For Official Use Only CLR Review Independent Evaluation Group 1. CPS Data Country: Nepal CAS/CPS Year: FY14 CAS/CPS Period: FY14- FY18 CLR Period: FY14 – FY18 Date of this review: July 26, 2018 2. Ratings CLR Rating IEG Rating Development Outcome: Moderately Satisfactory Moderately Satisfactory WBG Performance: Good Good 3. Executive Summary i. This review of the World Bank Group’s Completion and Learning Review (CLR) c overs the period of the Country Partnership Strategy (CPS), FY14-FY18, and updated in the Performance and Learning Review (PLR) of February 21, 2017. This is the first CPS following three consecutive Interim Strategy Notes (ISN) in FY07, FY09, and FY11. ii. Nepal is a low-income country with an average GNI per capita of $733 (2014-2016) and a population of 28.9 million in 2016. GDP per capita growth slowed to 0.6 percent in 2016 and inflation peaked at 12 percent in 2015/2016. The IMF estimates GDP growth at 7.5 percent for 2016/2017, and 5 percent in 2017/2018. The 2016 UNDP Human Development Index ranks Nepal 144 out of 188 countries. Poverty incidence fell from 46 percent in 1996 to 15 percent in 2011; and, it has continued to fall since then according to the Systematic Country Diagnostics (SCD, 2017). From 2004 to 2011, the consumption of the bottom 40 grew twice as fast as the top 60. But, inequality across regions and ethnic groups has been a source of political upheaval. During the CPS period, the country experienced two exogenous shocks and major political transitions. Two earthquakes (April and May 2015) took 9,000 lives and destroyed or damaged assets for approximately one quarter of the country’s GDP. Trade and fuel disruptions in 2015 further impacted economic activity. After the conflicting parties signed a peace treaty in 2006, Nepal has undergone a critical political transition, which culminated in 2015 with a new constitution that veers towards federalism. iii. The CPS was organized around two pillars (or focus areas): (i) increasing economic growth and competitiveness, and (ii) promoting inclusion and resilience. In addition, the CPS cross-cutting themes on governance, gender, and climate change, were envisaged to be integrated across operations in the two focus areas. The CPS reflected cautious optimism given the improved political environment since the national elections in 2013. The CPS program reflected well the country’s challenges, and was congruent with long term national objectives, as articulated in the 13th Periodic Plan (2014-2016) and further developed by the 14th Periodic Plan (2017-2019). The Periodic Plans focused on infrastructure, transforming the key productive sectors, human development, and effective service delivery. In line with the findings of the 2011 World Development Report on conflict and fragility, the CPS proposed to phase out short-term measures and focus more on strengthening the capacity of state institutions and making them more inclusive, to help build citizens’ trust in the state. At the PLR, significant adjustments were made in the results framework CLR Reviewed by Panel Reviewed by CLR Review Manager/Coordinator Luis Alvaro Sanchez Nils Fostvedt Pablo Fajnzylber Consultant, IEGEC Consultant, IEGEC Manager, IEGEC Albert Martinez Lourdes N. Pagaran Consultant, IEGEC CLRR Coordinator, IEGEC For Official Use Only CLR Review 2 Independent Evaluation Group including increasing the objectives from seven to nine. The PLR came relatively late during the CPS period, which ended in FY18. iv. At the beginning of the CPS period, total commitments were $1.3 billion, with 23 operations under implementation comprising 21 Investment Project Financing (IPF) including three Additional Financing, one Development Policy Financing (DPF) and one Program for Results (PforR). During the CPS period, total new commitments reached $2.0 billion, comprising 18 operations in the form of 13 IPFs, three Development Policy Financing and two PforRs. Overall response to the earthquake impact, mostly housing reconstruction, accounted for the largest share of new commitments at $500 million (or 25 percent of new commitments). IDA allocation was leveraged through access to IDA’s Crisis Response Window (CRW). Ten operations were approved towards the end of the CPS period (FY17-FY18), with total new commitments of $1.34 billion. This meant that delivery of results relied primarily on active projects at the beginning of the CPS and those approved during the first two years. During the CPS period, IFC made total commitments of $58.4 million, concentrated on trade finance and power. v. The overall achievement of the CPS objectives is rated as Moderately Satisfactory. Of the nine objectives, two were achieved and seven were mostly achieved. Under Focus Area I, there was substantial progress in improving transport connectivity, increasing supply and reliability of energy, improving financial sector stability and financial inclusion, and improving the business environment for private sector investment. Under Focus Area II, the most notable achievement was the housing reconstruction after the 2015 earthquake. There was substantial progress in increasing agricultural productivity and commercialization of selected commodities, increasing access to secondary and higher education for the underprivileged groups and improving relevance of skills for gainful employment, improving quality of health and nutritional services especially for mothers and children, and reducing vulnerability for the socially excluded and marginalized groups. vi. WBG’s performance is rated as Good. The CPS program reflected well the country’s challenges and was congruent with the government’s long-term objectives as articulated in its Periodic Plans. The CPS focus areas and objectives were aligned with the WBG twin goals and had the support of a solid program of operations, ASA and trust funds, that were broadly complementary but somewhat dispersed. The CPS program was selective in focus areas and number of objectives, but less selective in terms of number of lending interventions given the limited implementation capacity in the country. At the PLR, the results framework was modified by adding two objectives and revising indicators to reflect the Bank’s response to the aftermath of the 2015 earthquake and to reflect realities on the ground. The adjustments improved its overall design although some weaknesses remained. The identification of risks was adequate especially the concerns about the political economy and implementation capacity. Overall, Nepal’s portfolio performance at exit compared well with the SAR and Bank-wide averages. The percentage of projects at risk remains high as the size of the portfolio continues to tax implementation capacity despite efforts at consolidation by increasing the average project size. Following the PLR, there was a significant scaling up of the lending portfolio with ten operations approved between FY17- FY18. In effect, the program consolidation promised at the CPS and PLR did not fully materialize as envisaged. Internal collaboration between the Bank and IFC was strong in electricity, finance, and business environment. Donor coordination improved during the CPS. The WBG played a leading role in earthquake reconstruction and the emerging federalism agenda. Compliance with social and environment safeguards was affected by weak implementation capacity. The Management Action Plan to address the findings of the Inspection Panel regarding the Nepal Power Development Project (closed in December 2013) is under implementation. INT substantiated three cases of corruption in the energy, transport and health projects. vii. IEG concurs with key lessons from the CLR which are summarized as follows: (i) the important contribution of a solid knowledge base and outreach for policy reform in a difficult political environment; (ii) the need to find the right and adequate instruments that fit the fragile implementation environment; (iii) attention to selectivity not just with regard to the number of objectives but also of instruments so as to not overwhelm implementation capacity; (iv) the need for a multi-pronged approach to implementation; (iv) the critical role of WBG leadership and For Official Use Only CLR Review 3 Independent Evaluation Group coordination with Development Partner community; (v) the limitation of the community managed interventions from the perspective of impact and sustainability; and (vi) the need to focus results beyond project levels. viii. IEG adds the following lessons: • To effectively address a country’s needs after a natural disaster in a fragile environment, it is critical for the WBG to be agile and flexible, using a combination of instruments. In the case of Nepal, the WBG was flexible in responding to the challenges brought about by the earthquakes and the political disturbances. The fast response to the earthquake reconstruction needs was aided by a prompt and credible stocktaking of the impact of the earthquakes, which in turn facilitated the mobilization of resources from the development community and helped leverage Bank and IFC resources. The results framework was revised to take account of the impact of the earthquake effort on the program and supporting operations were designed to facilitate fast disbursement of project funds. • Greater selectivity is needed in post-conflict environments to align with the limited implementation capacity and ensure sustained delivery of results. Countries that move out of a conflict situation are bound to find themselves facing the broad challenges of institution building. In the case of the Nepal experience, while there were efforts at portfolio consolidation by increasing the average project size, implementation capacity remains an issue as reflected in the high percentage of projects at risk, and could affect the results of the next CPF if it were to remain unaddressed. Going forward, it is important to further consolidate the lending portfolio as originally envisaged in the CPS and PLR to align with implementation capacity and ensure sustained results on the ground. 4. Strategic Focus Relevance of the WBG Strategy: 1. Congruence with Country Context and Country Program . Nepal, with a population of 28.5 million, is a low-income country with a GNI per capita of $733. Real GDP growth slowed to 0.6 percent and inflation peaked at 12 percent in 2015/2016. The drop in the rate of economic growth resulted from the two earthquakes that hit the country in May 2015 and internal political disturbances, that affected trade with India. The IMF estimates GDP growth at 7.5 percent for 2016/2017, and 5 percent in 2017/2018. Nepal ranks 144 out of 188 countries in the 2016 UNDP Human Development Index. The rate of poverty incidence fell from 46 percent in 1996 to 15 percent in 2011; and has continued to fall since then according to the SCD. From 2004 to 2011, the consumption of the bottom 40 grew twice as fast as the top 60. The Gini coefficient was .33 in 2011. Inequality across regions and ethnic groups, however, has been a source of political upheaval. After an internal peace treaty in 2006, Nepal has been undergoing a critical political transition, which culminated in a new constitution in 2015 that emphasized federalism and shifted power away from Kathmandu. The two earthquakes (April and May 2015) took 9,000 lives and destroyed or damaged assets equal to about one quarter of Nepal’s GDP, and trade and fuel disruptions associated with the issuance of a new constitution further affected trade and the economy. 2. The CPS reflected cautious optimism emanating from an improved political environment, and reflected well the country’s challenges as identified from the available analytical w ork, the country dialogue, and extensive consultations with country stakeholders. It was congruent with the objectives and strategies articulated in Nepal’s 13th Periodic Plan (2014-2016), and later confirmed and developed further in the 14th Periodic Plan (2017-2019). In both these plans there is an emphasis on infrastructure, transforming the key productive sectors, human development, and effective service delivery. In line with the findings of the 2011 World Development Report (WDR) on conflict and fragility, the CPS proposed to phase out short-term measures and focus more on strengthening the capacity of state institutions and making them more inclusive, to help build citizens’ trust in the state. For Official Use Only CLR Review 4 Independent Evaluation Group 3. Relevance of Design. The CPS objectives were aligned with country priorities and relevant to the challenges that Nepal faced. The WBG interventions were envisaged to support the achievement of the CPS objectives, with a robust program of lending, ASA products and trust fund activities, that were broadly complementary but dispersed. The WB deployed a range of lending instruments including IPF, DPF and PfoR; while appropriate this may have also taxed the limited implementation capacity of the government. The CPS noted, for instance, that the initial results from the PfoR revealed challenges in a low capacity environment. After initial difficulties, however, some of these challenges were addressed with government support and through close follow-up during implementation. The CPS also planned to build on the close collaboration with IFC through joint projects in energy, finance and agriculture and envisaged a division of labor between IFC and the Bank, with IFC focusing on private sector development and the Bank working closely with the government on policy reforms and supporting public investments. Given the large investment needs in some sectors, the CPS also envisaged close coordination with development partners. The Performance and Learning Review (PLR) of February 2017 undertook a comprehensive revision of the results framework to address the impact of the 2015 earthquakes, and considering progress on the ground. The revisions brought greater realism to the design, including alignment with the supporting program, although some shortcomings remained unaddressed. Overall, the more realistic results framework contributed to the positive delivery of results at the end of the CPS. A Joint Implementation Plan (JIP) was introduced at the PLR stage to coordinate the work of the Bank, IFC and MIGA in the electricity sector; however, the JIP has yet to demonstrate results in advancing the electricity agenda. Finally, the significant scaling up of the lending portfolio with ten operations approved between FY17-FY18, two years prior to program closure, means that more than half of new lending are not