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Nepal: Capital Market and Infrastructure Capacity Support Project

Sovereign (Public) Project | 43490-013 Status: Closed

ADB is helping Nepal boost investments in infrastructure. The project will strengthen the regulatory and institutional framework for bond market development and build the capacity of the Securities Board of Nepal. It will help develop the policy and institutional framework for promoting private sector participation in infrastructure and a public-private partnership demonstration project.

Project Details

Project Officer
Panday, Anjan South Asia Department Request for information
Country
  • Nepal
Modality
  • Grant
Sector
  • Finance
 
Project Name Capital Market and Infrastructure Capacity Support Project
Project Number 43490-013
Country Nepal
Project Status Closed
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0252-NEP: Capital Market and Infrastructure Capacity Support Project
concessional ordinary capital resources lending / Asian Development Fund US$ 5.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector

Finance / Money and capital markets

Gender Equity and Mainstreaming No gender elements
Description

The impact will be greater availability of infrastructure services. The outcome will be greater private sector investment in the infrastructure sector.

Nepal needs to address prevailing inadequacies in the financial and infrastructure sectors while also progressing the infrastructure development agenda. The three project outputs aim to bridge the significant and growing gaps in infrastructure financing.

Output 1: Regulatory and institutional framework for bond market development

(i) Strengthening the institutional capacity for public debt management.

(ii) Developing a government securities issuance strategy and market access.

(iii) Developing the bond market infrastructure.

(iv) Building the institutional and regulatory capacity of Securities Board of Nepal (SEBON).

Output 2: Enabling policy and institutional framework for greater private sector participation in infrastructure.

Output 3: Development of a public-private partnership (PPP) demonstration project.

Project Rationale and Linkage to Country/Regional Strategy

Problems:

(i) Underdeveloped bond market

(ii) Weak policy and institutional frameworks

(iii) Lack of PPP experience and capacity

Opportunities for capital market development and infrastructure financing are included in the measures initiated by the government in support of the interim plan and the approach paper priorities, which include:

(i) undertaking a feasibility study for the establishment of an independent debt management office, separate from the monetary functions of the central bank;

(ii) establishing a central depository system for both bonds and equities, with support from the Government ofo India; and

(iii) establishing PPP cells in some line ministries for project-specific transactions, and prioritizing PPPs in its development strategies.

Impact Greater availability of infrastructure services
Project Outcome
Description of Outcome Greater private sector investment in the infrastructure sector
Progress Toward Outcome

Update (mid-September 2019)

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ADB is processing the government's request for an extension of the project to end-December 2019.

The PPP regulations are being finalized. Strengthening of the PPP unit is expected over time, especially after the finalization of the organizational and management survey.

The project earlier supported the preparation of several PPP-related guidelines and feasibility report of five potential PPP projects. Further work on preparing a pilot PPP project is unlikely to be taken up under the project.

Separately, ADB is planning a mission (in November) from the Office of Public Private Partnership to discuss possible support for preparing PPP projects with the Office of Investment Board of Nepal (OIBN) .

Implementation Progress
Description of Project Outputs

1. Regulatory and institutional framework for bond market development

2. Enabling policy and institutional framework for greater private sector participation in infrastructure

3. Development of a PPP demonstration project

Status of Implementation Progress (Outputs, Activities, and Issues)

Update (June 2019)

============

With the passage of the Public Private Partnership and Investment Act (PPPIA) in March 2019, there is now a possibility of developing PPP projects.

PPPIA regulations have been drafted and is being processed for approval. Office of Investment Board of Nepal (OIBN) is analyzing the human resource requirement for the PPP Unit.

Update (September 2019)

=================

ADB is processing the government's request for an extension of the project to end-December 2019.

Output 1:

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The government has submitted Public Debt Management bill and an amendment to Securities Act 2006 to the parliament. These legal provisions align with the reform measures supported by the project.

The Public Debt Management Office (PDMO) is in operation since December 2018. The proposed draft public debt management bill has provisions to give legal backing to PDMO's operations.

Development of Debt Operations and Management Software (DOMS) is in its final stage. A soft Go-Live of DOMS was achieved in February 2019. Some additional training to key stakeholders is being considered.

Output 2:

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The OIBN is continuing its efforts to finalize the draft regulations of PPPIA. The PPP Unit at OIBN will be expanded following the finalization of organization and management survey.

Output 3:

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Earlier the project submitted a bid structuring and related model concession agreement to the government. The model concession document may need to be updated to align with PPPIA. Under the project, five feasibility reports were prepared for consideration to develop them under the PPP approach.

Geographical Location Nation-wide
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design tbd
During Project Implementation tbd
Business Opportunities
Consulting Services tbd
Procurement tbd
Responsible ADB Officer Panday, Anjan
Responsible ADB Department South Asia Department
Responsible ADB Division Nepal Resident Mission
Executing Agencies
Ministry of Finance
[email protected]
The Government of Nepal
Singha Durbar
Kathmandu, Nepal
Timetable
Concept Clearance 31 May 2010
Fact Finding 07 Jun 2010 to 18 Jun 2010
MRM -
Approval 19 Apr 2011
Last Review Mission -
Last PDS Update 27 Sep 2019

Grant 0252-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
19 Apr 2011 27 Jun 2011 09 Aug 2011 30 Nov 2014 31 Dec 2019 07 Jul 2020
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 5.00 Cumulative Contract Awards
ADB 5.00 19 Apr 2011 2.74 0.00 91%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 19 Apr 2011 2.74 0.00 91%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Unsatisfactory

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

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Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
Public Debt Management Expert Individual - Consulting Closed 05 Apr 2019 17 Apr 2019
Lead Economist Individual - Consulting Closed 28 Mar 2019 07 Apr 2019
Project Management Specialist-II Individual - Consulting Closed 04 Jan 2018 15 Jan 2018
Accounting and Auditing Expert Individual - Consulting Closed 03 Nov 2017 10 Nov 2017
Information Technology Specialist Individual - Consulting Closed 03 Nov 2017 10 Nov 2017
Project Management Specialist Individual - Consulting Closed 05 Jul 2017 11 Jul 2017

Contracts Awarded

No contracts awarded for this project were found