KATHMANDU, Sept 13: It is an opportune time to put in place mechanisms to mobilize private sector solutions for infrastructure development in Nepal, a new World Bank assessment has concluded.
Releasing a report titled ‘Nepal Infrastructure Sector Assessment’, the World Bank said that unlocking private sector financing and expertise will, however, require an environment conducive for private sector participation.
For that to happen, the report recommends, creating conducive environment through sector-level groundwork, sustainable project structures, systematic and strategic public investment management and project selection and investment-friendly policies and regulations.
The report was launched on Thursday on the sidelines of the ‘Nepal Infrastructure Summit, 2019’ organized by the Ministry of Physical Infrastructure and Transport (MoPIT) and the Confederation of Nepalese Industries (CNI).
Nepal’s investment needs average 10% to 15% of GDP annually over the next decade as the country aspires to graduate from least-developed country status by 2022 toward middle-income country by 2030, according to the World Bank report.
“Despite a relatively low debt-to-GDP ratio, meeting the required investments is a challenging goal,” read the report. “Although public investment will continue to play a key role for infrastructure delivery, a stronger emphasis on private sector participation in infrastructure sectors could increase efficiencies by introducing private sector management expertise, technologies, and competition, and by transferring risks,” read the report, highlighting the need to rope in private sector in infrastructure development drive.
The report also assesses the energy, transport and urban infrastructure sectors together with cross-cutting issues and recommends interventions that combine short-term and longer-term structural and policy changes with tailored project implementation approaches to unlock private sector financing and cooperation with the public sector.
“For real benefits to accrue to Nepal’s citizens, the quality and sustainability of infrastructure services needs to improve with substantial and efficient investment,” World Bank Vice President and Treasurer Jingdong Hua said in a statement issued by the World Bank following the release of the report. “Unlocking private sector investment is key to sustainable infrastructure development to promote growth and equity and providing access to services, jobs and markets.”
Under the right conditions, infrastructure development can play a role in promoting growth and equity by providing access to basic services, jobs, and markets. In a geographically challenged country like Nepal, it will also help create reliable supply chains, allowing for more efficient movement of goods and services, according to the report.