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World Bank approves $200m to support fiscal and growth reforms, and develop provincial, local roads in Nepal

B360 March 1, 2024, 12:39 pm
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WASHINGTON: The World Bank’s Board of Executive Directors on Thursday approved $200 million in new financing for two projects in Nepal. These projects aim to support the country's transition towards Green, Resilient, and Inclusive Development (GRID) and to enhance the development and maintenance of Nepal's provincial and local road networks.

Faris Hadad-Zervos, the World Bank Country Director for Maldives, Nepal, and Sri Lanka, stated, "The World Bank is committed to supporting Nepal's green, resilient, and inclusive development. Through the new projects financed by the World Bank's International Development Association (IDA), we continue to focus our assistance on improving people's lives, including through infrastructure and services."

The Second Fiscal Policy for Growth, Recovery, and Resilience Development Policy Credit, worth $100 million, aims to strengthen revenue collection, reduce fragmentation of debt management, and increase debt transparency. It also supports reforms to enhance climate-resilient infrastructure spending, lower Nepal's minimum foreign direct investment (FDI) threshold to encourage FDI inflows, and facilitate automation to streamline the process of FDI.

Sibel Kulaksiz, World Bank's Task Team Leader for the programme, stated, "This operation will help strengthen the regulatory and institutional framework to support sustainable business growth, and enhance systems to protect the most vulnerable in Nepal."

The Provincial and Local Roads Improvement Programme will receive a credit of $100 million. This will support the implementation of a comprehensive programme for the development and maintenance of Nepal's provincial and local road network. It will help improve the efficiency of service delivery, strengthen the resilience of selected provincial roads and bridges, and ensure communities have safe access to markets and services.

This programme, the first in a three-phased series, will be implemented in the Madhes, Karnali, and Sudurpashchim provinces and local levels, with the potential to scale up in the future.

Reenu Aneja, Senior Transport Specialist and Task Team Leader, said, "The project will strengthen the institutional, management, and implementation capacity of the subnational governments over the long term to improve inclusive connectivity and promote efficiency through reduced travel time and costs."

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MARCH 2024

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