme is set to help the country attract and expand investment in several sectors important for jobs, livelihoods, health, and resilience for millions of citizens.  As one part of the solution to the challenges mentioned above, the DPO series supports Nepal to generate durable development impacts.

World Bank approves $80 million to strengthen financial sector, increase access to financial services

May 6

The World Bank’s Board of Executive Directors today approved an $80 million development policy credit for Nepal to strengthen the stability of the financial sector, diversify financial solutions, and increase access to financial services.

The third Finance for Growth Development Policy Credit aims to improve the functioning of the financial sector to support private sector-led growth. The operation will strengthen the supervision of the banking and insurance sectors in Nepal and foster financial product innovations in capital, insurance, and disaster risk markets, claims a press note issued by the World Bank.

The operation will also increase financial inclusion through digitalisation, enhanced credit infrastructure and improved financial literacy, with a focus on women entrepreneurs, it adds.

“This project supports Nepal’s green, resilient, and inclusive development and will help create an enabling environment for private investment to contribute to Nepal’s economic growth, particularly benefiting the poor and vulnerable,” said World Bank country director for Maldives, Nepal, and Sri Lanka Faris Hadad-Zervos.

The operation also supports Nepal's climate agenda by, for example, enhancing supervision of climate risks by requiring disclosures of climate-related risks and impacts of the banking sector portfolio; introducing risk-informed pricing for insurance products, including climate risks; establishing a framework for the issuance of green bonds; and integrating climate-related mitigation and adaptation commitments into credit guarantee products.

"This operation supports the government’s transformative financial sector reform agenda to promote private sector-led growth," World Bank task team leader for the project Tatsiana Kliatskova said, adding that the reforms in banking, insurance, and capital markets are instrumental for the sector’s resilience and the critical role it plays to enable private capital mobilisation.

World Bank supports fiscal and growth reforms and better provincial and local roads in Nepal

The World Bank’s Board of Executive Directors today approved $200 million in new financing for two projects in Nepal to support the country’s transition toward Green, Resilient, and Inclusive Development (GRID) and help improve the development and maintenance of Nepal’s provincial and local road network.

“The World Bank is committed to supporting Nepal’s green, resilient, and inclusive development. Through the new projects financed by the World Bank’s International Development Association (IDA), we continue to focus our assistance on improving people’s lives including through infrastructure and services,” said World Bank country director for Maldives, Nepal and Sri Lanka Faris Hadad-Zervos.

The $100 million Second Fiscal Policy for Growth, Recovery and Resilience Development Policy Credit aims to strengthen revenue collection, reduce fragmentation of debt management, and increase debt transparency. It also supports reforms to enhance climate-resilient infrastructure spending, lower Nepal’s minimum foreign direct investment (FDI) threshold to promote FDI inflows and facilitate automation to streamline the process of FDI.

“This operation will help strengthen the regulatory and institutional framework to support sustainable business growth, and enhance systems to protect the most vulnerable in Nepal” stated World Bank’s Task Team Leader for the programme Sibel Kulaksiz.

The $100 million credit for the Provincial and Local Roads Improvement Programme will support the implementation of a comprehensive program for the development and maintenance of Nepal’s provincial and local road network. It will help improve the efficiency of service delivery, strengthen the resilience of selected provincial roads and bridges, and ensure communities have safe access to markets and services.

This first of a three-phased series of programmes will be implemented in Madhesh, Karnali, and Sudurpaschim provinces and local levels with the potential to scale up in the future.

“The project will strengthen the institutional, management, and implementation capacity of the subnational governments over the long term to improve inclusive connectivity and promote efficiency through reduced travel time and costs,” said Senior Transport Specialist and Task Team Leader Reenu Aneja.

Government, stakeholders discuss actions and investment priorities for GRID

The World Bank and Finance Ministry convened a high-level roundtable meeting today on investment priorities and enabling policies to operationalise Nepal’s vision for Green, Resilient, and Inclusive Development (GRID).

