World Bank Group's new Country Partnership Framework prioritises jobs and resilience

The World Bank’s Board of Executive Directors discussed the new 7-year Country Partnership Framework (CPF) for Nepal on May 29, 2025. The CPF focuses on the fundamentals of job creation and building resilience to natural disasters, including those linked to climate change.

“Creating jobs is not just at the heart of our mission, it is also the lifeline that can drive Nepal’s sustainable and resilient growth,” said World Bank Country Division Director for Maldives, Nepal, and Sri Lanka David Sislen. “The CPF builds on more than 60 years of partnership between the World Bank Group and Nepal and will leverage development partner collaboration and private sector solutions to drive growth, job creation, and investments.”

Under the CPF, the World Bank Group aims to make available about $2.7 billion to achieve the CPF’s outcomes of helping create more and better jobs, strengthening connectivity and access to services, and enhancing resilience to natural disasters and climate risks.

In the immediate term, the World Bank Group will prioritize policy reform for growth, tourism, digital connectivity, and integrated urban development as engines of growth and job creation.

This will include creating a more investment-friendly environment with reforms that enable private sector-driven growth and investment; enhancing digital connectivity and access to digital government services for better productivity, governance, and service delivery; and improving the competitiveness and services of urban centers like the Kathmandu Valley and secondary cities to unlock their potential as tourist and investment destinations.

“We support Nepal in creating more and better jobs, bolstering disaster preparedness, and contributing to a sustainable future by mobilising domestic and international private capital, promoting public-private partnerships, and enhancing institutional capacity,” said regional director for South Asia at IFC Imad N Fakhoury. "The World Bank Group’s Country Partnership Framework will guide our efforts in advancing reforms that will unlock private sector investment and strengthen the business environment to make a meaningful difference in the lives of the people of Nepal."

As a cross-cutting priority, the World Bank Group will help strengthen the accountability and effectiveness of public sector institutions to improve the public sector’s capacity to deliver results for Nepal and its people.

“MIGA is committed to supporting Nepal’s development goals by providing political risk insurance and leveraging other guarantee instruments through the World Bank Group Guarantee Platform,” said director for Economics and Sustainability of MIGA Sebnem Erol Madan. “By mitigating investment risks, MIGA aims to attract private sector investments that are crucial for creating jobs and strengthening economic resilience," Madan said, adding that through the partnership with the World Bank and IFC under the new Country Partnership Framework, they aim to support Nepal to harness its assets and build a more sustainable and prosperous future.

The CPF is informed by a comprehensive analytical and evaluation program, broad-based consultations with stakeholders across all seven provinces, and the government's 16th Plan, which lays out its national development priorities.

Covid-19 to add as many as 150 million extreme poor by 2021

 Global extreme poverty is expected to rise in 2020 for the first time in over 20 years as the disruption of the Covid-19 pandemic compounds the forces of conflict and climate change, which were already slowing poverty reduction progress, the World Bank said today.

The Covid-19 pandemic is estimated to push an additional 88 million to 115 million people into extreme poverty this year, with the total rising to as many as 150 million by 2021, depending on the severity of the economic contraction. Extreme poverty, defined as living on less than $1.90 a day, is likely to affect between 9.1 per cent and 9.4 per cent of the world’s population in 2020, according to the biennial Poverty and Shared Prosperity Report. “This would represent a regression to the rate of 9.2 per cent in 2017.” 

Had the pandemic not convulsed the globe, the poverty rate was expected to drop to 7.9 per cent in 2020, it reads.

“The pandemic and global recession may cause over 1.4 per cent of the world’s population to fall into extreme poverty,” World Bank Group president David Malpass said, adding that countries will need to prepare for a different economy post-Covid, by allowing capital, labour, skills, and innovation to move into new businesses and sectors, in order to reverse this serious setback to development progress and poverty reduction. “World Bank Group support – across IBRD, IDA, IFC and MIGA – will help developing countries resume growth and respond to the health, social, and economic impacts of Covid-19 as they work toward a sustainable and inclusive recovery.”

The report also finds that many of the new poor will be in countries that already have high poverty rates. A number of middle-income countries will see significant numbers of people slip below the extreme poverty line. About 82 per cent of the total will be in middle-income countries, the report estimates.

