World Bank lends Nepal $41 million

The World Bank and government signed agreements today for a combined value of $41 million towards financing the implementation of two projects -- Kabeli Transmission Project and Strengthening Regional Cooperation for Wildlife Protection in Asia Project.
Finance Secretary Krishna Hari Banskota and World Bank Country Director for Nepal Susan Goldmark signed the agreement here today.
The assistance package signed today will be a blend of credit and grant from the International Development Association (IDA), the World Bank’s concessionary lending arm. Financing for the Kabeli Transmission Project will comprise $27.4 million in IDA credit and $10.6 million in IDA grant. Financing for the Strengthening Regional Cooperation for Wildlife Protection in Asia Project will comprise $3 million in grant.
The credit carries a 0.75 per cent service charge with a 10 year grace period and a maturity of 40 years. The Kabeli Transmission Project, identified as a priority in the government''s Electricity Management Plan formulated in response to the dramatic worsening of electricity supply which took place in 2008, will construct a 132 kV transmission line that will extend from Kabeli Bazaar in the north of Panchthar district to Damak in Jhapa district, both in eastern Nepal. Substations will be constructed in the vicinity of Kabeli Bazaar and at the towns of Phidim, Ilam and Damak.
The project’s location is significant from the perspective of the strategic development of the Integrated Nepal Power System as it will open up the extreme east of Nepal for power sector development and will shorten the distance required to transmit electricity to the country’s main industrial center around Biratnagar.
"The transmission line will facilitate efforts by Nepali private hydropower developers to arrange financing for their projects, as generation projects must have a credible plan for transmitting power before commercial banks will offer financing," Goldmark said, adding that in the medium term, the new transmission line could bring as much as 100 MW into the system.
Similarly, Strengthening Regional Cooperation for Wildlife Protection in Asia is a regional project that will address the cross-border illegal wildlife trade through regional cooperation and capacity building and support Nepal’s initiatives at habitat protection and management for wildlife in general and tigers in particular.
South Asia is home to 13 per cent to 15 per cent of the world's biodiversity and hosts some of the most endangered species on Earth. However, pressures like deforestation, habitat loss, pollution, and poaching of wild animals have put the environmental and ecological balance under severe threat.Bangladesh, Nepal and Bhutan are joining the project at this stage, the bank said, adding that participation by other ‘Tiger Range Countries' (TRCs) in South Asia and South East Asia is envisaged in later phases.
"No single country can manage or eliminate the threats of poaching and the illegal wildlife trade on its own," she said, adding that adopting and implementing a regional approach will be the most appropriate solution to ensure the effectiveness of interventions addressing illegal wildlife trade, habitat management and conservation of species.