Government officials and development partners including Asian Development Bank (ADB), France, Australia, UK, Republic of Korea, European Union (EU), Germany, Japan, Finland, International Monetary Fund (IMF), Norway, Switzerland, the United States of America (USA), United Nations (UN, World Bank Group, International Center for Integrated Mountain Development (ICIMOD), and Association of International NGOs; as well as representatives from civil society, the private sector, youth groups, and think tanks participated in the event and took stock of efforts to implement GRID since the government and development partners endorsed the Kathmandu Declaration on GRID in September 2021.

“Nepal formally adopted the integrated approach to green, resilient, and inclusive development, or GRID, as its national development vision,” said chief secretary Shanker Das Bairagi, on the occasion. "This approach can be an engine of sustainable growth, good jobs and livelihood opportunities, and resilience in the face of multiple risks.”

The Roundtable also reviewed priority actions in the government’s emerging draft GRID strategic action plan including managing land, water, and forests in a more productive, sustainable, and integrated way; equipping people with new skills and resilient livelihoods; greening urban development; scaling up water supply and sanitation, managing pollution and waste; scaling up renewable energy; boosting the sustainability and resilience of the transportation system; strengthening disaster risk management and financing; and enhancing social protection to be responsive to shocks, according to a press note issued by the World Bank.

“Green, resilient, and inclusive development is about lifting incomes, improving opportunities for all, and achieving growth in harmony with nature,” World Bank vice president for the South Asia Region Martin Raiser said, adding that the World Bank and development partners are fully committed to supporting Nepal's GRID priorities and we are excited to see the impactful outcomes of GRID unfold.

Nepal’s draft GRID strategic action plan defines an economy-wide shift to a GRID development path, and specifies a set of high-priority investments with ready financing and a set of priority policy commitments. The priorities in the strategic action plan derive from Nepal’s key development, climate, environmental, and sector strategies. Financing sources include public expenditure from the government, overseas development assistance, innovative financing such as carbon finance, and private sector investment.

The event also served to consolidate the GRID partnership led by the government, which has grown to 20 development partners. In addition, the event was a milestone for the government to begin consultations with provincial and local governments and other stakeholders on the emerging strategic action plan. "It is anticipated the strategic action plan will be further refined and finalized this year," the press note reads.

हरित, उत्थानशील र समावेशी विकासका कार्य र लगानी प्राथमिकतामाथि छलफल

विश्व बैंक र अर्थ मन्त्रालयले नेपालको हरित, उत्थानशील र समावेशी विकास (ग्रिड) सम्बन्धी दृष्टिकोणको प्रभावकारी कार्यान्वयनका लागि आवश्यक पर्ने लगानी प्राथमिकता र अनुकूल नीतिहरूबारे छलफल गर्न आज काठमाडौंमा एक उच्चस्तरीय गोलमेच बैठक आयोजना गर्यो । 

कार्यक्रममा सरकार र विकास साझेदारहरूका साथै नागरिक समाज, निजी क्षेत्र, युवा समूह र प्रबुद्ध वर्गका प्रतिनिधिहरूको सहभागिता रहेको थियो । सो अवसरमा सहभागी प्रतिनिधिहरूले नेपाल सरकार र विकास साझेदारहरूबाट असोज २०७८ मा ग्रिड सम्बन्धी “काठमाडौं घोषणापत्र” संयुक्त रूपमा अनुमोदन गरिएयता भएका कार्यान्वयन प्रयासहरूको लेखाजोखा गरेका थिए ।

विकास साझेदारहरूमा हाल एसियाली विकास बैंक, फ्रान्स, अष्ट्रेलिया, संयुक्त अधिराज्य, गणतन्त्र कोरिया, युरोपेली संघ, जर्मनी, जापान, फिनल्याण्ड, अन्तर्राष्ट्रिय मुद्रा कोष, नर्वे, स्विट्जरल्याण्ड, संयुक्त राज्य अमेरिका, संयुक्त राष्ट्रसंघ, विश्व बैंक समूह, अन्तर्राष्ट्रिय एकीकृत पर्वतीय विकास केन्द्र (इसिमोड), अन्तर्राष्ट्रिय गैरसरकारी संस्था संघ लगायत बैठकमा उपस्थित थिए।

