The Asian Development Bank has approved loans and grants of $5.8 billion and technical assistance of $0.2 billion for Nepal since 1966. But Nepal has not been able to utilise a big portion of funds made available, with cumulative loan and grant disbursements standing at $3.6 billion. The Manila-based multilateral lender has long been saying weak governance has prevented Nepal from effectively utilising the development assistance. This has affected development of transformative projects, such as Melamchi Drinking Water, Gautam Buddha International Airport and Improvement of Tribhuvan International Airport, funded by the ADB. Now the country faces even bigger challenges as lack of capacity at the newly-formed sub-national governments are bound to create problems in project implementation. Rupak D Sharma of The Himalayan Times met Hun Kim, director general of ADB’s South Asia Department, on the sidelines of the multilateral lender’s 52nd annual general meeting in Fiji to discuss these issues. Excerpts:
I would not say Nepal is lagging behind in credit disbursement. In fact, Nepal’s performance has improved a lot compared to that of four years ago. Today, Nepal’s performance is classified as average. One of the reasons for some slackness in credit disbursement is expansion of ADB’s portfolio in Nepal. A few years ago, the ADB was lending about $400 million per year to the government. That amount has now gone up to $600 million. Whenever the portfolio expands, disbursements initially fall before picking up. So, we hope credit disbursement to gather pace in the coming days.