The Asian Development Bank (ADB) director general for South Asia Kenichi Yokoyama on Friday said that improved portfolio performance is key for the timely delivery of development results and securing higher and sustained concessional resource allocations.

He was speaking at the opening session of the two-day country portfolio review meeting organised by the government of Nepal and ADB to assess the progress of ADB-supported development projects.

“The Ministry of Finance is proactively addressing issues to improve project implementation. Nepal needs to achieve at least $350 million to $450 million disbursement per year to be considered for higher concessional resource allocations based on ADB’s performance-based allocation system,” said Yokoyama.

“Higher disbursement is doable with the collective effort of the government and ADB by pursuing higher implementation disciplines.”

Finance Minister Prakash Sharan Mahat said, “We appreciate ADB’s support to Nepal’s development over the years. The government is committed to overcoming challenges related to project implementation and disbursements and improving capital expenditure for development impact on the ground for Nepali people.”

Revenue Secretary Ram Prasad Ghimire also presented awards to ADB-supported projects for their excellence in effective project management, gender equality, social inclusion, and environmental and social safeguards monitoring.

The projects that were awarded include Urban Water Supply and Sanitation (Sector) Project, Bagmati River Basin Improvement Project-Additional Financing, SASEC Highway Improvement Project, Rural Enterprise Financing Project, and Power Transmission and Distribution Efficiency Enhancement Project.

As of December 31, 2022, ADB’s active portfolio in Nepal stands at around $3.2 billion supporting a broad range of key sectors: energy, transport, agriculture, water and urban infrastructure and services, rural development and natural resources, health, and education.

“In 2022, the overall portfolio performance in Nepal was lower than expected, affected mainly due to insufficient project staff and high turnover, challenges in contract management, delays in environmental and land clearances, and disruption of the construction supply chain,” said ADB Country Director for Nepal Arnaud Cauchois.

“Following the review, the finance ministry and ADB will agree on specific actions to overcome the challenges and we are hopeful that project implementation and disbursement will pick up the pace,” he added.

Since the start of its operations in Nepal in 1969, ADB has provided about $7.6 billion in financial and technical assistance to the country.