नेपालले  राष्ट्रिय विकासको दूरदृष्टिका रूपमा हरित, उत्थानशील र समावेशी विकास (ग्रिड) सम्बन्धी अवधारणालाई औपचारिक रूपमै अंगीकार गरेको मुख्य सचिव शंकर दास बैरागीले बताए । “विभिन्न जोखिमहरूका बीच यो अवधारणा समृद्धि, दिगो आर्थिक वृद्धि, राम्रा रोजगारी र जीविकोपार्जनका अवसर एवं उत्थानशीलताको एउटा साधन बन्न सक्छ,” उनले भने । 

उक्त गोलमेच बैठकले सरकारको मस्यौदा ग्रिड रणनीतिक कार्ययोजनामा उल्लेखित प्राथमिकता प्राप्त कार्यहरूको समेत समीक्षा गर्यो । ती प्राथमिकताप्राप्त कार्यहरूमा जमिन, जल र वनलाई थप उत्पादनशील, दिगो र एकीकृत रूपमा व्यवस्थापन गर्ने, मानिसहरूलाई नयाँ सीप र उत्थानशील जीविकोपार्जनबाट सुसज्जित बनाउनेस सहरी विकासलाई हरित बनाउने, खानेपानी तथा सरसफाइको पहुँच र प्रदूषण तथा फोहोरमैला व्यवस्थापन अभिवृद्धि गर्ने, नवीकरणीय ऊर्जा विस्तार गर्ने, यातायात प्रणालीको दिगोपना र उत्थानशीलता बढाउने, विपद् जोखिम व्यवस्थापन र वित्तीय लगानी सुदृढ गर्ने र विपदबाट आइपर्ने आघातहरूप्रति अनुकूलन हुन सामाजिक सुरक्षालाई सबल बनाउने  रहेका छन् ।

हरित, उत्थानशील र समावेशी विकासले आयस्रोत बढाउने, सबैका लागि अवसरहरू सुधार गर्ने, र प्रकृतिसँगको सामन्जस्यतामा वृद्धि हासिल गर्ने कार्य गर्छ भन्दै दक्षिण एसिया क्षेत्रका लागि विश्व बैंकका उपाध्यक्ष मार्टिन रेजरले भने, “ग्रिड सम्बन्धी प्राथमिकताहरूलाई साकार पार्न विश्व बैंक लगायत अन्य विकास साझेदारहरू पूर्णरूपमा प्रतिवद्ध छौं र हामी नेपालमा यसको प्रभावकारी नतिजाहरू हेर्न उत्सुक छौं ।”

विश्व बैंकका अनुसार नेपालको मस्यौदा ग्रिड रणनीतिक कार्ययोजनाले ग्रिड विकासको मार्गतर्फ जान अर्थतन्त्रव्यापी परिवर्तनको व्यवस्था गर्नुका साथै तयारी अवस्थामा रहेका बित्तिय प्रावधान सहितको उच्च प्राथमिकताका लगानी र प्राथमिकता प्राप्त नीतिगत प्रतिवद्धताहरू निर्दिष्ट गरेको छ । रणनीतिक कार्ययोजनाका प्राथमिकताहरू नेपालका प्रमुख विकास, जलवायु, वातावरणीय र क्षेत्रगत रणनीतिहरूबाट साभार गरिएका छन् । यसका वित्तिय स्रोतहरूमा नेपाल सरकारको सार्वजनिक खर्च, वैदेशिक विकास सहायता, कार्बन वित्त जस्ता नवीनतम स्रोत र निजी क्षेत्र लगानी रहेका छन् ।

उक्त बैठकले नेपाल सरकारको नेतृत्वमा रहेको ग्रिड साझेदारीलाई थप मजबूत बनाएको छ । यसका २० वटा विकास साझेदार छन् । साथै, उक्त बैठक आसन्न रणनीतिक कार्ययोजनाका सम्बन्धमा प्रदेश तथा स्थानीय सरकार र अन्य सरोकारवालाहरूसँग परामर्श सुरू गर्न सरकारका लागि एउटा कोशेढुंगा बनेको पनि विश्व बैंकको बुझाइ छ । सो रणनीतिक कार्ययोजनालाई थप परिष्कृत गरी यसै वर्ष अन्तिम रूप दिने अपेक्षा पनि विश्व बैंकले गरेको छ ।

Government and World Bank sign $120 million concessional loan financing agreement and $19.7 million grant agreement to strengthen school sector

The government and the World Bank today signed a financing agreement for $120 million concessional loan from the International Development Association (IDA) and a grant agreement for $19.7 million from the Global Partnership for Education for the School Sector Transformation Programme (SSTP) Operation, which support the implementation of the government’s flagship School Education Sector Plan.

