country partnership strategyfor nepal

FY2014-2018

Country Partnership Strategyfor Nepal

4

ExEcutivESummary

Fy2014-2018


i. Nepal has achieved remarkable progress over the last

years. The country managed to halve the percentage of people

living on less than $1.25 a day in only seven years, from 53

percent in 2003/2004 to 25 percent in 2010/2011. Several social

indicators in education, health and gender have also improved.

In addition, since the end of the civil war in 2006, Nepal has

successfully transitioned away from being a post-conflict

country and former combatants have been integrated into the

country’s armed forces. While the country’s political transition

– notably the drafting of a new constitution – is taking longer

than expected, the November 2013 elections, which resulted in

a peaceful transfer in power, were an important step toward the

formation of an inclusive and democratic state.

ii. To build on this progress, Nepal needs to take

advantage of its economic potential and put in place

the prerequisites that will provide faster, sustained

and inclusive growth. While the political process remains

intricate (understandably so, given Nepal’s relatively short

experience with democratic governance), the country

urgently needs to pay greater attention to the economy.

Remarkably, Nepal’s economy grew steadily even during the

height of the conflict, and economic management remained

prudent, resulting in a budget surplus in 2013. Yet growth

levels are too low to enable Nepal to continue its past

progress and relegate poverty to history. Current growth

relies heavily on remittances supporting consumption and

growth in basic services with low growth potential.

ExEcutivESummarY

4FY2014-2018


5FY2014-2018


iii. To move to a higher growth trajectory, Nepal will have

to remove bottlenecks to private and public investment

in key growth sectors. The most vivid example of Nepal’s

economic potential is hydropower. While the estimated

potential for hydroelectricity generation in Nepal is 84,000

megawatts (MW), of which at least half is economically viable,

only 746 MW (less than 2 percent of the viable potential) is

currently developed. Hydropower development could be a

game changer for Nepal. Development of the sector would

reduce load-shedding and provide major revenues through

exporting electricity to India and Bangladesh.

iv. The World Bank Group stands ready to support Nepal’s

aspirations for increasing economic growth through

increased investments in key sectors and making growth

more inclusive to help equalize opportunities across

groups and communities. This constitutes a major shift

in World Bank Group (WBG) support away from short-term

post-conflict assistance towards establishing the foundations

for increased, inclusive and sustainable growth. After three

consecutive interim strategies in Fiscal Years (FY) 2007, 2009

and 2011, the WBG will provide more long-term support. The

Country Partnership Strategy (CPS) will cover four years from

FY2014-2018.

5FY2014-2018


6

ExEcutivESummary

Fy2014-2018


v. World Bank Group support to Nepal will be aligned

to the Bank’s twin global goals—eliminating extreme

poverty and boosting shared prosperity. A poverty “lens”,

developed for the CPS, concludes that Nepal’s progress on

poverty reduction has been commendable, yet a significant

share of the population remains clustered around the

poverty line. It confirms the need for WBG support to focus

on removing Nepal’s binding growth constraints to allow

for higher income levels. In this context the International

Development Association (IDA), the International Finance

Corporation (IFC) and the Multilateral Investment Guarantee

Agency (MIGA) will collaborate to make maximum use of their

joint comparative advantage. WBG efforts will be organized

within two pillars. Under pillar 1, the WBG will support

increasing economic growth and competitiveness, and

will focus on expanding hydroelectric power generation,

enhancing transport connectivity, and improving the

business environment. Under pillar 2, the WBG will provide

support to increasing inclusive growth and opportunities

for shared prosperity, aiming to enhance the productivity

of agriculture and equalize access to health care, skills

development and social protection. Cutting across these

pillars, WBG activities will contribute to improving the

effectiveness, efficiency and accountability of public

expenditure.

vi. WBG support will be guided by the principles of

balancing risks and rewards, selectivity and flexibility.

In a shift from more cautious approaches taken in past

strategies, the WBG will engage in larger programs that

6

ExEcutivESummarY

FY2014-2018


7FY2014-2018


strive for nation-wide impact. Regarding selectivity, this

strategy consolidates the WBG’s engagement into fewer

sectors, where the Group has a comparative advantage

and can leverage its financing and analytical resources for

greater development impact. In addition, the WBG will

maintain programming flexibility, given the politically-

fragile country environment.

vii. The WBG’s engagement in Nepal will continue

to face significant risks that could affect strategy

implementation. Given the challenges of developing

hydropower potential in particular, the overall risk rating is

high—as well as the potential rewards. Among the most

significant risks are political instability that can impact

economic performance, weak governance and increased

corruption and fiduciary risks, and low capacity for program

implementation, including for assessing and mitigating

environment and social impacts. Specific mitigation

measures have been devised to prevent these risks

from impacting CPS implementation and to deal

with them once they occur. These include, among

others, a more active cross-party engagement and

communication to build all-party consensus on

development needs; addressing both ex ante and

ex post dimensions of public resource use through

public financial management activities; increased

focus on safeguards during preparation and

implementation support through capacity building,

training and study tour programs for key officials

involved in safeguard work; and in hydropower

in particular, taking a more holistic approach that

focuses on the necessary governance, policy and

institutional frameworks and strengthening the

synergies between IDA, IFC and MIGA.

7FY2014-2018


8

ExEcutivESummary

Fy2014-2018


Coun

try

goal

s1 + C

onst

rain

ts/o

ppor

tuni

ties

to

war

d pr

ogre

ss o

n W

BG g

oals

2

Indi

cati

ve C

PS O

utco

mes

and

Indi

cato

rs

Targ

ets

= FY

18 u

nles

s sp

ecifi

edIn

dica

tive

Mile

ston

esO

ngoi

ng a

nd In

dica

tive

WBG

Pro

gram

Pilla

r 1: I

ncre

asin

g ec

onom

ic g

row

th a

nd c

ompe

titi

vene

ss

Coun

try

Goa

ls:

Ass

ist i

n ec

onom

ic p

rogr

ess

and

soci

al

deve

lopm

ent b

y de

velo

ping

mod

ern

ener

gy

thro

ugh

the

prod

uctio

n an

d di

strib

utio

n of

hy

drop

ower

.

Cons

trai

nts/

Opp

ortu

niti

es:

Lack

of e

nerg

y m

ain

cons

trai

nt to

boo

st

com

petit

iven

ess

and

grow

th a

s pr

ereq

uisi

te

for f

urth

er re

duci

ng p

over

ty.

Hig

h le

vels

of l

oad-

shed

ding

and

nee

d to

reha

bilit

ate

and

add

new

gen

erat

ion

capa

city

as

wel

l as

impo

rtin

g po

wer

ove

r the

m

ediu

m-t

erm

.

Nee

d fo

r inc

reas

ed tr

ansm

issi

on a

nd

dist

ribut

ion

both

to im

prov

e ac

cess

with

in

Nep

al a

nd to

link

with

Indi

a fo

r im

port

and

ev

entu

al e

xpor

t of p

ower

.

Hig

h hy

drop

ower

pot

entia

l, bu

t low

pow

er

gene

ratio

n ca

paci

ty, l

ow s

uppl

y an

d lo

w

relia

bilit

y.

Out

com

e 1.

