Nepal and ADB Sign $100 Million Loan Agreement for Public Financial Management Reform

KATHMANDU. A concessional loan agreement has been signed between the Government of Nepal and the Asian Development Bank (ADB) for Subprogram 2 of the Strengthening Public Financial Management and Devolved Service Delivery Program. 

The signing took place during a ceremony organized at the Ministry of Finance on Wednesday. For this program, the Asian Development Bank has provided policy-based loan assistance worth 100 million US dollars to the Government of Nepal.

The repayment period of the presented loan assistance will be 24 years, including a grace period of 8 years. For this loan, which has a grace period until February 1, 2034, the interest rate will be 1 percent during the grace period and 1.5 percent thereafter. Finance Secretary Dr. Ghanshyam Upadhyaya and the Director of the Nepal Resident Mission, Aano kushwa, signed the loan agreement on behalf of the Asian Development Bank.

The ceremony commenced with remarks from Joint Secretary Dr. Dhani Ram Sharma. After the signing, Director Aano kushwa and Finance Secretary Dr. Ghanshyam Upadhyaya delivered addresses, expressing their commitment to advancing the cooperation in a continuous and more effective manner.

This program will contribute to strengthening service delivery by effectively utilizing public resources for Nepal’s public financial management. 

It is expected to maintain fiscal discipline, improve budget formulation and expenditure management, further empower local governments, and make overall development results more outcome-oriented.