Nepal : COVID-19 Active Response and Expenditure Support Program
The CARES Program will help the government in implementing its pandemic response planthe National Relief Programto respond to public health emergencies and to mitigate adverse economic and social impacts caused by the coronavirus disease (COVID-19) pandemic. The program will extend support to the poor and vulnerable to withstand the pandemic's adverse impact on their livelihoods through food assistance and employment support. It will pay special attention to establishing gender-segregated hospital units and facilities, and ensuring that additional incentives are extended to women health workers. Further, the program will increase women's resilience to the pandemic's economic shocks. It will promote resilience to external shocks and strengthen public service delivery, especially in the health sector, contributing to a reduction in shared health risks. The program facilitates the government's mapping of the poor and vulnerable populations for effective food distribution and other relief service delivery.
Van Dael, Rudi Louis Hendrikus
South Asia Department
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|Project Name||COVID-19 Active Response and Expenditure Support Program|
|Country / Economy||Nepal
|Project Type / Modality of Assistance||Loan
|Source of Funding / Amount||
|Operational Priorities||OP1: Addressing remaining poverty and reducing inequalities
OP2: Accelerating progress in gender equality
OP6: Strengthening governance and institutional capacity
OP7: Fostering regional cooperation and integration
|Sector / Subsector||
Health / Disease control of communicable disease - Health system development
Public sector management / Public expenditure and fiscal management - Social protection initiatives
|Gender||Effective gender mainstreaming|
|Description||The CARES Program will help the government in implementing its pandemic response planthe National Relief Programto respond to public health emergencies and to mitigate adverse economic and social impacts caused by the coronavirus disease (COVID-19) pandemic. The program will extend support to the poor and vulnerable to withstand the pandemic's adverse impact on their livelihoods through food assistance and employment support. It will pay special attention to establishing gender-segregated hospital units and facilities, and ensuring that additional incentives are extended to women health workers. Further, the program will increase women's resilience to the pandemic's economic shocks. It will promote resilience to external shocks and strengthen public service delivery, especially in the health sector, contributing to a reduction in shared health risks. The program facilitates the government's mapping of the poor and vulnerable populations for effective food distribution and other relief service delivery. Its support to the government's economic response measures, especially financing MSMEs, will accelerate the recovery of an export-oriented manufacturing as well as tourism sector, for enhanced regional cooperation and integration. The program complements efforts by SAARC and the South Asia Subregional Economic Cooperation to ensure coordinated responses to mitigate the impact of the pandemic in the region and facilitate the recovery process.|
|Project Rationale and Linkage to Country/Regional Strategy||Nepal is considered as one of the high risk countries for rapid spread of COVID-19 infections due to the country's vulnerable public health system, underdeveloped sanitation and other infrastructure, and densely populated urban and semi urban areas. The sudden economic disruption caused by the pandemic hit hard the sectors such as service, wholesale, retail, trade, transport, construction and manufacturing, among others. Especially the entire service sector, which accounts over 60% of GDP and includes tourism, aviation and hospitality sector, have been severely affected. Further, remittance income, which contributes about 26.0% of GDP in fiscal year (FY) 2019 and the most important source of foreign exchange, will be adversely impacted. . Due to the pandemic, the fiscal deficit will widen from pre-COVID estimate of 6.4% of GDP to 8.5% in FY2020. The government estimates the additional financing need of $1.26 billion to respond to COVID-19 for FY2020.|
Disaster risks in human lives, livelihoods, health, economy, and social aspects sustainably reduced (Disaster Risk Reduction Policy)a
|Description of Outcome||
COVID-19 pandemic adverse impacts on health systems, livelihoods, poverty, employment, and economy mitigated
|Progress Toward Outcome||The project had three outcome indicators, based on assumptions from early 2020. Back then it was assume that Nepal would be able to contain the number of COVID-19 cases, that was a wrong assumptions as the number of COVID-19 infections far surpasses the expected number a year ago. As per the September 2021 report from the World Food Programme, the number of people that is food insecure remains below the 4.6 million. However, data shows that people are struggling. With regard to the economic support, the financial sector in Nepal has been able to provide refinancing and concessional loans to a large number of businesses. Whether or not these businesses survived, will be assessed.|