The agreement was signed by finance secretary Arjun Prasad Pokharel and the World Bank country director for Maldives, Nepal, and Sri Lanka Faris Hadad-Zervos at the Finance Ministry.

The operation focuses on improving foundational skills by implementing the national integrated curriculum in early grades, a press note issued by the World Bank reads. "The operation supports the government’s programme through the development and implementation of the Recovery and Accelerated Learning Plan to address learning losses as a result of school closures due to Covid-19 and other disasters, strengthening teaching and learning in the classrooms, construction of green and resilient classrooms, ensuring minimum enabling conditions such as qualified teacher, child-friendly taps and seating, and toilets in the early childhood education development centers, and strengthening digital teaching and learning materials, among others," it reads, adding that the operation also envisions improving the equity of the school sector by supporting girls, disabled students, and those of lower socio-economic status, through targeted scholarships programmes.

“I am hopeful that the reform agenda envisioned in the School Sector Transformation Programme will be instrumental in increasing equitable access and improving the quality of education, which are critical for human capital development,” said finance secretary Pokharel after signing the agreement.

“The School Sector Transformation Programme operation supports the government of Nepal’s Green, Resilient, and Inclusive Development (GRID) agenda by investing in quality and equitable access to education, which is key to developing human capital and fostering inclusive and resilient growth,” said World Bank country director for Maldives, Nepal, and Sri Lanka Faris Hadad-Zervos, after signing the pact.

World Bank to support forest-dependent indigenous peoples and local communities

The World Bank (WB) is providing grant support of $4.5 million to strengthen the capacity of Indigenous Peoples and Local Communities (IPLCs) in Nepal’s forest sector. 

The World Bank and Rural Reconstruction Nepal (RRN) today signed a $4.5 million grant agreement to strengthen the capacity of Indigenous Peoples and Local Communities (IPLCs) in Nepal’s forest sector. The five-year Dedicated Grant Mechanism for Indigenous Peoples and Local Communities in Nepal project will help enhance the capacity of IPLCs to participate in Nepal’s Reducing Emissions from Deforestation and Forest Degradation (REDD+) processes at the local, national, and global levels for the sustainable management of forests, according to the World Bank. “This will help create livelihood opportunities and increase the income of forest-dependent communities in the Madhesh and Lumbini Provinces.”

Rural Reconstruction Nepal is the national executing agency for the project.

World Bank Operations Manager for Maldives, Nepal, and Sri Lanka Lada Strelkova and president of Rural Reconstruction Nepal Dr Arjun Karki signed the agreement. “This project supports Nepal’s Indigenous Peoples and Local Communities through a dedicated funding mechanism that will promote and protect their customary institutions that are crucial for the sustainable management of natural resources and climate resilience,” said World Bank Operations Manager for Maldives, Nepal, and Sri Lanka Lada Strelkova, after signing the agreement. “The project contributes significantly to Nepal’s transition to Green, Resilient, and Inclusive Development (GRID) for sustainable recovery, growth, and jobs.”

The DGM Nepal project aims to provide long-term benefits to IPLCs from the sustainable use of forests, including adding value to products and more active involvement in Nepal’s policy-making process.

“The project provides much-needed support to forest-dependent indigenous peoples and local communities to enhance their resilience and build livelihoods through small-scale forest and non-forest-based business and employment opportunities,” said president of Rural Reconstruction Nepal Dr Arjun Kumar Karki, on the occasion.

IPLCs are both beneficiaries and active proponents and participants in the project. During implementation, they will preside over the use of the grant resources in Nepal through a National Steering Committee (NSC) to provide strategic and leadership guidance to the RRN as executing agency. The NSC is a 14-member team of representative NGOs identified through a self-selection process with an equal representation of IPLC representatives as decision-making members.