contributing to the CPS results for the period under review. Selectivity 4. The CPS program was selective in the context of focus areas and number of objectives. The CPS objectives were congruent with the challenges that the country faced and in line with government priorities, and built on the WBG’s comparative advantage. However, the program was less selective in terms of number of lending interventions given the limited capacity in the country to implement them. At the CPS and PLR, it was envisaged that the portfolio would be consolidated given fragmentation in the inherited portfolio which resulted in high transaction costs and diverted focus on potentially transformative interventions. However, the consolidation of the portfolio during the CPS period did not fully materialize as planned. While the average project size has increased, the total number of Bank operations has not been reduced. Between FY17-FY18, there was a significant scaling up of the lending portfolio, with 10 new operations approved amounting to $1.34 billion in new commitments. The limited gains in portfolio consolidation is reflected in the high number of projects and commitments at risk, and could impact the results of the next CPF if it were to remain unaddressed. Alignment 5. The CPS objectives were aligned with the 2013 WBG corporate goals on reducing extreme poverty and boosting shared prosperity. The two focus areas are aligned with the twin goals, and a number of objectives are focused on poverty reduction and shared prosperity directly or indirectly. That is the case, under Focus Area I, of efforts to create an environment conducive to economic activity and employment creation, including by means of expanding access to finance, electricity and rural transport. Similarly, under Focus Area II, Objective 5 focused on raising productivity and marketing capacity in agriculture, a source of livelihood for the rural poor. Objective 6 targeted access to higher education by the underprivileged. Objective 7 directed attention on skilled supported delivery to mothers from the two lowest quintiles, and Objective 8 targeted the socially excluded by engaging communities. For Official Use Only CLR Review 5 Independent Evaluation Group 5. Development Outcome Overview of Achievement by Objective: Focus Area I: Increasing Economic Growth and Competitiveness 6. Focus Area I had four objectives: (i) increased supply and reliability of energy, (ii) improved transportation connectivity, (iii) improved financial sector stability and financial inclusion, (iv) improved business regulatory environment for private sector investment. 7. Objective 1: Increased Supply and Reliability of Electricity. This objective was supported through lending and ASA: Kali Gandaki Hydropower Rehabilitation Project (FY14); Grid Solar and Energy Efficiency Project (FY15); Nepal India Electricity Transmission and Trade Project Rehabilitation Project (FY11), and Kabeli Transmission Project (FY11). Technical Assistance (TA) included: Economic Impacts of Hydro Developments (FY17); Household Renewable Access (FY15); Hydropower Scale-up in Nepal (FY14). IFC AS included: Hydro Sector Development (FY15); and Nepal E&S Hydro (FY17.) This objective had four indicators. • Local generation capacity rehabilitated (MW). The ICRR for the FY14 project reports that as of June 2017, 144 MW of generating capacity had been rehabilitated (in line with the target) Achieved. • Local generation capacity added: The ISR (May 2018) for the FY15 project reports that the construction of the 25MW solar plant started on April 2018. Consequently, no local generation capacity has been added. Not Achieved. • Additional power imports (increase from 100 MW in 2014 to 225 MW in 2018). The Restructuring Paper for the FY11 project reports that additional power imports of 160 MW from India as of 06/2018, exceeding the targeted increase of 125MW. Electricity import capacity stands now at 260 MW. Achieved. • Number of load-shedding hours reduced in selected areas (hours) (from 14 hours in 2014 to 8 hours in 2018). The indicator was achieved partly through the increased imports of electricity from India, which had the support of the FY11 project. The Restructuring Paper for the FY11 project informs that load-shedding has been reduced from 14 hours per day to no load shedding in the country today. Achieved 8. The indicators captured well the overall objective to increase supply and reliability of electricity. This objective was Mostly Achieved. 9. Objective 2: Improved transportation connectivity. This objective, with three indicators, was supported through the Road Sector Development Project (RSDP) (FY08) and its AF (FY17); and Bridges Improvement and Maintenance Project (FY12). • Percentage increase in population with access to all season road within 20 minutes of walking distance in targeted districts (from 8 percent in 2014 to 14 percent in 2018). The ICRR for the FY08 project reports that 15 percent of the population in targeted districts had access to an all-season road as August 2017. Achieved. • Decrease in journey times from the targeted areas to key economic centers (from 4 hours in 2014 to 2.6 hours in 2018). The ICRR for the FY08 project reports that the journey time in project areas to key economic centers decreased from 4 hours in 2014 to 1.2 hours as of August 2017. It also reports reduction in travel time for key social centers to 1.9 hours. Achieved. • Percentage of bridges in good and fair condition in targeted routes (from 53 percent in 2014 to 75 percent in 2018). The ICRR for the FY12 project reports that 81.2 percentage of bridges were in good and fair condition as of January 2018. Achieved. For Official Use Only CLR Review 6 Independent Evaluation Group 10. The three indicators are all project level indicators. Given the broader scope of the objective, as formulated, the CLR could have informed about the potential for scaling and/or the link with National Programs underway, as identified in the Periodic Plans of the government. On balance, this objective was Achieved. 11. Objective 3: Improved financial sector stability and increased financial inclusion. This objective was supported through the Financial Sector Stability DPC series 3 (FY17); and through ASA including the Financial Sector Assessment Program (FY15), jointly with the IMF (FY15); Financial Sector Support TA (FY14); Problem Bank Resolution TA (FY14); AgriFin-Nirham Utthan Bank TA (FY15.) IFC also contributed to this objective through several Advisory Services including: Nidhan Bank Project (FY11), Nepal Payment System Regulatory Reform (FY11), Nepal SME Banking ASA (FY14) SA-SME Banking (FY16). This objective had two indicators. • State-owned banks are either Capital Adequacy Ratio (CAR) compliant or under Prompt Collective Actions (PCA). Information provided by the Country Team from the Nepal Central Bank and respective Bank’s websites indicate that the CAR for the Nepal Bank Limited was 16.4 percent and for the Rastriya Baniljya Bank was 11.42 percent, both above the 10 percent target, as of February 2018. All other banks remain compliant above 10 percent, for the same date. Regarding PCA, the Special Inspections Program included 22 Class A banks covering 74 percent of Class A banks assets, above the target of 50 percent. Achieved. • Individuals and micro enterprises reached with financial services (increase from 2.3 million (of which 1.5 million female) in 2014 to 2.5 million (of which 1.6 million female) in 2018). The CLR reports that three million individuals and micro-enterprises had access to financial services and 215,000 microloans outstanding, of which 80 percent went to females, with IFC support. Additional information from the Nepal Central Bank reports that as of December 2017, the membership in the micro finance institutions was 2.5 million, up from 1.6 million in July 2014. Information available from IFC documents show contribution to 163, 217 loans to micro- enterprises. Mostly Achieved. 12. The IMF’s 2017 Article IV for Nepal notes overall improvements in the financial sector indicators (including CAR), but highlights the inadequacy of these indicators to measure financial sector stability, and calls for continued implementation of the recommendations in the Financial Sector Assessment Program (FSAP) carried jointly with the Bank. Advances have been made in financial inclusion. On balance, this Objective was Mostly Achieved. 13. Objective 4: Improved business regulatory environment for private sector investment. This objective was supported through following IFC operations: Kabelin (FY15); InfraV-UT1 (FY12); InfraV-UKamali (FY15) InfraV-KTCPL (FY15); Priotech (FY14), and Fairfiled-KTM (FY14); Regulatory Reform Project (FY11.) IFC also supported this objective through AS including the following: Nepal Investment Climate Reform Program (FY13); Regulatory Reform Project (FY11); ICRP-Public Private Dialogue (FY10); and, South Asia Regional Integration in Trade and Investment (FY12). Bank ASA included: Enhancing Business Climate in Nepal (FY16). This objective had three indicators. • $100 million in new private investment supported or mobilized in priority sectors. The CLR reports that $38 million were invested in long term finance from nine IFC projects. Based on available information from IFC project documents, $37.5 million were mobilized through nine IFC projects in the following sectors: electric power ($28.8 million), agriculture and forestry ($1 million), and accommodation and tourism services ($7.7 million). Partially Achieved • Compliance cost savings (CCS) from investment climate interventions. The CLR reports that direct compliance was achieved through various IFC operations. Based on information from individual IFC interventions, the compliance cost savings were $15.04 million (against the target of $18.5 million). Mostly Achieved • Additional number of formally registered business increased. IFC documentation provides an estimate of 196,775 as of June 2017 (above the target of 13,400). Achieved For Official Use Only CLR Review 7 Independent Evaluation Group 14. The CLR points to improvements in the Global Competitiveness ranking from 105 in 2013/2014 to 98 in 2017/2018. The CLR also refers to positive contributions in opening a business. The improvements in Global Competitiveness ranking have been driven by the macroeconomic situation, not the quality of the business environment, which did not improve from 2013 to 2018, according to the Doing Business Reports for 2013 and 2018. However, comparing DB2014 to DB2018, it has become easier to open a business in Nepal, mostly because of lower fees, in line with the reduction in compliance costs as reported in the second indicator. Overall, the IFC work helped facilitate registration, which is having an impact on the number of newly registered firms. On balance, Objective 4 was Mostly Achieved. 15. Focus Area 1 was Moderately Satisfactory. Of the four objectives, one was Achieved and three were Mostly Achieved. There was substantial progress in improving transportation connectivity in selected areas, increasing supply and reliability through imports from India and refurbishing existing capacity. The stability of the financial sector improved, and gains on financial inclusion have been made. The business regulatory environment has improved, contributing to increased formal enterprise registration. Focus Area II: Promoting Inclusion and Resilience 16. Focus Area II had five objectives: (i) increased agricultural productivity and commercialization, (ii) increased equitable access to education and improved relevance of skills development, (iii) increases to and quality of health and nutrition services, (iv) reduced vulnerability of the socially excluded, marginalized, and economically vulnerable population, and (v) improved infrastructure in areas affected by the 2015 earthquakes 17. Objective 5: Increased agricultural productivity and commercialization. This objective was supported through the Agriculture Commercialization and Trade Project (FY09), Modernization of Rani Jamara Kuariya Irrigation Scheme Project—phase 1(FY12) and its Additional Financing (FY18). Bank ASA support included Sources of Growth in Agriculture (FY16). IFC also supported this objective through Promoting Climate Resilient Agriculture Project (FY13). This objective had three indicators: • Productivity of selected high value commodities (tomato, milk and sugarcane): Tomato is expected to increase from 52.85 mt/ha to 66.06 mt/ha; milk from 978 liter/year and cow to 2,250 liter/year and cow; and sugarcane from 39.5 mt/ha to 47 mt/ha. The CPS and PLR did not provide baseline and target years. Per the February 2018 ISR for the FY09 project, tomato production was 91.58 mt/ha as of January 2018, and milk production increased to 3,113 liters of milk per cow as of January 2018. Additional information from the team indicates that sugarcane productivity increased to 88 mt/ha among lead farmers, as of 2016. Information beyond lead farmers is not available. Mostly Achieved. • Increased area under irrigation farming (from 15,817 ha in 2014 to 26,800 ha. in 2018). The ICR and the ICRR for the FY12 operation do not report on this indicator. The Country Team reports that, based on the Project Trimester Report (The Modernization of Rani Jamara Kulariya Irrigation Scheme Project and its additional financing) 28,942 hectares are under irrigation, 18,312 from the main Phase of the Rani Jamara Kularya Project and 10,630 from additional financing. Achieved. • Increase in selected high value agricultural commodities sold (ginger and milk): Ginger is expected to increase from 930 t/year to 1302 t/year and milk from 9,598, ltr/year to 13,437ltr/year. Information from the Agriculture Commercialization and Trade Project shows that as of February 2018, the quantities sold were: for ginger,1620t/year and for milk 16,704 liter/year. Achieved. 