RRRSDP - Rural Reconstruction and Rehabilitation Sector Development Program

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Why RRRSDP?

Rural Reconstruction and Rehabilitation Sector Development Program (RRRSDP) will reduce rural poverty in hill, mountain and Terai districts where isolation and hardship are common.

Cost Estimates:

The project investment cost is estimated at $78.4 million, including taxes and duties of $4.6 million. Summary estimates by component are in Table 1

Table 1: Project Investment Plan ( $ million )
Item			Amount^a
A.	Base Cost^b
	1.	Rural Transportation	45.2
	2.	Supplementary Infastructure	17.5
	3.	Community Empowerment	3.2
	4.	Institutional Capacity Development	0.3
	5.	Project Management Services	82
	Sub Total (A)		74.4
B.	Contingencies^c		3.7
C.	Intrest During Implementation		0.3
		Total	78.4
a) Includes taxes and duties of $4.6 million In October 2007 prices b) Physical contingencies computed at 5% for civil works, equipment, and c) vehicles. Price contingencies computed at a foreign price escalator of 0.8% per year, and a domestic price escalator of 5.4% in the first year, 5.1% in the second year, and 5.0% in the following years. Source: Asian Development Bank estimates.

Financing Plan:

ADB has approved a grant of f $50.0 million equivalent from its Special Funds resources to help finance the Project. The grant will finance 63.8% of the Project cost. The provision of grant assistance is justified by the pro-poor orientation of the Project and the country’s tight fiscal position. The Government is to provide $15.7 million equivalent to finance part of civil works (16.5% on rural roads and 31.3% on supplementary infrastructure), 20% on land acquisition and resettlement compensation, 50% on rural road O&M, 100% on project staff salary and taxes and duties. Beneficiaries will provide about $2.7 million on the construction (in kind) and O&M of supplementary infrastructure.

The OPEC Fund for International Development (OFID) will provide a loan of $10.0 million equivalent to jointly finance 29.1% rural road civil works. Administered by ADB, the OFID loan will have a maturity of 20 years including a 5 years grace period, 1% interest charge per year and 1% service charge per year. Table 2 summarizes the financing plan.

Table 2: Financing Plan ( $ million )
Source	Total	%
Asian Development Bank	50.0	63.8
OPEC Fund for International Development	10.0	12.8
Government of Nepal	15.17	20.0
Beneficiaries	2.7	3.4
Total	78.4	100