“This project is an excellent example of the innovation and leadership of Indigenous Peoples and Local Communities in Nepal,” said Natural Resources Management Specialist at the World Bank Meerim Shakirova, on the occasion. “Notably, it demonstrates that they can lead the design and implementation of development projects, meeting the expectations of the communities they represent as well as the requirements of the World Bank, donors, and partners.”

The DGM Nepal project is funded by the Climate Investment Funds (CIF) Forest Investment Programme (FIP) implemented by the World Bank to enhance the role of IPLCs in protecting the forests they depend on.

“Indigenous Peoples and Local Communities in Nepal are a critical pillar for climate action,” co-chair of the National Steering Committee Bharati Pathak said, adding that they believe the project will improve their capacity and skills to have a greater role in forest-related decisions at the country and international levels.

“If forest-dependent indigenous peoples and local communities from Madhesh and Lumbini Provinces can generate income from forest-related activities and foster innovation through this project’s capacity building and competitive grants mechanism, it will encourage IPLCs to ensure that their traditional knowledge, norms, and values are recognized alongside with the customary law,” said co-chair of the National Steering Committee  Jagat Baram added.

Nepal-Australia sign Water resource management cooperation agreement

Nepal and Australia today signed a five-year memorandum of understanding (MoU) on Cooperation in Water Resource Management.

The MoU has been signed during the second bilateral consultation mechanism (BCM) between the Australia Government Department of Foreign Affairs and Trade (DFAT) and the Government of Nepal Ministry of Foreign Affairs (MoFA) held today in Canberra of Australia.

DFAT secretary Jan Adams AO PSM, and the secretary of the Water and Energy Commission Secretariat Dinesh Kumar Ghimire signed the five-year memorandum on behalf of their respective countries.

Under the MoU, Australia will provide training, technical assistance and share internationally recognised expertise on water governance. It will complement’s Australia’s existing partnership with the International Center for Integrated Mountain Development (ICIMOD) to strengthen transboundary river basin management, localise climate action and promote green livelihoods, aligned to Government of Nepal’s transition to Green, Resilient and inclusive Development (GRID) for sustainable recovery, growth and jobs.   

The BCM was co-chaired by DFAT’s deputy secretary of Geostrategic Group Justin Hayhurst and secretary at the Ministry of Foreign Affairs Bharat Raj Paudyal.

DFAT’s deputy secretary Hayhurst was pleased to open the second meeting of the Bilateral Consultation Mechanism and thanked secretary Paudyal and the Nepal delegation for travelling to Australia. During his opening remarks deputy secretary Hayhurst welcomed Australia and Nepal’s strong people-to-people links with over 120,000 Nepali calling Australia home. He also congratulated Nepal on its recent democratic local elections and reiterated the two countries’ strong commitment to democracy, domestically and internationally. “Australia supports a free, open and resilient Indo-Pacific and the international rules-based order,” he said, welcoming  Nepal’s strategic outlook. 

Both sides, on the occasion, also noted mutual climate change and energy challenges and the importance of achieving net-zero emissions. In addition to talks on Nepal’s development priorities and future cooperation agenda, Australia undertook to share its expertise in forest fire management, and search as rescue initiatives through a new package of development support. 

The Bilateral Consultation Mechanism was established in 2017 between the Australia Government Department of Foreign Affairs and Trade, and the Government of Nepal Ministry of Foreign Affairs.

The two sides also reviewed the bilateral relations between Nepal and Australia and exchanged views on further strengthening the bilateral relations and cooperation in different fields including education, energy, investment, trade, tourism, technology transfer, migration, cooperation in climate action, and disaster risk reduction, among others. Both sides agreed to prioritise the exchange of high-level visits, promote people to people contacts, and facilitate trade, investment and transfer of technology. They also discussed cooperation in multilateral forums, including the exchange of experiences in UN Peace keeping operations.

While appreciating Australian cooperation to Nepal, foreign secretary Paudyal requested the Australian side to place Nepal as a priority country for Australian aid, support for post-Covid economic recovery, graduation from the LDC status, and realize the Agenda 2030 for Sustainable Development (SDG), and consider issuing visa services from the Australian Embassy in Kathmandu.

