Finance Minister hails ADB’s support
Kathmandu / Apr. 22: Finance Minister Dr. Prakash Sharan Mahat has said that the government is committed to overcome the challenges related to project implementation and disbursements and improve capital expenditure.
He made this remark while speaking at the opening session of a 2-day country portfolio review meeting organised by the government of Nepal and ADB to assess the progress of ADB-supported development projects.
Finance Minister Dr. Mahat also appreciated ADB’s support to Nepal’s development over the years.
On the occasion, Asian Development Bank (ADB) Director General for South Asia Kenichi Yokoyama said improved portfolio performance was key for timely delivery of development results and securing higher and sustained concessional resource allocations. “The Ministry of Finance is proactively addressing issues to improve project implementation.
Nepal needs to achieve at least US$350 million to US$450 million disbursement per year to be considered for higher concessional resource allocations based on ADB’s performance-based allocation system,” said Yokoyama, according to a statement issued by ADB on Friday.
“Higher disbursement is doable with collective efforts of the government and ADB by pursuing higher implementation disciplines.”
On the occasion, Revenue Secretary of the Ministry of Finance Ram Prasad Ghimire presented awards to ADB-supported projects for their excellence performance in effective project management, gender equality, and social inclusion, environmental and social safeguards monitoring.
The projects that were awarded include Urban Water Supply and Sanitation (Sector) Project, Bagmati River Basin Improvement Project-Additional Financing, SASEC Highway Improvement Project, Rural Enterprise Financing Project, and Power Transmission and Distribution Efficiency Enhancement Project.
As of 31 December 2022, ADB’s active portfolio in Nepal stands at around US$3.2 billion supporting a broad range of key sectors: energy, transport, agriculture, water and urban infrastructure and services, rural development and natural resources, health, and education, said the ADB.
“In 2022, the overall portfolio performance in Nepal was lower than expected affected mainly due to insufficient project staff and high turnover, challenges in contract management, delays in environmental and land clearances, and disruption of construction supply chain,” said ADB Country Director for Nepal Arnaud Cauchois.
“Following the review, MOF and ADB will agree on specific actions to overcome the challenges and we are hopeful that project implementation and disbursement will pick up pace,” he added. Since the start of its operations in Nepal in 1969, ADB has provided about $7.6 billion in financial and technical assistance to the country.
Finance Minister Dr. Mahat chaired the session on sector and project performance, attended by secretaries of the government of Nepal, senior officials, project directors, and staff from ADB’s Nepal Resident Mission.