Unprecedented crisis could push up to 60 million into extreme poverty

Covid-19 (coronavirus) pandemic and shutdown of advanced economies could push as many as 60 million people into extreme poverty, according to the World Bank.
“The pandemic and shutdown of advanced economies could push as many as 60 million people into extreme poverty, erasing much of the recent progress made in poverty alleviation,” said World Bank Group President David Malpass. “The World Bank Group has moved quickly and decisively to establish emergency response operations in 100 countries, with mechanisms that allow other development partners to rapidly expand the programmes,” he said, adding that to return to growth, the multilateral agency’s goal must be rapid, flexible responses to tackle the health emergency, provide cash and other expandable support to protect the poor, maintain the private sector, and strengthen economic resilience and recovery.
In line with its rapid response, the World Bank Group today announced its emergency operations to fight Covid-19 (coronavirus) have reached 100 developing countries, home to 70 per cent of the world’s population. Since March, the Group has rapidly delivered record levels of support in order to help countries protect the poor and vulnerable, reinforce health systems, maintain the private sector, and bolster economic recovery, according to a press note issued by the Bank Group.
This assistance, the largest and fastest crisis response in the Bank Group’s history, marks a milestone in implementing the Bank Group’s pledge to make available $160 billion in grants and financial support over a 15-month period to help developing countries respond to the health, social and economic impacts of Covid-19 and the economic shutdown in advanced countries, the press note reads.
Of the 100 countries, some 39 are in Sub-Saharan Africa. Nearly one-third of the total projects are in fragile and conflict-affected situations, such as Afghanistan, Chad, Haiti, and Niger. The International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) have also fast-tracked support to businesses in developing countries, including trade finance and working capital to maintain private sectors, jobs and livelihoods.
The Bank Group’s support through grants, loans and equity investments will be supplemented by the suspension of bilateral debt service, as endorsed by the Bank’s governors. IDA-eligible countries that request forbearance on their official bilateral debt payments will have more financial resources to respond to the Covid-19 pandemic and fund critical, lifesaving emergency responses.
“The bilateral debt-service suspension being offered will free up crucial resources for IDA countries to fund emergency responses to Covid-19,” Malpass said, adding that nations should move quickly to substantially increase the transparency of all their governments’ financial commitments. “This will increase the confidence in the investment climate and encourage more beneficial debt and investment in the future.”
The Bank Group’s operational response will strengthen health systems, support the poorest households, and create supportive conditions to maintain livelihoods and jobs for those hit hardest. Country operations will deliver help to the poorest families through cash transfers and job support; maintain food security, nutrition and continuity of essential services such as clean water and education; target the most vulnerable groups, including women and forcibly displaced communities, who are most likely to be hit hard; and engage communities to support vulnerable households and foster social cohesion. The scale and speed of the Bank Group’s response is critical in helping countries mitigate the adverse impacts of this crisis and prioritise the human capital investments that can accelerate recovery.
The Bank Group’s operations in 100 countries aim to save lives, protect livelihoods, build resilience, and boost recovery by:
•       Strengthening health systems, monitoring, and prevention, particularly in low-income countries and in fragile and conflict-affected situations. The Bank Group’s health response addresses emergency containment and mitigation needs for Covid-19, including strengthening countries’ health systems to treat severe cases and save lives. Establishing and supporting efforts in fragile and conflict-affected situations is a priority, given the rapidly growing number of cases in some of these countries.
•       Scaling up social protection: The Bank Group is leveraging countries’ existing social protection systems to help families and businesses restore income, preserve livelihoods, and compensate for increasing prices and unexpected medical expenses. These safety nets will need to be augmented with safe, direct food distribution, accompanied by key information on nutrition, social distancing, and hygiene.
•       Supporting businesses and preserving jobs: The International Finance Corporation (IFC) continues to implement its $8 billion fast-track financing facility, which aims to keep companies in business and preserve jobs. Close to 300 clients have requested support, and the facility may be oversubscribed. Building on this effort and market demand, IFC aims to provide $47 billion in financing to developing countries over 15 months. Cumulative Covid-19 related commitments under IFC’s Global Trade Finance Program, which supports small and medium-sized enterprises involved in global supply chains, have totaled 1,200 transactions across 33 countries for $1.4 billion, with 51 per cent of this volume in low-income and fragile countries.
•       Procuring medical equipment and supplies: Many developing countries import most, and in some cases all, of the medical supplies critical for fighting Covid-19, leaving them extremely vulnerable to supply disruptions and export restrictions.

