Release number IFAD/28/08

Second phase of social exclusion project to target communities and rural women

Rome, 8 May 2008 – IFAD has announced a US$4 million grant to support the second phase of a project to fight social exclusion in Nepal. 

The Poverty Alleviation Fund is a community-driven project that focuses on groups that have been traditionally excluded, mainly for reasons of gender, ethnic origin, caste and location. The project uses incentives to encourage community organizations to include rural women, dalits (outcasts) and indigenous people as members and beneficiaries who can also hold positions of responsibility.

The US$113 million project is partly funded by the US$4 million IFAD grant, under the organization’s debt sustainability framework. The International Development Association is contributing a grant of US$100 million. The Government of Nepal will contribute US$1 million and project participants the remaining US$8 million.

The grant agreement was signed today in Rome by Lennart Båge, IFAD’s President, and Krishna Gyawali, Nepal’s Joint Secretary, Ministry of Finance.

The pilot phase of the Poverty Alleviation Fund started in 2004 in six of the poorest and most remote districts of Nepal. Once the project was up and running, the pace of implementation accelerated rapidly in response to growing demand from rural communities and the fund subsequently expanded its activities to 25 districts.

Following the 2006 peace process, there is a new commitment in Nepal to address inequality and poverty. Community-based development programmes are being used to reach out to the poorer remote areas of the country.

“The Poverty Alleviation Fund is seen as a model because of its successful track record in effectively reaching poor communities and marginalized groups within them,” said Kati Manner, IFAD’s country programme manager for Nepal.

The second phase of the project will continue the work carried out during the pilot phase, expanding to all 75 districts by the end of 2008. It will build roads and bridges and improve water supplies, sanitation, schools and health services, and develop community infrastructure such as small-scale irrigation. It will also help create opportunities for the poorest and most excluded people to earn an income.

With this project, IFAD has supported 12 programmes and projects in Nepal with loans and grants worth US$130.9 million.

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IFAD was created 30 years ago to tackle rural poverty, a key consequence of the droughts and famines of the early 1970s. Since 1978, IFAD has invested more than US$10 billion in low-interest loans and grants that have helped over 300 million very poor rural women and men increase their incomes and provide for their families.
IFAD is an international financial institution and a specialized United Nations agency. It is a global partnership of OECD, OPEC and other developing countries. Today, IFAD supports more than 200 programmes and projects in 81 developing countries and one territory.