ADB ready to increase loan, grant

ADB ready to increase loan, grant

Asian Development Bank (ADB) has agreed to increase loan and grant to Nepal. ADB president Takehiko Nakao – during the 47th annual meeting in Astana of Kazakhstan – assured finance minister Dr Ram Sharan Mahat that the bank is ready to scale up loan and grant assistance to Nepal. Mahat has asked Asian Development Bank to increase its aid to help Nepal graduate from current least developed country’s (LDCs) status to developing countries. Nepal needs huge investment in infrastructure like hydropower, roads, irrigation for which ADB’s increased support is necessary, Mahat told ADB president, during the meeting. Emphasising for additional investment particular in the infrastructure sector in the context of Nepal’s goal to be graduated from LDCs status by 2022, Mahat requested ADB president to continue with grant financing for Nepal, against its decision of converting to 100 per cent concessional loan financing citing Nepal moving from medium to low debt distress country status. Mahat reemphasised not to penalise the good performing countries in the name of improved debt sustainability condition since Nepal was paying back its foreign loans timely without any default despite political and economic difficulties. He also requested Nakao to show flexibility in performance based allocation (PBA) criteria in Asian Development Fund considering the country’s transitional condition. Briefing Nakao about Nepal’s recent political progress, Mahat also highlighted the importance of higher economic growth in the context of lower growth scenario despite the reasonably good progress achieved in social development front during the last two decades. During the meeting, president Nakao mentioned his insight feeling that he always remember Nepal as country of Buddha and respect Nepal and Nepali people very much. He commended Nepal’s progress in social development front and for maintaining fiscal discipline even such a difficult times of insurgency. Mahat also recalled his earlier decision of not joining Highly indebted Poor Countries( HIPC ) Initiative in the past and Nakao commended his vision in this respect. Mahat also invited Nakao to visit Nepal in appropriate time. Nakao accepting his invitation indicated that he will be visiting Nepal sometime latter this year. Mahat is leading the Nepali delegation in the 47th annual meeting of ADB. Likewise, addressing the 47th annual meeting of ADB today Mahat said low income countries can overcome poverty and inequality through development of infrastructure. “ADB’s financial resources and lending capacity need to be expanded to meet the evolving development challenges,” he said, informing that Nepal has made a significant progress in poverty alleviation and human development despite a decade long internal conflict. “Due to the acute shortage of critical infrastructure, Nepal is not making satisfactory progress in economic growth and creation of employment opportunities,” he added. “Development of infrastructure, especially hydropower projects and roads are critical to development.” The ADB board recently has approved the Country Partnership Strategy (CPS) 2014-2017 for Nepal, aligning with Nepal’s development policies and priorities. ADB has announced $1.5 billion assistance for 2014-2017 to implement its country partnership strategy (CPS). The strategy has prioritised energy, transportation, urban infrastructure, skill development, and agriculture.
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