KATHMANDU, JUN 24 - The government expects big aid pledges from donors at the International Conference on Nepal’s Reconstruction to be held in Kathmandu on Thursday.
Though a majority of donors have not spoken about their pledges, multiple sources said the government hopes aid commitments of at least $3 billion (Rs300 billion) from the development partners and neighbouring countries for rebuilding Nepal post-earthquake.
“Based on our conversation with various multilateral and bilateral donors , we are expecting commitments around $3 billion,” said a senior government official. The same figure was briefed to Prime Minister Sushil Koirala during a high-level meet ing attended by ministers and senior officials in Baluwatar on Tuesday morning.
Finance Minister Ram Sharan Mahat, however, downplayed the government’s expectations. “It is being publicised that the donors are expected to give all the required resources. Domestic resources including internal loans and private sector investment will also be part of the required resources for reconstruction,” Mahat said during a press meet at the Finance Ministry on Tuesday afternoon.
The government has already set up a National Reconstruction Fund of $2 billion for post-earthquake reconstruction and rehabilitation works. “Meeting the target is our first goal but we would be happier if donors pledged more,” said a senior Finance Ministry official. According to the Post Disaster Needs Assessment (PDNA), Nepal needs $6.67 billion for reconstruction.
The World Bank on Tuesday announced its pledge of $500 million (Rs50 billion) for rural housing, financial sector and other reconstruction activities. The Asian Development Bank, which has already announced at least $200 million in aid, has indicated that it could provide more.
According to Madhu Marasini, chief of the International Economic Cooperation Coordination Division at the Finance Ministry, the WB would be investing in rural housing and the ADB would invest more in the school sector. The government expects big pledges from two immediate neighbours--India and China. “They have not yet hinted at the size of their pledges but both the countries have said there would be good aid commitments,” said Finance Secretary Suman Sharma. “We expect big announcements as foreign ministers of the two neighbours are attending the conference.”
Finance Ministry officials said India has not made it clear where it intends to assist but the government has requested China to rebuild the roads connecting Kathmandu to Rasuwagadhi and Tatopani, which were badly damaged by the earthquake. “We have also requested the Chinese side to help rebuild houses in rural areas,” said an official.
Japan, which is sending its state minister for foreign affairs along with the Jica president to the event, has already pledged Rs4 billion grant to repair the damaged Kathmandu -Bhaktapur and Kathmandu -Sindhuli roads. “They have said they will announce additional amounts at the conference,” said Hari Pandey, under-secretary at the Finance Ministry.
Jica has also proposed a comprehensive package in the form of grant, loan and technical assistance to rebuild Nepal. As per its proposal, its fund will be spent on rural housing and school reconstruction, maintenance of roads damaged by the earthquake and the drafting of a comprehensive city resilience reconstruction master plan. According to the Jica proposal, its aid will be concentrated in Gorkha, Sindhupalchok and Kathmandu districts.
The government will seek aid primarily in the form of grants and concessional loans. “We will not take commercial loan. We have never taken it,” said Mahat.
Amid suggestions to seek loan waivers from donors , the government is not much optimistic about it. “There is the possibility of deferral of loan repayment schedule instead of loan waiver,” said Mahat. “We are not going to discuss the matter at the meet .”
Though some friendly countries had proposed to host the conference abroad in August, the government chose Kathmandu as the venue to send a message across that Nepal is limping back to normal. “The delay on holding the conference means losing sympathy over Nepal. Hence, we decided to hold it early in Nepal,” said Foreign Minister Mahendra Bahadur Pandey.
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