Poverty Alleviation Fund II

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The Second Poverty Alleviation Fund Project (PAF) will assist Government of Nepal (GoN) in implementing a significant scaling up of the PAF program. The Project Development Objective (PDO) is to improve living conditions, livelihoods and empowerment among the rural poor, with particular attention to groups that have traditionally been excluded by reasons of gender, ethnicity, caste and location. This is to be achieved through: (a) investing in community selected and managed sub-projects that create access to basic socioeconomic infrastructure and services, increase assets, generate employment and expand income-generating opportunities in poor villages; (b) enhancing the capacity of local bodies, particularly the Village Development Committees (VDCs), to provide better services for poor and socially excluded groups; and (c) improving government efforts to better coordinate support targeted towards poor and excluded groups. Given the rapid and successful implementation under the original PAF project, PAF II will maintain the existing design features, activities and inputs, under the following five components: (a) Small-Scale Village and Community Infrastructure, whereby small investments in infrastructure and services can make an important difference to poor communities; (b) Income Generating Sub-projects by which matching grants will be provided to self-selected groups of poor and excluded people for income-generation activities, based on objective criteria including ethnicity, caste, gender and poverty levels; (c) Innovation and Special Programs to continue to support proposals meriting special consideration owing to exceptional needs in a given context, or demonstrating innovative ways to improve livelihoods development and reach targeted groups; (d) Capacity Building which includes five sub-components: (i) Social Mobilization of Community Groups; (ii) Capacity Building for Local Bodies; (iii) Capacity Building for Target Groups Engaged in Income-Generating Activities; (iv) Support to Rural and Community Finance; (v) Information, Monitoring and Evaluation; and (e) Administration of PAF II which will continue to finance the operating costs of the PAF, including staff costs and other operating expenses.