WB to give at least $500m for recovery

 Kathmandu, June-17 The World Bank (WB) soon plans to announce a comprehensive package of support for Nepal in the aftermath of the deadly earthquake that caused massive damage to life and property, the global lender said Tuesday.

According to a WB official, the total financial support will be not less than $500 million (Rs51.15b). “This will be credit without interest and repayable over 40 years,” the official said.  

Nepal has suffered damage amounting to one-third of its economy as per the Post-Disaster Need Assessment (PDNA), and it will require sustained financial support and effective recovery programmes to create a more resilient country, and the aid needs to be targeted at those most in need, the WB said.

The WB said in a press release that its support would consist of budget and financial sector support and finance for housing reconstruction in poor rural areas, subject to board approval.

“The bank is also planning to redirect money from the existing projects and set up a Multi-Donor Trust Fund (MDTF),” said the WB. “The fund will help Nepal’s partners coordinate their financing in the reconstruction effort.”

The WB official said the amount to be redirected to reconstruction will also be finalized within a few days.

The PDNA has priced the damage at $5.15 billion, losses at $1.9 billion and recovery needs at $6.6 billion, roughly a third of the economy. Early estimates suggest that an additional 3 percent of the population has been pushed into poverty as a direct result of the earthquakes. This translates into as many as a million more poor people.

Reacting to the PDNA results, the WB said the planned donor conference on June 25 must provide Nepal with sustained support to repair the economic damage and to prevent more people from falling into poverty.

“The economy of Nepal took a huge hit from these earthquakes, and there is a danger that many of the country’s impressive gains in overcoming poverty

could be reversed unless this challenge is addressed in a decisive way,” said Annette Dixon, Vice-President for the South Asia Region at the World Bank “The country needs resources to pay for the recovery that can be channelled through credible programmes to make itself more resilient to the next natural disaster and ensure that those most in need receive the help they deserve.”

As per the PDNA, the most heavily-impacted sector by far is housing, which accounts for about three-fifths of damages and half of needs.

As the government and its donors transition from relief to reconstruction, more detailed assessments will be completed at the sectoral levels, the WB said.

Johannes Zutt, World Bank Country Director for Nepal, said that the results of the PDNA show that reconstruction will be costly and time-consuming.

“To raise the money needed, there must first be clear plans on how it will be spent,” he added.

Source: The Kathmandu Post