Countries and Regions

	Table of Contents
p. 20 of 20 BACK | NEXT I. Country Performance Assessment II. Country Operational Strategy III. Sector Strategies 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

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IX. Local Cost Financing

100. Shortage of counterpart funds is not a serious problem in Nepal as it was in earlier years of ADB operations. In FY2000 only one project received insufficient budgetary allocation. However, the Government has assured ADB that adequate funding would be provided as required. The low level of domestic savings continues to be a significant constraint on development efforts. The Government is still constrained to allocate adequate funds for operation and maintenance expenditures and this issue is being addressed by ADB CPRMs and policy dialogue for new projects. ADB's program in Nepal includes a large proportion of agriculture and social infrastructure projects that have small foreign exchange components, so a high percentage of local cost financing is warranted, particularly for projects that address poverty, human development, gender, and environmental concerns. However, the 2000 Country Programming Mission reminded the Government that the scarcity of ADF resources means that the Government's contribution to total project costs will have to be more than 20 percent, as an indication of strong commitment and ownership, with or without other cofinancing.

Back VIII. Economic and Sector Work Program	Country Assistance Plans - Nepal