For the first time since 2007, the World Bank is coming up with a four-year full-fledged country assistance strategy for Nepal. The global lender will launch its Country Assistance Strategy (CAS) in July, which will have infrastructure as its top priority, according to sources at the Finance Ministry.

Against the backdrop of a fragile political environment following the Jana Aandolan 2, the bank had adopted a strategy of assisting Nepal through Interim Strategy Note (ISN). The last full-fledged assistance strategy for Nepal was CAS 2004-07.

In its first ISN in 2007, the WB had stated that greater clarity will emerge on the political front only in the next 12-18 months. However, with prolonged political transition, the bank continued the ISN for two more times. At the same time, the government also adopted strategy of three-year interim plan instead of five-year period plan. 

In its ISN 2012-13, the World Bank had stated: “If the situation stabilizes over the next two years, it should be possible to prepare a Country Assistance Strategy after this Interim Strategy Note.”

Ministry officials say the fact that the WB is working on a full-fledged assistance strategy indicates the country is heading towards stability. “This is a reflection of positive political development we have had in recent months,” said a senior ministry official. 

World Bank board members, who visited Nepal in the first week of March, had indicated that infrastructure would be a key focus area for its future assistance to Nepal.

Of late, the government has been asking the bank to provide larger assistance to the infrastructure sector. Finance Minister Ram Sharan Mahat, during his meeting with visiting World Bank Vice President Phillippe Le Houerou on Wednesday, also sought additional assistance to the sector. In reply, Houerou said the new CAS will reflect the Nepal government’s priority. After the formation of the new government, there have been two high profile visits by top World Bank officials.

How much support Nepal would get under the new CAS is still under discussion. The bank has been providing $220 million on an average over last three years. In the lSN 2012-13, the bank had pledged to provide $450 million for two years.