--By TC Correspondent 

 

The World Bank Group has suggested that the Nepali government should focus on infrastructure sector, including hydropower, to achieve economic prosperity.

 

Wrapping up a six-day visit to Nepal on Saturday, board members underlined the need of developing hydropower and better connectivity. They emphasized the need to sign a bankable PDA.”Nepal urgently needs to improve connectivity and power sectors,” Jorg Frieden, executive director of the World Bank Group said. 

 

“We need private sector to take lead in hydropower. And, we’re working on to have a bankable PDA signed. Once that is done then we can bring full weight of the IFC,” said Kyle F Kelhofer, IFC country manager for Nepal, 

Bangladesh and Bhutan.

 

He further said that IFC may be interested in equity investment on Upper Karnali Hydro Project.  “Any reasonable proposal that is technically and economically sound would be considered positively,” Frieden added.

 

They also suggested improving road connectivity to ensure road safety. On possible World Bank assistance to Kathmandu-Tarai Fast Track, World Bank Country Director for Nepal Johannes Zutt said the bank is in discussion with the Nepali government on the issue. 

 

The board members said that they see Nepal as a country that needs more resources and the bank will try its best to facilitate better resource mobilisation. However, the members cautioned that mobilisation of the resources would make sense only if it is combined with high quality policy and projects. 

 

“The attention on political transition we know is certainly the priority, but it is not enough,” said Frieden adding “Economic growth is crucial to support transition. You cannot get stability if the economic performance does not improve. Thus attention on economy is necessary to facilitate the transition.” He further added that the government should focus on creating jobs. 

 

The team also emphasized spending in the public sector for the high economic growth. The emphasis comes a week after this fiscal year’s mid-term budget review pointed that the capital expenditure stood at 30 percent, while only 19 percent of the allocated budget was spent on national pride projects. With World Bank country office in Nepal currently working on new country assistance strategy, the board members assured that they would recommend to the country teams—World Bank and IFC—to listen to the new government, new political leaders and society at large to understand what can be achieved and what really is expected.