Development policy credits to come as budgetary support to Nepal
KATHMANDU, Oct 11: The Ministry of Finance and the World Bank have signed two agreements totaling $200 million, nearly Rs 23.5 billion, as budgetary support for financial and energy sectors.
The agreements were signed between Shree Krishna Nepal, joint secretary at the Ministry of Finance, and the World Bank Country Director for Bangladesh, Bhutan and Nepal, Qimiao Fan, during the World Bank Annual Meeting in Bali on Wednesday.
Minister for Finance, Yuba Raj Khatiwada, and World Bank Regional Vice President for South Asia Hartwig Schafer were also present in the signing ceremony.
According to a statement issued by the World Bank, the first agreement will finance the Fourth Financial Sector Stability Development Policy Credit (DPC 4) with a credit of $100 million, nearly Rs 11.7 billion, while the second agreement is for the credit of $100 million (nearly Rs11.7 billion), to support the First Programmatic Energy Sector Development Policy Credit Project (DPC).
“These two credits will complement and support the priorities of the Government of Nepal by helping strengthen the energy and financial sectors, by bolstering their institutions, and by reducing vulnerabilities and increasing transparency,” the statement quoted Fan, the World Bank Country Director for Bangladesh, Bhutan and Nepal, as saying.
The credit facility under the first agreement is the final in a series of financial sector DPCs initiated in 2013. This program supports key reforms through a strengthened legal and regulatory framework, consolidation of the financial sector, placing the financial sector safety net on a firm footing, and laying the ground for further reforms to broaden and deepen access to financial services for both business and individuals, according to the World Bank statement.
The energy sector development policy credit project supports key policy, regulatory and institutional measures in the energy sector. Such measures include improving financial viability of the Nepal Electricity Authority (NEA), establishing a regulatory framework that is transparent, autonomous, and accountable, encouraging electricity trade and restructuring NEA.
“The DPC is linked to the government's key goal of providing electricity to a hundred percent of the population,” the statement added.
This is the first development policy credit of the World Bank for Nepal's energy sector.