Bilateral Consultation Mechanism between Ministry of Foreign Affairs of Nepal and Ministry of Foreign Affairs and Trade of Australia was established on 14 July, 2017 and its first meeting was held in Kathmandu on 16 August 2018.

Nepal and World Bank sign $100 million financing agreement

 The government and the World Bank today signed a concessional financing agreement for $100 million (equivalent to Rs. 12.7 billion) for Green, Resilient, and Inclusive Development (GRID). The proposed budgetary support aims to support improvements in the enabling environment in Nepal toward a green, climate-resilient, and inclusive development. It is the first in a programmatic series of three concessional loan on GRID, according to a press note issued by the multilateral development partner.

The agreement was signed by joint secretary at the International Economic Cooperation Coordination Division under Ministry of Finance Ishwori Prasad Aryal and World Bank Operations Manager for Maldives, Nepal, and Sri Lanka Lada Strelkova.

“In the wake of the Covid-19 pandemic, the government, World Bank and development partners signed the critical Kathmandu Declaration pivoting our programmes in Nepal to support the country’s goals of a greener, more inclusive, and more resilient development,” World Bank acting country director for Maldives, Nepal, and Sri Lanka Lada Strelkova said, adding that the operation is a key part of this commitment. “Through this operation, we are supporting the Government’s key policy actions across sectors including water, land use, climate-smart agriculture, sustainable forest management, urban, waste, and pollution.”

This first operation supports policy actions for strategic GRID transitions such as the sustainable and productive use of natural capital; resilience of urban and rural infrastructure, human capital, and livelihoods to climate and environmental risks; and more efficient and cleaner production, consumption, and mobility. It also supports policy actions of the government for strategic GRID transitions that help build and maintain prosperity for all.

The operation encourages private sector investment in greening Nepal’s economy and creating jobs and livelihoods related to areas such as community forestry, agriculture, clean air, and solid waste management. It also supports reforms for strengthening inclusion in development decision-making and access to assets and services, according to the World Bank.

“Nepal’s shift to the GRID approach is a strategic move during a challenging time that is full of opportunities for the country,” joint secretary Ishwori Prasad Aryal said, adding that the shift will help Nepal continue to make progress in expanding and protecting prosperity while reducing poverty in the face of compounding challenges that affect Nepal’s development prospects, including the economic recovery from Covid and the on-going disaster, climate and environmental risks.

ADB vice president reaffirms partnership with Nepal

Asian Development Bank (ADB) vice president Shixin Chen met with Prime Minister Sher Bahadur Deuba today and reiterated ADB’s commitment to further strengthen its partnership with Nepal.

In his meeting with the Prime Minister Deuba, Chen reaffirmed ADB’s commitment to continue to support Nepal, focusing on the government’s reforms and investments in infrastructure and human development while promoting gender equality and social inclusion and addressing climate change impacts. “ADB will also continue to assist with the implementation of federalism for more effective and efficient delivery of services, including those devolved to subnational governments,” he added.

“ADB’s operations in Nepal are aligned with the government’s Green, Resilient, and Inclusive Development (GRID) Strategy, and we stand ready to support the government’s commitment of achieving net-zero climate emission target by 2045,” he said, acknowledging the government’s leadership in managing the coronavirus disease (Covid-19) pandemic. He commended the government on the completion of Nepal’s second international airport, the Gautam Buddha International Airport in Bhairahawa in western Nepal, which is expected to enhance air connectivity and boost tourism.

In his meeting with finance minister Janardan Sharma, Chen noted the government’s efforts in accelerating the implementation of development programmes and reforms as well as project readiness to ensure that planned commitments are implemented on time. He further noted that it is imperative for Nepal to enhance the competitiveness of its economy, including greater facilitation of foreign investment and innovative solutions.

Chen also met with private sector representatives and said that ADB is seeking opportunities to expand its private sector operations in the country and provide assistance to small, medium, and women-led enterprises; climate-smart agriculture; and digitalisation.

He visited ADB-supported Bagmati River Improvement Project, Kathmandu Valley Wastewater Management Project, Melamchi Water Supply Project, and Rural Enterprise Financing Project. He also visited an energy sector project in Kavre and interacted with women entrepreneurs of Electricity Users’ Cooperatives.

