BRIEF

Fact Sheet: What the World Bank Group is doing in Nepal after the earthquakes

April 21, 2016

Image
Photo Credit: Laxmi Prasad Ngakhushi


Here’s an overview and status update on the World Bank Group and its partners’ reconstruction efforts in Nepal after the 2015 earthquakes:

Financing for Reconstruction

The World Bank Group has offered up to half-a-billion dollars to finance the reconstruction of Nepal and this consists of:

·         $200 million for housing reconstruction: was approved by the World Bank Board of Executive Directors on June 29, 2015. This credit from the International Development Association (IDA), the World Bank’s fund for the poorest countries, will provide grants to home-owners to rebuild about 55,000 houses for the poor in rural areas. The grants will be disbursed in tranches after verification that houses have been constructed to standards resistant to natural disasters. The credit will also finance technical assistance to improve disaster risk management systems. It has been extended on standard IDA terms with a maturity of 38 years and a six-year grace period.

·         $100 million for budget support: was also approved by the World Bank Board on June 29, 2015. This IDA credit provided the government of Nepal with much-needed short-term financial support to accelerate and expand relief and recovery efforts. It also supports policy measures to strengthen the country’s financial sector, which has weakened along with the economy. This was fully disbursed in September 2015.

·         $50 million is allocated for roads.  This will support repairs and upgrades to Nepal’s strategic roads network and will be approved in May 2016.

·         $100 to $200 million reallocated from the existing portfolio: Of the 23 projects that the World Bank currently supports in Nepal, 12 have reallocated funds or extended their durations to assist in the recovery. These include the repair of damaged roads, irrigation and drinking water schemes; expansion of vocational training in areas related to post-earthquake recovery; as well as healthcare, nutrition and livelihood support in the poorest communities.  Any reallocated money will be replaced with additional funds.

·         $50 to $70 million liquidity facility and $9.8 million of quick post-earthquake response from IFC: the liquidity facility from the World Bank Group’s private sector arm has been available to commercial bank clients to support recovery of small and medium enterprises in tourism or housing. This USD facility can also be used to import essential capital equipment and for working capital needs. The $ 9.8 million quick response initiative accelerated commitments and disbursements to clients in tourism and agribusiness to ensure business continuity.

·         Multi-Donor Trust Fund (MDTF): has been set up to enable donors to coordinate their finance for housing reconstruction. Current committed financing include: (i) $200 million from IDA’s Crisis Response Window; (ii) $100 million credit from JICA for parallel financing; (iii) $25.5 million in the World Bank-administered Multi-Donor Trist Fund (US – $9.6 million, Switzerland - Swiss Francs 9 million, and Canada – CAN$10 million); (iv) about $200 million earmarked by I/NGOs for the sector; and (v) $50 million from the World Bank’s budget support.  The Government of Nepal’s budget appropriation for its overall reconstruction activities is $900 million for fiscal year 2016.

Initial Response and Rapid Needs Assessment

Immediately after the earthquake and during the many aftershocks, the Bank supported government departments to undertake a structural damage assessment to determine the safety and soundness of public and private spaces such as schools, hospitals, government offices as well as modern urban housing blocks and traditional inner-city and sub-urban dwellings.  This helped determine whether students could safely go back to school, medical wards required temporary relocation, or families could secure their homes. Teams were also deployed to study the impact on highways and bridges and to make sure they stayed open.

The Bank supported several government ministries in assessing the damage, sector by sector, and identifying priority actions. This rapid needs assessment later fed into the more formal Post-Disaster Needs Assessment, which involved a wide range of experts and development partners.

Post-Disaster Needs Assessment (PDNA): Rebuilding a Resilient Nepal

The Post-Disaster Needs Assessment estimates that Nepal’s recovery needs will amount to the equivalent of a third of its economy. [June 16 World Bank Press Release here] It takes stock of the extent of the damages inflicted by the earthquakes and calculates economic losses and needs associated with the development of sound reconstruction programs to build a more resilient Nepal.  It will also inform strategies for planning and preparing better for risks, hazards, vulnerabilities and future disaster-related economic shocks. The PDNA prices the damage at $5.15 billion, losses at $ 1.9 billion and recovery needs at $6.7 billion, roughly a third of the economy.

The PDNA was led by Nepal’s National Planning Commission and conducted jointly by more than 250 government officials and a small team of experts from the Asian Development Bank, the EU, the Government of India, the Japan International Cooperation Agency, the UN, the World Bank, as well as other development partners across 23 sectors and aspects of public life.

 

National Reconstruction Authority

A National Reconstruction Authority (NRA) was established in December, 2015. Since its inception, important progress has been achieved in terms of policies, legal procedures and direction – all of which are necessary to advance with reconstruction but were not in place before the NRA was established.  The NRA is gradually expanding its presence in the 14 districts most affected by the earthquakes and it is still staffing itself, streamlining procedures and procuring equipment to effectively carry out its role.  The World Bank, with support from USAID, JICA, DFID and key I/NGOs, is providing technical and financial support to help build the NRA’s institutional capacity.

Post Disaster Recovery Framework

A post-disaster recovery program of Nepal’s scale requires a commitment of financial and human resources, as well as focused efforts to prioritize and sequence reconstruction over several years.  The Government of Nepal, with support from the Global Facility for Disaster Reduction and Recovery, is preparing a Post Disaster Recovery Framework (PDRF).  Going forward, the PDRF will be a common framework for all partners and stakeholders and will guide the planning, financing, implementation and monitoring of recovery and reconstruction.  

Last Updated: Apr 21, 2016