World Bank projects 6.5 per cent economic growth

The World Bank projects continued strong growth with an average annual rate of 6.5 per cent – in the medium term – driven by investments in the tourism sector, particularly the Visit Nepal Year 2020 (VNY2020) programme, including efforts to increase air connectivity.
High tourist arrivals will be supported by the Visit Nepal Year 2020 programme, the completion of the second international airport, the construction of big hotels and the increase in air connectivity through implementation of the newly-revised air service agreements with countries like Australia, Cambodia, China, the UAE and Vietnam, the update noted.
The 6.5 per cent growth forecast by the multilateral development partner – in fiscal year 2019-20 – is sharply lower than the 8.5 per cent economic growth target of the government for the current fiscal year.
Launching Nepal Development Update today, the World Bank claimed that industrial growth is likely to be supported by construction activities, investments in the cement and hydropower sectors, and improved capacity utilisation in the manufacturing sector.
The report also notes that import growth will slow down as the government implements its programme to keep the fiscal deficit in check. “It should help contain the trade deficit,” the report reads adding that inflation is expected to pick up slightly but will remain below 5 per cent assuming stable agricultural production, regular supply of electricity, and low inflation in India. “The focus going forward will need to be on strengthening exports.”
“Increased exports will be critical to sustained growth over the medium-term,” said World Bank senior economist Dr Kene Ezemenari, who led the team that produced the update. “It will be important for government to continue with reforms to attract foreign investment,” she said, adding that future reforms will need to be grounded in strong analysis and data to effectively support Nepal’s growth aspirations.
On the supply side, according to the report, the growth will continue to be driven by private investment and government consumption. “Government consumption will be supported by increased spending on salaries and on goods and services,” the report reads, adding that efforts, in addition, aimed at building capacity at the sub-national levels coupled with the implementation of performance-based contracts is also likely to raise government spending.
The Nepal Development Update – a bi-annual report of the World Bank – highlights the importance of data for development, particularly in the context of the country’s historic transition to federalism. Federalism has created a surge in demand for more and better data. Enhanced data availability is needed to strengthen planning and budgeting at the sub national levels, including the preparation of Medium-Term Expenditure Frameworks (MTEF).
In addition, the transfer of fiscal resources to sub national levels also requires data on several parameters. A robust federal framework therefore rests on more and better data that will support evidence-based policies.
“The need for Nepal is data that is disaggregated, more frequent, reliable and accessible,” finance minister Dr Yuba Raj Khatiwada said. “Nepal’s federal structure has added another dimension for data at the provincial level, which is a challenge but very important for development programmes to leave no one behind,” he said, adding that the Statistics Act, which is to be approved soon, is expected to further empower the Central Bureau of Statistics (CBS) and provide added responsibility to sub national governments on data for national policy making.
In its Special Focus section, the report articulates a vision for a future data ecosystem and the need for short-term reforms to make the most of existing data and long-term reforms that establish an enabling environment that fosters data sharing, integration and use. Measures that can be implemented in the short-term include the publication of data in machine readable format, and the development of a comprehensive data dissemination policy and open government strategy.
“Data is central to the success of federalism,” World Bank Country Manager for Nepal Faris Hadad-Zervos said. “Nepal needs a vision and strategy for a future data ecosystem that is aligned to the new federal structure and promotes engagement of civil society and the private sector,” he said, adding that engaging all data actors – including civil society, the private sector and government agencies at various levels – can play a greater role in data production, sharing and use. “This will help in the design of reforms for better service delivery to citizens and an improved business and investment climate.”
In Nepal, the World Bank Group (WBG) includes the International Development Association (IDA), the concessionary lending arm; the International Finance Corporation (IFC), the private sector arm; and the Multilateral Investment Guarantee Agency (MIGA), the investment risk insurance arm.
The World Bank currently supports 25 active investment projects in Nepal with $2.4 billion dollars in commitments from IDA. The indicative resources available under IDA18 (fiscal year 2018-20) were about $1.39 billion, including $300 million from the IDA Risk Mitigation Regime. IFC aims to commit about $800 million to $1.2 billion over the five-year period (fiscal year 2019 to fiscal year 2023). MIGA is actively seeking opportunities to support foreign private investment into Nepal. IFC and MIGA may make use of the IDA IFC/MIGA Private Sector Window (PSW) and the MIGA Guarantee Facility to underwrite eligible projects.
The World Bank Group (WBG) fielded its first economic mission to Nepal in 1963 to assess the country’s development prospects and challenges. It approved its first credit in 1969 for a telecommunications project. Since then, the World Bank has provided Nepal $4.75 billion in assistance, some $3.48 billion in credits and $1.27 billion in grants.

