WB provides $300m for housing rebuildThe World Bank has approved a credit of $300 million to rebuild private houses destroyed by devastating earthquakes of April and May, 2015.
The World Bank has approved a credit of $300 million to rebuild private houses destroyed by devastating earthquakes of April and May, 2015. This loan amount supplements a $200 million credit approved by the Washington, DC-based multilateral lending institution in June 2015 for the Earthquake Housing Reconstruction Project.
The additional fund will help the government to meet a share of the financing gap in its housing reconstruction programme that is currently under implementation, says a statement issued by the World Bank.
The impact of the earthquakes is estimated to hover around 35 percent of Nepal’s gross domestic product (GDP) with recovery needs of about $7 billion. As per initial estimates of the government, the earthquakes had destroyed around 500,000 houses.
That estimate has been revised upwards to around 650,000. This has raised the total number of eligible and enrolled beneficiaries for housing grant to 650,000 households.
Initially, the government had said each household that lost a home would be eligible for a housing grant of Rs200,000 (approximately $2,000). But as construction costs went up, the government decided to provide housing grant of Rs300,000 to each household. With the revision in grant amount and number of housing grant beneficiaries, the financing gap in the government’s housing reconstruction programme has widened to over $1.2 billion, according to the World Bank.
“The additional credit will finance hazard-resistant reconstruction of an additional 96,000 houses,” says the statement. “The original Bank credit covers the reconstruction of 55,000 houses.” Over 73,706 houses have been rebuilt till date. Reconstruction of another 177,000 houses has also started. “Nepal requires critical investments in resilient recovery,” said Takuya Kamata, the World Bank’s country manager for Nepal.
“This will help avoid new disaster risks and ensure Nepal’s continued progress in key development indicators. Such investments will also strengthen disaster preparedness and improve the capacity to respond,” he said.
The new financial support will help the Earthquake Housing Reconstruction Project to continue transferring housing grants directly to the bank accounts of beneficiaries.
“This remains a key principle in order to ensure that the right beneficiary gets the right tranche of grant upon verification,” said Kamran Akbar, senior disaster risk management specialist at the World Bank.
A World Bank administered Multi-Donor Trust Fund (MDTF) supports the implementation of the Earthquake Housing Reconstruction Project.
Other MDTF partners include the US, the UK, Switzerland and Canada. Japan and India also provide parallel financing support for housing reconstruction.