THE WORLD BANK GROUP’S COUNTRY PARTNERSHIP FRAMEWORK FOR NEPAL FY2019-FY2023 What is a Country Partnership Framework? A Country Partnership Framework (CPF) guides the World Bank Group’s engagement in a country and is updated every four to five years, depend- ing on the country. In the context of the CPF, the World Bank Group (WBG) includes the World Bank CONNECT (i.e. the International Development Association WITH US (IDA)/International Bank for Reconstruction and Development (IBRD)), the International Finance @ wbg.org/Nepal Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). The CPF identifies key @ WorldBankNepal objectives and development results contributing to the WBG goals of ending extreme poverty and @ WorldBankSAsia boosting shared prosperity in a sustainable man- infonepal@worldbank.org ner. It serves as a tool to gauge the effectiveness of WBG support in a country. What are the building blocks of a Country Partnership Framework? To prepare a CPF the WBG considers the country’s What is the focus of the development priorities for the medium and longer new World Bank Group term. The CPF is informed by the Systematic Country Partnership Country Diagnostic (SCD), which identifies the key Framework for Nepal? challenges and opportunities faced by a country in advancing the World Bank Group’s goals of ending The World Bank Group Country Partnership extreme poverty and boosting shared prosperity in Framework (CPF) for Nepal covers a period of a sustainable manner. The SCD incorporates a range five years – FY2019 to FY2023. The overarching of country analyses. In addition, the CPF considers goal is to support Nepal’s new federal system feedback from stakeholder consultations. The CPF is that can deliver on higher sustained growth for also informed by the WBG’s comparative advantage. poverty reduction, inclusive development, and shared prosperity. The new federal structure In preparing the CPF for Nepal, the WBG carried out the introduced by the 2015 Constitution presents SCD. The WBG also carried out extensive consultations unprecedented opportunities to reset Nepal’s for the SCD and the CPF involving face-to-face development trajectory. There is a new-found meetings, online outreach, facebook, and SMS survey. optimism for greater political stability, inclusion, It reached representatives from the government at the good governance and sustainable growth national and sub-national levels, the private sector, following the elections in 2017 and the placement the civil society, and the development partners. In of a new government in early 2018. addition, it reached thought leaders and heard from approximately 200,000 citizens from across the country through SMS. Building blocks of Nepal CPF * The Systematic Considers: Country Diagnostic l Stakeholder (SCD) incorporates the consultations Risk and Resilience l Development Country Systematic Assessment, the partners’ activities Development Country Country Economic l WBG comparative Goals Diagnostic* Memorandum, and advantage CPF the Poverty and l Experience and Mobility Analysis. Other lessons learned key analytical work ongoing includes the Country Private Sector Diagnostic, InfraSAP, WBG Comparative and Policy Note on Advantage Federalism. STRENGTHEN RESILIENCE/MAXIMIZING FINANCE FOR DEVELOPMENT What are the challenges and opportunities facing Nepal? How does the CPF tap into the opportunities and address the The government has expressed a strong resolve to fo- cus on results and strengthen governance. Nevertheless, challenges in Nepal? the new federal system poses challenges for the country and may be a source of instability against a backdrop of The CPF prioritizes the following areas: heightened popular aspirations. In the early years of fed- eralism, when the roles, responsibilities, and accountabil- (1) Strengthening public institutions. The ities of different levels of government are being clarified, WBG will be explicit in its support to there is a risk of weakening governance and increased strengthening public institutions for rent seeking behavior, deteriorating public services and infrastructure, increasing uncertain investment climate, SCHOOL effective economic management, and unchanging or increasing exclusion or inequity. service delivery, and public investment not only at national level, but also at sub-national levels. What are the World Bank Group Instruments available (2) Private sector led jobs and growth. The to support a country? WBG will contribute to generating more and better jobs through private sector-driven growth, building on ongoing work to im- prove access to energy and infrastruc- The World Bank can provide: ture connectivity, regulatory environ- n Investment Policy Financing: Financing for a wide range of activities aimed at creating physical and so- ment and financial sector stability. cial infrastructure necessary to reduce poverty and create sustainable development. (3) Inclusion and resilience. The WBG will work n Development Policy Financing: Financing that is to achieve greater inclusion for the poor, vul- rapidly disbursing (budget support) to help the bor- nerable, and marginalized groups through rower achieve sustainable poverty reduction. human capital development, with greater n Program-for-Results Financing: Financing to help resilience against climate change, natural improve the design and implementation of the gov- disasters, and other exogenous shocks. ernment’s development programs and strengthen its institutions and capacities. Across all its activities, the World Bank will aim n Catastrophe Deferred Drawdown Option (CAT- to achieve greater gender equity and inclusion, to ensure DDO) and Pandemic Emergency Financing (PEF): citizen engagement, to incorporate climate co-benefits, Financing aimed at providing liquidity after a natural catastrophe (CAT-DDO), and in response to pan- and to maximize financing for development. demics, to help contain the outbreak and associated human and financial costs (PEF). n Advisory Services and Analytics: The World Bank What kind of support has the World also provides technical assistance, economic and sector work, business advice, donor aid coordination Bank Group provided to Nepal? and reimbursable advisory services. The World Bank portfolio in Nepal comprises of 23 projects, IFC provides solutions in private sector development with a net commitment of US$2.7 billion. Education (4 projects; through investment, advice, and asset management US$531M), agriculture (4 project US$498M), and energy (5 pro- products to help create markets and open opportu- jects, US$342M) comprise the largest share of the WB portfolio. nities where they are needed most. IFC products are mutually reinforcing, delivering financing and global IFC is focused on key development gaps and creating expertise to clients to solve key development gaps. markets in financial inclusion, sustainable infrastructure They enable companies to manage risk and expand (largely power and connectivity), and competitiveness. IFC their access to foreign and domestic capital markets. IFC works closely with the WB and MIGA to maximize is ramping up in energy through investment and advisory, finance for development. including in the transformational UT-1 hydropower project. IFC is building on its support for financial institutions fo- MIGA can provide political risk insurance guarantees cused on the underserved including MSMEs. IFC is continu- to private sector investors and lenders to encourage ing to boost competitiveness especially in tourism, agribusi- cross-border investments into developing countries. ness, manufacturing, and financial sector. What are the results envisioned at the The CPF incorporates results indicators to monitor the World Bank Group’s contribution to Nepal’s development. The World Bank Group end of the CPF will be carrying out a mid-term review to take stock of the progress in period (FY2023)? achieving the indicators. Some examples of indicators include: PUBLIC INSTITUTIONS: 90% of tax collections information made All 7 states available on real to incorporate time basis gender informed budget in their 25 districts plans to have electronic national population register PRIVATE SECTOR-LED JOBS AND GROWTH: 1,210 km 11,000 Small and Medium Enterprises of roads (SMEs), 500 agriculture 0.5 million 500,000 people constructed or producer groups and mobile provided with new or upgraded 600,000 individuals banking improved access to with access to customers electricity finance added Long-term finance to Border Border crossing time 20% increase Crossing grow by 15% per annum and total market capitalization at selected border posts in tourism increases by 7% per annum reduced from 2.3 days to spending in targeted 1.5 days destinations INCLUSION AND RESILIENCE: PHOTOS © NABIN BARAL/WORLD BANK 1,182,000 20% out-of-school households with 750,000 people with access to water and access to improved private students (5 to 16 years) brought to school sanitation services health services 0.6 million 116,800 farmers 30,000 people persons with to adopt climate with access to access to social smart agricultural improved nutrition security allowance practices