World Bank discuss federalism, diversified investment and reconstruction

The visiting World Bank officials discussed Nepal’s transition to federalism, the need to invest in the country’s human capital, crowding in the private sector for diversified investment, the pace of reconstruction after the earthquakes in 2015, and the creation of jobs, especially for Nepal’s youth, during their stay in Nepal.
An eleven-member delegation of the World Bank Group Executive Directors (EDs) visited Nepal from October 29 to November 1, marking the 50th year of World Bank Group-Nepal engagement, with the first World Bank credit in Nepal approved by the board on November 4, 1969.
The trip – that was part of a larger visit to the South Asia Region that will also include Bangladesh and Maldives – also gained a comprehensive view of Nepal’s current development status and opportunities, a press note issued by the multilateral development partner reads.
During their visit, the EDs met with representatives from federal and local governments, the private sector, development partners, and civil society, it reads.
“Nepal has made progress in reduction of poverty and its stable government signals a smoother transition to the federal structure,” said spokesperson of the Delegation and Executive Director for Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Spain and Republica Bolivariana de Venezuala, Jorge Chavez Presa. “However, to ensure stronger and more sustained growth, it needs rapid strengthening of institutions and systems,” he said, adding that the World Bank Group is committed to help the Nepal achieve its ambitious goals for the benefit of all Nepalis.
The EDs’ conversations with finance minister Dr Yuba Raj Khatiwada, focused on leveraging World Bank Group-wide support for the federalism agenda, maximizing finance for development, and investing in health and education for the people of Nepal.
During the visit to an earthquake reconstruction site in Patlekhet of Kavrepalanchowk, the EDs learnt about the reconstruction program that supported rebuilding of more than 430,000 houses after the devastating earthquakes. The government’s larger rural housing reconstruction programme aims at providing earthquake-resistant housing for around 700,000 beneficiaries.
The EDs also visited Incessant Rain Animation Studios – a Nepali studio exporting digital products to global cinema and gaming industry – and observed firsthand the retaining of young talent and the disruptive technology in action, the note further reads, adding that the EDs met entrepreneurs and private sector representatives to further understand investment scenarios and discuss ways for diversifying investment. “In their discussions with policymakers and civil society representatives, the EDs continued the conversation about opportunities emerging in different sectors in federal Nepal and ways to expand and enhance their positive impact.”
The World Bank Group has a strong partnership with Nepal, with 50 years of engagement since 1969. The current investment portfolio cuts across all key sectors in 25 projects and has a net commitment of $2.47 billion, as of September 2019.
The World Bank Group Board of Directors are collectively called the Executive Directors (EDs). The Board of Directors includes the president of the World Bank Group and 25 Executive Directors. Member countries of the World Bank Group appoint or elect Executive Directors to the Boards of the International Bank for Reconstruction and Development (IBRD), International Development Association (IDA), International Finance Corporation (IFC) and Directors to the Board of the Multilateral Investment Guarantee Agency (MIGA). While the World Bank Group maintains four Boards for these separate arms, Executive Directors typically serve on all Boards simultaneously.
The visiting delegation of the EDs includes Executive Director and Host for Nepal Kulaya Tantitemit; Executive Director Jorge Chavez Presa; Executive Director Herve de Villeroche; Executive Director Geir Haarde; Executive Director Patrizio Pagano; Executive Director DJ Nordquist; Executive Director Jean-Claude Tchatchouang; Executive Director Aparna Subramani; Executive Director Merza Hasan; Alternate Executive Director Gerard Antioch and Alternate Executive Director Nathalie Francken.

