ADB’s policy-based loan will be used to improve Nepal’s food safety measures and enhance agricultural trade standards


Image: The ADB programme will improve food safety measures in Nepal. Photo: courtesy of Asian Development Bank.

The Asian Development Bank (ADB) has approved $50m in financing for the Government of Nepal to support the reforms to develop agriculture and improve food safety measures.

The policy-based loan will be used to improve food safety measures, enhance agricultural trade standards, and promote agricultural commercialisation in the country.

ADB senior public management economist Navendu Karan said: “Agriculture has a big potential to contribute significantly to Nepal’s growth and development, but the sector remains rooted on subsistence farming and food safety measures are impeding the prospect of trade with other countries.

“ADB’s assistance will help address these issues by making sure that Nepal’s agricultural products and processes are up to international standards.”

Agricultural commercialisation in the country is constrained by the farmers’ limited capacity to prepare bankable business proposals for financing, while the food safety measures are not aligned with international standards, making it difficult to trade agricultural commodities.

ADB’s programme comprises two-tranche, standalone policy-based loan

The ADB’s Food Safety and Agriculture Commercialization Programme, which comprises a two-tranche, standalone policy-based loan, aims to improve food safety and quality monitoring systems in Nepal.

In order to promote agricultural commercialisation, the programme will support the preparation of bankable business plans for selected commodities to widen access for finance and business knowledge for farmers.

Additionally, the programme aims to enhance the institutional capacity of relevant government authorities in a bid to ensure the agriculture sector’s sustainability of progress.

ADB said it will also provide a technical assistance grant of $500,000 to assist implementing agencies to comply with the policy conditions of the program’s second tranche.

In September 2019, ADB approved a $249.8m loan to the Republican State Enterprise Kazvodkhoz (KVK) to help rehabilitate and improve irrigation networks across Kazakhstan.

The loan will help KVK, a state-owned enterprise that deals with water facilities, to improve irrigation networks serving 171,000ha in four provinces including East Kazakhstan, Karaghandy, Kyzylorda, and Zhambyl.