Announcement of The World Bank's Approval of a Fifty Point Five Million Credit for a Road Project in Nepal on March 15, 1994

FOR IMMEDIATE RELEASE <World Bank 1818 H Street, N.W., Washington, D.C. 20433, USA *Telephone: (202) 477-1234 IDA Press Release No. 94/68SAS Contact: Gautam Adhikari (202) 458-1423 WORLD BANK APPROVES $50.5 MILLION CREDIT FOR NEPAL ROAD PROJECT WASHINGTON (March 15, 1994) - The World Bank announced today tht approval of a $50.5 million credit by the International Development Association (IDA) to Nepal to help finance a six-year road maintenance and rehabilitation project. The project will be cofinanced by the United Kingdom Overseas Development Administration (US$12.4 million), the Swiss Development Cooperation (USS2.8 million), and the United Nations Development Program (USS1 million). With its current limited maintenance capabilities, the Government is able io maintain barely one-fourth of the country's total road network. This results in high vehicle. operating costs that are a constraint on Nepal's economic development. The lending will ami.st Nepal in reducing vehicle operating costs and delays associated with the current state of the country's road system. The loan will help create a more efficient and cost effective road transport administration system, help develop maintenance implementation capacities, and si.1eguard past investments in the road transport sector. Benefits will accrue to the overall :.:.onomy through reductions in transportation costs, including savings in operating and maL ining vehicles. The project will help generate rural employment by adopting labor-inteasive methods and technologies. The project is not likely to have any significant adverse effects on the environment, in that existing road alignments will be followed to the extent technically feasible. The national road network comprises about 8.300 km, including some 3,000 km of paved roads. The credit is on standard IDA terms, with 40 years maturity, including a 10-year grace period.