Kathmandu, March 2:Following Asian Development Bank’s Country Programming Mission’s week plus long visit to Nepal and its consultation with the government, the two parties today reached an agreement in which the Bank pledged a loan and technical assistance totalling over 300 million US dollars for the period of 2001-2003.
The Mission visited Nepal from February 22 to March 2. The consultations, according to ADB, focused on confirming the government’s commitment to various projects and prioritising ADB Nepal’s operational programme for 200 -2003. It also discussed a framework for the Poverty Reduction Partnership Agreement and ADB’s new performance based allocation system that would link the level of future lending to Nepal’s progress in addressing major country performance issues.
The Mission also met with other donors and representatives of various non-governmental organisations and the private sector, a press release issued by the Bank said.
ADB’s proposed lending programme for the period comprises 11 projects totalling 295 million US dollars. The technical assistance programme with its focus on institutional strengthening and capacity building comprises 27 TAs averaging about five million US dollars annually.
The 11 projects and 27 TAs in the programme include assistance for agricultural productivity and diversification, irrigation, water supply and sanitation, education, rural infrastructure, environmental management and improvements, road improvements, financial and corporate governance, and civil service reform.
With the annual indicative planning figure for Nepal set at around 80 million US dollars, the actual lending levels would depend on Nepal’s achievements in key performance areas and also in meeting criteria set for sector involvement. In line with ADB’s policy, future lending to Nepal would be linked to progress in addressing the major country performance issues that would improve the environment for private and public investments to generate and sustain development impact.
The Bank said that human development, fiscal performance, civil service reform, governance, and portfolio performance had been identified as five performance areas. The performance standards also were set for further monitoring and evaluation of achievements.
The Mission and the government discussed the country’s performance to date in the five key areas and concluded that the performance was average and was consistent with the average annual allocation of around 80 million US dollars.
The Bank said that about 45 per cent of 2001-2003 lending for Nepal would be for projects that would directly address poverty reduction primarily in the social infrastructure and agriculture sectors, while the remainder support pro-poor growth.
Identifying lack of efficiency, predictability, transparency, and accountability as a major barrier to poverty reduction, the Mission emphasised the importance of improved governance in both the public and private sectors, the press release stated.
ADB began operating as a multilateral development financial institution in 1966 from its headquarters in Manila, the Philippines. ADB currently has 58 members, 42 in the Asia and Pacific region and 16 from outside. The Nepal Resident Mission has been assisting the government in project implementation and in the formulation for the operational programme for ADB’s assistance. Currently there are 19 ongoing projects for a total of 480.4 million US dollars.