During his 7-day visit to the country from April 13 to 19, Chen will meet with minister of Urban Development Ram Kumari Jhakri; minister of Energy, Water Resources, and Irrigation Pampha Bhusal; minister of Education, Science, and Technology Devendra Poudel; and the secretaries of these ministries, according to the ADB. “He also met with Nepal Rastra Bank acting governor Neelam Dhungana, and is set to meet other senior government officials, and development partners.”

ADB’s cumulative assistance to Nepal since 1969 stands at $7.3 billion as of December 31, 2021. ADB’s operations in Nepal is growing and as of the end of 2021, ADB’s active portfolio in the country stands at around $3.4 billion with 30 investment projects.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

Economy to grow by 3.9 per cent: World Bank

The World Bank (WB) has projected that the Nepali economy will grow by 3.9 per cent in the current fiscal year, an improved average from 2020-21, as theh country is lifting containment measures due to vaccination picks up and tourism and migrant worker flow recover.

A week ago, the Asian Development Bank (ADB) revised its projection for Nepal to 4.1 per cent from earlier 5.1 per cent, though the government, through its replacement budget has targetted to achieve some 7 per cent economic growth.

Unveiling its latest South Asia economic focus, 'Shifting Gears: Digitisation and Services-Led Development,' today, the multilateral development partner attributed an improved economic growth largely to an expansion of the services sector.

In Nepal, the pandemic has accelerated the growth of digital services, with the use of electronic payment transactions increasing by double digits, the report reads, adding that the growth in the service sector as a whole is expected to drive Nepal’s recovery, despite structural constraints like slow domestic job creation, the country’s high vulnerability to natural disasters and climate change, and large infrastructure gaps.

The World Bank country director for the Maldives, Nepal, and Sri Lanka Faris Hadad-Zervos said that the pandemic provides an opportunity for a number of South Asian countries to craft a recovery path that draws lessons from the crisis. He also praised Nepal for stepping up for green development.

"Nepal has recently adopted the Kathmandu Declaration as a joint commitment of the government and development partners towards the country’s Green, Resilient and Inclusive Development (GRID)," he said, adding, "mobilising the private sector through green investment and support for small and medium enterprises with job growth potential in the services sector is a key part of Nepal’s GRID strategy."

According to the World Bank, in South Asia, recovery continues as global demand rebounded and targeted containment measures helped minimise the economic impacts of the recent waves of Covid-19. But the recovery remains fragile and uneven, and most countries are far from pre-pandemic trend levels. "In Nepal, recovery is vulnerable to risks, and will rely on the continued gradual resumption of economic activities alongside social distancing and an effective vaccination rollout this year," it adds.

World Bank vice president emphasises support to green, resilient, and inclusive development

World Bank vice president for South Asia Hartwig Schafer concluded his five-day visit to Nepal, reiterating the multilateral development partner's commitment to support Nepal’s resilient recovery from the pandemic.

In separate meetings with the Prime Minister Sher Bahadur Deuba and the finance minister Janardan Sharma, Schafer commended the government’s effective Covid-19 response, including the swift rollout of vaccines and strong focus on economic recovery, according to a press note issued by the World Bank. The meetings also stressed the importance of accelerating reform implementation and investment, and enhanced collaboration to support Nepal’s sustainable development, it adds.

"Nepal is an example in resilience, emerging stronger from shocks such as the 2015 earthquake and working with a clear vision to build back better from the impacts of Covid-19,” Hartwig Schafer said, adding that the World Bank is proud to be Nepal’s partner in development and is committed to work together with the government, development partners, private sector, civil society, and other key stakeholders for a recovery that is green, resilient, and inclusive.

The World Bank joined Nepal and development partners for the endorsement of the Kathmandu Declaration at a high-level roundtable on Green, Resilient, and Inclusive Development (GRID) on September 23. The declaration underscored Nepal’s commitment to the GRID vision and aligning partners’ support around potential priority investments, market incentives and policies, institutional actions, and information needed to support Nepal’s GRID transition.

