KATHMANDU: Two separate projects, amounting to US$40 million, aimed at poverty reduction through community-led and managed initiatives in Nepal has been approved by the World Bank Tuesday, a WB press release stated.

A US$25.3 million credit was approved to extend water supply and sanitation to over 800,000 people in rural areas of the country. A second US$15 million grant was also approved to the Poverty Alleviation Fund, a pilot initiative created to bring increased opportunities for income generation and access to basic services and infrastructure to poor communities in rural areas.

The US$ 25.3 million Second Rural Water Supply and Sanitation Project is a follow-on operation to a similar project, which was also financed primarily by the World Bank. The project aims to improve rural water supply and sanitation, and support communities to form inclusive local water supply and sanitation user groups that can plan, implement, and operate their drinking water and sanitation infrastructure to benefit rural households.

According to World Bank’s Country Director for Nepal Ken Ohashi, the government has recognized that some NGOs, community based organizations and donors have implemented a number of successful programs to reach out to the marginalized groups, through community-managed infrastructure.

“Thus the government has wisely decided to turn the Poverty Alleviation Fund over to those who know how to run it best and to scale up the provision of safe drinking water to the rural poor through mechanisms successfully demonstrated by the Rural Water Supply and Sanitation Fund Board,” Ohashi said.

The Poverty Alleviation Fund (PAF), a US$15 million grant, will finance a pilot program that can be subsequently scaled up to assist the government of Nepal in reaching poor and excluded communities. PAF will be an autonomous institution engaged in the creation of small infrastructure and employment and income-generating opportunities in poor communities.

The program will enhance the capacity of local bodies to provide better services for poor and socially excluded groups. The initial phase to be supported by this grant will be implemented in six districts, including Darchula in the far western region, Mugu and Pyuthan in the mid west, Kapilbastu also in the west, Ramechhap in the central region, and Siraha in the east.

In subsequent phases, as PAF gains experience and can demonstrate its ability to reach targeted groups effectively the program will be expanded.

Poverty in Nepal is pervasive with about 40 percent of the population living below the poverty line.