The World Bank Group has said it would provide up to half-a-billion dollars to finance the reconstruction of Nepal after the devastating earthquakes in April and May killed almost 9,000 people and left many mountain districts of the country in ruins.

Subject to the approval of the Bank’s Board of Executive Directors, the financing will consist of $200 million for housing reconstruction in poor rural areas and another $100 million for the government’s budget and for strengthening the banking system, which has suffered with the economy. An additional $100 to $200 million will be redirected from existing World Bank projects in Nepal and invested in reconstruction efforts. Any reallocated money will be replaced with additional funds.

“The World Bank Group stands with the people of Nepal in their time of need,” said World Bank Group President Jim Yong Kim. “We are working with the Government of Nepal and its international partners to help the country get the resources it needs to build back better. We will do everything possible to help people who suffered from the earthquake, especially the poor, rebuild their homes and livelihoods.”

A Post-Disaster Needs Assessment (PDNA) released last week said Nepal’s recovery needs were $ 6.7 billion, roughly a third of the economy. Early estimates suggest that an additional 3 percent of the population has been pushed into poverty as a direct result of the earthquakes.  This translates into as many as a million more poor people.

“Our financial support targets areas that are critical for the people of Nepal,” said Annette Dixon, World Bank Vice President for the South Asia Region of the World Bank. “Housing was heavily damaged by the earthquakes and we need to get people as quickly as possible out of temporary shelters and into more permanent buildings that can withstand Nepal’s weather conditions. Our budget support will help to get the government more rapidly back on its feet.”

IFC, the World Bank Group’s private sector arm, is making a $50 to 70 million liquidity facility available to commercial bank clients in Nepal so they can support Small and Medium-sized Enterprises and boost trade lines. IFC is also trying to accelerate agreements with market leaders to increase production of galvanized corrugated iron (CGI) sheets, the largest single need for new housing in the reconstruction phase