Kathmandu, August 26

The World Bank has provided a grant of US$ 127 million to help the Government of Nepal consolidate the peace process and to scale up the delivery of basic services to under-served rural population.

Three agreements were signed in Kathmandu today by Finance Secretary Rameshwore Khanal and Susan Goldmark, the World Bank Country Director for Nepal, the World Bank Nepal Office stated in a press release.

Finance Minister Dr. Baburam Bhattarai and Isabel Guerrero, the World Bank Vice President for South Asia, witnessed the signing.

The US$ 50 million grant for the Emergency Peace Support project 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 previous Seven Party Alliance government had authorized payments of Nepalese Rupees, 100,000 each to the families of the war deceased.

It had also authorized payment of Nepalese Rupees 3,000 per month to approximately 19,600 verified Maoists in cantonments, including arrears on these payment that have built up over the previous months. In addition, the project will also help the Government pilot reintegration initiatives.

"All three projects are anchored in the Nepali agenda— peace needs development and development needs peace," said Ms. Susan Goldmark, World Bank Country Director for Nepal. "As Nepal continues to make progress on the crucial path of peace-building and development, Nepal can be assured of continued World Bank assistance," she said.

The US$ 50 million grant for the Nepal 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 college 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 6 to 55 districts and will cover all the country’s 75 districts within a year.

The US$ 27 million grant for the Second 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 institutionalised. 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.