1: In

crea

sed

supp

ly o

f ele

ctri

city

, inc

ludi

ng

impo

rt, a

nd im

prov

ed a

cces

s to

relia

ble

and

affor

dabl

e el

ectr

icit

y w

ithi

n N

epal

Indi

cato

r 1: P

ower

Gen

erat

ion

Capa

city

add

ed o

r re

habi

litat

ed (M

W)

Loca

l Cap

acit

y:

Ba

selin

e:

0 M

W (a

dded

or

reha

bilit

ated

; 201

4)

Pow

er Im

port

s:

Ba

selin

e:

100

MW

Targ

et:

144

MW

reha

bilit

ated

and

at

leas

t 20

MW

new

cap

acity

Targ

et:

250

MW

cum

ulat

ive

pow

er

impo

rt fr

om In

dia

by e

nd-

2017

Sour

ce: P

roje

ct D

ata

(Ban

k an

d IF

C)

Indi

cato

r 2: L

engt

h of

tran

smis

sion

and

dis

trib

utio

n sy

stem

add

ed o

r reh

abili

tate

d

Base

line:

0

km (n

ew o

r reh

abili

tate

d;

2014

)

Targ

et:

600

km n

ew a

nd

reha

bilit

ated

Sour

ce: G

oN; P

roje

ct D

ata

Mile

ston

e: G

ener

atio

n - (

i) Pr

ocur

emen

t for

turb

ine

and

mai

n va

lve

reha

bilit

atio

n co

mpl

eted

by

Dec

embe

r 20

14; (

ii) P

rocu

rem

ent f

or

EPC

cont

ract

for 2

0 M

W g

rid-

conn

ecte

d so

lar p

roje

ct b

y D

ecem

ber 2

014.

Mile

ston

e: T

rans

mis

sion

- pr

ocur

emen

t for

all

subs

tatio

ns,

tran

sfor

mer

s an

d co

nduc

tors

co

mpl

eted

by

Dec

embe

r 201

4.

Mile

ston

e: S

ucce

ssfu

l co

mm

itmen

t of 2

IFC

inve

stm

ents

by

end

of C

Y201

5.

Ong

oing

Fin

anci

ng:

(i) K

abel

i-A T

rans

mis

sion

Pro

ject

; (ii

) Nep

al-In

dia

Elec

tric

ity T

rade

and

Tr

ansm

issi

on P

roje

ct (I

DA

);

(iii)

Kali

Gan

daki

Hyd

ropo

wer

Reh

abili

tatio

n Pr

ojec

t

Indi

cati

ve F

inan

cing

: (i)

IFC

Inve

stm

ents

in A

ndhi

khol

a, U

pper

Tr

ishu

li an

d Ka

beli

proj

ects

;(ii

) IFC

& S

REP

term

loan

for b

anks

for s

mal

l hy

drop

ower

pro

ject

s (<

=10

MW

) fina

ncin

g;

(iii)

Grid

Sol

ar a

nd E

nerg

y Effi

cien

cy P

roje

ct;

(iv) H

ydro

pow

er P

roje

ct o

r PRG

; (v

) Sca

ling-

up R

enew

able

Ene

rgy

Proj

ect

(TF)

; (v

) Ene

rgy

DPO

; (v

i) In

vest

men

t for

the

Indo

Nep

al P

ower

( ID

A);

(vii)

IDA

/IFC

Kabe

li A

Hyd

ropo

wer

Pro

ject

.

Ong

oing

AA

A/O

ther

s:

(i) Te

chni

cal A

ssis

tanc

e fo

r hyd

ropo

wer

pr

ojec

t pre

para

tion

and

sect

or re

form

;

(ii) H

ydro

pow

er D

ialo

gue.

Coun

try

Goa

ls:

Expa

nd a

sus

tain

able

and

saf

e tr

ansp

ort

netw

ork

that

con

trib

utes

tow

ards

nat

iona

l so

cioe

cono

mic

inte

grat

ion,

regi

onal

bal

ance

an

d de

velo

pmen

t.

Enha

nce

the

oppo

rtun

ities

of i

ncom

e an

d em

ploy

men

t by

prom

otin

g do

mes

tic a

nd

inte

rnat

iona

l tra

de.

Cons

trai

nts/

Opp

ortu

niti

es:

Low

est r

oad

dens

ity in

Sou

th A

sia

with

one

th

ird o

f hill

resi

dent

s liv

ing

mor

e th

an 4

ho

urs

from

an

all-s

easo

n ro

ad.

Nee

d to

exp

and

regi

onal

tran

spor

tatio

n co

nnec

tivity

and

trad

e w

ith In

dia

and

pote

ntia

lly C

hina

.

Out

com

e 1.

2: Im

prov

ed tr

ansp

orta

tion

con

nect

ivit

y,

inte

rnal

ly a

nd w

ith

Indi

a

Indi

cato

r 1: N

umbe

r of d

istr

ict h

eadq

uart

ers

conn

ecte

d w

ith a

ll-se

ason

road

s D

P

Base

line:

59

Targ

et:

65So

urce

: GoN

and

Pro

ject

Dat

a

Indi

cato

r 2: A

vera

ge ti

me

from

shi

p re

adin

ess

to u

nloa

d to

fina

l des

tinat

ion

for a

n im

port

ed c

onta

iner

, on

Kolk

ata-

Birg

unj-K

athm

andu

Cor

ridor

(day

s)

Base

line:

22

day

sTa

rget

: 18

Sour

ce: P

roje

ct D

ata

Mile

ston

e: A

ll ro

ad

cons

truc

tion

cont

ract

s pr

ocur

ed b

y 20

16

Mile

ston

e: A

ll ro

ad u

p-gr

adin

g co

ntra

cts

proc

ured

by

2016

Ong

oing

Fin

anci

ng:

(i) B

ridge

s Im

prov

emen

t and

Mai

nten

ance

Pr

ogra

m;

(ii) R

oad

Sect

or D

evel

opm

ent P

roje

ct;

(iii)

Nep

al In

dia

Elec

tric

ity T

rade

and

Tr

ansm

issi

on P

roje

ct;

(iv) N

epal

-Indi

a Tr

ade

and

Tran

spor

t Pro

ject

; (v

) Rur

al T

rans

port

Pro

ject

.

Indi

cati

ve F

inan

cing

: (i)

Nep

al F

ast T

rack

; (ii

) Str

ateg

ic R

oad

Net

wor

k Pr

ojec

t.

Ong

oing

AA

A/O

ther

s:

(i) F

ast T

rack

Stu

dies

; (ii

) Fas

t Tra

ck TA

.

Resu

lts F

ram

ewor

k fo

r the

Nep

al C

PS F

Y14

-FY

18

1.

App

roac

h pa

per t

o th

e 20

13/1

4-20

15/1

6 D

evel

opm

ent P

lan

(tra

nsla

ted

from

Nep

ali o

rigin

al).

2.

End

extr

eme

pove

rty

and

prom

ote

shar

ed p

rosp

erity

.

ExEcutivESummarY

9FY2014-2018


Coun

try

Goa

ls:

Ensu

re fi

nanc

ial s

ecto

r sta

bilit

y th

roug

h ba

lanc

ed m

onet

ary,

fore

ign

exch

ange

and

fin

anci

al s

ecto

r pol

ices

.

Crea

te e

nabl

ing

envi

ronm

ent t

o im

prov

e ac

cess

to b

anki

ng a

nd u

se o

f ava

ilabl

e fin

anci

al m

eans

lead

ing

to a

ccel

erat

ed

econ

omic

act

ivity

.

Incr

ease

fore

ign

inve

stm

ent b

y pr

omot

ing

a fo

reig

n in

vest

men

t frie

ndly

env

ironm

ent f

or

the

deve

lopm

ent o

f prio

rity

sect

ors.

Cons

trai

nts/

Opp

ortu

niti

es:

Inst

abili

ty in

the

finan

cial

sec

tor,

incl

udin

g ris

ks o

f ins

olve

ncy

of s

tate

-ow

ned

bank

s an

d lo

w le

vels

of c

apita

lizat

ion.

Low

leve

ls o

f priv

ate

inve

stm

ent,

incl

udin

g co

mpl

ianc

e co

st s

avin

gs in

clim

ate

inte

rven

tions

. Low

acc

ess

to fi

nanc

e.

Out

com

e 1.

3: I

ncre

ased

fina

ncia

l sec

tor s

tabi

lity

and

impr

oved

env

iron

men

t for

pri

vate

sec

tor i

nves

tmen

t

Indi

cato

r 1: S

tate

-ow

ned

bank

s (N

BL a

nd R

BB)

reca

pita

lized

as

per p

rude

ntia

l nor

ms

and

NBL

priv

atiz

ed

Base

line:

Ca

pita

l Ade

quac

y Ra

tio

(FY1

3):

NBL

: -0.

