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Table of Contents
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I. Country Performance Assessment
II. Country Operational Strategy
III. Sector Strategies
A. Agriculture
B. Infrastructure
>> C. Social Infrastructure and Environment
D. Governance Dimensions of ADB Operations
F. Gender Dimensions of ADB Operations
G. Private Sector Development
IV. Regional Cooperation
V. Donor Activities and Aid Coordination
VI. Cofinancing and Catalyzing External Resources
VII. ADB’s Operational Program
VIII. Economic and Sector Work Program
IX. Local Cost Financing
Country Assistance Plans - Nepal : III. Sector Strategies

C. Social Infrastructure and Environment

1. Education

62. ADB assistance to the education sector will be consistent with the Government's priorities by focusing on primary and secondary education, and nonformal education, and will improve human development as part of the Poverty Reduction Strategy. While access to primary education (grades 1 to 5) has improved dramatically, the efficiency of primary education is low with high repetition and dropout rates. There are considerable disparities in access by gender, and by geographic location. The quality of education needs to be improved through teacher training, curriculum development, and better school management, maintenance and supervision. To complement the efforts of a consortium of donors financing the Second Basic and Primary Education Project, ADB will concentrate on improvements in teacher training for basic education. A loan for a basic education project is included in the 2001 program. In secondary education, ADB's primary focus will be on technical assistance to secondary education, in cooperation with other donors in the sector. Investments are needed to improve quality, expand and upgrade physical facilities and to develop teacher training. An ADTA for institutional and capacity building in secondary education to assist the new Department of Education is planned for 2001, with a loan for a Secondary Education II Project planned for 2002.

63. Given the high primary school dropout and high adult illiteracy rates (especially amongst women), the expansion of nonformal education is essential. Nonformal education is effective in providing other life-related knowledge and basic skills. The Government has taken initial steps to facilitate and coordinate nonformal education by forming a national council for nonformal education, and establishing district nonformal education committees under each district development committee. However, there is still a need to improve the quality of public and private partnership. If there are improvements in meeting the sector criteria for ADB involvement as enunciated in the COS, ADB assistance for nonformal education will include a PPTA in 2002 for a Nonformal Education Project in 2003.

2. Urban Development

64. There is an urgent need to address urban environment issues. Protection of the environment is particularly critical to sustainable economic development in Nepal. All major economic sectors and potential areas of economic growth, including agriculture, hydropower and particularly tourism depend directly on sustainable management of natural resources. Poor waste management and lack of air pollution controls in urban and tourist areas are adversely affecting people's health and the potential for tourism development. It will be critically important to involve more directly community groups and the private sector in resolving these issues. Future assistance will depend on progress in institutional development of the Kathmandu Metropolitan City to establish effective and sustainable delivery mechanisms for urban services. ADB will consider involvement in solid waste management and sanitation in collaboration with local communities and the private sector, air and water pollution monitoring in cooperation with NGOs, and introduction of policy measures and economic instruments for better environmental management in urban development with specific reference to sustainable tourism development. An Urban Environment Improvement Project has been prepared under a 1999 PPTA, with a loan planned for 2002. A Kathmandu Valley Urban Improvement Project PPTA is planned in 2002, with a loan in 2003.

3. Water Supply and Sanitation

65. Access to a clean water supply and good sanitation has an immediate and substantial impact on the population, especially for women through time saved in fetching water and for children through decreases in water-borne disease and related fatalities. Improvements in access to clean water allow women more time to participate in income-generating activities and promote healthy growth of children. ADB will continue to support community initiatives in small towns to develop water supply facilities to be maintained by local communities or private enterprises. A water supply and sanitation sector strategy is under preparation by the Government and due for completion in July 2000. ADB will prepare its strategy for future assistance in this sector based on the Government's strategy, and in consultation with other donors in the sector. Building on previous projects in the sector, a PPTA in 2001 will be provided to prepare a Community-Based Water Supply and Sanitation Sector Project for 2002, intended to develop community-based water supply projects in rural areas. Progress in implementing reforms is crucial to sustaining future sector investments. In this regard, award of a private sector management contract for urban water supply and sewerage services in Kathmandu valley, under World Bank assistance in 2000, will be an important milestone for further processing of ADB assistance for the Melamchi Water Supply Project, a 2000 project.

4. Environment

66. ADB will provide a more focused approach to assisting the Government in strengthening environmental protection by emphasizing urban and peri-urban environmental issues. There are a number of projects in the pipeline with strong environment components, including the Melamchi Water Supply Project in 2000 and the Ecotourism Project in 2001. In 2002, the Rural Infrastructure Sector Development, Urban Environment Improvement, and Community-Based Water Supply and Sanitation Sector Projects have environmental considerations. In 2003, the Kathmandu Valley Urban Improvement, and the Watershed Management and Rehabilitation Projects will address environmental concerns.

67. A long-term program will be needed to achieve meaningful environmental improvements, so further support for capacity building for environmental improvement is planned for 2003, possibly to complement the Melamchi Project.

68. In the tourism sector, ADB's strategy is to promote public and private partnerships in environmental improvement to enhance rural tourism, and to stimulate income generation and poverty reduction in rural areas. In addition to the Ecotourism Project in 2001, an ADTA for a tourism sector review is planned in 2003 to identify means of further improving the quality of the industry, and particularly its environmental quality.



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B. Infrastructure
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D. Governance Dimensions of ADB Operations