At a time when Nepal is yet to spend the portfolio allocated by various international multilateral agencies including the World Bank and Asian Development Bank, Nepal is given another assurance to fund development projects.
As Nepal needs more funds for the coming days for its development, the commitment made by Beijing based AIIB for Nepal’s development projects is good news. However, the question remains how it will improve its efficiency to use the allocation.
At a time when Nepal is unable to spend the money committed by the World Bank and Asian Development Bank for development projects, there is a limited use of AIIB fund given the present problems.
“Nepal’s current problem is not lack of fund for development but what is lacking is to improve its lackluster performance,” said senior officials of Ministry of Finance. “When our capital expenditure is less than 15 percent a year and there are huge resources lying without use, what is the use of more fund?” asked the officials. “It is good news that Nepal has no other alternative source to seek funds.”
After attending the first meeting of the Board of Governors of AAIB, Finance Minister Bishnu Prasad Paudel revealed that he held discussions with his Chinese counterpart on the sidelines of AIIB board of governors’ meeting, on the areas of broad cooperation including fuel supply to Nepal.
Talking to the media at the Tribhuvan International Airport, he said Nepal will submit viable projects related to hydropower generation, transmission and north-south road connectivity projects to the AIIB and try to get funding from next fiscal.
During his China visit, Minister Paudel requested his Chinese counterpart, Lou Jiwei, to fix dates for meetings of high-level bilateral mechanisms ahead of Prime Minister KP Oli’s visit to China. In addition, he sought additional support from the Chinese government in supply of petroleum products, infrastructure development and investment promotion.
AIIB, a new China-led multilateral development bank, is said to finance infrastructure projects in Asia. For which, the AIIB is expected to lend around $10 billion-$15 billion annually for the first five to six years and has stated to start operations in the second quarter of 2016.
Nepal had formally become one of the founding members of the AIIB on June 29 after former finance minister Ram Sharan Mahat put the initials on the AIIB charter — officially known as the Articles of Agreement (AoA).
The AoA has so far been signed by 56 countries, making them founding members of the AIIB. The AoA came into force on December 25. Nepali Parliament ratified the AoA in late December.