49%

RB

B: 3

.33%

GoN

ow

ners

hip

of N

BL: 3

0%

Targ

et:

10%

CA

R fo

r eac

h on

e

GoN

ow

ners

hip

of N

BL: 0

%So

urce

: NRB

and

GoN

Indi

cato

r 2: T

he N

RB p

rogr

am o

f spe

cial

insp

ectio

ns h

as b

een

com

plet

ed a

nd a

ll un

derc

apita

lized

inst

itutio

ns h

ave

been

ei

ther

reso

lved

or a

re u

nder

form

al P

rom

pt C

orre

ctiv

e Ac

tion.

Base

line:

N

o in

spec

tions

Targ

et:

50%

of a

sset

s of

Cla

ss A

ba

nks

Sour

ce: N

RB a

nd p

roje

ct d

ata

Indi

cato

r 3: A

mou

nt o

f new

priv

ate

inve

stm

ent m

obili

zed

in

prio

rity

sect

ors

Base

line:

0Ta

rget

: $10

0mSo

urce

: IFC

Indi

cato

r 4: C

ompl

ianc

e co

st s

avin

gs o

f inv

estm

ent i

n cl

imat

e in

terv

entio

ns

Base

line:

0

Targ

et:

$18.

5mSo

urce

: IFC

Indi

cato

r 5: A

cces

s to

fina

nce:

Impr

oved

acc

ess

to fi

nanc

e -

to b

e m

easu

red

by n

umbe

r of b

enefi

ciar

ies

(indi

vidu

als

and

SMEs

, dis

aggr

egat

ed b

y ge

nder

)

Base

line:

SM

Es: 4

3,90

0 (5

,268

fem

ale

owne

d); I

ndiv

idua

ls: 2

.3 m

illio

n (o

f whi

ch 1

.5 m

illio

n fe

mal

e)

Targ

et:

SMEs

: 51,

300

(6,3

00 fe

mal

e-ow

ned)

; Ind

ivid

uals

: 2.5

m

illio

n (o

f whi

ch 1

.6 m

illio

n fe

mal

e)So

urce

: IFC

Mile

ston

e: T

he s

tren

gthe

ned

lega

l fra

mew

ork

for e

ffect

ive

bank

re

solu

tion

has

been

ena

cted

and

co

nflic

ts b

etw

een

the

NRB

Act

and

BA

FIA

hav

e be

en re

mov

ed

Mile

ston

e: T

he le

gal f

ram

ewor

k fo

r dep

osit

insu

ranc

e ha

s be

en e

nact

ed a

nd D

CGT

has

oper

atio

naliz

ed th

e Ac

t by

deve

lopi

ng a

dequ

ate

oper

atin

g ca

paci

ty a

nd b

y is

suin

g en

ablin

g re

gula

tions

and

byl

aws

Mile

ston

e: 1

0 IF

C le

d te

chni

cal

advi

sory

and

/or P

PP p

roje

cts

by

2015

Mile

ston

e: 4

IFC

led

inve

stm

ent

proj

ects

by

2015

Ong

oing

Fin

anci

ng:

(i) IF

C fa

cilit

ated

syn

di-c

atio

n an

d sp

onso

r eq

uity

inve

stm

ent i

n in

dica

tive

500M

W

hydr

o pr

ojec

t;

(ii) S

EDF:

Inve

stm

ent C

limat

e fo

r Ind

ustr

y (IF

C);

(iii)

Acce

ss to

fina

nce

in S

ME

Vent

ures

and

Po

ultr

y (IF

C);

(iv) F

inan

cial

Sec

tor D

PC;

(iv

) IFC

equ

ity a

nd d

ebt s

uppo

rt to

in

fras

truc

ture

com

pani

es, M

FIs

and

FIs.

Indi

cati

ve F

inan

cing

:(i)

IFC

Inve

stm

ents

in A

ndhi

khol

a, U

pper

Tr

ishu

li 1,

Join

t Dev

elop

men

t Agr

eem

ent f

or

Upp

er M

arsy

angd

i and

, and

Kab

eli p

ower

pr

ojec

ts;

(ii) I

FC’s

supp

ort t

o to

uris

m b

y in

vest

ing

in

hote

l pro

ject

s;

(iii)

Seco

nd F

inan

cial

Sec

tor D

PC.

Ong

oing

AA

A:

(i) C

ompe

titiv

e In

dust

ries

Stud

y;(ii

) IFC

Nep

al In

vest

men

t Clim

ate

Refo

rm

Prog

ram

(SED

F);

(iii)

IFC

advi

sory

with

exi

stin

g cl

ient

s in

N

irdha

n an

d RM

DC

(FM

+A2F

);

(v) I

FC p

aym

ents

pro

ject

s;

(vi)

IFC

PPP

tran

sact

ion

advi

sory

to G

oN;

(vi)

Fina

ncia

l Sec

tor A

sses

smen

t Pro

gram

(F

SAP)

; (v

ii) F

inan

cial

Sec

tor D

evel

opm

ent S

trat

egy

(TA

); (v

iii) A

griF

inan

ce a

dvis

ory

to N

irdha

n (T

F);

(ix) I

FC’s

Sout

h A

sia

Regi

onal

Inte

grat

ion

in T

rade

and

Inve

stm

ent (

SART

I) Po

licy

Prog

ram

; (x

) IFC

SM

E Ba

nkin

g an

d Fi

nanc

ial

Infr

astr

uctu

re P

roje

cts.

10

ExEcutivESummary

Fy2014-2018


Pilla

r 2: I

ncre

asin

g in

clus

ive

grow

th a

nd o

ppor

tuni

ties

for p

rosp

erit

y

Coun

try

Goa

ls:

To im

prov

e ec

onom

ic s

tatu

s of

rura

l pe

ople

by

incr

easi

ng th

e pr

oduc

tion

and

prod

uctiv

ity o

f agr

icul

ture

and

live

stoc

k co

mm

oditi

es in

line

with

the

requ

irem

ents

of

farm

ers

and

othe

r sta

keho

lder

s.

To in

crea

se a

gric

ultu

ral p

rodu

ctio

n an

d pr

oduc

tivity

thro

ugh

effici

ent,

sust

aina

ble,

eff

ectiv

e an

d re

liabl

e irr

igat

ion

syst

em fo

r pr

ovid

ing

irrig

atio

n fa

cilit

y to

the

agric

ultu

ral

land

thro

ugho

ut th

e ye

ar

Cons

trai

nts/

Opp

ortu

niti

es:

Agric

ultu

re s

econ

d gr

eate

st s

ourc

e of

val

ue-

adde

d to

the

econ

omy;

larg

est s

ourc

e of

em

ploy

men

t, in

com

e an

d po

vert

y re

duct

ion.

Onl

y 28

per

cent

of N

epal

’s ar

able

land

is

irrig

ated

; mos

t irr

igat

ion

syst

ems

are

farm

er-

man

aged

and

in n

eed

of m

oder

niza

tion

and

reha

bilit

atio

n

Nee

d to

impr

ove

agric

ultu

re p

rodu

ctiv

ity

for m

arke

tabl

e co

mm

oditi

es a

nd in

crea

se

inte

grat

ion

of s

mal

lhol

ders

in v

alue

cha

ins

for n

on-t

radi

tiona

l hig

her v

alue

com

mod

ities

(m

arke

t-or

ient

ed s

mal

lhol

der p

rodu

ctio

n) to

im

prov

e ru

ral i

ncom

es.

Out

com

e 2.

1 In

crea

sed

agri

cult

ural

pro

duct

ivit

y an

d co

mm

erci

aliz

atio

n In

dica

tor 1

: Pro

duct

ivity

of p

riorit

y hi

gh v

alue

co

mm

oditi

es

Base

line:

To

mat

o : 8

4t/h

a

M

ilk :

978

ltr/y

ear,c

ow

Su

garc

ane:

39.

