KATHMANDU, NOVEMBER 18
The government of Nepal and World Bank signed two separate agreements today that will help strengthen urban governance and the financial sector in Nepal in support of the country’s COVID-19 resilience and recovery efforts.
The agreements for the Nepal Urban Governance and Infrastructure Project and the Finance for Growth Development Policy Credit were signed by Finance Secretary Sishir Kumar Dhungana on behalf of the Nepal government, and the World Bank Country Director for Nepal, Maldives and Sri Lanka, Faris Hadad-Zervos, according to a media release.
The $150 million (around Rs 18 billion) Nepal Urban Governance and Infrastructure Project will support municipalities located in two strategic urban clusters: Eastern-Tarai region (Provinces 1 and 2) and Western region (Gandaki Province and Lumbini Province). Through Nepal’s’ first dedicated Urban Sector support, the project will finance strategic infrastructure in the targeted cities, based on the priorities of the municipalities and their citizens. The project will also support capacity building for the municipalities for improved urban management and with strong focus on citizen engagement, enabling targeted municipalities to better plan, manage and execute service delivery and urban management activities.
The project will finance small scale labour intensive public works, thus supporting economic recovery and creating temporary jobs for at least 20,000 people across Nepal, including women and other vulnerable groups. The project also includes a contingency emergency response component to allow for reallocation of project funds to support response and recovery in case of a national emergency, the release adds.
Similarly, recognising several initiatives and strong commitment of the government in strengthening financial sector stability, diversifying financial solutions and increasing access to financial services, the World Bank offered the $200 million (around Rs 24 billion) Finance for Growth operation as a budgetary support. It will support enhanced supervision of risks confronting the banking and financial institutions, especially in the context of the pandemic’s impacts.
The operation will also help build capital, insurance, venture capital and private equity and disaster risk financing markets through regulatory reforms. This will help open new investment opportunities for market actors and crowd-in private financing.
The operation also focuses on expanding access to finance for households, women and firms through regulatory and other reforms that will attract additional inflows of international finance and mobilise digital services, credit infrastructure and literacy programmes.
Ramesh Singh, secretary at Ministry of Urban Development; Shreekrishna Nepal, joint secretary at Ministry of Finance; Maniram Gelal, director general of Department of Urban Development and Building Construction; Lada Strelkova, World Bank operation manager for Nepal, Maldives and Sri Lanka; Bigyan Pradhan, World Bank senior operation officer; and other officials were also present at the signing ceremony.
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