Nepal Early Warning Update

Asian Development Bank Business Opportunities: Volume No. 4, March 2008

Thursday, April 17, 2008

This Bulletin is a periodic electronic update from the Bank Information Center (BIC) South Asia office to inform civil society about Asian Development Bank (ADB) projects in Nepal before they are approved by the Board of Directors of the ADB. This Update covers project information, organized by sectors. The information is compiled directly from ADB’s Business Opportunities.

For feedback on the Early Warning Update or to subscribe, please contact:
Bank Information Center, South Asia Office (New Delhi)
Phone: +91-11-2602-0143; Email: southasia@bicusa.org; Web: www.bicusa.org

For more information on specific projects, please contact the following at the ADB:
The Project Officer (contact details listed against each project). When emailing, also copy to: disclosure@adb.org. You may also contact the ADB Public Information and Disclosure Unit [2] (See: http://www.adb.org/Disclosure/contact.asp).

About Business Opportunities (BOp)  

Business Opportunities (BOp) identifies potential projects that are under consideration for ADB financing.  The BOp listings do not guarantee that financing will be approved for particular projects.  However, BOp listings serve as important tools for monitoring and follow up of proposed projects.  These, along with your country’s Country Partnership Strategy (CPS), work as early warnings on the projects that your government and the Bank are considering for funding. Advocacy and campaigning experience around the world on Bank projects indicates that the earlier civil society gets involved on proposed projects, the greater the likelihood for impacting them.  Proposed projects are listed until the point of ADB Board approval; the remaining are dropped from the list.  BOp listings are prepared after CPS approval and during the early phases of Project Preparation. For better understanding of this process, the Bank’s Project Cycle is summarized below.

Project Cycle (ADB website for complete project cycle)

ADB’s Project Cycle

Project Identification/Preparation: ADB often provides grants called project/program preparatory technical assistance (PPTA) to help the government identify and prepare feasible projects. The summary is made available in the form of a project profile or project information document (PID).

During the early stage of the PPTA, an initial poverty and social assessment is conducted to identify people who may be beneficially or adversely affected. A technical assistance report is prepared as a recommendation for ADB to finance a technical assistance project.

If the project requires resettlement of people or might adversely impact the environment, or indigenous peoples, certain safeguard assessments are prepared during this stage. The results of these assessments are to be made available to affected people.  For more information on community rights under ADB safeguards and international best practices, see comparative matrices of MDB safeguard policies on BIC's website.

Project Examination: ADB examines project feasibility, first through a fact-finding mission and then through an appraisal mission. The fact-finding mission examines the project's technical, financial, economic, environmental, marketing, and management aspects and potential social impact. Detailed project risks and sensitivity analyses are carried out to assess viability of the proposed project and loan terms are discussed.

Following this, the Appraisal Mission conducts further field study, analyses and consultation, as required. The mission then prepares a loan proposal report and draws up a draft loan agreement for negotiation. After appraisal, the draft loan agreement and draft project proposal is submitted for review. Government is then called for negotiation with ADB. After negotiations with the government, the loan proposal is submitted to Board of Directors for Approval, through its Report and Recommendation of the President (RRP).

After Board approval, the document is sent to the borrowing country's Government for cabinet authorization following which the loan agreement is signed. The loan takes effect once certain conditions are met. The requirements and deadline for loan effectiveness are stipulated in the loan agreement.

ADB-assisted projects are implemented by the executing agency according to the agreed schedule and procedures as detailed out in the project administration memorandum. Implementation time generally ranges from two to five years but depends on the type and nature of the project. ADB's review missions assess the progress of project implementation by visiting it at least twice a year throughout the implementation period.

If a project has significant environmental or social issues, ADB will often require the borrower to submit regular monitoring reports, in addition to progress reports. Information on the project's implementation progress and status of development objectives and loan covenants is added to the project information document during this implementation phase.

For more information, refer to: Unpacking the ADB: A Guide to Understanding the Asian Development Bank

Commonly Used BOp Acronyms

TA:      Technical Assistance

AOTA:  Advisory and Operational Technical Assistance Loans

PPTA:  Project Preparatory Technical Assistance

RETA:  Regional Technical Assistance

EIA:     Environmental Impact Assessment

IEE:     Initial Environmental Examination

   N:     New Project

   R:     Revised (italic text indicates change from previous month)

ADB Environmental Categorization

Category “A” Projects: Projects having severe environmental impacts are categorized as “A”. An EIA is required.

Category “B” Projects: Projects having some adverse environmental impacts are categorized as “B”. An IEE is required in order to determine whether an EIA also needs to be done. If not, then the IEE is the final environment document.

Category “C” Projects: Projects havening no environmental impacts are categorized as “C”. No IEE or EIA is required but environmental considerations are still reviewed.