5t/h

aPo

ultr

y FC

R: 2

.1:1

Targ

et:

110t

/ha

2,25

0 ltr

/yea

r,cow

47

t/ha

(IFC

)1.

9:1

(IFC)

Sou

rce:

Pro

ject

Dat

a (P

ACT

and

NPS

CSP)

Indi

cato

r 2: P

erce

ntag

e in

crea

se in

the

crop

ping

inte

nsity

Base

line:

Cr

oppi

ng in

tens

ity: 1

.68

Ta

rget

: 2.

20 S

ourc

e: P

roje

ct D

ata

(IWRM

P)

Indi

cato

r 3: A

rea

unde

r irr

igat

ion

farm

ing

Base

line:

Irr

igat

ed a

rea:

15,

817

ha

Targ

et:

26,8

00 h

a S

ourc

e: P

roje

ct D

ata

(IWRM

P)

Indi

cato

r 4: A

nnua

l sm

allh

olde

r pro

duct

ion

mar

kete

d

Base

line:

G

inge

r: 2,

288

mt/

year

Milk

: 5,1

22,2

60 lt

r/ye

ar

Targ

et:

2,32

4 m

t/ye

ar5,

170,

520

ltr/y

ear

Sou

rce:

Pro

ject

Dat

a (P

ACT)

Mile

ston

e: In

crea

se in

pr

oduc

tion

of to

mat

oes

and

milk

by

8%, 3

2% re

spec

tivel

y;

FCR

redu

ctio

n fo

r pou

ltry

by 0

.2

(201

6).

Mile

ston

e: In

crea

sed

crop

ping

in

tens

ity b

y at

leas

t 1.9

0%

(201

6).

Mile

ston

e: In

crea

sed

tota

l are

a irr

igat

ed to

at l

east

18,

000

ha

(201

6).

Mile

ston

e: In

crea

sed

volu

me

of

ging

er m

arke

ted

by s

mal

lhol

der

farm

ers

by 2

5mt/

year

(min

. 0.5

%

per y

ear;

2016

).

Ong

oing

Fin

anci

ng:

(i) P

roje

ct fo

r Agr

icul

ture

Co

mm

erci

aliz

atio

n an

d Tr

ade

(PAC

T);

(ii

) Mod

erni

zatio

n of

Ran

i, Ja

mar

a, K

ular

iya

Irrig

atio

n Pr

ojec

t (RJ

K);

(iii)

Nep

al Z

oono

ses

Cont

rol P

roje

ct (T

F);

(iv) I

rrig

atio

n an

d W

ater

Res

ourc

e M

anag

emen

t Pro

ject

(IW

RMP)

;

(v) N

epal

Agr

icul

ture

Foo

d Se

curit

y Pr

ojec

t (G

AFS

P gr

ant)

; (v

i) N

epal

Pou

ltry

Supp

ly C

hain

St

reng

then

ing

Proj

ect (

IFC)

.

Indi

cati

ve F

inan

cing

: [W

ill b

e de

term

ined

by

the

outc

omes

of

on-g

oing

AA

A]

On-

goin

g A

AA

:So

urce

s of

Gro

wth

in A

gric

ultu

re

Indi

cati

ve A

AA

:St

reng

then

ing

the

Poul

try

Valu

e Ch

ain

(IFC)

Coun

try

Goa

ls:

To p

rovi

de o

ppor

tuni

ties

for l

itera

cy a

nd

cont

inuo

us e

duca

tion

to a

ll N

epal

ese,

pa

rtic

ular

ly to

wom

en a

nd p

eopl

e fr

om

poor

com

mun

ities

by

linki

ng li

tera

cy w

ith

way

of l

ife a

nd b

y es

tabl

ishi

ng in

ter-

linka

ges

betw

een

skill

s an

d w

ork.

Cr

eate

skill

s and

voc

atio

nal t

rain

ing

oppo

rtun

ities

to c

reat

e hu

man

reso

urce

abl

e to

com

pete

bot

h na

tiona

lly a

nd in

tern

atio

nally

.

Cons

trai

nts/

Opp

ortu

niti

es:

Low

leve

ls o

f acc

ess a

cros

s to

post

-bas

ic

(sec

onda

ry a

nd te

rtia

ry) e

duca

tion

acro

ss

inco

me

grou

ps a

nd g

ende

r. Co

nsid

erab

le

wag

e pr

emiu

ms f

or h

ighe

r lev

els o

f edu

catio

n in

Nep

al a

s wel

l as f

or m

igra

nt w

orke

rs. L

ow

leve

ls o

f em

ploy

abili

ty a

nd n

eed

for t

rain

ing

to b

e m

ore

empl

oym

ent f

ocus

ed.

Out

com

e 2.

2: M

ore

equi

tabl

e ac

cess

to e

duca

tion

and

sk

ills

deve

lopm

ent,

of h

ighe

r qua

lity

and

rele

vanc

eIn

dica

tor 1

: Enr

ollm

ent r

ate

(NER

) in

seco

ndar

y ed

ucat

ion

(by

gend

er a

nd in

com

e qu

intil

e)

Base

line:

M

ale:

30.

9%

Fem

ale:

30.

3%

Poor

est Q

uint

ile3 : 1

7.7%

Se

cond

Poo

rest

: 25.

9%

Targ

et:

Mal

e: 3

4%

Fem

ale:

33.

5%

Poor

est Q

uint

ile: 2

2.5%

Se

cond

Poo

rest

: 25.

9%So

urce

: GoN

(NLS

S if

avai

labl

e)

Indi

cato

r 2: N

umbe

r of s

tude

nts

grad

uatin

g an

nual

ly fr

om

tert

iary

acc

redi

ted

inst

itutio

ns

Base

line:

2,0

00Ta

rget

: 5,0

00So

urce

: GoN

In

dica

tor 3

: Per

cent

age

of g

radu

ates

from

sup

port

ed

prog

ram

s ga

infu

lly4 e

mpl

oyed

at l

east

for s

ix m

onth

s af

ter

com

plet

ion

of th

e sh

ort t

erm

trai

ning

Base

line:

68%

Targ

et: 7

0%So

urce

: GoN

Mile

ston

e: 1

2,00

0 (3

,000

per

ye

ar) p

oor s

tude

nts

at s

econ

dary

an

d te

rtia

ry le

vels

rece

ivin

g sc

hola

rshi

ps fr

om 2

014

to 2

017

So

urce

: GoN

Mile

ston

e: (b

y m

id-t

erm

) N

ER

Mal

e:33

.5%

Fe

mal

e: 3

3.0%

So

urce

: GoN

Mile

ston

e: 3

,500

stu

dent

s gr

adua

ting

from

acc

redi

ted

HE

inst

itutio

ns; 1

5 in

stitu

tions

ar

e ac

cred

ited;

45,

000

pers

ons

trai

ned

Ong

oing

Fin

anci

ng:

(i) S

choo

l Sec

tor R

efor

m P

rogr

am (S

SRP;

ed

ucat

ion

SWA

p);

(ii) P

ro-p

oor T

arge

ted

Stip

end

Proj

ect (

TF);

(ii

i) En

hanc

ed V

ocat

iona

l Edu

catio

n an

d Tr

aini

ng P

roje

ct;

(iv) S

econ

d H

ighe

r Edu

catio

n Pr

ojec

t. O

ngoi

ng A

AA

: (i)

Nep

al E

duca

tion

Stud

ies;

(ii

) Im

pact

Eva

luat

ion

of s

hort

-ter

m

trai

ning

. In

dica

tive

Fin

anci

ng:

(i) H

ighe

r Edu

catio

n Re

form

s Pr

ojec

t;

(ii) S

kills

Dev

elop

men

t Pro

ject

.

