Nepal requires $13-18b infra investment: WB



    wbankNepal needs $13-18 billion from 2011-2020 in order to bridge the investment gap in infrastructure, according to a new World Bank (WB) study.

    The WB report released on Wednesday says Nepal has one of the poorest infrastructure services along with Afghanistan and Bangladesh, which resemble the infrastructure situation in the Sub-Saharan region of Africa.

    The report entitled “Reducing Poverty by Closing South Asia’s Infrastructure Gap” states Nepal needs the highest resources for electricity, followed by the transportation sector. The country will require as high as $5.3-7 billion for electricity, while the transport sector will require $3.7-5.5 billion. Nepal has been facing longer power outages for last few years, and the quality of roads has been very poor.

    Likewise, a significant investment will require for irrigation, telecommunications, solid waste management, water supply, and sanitation, according to the report.

    The report says the country has to invest 8.24 percent to 11.75 percent of the gross domestic product (GDP) in infrastructure. Currently, Nepal’s investment in the sector stands at just 5 percent of the GDP.

    Compared with other South Asian nations, Nepal’s investment need is the highest, with the maximum necessary amount standing at 11.75 percent of the GDP. The report said closing the huge infrastructure gap should be a priority for the South Asia in order to meet its development goals, poverty alleviation and shared prosperity.

    For businesses in South Asia, infrastructure is a major hindrance to growth, with electricity shortage being the largest problem. Transport is also an obstacle for regional and international trade.

    Given the low investment so far, the report has stressed on the need for bringing investment from the private sector to infrastructure. However, there are not many infrastructure projects in which the private sector has been involved in South Asia. The report says there are fewer than 1,000 active projects in energy, telecommunication, transport and water and sanitation sectors either fully-owned by the private sector or under the public-private partnership model.

    “This number is low when compared with more than 400 power plants, in the region, the extension to the electricity transmission network; the large number of cities where electricity distribution, water and sanitation network exit or are needed; the more than 400 seaports and airports and he extension of the road network,” states the report.

    Private sector’s participation in infrastructure in Nepal is 0.66 percent of the GDP, which is the second lowest in South Asia after Afghanistan. Maldives tops the chart, followed by India, in private sector investment against the GDP in infrastructure.

    The report has suggested a number of policy options to provide better infrastructure services. The suggestions are rehabilitate and maintain existing infrastructure, reform service providers and ensure their financial sustainability, establish solid legal, policy and regulatory framework and decentralise the centre’s authority to local bodies as a means to improve service delivery.

    Source : eKantipur