Nepal Early Warning Update

Asian Development Bank Business Opportunities: Volume No. 6, May 2008

Monday, June 30, 2008

This Bulletin is a periodic electronic update from the Bank Information Center (BIC) South Asia office to inform civil society about Asian Development Bank (ADB) projects in Nepal before they are approved by the Board of Directors of the ADB. This Update covers project information, organized by sectors. The information is compiled directly from ADB’s Business Opportunities.

For feedback on the Early Warning Update or to subscribe, please contact:
Bank Information Center, Phone: +1-202-737-7752; Email: southasia@bicusa.org; Web: www.bicusa.org

For more information on specific projects, please contact the following at the ADB:
The Project Officer (contact details listed against each project). When emailing, also copy to: disclosure@adb.org. You may also contact the ADB Public Information and Disclosure Unit [2] (See: http://www.adb.org/Disclosure/contact.asp).

About Business Opportunities (BOp)  

Business Opportunities (BOp) identifies potential projects that are under consideration for ADB financing.  The BOp listings do not guarantee that financing will be approved for particular projects.  However, BOp listings serve as important tools for monitoring and follow up of proposed projects.  These, along with your country’s Country Partnership Strategy (CPS), work as early warnings on the projects that your government and the Bank are considering for funding. Advocacy and campaigning experience around the world on Bank projects indicates that the earlier civil society gets involved on proposed projects, the greater the likelihood for impacting them.  Proposed projects are listed until the point of ADB Board approval; the remaining are dropped from the list.  BOp listings are prepared after CPS approval and during the early phases of Project Preparation. For better understanding of this process, the Bank’s Project Cycle is summarized below.

Project Cycle (ADB website for complete project cycle)

ADB’s Project Cycle

Project Identification/Preparation: ADB often provides grants called project/program preparatory technical assistance (PPTA) to help the government identify and prepare feasible projects. The summary is made available in the form of a project profile or project information document (PID).

During the early stage of the PPTA, an initial poverty and social assessment is conducted to identify people who may be beneficially or adversely affected. A technical assistance report is prepared as a recommendation for ADB to finance a technical assistance project.

If the project requires resettlement of people or might adversely impact the environment, or indigenous peoples, certain safeguard assessments are prepared during this stage. The results of these assessments are to be made available to affected people.  For more information on community rights under ADB safeguards and international best practices, see comparative matrices of MDB safeguard policies on BIC's website.

Project Examination: ADB examines project feasibility, first through a fact-finding mission and then through an appraisal mission. The fact-finding mission examines the project's technical, financial, economic, environmental, marketing, and management aspects and potential social impact. Detailed project risks and sensitivity analyses are carried out to assess viability of the proposed project and loan terms are discussed.

Following this, the Appraisal Mission conducts further field study, analyses and consultation, as required. The mission then prepares a loan proposal report and draws up a draft loan agreement for negotiation. After appraisal, the draft loan agreement and draft project proposal is submitted for review. Government is then called for negotiation with ADB. After negotiations with the government, the loan proposal is submitted to Board of Directors for Approval, through its Report and Recommendation of the President (RRP).

After Board approval, the document is sent to the borrowing country's Government for cabinet authorization following which the loan agreement is signed. The loan takes effect once certain conditions are met. The requirements and deadline for loan effectiveness are stipulated in the loan agreement.

ADB-assisted projects are implemented by the executing agency according to the agreed schedule and procedures as detailed out in the project administration memorandum. Implementation time generally ranges from two to five years but depends on the type and nature of the project. ADB's review missions assess the progress of project implementation by visiting it at least twice a year throughout the implementation period.

If a project has significant environmental or social issues, ADB will often require the borrower to submit regular monitoring reports, in addition to progress reports. Information on the project's implementation progress and status of development objectives and loan covenants is added to the project information document during this implementation phase.

For more information, refer to: Unpacking the ADB: A Guide to Understanding the Asian Development Bank

Commonly Used BOp Acronyms

TA:      Technical Assistance

AOTA:  Advisory and Operational Technical Assistance Loans

PPTA:  Project Preparatory Technical Assistance

RETA:  Regional Technical Assistance

EIA:     Environmental Impact Assessment

IEE:     Initial Environmental Examination

   N:     New Project

   R:     Revised (italic text indicates change from previous month)

ADB Environmental Categorization

Category “A” Projects: Projects having severe environmental impacts are categorized as “A”. An EIA is required.

Category “B” Projects: Projects having some adverse environmental impacts are categorized as “B”. An IEE is required in order to determine whether an EIA also needs to be done. If not, then the IEE is the final environment document.

Category “C” Projects: Projects havening no environmental impacts are categorized as “C”. No IEE or EIA is required but environmental considerations are still reviewed.

Category “F1” Projects: Projects involving a financial intermediary or equity investment are classified as “F1”. The financial intermediary will apply an environmental management system if environmental impacts are expected.

Current Business Opportunities for Nepal

Energy
Project Name	Transmission and Distribution Project
Project Type and ID	PPTA: NEP 42119-01
Executing Agency	Nepal Electricity Authority
Grant Amount (US$ '000)	150.00
Date of First Listing	07 April 2008
Objectives and Scope	The SSTA will facilitate the preparation of transmission and distribution expansion and reinforcement projects that also address capacity development program to support physical investments.
Environmental Assessment	To Be Determined
Project Processing Stage	Approved by the Bank : 21 April 2008
Project Officer	Neside T. Anvaripour (632-6468); Energy Division, SARD; ntasanvaripour@adb.org

Law, Economic Management, and Public Policy
Project Name	Strengthening Capacity for Managing for Development Results
Project Type and ID	AOTA: (N) NEP 39476-01
Executing Agency	To Be Determined
Grant Amount (US$ '000)	750.00
Date of First Listing	07 May 2008
Objectives and Scope	Impact: Effectiveness of development programs enhanced with better achievement of results.  The TA will (i) develop sector specific results frameworks and business plans; (ii) support MfDR capacity development including linkage between planning and budgeting processes; (iii) strengthen monitoring and evaluation system; and (iv) build on the achievements of TA4765 and RETA 6306 in the process of institutionalizing MfDR . The TA will be implemented over two years (2009 -2010).
Environmental Assessment	To Be Determined
Project Processing Stage	Beginning of Fact Finding Mission : June 2008
Project Officer	Surya P. Shrestha (632-5515), Nepal Resident Mission; sshrestha@adb.org

The Bank Information Center (BIC) partners with civil society in developing and transition countries to influence the World Bank and other international financial institutions (IFIs) to promote social and economic justice and ecological sustainability. BIC is an independent, non-profit, non-governmental organization that advocates for the protection of rights, participation, transparency, and public accountability in the governance and operations of the World Bank, regional development banks, and IMF. For more information about BIC, see www.bicusa.org.