Indi

cati

ve A

AA

: (i)

Eva

luat

ion

of d

iffer

ent m

odal

ities

of

enha

ncin

g ea

rly g

rade

read

ing

skill

s;

(ii) S

kills

Dev

elop

men

t Stu

dy;

(iii)

Educ

atio

n Se

ctor

Rev

iew

.

3.

NER

will

be

base

d on

EM

IS, w

here

as N

ER o

f poo

rest

Qs

is b

ased

on

NLS

S da

ta.

4.

Gai

nful

ly e

mpl

oyed

mea

ns th

at a

gra

duat

e ea

rns

at le

ast N

Rs 2

7,60

0 (N

Rs 4

,600

per

mon

th o

n av

erag

e) fr

om th

e jo

b (o

r sel

f-em

ploy

men

t) th

at is

dire

ctly

rela

ted

to th

e tr

aini

ng re

ceiv

ed b

y th

e gr

adua

tes.

The

grad

uate

mus

t ha

ve b

een

plac

ed in

em

ploy

men

t with

in tw

o m

onth

s of

com

plet

ion

of th

e tr

aini

ng.

ExEcutivESummarY

11FY2014-2018


Coun

try

Goa

ls:

To in

crea

se e

quita

ble

acce

ss a

nd q

ualit

y of

he

alth

, edu

catio

n an

d w

ater

sup

ply

serv

ices

to

all

citiz

ens,

espe

cial

ly th

e m

argi

naliz

ed

popu

latio

n gr

oups

.

To in

crea

se e

quita

ble

acce

ss to

and

qua

lity

basi

c- h

ealth

car

e se

rvic

es.

Prov

ide

basi

c dr

inki

ng w

ater

and

san

itatio

n fa

cilit

ies

to a

ll ci

tizen

s of

Nep

al. R

each

un

iver

sal a

cces

s to

wat

er a

nd s

anita

tion

by

2017

.

Cons

trai

nts/

Opp

ortu

niti

es:

Low

birt

h at

tend

ance

in h

ealth

faci

litie

s/ b

y sk

illed

per

sona

l for

the

poor

est q

uint

iles.

Low

pro

gres

s in

redu

cing

hun

ger a

nd

impr

ovin

g nu

triti

on; h

igh

prev

alen

ce o

f poo

r in

fant

and

chi

ld fe

edin

g pr

actic

es.

Hig

h ou

t-of

poc

ket e

xpen

ditu

res

for h

ealth

an

d lo

w e

nrol

lmen

t in

heal

th in

sura

nce.

85 p

erce

nt w

ater

acc

ess

in ru

ral a

reas

and

55

per

cent

san

itatio

n ac

cess

. Hig

h ne

ed

for r

epai

rs o

f exi

stin

g ru

ral w

ater

sys

tem

s. A

bout

5.5

mill

ion

peop

le s

uffer

from

in

adeq

uate

wat

er s

ervi

ce a

nd 1

6 m

illio

n fr

om in

adeq

uate

san

itatio

n fa

cilit

ies.

Out

com

e 2.

3: Im

prov

ed h

ealt

h an

d nu

trit

ion

outc

omes

, par

ticu

larl

y fo

r the

poo

r and

dis

adva

ntag

ed

Indi

cato

r 1: P

erce

ntag

e of

birt

hs d

eliv

ered

by

skill

ed b

irth

atte

ndan

ts in

the

poor

est t

wo

quin

tiles

Base

line:

Lo

wes

t 10.

7%

2nd L

owes

t 23.

7 %

Targ

et:

Lo

wes

t 20%

2nd

low

est 3

0%So

urce

: Pro

ject

Dat

a; D

HS

data

Indi

cato

r 2: P

erce

ntag

e of

chi

ldre

n 6-

24 m

onth

s of

age

who

co

nsum

e a

min

imum

acc

epta

ble

diet

in th

e m

ost d

isad

vant

aged

VD

Cs o

f the

15

proj

ect d

istr

icts

Base

line:

11

.8Ta

rget

: 25

So

urce

: Pro

ject

Dat

a

Indi

cato

r 3: P

ropo

rtio

n of

peo

ple

in a

dis

tric

t enr

olle

d in

hea

lth

insu

ranc

e

Base

line:

0

Targ

et:

10%

Sour

ce: P

roje

ct D

ata

Indi

cato

r 4: N

ew h

ouse

hold

s w

ith a

cces

s to

saf

e dr

inki

ng w

ater

, ne

w V

illag

e D

evel

opm

ent C

omm

ittee

s (V

DCs

) tha

t are

ope

n de

feca

tion

free

(OD

F) a

nd n

ew p

ublic

latr

ines

Base

line:

D

rinki

ng w

ater

: 0 (2

014;

pro

ject

ar

ea o

nly)

Sani

tatio

n: 0

VD

Cs (2

014;

pr

ojec

t are

a on

ly)

Publ

ic la

trin

es: 0

(201

4; p

roje

ct

area

onl

y)

Targ

et:

Drin

king

wat

er: 1

77,0

00 n

ew

hous

ehol

ds (2

017)

Sani

tatio

n: 2

40 n

ew V

DCs

or

abou

t new

116

,000

hou

seho

lds

(201

7)

New

pub

lic la

trin

es: 6

00So

urce

: RW

SSP3

pro

ject

dat

a

Mile

ston

e: A

t lea

st 5

00 S

kill

Birt

h A

tten

dant

s tr

aini

ng to

doc

tors

/nu

rse/

mid

-wiv

es c

ompl

eted

eve

ry

year

Mile

ston

e: a

t lea

st 2

00

disa

dvan

tage

d VD

Cs h

ave

the

nutr

ition

pro

ject

Mile

ston

e: Im

pact

Eva

luat

ion

of H

ealth

Insu

ranc

e co

mpl

eted

Mile

ston

e: P

eopl

e tr

aine

d on

im

prov

ed h

ygie

ne b

ehav

ior

and

sani

tatio

n pr

actic

es fr

om

zero

(201

4) to

0.3

mill

ion

(201

5) a

nd 1

.6 m

illio

n (2

017)

Ong

oing

Fin

anci

ng:

(i) S

econ

d H

NP

and

HIV

/AID

S Pr

ojec

t (h

ealth

SW

Ap)

; (ii

) Com

mun

ity A

ctio

n fo

r Nut

ritio

n Pr

ojec

t.

Ong

oing

AA

A:

(i) F

ood

Secu

rity

and

Nut

ritio

n Th

emat

ic

Repo

rt;

(ii) C

apac

ity A

sses

smen

t of C

omm

unity

W

orke

rs to

Impl

emen

t Prio

rity

Nut

ritio

n Ac

tions

in N

epal

; (ii

i) D

istr

ict P

rofil

es o

f Det

erm

inan

ts o

f M

alnu

triti

on in

Nep

al;

(iv) R

evie

w o

f Beh

avio

r Cha

nge

for

Infa

nt a

nd Y

oung

Chi

ld F

eedi

ng (I

YCF)

In

terv

entio

ns in

Nep

al;

(v) P

repa

ratio

n of

a s

trat

egic

co

mm

unic

atio

ns p

lan

to ra

ise

awar

enes

s an

d in

crea

se c

omm

itmen

t fo

r act

ion

agai

nst f

ood

and

nutr

ition

in

secu

rity

in N

epal

; (v

i) N

epal

Rur

al W

ater

Sup

ply

and

Sani

tatio

n Se

ctor

-Iden

tifica

tion

of

Opt

ions

to In

crea

se S

usta

inab

le A

cces

s to

Ser

vice

s.

Indi

cati

ve F

inan

cing

: (i)

Thi

rd R

ural

Wat

er S

uppl

y an

d Sa

nita

tion

Proj

ect;

(ii) T

hird

Nep

al H

ealth

Sec

tor P

rogr

am.