18. Two indicators have been achieved or mostly achieved. The indicators were set at project level without specifying or indicating how to reach the broader development objective sought under the CPS. On balance, this Objective was Mostly Achieved. For Official Use Only CLR Review 8 Independent Evaluation Group 19. Objective 6: Increased equitable access to education and improved relevance of skills development. This objective was supported through the School Reform Project (FY10); the Higher Education Reforms Project (FY15); and Enhanced Vocation and Training Project (FY11). ASA support included Nepal Education Studies (FY14). This objective had four indicators. • Net Enrollment rate in secondary education. As of June2018 ISR for the FY10 project, net enrollment rate in secondary education was 43.9 percent for males and 43.2 percent for females, above the targets of 40 percent and 39.5 percent for males and females respectively. Achieved • Number of under-privileged enrolled in higher secondary and bachelors program The CLR reports that 8,410 underprivileged were enrolled in higher and bachelors program. Per the latest ISR information from the FY11 and FY15 projects, IEG estimates that 22,700 underprivileged students were enrolled as of June 2018, above the CPS target of 23,000 students. Achieved • Number of students graduating annually from tertiary accredited institutions The CLR reports that 3,586 students graduating as of December 2017 b ased on data from the government’s Education and Management Information System, compared to the target of 5,000 in 2018. The supporting Higher Education Reforms Project does not report on this indicator and no information is available on how the Bank contributed to this indicator. Not Verified. • Percentage of graduates from supported programs gainfully employed at least for six months after completion of the short-term training. The ICRR for the Enhanced Vocational Education and Training Project reports that the percentage slightly increased from 68 percent in 2014 to 70.3 in June 2017. It also reports that, according to the project’s tracer study, which tracked graduates 3 to 18 months after completion of training, 87.5 percent were employed as of 2016. Achieved. 20. On balance, this objective was Mostly Achieved. 21. Objective 7: Improved access to and quality of health and nutrition services. This objective was supported through the Second HNP and HIV AIDS Project (FY10); Rural Water Supply and Sanitation Improvement Project (FY14); Community Action for Nutrition Project (FY11); Nutrition Policy Dialogue II TA (FY14) and Nutrition Policy Dialogue III TA (FY15). This objective had three indicators. • Percentage of births delivered by skilled birth attendants in the poorest two quintiles. Per the Nepal Demographic and Health Survey 2016 Final Report, 34 percent and 48 percent of births were delivered by skilled professionals, for the lowest and the second lowest quintiles, respectively. The targets were 23.7 percent and 30 percent, respectively. Achieved • Percentage (15 percent) of children 6-24 months of age who consume a minimum acceptable diet in the most disadvantaged Village Development Committees (VDCs) of the 15 project districts. The ICR and the ICRR for the Community Action for Nutrition Project report that 15 percent of children 6-24 months of age consumed a minimum acceptable diet in several selected VDCs. Achieved • New households with access to safe drinking water, new VDCs that are open defecation free (ODF) and new public latrines added in selected areas. The CLR reports that by October 2017 around 56,500 new households had access to safe drinking water, against a target of 100,000. The latest ISR (June 2018) for the FY14 project reports 435,000 people had access to safe drinking water. The ISR does not report on households. IEG estimates that around 95,000 new households have access to safe drinking water, using the average number of 4.6 people per household per the 2016 Health Survey. The number of VDCs declared ODF increased to 106 in June 2018, slightly below the target of 140. The number of improved latrines increased from to 122 as of June2018, below the target of 130. Mostly Achieved. 22. On balance, Objective 7 was Mostly Achieved. For Official Use Only CLR Review 9 Independent Evaluation Group 23. Objective 8: Reduced vulnerability of the socially excluded, marginalized, and economically vulnerable population. This objective was supported through the Poverty Alleviation Fund Project (PAF- II) (FY08); Social Protection Study (FY15); and Safety and Net Building TA (FY18). This objective had two indicators. • Number of marginalized household supported with productive assets in targeted areas - Around 830,000 marginalized households benefited from improved infrastructure and income generation activities (versus the target 575,000), as of April2018. Achieved. • Percentage of households in the targeted communities with income increase of at least 15% against a baseline income in 2007. The latest ISR (April 2018) for the FY08 project reports an estimated-68 percent of the beneficiary households have increased their incomes by at least 15 percent (against a target of 70 percent) as of April 2018. Mostly Achieved. 24. Objective 8 was Mostly Achieved. 25. Objective 9: Improved infrastructure in areas affected by the 2015 earthquakes. This objective, with one indicator, was supported through the Earthquake Housing and Reconstruction (EHRP) Project (FY15) and its two additional financings (FY18). • Additional number of households with multi-hazard resilient feature reconstructed by end FY18. As of May 2018, an estimated 53,568 households had their houses reconstructed with multi-hazard resilient features. of which 13,928 were women headed households (versus the target of 40,000 of which 10,390 female headed households). Achieved 26. This objective was Achieved. 27. On balance, Focus Area II is rated Moderately Satisfactory. Of the five objectives, four were rated mostly achieved and one achieved. Notable achievement was the housing reconstruction after the 2015 earthquakes. Gains have been made in agriculture productivity and commercialization for selected commodities, although some of these gains are at the pilot level. Skilled-attended birth delivery has improved for women in the two lowest quintiles. Secondary education enrollment has improved, and the percentage of graduates with jobs after completing training has increased. Progress has been made in reducing the vulnerability of the socially excluded and marginalized. Overall Assessment and Rating 28. The overall achievement of the CPS objectives is rated as Moderately Satisfactory. Of the nine objectives, two were achieved and seven were mostly achieved. Under Focus Area I, there was substantial progress in improving transport connectivity, increasing supply and reliability of energy, improving financial sector stability and financial inclusion, and improving the business environment for private sector investment. Under Focus Area II, the most notable achievement was the reconstruction of housing after the 2015 earthquake. There was substantial progress in increasing agricultural productivity and commercialization of selected commodities, increasing access to education for the underprivileged groups and improving relevance of skills for gainful employment, improving to quality of health and nutritional services especially for mothers and children, and reducing vulnerability for the socially excluded and marginalized groups. Objectives CLR Rating IEG Rating Focus Area I: Increasing Economic Growth and Moderately Satisfactory Moderately Satisfactory Competitiveness Objective 1 Increased Supply and Reliability of Energy Mostly Achieved Mostly Achieved Objective 2 Improved transportation connectivity Achieved Achieved Objective 3 Improved Financial Sector Stability and Financial Mostly Achieved Mostly Achieved Inclusion For Official Use Only CLR Review 10 Independent Evaluation Group Objective 4 Improved business regulatory environment for Mostly Achieved Mostly Achieved private sector investment Focus Area II: Promoting Inclusion and Resilience Moderately Satisfactory Moderately Satisfactory Objective 5 Increased Agricultural Productivity and Achieved Mostly Achieved Commercialization Objective 6 Increased Equitable Access to Education and Mostly Achieved Mostly Achieved Improved Relevance of Skills Development Objective 7 Increased Access to and Quality of Health and Partially Achieved Mostly Achieved Nutrition Services Objective 8 Reduced Vulnerability of the Socially Excluded, Mostly Achieved Mostly Achieved Marginalized, and Economically Vulnerable Population. Objective 9 Improved infrastructure in areas affected by the Achieved Achieved 2015 earthquakes. 6. WBG Performance Lending and Investments 29. At the beginning of the CPS period, total commitments were $1.3 billion, with 23 operations comprising 21 Investment Project Financing (IPF) including three Additional Financing, one Development Policy Financing (DPF) and one Program for Results (PforR). During the CPS period, total new commitments reached $2.0 billion, with 18 operations in the form of 13 IPFs, three DPFs and two PforRs. The largest share of new financing went to earthquake reconstruction (25 percent) and to finance and macroeconomic support jointly (20 percent), followed by education (16 percent), health and social protection (16 percent), and transport (8 percent). IDA allocation was leveraged through access to IDA’s Crisis Response Window (CRW) in support of earthquake reconstruction. Ten operations were approved towards the end of the CPS period (FY17-FY18) with total new commitments of $1.34 billion. This meant that delivery of results relied primarily on active projects at the beginning of the CPS and those approved during the first two years. At the beginning of the CPS, there were 21 trust funded activities for $251.8 million. The bulk of the resources were concentrated in seven operations in education (48 percent), agriculture (18 percent), and climate change and environment (12 percent). During the CPS period, 15 trust fund activities were approved for $106 million. Trust Funds approved during the CPS were concentrated in six operations, in education (59 percent), power (9.4 percent); earthquake reconstruction (9.4 percent); and road safety (7 percent). Trust Funds in education, agriculture, climate change and public financial management were well integrated with the CPS program. Efforts at consolidating the TF portfolio have reduced the number of non-core operations. 30. During the CPS period, Nepal’s portfolio at exit showed mixed results compared to the SAR and Bank-wide averages. By number of projects, IEG validated fourteen ICRs and rated twelve (or 86 percent) as Moderately Satisfactory or better on development outcomes, compared to SAR (79 percent) and Bank-wide (75 percent). By commitment volume, Nepal performed less well (or 82 percent) compared to SAR (89 percent) and Bank-wide (86 percent) averages. The percentage of completed projects with moderate or lower risk to development outcome was 56 percent for Nepal compared to the average rating for SAR (45 percent) and the Bank (43.4 percent.) 31. During the CPS period, the active portfolio shows a high percentage of projects and commitments at risk which may reflect implementation difficulties with the rapid scaling up of the number of projects in the context of institutional capacity constraints. The percentage of projects at risk was 46.7 percent, higher than SAR (23.6 percent) and the Bank (23.7 percent) averages. The percentage of commitments at risk was also significantly higher at 47.6 percent compared to the averages for SAR (20.9 percent) and the Bank (22.1 percent). The high percentage of projects at risk reflects a difficult implementation environment and the limited gains at program consolidation. According to the CLR, the Bank tackled these implementation roadblocks through joint portfolio For Official Use Only CLR Review 11 Independent Evaluation Group reviews, capacity building of implementing agencies, and use of Disbursement Linked Indicators (DLI) and output-based disbursements, such as in the Earthquake Housing Reconstruction Project. These efforts may have contributed to the positive disbursement ratio and ratings at exit. For instance, the ICRR for the School Reform Project notes that the introduction of Incentive-Linked-Indicators and Disbursement-Linked-Indicators helped in advancing project implementation. During the CPS period the average disbursement ratio for investment projects was 20.9 percent, higher than the averages for SAR (17 percent) and the Bank (18.6 percent). 32. At the start of the CPS period, IFC had net commitments of $92.9 million, of which 81 percent were in the financial sector, followed by the energy sector (11 percent), and investment fund (8 percent). The financial sector commitments were mainly in trade finance. During the CPS period, IFC made total commitments of $58.4 million, of which 59 percent were in trade finance, power sector (30 percent), tourism (8 percent), and agribusiness (3 percent). For the commitments in the energy sector, $8.5 million were cancelled, while a hydropower project with $19.3 million of IFC commitments has stalled. The financial sector investments were mainly in short term trade finance. 33. During the CPS period, IEG validated one Expanded Project Supervision Report (XPSR) covering an IFC investment in a microfinance institution. The IEG XPSR Evaluative Note assigned the project a Highly Successful rating for development outcome considering the performance of the microfinance institution under a very challenging environment in Nepal. The project combined effective reach to both urban and rural poor, which are preponderantly women, with a healthy and sustainable commercial rate of return. 34. There were no MIGA supported projects during the CPS period. Analytic and Advisory Activities and Services (ASA) 35. The ASA work supported the CPS/PLR agenda and informed the development of the country program going forward. It also served as an important instrument in the dialogue with government on policy as well as in the implementation of priority agenda. The CPS organized the ASA program around advocacy to prepare future operations, quality to support the on-going program, and advice to government on specific requests. The CLR emphasized the work in support of the policy dialogue on key reform areas and to deepen sector knowledge. The Bank delivered 40 ASA pieces during the CPS period, including 13 for economic and sector work (ESW) and 27 technical assistance (TA). The actual delivery was broadly in line with the planned ASA program both in the CPS and the PLR. A set of Policy Notes was prepared to support the dialogue on investment, infrastructure and inclusion with the new government and to inform the preparation of the CPS. A Country Economic Memorandum (FY17) has informed the dialogue with government on the challenges going forward and grounded the preparation of the 2017 SCD. ASA work has been used to prepare the scaling-up of hydro development and the Fast Track Initiative on transport. The ASA work on the financial sector, such as the FSAP (FY15) and TA to banks, has aided the design and implementation of the Financial Sector DPC support, and continues to inform the financial sector agenda going forward. ASA work on governance and fiscal issues, such as Public Expenditure and Financial Accountability Assessment (PEFA)-II (FY16) has informed the preparation of the Fiscal Reform DPC (FY18) and the strengthening of the fiscal institutions. The core ASA work is available in the WBG Repository. 