WB gives $350M for COVID-19 resilience

Kathmandu, Nov. 18

The government and the World Bank on Wednesday signed two separate agreements that will help strengthen urban governance and financial sector in Nepal, supporting 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 Government of Nepal, and the World Bank Country Director for Maldives, Nepal, and Sri Lanka, Faris Hadad-Zervos, according to the joint statement.

"We are thankful to the World Bank for the support in strengthening urban development and improving financial sector stability in Nepal," said Dhungana. "The projects support Nepal’s implementation of federalism and the financial sector reform agenda, while contributing to the government’s recovery efforts from the COVID-19 crisis."

The $150-million (around Rs. 18 billion) Nepal Urban Governance and Infrastructure Project will support municipalities located in two strategic urban clusters: Eastern-Terai region (States 1 and 2) and Western region (Gandaki and Lumbini States).

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 labor intensive public works, supporting economic recovery and creating temporary jobs for at least 20,000 people across the country, 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.

Similarly, recognizing several initiatives and strong commitment of the government in strengthening financial sector stability, diversifying financial solutions and increasing access to financial services, the WB offered $200 million (around Rs. 24 billion) for growth operation as a budgetary support.

It will support in enhancing 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.

"Through the new projects, we look forward to working with the government to strengthen institutions for effective service delivery as part of the federalism implementation process and build a resilient financial sector to boost economic recovery," said Hadad-Zervos.

Published in The Rising Nepal daily on 19 November 2020.