Category “F1” Projects: Projects involving a financial intermediary or equity investment are classified as “F1”. The financial intermediary will apply an environmental management system if environmental impacts are expected.

Current Business Opportunities for Nepal

Education /Education Sector Development
Project Name	(R) Education Sector Program (Subprogram II)
Project Type and ID	Grant: NEP 35174-03
Executing Agency	Ministry of Education & Sports
Grant Amount (US$ '000)	8,000.00
Date of First Listing	22 October 2007
Objectives and Scope	The ESP II will contribute to poverty reduction in Nepal by increasing the level of education attainment, particularly for girls and disadvantaged groups. The ESP II will support the preparation and transition to School Sector Reform (SSR), particularly the early implementation of the 1-8 basic education restructuring in a few districts.
Environmental Assessment	Not Required
Project Processing Stage	Approved by the Bank : 24 January 2008
Project Officer	Ayako Inagaki (632-6582); Agriculture, Natural Resources and Social Services Div, SARD; ainagaki@adb.org

Transport & Communications /Telecommunications & Communications
Project Name	Information and Communications Technology (ICT) Development Project
Project Type and ID	Grant: NEP 38347-02
Executing Agency	Office of the Prime Minister and Council of Ministers (OPMCM)
Grant Amount (US$ '000)	25,000.00
Date of First Listing	16 January 2008
Objectives and Scope	The Project will (i) make ICT more accessible, affordable, inclusive, sustainable, and useful to remote and rural communities; (ii) make public services more citizen-centric and business-friendly through ICT; (iii) improve accessibility, efficiency, and transparency in government service delivery with the application of ICT; and (iv) enhance ICT business and industry. The following are the expected outputs from the Project: 1. Rural e-Community The Project will modernize rural communities, particularly for remote areas, by improving the rural connectivity using the wireless broadband networks in districts and by mobilizing community socioeconomic activities using a village network portal through which villagers can share their social capital, and by building telecenters to improve last mile service access in remote rural areas. 2. Government Network The Project will build the government ICT network which allows a government-to-government exchange of data and information and central management of government data and information with suitable protection and efficient backup and recovery solution. The government ICT network component includes (i) a government information and data center, and (ii) government groupware. 3. E-Government Applications The Project will develop various priority e-government applications that have been selected on the basis of criteria such as (i) priority applications, (ii) areas which require little legislative changes, (iii) easily identifiable benefits, (iv) owners' keenness to initiate change processes and own the application, (v) relevance to immediate community needs, (vi) contribution to quick achievement of MDGs, (vii) actual or latent demand, cost, and organizational capability, (viii) likelihood of quick successes with a significant community dividend. 4. Human Resources Development for E-Governance The lack of adequate knowledge and skills in ICT and e-governance in the public sector has caused (i) poor quality or non-existent service delivery, (ii) perpetuation of corruption due to lack of transparency, (iii) greatly excessive processes and inefficiencies in government works, (iv) flaws in decision processes due to a lack of information and analysis, (v) problems of coordination and an aversion towards innovation, and (vi) poor financial, human, physical, and technical resource utilization. To address this poor capacity problem, the Project will (i) build awareness, knowledge, and skills of the key stakeholders in ICT governance to help in improving efficiency in delivery of e-services to the community; (ii) establish computer laboratories for capacity development of institutions promoting ICT human resource development and strengthen networking between training institutions and support for functional linkages; (iii) revise existing training curriculum and develop new curricula of public training institutions aiming to improve the quality of training curriculum and materials in ICT governance and enhance the cost-effectiveness of training programs by developing quality training materials; (iv) share knowledge and experiences to promote ICT governance and applications through exchange and fellowship programs designed to recognize the contributions and commitments of exemplary civil servants, and leaders of NGOs in adopting ICT governance applications effectively and efficiently; and (v) support development of ICT governance courses, help to develop new curriculum for ICT governance, and support to develop new teaching materials in ICT governance in association with universities and research institutes. The impact of the Project is socioeconomic improvements of remote and rural communities through ICT and ICT uptake improvements of the country (community, business and government).
Environmental Assessment	To Be Determined
Project Processing Stage	Approved by the Bank : 28 January 2008
Project Officer	Dong-Soo Pyo (632-6817), Transport and Communications Division, SARD; dspyo@adb.org

The Bank Information Center (BIC) partners with civil society in developing and transition countries to influence the World Bank and other international financial institutions (IFIs) to promote social and economic justice and ecological sustainability. BIC is an independent, non-profit, non-governmental organization that advocates for the protection of rights, participation, transparency, and public accountability in the governance and operations of the World Bank, regional development banks, and IMF. For more information about BIC, see www.bicusa.org.