IFC, partners provide more than $450 million for Upper Trishuli-1

International Finance Corporation (IFC) – a member of the World Bank Group – and a consortium of other lenders today finalised a $453 million debt financing package that will support the construction of a landmark hydroelectric plant in central Nepal.
The plant – Upper Trishuli-1 – will increase Nepal's electricity supply by one-third from today’s levels and provide clean, reliable power to some 9 million people, part of a larger effort by IFC to create markets and fight poverty in the country.
IFC is the lead arranger of the debt package, which includes eight other lenders, and is one of the largest foreign direct investments (FDI) in Nepal’s history. The financing is being provided to the privately-owned Nepal Water and Energy Development Company. The firm will develop and operate a 216-megawatt (MW), run-of-the-river hydroelectric plant on the Trishuli River about 70-km north of Kathmandu. Officially known as Upper Trishuli-1, the project’s financing structure, competitive tariffs, and use of internationally accepted contract standards is expected to set a standard for future hydropower projects in Nepal.
“This project is a game-changer for Nepal," said energy minister Barshaman Pun, during the signing ceremony of the financial closure. “Not only will it power hundreds of thousands of homes and businesses, but it will also serve as an example of how private companies can help Nepal expand its hydropower sector and attract much needed foreign direct investment,” he added.
Nepal's rivers – fed by runoff from the Himalaya Mountains – could support 43 gigawatts (GW) of electrical generation capacity. But less than three per cent of that has been developed as of today. As well, the country has suffered from blackouts and brownouts, hampering businesses and making life difficult for residents.
"There is no question that Nepal has the potential to be an energy powerhouse," said the chief executive officer of the Nepal Water and Energy Development Company Bo-Seuk Yi. “To realise that promise, Nepal can enlist the help of private companies, which have the capital and expertise to make major projects a reality,” he added.
The new hydroelectric plant is expected to be completed in 2024. Along with providing clean, reliable power to millions, it will set new environmental and social-impact benchmarks and enhance benefits for local communities. Furthermore, a cumulative impact assessment of existing and planned hydropower projects has been completed for the Trishuli basin, which will help guide sustainable development in the watershed.
“This project represents a significant milestone in the development of Nepal’s hydropower potential as it has been able to attract meaningful private sector participation, particularly from international investors,” said IFC director for South Asia Mengistu Alemayehu. “It also shows the unprecedented resilience and commitment by the government, the sponsors, and other stakeholders against all odds over the years,   including a major earthquake,” he said, adding that the development partners expect the project to become a model for expanded investments in developing Nepal’s hydropower to meet the growing domestic demand and export to the neighboring countries.
IFC and a consortium of Korean and Nepali partners, in collaboration with the Government of Nepal, have spent over seven years developing the Upper Trishuli-1 project, which is a prime example of IFC’s ability to create markets through upstream project preparation work over many years in low-income countries.
The Nepal Water and Energy Development Company’s key owners are Korea South-East Power, Daelim Industrial, Kyeryong Construction Industrial, and IFC. IFC is providing $190 million in financing, including $95 million of equity and loans from its own account, and $95 million as the implementing entity for other funding sources. The Multilateral Investment Guarantee Agency (MIGA) – yet another member of the World Bank Group – will provide $135 million in guarantees to cover political risk for the sponsors. Other financiers include the Export and Import Bank of Korea, the Asian Development Bank (ADB), the Asian Infrastructure and Investment Bank (AIIB), the Korea Development Bank (KDB), the United Kingdom’s development finance institution, Commonwealth Development Corporation (CDC), the Dutch Entrepreneurial Development Bank,Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden NV (FMO), the OPEC Fund for International Development, and Proparco.
Because of its unique development impact, pioneering features, and demonstration to private investors, the project also includes support from the International Development Association’s (IDA) Private Sector Window, a global facility of concessional funds to support high-impact private sector investments in lower-income countries, the Finland-IFC Blended Finance for Climate Program, and the Climate Investment Funds.
As part of the record $75 billion IDA18 replenishment, the World Bank Group created the $2.5 billion IDA Private Sector Window to catalyze private sector investment in the poorest and most fragile countries. Recognising the key role of the private sector in achieving IDA18 objectives and the Sustainable Development Goals (SDGs), the window provides concessional funds for co-investment alongside IFC and Multilateral Investment Guarantee Agency (MIGA) private investments. Concessional funds help to mitigate risk and reduce barriers, which unlocks and crowds in private investment in emerging markets.
Likewise, IFC – a sister organisation of the World Bank and member of the World Bank Group – is the largest global development institution focused on the private sector in emerging markets. “We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities where they are needed most,” the agency said, adding that it delivered more than $19 billion in long-term financing for developing countries – in the fiscal year 2019 – leveraging the power of the private sector to end extreme poverty and boost shared prosperity.