36. During the CPS period, IFC approved 22 advisory services (AS) projects amounting to $28.6 million, of which 49 percent supported the energy sector, and provided advice to financial institutions (44 percent), and promoted public private partnership (PPP) opportunities (5 percent). The AS in the energy sector focused on hydropower projects, including ensuring adherence to environmental and social standards and identifying potential energy projects, while the AS in the financial sector mainly supported SME finance as well as to help improve the financial infrastructure. Eight AS projects – seven in the financial sector and one PPP for a hotel - amounting to about 10 percent of total amount were put on hold or terminated for various reasons, including lack of commitment from new management of beneficiary institutions and merger of AS projects. 37. During the CPS period, IEG validated one Project Completion Report (PCR) for IFC advisory services. The IEG Evaluative Note assigned a Mostly Unsuccessful rating for development For Official Use Only CLR Review 12 Independent Evaluation Group effectiveness to a project that supported the sustainable energy financing capacity of a financial institution. The financial institution supported by the AS project was acquired by another FI and it was unclear whether the project outcomes were sustained. Results Framework 38. The results framework reflected well the links between country development goals and the CPS program objectives and WBG interventions. The original design showed some weaknesses in the results chain which were addressed at PLR. For instance, indicators in energy did not reflect well the program, or were not attributable to the program, as in transport. One objective combined two substantially different engagements, one on the financial sector and other in the business environment. The PLR made substantial adjustments in the results framework to take into account the response to the earthquakes that hit the country in 2015, the political transition, design concerns, and the implementation challenges due to capacity constraints. Two new objectives were introduced, including one to reflect the contribution to the reconstruction of housing after the two earthquakes that hit the country in 2015, and the second to sharpen the focus on improving the business environment. Links to external connectivity in the transport objective were dropped because work on linking to India was affected by political disturbances. Overall, the results framework became more realistic, and the quality improved contributing to the positive delivery of results at the end of the CPS. The quality of the RF still remained somewhat uneven. On electricity, the relationship between objective, indicators, and supporting program was well balanced and realistic. The same was the case for education, health and nutrition, earthquake reconstruction, and financial stability. However, in transport, social inclusion, and agriculture, there was a disconnect between the objectives, pitched at a high level, and the indicators reflecting pilot project interventions. No scaling up efforts were developed in these cases, or any indication on how the projects would be scaled to broader CPS objectives and national programs. For some of the interventions, it was also difficult to measure the indicators, and/or the information was not easily available. This was the case for financial inclusion, business environment, and education. Partnerships and Development Partner Coordination 39. IEG’s 2014 IEG “World Bank Group Assistance to Fragile and Conflict- Affected Low-Income States, had noted difficulties in donor coordination in Nepal, and the CPS highlighted the high fragmentation of donor portfolios, including the WBG’s, and a lack of cooperation among donors. Significant progress in coordinating with other Development Partners was made during the CPS, and it is quite solid today in areas such as earthquake reconstruction The Bank led the Development Partner community in responding to the reconstruction needs after the earthquake. It prepared the Earthquake Post Disaster Needs Assessment (July,2015) taking stock of the impact of the earthquakes and the reconstruction needs by sector. Thus, the international community responded to support reconstruction after the earthquakes, with pledges of around $4 billion. The Bank supported the creation of the Housing Reconstruction Multi-Donor Trust Fund. The Bank has maintained a strong relationship with the IMF around the DPC operations, the joint preparation of FSAP and fiscal issues. Cooperation has also been strong around education, with the support of Trust Fund resources, for $185 million. The Bank has been a member of the International Development Partners Group, which includes Asian Development Bank, United Nations, Australia, Denmark, Finland, France, Germany, Japan, Norway, Switzerland, United Kingdom, and United States. The World Bank with Swiss Development Group lead the Federalism Working Group. Safeguards and Fiduciary Issues 40. Of the fourteen operations that were closed and validated by IEG during the CPS period, twelve triggered environmental and social safeguard policies in the transport, education, agriculture, health, social protection, water, energy and social development practices. The ICRs and the ICRRs point to the lack of in-country capacity and inadequate staffing as impacting negatively safeguards performance. The CLR further points to sector complexities, political economy, instability in the country and the 2015 earthquake as increasing the costs of coordination, which affected decision making and implementation. Overall safeguards compliance generally received a satisfactory rating at project completion, although impact mitigation measures were not always explicit. A request for For Official Use Only CLR Review 13 Independent Evaluation Group investigation was registered by the Inspection Panel (IP) in November 2013 for alleged harm during the implementation of the closed Nepal Power Development Project (2013). The request had been submitted by the representatives of affected communities with Indigenous Peoples, in July of 2013. In its final report, the IP found the WB partly in noncompliance with the applicable policies. In response, the Bank prepared an action plan which is still under implementation. A second request for investigation by the LGBTI community was submitted to the Inspection Panel in September 2013 for alleged discrimination during consultations for the ongoing Enhanced Vocational Education and Training Project (2018). The request was not registered because management had already acted to resolve the issue. 41. During the CPS period, INT substantiated three cases and is currently investigating a case. The substantiated cases included one in the energy sector, Nepal-India Electricity Transmission and Trade Project, wherein allegations of corruption and fraud were substantiated; one in the Transport sector, Project for Strengthening the National Rural Transportation Program (SNRTP), wherein allegations of rent-seeking were substantiated; and one in the Health sector (the case was focused on Bangladesh but the subject firm was fraudulent while bidding in a contract in the Nepal Health sector). The ongoing case is in the Industrial and Trade sector. Separately, during FY14-18, 30 complaints were documented in INT databases, the major clusters included: seven in the Agriculture sector, seven in the Health, Nutrition and Population sector, four in Transport & ICT, and three each that were Energy sector and Water sector-related. Ownership and Flexibility 42. The CPS was aligned with the government’s long-term national objectives as articulated in the Periodic Plans. In preparation for the CPS, the World Bank consulted with a broad range of stakeholders including representatives from government, political parties, civil society and development partners among others. The CPS noted that broad based consultation was important given the political situation at that time to obtain alignment with development priorities. The CLR reports that changes in national leadership (five prime ministers from 2013 to 2018) have made it difficult to implement projects and sustain dialogue with government on critical policy issues. Recent ICRRs (e.g. Emergency Towns, Road Sector, Second HNP and HIV/AIDS projects) confirm that changes at the top did affect implementation. The political changes have also affected the pace of implementation of the policy agenda, and professional bureaucracy has played a critical role in sustaining it. The Bank demonstrated flexibility during implementation. After the earthquakes and based on a needs assessment, the Bank prepared and approved the Earthquake Housing and Reconstruction Project (FY15) for $500 million which accounted for the largest share in new commitments. IFC also responded to the earthquake reconstruction needs by adjusting credit financing and directing financial resources to enable economic recovery. The recent adoption of a new constitution is posing additional challenges and the Bank has committed to help in making federalism work. The Bank also showed flexibility by significantly adjusting the results framework at the PLR stage. WBG Internal Cooperation 43. There was strong internal collaboration between the Bank and IFC, with clear division of labor. The contributions of both the Bank and IFC were reflected in the results framework. At the PLR, internal collaboration between the Bank, IFC and MIGA to support Objective 1 was reflected under a Joint Implementation Plan (JIP) in electricity production and distribution. The Bank and IFC financed Kabeli-A, a 37.6 MW hydropower project (FY15), which is under implementation. However, Upper Trishuli 1, which was included in the JIP and was expected to attract the largest single-project foreign direct investment into Nepal has experienced implementation delays. The CLR reports that the corresponding Power Purchase Agreement (PPP) for the project has been signed in January 2018. Risk Identification and Mitigation 44. The risks identified by the CPS covered political, economy (external), fragility, governance, capacity and engagement issues. They fitted well the situation at the time. The PLR reassessment rated the overall risk for the overall program as Substantial, and on Political and Governance and For Official Use Only CLR Review 14 Independent Evaluation Group Institutional Capacity for Implementation and Sustainability as High. The Bank managed the political risks to the policy agenda, especially in the area of finance, through the DPC series to help gradually generate and solidify consensus on the reform agenda. Strong cooperation with the IMF and DFID helped mitigate the political risk on the policy agenda. Extensive TA was also provided. To mitigate capacity and engagement risks, the Bank undertook periodic portfolio reviews, capacity building efforts, and use of DLIs and output-based indicators may have contributed to improved disbursement ratios and quality at exit ratings. Notably, the risk from natural disasters such as earthquakes was not considered in the CPS. However, when the risk materialized, the WBG responded in a timely and substantive manner. Overall Assessment and Rating 45. WBG’s performance is rated as Good. Design 46. The CPS program reflected well the country’s challenges and was congruent with the government’s long-term objectives as articulated in the government’s Periodic Plans. The CPS focus areas and objectives were aligned with the WBG twin goals and had the support of a solid program of operations, ASA and trust funds, that were broadly complementary but somewhat dispersed. The CPS program was selective in focus areas and number of objectives but less selective in terms of number of lending interventions given the limited implementation capacity in the country. Implementation 47. At the PLR, the results framework was modified by adding two objectives and revising indicators to reflect the Banks’ response to the aftermath of the 2015 earthquake and to reflect realities on the ground, and improved its design although some weaknesses remained. The identification of risks was adequate especially the concerns about the political economy and implementation capacity. Overall, Nepal’s portfolio performance at exit compared well with respect to the SAR and Bank-wide averages in terms of number of projects rated Moderately Satisfactory or better. The percentage of projects at risk remains high as the size of the portfolio continues to tax implementation capacity despite efforts at consolidation by increasing the average project size. Following the PLR, there was a significant scaling up of the lending portfolio with ten operations approved between FY17-FY18. In effect, the program consolidation promised at the CPS and PLR did not fully take place as envisaged. The identification of risks was adequate especially the concerns about politics and implementation capacity. Internal collaboration between the Bank and IFC was strong and reflected in electricity, finance, and business environment. Donor coordination improved during the CPS. The WBG has played a leading role in earthquake reconstruction and the emerging federalism agenda. Compliance with social and environment safeguards was affected by a difficult implementation and weak capacity, further tested by the impact of the earthquakes. The Management Action Plan (MAP) to address the findings of the Inspection Panel regarding the Nepal Power Development Project (closed in December 2013) is under implementation. INT substantiated three cases of corruption in the energy, transport and health projects. 