ADB provides $106.3 mln grant to Nepal

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Singapore, Oct 22 (UNI) The Asian Development Bank (ADB) is helping Nepal improve local governance and promote community development in the country through a programme grant of 106.3 million dollars.

The grant, which will be disbursed in three tranches, will support the active engagement of communities in local governance and improve resource management and service delivery by local government agencies.

The post-conflict Nepal government is moving towards a federal form of government, with the three-year interim plan (FY2008-2010) calling for decentralisation as the main means for good governance.

''The grant will support the government's move to improve local service delivery through strong local bodies and strong community organisations,'' said Gambhir Bhatta, Senior Governance Specialist at the South Asia Department.

''In the medium term, this is expected to bring good local governance, and ultimately, inclusive development,'' Mr Bhatta said.

The programme will increase the involvement of women as well as caste, ethnic, and minority groups in the local governance process.

It will also undertake new ways of monitoring local finances by incorporating gender equality and social inclusion indicators; administering safety nets and social assistance programmes to the poorest people; budgeting grants to education, health, and agriculture sectors; and testing coordination with other districts.

The overall programme is estimated to cost 470 million dollars, with the Nepal government contributing 260.8 million dollars. The rest will come from other development partners, such as the Canadian International Development Agency, UK's Department for International Development, the Swiss Agency for Development and Cooperation, the governments of Denmark and Norway, and several United Nations agencies.

The first tranche of the ADB grant, not exceeding 20 million dollars, will be disbursed upon grant effectiveness, while the second tranche, not exceeding 45 million dollars, will be disbursed upon finalisation of the joint financing arrangement between the Government and development partners and upon fulfillment of specific policy actions.

The third tranche, not exceeding 41.3 million dollars, will be disbursed within 12 months after the second tranche.

A follow-up ADB program grant of 50 million dollars is being considered for 2012 to 2015. The grant will focus on policy reforms such as business process reengineering to support a federal government structure, putting in place the legal framework for proper local governance and strengthening the fiscal transfer process and system.

UNI XC SG SB KP1744

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