High-level World Bank Group delegation heads for Nepal Investment Summit

The chief executive officer of the Multilateral Investment Guarantee Agency (MIGA) and two World Bank Group vice presidents will join development banks, ambassadors, and hundreds of investors from more than 30 countries at the Nepal Investment Summit on March 29 and 30, according to the World Bank.
The summit aims at helping attract private financing for key infrastructure projects as Nepal undertakes new regulatory reforms.
The top three bank officials including executive vice president and CEO of MIGA Keiko Honda, vice president of the World Bank’s South Asia region Hartwig Schafer, and vice president at the Economics and Private Sector Development of International Finance Corporation (IFC) Hans Peter Lankes will take active part in the summit.
The three World Bank Group representatives will discuss the bank’s support for Nepal with Prime Minister K P Sharma Oli and finance minister Dr Yuba Raj Khatiwada, the bank's press note reads.
“Nepal has been a rising star in South Asia with foreign direct investment flows reaching a record high in 2017, and likely to remain an important investment destination in the region," Honda said, adding that it confirms Nepal’s efforts to improve its investment climate and become a competitive investment destination for multinational companies that want to have an impact. "We stand ready to work with investors and the government to make Nepal a hub for investment in infrastructure that improves lives, leads to sustainable growth and delivers opportunity for its citizens."
"With 25 projects approaching $3 billion in financing, we are here for the long haul and will continue to support infrastructure development, policy reforms, skills development, and anything required," South Asia VP Schafer said, adding that there is a clear acceptance by Nepal authorities that the country’s prosperity will rely on crowding in the investment from around the world. "Not only financial resources, but also technical and managerial know-how, will be critical to realise Nepal’s vast potential."
"IFC has played a role in creating markets and supporting investments for 60 years," added IFC VP Lankes. "In Nepal, we are looking to scale up significantly our investments in strategic sectors such as hydropower, agribusiness, tourism, and financial inclusion," he said, adding that the IFC is encouraged by the government’s efforts to improve the enabling environment and IFC plans to increase its cumulative investment portfolio to around $1 billion over the next four years.
Schafer will speak at the summit’s inaugural session tomorrow. Lankes and Honda will deliver special addresses at March 30 sessions on international experience-sharing and financing infrastructure, respectively.
In Nepal, the World Bank Group (WBG) includes the International Development Association (IDA), the concessionary lending arm; the International Finance Corporation (IFC), the private sector arm; and the Multilateral Investment Guarantee Agency (MIGA), the investment risk insurance arm.
The World Bank currently supports 25 active investment projects in Nepal with $2.6 billion in commitments from IDA and trust funds of which a significant portion is for policy reforms in the areas of fiscal decentralisation, the financial sector, and the energy sector. The indicative resources available under IDA18 (fiscal year 2018-20) are about $1.39 billion, including $300 million from the IDA Risk Mitigation Regime. IFC aims to commit about $800 million to $1.2 billion over the five-year period (Fiscal year 2019-23). MIGA is actively seeking opportunities to support foreign private investment into Nepal.
IFC Nepal focuses on private sector development through provision of financing and advisory services to companies to boost their competitiveness, while expanding financial inclusion and delivering sustainable infrastructure solutions. IFC’s current portfolio in Nepal is $57 million. The budget for advisory support aimed at creating bankable projects and building capacity stands at nearly $16 million.
The World Bank Group (WBG) fielded its first economic mission to Nepal in 1963 to assess the country’s development prospects and challenges. It approved its first credit in 1969 for a telecommunications project. Since then, the World Bank has provided Nepal $4.75 billion in assistance ($3.48 billion in credits and $1.27 billion in grants).