7. Assessment of CLR Completion Report 48. The CLR followed the joint OPCS/IEG guidelines in reporting and in rating the program and WBG performance. It reported on the objectives and indicators as per the Performance and Learning Review. Overall the sources of information were clear, but in some cases, they were not, thus making it cumbersome to determine the contribution of the program, as in financial inclusion, and business environment. The CLR is candid in discussing pertinent and relevant issues, like selectivity, and the need to target objectives above the project level. The lessons that the CLR draws are relevant. The CLR could have discussed two issues. First, the reasons and possible consequences of the late preparation of the PLR, two and a half years after the CPS went to the Board. Second, the CLR could have explained in greater detail the impact on the program of the two earthquakes and political For Official Use Only CLR Review 15 Independent Evaluation Group disruptions in 2015, including project reprogramming, and the rather comprehensive changes in the results framework at the time of the PLR. 8. Findings and Lessons 49. The CLR draws lessons in the following areas: (i) the use of the knowledge base and outreach for policy reform in a difficult political environment; (ii) the need to find the right and adequate instruments that fit the implementation environment; (iii) the attention to selectivity not just with regard to the number of objectives but also of instruments so as to not overwhelm implementation capacity; the need for a multi-pronged approach to implementation; (iv) WBG leadership and coordination with DP community; (v) the limitation of the community managed interventions from the perspective of impact and sustainability; and (vi) the need to focus results beyond project levels. 50. IEG adds the following lessons: • To effectively address a country’s needs after a natural disaster in a fragile environment, it is critical for the WBG to be agile and flexible, using a combination of instruments. In the case of Nepal, the WBG was flexible in responding to the challenges brought about by the earthquakes and the political disturbances. The fast response to the earthquake reconstruction needs was aided by a prompt and credible stocktaking of the impact of the earthquakes, which in turn facilitated the mobilization of resources from the development community and helped leverage Bank and IFC resources. The results framework was revised to take account of the impact of the earthquake effort on the program and supporting operations were designed to facilitate fast disbursement of project funds. • Greater selectivity is needed in post-conflict environments to align with the limited implementation capacity and ensure sustained delivery of results. Countries that move out of a conflict situation are bound to find themselves facing the broad challenges of institution building. In the case of the Nepal experience, while there were efforts at portfolio consolidation by increasing the average project size, implementation capacity remains an issue as reflected in the high percentage of projects at risk, and could affect the results of the next CPF if it were to remain unaddressed. Going forward, it is important to further consolidate the lending portfolio as originally envisaged in the CPS and PLR to align with implementation capacity and ensure sustained results on the ground. Annexes CLR Review 17 Independent Evaluation Group Annex Table 1: Summary of Achievements of CPS Objectives – Nepal Annex Table 2: Planned and Actual Lending for Nepal, FY14-FY18 Annex Table 3: Analytical and Advisory Work for Nepal, FY14-FY18 Annex Table 4: Trust Funds Active for Nepal, FY14-FY18 Annex Table 5: IEG Project Ratings for Nepal, FY14-FY18 Annex Table 6: IEG Project Ratings for Nepal and Comparators, FY14-18 Annex Table 7: Portfolio Status for Nepal and Comparators, FY14-18 Annex Table 8: Disbursement Ratio for Nepal, FY14-FY18 Annex Table 9: Net Disbursement and Charges for Nepal, FY14-FY17 Annex Table 10: Total Net Disbursements of Official Development Assistance and Official Aid for Nepal Annex Table 11: Economic and Social Indicators for Nepal, FY14-FY18 Annex Table 12: List of IFC Investments in Nepal Annex Table 13: List of IFC Advisory Services in Nepal Annex Table 14: IFC net commitment activity in Nepal, FY14 - FY17 Annex Table 15: List of Active MIGA Activities in Nepal, 2014-2018 Annexes CLR Review 19 Independent Evaluation Group Annex Table 1: Summary of Achievements of CPS Objectives – Nepal CAS FY14-FY18: Focus Area I: Increasing Actual Results IEG Comments Economic Growth and Competitiveness 1. CPS Objective: Increased supply and reliability of electricity Indicator 1: Local The Kali Gandaki A Hydropower Plan Before the PLR this Objective generation capacity Rehabilitation Project (P132289, FY14) was: “Increased supply of rehabilitated: supported this indicator. IEG ICRR: MU electricity, including import, Baseline: 0 MW (2014) reports that 144 MW of hydropower and improved access to Target: 144 MW (2018) generation capacity were rehabilitated reliable and affordable under the project, as of June 2017. electricity within Nepal” and Achieved possessed two indicators: Indicator 1: Power Generation Indicator 2: Local The Grid Solar and Energy Efficiency Capacity added or generation capacity Project (P146344, FY15), supported this rehabilitated (MW), with two added: indicator. The November 2017 ISR: MS baselines and targets for Local Baseline: 0 MW (2014) reports that the contract agreement was Capacity and for Power Target: 25 MW (2018) signed for supply and installation of Imports; and 25MW grid connected solar PV plant. Indicator 2: Length of The latest ISR: MS (May 2018) reports transmission and distribution that the construction of the 25MW solar system added or rehabilitated plant started on April 2018. Baseline: 0km Consequently, the ISR reported no Target: 600km new and progress in the generation capacity of rehabilitated renewable energy constructed. Not Achieved Major Outcome Indicator 3: Additional The Nepal India Electricity Transmission Measures power imports: and Trade Project (P115767, FY11) Baseline: 100 MW (2014) supported this indicator. The latest ISR: Target: 225 MW (2018) MS (June 2018) reports that, as of January 2018, 700 GWh were imported from India to Nepal. The Project Restructuring Paper) reports that additional power imports of 160 MW from India as of 06/2018, exceeding the targeted increase of 125MW. Achieved Indicator 4: Number of The Kali Gandaki A Hydropower Plan load-shedding hours Rehabilitation Project (P132289, FY14), reduced in selected the Grid Solar and Energy Efficiency areas (hours): Project (P146344, FY15, PAD), the Baseline: 14 hours (2014) Kabeli-A Transmission Project (P112893, Target: 8 hours (2018) FY11, latest ISR: MU, April 2017), the Kabeli-A Hydro Electric Project (P122406, FY15), jointly financed by the IFC project 30977 (FY15) and the Nepal India Electricity Transmission and Trade Only the ICR: MU of the Kali Project (P115767, FY11, PAD) Gandaki A Hydropower Plan supported this indicator as they aimed to Rehabilitation Project address load shedding issues in the (P132289, FY14) reports that country. the plant comprises about 20% Annexes CLR Review 20 Independent Evaluation Group CAS FY14-FY18: Focus Area I: Increasing Actual Results IEG Comments Economic Growth and Competitiveness of the total generation capacity Information provided by the Country of the country and that its Team, using data from the Nepal contribution in reducing load Electricity Authority, reports that the load- shedding is very significant. shedding hours reduced in major cities IEG ICRR: MU does not report like Kathmandu and connecting districts data for shedding hours. from 14 hours to 0 hours in 2017 and that improvement in supply is due to electricity imports of 160 MW from India (through the Nepal India Electricity Transmission and Trade Project (P115767, FY11). The Project Restructuring Paper of the Nepal India Electricity Transmission and Trade Project Rehabilitation Project (P115767, FY11) informs that load-shedding has been reduced from 14 hours per day to no load shedding in the country today. Achieved 2. CPS Objective: Improved transportation connectivity Indicator 1: Percentage The Road Sector Development Project These three indicators were increase in population (P095977, FY08) and its additional added at PLR stage. with access to all financing operations supported this season road within 20 indicator. IEG ICRR: MS reports that the The original indicators were: minutes of walking share of rural population with access to Indicator 1: Number of district distance in targeted an all-season road increased from 7.6% headquarters connected with districts: to 15% as of August 2017. all-season roads DP Baseline: 8% (2014) Achieved Baseline: 59 Target: 14% (2018) Target: 65 and Indicator 2: Decrease in The Road Sector Development Project Indicator 2: Average time from journey times from the (P095977, FY08) and its additional ship readiness to unload to targeted areas to key financing operations also supported this final destination for an economic centers: indicator. IEG ICRR: MS reports that the imported container, on journey time, in project areas, to key Kolkata- Birgunj-Kathmandu Baseline: 4 hours (2014) economic centers and to key social Corridor: Target: 2.6 hours (2018) services centers decreased from 4h to Baseline: 22 days 1.2h and to 1.9h, respectively, as of Target: 18 days August 2017. Achieved Indicator 3: Percentage of The Bridges Improvement and bridges in good and fair Maintenance Project (P125495, FY12) condition in targeted supported this indicator. Management routes: ICR: S reports that the share of improved Baseline: 53% (2014) condition (good or fair) of bridges on the Target: 75% (2018) target group increased from 53% to 81.2% as of July 2017. Achieved Annexes CLR Review 21 Independent Evaluation Group CAS FY14-FY18: Focus Area I: Increasing Actual Results IEG Comments Economic Growth and Competitiveness 3. CPS Objective: Improved financial sector stability and increased financial inclusion Indicator 1: State-owned The Third Financial Sector Stability Credit Before the PLR, the indicator banks are either Capital (P156960, FY17) supported this indicator. was: Adequacy Ratio (CAR) The Program Document indicates that: State-owned banks (NBL and compliant or under RBB) recapitalized as per Prompt Collective prudential norms and NBL Actions (PCA): CAR: privatized. CAR: - Nepal Bank Limited (NPL): CAR was The baselines and targets for NBL: Baseline: -0.49%; 11.4% as of mid-July 2016 NBL and RBB were the same Target: 10% - Rastriya Banijya Bank (RBB): CAR and the indicator had another RBB: Baseline: 3.33%; was 11.2% as of mid-July 2016 baseline and target: Target: 10% - CAR for commercial banks has GoN ownership of NBL: 30% Other Banks>10%; Target: improved to 12.2% by FY2016 and GoN ownership of NBL: 0% >10% that all banks meet the minimum of 10% Before the PLR, the baseline and target for PCA were Additional data (as of mid-January 2018) presented as a distinct from the NNL and respective Banks’ indicator. websites provided by the Country Team, indicates that: - Nepal Bank Limited (NPL): CAR was 16.41% - Rastriya Banijya Bank (RBB): CAR was 11.42% - CAR for commercial banks were: - A class banks: 14.22% - B class banks: 20.44% - C class banks: 21.9% - Overall banks: 15.40% PCA: Information provided by the Country PCA: Team indicates that Special Inspections Baseline: No inspections; Program were carried out on 54 financial Target: 50% of Assets in institutions covering 64% banking sectors Class A Bank assets which included 22 Class A banks covering 74% Class A banks assets. It also reports that, at present, 9 Financial Institutions (FIs) are under PCA while 7 FIs are in the process of resolution. Achieved Indicator 2: Individuals The IFC Advisory Service (AS) Nidhan Before the PLR indicator, and micro enterprises Bank project (580627, FY11) supported baseline and target were also reached with financial this Indicator by providing the Bank with included for SMEs: services: advisory services to expand its Baseline: 43,900 (5,286 operations to the clients with micro- female owned) Baseline: Micro enterprise finance and related financial services. Target: 51,300 (6,300 female- and individual 2.3 million The FY2017-Q2 AS Supervision Report owned). indicates that the number of micro-loans Annexes CLR Review 22 Independent Evaluation Group CAS FY14-FY18: Focus Area I: Increasing Actual Results IEG Comments Economic Growth and Competitiveness (of which 1.5 million increased from 84,931 to 163.217 and female) (2014) that the value of micro-loans increased Target: Micro enterprise from USD 20.8 million to USD 67.5 and individual 2.5 million million. No more recent document was (of which 1.6 million available to verify that, as reported in the female) (2018) CLR, 215,397 microloans outstanding, of which, 80 percent (172,318) are female borrowers were approved. The IFC also provided financial sector advisory engagements to, among others, foster the development of e-payments and mobile banking through: - The Nepal Payment Systems Regulatory Reform AS, 586887, FY11, The December 2017 Banking see AS Completion Report that reports and Financial Statistics Report that during the project implementation, of the Nepal Rastra Bank FY11-14, about 559,000 mobile reports that the number of banking/branchless banking accounts mobile banking customers were opened by Banks and Financial reached 2,986,669 people as Institutions) of mid-December 2007. - The TA to M. Nepal on Launching of Mobile Money Initiative and Agent Network Development (596407, FY12, see IFC 2013 Mobile Money Scoping Report for Nepal) - The Nepal SME Banking AS (599173, FY14, see AS Completion Report ) that supported the dissemination of sectoral knowledge on SME banking - The SA -SME Banking AS (600409, FY16, no supervision document found) As reported in the CLR and confirmed by the Country Team, 2.9 million individuals and microenterprises have access to financial services through mobile banking, of which at least 1.67 million are female. The December 2017 Banking and Financial Statistics Report of the Nepal Rastra Bank reports that the number of borrowers from microfinance financial institutions increased from 1,102,132 in mid-July 2014 to 1,675,562 in mid- December 2017 and that the total number of members increased from 1,612,430 to 2,519,778 in the same timeframe. Based on the review of the projects’’ document which permitted to verify that Annexes CLR Review 23 Independent Evaluation Group CAS FY14-FY18: Focus Area I: Increasing Actual Results IEG Comments Economic Growth and Competitiveness 163,217 micro-loans were supported by IFC during the period. Mostly Achieved 4. CPS Objective: Improved business regulatory environment for private sector investment Indicator 1: $100 million in The CLR reports that, through IFC The contributing IFC new private investment investment projects, USD 38 million were operations are: supported or mobilized invested in long-term finance. Project Project IFC Total in priority sectors: Additional information provided by the ID Name Financing Baseline: 0 (2014) Country Team reports the contribution of (in USD Target: $100 million (2018) 9 IFC long-term finance (LTF) projects to million) this indicator (see IEG comment). 