IFAD to Support the Western Uplands Poverty Alleviation Project in the Kingdom of Nepal

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IFAD to Support the Western Uplands Poverty Alleviation Project in the Kingdom of Nepal

Press release number: IFAD 05/02

Rome, 5 February 2002 – A USD 32.6 million project in the Kingdom of Nepal – The Western Uplands Poverty Alleviation Project – will receive a USD20 million loan from the International Fund for Agricultural Development (IFAD). A financing agreement was signed today in Nepal, by His Excellency, Mr. Bimal Prasad Koirala, Secretary, Ministry of Finance, Kingdom of Nepal and Mr. Phrang Roy, Director of the Asia and Pacific Division of the Fund.

The programme will operate in the Western Uplands of Nepal, a remote and harsh area with low rainfall and very poor access. Many people living in these mountainous areas suffer serious food insecurity. At between 60 and 86 per cent, malnutrition rates among young children are among the highest anywhere in the world. Agriculture is still the mainstay of the economy, employing around 81 per cent of the population, and although output is low, there is scope for boosting the incomes of local people through livestock, crop and forestry production.

At present, the poor are unable to develop local resources due to lack of services, capital, communications and lack of access to the resource base itself. Furthermore, this isolated region has had very little donor assistance. Problems facing local people are compounded by political insurgency, which has grown in recent years and could become even more widespread if poverty is not alleviated. The area targeted by the project is home to some 1.2 million people, many of them drawn from particularly vulnerable groups, including women, dalits or disadvantaged castes, youth and landless or semi-landless people.

The project will cover 11 districts in the far and mid-western development regions. By its close, in 11 years’ time, it is expected to have helped 115,000 households. The project will be multi-pronged, spearheaded by initiatives to enable local communities to achieve sustainable livelihoods from the better management of their local resources -- especially forests, livestock and crops. The project will provide access to savings and credit services at the village level, focusing on the promotion of high value marketable products, such as non-timber-forest products. The project will also seek to enable the poor to have improved access and control over productive natural resources, particularly through providing groups with long term leases to forest land. Together with other donor programmes, the project will support construction of access roads to ease marketing constraints, while other small scale infrastructure schemes will also be supported depending on each community’s need. Infrastructural development will in turn provide local employment. Social issues will be addressed through rights awareness activities, and the special vulnerability of women will be mitigated by offering this group access to knowledge and technology, control over productive resources, and leadership skills training.

Cofinanciers of the Western Uplands Poverty Alleviation Project are the World Food Programme and the Government of Nepal. This is the tenth project in the Kingdom of Nepal to be financed by IFAD, for a total loan value of about USD115 million.

IFAD is a specialised agency of the United Nations with the specific mandate of combating hunger and poverty in the most disadvantaged regions of the world. Since 1978 IFAD has financed 603 projects in 115 recipient countries and in the West Bank and Gaza for a total commitment of approximately USD 7.3 billion in loans and grants. Through these projects, about 250 million rural people have had a chance to move out of poverty. IFAD makes the greater part of its resources available available to low-income countries on very favorable terms, with up to 40 years for repayment and including a grace period of up to ten years and a service charge of 0.75% per year.