MDBs announce joint framework to combat climate change

Multilateral Development Banks (MDBs) today announced a joint framework for aligning their activities with the goals of the Paris Agreement, reinforcing their commitment to combat climate change.
In a joint declaration, the MDBs committed to working together in six key areas considered central to meeting the goals of the agreement, which aims to limit the increase in global temperatures to well below 2°C, pursuing efforts for 1.5°C.
The declaration was issued at the start of the 24th Session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP24) in Katowice, Poland.
"The global development agenda is at a pivotal point," the joint declaration reads. "There is international consensus on the urgent need to ensure that policy engagements and financial flows are consistent with a pathway towards low greenhouse gas emissions and climate-resilient development."
The MDBs and the International Development Finance Club (IDFC) had already pledged in December 2017 to align financial flows with the objectives of the Paris Agreement.
"To realise this vision, we are working together to develop a dedicated approach," the joint MDB declaration adds.
The MDBs plan to break their joint approach down into practical work on six core Paris Alignment areas – the building blocks – including: aligning their operations against mitigation and climate-resilience goals; ramping up climate finance; capacity building support for countries and other clients; plus an emphasis on climate reporting.
This approach builds on the ongoing MDB contribution to climate finance, which, in 2017, amounted to $35 billion to tackle climate change in developing and emerging economies, while mobilising an additional $52 billion from private and public sector sources.
The MDBs will report back to next year’s COP25 gathering on their progress under the six building blocks.
The nine MDBs includes the African Development Bank Group, the Asian Development Bank, the Asian Infrastructure Investment Bank, the European Bank for Reconstruction and Development, the European Investment Bank, the Inter-American Development Bank Group, the Islamic Development Bank, the New Development Bank, and the World Bank Group (World Bank, IFC, MIGA).

World Bank Group committed to support Nepal’s development goals

World Bank Group’s reiterated its commitment to support Nepal.
Concluding his five-day visit to Nepal, World Bank vice president for South Asia Region Hartwig Schafer today reiterated the World Bank Group’s commitment to support Nepal in its ambitious transition to federalism.
During his meeting with Prime Minister KP Sharma Oli, Schafer congratulated the government’s visionary goal of reaching middle-income country status by 2030, and reaffirmed the World Bank’s commitment to support government priorities to help the country raise additional finance from a broader range of sources.
Likewise, in his meeting with finance minister Dr Yuba Raj Khatiwada he also discussed further support to the federalism transition, as well as the planned International Investors’ Conference in 2019 in support of Nepal’s agenda to crowd in private finance for development.
"With a stable government that has prioritised broad-based reforms and private sector-driven growth, I am positive that Nepal can achieve higher growth rates for the next several years," he said, adding that the World Bank wants to help Nepal mobilise investments from sources that go beyond traditional development finance to sustain higher growth. "We call this approach Maximizing Finance for Development."
Private sector investment will only come if there is a transparent, conducive policy environment,” he said, “Nepal is one of the first countries where we are approaching this in a systematic way with the World Bank, IFC and MIGA coming in and helping to provide a platform for private investments in the energy, technology, and other sectors."
This will also create jobs for more and more Nepalis, which is the need of the hour, he added.
The WB vice president also had a joint field visit with finance minister Khatiwada and energy minister Barsha Man Pun to discuss the potential of tourism, hydropower and private sector investment in the country. The team visited Solukhumbu district and Sankhuwasabha district before seeing houses being rebuilt after the earthquake in the Majhi settlement of Gaikhura in Manthali Municipality, Ramechhap. 
Walking through the houses being rebuilt, Schafer met members of local communities, commending their resilience and efforts to build back better after the earthquake. He also met elected members of parliament and local level representatives. “It is heartening to see the collective effort of so many actors to ensure that people’s homes and lives are rebuilt,” Schafer said, adding, "We must pick up the pace of reconstruction, and also ensure that disaster risk reduction measures are put in place to deal with future contingencies."
The World Bank has provided a credit of $500 million to the government through the Earthquake Housing Reconstruction Project.
In Kathmandu, Schafer also participated in the launch of a joint report of the World Bank Group entitled 'Country Private Sector Diagnostic: Creating Markets in Nepal'. He was a part of the signing of two agreements between the government and World Bank. The agreements, totaling $155.7 million, will be invested in the construction and maintenance of safe, resilient and cost-effective bridges in Nepal, and in improving food security of vulnerable households and communities.
In his first visit to Nepal as the World Bank vice president for South Asia, Schafer also met with opinion leaders, senior government officials and civil society representatives. In engaging with the private sector, he visited Saral Urja Nepal – the investee clients of Business Oxygen (BO2), an IFC SME-Venture Fund – and Incessant Rain Animation Studios, a state-of-the-art animation and visual effects studio.
After his interactions with the team at Incessant Rain, Schafer commented thathe enjoyed the opportunity to visit an enterprise that is nurturing the artistic and creative talents of the Nepalese youth. "With a world class facility that provides services to well- known international clients, organisations like this play an important role in putting Nepal on the map as an outsourcing destination."
Apart from contributing to the economic growth through exports and job creation, it is a pleasure to see a home-grown company that promotes the country’s rich cultural heritage and diversity. "It is the kind of future we want for the private sector in Nepal, and the World Bank is committed to support this vision," he added.