30977 Kabelim 19.3 FY15 These projects were approved for the 31797 InfraV- 1.0 following sectors (as per IFC primary UT1, FY12 sector classification): Electric Power 32353 InfraV- 2.0 (USD 28.8 million), Agriculture and UMP, Forestry (USD 1 million), Accommodation FY14 and Tourism Services (USD 7.7 million). 35355 InfraV- 4.0 Partially Achieved UKarnali, FY15 35356 InfraV- 1.0 KTCPL, FY15 35408 InfraV- 1.5 MTCPL, FY15 33069 Probiotech, 1.0 FY14 35111 Fairfield- 6.0 KTM, FY14 38208 HCR, 1.7 FY17 Indicator 2: Compliance The CLR reports that direct compliance cost savings (CCS) from cost savings were achieved through investment climate various IFC operations: interventions: - USD 24 million through the Nepal Baseline: US$0 million Investment Climate Reform Program: the (2014) AS completion report of the Investment Target: US$18.5 million Climate for Industry project (593787, (2018) FY13) indicates that, as of November 2017, it was too early to measure the impact of automation on business processes but that CCS of about USD 474,000 were expected (project end target is June 2018). - USD 6.3 million from the Regulatory Reform Project (575068, FY11): the AS Completion Report indicates that the new Annexes CLR Review 24 Independent Evaluation Group CAS FY14-FY18: Focus Area I: Increasing Actual Results IEG Comments Economic Growth and Competitiveness on-line business registration system led to annual CCS of about USD 6.5 million as of December 2017. - USD 8.5 million from the ICRP- Public Private Dialogue project (575070, FY10): the AS Completion Report indicates direct CCS of USD 8.54 million as of June 2015. It also reports that CCS were expected to increase to USD 10 million post completion - USD 9.5 million from the South Asia Regional Integration in Trade and Investment (577807, FY12) for which no IFC supervision/completion document was available in WBG systems. As per the review of the reported IFC documents, about USD 15.5 million CC were saved thanks to IFC investment climate interventions. Mostly Achieved Indicator 3: Additional The Regulatory Reform Project (575068, This indicator was added at number of formally FY11) supported this indicator. The AS PLR stage. registered business Completion Report indicates that the increased: number of formally registered businesses Baseline: 10,123 (2014) increased from 10,123 (2014) to 196,775 Target: 13,400 (2018) as of June 2017. Achieved CAS FY14-FY18: Focus Area II: Promoting Actual Results IEG Comments Inclusion and Increasing Resilience 5. CPS Objective: Increased agricultural productivity and commercialization Indicator 1: Productivity The Agriculture Commercialization and Before the PLR, this Pillar was of selected high value Trade Project (P087140, FY09) named “Increasing inclusive commodities increased: supported productivity increase for growth and opportunities for Major tomatoes and milk. The latest project’s prosperity”. Outcome Tomato: Baseline: 52.85 ISR: MS (February 2018) reports that: Measures mt/ha; Target: 66.06 - tomato production increased from 51.8 Before the PLR the baseline mt/ha mt/ha to 91.56 mt/ha and that and target for tomatoes were - milk production increased from 2,381 Tomato: Baseline: 84t/ha; Milk: Baseline: 978 liters to 3,113 liters as of January 2018 Target: 110t/ha liter/year and cow; Target: (as reported in the CLR, the ISR Before the PLR, this indicator 2,250 liter/year and cow measurement is different than the also comprised baseline/ target CLR’s). for poultry. Annexes CLR Review 25 Independent Evaluation Group CAS FY14-FY18: Focus Area II: Promoting Actual Results IEG Comments Inclusion and Increasing Resilience The IFC Promoting Climate Resilient Sugarcane: Baseline: 39.5 Agriculture Project (588487, FY13) mt/ha; Target: 47 mt/ha supported sugarcane productivity increases. Sugarcane productivity increased to 88 mt/ha among lead farmers, as of 2016. Information beyond lead farmers is not available. Mostly Achieved Indicator 2: Increased The Modernization of Rani Jamara At PLR stage, one indicator area under irrigation Kulariya Irrigation Scheme Project – was taken out: farming: Phase 1 (P118179, FY12) and its Indicator 2: Percentage Baseline: Irrigated area additional financing supported this increase in the cropping 15,817 (2014) indicator. intensity Target: 26,800 (2018) Management ICR: MS and IEG ICRR: S Baseline: 1.68 reports do not report information related Target: 2.20 to the area under irrigation farming. Information from the Project Trimester Phase 2 of the Modernization Progress Report 2017/18 reported by of Rani Jamara Kulariya the Country Team indicates that 28,942 Irrigation Scheme Project ha are under irrigation (18,312 ha from (P158364) was approved in the main phase of the project and March 2018. 10,630 from the additional financing). Achieved Indicator 3: Increase in The Agriculture Commercialization and Before the PLR, this indicator selected high value Trade Project (P087140, FY09) was as follows: agricultural supported this indicator. The latest Indicator 4: Annual smallholder commodities sold project’s ISR: MS (February 2018) production marketed: (annual): reports the following volume increase in Ginger: Ginger: Baseline: 930 commodities sold, as of January 2018: Baseline: 2,288 mt/year; t/year; Target: 1302 t/year - Ginger: from 930 t/year to 1,620 t/year Target: 2,324 mt/year Milk: Baseline: 9,598, - Milk: from 9,598 liter/year to 16,704 Milk: ltr/year; Target: liter/year Baseline: 5,122,260, ltr/year; 13,437ltr/year Achieved Target: 5,170,520 ltr/year 6. CPS Objective: Increased equitable access to education and improved relevance of skills development Indicator 1: Net The School Sector Reform Program Before the PLR, this objective Enrollment rate in (P113441, FY10) supports this indicator. was called “More equitable secondary education: The December 2017 ISR: S reports that access to education and skills net enrollment rate in secondary grades development, of higher quality Baseline: Target: (9-12) increased from 21% (September and relevance”. Male: 30.9% Male: 2009) to 43.90%, as of November 2017 Female: 40% and reports a 99% gender parity index in At PLR stage, baselines and 30.3% Female: enrolment for secondary education. targets for net enrolment rate 39.5% This rate is higher than the information for the Poorest and Second reported in the CLR (male net enrollment Poorest Quintiles were taken rate of 39% and 38.6% for female), out. based on national information from the Annexes CLR Review 26 Independent Evaluation Group CAS FY14-FY18: Focus Area II: Promoting Actual Results IEG Comments Inclusion and Increasing Resilience Consolidated Flash Report 2016-2017 of Data from the WDI reports that the Department of Education. net school enrollment in Achieved secondary education was about 54.4% in 2016 (and 55.8% for girls). Indicator 2: Number of The Higher Education Reforms Project At PLR stage, the following under-privileged (P147010, FY15) supported this indicator was taken out: enrolled in higher indicator. The June 2018 ISR: S reports: Number of students graduating secondary and - 858 underprivileged students (from annually bachelors program: bottom two poorest welfare quintiles) from tertiary accredited Baseline: 14,100 (2014) at the higher secondary level (HSL) institutions: Target: 23,000 (2018) science stream Baseline: 2,000 - 4,674 students at the Bachelor’s Target: 5,000 level supported In total, as or May 2018, 5,532 under- privileged were enrolled in higher The baseline data could not be secondary and bachelor programs. verified. The Enhanced Vocational Education and Training Project (P104015, FY11) also supported this indicator. IEG ICRR: S reports that the project supported, through scholarship, 4,883 poor students from disadvantaged groups and laggings regions to attend technical school leaving certification (TLSC) or diploma The Enhanced Vocational programs., as of June 2017, from a Education and Training Project baseline of 1,814 in 2014, and a net (P163018) Phase 2 was increase of 3,069 students. approved in FY18. Its first ISR: S (December 2017) does not The increase in student enrolled during report progress yet. the CPS, under both programs, was 8,601. Taking into account the baseline of 14,100, by 2018, 22,701 under- privileged students enrolled in higher education and bachelor programs, above the 23,000 target. Achieved Indicator 3: Number of This indicator is supported by the Higher students graduating Education Reforms Project (P147010, annually from tertiary FY15). The June 2018 ISR: S does not accredited institutions: report this indicator. Baseline: 2,000 (2014) The CLR reported 3,586 students Target: 5,000 (2018) graduating annually from accredited institutions. The Country Team specified that this data is not reported in the ISR but that it is reported in Education Management Information System (EMIS) reports. Partially Achieved Annexes CLR Review 27 Independent Evaluation Group CAS FY14-FY18: Focus Area II: Promoting Actual Results IEG Comments Inclusion and Increasing Resilience Indicator 4: Percentage The Enhanced Vocational Education and IEG ICRR: S also notes that the of graduates from Training (P104015, FY11) supported this baseline figure was not relevant supported programs indicator. IEG ICRR: S reports that the due to the revised working of gainfully employed at share of graduates from supported the indicator. It also reports least for six months programs gainfully employed at least for that, according to the project's after completion of the 6 months after the completion of the tracer study, which tracked short-term training: training increased from 70% (August graduates 3 to 18 months after Baseline: 68% (2014) 2011) to 70.30% as of June 2017. completion of training, 87% of Target: 70% (2018) Achieved the graduates were employed. 7. CPS Objective: Improved access to and quality of health and nutrition services Indicator 1: Percentage The Second HNP and HIV/AIDS Project Before the PLR, the objective of births delivered by (P117417, FY10) supported this was: “Improved health and skilled birth attendants indicator. IEG: MU reports that the share nutrition outcomes, particularly in the poorest two of births delivered by skilled attendants for the poor and quintiles: increased from 19% (2006) to 58% disadvantaged”. (2016) and that the ratio for the poorest Baseline: Target: income quintile increased from 8.5% Lowest Lowest 20% (2009) to 25.5% (2012). 10.7% 2nd lowest More recent data, presented in the CLR, 2 Lowest 30% nd using the Nepal Demographic and 23.7 % Health Survey 2016 Final Report, indicates that 34% and 48% of births were delivered by skilled professionals for, respectively, the lowest and second lowest quintiles. Achieved Indicator 2: Percentage The Second HNP and HIV/AIDS Project Before the PLR, the baseline of children 6-24 months (P117417, FY10) supported this and target were: of age who consume a indicator. IEG: MU reports that the Baseline: 11.8% minimum acceptable project provided support for the Target: 25% diet in the most consolidation and expansion of disadvantaged VDCs of government programs on malnutrition, At PLR stage, the following the 15 project districts: including Vitamin A supplementation for indicator was taken out: Baseline: 9.3% (2014) children 6-24 months, as of 2016, Indicator 3: Proportion of Target: 15% (2018) without reporting any specific rate. people in a district enrolled in health insurance The Community Action for Nutrition Baseline: 0 Project (P125359, FY11), also supported Target: 10% this indicator. IEG ICRR: MS reports a rate of 15% of children 6-24 months of The CLR reported a rate of age who consume a minimum 13.76% of children 6-24 months acceptable diet, as of 2017. However, of age according to data from 15% was far below the target of 25 % Nepal Sunaula Hazar Din under the supporting project. Community Action Project Achieved Impact Evaluation Midline Report. Annexes CLR Review 28 Independent Evaluation Group CAS FY14-FY18: Focus Area II: Promoting Actual Results IEG Comments Inclusion and Increasing Resilience Indicator 3: New The Rural Water Supply and Sanitation Before the PLR, the following households with access Project (P143036, FY14) supported this targets were reduced from: to safe drinking water, indicator. The latest ISR: MS (June Drinking water: 177,000 new new Village 2018) reports the following information: households (2017) Development - Drinking water: the number of people, Sanitation: 240 new VDCs or Committees (VDCs) that in rural areas, provided with access to about new 116,000 households are open defecation free improved water sources increased (2017) (ODF) and new public from 0 to 434,969 as of June 2018. New public latrines: 600 latrines added in The ISR does not report on the selected areas: number of households. Additional information shared by the Country Baseline: Target: Team, using data from the Drinking Drinking Management Information System of water: 0 water: the Rural Water Supply and Sanitation (2014) 100,000 new Fund Development Board reports that households 563,567 new households were (2017) provided with access to drinking water Sanitation: 0 VDCs Sanitation: - Sanitation: the number of VCs (2014) 140 new declared ODF increased from 0 to 106 VDCs or as of June 2018 about new 50,000 - Latrines: the number of improved Public households latrines increased from 0 to 122 as of latrines: 0 (2017) June 2018 (2014) New public Mostly Achieved latrines: 130 8. CPS Objective: Reduced vulnerability of the socially excluded, marginalized, and economically vulnerable population Indicator 1: Number of The Poverty Alleviation Fund II Project Before the PLR, this objective marginalized household (P105860, FY08) supported this was named: “Improved social supported with indicator. The October 2017 ISR: S protection” productive assets in reports that 317,534 households targeted areas: benefited from increased access to Additional information provided Baseline: 416,712 (2014) community infrastructure, as of by the country team indicates Target: 575,000 (2018) September 2017. that 879,274 marginalized It also reports that the total number of households benefitted from beneficiary households (from both improved infrastructure and infrastructure and income generation income generation activities. activities) is 825,765, which is below the (Source: Management data reported in the CLR (966,622). Information Data) Achieved Indicator 2: Percentage of The Poverty Alleviation Fund II Project This indicator was added at households in the (P105860, FU08) supported this PLR stage. targeted communities indicator. The October 2017 ISR: S with income increase of reports that, as of September 2017, 68% At PLR stage two indicators at least 15%: of the beneficiary households have were taken out: Baseline: 0.5% (2014) increased their incomes by at least 15% Target: 70% (2018) against the 2007 base year. Annexes CLR Review 29 Independent Evaluation Group CAS FY14-FY18: Focus Area II: Promoting Actual Results IEG Comments Inclusion and Increasing Resilience Mostly Achieved Indicator 2: Percentage of vulnerable people benefiting from safety net programs: Baseline: 42% of poor receive SA Target: 50% and Indicator 3: Number of payment accounts opened (disaggregated by gender): Baseline: 0 (male vs female: N/A) Target: 1 million (of which 0.12mn female) 9. CPS Objective: Improved infrastructure in areas affected by the 2015 earthquakes Indicator 1: Additional The Earthquake Housing Reconstruction These objective and indicator number of Project (P155969, FY15) supported this were added at PLR stage. households with multi- indicator. The latest ISR: MS (June hazard resilient feature 2018) reports that, as of May 2018, reconstructed by end 53,568 households with resilient core FY18: housing were reconstructed under the Baseline: 0 (2014) project, of which 13,928 were women Target: 40,000 (of which headed households. 