12

ExEcutivESummary

Fy2014-2018


Coun

try

Goa

ls:

To e

nabl

e ec

onom

ical

ly v

ulne

rabl

e an

d so

cial

ly

excl

uded

mar

gina

lized

indi

vidu

als,

grou

ps a

nd

com

mun

ities

to c

ope

and

man

age

risks

and

vu

lner

abili

ties

by p

rovi

ding

them

min

imum

le

vel o

f soc

ial p

rote

ctio

n.

Cons

trai

nts/

Opp

ortu

niti

es:

Cont

inue

d hi

gh v

ulne

rabi

lity

of

mar

gina

lized

hou

seho

lds,

incl

udin

g la

ck

of a

vaila

bilit

y of

pro

duct

ive

asse

ts.

Out

com

e 2.

4: Im

prov

ed s

ocia

l pro

tect

ion

Indi

cato

r 1:

Num

ber o

f m

argi

naliz

ed h

ouse

hold

su

ppor

ted

with

pro

duct

ive

asse

ts

Base

line:

41

6,71

25

Targ

et:

575,

0006

Sour

ce: P

AF-II

Indi

cato

r 2: P

erce

ntag

e of

vul

nera

ble

peop

le b

enefi

ting

from

saf

ety

net p

rogr

ams7

Base

line:

42%

of p

oor r

ecei

ve S

A

Targ

et: 5

0%

Sour

ce: H

DSP

, SSN

P an

d SP

P

Indi

cato

r 3: N

umbe

r of p

aym

ent a

ccou

nts

open

ed

(dis

aggr

egat

ed b

y ge

nder

)

Base

line:

0 (m

ale

vs. f

emal

e: N

/A)

Targ

et: 1

mn

(of w

hich

0.1

2mn

fem

ale)

Sour

ce: I

FC’s

TA N

epal

Pay

men

ts R

egul

ator

y Re

form

Mile

ston

e: N

umbe

r of G

ende

r an

d So

cial

and

Incl

usio

n (G

ESI)

Stra

tegy

in k

ey m

inis

trie

s m

onito

red

for p

rogr

ess

on

gend

er a

nd in

clus

ion

scor

es.

Mile

ston

e: G

ESI A

naly

sis

of 3

se

ctor

s co

mpl

eted

.

Mile

ston

e: 4

,500

new

PA

F co

mm

unity

org

aniz

atio

ns b

y en

d of

July

201

5.

Mile

ston

e: 6

,120

new

PA

F co

mm

unity

org

aniz

atio

ns b

y en

d of

July

201

6.

Ong

oing

Fin

anci

ng:

(i) E

mer

genc

y Pe

ace

Supp

ort P

roje

ct;

(ii) P

over

ty A

llevi

atio

n Fu

nd II

Pro

ject

(P

AF

II);

(iii)

Soci

al S

afet

y N

ets

Proj

ect;

(iv) H

uman

Dev

elop

men

t and

Soc

ial

Prot

ectio

n Pi

lot (

TF)

Ong

oing

AA

A:

(i) H

uman

Dev

elop

men

t Not

e (b

ased

on

NLS

S da

ta);

(ii

) Gen

der a

nd S

ocia

l Inc

lusi

on

Ass

essm

ent o

f NLS

S;

(iii)

Food

Inse

curit

y Ta

rget

ing;

(iv

) Gen

der a

nd n

utrit

ion

revi

ew o

f pu

blic

wor

ks;

(v) I

FC’s

TA N

epal

Pay

men

ts R

egul

ator

y Re

form

Pro

gram

Indi

cati

ve F

inan

cing

: (i)

Soc

ial S

afet

y N

ets

Syst

ems

Build

ing

Proj

ect.

Indi

cati

ve A

AA

: (i)

Soc

ial P

rote

ctio

n St

udy;

(ii

) Rev

iew

of p

ublic

wor

ks p

rogr

am a

s a

safe

ty n

et;

(iii)

Soci

al P

rote

ctio

n Pr

ogra

mm

atic

A

AA

.

5.

The

figur

e is

bas

ed o

n PA

F’s

Prog

ress

Rep

ort (

as o

f Nov

embe

r 15,

201

2)

6.

This

num

ber i

s ba

sed

on th

e es

timat

es fo

r the

Sec

ond

AF

sugg

estin

g th

at P

AF

will

cov

er a

n ad

ditio

nal 1

53,0

00 h

ouse

hold

s ba

sed

on th

e ad

ditio

nal fi

nanc

ing

of $

80 m

illio

n fo

r the

sec

ond

AF

of P

AF

II. T

he a

dditi

onal

fina

ncin

g w

ill p

rovi

de s

uppo

rt fo

r abo

ut 6

,000

add

ition

al c

omm

unity

org

aniz

atio

ns.

7.

Poor

peo

ple

who

are

ben

efitin

g of

a re

liabl

e an

d ro

bust

saf

ety

nets

pro

gram

whi

ch h

as a

n effi

cien

t del

iver

y m

echa

nism

ExEcutivESummarY

13FY2014-2018


IBRD/IDA

Total Disbursed (Active) 730.96

of which has been repaid 0.00

Total Disbursed (Closed) 770.19


Total Disbursed (Active + Closed) 1,501.15


Total Undisbursed (Active) 683.47

Total Undisbursed (Closed) 6.66

Total Undisbursed (Active + Closed) 690.13

As Of Date 4/15/2014

Closed Projects 89

Active Projects Difference BetweenExpected and ActualDisbursements a/

Last ISR Supervision Rating

Project ID

Project Name Development Objectives

Implementa-tion Progress

Fiscal Year

IDA Cancel. Undisb. Orig. Frm Rev’d

P132289 Kali Gandaki Rehab MS MS 2013 27.26 27.84P125495 NP: Bridges Program Support MU MU 2012 60 43.31 9.56P120265 NP: Emerging Towns Project MU MU 2011 25 6.43 10.50 5.74 -1.52P104015 NP: Enhanced Vocational Educ & Trng MS MU 2011 50 10.37 26.57 24.88 -0.00P099296 NP: Irrig & Water Res Mgmt Proj S S 2008 114.3 59.79 -4.73 9.57P112893 NP: Kabeli Transmission Project MU MU 2011 38 27.09 8.51P105860 NP: PAF II S MS 2008 245 0.03 82.04 -62.80 -4.69P110762 NP: Peace Support Project MS MS 2008 50 13.06 0.68 15.33 13.71P118179 NP: Rani Jamara Kulariya Irrigation Proj S MS 2012 43 30.68 11.58P095977 NP: Road Sector Development Project MS MU 2008 117.6 28.49 -46.72 -1.26P113441 NP: School Sector Reform Program MS MS 2010 230 83.16 -32.68 98.65P090967 NP: Second Higher Education Project MS MS 2007 60 9.50 7.68 1.43P117417 NP: Second HNP and HIV/AIDS Project S MS 2010 129.15 57.16 30.34P113002 NP: Social Safety Nets Project S MS 2009 64.47 5.18 7.81 -30.67 12.13P087140 NP:Agriculture Commercialization & Trade S MS 2009 60 50.75 8.50P125359 NP:Community Actionfor Nutrition Project MU MU 2012 40 37.68 2.63P132750 SNRTP S S 2014 100 100.42 0.67

Overall Result 1453.78 35.07 683.47 -52.17 128.02

Regional Projects with Nepal ComponentsProject ID

Project Name Development Objectives

Implementa-tion Progress

Fiscal Year

IDA Cancel. Undisb. Orig. Frm Rev’d

P144335 Nepal-India Reg Trade & Transport Prj S S 2013 99 93.2 -6.0 186.1P121210 REG: Wildlife Protection: BD and NP MS MU 2011 39 31.3 20.3 90.6P115767 REG:Northeast Regional Electr. Transmiss MS MS 2011 138 122.6 64.3 324.9

Overall Result 276 247.0 78.5 602

IDA Operations Portfolio

14

ExEcutivESummary

Fy2014-2018


(As

of M

arch

31,

201

4)

S.

No.

