President Kim Announces Financing for Nepal Earthquake Recovery

The World Bank Group will always stand with the people of Nepal, especially in their time of need. The World Bank is helping the country face its next challenge — moving beyond the emergency to start building back better.

As of June 23, 2015, here’s an overview and status update on the World Bank Group and its partners’ reconstruction efforts in Nepal after the 2015 earthquakes:

Financing for Reconstruction

The World Bank Group has offered up to half-a-billion dollars to finance the reconstruction of Nepal and this consists of:

·         $200 million for housing reconstruction: was approved by the World Bank Board of Executive Directors on June 29, 2015. This credit from the International Development Association (IDA), the World Bank’s fund for the poorest countries, 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. It has been extended on standard IDA terms with a maturity of 38 years and a six-year grace period.

·         $100 million for budget support: was also approved by the World Bank Board on June 29, 2015. This IDA credit provided the government of Nepal with much-needed short-term financial support to accelerate and expand relief and recovery efforts. It also supports policy measures to strengthen the country’s financial sector, which has weakened along with the economy. This was fully disbursed in September 2015.

·         $50 million is allocated for roads.  This will support repairs and upgrades to Nepal’s strategic roads network and will be approved in May 2016.

·         $100 to $200 million reallocated from the existing portfolio: Of the 23 projects that the World Bank currently supports in Nepal, 12 have reallocated funds or extended their durations to assist in the recovery. These include the repair of damaged roads, irrigation and drinking water schemes; expansion of vocational training in areas related to post-earthquake recovery; as well as healthcare, nutrition and livelihood support in the poorest communities.  Any reallocated money will be replaced with additional funds.

·         $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 has been available to commercial bank clients to support recovery of small and medium enterprises in tourism or housing. This USD facility can also be used to import essential capital equipment and for working capital needs. The $ 9.8 million quick response initiative accelerated commitments and disbursements to clients in tourism and agribusiness to ensure business continuity.

·         Multi-Donor Trust Fund (MDTF): has been set up to enable donors to coordinate their financing for housing reconstruction. Current committed financing includes: (i) $200 million from IDA’s Crisis Response Window; (ii) $100 million credit from JICA for parallel financing; (iii) $25.5 million in the World Bank-administered Multi-Donor Trist Fund (US – $9.6 million, Switzerland - Swiss Francs 9 million, and Canada – CAN$10 million); (iv) about $200 million earmarked by I/NGOs for the sector; and (v) $50 million from the World Bank’s budget support.  The Government of Nepal’s budget appropriation for its overall reconstruction activities is $900 million for fiscal year 2016.

To learn more access: Fact Sheet: What the World Bank Group is doing in Nepal after the earthquakes