10,390 women headed Achieved households) (2018) Annexes CLR Review 30 Independent Evaluation Group Annex Table 2: Planned and Actual Lending for Nepal, FY14-FY18 Proposed Proposed Approved Project Proposed Approval Closing Project name IDA IDA IDA ID FY FY FY Amount Amount Amount Project Planned Under CPS/PLR FY14-17 CPS PLR Strengthening the National Rural P132750 2014 2014 2020 100 100 Transport Program Irrigation and Water Resource P144474 2014 2014 50 50 Management AF Rural Water Supply and Sanitation P143036 2014 2014 2020 72 72 Project P147010 Higher Education Reform Project 2015 2015 2020 65 65 Second Financial Sector Development P133777 2015 2015 2016 100 100 Policy Credit Delayed Energy Sector Development Policy Credit 2015 P146344 Grid Solar and Energy Efficiency Project 2015 2015 2021 130 P122406 Kabeli A Hydroelectric Project 2015 2015 2020 46 46 Earthquake Housing Reconstruction P155969 2015 2015 2023 200 200 Project Total FY15 200-300** Delayed Second Energy Sector Development 2016 to FY19 Policy Credit Delayed Hydropower Project or IDA Partial Risk 2016 to FY19 Guarantee (PRG) Dropped Strategic Roads Network Project 2016 Power Sector Reform and Sustainable P150066 2016 2016 2020 20 20 Hydro Dev. Total FY16 200-300** Delayed Hydropower Project or IDA PRG 2017 to FY19 Delayed Skills Development 2017 to FY19 Delayed Local Roads Bridges 2017 to FY19 P156960 Financial Sector Stability DPC3 2017 2017 2018 100 100 Strengthening Systems for Social P154548 2017 2017 2022 150 150 Protection and Civil Registration P160207 Health Sector Management Reform PforR 2017 2017 2022 150 150 P160748 School Sector Development PforR 2017 2017 2022 185 185 P157607 AF for Road Sector Development 2017 2017 55 55 Total FY17 200-300** Delayed Hydropower Project or IDA PRG 2018 to FY19 Delayed Nepal Fast Track 2018 P160792 First Programmatic Fiscal and PFM DPC 2018 2018 100 200 Delayed Financial Sector Stability DPC4 2018 100 to FY19 Enhanced Vocational Education and P163018 2018 2018 2023 60 60 Training II P156797 Livestock Sector Innovation 2018 2018 2023 80 80 Delayed Energy Sector DPC 2018 150 to FY19 Annexes CLR Review 31 Independent Evaluation Group P158364 Rani Jamara Kulariya Irrigation – Phase 2 2018 2018 65 66 Delayed Second Bridges Improvement and 2018 150 to FY19 Maintenance Program PforR Delayed Upper Trishuli 1 Hydro Project 2018 100 to FY19 AF for Earthquake Housing P163593 2018 2018 200 300 Reconstruction Delayed Jobs and Youth in Nepal 2018 150 to FY19 Total FY18 200-300** Total Planned 1422 2356 1999 Unplanned Projects during the CPS Period Total Unplanned 0 0 Approved Approval Closing On-going Projects during the CPS/PLR Period IDA FY FY Amount P129929 NP: Financial Sector DPC 2013 2014 30 P132289 Kali Gandaki Rehab 2013 2017 27 P118179 NP: Rani Jamara Kulariya Irrigation Proj 2012 2018 43 P125359 NP:Community Actionfor Nutrition Project 2012 2017 40 P125495 NP: Bridges Program Support 2012 2018 60 P104015 NP: Enhanced Vocational Educ & Trng 2011 2017 50 P112893 NP: Kabeli Transmission Project 2011 2017 38 P115767 NP-IN Electricity Transmission & Trade P 2011 2018 99 P120265 NP: Emerging Towns Project 2011 2017 25 P107853 NP: Rural Access (RAIDP) - AF 2010 45 P113441 NP: School Sector Reform Program 2010 2017 130 P117417 NP: Second HNP and HIV/AIDS Project 2010 2016 129 P120538 NP: Social Safety Nets Project Add Fin 2010 48 NP: Agriculture Commercialization & P087140 2009 2018 20 Trade P113002 NP: Social Safety Nets Project 2009 2015 17 P116190 NP: Power-AF 2009 89 P095977 NP: Road Sector Development Project 2008 2020 43 P099296 NP: Irrig & Water Res Mgmt Proj 2008 2018 50 P105860 NP: PAF II 2008 2019 100 P110762 NP: Peace Support Project 2008 2014 50 P090967 NP: Second Higher Education Project 2007 2014 60 NP: Rural Access Improve. & P083923 2005 2014 32 Decentraliza P043311 NP: POWER DEVELOPMENT PROJECT 2003 2014 76 Total On-going 1300 Source: CPS and PLR, WB BI as of 2/8/18 *LIR: Latest internal rating. MU: Moderately Unsatisfactory. MS: Moderately Satisfactory. S: Satisfactory. HS: Highly Satisfactory. ** Proposed total was based on a 300 assumption Annexes CLR Review 32 Independent Evaluation Group Annex Table 3: Analytical and Advisory Work for Nepal, FY14-FY18 Fiscal Proj ID Economic and Sector Work Output Type Practice year Understanding labor market P156694 FY18 Sector or Thematic Study/Note Social Protection & Labor decisions Nepal Country Economic Country Economic Memorandum Macroeconomics, Trade P151901 FY17 Memorandum (CEM) and Investment P157853 Mobility and the Middle Class FY17 Other Poverty Study Poverty and Equity P147727 Sources of Growth in Agriculture FY16 Sector or Thematic Study/Note Agriculture Public Expenditure Financial P147728 PEFA -II FY16 Governance Accountability FY2016 Nepal Development Macroeconomics, Trade P157501 FY16 Sector or Thematic Study/Note Updates and Investment Financial Sector Assessment Finance, Competitiveness P146345 Nepal FSAP FY15 Program (FSAP) and Innovation Accounting and Auditing P147582 Nepal ROSC A&A FY15 Governance Assessment (ROSC) P149876 Social Protection Study FY15 Sector or Thematic Study/Note Social Protection & Labor Debt management Performance Macroeconomics, Trade P150422 DeMPA Nepal FY15 Assessment(DeMPA) and Investment P131381 Nepal Education Studies FY14 Sector or Thematic Study/Note Education Competitive Industries (CI) PSD, Privatization and Industrial P133457 FY14 Trade & Competitiveness Diagnostic Policy Policy Notes for the New Macroeconomics, Trade P147471 FY14 Sector or Thematic Study/Note Government and Investment Fiscal Proj ID Technical Assistance Output Type year Nepal Trade Transport & Digital P148953 FY18 Technical Assistance Facilitation&Competitiveness Development Safety Net System Building P153410 FY18 Technical Assistance Social Protection & Labor (SNSB) TA Economic impacts of hydro Macroeconomics, Trade P153729 FY17 Technical Assistance development and Investment P160077 Womens Enterprise Nuwakot FY17 Technical Assistance Agriculture Social, Urban, Rural and P126009 NP: DRM Country Program FY16 Technical Assistance Resilience Global Practice Nepal: Strengthening Budgeting Macroeconomics, Trade P145814 FY16 Technical Assistance Process and Investment Nepal Fast Track: Preparing Transport & Digital P150358 FY16 Technical Assistance Next Steps Development Macroeconomics, Trade P153358 MTEF 2016 Preparation FY16 Technical Assistance and Investment Supporting Nepal's Trade Int. P154536 FY16 Technical Assistance Trade & Competitiveness Strategy Enhancing Investment Climate P155116 FY16 Technical Assistance Trade & Competitiveness in Nepal P157854 Statistical Capacity Building FY16 Technical Assistance Poverty and Equity P116281 NP: Governance Reform NLTA FY15 Technical Assistance Governance Finance, Competitiveness P132887 AgriFin-Nirdhan Utthan Bank FY15 Technical Assistance and Innovation Household Renewable Energy P144683 FY15 Technical Assistance Energy & Extractives Access Annexes CLR Review 33 Independent Evaluation Group Support to MTEF anchoring Macroeconomics, Trade P147711 FY15 Technical Assistance Three Year Pla and Investment Nepal Nutrition Policy Dialogue Health, Nutrition & P149901 FY15 Technical Assistance III Population NP Rural Water Study P150557 FY15 Technical Assistance Water Dissemination Nepal #B043 Bank Resol Finance, Competitiveness P153264 FY15 Technical Assistance Capacity Building and Innovation Health, Nutrition & P127709 NP: Nutrition Policy Dialogue II FY14 Technical Assistance Population Nepal #10245 Problem Bank Finance, Competitiveness P130747 FY14 Technical Assistance Resolution and Innovation Kathmandu Valley Urban Policy Social, Urban, Rural and P132703 FY14 Technical Assistance Dialogue Resilience Global Practice Transport & Digital P133169 Nepal Regional Trade Program FY14 Technical Assistance Development NLTA for Hydropower Scale-Up P133677 FY14 Technical Assistance Energy & Extractives in Nepal Macroeconomics, Trade P144053 MTEF FY 14 FY14 Technical Assistance and Investment Finance, Competitiveness P145850 National Risk Assessment FY14 Technical Assistance and Innovation Finance, Competitiveness P146993 NP: Financial Sector Support FY14 Technical Assistance and Innovation P147730 Mapping Local Service Delivery FY14 Technical Assistance Governance Source: WB Business Intelligence 7/10/18 *NO RAS Annex Table 4: Trust Funds Active for Nepal, FY14-FY18 Project Approval Closing Approved Project name TF ID ID FY FY Amount MDTF Funding for Earthquake Housing P162067 TF A4783 2018 2021 10,000,000 Reconstruction Project P160523 Nepal - Forest Investment Plan Preparation Grant TF A4496 2017 2019 250,000 P125198 Nepal REDD Readiness Preparation Program TF A4169 2017 2020 5,200,000 Nepal: Power Sector Reform and Sustainable P150066 TF 18570 2016 2018 2,500,000 Hydropower Development (PSRSHD) Integrated Platform for Gender Based Violence TF A2450 2016 2019 500,000 Prevention and Response in Nepal P155096 Integrated Platform for Gender Based Violence TF A2451 2016 2019 1,300,000 Prevention and Response in Nepal P154401 Strengthening Public Financial Management II Project TF A1065 2016 2018 3,680,000 Nepal: School Sector Reform Program TF A0779 2016 2019 47,800,000 P113441 Nepal: School Sector Reform Program TF A0915 2016 2019 4,000,000 Nepal: School Sector Reform Program TF A0843 2016 2017 11,500,000 Strengthening Civil Society Organizations' use P153514 TF A0369 2015 2017 950,000 of Social Accountability to improve PFM in Nepal 2 P149606 ROAD SAFETY SUPPORT PROJECT TF 18701 2015 2018 7,470,000 P131592 SREP-Supported Extended Biogas Project TF 16552 2015 2020 7,900,000 Annexes CLR Review 34 Independent Evaluation Group Project Approval Closing Approved Project name TF ID ID FY FY Amount P145359 Nepal: Pro-poor Urban Regeneration Pilot TF 15780 2014 2019 2,750,000 P145736 Adolescent Girls Employment Initiative II TF 16296 2014 2015 580,000 Output-Based Aid for Municipal Solid Waste P130461 TF 13464 2013 2017 4,288,381 Management Building Resilience to Climate Related Hazards TF 13665 2013 2019 16,000,000 P127508 Building Resilience to Climate Related Hazards TF 13557 2013 2019 15,000,000 P128905 Nepal Agriculture and Food Security Project TF 13719 2013 2018 46,500,000 Nepal PFM-MDTF Strengthening Civil Society P131860 Organizations' use of Social Accountability to TF 12485 2013 2015 800,000 improve PFM in Nepal Nepal: Pilot Project for Seismic School Safety in the P129177 TF 11452 2013 2014 1,370,000 kathmandu P130089 Zoonoses Control Project (ZCP) TF 12273 2013 2014 10,000,000 P127040 NP: Strengthening the Office of the Auditor General TF 10455 2012 2016 2,300,000 Nepal: Making markets work for the conflict affected in P128744 TF 11208 2012 2018 2,646,777 Nepal P125770 Strengthening PFM Systems in Nepal TF 10452 2012 2016 4,300,000 P124088 Additional Financing to the Poverty Alleviation Fund II TF 99274 2012 2014 10,000,000 Nepal: Human Development - Social Protection Pilot P125331 TF 99288 2012 2015 1,500,000 Project Strengthening Institutional Capacity of the DNPWC for P125891 the Effective Management of Mountain Protected TF 99675 2012 2015 500,000 Areas P095978 Nepal - Village Micro Hydro TF 10684 2012 2019 654,211 Extending Mobile Applications in Asia through Social P125010 TF 98342 2011 2013 73,000 Networking - Nepal (Young Innovations Pvt. Ltd.) P119113 Program to Promote Demand for Good Governance TF 98650 2011 2014 1,407,000 P113441 Nepal: School Sector Reform Program TF 98235 2011 2015 120,000,000 P125198 Nepal REDD Readiness Preparation Program TF 94724 2010 2016 3,600,000 P090967 Second Higher Education Project TF 93397 2009 2014 1,904,636 P095978 Nepal - Village Micro Hydro TF 90264 2007 2017 1,957,750 P090038 Nepal - Biogas Program TF 56440 2006 2017 7,000,000 Total 358,181,755 Source: Client Connection as of 2/7/18 ** IEG Validates RETF that are 5M and above Annexes CLR Review 35 Independent Evaluation Group Annex Table 5: IEG Project Ratings for Nepal, FY14-FY18 Total Exit Proj ID Project name Evaluated IEG Outcome IEG Risk to DO FY ($M) NP: Rural Access Improve. & 2014 P083923 70.1 SATISFACTORY MODERATE Decentraliza NP: Second Higher Education 2014 P090967 63.9 SATISFACTORY SIGNIFICANT Project MODERATELY NEGLIGIBLE TO 2014 P110762 NP: Peace Support Project 34.1 SATISFACTORY LOW 2014 P129929 NP: Financial Sector DPC 30.8 SATISFACTORY MODERATE MODERATELY 2014 P130089 Zoonoses Control Project* 7.4 MODERATE SATISFACTORY MODERATELY 2015 P113002 NP: Social Safety Nets Project 53.6 SIGNIFICANT SATISFACTORY NP: Second HNP and HIV/AIDS MODERATELY 2016 P117417 124.8 SIGNIFICANT Project UNSATISFACTORY NP: Enhanced Vocational Educ & 2017 P104015 36.6 SATISFACTORY # Trng MODERATELY 2017 P120265 NP: Emerging Towns Project 12.0 SIGNIFICANT SATISFACTORY NP: Community Actionfor Nutrition MODERATELY 2017 P125359 31.6 # Project SATISFACTORY MODERATELY 2017 P132289 Kali Gandaki Rehab 4.9 # UNSATISFACTORY NP: School Sector Reform 2017 P113441 216.2 SATISFACTORY MODEST