Global investors still optimistic on emerging market prospects

Heightened global risk perceptions in the aftermath of the financial crisis, fueled by sovereign credit risk in the developed world and political crises in the Middle East and North Africa, have increased investors’ concerns, according to a new report by the World Bank’s Multilateral Investment Guarantee Agency (MIGA).
However, the report, World Investment and Political Risk, notes that investors are more optimistic over the medium term.
A survey of global investors conducted for the report finds they are 'cautiously optimistic' about their investment plans in the next 12 months. They are more confident over the next three years: nearly 75 per cent of corporate respondents have plans to expand in developing countries over this period.
MIGA’s survey shows that events in the Middle East and North Africa have had a negative effect on foreign direct investment (FDI), but a significant majority of global investors said they have not changed their investment plans. However, while investors appear willing to ride out this period of turmoil and uncertainty, they are also ready to downsize plans should political instability intensify and become prolonged.
Overall, the report notes that the recorded growth of private capital flows to developing countries, including FDI, is moderating, but is expected to regain speed in the medium term— corroborating the sentiment found in the investor survey. “This uncertain economic landscape aside, developing countries are expected to grow more than twice as fast as high-income economies over the next few years,” notes MIGA’s executive vice president Izumi Kobayashi. “This continued growth, together with stronger and more business-friendly environments, should enhance their appeal to savvy investors worldwide.”
The report notes developing countries now attract two-fifths of global FDI and originate close to one-fifth of overseas investment. Nonetheless, political risk remains a significant constraint to investment in these countries, becoming more prominent over the next three years as current concerns about the global economy subside.
The survey found that heightened global risk perceptions have prompted investors to employ a wide variety of risk-mitigation tools, including political risk insurance (PRI). PRI issuance has grown, not only in absolute terms, but also relative to FDI. Over the past five years, the rate of growth of PRI has exceeded that of FDI, meaning that a higher percentage of FDI is now insured for political risk. In 2011, this trend appears to be continuing.
Concerns about expropriation remain elevated and the report provides an in-depth analysis of this risk. It found that the probability of disputes between governments and foreign investors is materially increased by an economic shock and/or significant political shift. Evidence also shows that investor disputes are more likely to be resolved—avoiding outright expropriation— by democratically elected governments rather than non-democratic regimes.
“In today’s turbulent world, we hope that this report sheds light on different dimensions of political risk and the role of investment insurance in fostering an environment conducive to attracting FDI and promoting development,” says Kobayashi.