World Bank Supports Nepal’s Efforts to Consolidate Peace and Development

The Emergency Peace Support Project, approved today by the World Bank, intends to help the Government of Nepal fulfill commitments made under the Comprehensive Peace Agreement and the subsequent 23 Point Agreement. As part of the peace process, the Seven Party Alliance government has authorized payments of US$1,540 each to the families of the war deceased. It has also authorized payment of US$48 per month to approximately 19,600 verified Maoists in cantonments, including arrears on these payments that have built up over the past 10 months. In addition, the project will also help the government pilot reintegration initiatives.

A fragile peace has been sustained over the past two years and important steps have been taken towards a “new Nepal,” including the establishment of the Seven Party Alliance in November 2005 and the recently held Constituent Assembly elections.

“There is a high degree of commitment at the political level to ensure lasting peace in Nepal, and this project is designed to contribute to this agenda,” said Susan Goldmark, World Bank Country Director for Nepal. “In this pivotal moment in Nepal’s history, it is important to take concrete steps to consolidate the peace process and to ensure that development and service delivery are scaled up.”

The World Bank today also approved additional grant financing of US$50 million for the Nepal Health Sector Program and US$27 million for the Second Rural Water Supply and Sanitation Project. The grant to the health sector program is designed to expand access to and the use of essential health care services, especially by underserved populations. In addition, the grant will support two recent initiatives: the removal of some user fees and the introduction of the Safe Delivery Incentive Program benefiting many poor and disadvantaged women and children. The incentive program will be open to women who choose to deliver in non-state hospitals with healthcare providers receiving the incentives. In addition, all medical colleges and reputed non-state hospitals will be contracted to provide free surgical services for uterine prolapse which will benefit rural, poor women. The original project, which was approved on September 9, 2004, has helped a rapid expansion of access to essential services. For example, the community-based integrated management of childhood illnesses has been expanded from six to 55 districts and will cover all the country’s 75 districts within a year.

The grant for the Rural Water Supply and Sanitation Project will scale up the project to provide services to more remote rural areas. It aims to improve institutional performance of the rural water supply and sanitation sector and will also support communities to form inclusive local water supply and sanitation user groups that can plan, implement, and operate drinking water and sanitation infrastructure that delivers sustainable health, hygiene, and productivity benefits to rural households. An additional 400,000 people from nearly 600 communities stand to benefit from rural water supply and sanitation facilities with the new financing. Another 450 schemes will undergo the development phase, which includes activities for social capital development, preceding the construction phase. Meanwhile, social accountability and community score card systems will be institutionalized. It is also expected that a rural water supply and sanitation sector monitoring and evaluation system will be established and made operational within the government system prior to the close of the extended project period. It is also envisaged that legislation will be enacted to make the Rural Water Supply and Sanitation Fund Development Board a regular sector institution.

The grants are from the International Development Association (IDA), the World Bank’s concessionary lending arm.

For more information on the Bank’s work in Nepal, please visit http://www.worldbank.org.np

For project information, please visit http://www.worldbank.org.np/external/default/main?menuPK=286969&pagePK=141143&piPK=51055560&theSitePK=223555