Bank loan

World Bank loan for GRID project against interest from Nepal – myRepublica

KATHMANDU, August 31: Experts have said the concessional loan agreement signed between the World Bank and Nepal on Monday for the purpose of obtaining assistance to avoid and adapt to climate-related disasters is not in line with the international standards on climate finance and the position Nepal takes in international forums. In the field of climate sustainability and adaptation, their argument is that it is completely wrong to take a loan because the financial aid given to an underdeveloped and at risk country like Nepal should be in the form of grants .

Nepal and the World Bank (WB) on Monday signed a US$100 million (Rs 12.7 billion) concessional financing agreement for the Green, Resilient and Inclusive Development (GRID) initiative. With this support from the World Bank, preparations are underway to support priority policy actions in the areas of water, land use, climate-smart agriculture, sustainable forest management, urban waste and the fight against pollution.

This is the first of three GRID financing concessional loans that the international lending institution is extending to Nepal. The budget support aims to support improvements in the enabling environment in Nepal towards green, climate-resilient and inclusive development.

The agreement was signed by Ishwori Prasad Aryal, Joint Secretary in the International Economic Cooperation Coordination Division of the Ministry of Finance (MoF) and Lada Strelkova, WB Operations Manager for Maldives, Nepal and the Sri Lanka.

“If Nepal has accepted loan assistance in the area of ​​adaptation, climate resilience and climate-related disasters under GRID cooperation, it is completely wrong. This is contrary to the demand that Nepal has raised in international forums,” Raju Pandit Chhetri said. , director of the Prakriti Resource Center, a policy and research NGO that promotes environmentally friendly development policies and practices.

Chhetri says that even in the international development cooperation policy announced by the finance ministry itself in 2019, aid in the area of ​​environmental protection and adaptation should come in the form of grants. “The government should immediately stop taking loans for climate change, resilience and climate disaster management. This is contrary to human sensibility, our position and international agreements on climate finance,” climate change expert Dr Bimal Regmi said in a tweet on Tuesday.

Despite its insignificant contribution to global climate change, Nepal is one of the leading countries in the world in terms of climate risks. Nepal has called on the international community to establish a separate fund to address loss and damage from climate-related disasters in international climate forums.

Dr Pem Narayan Kandel, secretary in the Ministry of Forestry and Environment, said GRID support is important for Nepal, but details of its implementation are yet to be discussed. “Most of the programs under this cooperation are related to building physical infrastructure, but these issues are also directly related to climate-related disasters,” Secretary Kandel said.

Aryal, co-secretary of the finance ministry, who signed the agreement on behalf of Nepal on Monday, says the deal contains “budget support” but not “project support”. “Depending on our needs and priorities, this aid will be used in areas such as infrastructure development. It is not related to the areas of climate-related disaster resilience and adaptation,” says Aryal.

He says this support will be important for Nepal’s development efforts, economic recovery from COVID-19, disaster management, climate and environmental risks.

Last year, various donor agencies pledged to support Nepal with US$4.2 billion by 2030 under Green, Resilient and Inclusive Development (GRID). A strategic action plan with the identification of priority areas to be determined by this assistance has not yet been developed.

Experts say caution should be exercised when seeking help from donor agencies on issues related to climate change. “We are threatened by global warming. Along with that, if we have to take out loans for financial support related to climate change, it will be a double whammy for us,” said climate expert Raju Pandit Chhetri.

He argues that Nepal and the Nepalese people should not be burdened. Climate change expert Dr Bimal Regmi argues that the issue of adaptation to climate-related disasters is very sensitive and says: “Taking a loan from a donor agency to solve this problem is an insult to the poor and vulnerable population. »