|Description of Project Outputs||
Health system response measures supported
Social protection and relief programs delivered
Economic support for affected sectors implemented
|Status of Implementation Progress (Outputs, Activities, and Issues)||Five steering committee meetings were conducted as planned, to discuss progress. The progress towards outputs is the following as of October 2021. In the health sector, the testing capacity in the country has increased way beyond 3,000 tests per day, and currently over 102 medical laboratories (public and private) are certified to conduct tests, spread out over the 7 provinces. On 21 May 2021 23,226 RT-PCR tests on a single day was achieved. As per the data from the Ministry of Federal Affairs and General Administration over 6,304 quarantine centers with a bed capacity of 205,000 was established as of the first week of July 2020. Based on a sample survey separate wards for males and females were maintained in all the quarantine centers. Financial incentives have been provided to health and frontline personnel, with the full data still being collected. On the support to the poor and vulnerable, the following update. As per the data from the Ministry of Federal Affairs and General Administration over 1 million households have received food assistance so far. The Prime Minister's Employment Program (PMEP) has enrolled over 750,000 unemployed persons from the informal sector in Employment Service Centers at the local levels. Employment programs are currently being provided, but the target of 500,000 will most likely not be achieved. A study on the program was done together with the Ministry of Labour, Employment and Social Security and the World Bank, and will be published end of 2021. For Economic Support for Affected Sectors the following update. NRB is facilitating its regular re-financing and concessional lending programs, and a new fund, the fund for Business Continuity Loan is under operation. The lending shows very good progress, and the first figures show that over 100,000 MSME's received financing. Collection of disaggregated data, to assess if the program also reached the specific target groups is ongoing.|
|Summary of Environmental and Social Aspects|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design|
|During Project Implementation|
|Consulting Services||Any consulting services during the implementation of the program shall conform to all applicable ADB policies.|
|Procurement||Any procurement during the implementation of the program shall conform to all applicable ADB policies.|
|Responsible ADB Officer||Van Dael, Rudi Louis Hendrikus|
|Responsible ADB Department||South Asia Department|
|Responsible ADB Division||Nepal Resident Mission|
Ministry of Finance
|Concept Clearance||01 Apr 2020|
|Fact Finding||14 Apr 2020 to 14 Apr 2020|
|MRM||29 Apr 2020|
|Approval||26 May 2020|
|Last Review Mission||-|
|Last PDS Update||29 Nov 2021|
|Approval||Signing Date||Effectivity Date||Closing|
|26 May 2020||01 Jun 2020||08 Jun 2020||15 Jul 2021||-||30 Nov 2021|
|Financing Plan||Loan Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||250.00||Cumulative Contract Awards|
|ADB||250.00||19 Dec 2022||250.00||0.00||100%|
|Cofinancing||0.00||19 Dec 2022||250.00||0.00||100%|
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|Title||Document Type||Document Date|
|COVID-19 Active Response and Expenditure Support Program: Completion Report||Project/Program Completion Reports||Dec 2022|
|COVID-19 Active Response and Expenditure Support Program: Cash for Work Program||Documents Produced Under Grant/Loans/TA||Sep 2022|
|Loan Agreement (Ordinary Operations [Concessional]) for Loan 3926-NEP: COVID-19 Active Response and Expenditure Support Program||Loan Agreement (Ordinary Resources)||Jun 2020|
|COVID-19 Active Response and Expenditure Support Program: Report and Recommendation of the President||Reports and Recommendations of the President||May 2020|
Safeguard Documents See also: Safeguards
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Evaluation Documents See also: Independent Evaluation
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Nepal: COVID-19 Response Measures Strengthen Health System; Vaccines Bolster ConfidenceThe Government of Nepal introduced the National Relief Program to respond to public health emergencies triggered by COVID-19. ADB provided budgetary support of $250 million under the COVID-19 Active Response and Expenditure Support Program.
Economic Stimulus Helps Micro, Medium and Small Enterprises, Jobless to Weather COVID-19 Crisis in NepalADB is supporting Nepal’s pandemic response plan through a $250 million countercyclical support facility loan under its COVID-19 Active Response and Expenditure Support Program.
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