Proj

ect

IDTr

ust F

und

Num

ber

Proj

ect

Effec

tive

D

ate

Clos

ing

Dat

eN

et C

omm

it.

Am

ount

Dis

b.

FY14

Tota

l Cum

. D

isb.

% D

isb.

Und

isb.

Ba

lanc

e1

P090

038

TF 5

6440

Nep

al -

Biog

as P

rogr

am3-

May

-06

31-J

ul-1

57.

00

1.57

3.

55

50.7

3%3.

45

2P0

9597

8TF

902

64N

epal

- Vi

llage

Mic

ro H

ydro

30-J

un-0

715

-Dec

-15

1.96

0.

00

0.00

0.

00%

1.96

3

P090

967

TF 9

3397

Japa

n So

cial

Dev

elop

men

t Fun

d G

rant

for P

ro-p

oor T

arge

ted

Seco

ndar

y Sc

hool

St

ipen

d Pr

ojec

t (C)

2-

Jan-

0915

-Jan

-14

1.90

0.

18

1.58

82

.87%

0.33

4P1

2519

8TF

947

24N

epal

RED

D R

eadi

ness

Pre

para

tion

Prog

ram

26-A

ug-0

930

-Jun

-15

3.60

0.

73

1.43

39

.64%

2.17

5

P119

113

TF 9

8650

Prog

ram

to P

rom

ote

Dem

and

for G

ood

Gov

erna

nce

(C)

24-J

an-1

131

-Dec

-13

1.41

0.

19

1.32

93

.53%

0.09

6

P123

653

TF 9

7889

AD

KF S

mal

l Gra

nts

Prog

ram

1-M

ar-1

128

-Feb

-14

1.00

0.

00

1.00

10

0.00

%0.

00

7P1

1344

1TF

982

35N

epal

: Sch

ool S

ecto

r Ref

orm

Pro

gram

21-M

ar-1

115

-Dec

-14

120.

00

13.4

1 11

6.33

96

.94%

3.67

8

P125

891

TF 9

9675

Stre

ngth

enin

g In

stitu

tiona

l Cap

acity

of t

he D

NPW

C fo

r the

Effe

ctiv

e M

anag

emen

t of M

ount

ain

Prot

ecte

d A

reas

25-A

ug-1

125

-Aug

-14

0.50

0.

16

0.33

66

.04%

0.17

9P1

2533

1TF

992

88N

epal

: Hum

an D

evel

opm

ent -

Soc

ial P

rote

ctio

n Pi

lot P

roje

ct29

-Aug

-11

31-J

ul-1

41.

50

0.34

0.

79

52.6

9%0.

71

10P1

2408

8TF

992

74Ad

ditio

nal F

inan

cing

to th

e Po

vert

y A

llevi

atio

n Fu

nd II

11-O

ct-1

130

-Jun

-14

10.0

0 0.

47

10.0

0 10

0.00

%0.

00

11P1

2577

0TF

104

52St

reng

then

ing

PFM

Sys

tem

s in

Nep

al31

-Oct

-11

30-J

un-1

54.

30

1.49

3.

15

73.3

3%1.

15

12P1

2874

4TF

112

08N

epal

: Mak

ing

mar

kets

wor

k fo

r the

con

flict

affe

cted

in N

epal

17-F

eb-1

217

-Feb

-16

2.65

0.

43

0.79

29

.72%

1.86

13

P127

040

TF 1

0455

NP:

Str

engt

heni

ng th

e O

ffice

of t

he A

udito

r Gen

eral

23-F

eb-1

230

-Jun

-15

2.30

0.

64

0.99

43

.24%

1.31

14

P130

089

TF 1

2273

Zoon

oses

Con

trol

Pro

ject

(ZCP

) (C)

5-

Jul-1

231

-Mar

-14

10.0

0 3.

56

5.06

50

.60%

4.94

15

P129

177

TF 1

1452

Nep

al: P

ilot P

roje

ct fo

r Sei

smic

Sch

ool S

afet

y in

the

kath

man

du23

-Jul

-12

30-J

un-1

41.

37

0.10

0.

10

7.30

%1.

27

16P1

3186

0TF

124

85N

epal

PFM

-MD

TF S

tren

gthe

ning

Civ

il So

ciet

y O

rgan

izat

ions

’ use

of S

ocia

l Ac

coun

tabi

lity

to im

prov

e PF

M in

Nep

al30

-Aug

-12

30-J

un-1

40.

80

0.35

0.

70

87.4

1%0.

10

17P1

2750

8TF

135

57Bu

ildin

g Re

silie

nce

to C

limat

e Re

late

d H

azar

ds20

-Jun

-13

30-N

ov-1

815

.00

0.00

0.

00

0.00

%15

.00

P127

508

TF 1

3665

16.0

0 6.

00

6.00

37

.50%

10.0

0 18

P130

461

TF 1

3464

Out

put-

Base

d A

id fo

r Mun

icip

al S

olid

Was

te M

anag

emen

t21

-Jun

-13

30-J

un-1

74.

29

0.26

0.

26

6.10

%4.

03

19P1

2890

5TF

137

19N

epal

Agr

icul

ture

and

Foo

d Se

curit

y Pr

ojec

t30

-Apr

-13

31-M

ar-1

846

.50

4.25

4.

25

9.14

%42

.25

20P1

4535

9TF

157

80JS

DF

for P

ro-P

oor U

rban

Reg

ener

atio

n Pi

lot P

roje

ct10

-Feb

-14

30-S

ep-1

72.

75

0.00

0.

00

0.00

%2.

75

21P1

4573

6TF

162

96Ad

oles

cent

Girl

s Em

ploy

men

t Ini

tiativ

e II

10-F

eb-1

430

-Sep

-17

0.58

0.

00

0.00

0.

00%

0.58

TO

TAL

255.

40

34.1

2 15

7.62

61

.72%

97.7

8

Nep

al T

rust

Fun

d Po

rtfo

lioU

SD in

Mill

ion

15FY2014-2018


S. No. Project ID

COFN Number

Project Effective Date

Closing Date

Net Commit. Amount

Disb. FY14

Total Cum. Disb.

% Disb. Undisb. Balance

20 P105860 COFN C1200 Poverty Alleviation Fund II 31-Jul-08 31-Dec-14 3.94 0.09 3.81 94.29% 0.13

Project Preparation FundS. No. Project

IDPPF Number

Name of Disbursing PPF Effective Date

Closing Date

Net Commit. Amount

Disb. FY14

Total Cum. Disb.

% Disb. Undisb. Balance

20 P143036 IDA Q8700 Rural Water Supply and Sanitation Improvement Project

24-Sep-13 30-Jun-14 3.00 0.00 0.00 0.00% 3.00

+ Utilization of Resources as of March 31, 2014 .* Exchange Rate Adjustment# Adjusted Trust Amount amount in columns 8 are figures derived after cancellation from original Trust Fund amount.