Program NP: Rani Jamara Kulariya 2018 P118179 34.8 SATISFACTORY # Irrigation Proj Road Safety Activity under on 2018 P149606 10.0 SATISFACTORY # RSDP roads* Total 730.8 Source: AO Key IEG Ratings as of 7/10/18 Annex Table 6: IEG Project Ratings for Nepal and Comparators, FY14-18 Total Total RDO % RDO % Outcome Outcome Region Evaluated Evaluated Moderate or Lower Moderate or Lower % Sat ($) % Sat (No) ($M) (No) Sat ($) Sat (No) Nepal 730.8 14 82.2 85.7 58.0 55.6 SAR 13,681.2 109 88.6 78.9 61.2 44.7 World 87,616.8 958 85.7 75.0 50.2 41.8 Source: WB AO as of 7/10/18, IEG Calculation Annexes CLR Review 36 Independent Evaluation Group Annex Table 7: Portfolio Status for Nepal and Comparators, FY14-18 Fiscal year 2014 2015 2016 2017 2018 Ave FY14-18 Nepal # Proj 16 20 18 18 18 18 # Proj At Risk 9 8 12 6 7 8 % Proj At Risk 56.3 40.0 66.7 33.3 38.9 46.7 Net Comm Amt 1,393.8 1,868.7 1,421.8 2,043.1 2,546.3 1,855 Comm At Risk 787.3 850.2 994.3 679.0 1,102.8 883 % Commit at Risk 56.5 45.5 69.9 33.2 43.3 47.6 SAR # Proj 190 206 215 228 231 214 # Proj At Risk 46 58 49 54 45 50 % Proj At Risk 24.2 28.2 22.8 23.7 19.5 23.6 Net Comm Amt 40,125.7 43,454.3 48,475.6 47,785.6 52,170.0 46,402 Comm At Risk 7,379.4 10,821.3 8,273.2 11,632.3 10,339.1 9,689 % Commit at Risk 18.4 24.9 17.1 24.3 19.8 20.9 World # Proj 1,386 1,402 1,398 1,459 1,486 1,426 # Proj At Risk 329 339 336 344 344 338 % Proj At Risk 23.7 24.2 24.0 23.6 23.1 23.7 Net Comm Amt 183,153.9 191,907.8 207,350.0 212,502.9 227,955.9 204,574 Comm At Risk 39,748.6 44,430.7 42,715.1 50,837.9 47,941.6 45,135 % Commit at Risk 21.7 23.2 20.6 23.9 21.0 22.1 Source: WB BI as of 7/11/18 Note: Only IBRD and IDA Agreement Type are included Annex Table 8: Disbursement Ratio for Nepal, FY14-FY18 Fiscal Year 2014 2015 2016 2017 2018 Overall Result Nepal Disbursement Ratio 28.7 22.8 15.2 26.4 12.2 20.9 Inv Disb in FY 221.0 148.0 138.3 222.3 96.1 825.7 Inv Tot Undisb Begin FY 769.2 649.9 908.1 843.1 785.5 3,955.8 SAR Disbursement Ratio 19.0 19.7 19.0 19.1 8.2 17.0 Inv Disb in FY 4,714.8 5,146.1 5,366.2 5,205.3 2,151.5 22,583.8 Inv Tot Undisb Begin FY 24,827.2 26,091.9 28,273.2 27,221.4 26,201.6 132,615.4 World Disbursement Ratio 20.8 21.8 19.5 20.5 11.1 18.6 Inv Disb in FY 20,757.7 21,853.7 21,152.9 22,129.9 12,293.8 98,188.0 Inv Tot Undisb Begin FY 99,854.3 100,344.9 108,600.3 108,175.4 110,571.7 527,546.6 * Calculated as IBRD/IDA Disbursements in FY / Opening Undisbursed Amount at FY. Restricted to Lending Instrument Type = Investment. Source: AO disbursement ratio table as of 2/6/18 Annexes CLR Review 37 Independent Evaluation Group Annex Table 9: Net Disbursement and Charges for Nepal, FY14-FY17 Period Disb. Amt. Repay Amt. Net Amt. Charges Fees Net Transfer FY14 252,107,619.5 50,346,377.9 201,761,241.7 - 11,521,056.4 190,240,185.2 FY15 192,452,997.0 52,702,025.3 139,750,971.8 - 11,232,509.6 128,518,462.2 FY16 278,135,750.0 51,539,730.2 226,596,019.8 - 11,966,263.4 214,629,756.4 FY17 318,835,930.3 50,792,337.8 268,043,592.5 - 12,847,645.5 255,195,947.0 Report 1,041,532,296.8 205,380,471.1 836,151,825.7 - 47,567,475.0 788,584,350.7 Total World Bank Client Connection 2/7/18 Note: Complete FY18 data not yet available Annex Table 10: Total Net Disbursements of Official Development Assistance and Official Aid for Nepal Development Partners 2014 2015 2016 All Donors, Total 883.82 1224.78 1065.92 DAC Countries, Total 542.76 666.47 572.89 Australia 13.61 36.31 16.49 Austria 1.63 4.5 1.84 Belgium 0.22 0.98 0.32 Canada 3.06 29.09 12.41 Czech Republic 0.01 0.84 0.33 Denmark 27.31 21.48 12.89 Finland 37.54 26.82 25.93 France -2.63 1.22 -0.33 Germany 37.26 38.87 35.02 Greece 0 0 .. Hungary .. 0 0.01 Iceland .. 0.3 .. Ireland 0.23 0.56 0.38 Italy 0.4 2.69 1.87 Japan 56.37 48.82 65.13 Korea 14.44 17.56 15.65 Luxembourg 1.61 2.38 2.81 Netherlands 0.07 9.8 0.24 New Zealand 1.19 2.9 2.9 Norway 42 61.03 30.72 Poland 0.01 0.16 0 Portugal .. .. 0 Slovak Republic .. 0.12 .. Slovenia .. 0.06 .. Spain 0.05 1.35 0.13 Sweden 3.37 9.81 1.21 Switzerland 45.32 52.66 47.73 United Kingdom 184.23 134.77 139.04 United States 75.47 161.38 160.2 Multilaterals, Total 340.53 548.43 490.71 EU Institutions 35.15 47.96 100.77 International Monetary Fund, Total -13 35.92 -17.84 Annexes CLR Review 38 Independent Evaluation Group Development Partners 2014 2015 2016 IMF (Concessional Trust Funds) -13 35.92 -17.84 Regional Development Banks, Total 73.13 84.99 130.05 Asian Development Bank, Total 73.13 84.99 129.83 AsDB Special Funds 73.13 84.99 129.83 Islamic Development Bank [IsDB] .. .. 0.23 United Nations, Total 39.72 41.28 44.86 International Atomic Energy Agency [IAEA] 0.67 0.38 0.43 IFAD 2.9 2.55 14.51 International Labour Organisation [ILO] 0.75 1.72 0.78 UNAIDS 0.6 0.63 0.43 UNDP 8.96 8.07 6.4 UNFPA 4.22 4.38 3.51 UNHCR .. 5.06 4.58 UNICEF 6.85 5.83 7.8 UN Peacebuilding Fund [UNPBF] 4.06 2.76 1.79 WFP 6.33 5.67 1.36 World Health Organisation [WHO] 4.38 4.24 3.27 World Bank Group, Total 170.07 273.56 188.37 World Bank, Total 170.07 273.56 188.37 International Development Association [IDA] 170.07 273.56 188.37 Other Multilateral, Total 35.46 64.72 44.49 Adaptation Fund .. 2.34 .. Climate Investment Funds [CIF] 1.29 0.94 .. Global Alliance for Vaccines and Immunization [GAVI] 13.93 29.7 16.61 Global Environment Facility [GEF] 4.99 4.9 4.78 Global Fund 13.26 18.63 15.99 Global Green Growth Institute [GGGI] .. 0.04 0.14 Nordic Development Fund [NDF] -0.2 -0.44 -0.62 OPEC Fund for International Development [OFID] 2.2 8.59 7.59 Non-DAC Countries, Total 0.52 9.88 2.32 Azerbaijan .. 0.07 .. Bulgaria .. 0.04 .. Estonia 0.02 0.06 .. Israel 0.04 6.65 0.08 Kazakhstan .. 0.2 .. Kuwait -0.16 -0.11 0.3 Latvia .. 0.02 .. Lithuania .. 0.02 .. Romania 0 0.06 0 Russia .. .. 0.2 Thailand 0.08 0.44 0.08 Timor-Leste .. 0.5 .. Turkey 0.33 0.55 0.25 United Arab Emirates 0.21 1.38 1.39 Source: OECD Stat, [DAC2a] as of 2/7/18 * Data only available up to FY16 Annexes CLR Review 39 Independent Evaluation Group Annex Table 11: Economic and Social Indicators for Nepal, FY14-FY18 Nepal SAR World Series Name 2014 2015 2016 Average 2014-2016 Growth and Inflation GDP growth (annual %) 6.0 3.3 0.4 3.2 7.1 2.7 GDP per capita growth (annual 4.7 2.1 (0.7) 2.0 5.7 1.5 %) GNI per capita, PPP (current 2,430.0 2,510.0 2,520.0 2,486.7 5,678.4 15,698.6 international $) GNI per capita, Atlas method 730.0 740.0 730.0 733.3 1,547.4 10,608.1 (current US$) (Millions) Inflation, consumer prices 8.4 7.9 .. 4.7 2.0 (annual %) Composition of GDP (%) Agriculture, value added (% of 33.8 33.0 33.0 18.1 3.8 GDP) Industry, value added (% of 15.4 15.4 14.8 28.4 27.5 GDP) Services, etc., value added (% of 50.7 51.7 52.3 53.5 68.6 GDP) Gross fixed capital formation (% 23.5 28.0 28.8 26.8 27.4 23.4 of GDP) Gross domestic savings (% of 11.9 9.2 3.8 8.3 27.1 24.8 GDP) External Accounts Exports of goods and services 11.5 11.6 9.5 10.9 19.5 29.3 (% of GDP) Imports of goods and services 40.8 41.5 39.4 40.5 23.0 28.7 (% of GDP) Current account balance (% of 2.5 11.4 (0.8) GDP) External debt stocks (% of GNI) 20.5 19.1 19.7 22.9 Total debt service (% of GNI) 1.1 1.0 1.1 3.1 Total reserves in months of 8.4 12.5 10.3 7.5 13.0 imports Fiscal Accounts /1 General government revenue (% 20.4 20.8 23.4 21.5 of GDP) General government total 18.8 20.1 22.0 20.3 expenditure (% of GDP) General government net 1.5 0.7 1.4 1.2 lending/borrowing (% of GDP) General government gross debt 28.3 25.0 27.3 26.9 (% of GDP) Health Life expectancy at birth, total 69.5 69.9 .. 69.7 68.3 71.8 (years) Immunization, DPT (% of 92.0 91.0 87.0 90.0 84.9 85.4 children ages 12-23 months) Improved sanitation facilities (% 44.2 45.8 .. 45.0 44.6 67.3 of population with access) Annexes CLR Review 40 Independent Evaluation Group Nepal SAR World Series Name 2014 2015 2016 Average 2014-2016 Improved water source (% of 90.6 91.8 .. 91.2 90.8 84.2 population with access) Mortality rate, infant (per 1,000 31.0 29.6 28.4 29.7 40.4 31.4 live births) Education School enrollment, preprimary 85.8 85.4 84.2 18.2 48.1 (% gross) School enrollment, primary (% 135.2 135.4 135.9 135.5 109.1 104.2 gross) School enrollment, secondary (% 66.9 67.2 69.6 67.9 64.8 76.4 gross) Population Population, total (Millions) 28,323,241 28,656,282 28,982,771 28,654,098 1,744,138,231 7,355,447,389 Population growth (annual %) 1.2 1.2 1.1 1.2 1.3 1.2 Urban population (% of total) 18.2 18.6 19.0 18.6 33.0 53.8 Poverty Source: DDP as of 1/25/18 *International Monetary Fund, World Economic Outlook Database, October 2017 ** Data only available up to FY16 Annexes CLR Review 41 Independent Evaluation Group Annex Table 12: List of IFC Investments in Nepal Investments Committed in FY14-FY18 Project Cmt Project Project Original Original Original Loan Equity Net Net Net Primary Sector Name ID FY Status Size Loan Equity CMT Cancel Cancel Loan Equity Comm 38208 2017 Active Accommodation & Tourism Services 1,700 1,700 - 1,700 - - 1,700 - 1,700 30977 2015 Hold Electric Power 96,894 19,300 - 19,300 - - 19,300 - 19,300 35111 2015 Active Accommodation & Tourism Services 6,000 3,000 - 3,000 - - 3,000 - 3,000 35355 2015 Closed Electric Power - - 4,000 4,000 - 4,000 4,000 - - 35356 2015 Closed Electric Power - - 1,000 1,000 - 1,000 1,000 - - 35408 2015 Closed Electric Power - - 1,500 1,500 - 1,500 1,500 - - 32353 2014 Closed Electric Power 2,000 - 2,000 2,000 - 2,000 2,000 - - 33069 2014 Active Agriculture and Forestry 6,450 - 1,900 1,900 - - 1,900 1,900 1,900 34511 2014 Active Finance & Insurance 2,500 1,155 - 1,155 - - 1,155 - 1,155 34794 2014 Active Finance & Insurance 2,500 8,021 - 8,021 - - 8,021 - 8,021 Sub-Total 118,044 33,176 10,400 43,576 - 8,500 43,576 1,900 35,076 Investments Committed pre-FY14 but active during FY14-18 Project CMT Project Project Original Original Original Loan Equity Net Net Net Primary Sector Name ID FY Status Size Loan Equity CMT Cancel Cancel Loan Equity Comm 29011 2012 Active Finance & Insurance 798 - 718 718 - - 718 718 718 31797 2012 Active Electric Power 4,250 - 4,000 4,000 - - 4,000 4,000 4,000 28779 2011 Active Collective Investment Vehicles 14,300 6,700 283 6,983 - - 6,983 283 6,983 30541 2011 Active Finance & Insurance - 4,099 - 4,099 - - 4,099 - 4,099 27742 2010 Active Finance & Insurance 255 - 255 255 - 58 255 197 197 28083 2010 Active Electric Power 13,931 6,500 - 6,500 - - 6,500 - 6,500 29288 2010 Active Finance & Insurance 2,500 18,449 - 18,449 - - 18,449 - 18,449 26084 2009 Active Finance & Insurance 2,000 5,389 - 5,389 - - 5,389 - 5,389 28167 2009 Active Finance & Insurance 2,000 13,462 - 13,462 - - 13,462 - 13,462 26083 2008 Active Finance & Insurance 3,500 33,125 - 33,125 - - 33,125 - 33,125 Sub-Total 43,534 87,724 5,256 92,980 - 58 92,980 5,198 92,922 TOTAL 161,578 120,900 15,656 136,556 - 8,558 136,556 7,098 127,998 Source: IFC-MIS Extract as of 12/31/17 Annexes CLR Review 42 Independent Evaluation Group Annex Table 13: List of IFC Advisory Services in Nepal Advisory Services Approved in FY14-18 Project Impl Impl Primary Total Project Name Project Status ID Start FY End FY Business Line Funds, US$ 600688 South Asia Energy - Business Development 2018 2019 ACTIVE CAS 411,247 Knowledge Products to facilitate Power 600899 2018 2018 ACTIVE CAS 563,000 deals 601094 Hydro MOU with MoE, Govt of Nepal 2018 2020 ACTIVE CAS 1,805,000 602671 Nepal Agri study 2018 2018 ACTIVE MAS 50,000 599400 Kathmandu Airport PPP 2017 2018 ACTIVE CAS 1,357,505 600378 ESRM for the financial sector of Nepal 2017 2018 ACTIVE ESG 322,417 LOCAL EQUITY SHARING SCHEMES 601374 FOR HYDROPOWER PROJECTS IN 2017 2017 ACTIVE ESG 800,000 NEPAL 601650 Nepal SME Ventures Advisory Project 2017 2021 ACTIVE CTT 1,240,715 601760 Nepal E&S Hydro 2017 2020 ACTIVE ESG 5,000,000 601861 Nepal Local Shares 2017 2018 ACTIVE ESG 409,000 599146 Scoping for PPP opportunities in Nepal 2016 2016 CLOSED CAS 120,852 600120 Nepal SEF 2016 2017 ACTIVE FIG 1,000,000 600409 SA Umbrella SME-Risk Banking 2016 2020 ACTIVE FIG 7,906,000 600930 Financial Infrastructure Project (Nepal) 2016 2019 HOLD FAM 1,060,355 601286 Post-Earthquake Support to PBIL 2016 2018 HOLD MAS 250,000 RMDC Risk Management and 599531 2015 2017 TERMINATED FIG 413,770 Microinsurance AS 599991 Nepal Hydro Sector Development 2015 2021 ACTIVE CAS 4,166,510 579807 Nepal SME Ventures 2014 2017 TERMINATED CTT 503,000 599173 Nepal SME Banking 2014 2016 CLOSED FAM 508,669 599437 TA to Himalayan Bank 2014 2015 TERMINATED FIG 440,000 599735 Nepal Tourism 2014 2014 TERMINATED PPP 120,000 599763 CEDBL Nepal- Women in Business 2014 2015 TERMINATED A2F 153,541 599849 RMDC Microinsurance TA 2014 2016 TERMINATED A2F - Sub-Total 28,601,581 Advisory Services Approved pre-FY14 but active during FY14-17 Project Impl Impl Project Primary Total Project Name ID Start FY End FY Status Business Line Funds, US$ 588487 PPCR- Promoting Climate Resilient Agriculture, Nepal 2013 2018 ACTIVE MAS 2,250,000 593787 Nepal Investment Climate for Industry 2013 2017 ACTIVE TAC 2,784,213 TA to M.Nepal on Launching of Mobile Money 596407 2013 2014 CLOSED FIG 199,228 Initiative and Agent Network Development 586887 Nepal Payment Systems Regulatory Reform 2012 2014 CLOSED FAM 394,736 575068 Nepal ICRP Regulatory Reform 2011 2016 ACTIVE TAC 3,652,721 576527 Nepal Poultry Supply Chain Strengthening Project 2011 2014 CLOSED MAS 500,685 580627 As-Nirdhan Bank 2011 2017 ACTIVE FIG 619,035 Nepal Investment Climate Reform Program - Public 575070 2010 2014 ACTIVE TAC 2,658,843 Private Dialogue 566567 Sustainable Energy Finance Nepal 2009 2014 CLOSED FIG 628,500 Sub-Total 13,687,961 TOTAL 42,289,542 Source: IFC AS Data as of 10/15/17 Annexes CLR Review 43 Independent Evaluation Group Annex Table 14: IFC net commitment activity in Nepal, FY14 - FY17 2014 2015 2016 2017 2018 Total Financial Microfinance (58,662) - - - - (58,662) Markets TCF (Trade and (1,600,000) - - - - (1,600,000) Commodity) NBFI (350,000) - - - - (350,000) Trade Finance GTFP 1,822,358 7,163,346 6,869,622 13,078,263 5,280,377 34,213,966 (TF) Primary Production Agribusiness & & Commodity 950,000 950,000 - - - 1,900,000 Forestry Processing Construction Manufacturing - - - - Materials Tourism, Retail, Construction & Tourism - 3,000,000 - 1,700,000 (250,000) 4,450,000 Real Estates (TRP) Transportation & Infrastructure (6,900,000) - - - - (6,900,000) Warehousing Electric Power 3,000,000 23,300,000 - (8,500,000) - 17,800,000 TOTAL (3,136,304) 34,413,346 6,869,622 6,278,263 5,030,377 49,455,304 Source: IFC MIS as of 2/8/18 Annex Table 15: List of Active MIGA Activities in Nepal, 2014-2018 Project Max Gross ID Contract Enterprise FY Sector Investor Status Issuance No Active Activities in Nepal Total - Source: MIGA 2/8/18