WB suspends grant assistance to Nepal
KATHMANDU:
The World Bank Group has suspended its grant assistance to Nepal citing the country falls in the group of nations with low risk of debt distress, but has pledged to provide soft loan of Rs 700 billion.
Of the total soft loan of Rs 700 billion, the country has already received commitment of Rs 600 billion from the International Financial Corporation (IFC), and the remaining Rs 100 billion will be provided under IDA-17 over the next three years, the World Bank said.
The Asian Development Bank (ADB) had also suspended grant assistance to Nepal in 2013 citing similar reasons.
Finance Minister Ram Sharan Mahat, while participating the Board of Governors meeting of the World Bank and International Monetary Fund (IMF), urged the top-level officials of the World Bank to resume the grant assistance to Nepal, keeping the country’s development needs in mind.
“The country is passing through post-conflict scenario and still suffering from long-run political transition, which is why we need grant assistance as well,” Mahat said upon his arrival at the Tribhuvan International Airport (TIA) today.
He said that during the meet, he also demanded for a separate assessment system of debt distress for the countries coming out of conflict. Mahat further said that the international community is positive regarding Nepal’s efforts of maintaining peace and stability to graduate to the league of developing nation by 2022.
“We have to manage more funds for financing large scale infrastructure projects, which will create more space for private businesses as well,” Mahat said, adding, “Without overcoming the infrastructure gaps, we can’t achieve our medium-term goal of upgrading the country to a developing nation.”
Informing that the World Bank’s top-level officials have expressed support to Nepal in hydropower development following recently signed Power Trade Agreement (PTA) with India, he also added that Project Development Agreement (PDA) of 900 megawatt Upper Karnali Hydropower Project with Indian venture GMR is milestone for energy sector development of the country.
In the past, the World Bank had been reluctant to extend support in hydropower sector after the failure of Arun III Hydropower project. It has also prioritised the energy sector development through its Country Partnership Strategy (CPS) for 2014-18.
Mahat also said that the reform initiative introduced in the legal front would help create a conducive environment for businesses. The government had announced reforms of three dozen legislations through fiscal budget 2014-15 and prioritised developing energy, tourism, agriculture, irrigation by providing facilities for large-scale investment on such sectors.
Source: THT