Note:1) The matrix presents the disbursement status of only ongoing portfolio and closed portfolio with disbursement period open. Projects which are already closed are not included in the matrix.2) Japan Social Development Fund Grant for Pro-poor Targeted Project (TF93397) extended until January 15, 2014 (extension letter dated July 31, 2012)3) Social Protection Project (TF 99288) extended until July 31, 2013 (1st extension)4) TF 94724 FCPF REDD Cell extended by one and half year with new closing date of June 30, 2015.(1st extension)

16

ExEcutivESummary

Fy2014-2018


As of 03/31/2014 (In USD Millions)

2010 2011 2012 2013 2014*Original Commitments (US$m)

IFC and Participants 14 13 35 22 4IFC’s Own Accounts only 14 13 35 22 4

Original Commitments by Sector (%)- IFC Accounts onlyE - Transportation and Warehousing 0 0 0 32 0O - Finance & Insurance 53 98 73 57 33P - Collective Investment Vehicles 0 2 19 0 0V - Electric Power 47 0 8 11 67

100 100 100 100 100Original Commitments by Investment Instrument (%) - IFC Accounts only

Guarantee 51 98 48 57 33Loan-LN 47 0 23 43 0Quasi-Equity (Loan Type) 0 0 19 0 0Straight Equity (incl. Fund) 2 2 10 0 67Total 100 100 100 100 100

Nepal: IFC Investment Operations Program

IFC’s Committed and Disbursed Outstanding Investment Portfolio

* As of Mar 31, 2014

Committed Disbursed Outstanding

FY Approval Company Loan Equity **Quasi Equity

*GT/RM

Partici pant

Loan Eq-uity

**Quasi Equity

*GT/RM

Partici pant

2008/ 2009/ 2010/ 2011/ 2012/ 2013/ 2014

BoK 8.00 0 0 0.74 - 6.40 0 - 0.74 -

2009/ 2013 Buddha Air Nepal 5.45 0 0 0 - 5.45 0 - 0 -

2010/ 2013 Butwal Power Co 8.24 0 0 0 - 5.66 0 - 0 -

2014 Himtal Hydro - 2.000 0 0 - 0 0 - 0 -

1998 Jomsom Resort 4.00 0 0 0 - 4.00 0 - 0 -

2011/ 2012/ 2013/ 2014

Laxmi Bank Ltd - 0 0 0.04 - 0 0 - 0.04 -

2009/ 2010/ 2011/ 2013/ 2014

NIC Bank - 0 0 0.02 - 0 0 - 0.02 -

2012/ 2014 NWEDC - 3.894 0 0 - 0 3.00 - 0 -

2011/ 2012 Nepal BO2 - 0.283 6.70 0 - 0 0.28 - 0 -

2010 Nirdhan MFB - 0.187 0 0 - 0 0.19 - 0 -

2012 RMDC Nepal - 0.539 0 0 - 0 0.54 - 0 -

2009 Smartchoice - 0.350 0 0 - 0 0 - 0 -

25.69 7.25 6.70 0.79 - 21.51 4.00 - 0.79 - * Denotes Guarantee and Risk Management Products.** Quasi Equity includes both loan and equity types.

Nepal IFC Portfolio

ExEcutivESummarY

17FY2014-2018


Proposed AAA and TA (FY14-18)FY14 FY15 FY16 FY17 FY18

Advocacy Poverty and shared prosperity Non-lending Technical Assistance (NLTA)Social protection

CEM/Growth studyNutrition policy

Mapping local service deliveryCompetitive industries diagnosticEducation PETS

FederalismQuality Hydropower dialogue, studies and TA

Fast Track study and TAFinancial sector strategy TAPublic Financial Management TA

Agriculture growthPEFA

Education sector reviewSkills development study

Advice Policy notesEconomic updatesNational risk assessment

ROSCGovernance reform Governance reform

IDA lending program FY14-18Fiscal Year Lending Indicative IDA ($ m)2014 Strengthening the National Rural Transport Program 100

Irrigation and Water Resource Management AF 50Rural Water Supply and Sanitation Project 72Others (Trust Funds): • Scaling-up Renewable Energy (SREP) – Biogas

20158 Higher Education Reform Project Total: 200-300Second Financial Sector Development Policy Credit

Energy Sector Development Policy CreditGrid Solar and Energy Efficiency Project

Kabeli A Hydroelectric Project

Technical Assistance for Preparation of Hydropower Project and Sector Reform

Others (Trust Funds): • ESMAP – Wind Energy Resource Mapping

2016 Third Health SWAp (Health, Nutrition & Population - HNP) Total: 200-300Second Energy Sector Development Policy Credit

Hydropower Project or IDA Partial Risk Guarantee (PRG)Social Safety Nets Systems Building Project

Strategic Roads Network ProjectOthers (Trust Funds): • Public Procurement Performance Improvement Project

2017 Hydropower Project or IDA PRG Total: 200-300Skills Development

Local Roads Bridges2018 Hydropower Project or IDA PRG Total:

200-300Nepal Fast Track

18

ExEcutivESummary

Fy2014-2018


Ongoing Non Lending Activities (IFC)

Business Line No of projects* Total IFC-managed funds** (US$mn)

Access to Finance 7 2.9

Investment Climate 3 7.4

Sustainable Business Advisory 2 2.4

Total Non Lending Activities 12 12.7

* Based on primary business line** Based on product wise split for the projects*** Data as of Apr 14, 2014

IFC Portfolio and Pipeline Summary

Summary of Ongoing Non Lending Activites (IFC)

Project Name Project Description Expected End Date

Access to Finance

Sustainable Energy Finance Nepal

Improve the financial performance of Nepalese industry by reducing energy costs as well as emissions of greenhouse gases by helping 2-3 local Nepalese banks to develop a sustainable business in EE finance and promote energy efficiency within industry

FY14

AS to Nirdhan Bank The overall objectives includes: (i) support Nirdhan to expand its operations and outreach to the clients; (ii) strengthen its risk management system and processes; and (iii) diversify and introduce new products and delivery mechanisms

FY16

Nepal Payment Systems Regulatory Reform

Engage with Nepal Rastra Bank and the Ministry of Finance in Nepal to facilitate the formulation of regulations and policies concerning National Payment Systems. The project also aims to provide capacity building for NRB so that it is able to monitor and regulate the financial sector efficiently.

FY14

TA to M. Nepal on Launching of Mobile Money Initiative and Agent Network Development

Engage with M.Nepal to develop and roll out mobile financial services by developing a mobile banking strategy and product as well as an agent and risk management framework.

FY14

TA to CEDBL, Nepal - Women in Business

Increase access to finance for women entrepreneurs by providing advisory services to a Nepali bank, CEDBL on strategy, product development and portfolio development

FY15

Nepal SME Banking Improve SME banking practices in Nepal through the following 2 key objectives: (1) Developing SME Banking and Risk Management capacity among regulators and BFIs, and dissemination of SME Banking and RM global best practices through training programs; and (2) Advisory to banks on SME Banking/RM

FY16

RMDC Risk Management and Microinsurance AS

Provide advisory to RMDC across two key components: (i) Support RMDC in creating a strong risk management foundation & allow some of the largest MFIs in Nepal to prioritize RM practices. (ii) Build internal expertise & incentivize RMDC to act as an aggregator & insurance agent in scaling up of Nepal’s small & medium size MFIs’ insurance business

FY17

Investment Climate

Nepal ICRP - Regulatory Reform

The objective of the Project is to improve the investment climate in Nepal by (i) identifying and removing major regulatory constraints for starting and operating a business, (ii) reducing tax compliance burden for businesses and (iii) improving the efficiency of export-import procedures.

FY14

Nepal ICRP - Public Private Dialogue

The project will comprise of the following three components: (i) Establishment and Operationalization of NBF Mechanism; (ii) Support private sector reforms to reduce the cost of doing business and capacity building; (iii) Communications and stakeholder engagement

FY14

Nepal Investment Climate for Industry

Support the Government of Nepal in streamlining procedures related to investment, improving air safety and food standards, as well as enhancing the capacity of investment promotion agencies, which will stimulate growth of the tourism sector through additional investments.

FY16

Sustainable Business Advisory

Nepal SME Ventures Build a pipeline of investable SMEs for the Fund by igniting interest and helping SMEs develop their managerial capacity and thus become more qualified and attractive for investments.

FY17

PPCR- Promoting Climate Resilient Agriculture, Nepal

Work with agribusiness lead firms to promote improved agricultural and water management practices and introduce new technologies among smallholder farmers producing rice, maize and sugarcane to adapt to climate change.

FY17

* Data as of Apr 14, 2014

ExEcutivESummarY

19FY2014-2018


The World Bank GroupNepal OfficeP.O. Box 798Yak and Yeti Hotel ComplexDurbar Marg, Kathmandu, NepalTel.: 4226792Fax: 4225112Email: [email protected]

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country partnership strategyfor nepal

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