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World Bank Assistance for Poverty Reduction, Food Security, and Skills Training

April 21, 2011

WASHINGTON, April 21, 2011 – The World Bank today approved a US$125 million assistance package for the Government of Nepal to help it meet its objectives to alleviate poverty, maintain and enhance food security for vulnerable households, and improve access for disadvantaged youth to Technical Education and Vocational Training (TEVT) programs.

The Poverty Alleviation Fund (PAF) has helped improve living conditions, livelihoods, and empowerment among the rural poor, particularly those who are disadvantaged due to gender, caste, ethnicity, or physical isolation. Since 2004, PAF has covered Nepal’s 40 poorest districts, directly supporting over nearly 14,500 Community Organizations (COs) and benefiting nearly 530,000 households, of whom 57 percent are from the disadvantaged Dalit and Janajati communities. Average incomes for households in areas supported by PAF have increased over 80 percent. More than 15,600 households now have road access for the first time, and water supply, bridges, and sanitation have been provided for more than 32,000 households. The impact on other welfare indicators is also positive and significant, e.g., a 10 percent decrease in the incidence of food insufficiency and a 6 percent increase in school enrolment rate for children aged 5-15. The program has also helped increase access to services such as agriculture centers, community forest groups, farmer’s groups, and women’s empowerment.

The additional US$75 million support for PAF will continue supporting these activities in more communities. It will also help improve food security in response to the drought and price fluctuations, particularly among the 3.7 million Nepalis most vulnerable to the spiraling cost of food.

“Continued support will help PAF expand to more districts and ensure that assisted communities do not fall back into poverty,” said Gayatri Acharya, World Bank Team Leader for the project.

The World Bank also approved US$50 million for the Enhanced Vocational Education and Training (EVENT) project to improve access to Technical Education and Vocational Training (TEVT) programs for disadvantaged youth. While the country has a vibrant workforce, nearly half of the workers have never attended school. The project will help approximately 75,000 Nepali youth get access to short-term skills training, technical education, and opportunities for certifying their existing skills, paying special attention to lagging regions, poor youth, women, and youth belonging to Dalit, Janajati and other marginalized communities, as well as persons with disability.

“An inclusive and accessible Technical Education and Vocational Training system can contribute to making Nepali workers more competitive in a globalized world,” said Saurav Dev Bhatta. “EVENT is results-focused and will aid the reorientation of the TEVT system in Nepal towards greater quality and market relevance,” said Sangeeta Goyal, World Bank Team Leaders for the project.

“The results of the Poverty Alleviation Fund have been significant,” said Susan Goldmark, World Bank Country Director for Nepal. “While it is helping create employment through income-generating activities and community infrastructure, Nepal needs to invest additional resources for enhancing the skill levels of workers in order to fully harness the nation’s human resources. Combined with technical education and vocational training, these two projects will help ensure that the poorest and most vulnerable continue to receive assistance and also employability skills for them to take advantage of new opportunities,” she said.

The International Development Association (IDA), the World Bank’s concessionary lending arm, will provide US$65 million in additional financing for the Poverty Alleviation Fund (PAF). US$27.5 million of the financing will be in the form of a credit and US$37.5 million as a grant. A supplementary US$10 million will be provided in a grant from the Global Food Price Response Program, a multi-donor trust fund. Of the US$50 million financing for the Enhanced Vocational Education and Training project, US$20.25 million will be provided as a grant and US$29.75 million as a credit. The credit portions for both projects carry a 0.75 percent service charge, 10 years of grace period, and a maturity of 40 years.

Media Contacts
In Washington
Benjamin S. Crow
Tel : (202) 473 1729
In Kathmandu
Rajib Upadhya
Tel : (977) 1 422-6792
Natalia Cieslik
Tel : (202) 458-9369