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Statement delivered by UNDP Country Director Ms. Anne-Isabelle Degryse-Blateau on the Interaction Programme on Financing Policy Document, 5 February 2010

February 05, 2010



Honourable Vice Chairman of the National Planning Commission, Dr. Yubaraj Khatiwada
Distinguished Government Officials,
Public and Private sector specialists
Ladies and Gentlemen
We are here today to get feedback on a potentially very important policy document the ?Draft Policy Document for Financing Infrastructure Public Private Partnership projects in Nepal?, to move one step further in the promotion of Public Private Partnerships .
Public-Private Partnerships have real potential in this country for both accelerating the pace and delivery of and improving the quality of basic services, to speeding up urgent investments , creating new job opportunities and dynamizing the economy. PPP still a new field. For close to 7 years MLD, FNCCI and UNDP have been working on raising awareness and promoting both the legal and policy framework as wells as practical training and demonstrations on the ground at municipality level.
Some major achievement so far have been the promulgation of the first ever PPP Policy, followed by the local PPP policy, resulting amendments in the Local self government Act, a PP legal Source book which captures all the legislation related to PP, the PPP Guidelines. On the ground in 14 municipalities both local authorities and community organizations have been sensitized on the potential benefits and use of PPP and around 60 demonstration mall scale projects under the PPP model, mainly in water, sanitation, solid waste management, transport management and renewable energy have been conducted. The results show that PPP can indeed be a very beneficial option to basic service provisions.
While these small scale initiatives are all valuable, there is a need to look at the bigger scale, from medium to large projects. The current Third Year Interim Plan of the Government of Nepal has given priority to increasing the level of investment in infrastructure projects such as roads, communications, health, education, drinking water, sanitation, to generating 10,000MW of power within 10 years, to establishing a quick trajectory of double digit economic growth, and to triple income levels within 10 years, all which calls for greater private sector participation unleashing entrepreneurship for which there is still interest from the private sector in Nepal.
But much remains to be done at all levels policy, financing, political decisions, for the government and the private sectors to take full advantage of the PPP modality and to harnessing private capital and managerial expertise, Some of the current work which is ongoing with MLD, NPC, sectoral ministries with the support of key donors such as ADB, AusAid and UNDP/UNV to further that agenda are :
? The Preparation of a White Paper through National Planning Commission to give support and direction to PPP activities
? The formulation of sector wise PPP strategies for major sectors
? A feasibility study to establish a PPP mechanism to support various Ministries in PPP identification, PPP project formulation and PPP procurement
But at this stage, a major obstacle remains the access to funding, especially for smaller and medium scale projects. Right now access to funding is based on the provision of collaterals, which clearly limits the scope for new and innovative entrepreneurship. A proper financing policy can ease fund generation for all sizes of projects which all have a role to play both at the central and local levels to enhance access to basic services, stimulate the economy and create jobs and ultimately contribute to the achievement of the MDGs.
As such we look forward to hearing form all of you, from the government, banking sector, other private sector, NGOs and other key stakeholders on how to improve the proposed draft to arrive quickly to an effective financing policy which can become catalytic to the expansion of PPP.
Thank-you.