Friday, March 8, 2019

ADB lending hits record high, disbursement fails to match

The Asian Development Bank's (ADB) annual lending to Nepal hit a record high in 2018, but disbursement has been lagging. ADB’s total lending reached $592 million and technical assistance at $8.01 million – including $5.31 million in cofinancing – in 2018 for projects in transport, urban development and water supply, energy, rural roads, agriculture, and natural resources.
"This is a substantial increase from the $253 million a year on average lending during 2014–2016 that demonstrates ADB’s strong commitment to Nepal’s economic development and improving the lives of its people,” said ADB’s deputy director general for South Asia Diwesh Sharan.
Speaking at a country portfolio review meeting jointly organised by ADB and Finance Ministry Sharan also said ADB’s portfolio performance in Nepal has shown good progress in recent years but contract awards and disbursement could be better. "In 2018, disbursements – as a measure of actual project implementation progress on the ground –totaled $246.7 million, excluding cofinancing, and met 80 per cent of the original target," he added. "Of the net available funding amount of $2.8 billion spread over 36 investment projects, 61 per cent is still to be disbursed."
“Nepal has entered into a federal structure, which can considerably improve service delivery to the people,” Sharan said, adding that there is, but, a gap in capacity both at the central and the sub-national government levels that needs to be addressed for timely and successful project implementation. "This in turn will improve services that people receive on the ground."
Nepal was able to utilise less than half of the loan commitments made by the ADB in 2018 due to the poor capacity of all its three tier of governments, the Nepal Portfolio Performance Review 2018 revealed.
Nepal could use $246.7 million – some 41.6 per cent – of the loan commitments totalling $592 million made by the ADB. Of the disbursed loans, most were utilised in transport and energy-related projects, the review report reads, adding that over the period, contracts worth $131.9 million were awarded to transport-related projects compared to the target of $157 million. Contracts valued at $95.1 million were awarded to energy-related projects, well short of the target of $160 million.
At a special ceremony held during the meeting, finance secretary Rajan Khanal presented awards to ADB-supported projects that showed excellent results. Rural Connectivity Improvement Project, Skills Development Project, and Regional Urban Development Project won outstanding project management teams awards on the occasion.
The Disaster Resilience of Schools Project was awarded in the category of best team for procurement management, whereas the Kathmandu Valley Water Supply Improvement Project-Additional Financing received the best team awards in the categories of environmental and social safeguard monitoring and gender equality and social inclusion.
"These awards recognise the project teams' efforts in achievement of targets and ensuring that the environment, social safeguards, and gender equality and social inclusion aspects were also considered during project implementation,” said ADB country director for Nepal Mukhtor Khamudkhanov. “All these are critical for results on the ground that promote socially inclusive development," he added.
Since 1966, ADB has approved assistance totaling $5.8 billion for Nepal. ADB's portfolio consists of 36 projects amounting to $2.8 billion and 18 technical assistance projects worth $26.4 million. The Asian Development Bank had also pledged to provide $8.01 million in technical assistance and $5.31 million in co-financing. The bank pledged the assistance for transport, urban development and water supply, energy, rural roads, agriculture and natural resources projects.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty, the multilateral development partner said, adding that it made commitments of new loans and grants amounting to $21.6 billion in 2018. Established in 1966, it is owned by 67 members, 48 from the region.

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