"I applaud Nepal for embarking on a new development paradigm—the green, resilient and inclusive development framework or 'GRID'," Schafer added. "The GRID approach is meant to deliver short-, medium-, and long-term benefits to people, the planet, and Nepal’s economy. The World Bank is pleased to support the Kathmandu Declaration to strengthen Nepal’s sustainable development."

Likewise, he also met minister of Energy Pampha Bhusal, state minister of Health Umesh Shrestha, government secretaries, development partners and representatives of the private sector, the World Bank press note reads. "Outside Kathmandu, Schafer visited the proposed Upper Arun Hydro Electric Project site and participated in an event on federalism with federal and local level authorities in Dhulikhel."

The World Bank is supporting feasibility studies and detailed design for the development of the proposed Upper Arun project.

Schafer wrapped up his visit with a special event organised in partnership with the Fédération Internationale de l'Automobile and Nepal Automobile Sports Association to promote awareness of road safety and advocate for UN-standard helmets, which are affordable and certified for motorized two-wheeler riders. The event was organised as part of an ongoing road safety campaign with the Ministry of Physical Infrastructure and Transport.

ADB, government sign Rs 18.25 billion loan to improve electricity grid system

 Asian Development Bank (ADB) and government today signed a loan agreement worth Rs 18.25 billion ($156 million) for upgrading the electricity grid system in Nepal.

Joint secretary of the Finance Ministry Shreekrishna Nepal and officer-in-charge at Nepal Resident Mission of ADB Rudi Louis Hendrikus Van Dael signed an agreement on behalf of their respective institutions at a programme today, according to a press release issued by the Finance Ministry.

The development partner is providing loan to support the Electricity Grid Modernisation Project to be implemented by Nepal Electricity Authority (NEA). “Of the estimated total costs of Rs 22.81 billion, the government and the power utility will jointly invest the remaining Rs 4.56 billion of the project, it reads, adding that the project has targeted to improve electricity transmission and distribution systems and reduce power leakages.

“The objective is to improve the power transmission and distribution system of the Electric Grid Modernisation Project, to make the power supply sustainable and reliable by modernising the power grid and to develop and strengthen the capacity of NEA,” the press note adds.

The total cost of the Electric Grid Modernisation Project is about Rs. 22.81 billion and Rs 18.25 billion will be borne by the ADB and the remaining Rs. 4.56 billion will be invested by the Government and Nepal Electricity Authority.

The Finance Ministry has stated that the energy saved from the power grid modernisation project can be exported to the neighboring countries by minimizing the energy loss due to power leakage and this will also make a positive contribution to the economic activities.

ADB approves loan to upgrade power grids in Nepal

 The Asian Development Bank (ADB) has approved a $156 million concessional loan to modernise power transmission and distribution systems in Nepal.

While majority of Nepali population has access to grid-supplied electricity, there is a need to increase the capacity and reach of power distribution networks to meet current and future demands, improve reliability and quality of supply, and reduce losses, according to a press note issued by the multilateral development partner. “The Electricity Grid Modernisation Project will finance the automation of grid substations throughout the country, modernise distribution and transmission systems in various areas, complete the installation of smart meters in the Kathmandu Valley, and support sector reform and institutional strengthening of the Nepal Electricity Authority (NEA), the press note reads.

“ADB has been actively involved in major policy and institutional reforms in the power sector, and this project is a continuation of our support to provide reliable and efficient electricity supply in the country,” ADB Principal Energy Specialist Jiwan Acharya said, adding that the project will, moreover, position Nepal to be better prepared in its post-pandemic economic rebuilding.

The project will, among others, automate 34 existing grid substations, install 220-kilovolt (kV) and 132-kV automated grid substations, construct a total of 113 kilometers (km) of new transmission lines, upgrade 144 km of existing transmission lines with efficient conductors, and expand the installation of smart meters for 350,000 electricity consumers in the Kathmandu Valley. An electricity distribution system command and control center in Kathmandu will also be constructed, reads the press note.

Awareness-raising activities on the safe and efficient use of electricity for electricity consumers, including women and disadvantaged groups, will be conducted. The project will strengthen the institutional capacity of NEA in implementing its comprehensive corporate development plan, train its staff in managing the automated grid substations, and improve financial sustainability and corporate financial reporting.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members, 49 from the region.