With the Post-Disaster Needs Assessment complete and the Government’s new budget cycle beginning in mid-July the World Bank Group is mobilizing resources to align budget support and investments with the recovery and reconstruction needs.
The World Bank Group plans to provide up to half-a-billion dollars to finance the reconstruction of Nepal, of which $300 million is new funding from the International Development Association’s Crisis Response Window. The World Bank Group support will consist of:
- $100 million for budget support: to be considered by the World Bank Board on June 29. This IDA credit will provide the Government of Nepal with short-term financial support to accelerate and expand relief and recovery efforts. It will also support policy measures to strengthen the country’s financial sector as a vehicle that channels resources for reconstruction to the private sector and households.
- $200 million for housing reconstruction: submitted to the World Bank Board of Executive Directors for consideration on June 29. This credit 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.
- Multi-Donor Trust Fund (MDTF) for housing reconstruction: we have proposed a facility to enable coordination, increase harmonization and reduce transaction costs for donor financing of housing reconstruction. Additional funding is needed as the World Bank’s $200 million credit only covers a small part of the housing reconstruction needs.
- $100 to $200 million reallocated from the existing portfolio: we are supporting the Government of Nepal in reallocating resources from existing projects to support the reconstruction effort across multiple sectors (agriculture, health, education, energy, roads and bridges, water and sanitation) without affecting the long-term development agenda. An initial $40 million is proposed for reallocation toward disaster response, of which $12 million has already been redirected to finance nutrition and rural water supply needs in the worst-hit districts.
- Expected $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, will be available to commercial bank clients to support recovery of firms including SMEs in tourism or housing. This USD facility can be used for import of essential capital equipment and for working capital needs of firms, as well as accelerated financing to clients in tourism and agribusiness to ensure business continuity.
- Joint WBG Hydropower: Under the joint implementation plan for hydro power, the World Bank Group intends to accelerate existing agreements for development and rehabilitation of approximately 2500MW hydropower generation capacity. This includes required direct IDA and IFC financing and mobilizing necessary financing from partners including the private sector, as well as advisory and technical assistance.
Last Updated: Jun 25, 2015