Kathmandu: The Asian Development Bank (ADB) will provide Nepal with a USD 100 million concessional loan to support the implementation of fiscal federalism, strengthen public financial management, and improve budgetary systems at the federal, provincial, and local levels.
The loan is being provided under Subprogram–2 of ADB’s Strengthening Public Financial Management and Devolved Service Delivery Programme. An agreement was signed on Wednesday at the Ministry of Finance by Finance Secretary Dr Ghanashyam Upadhyay and ADB Country Director for Nepal, Arnaud Cauchois.
The policy-based loan will be provided as budgetary support with a repayment period of 24 years, including an eight-year grace period. The interest rate will be one percent until February 1, 2034, and will increase to 1.5 percent thereafter.
Speaking at the programme, Finance Secretary Dr Upadhyay said strengthening public financial management and service delivery is closely linked to effective federalism. He said the programme will improve budget formulation, implementation, and results-based management across all three levels of government.
ADB Country Director Cauchois said the loan aims to improve fiscal governance and strengthen fiscal federalism by enhancing fiscal sustainability, increasing revenue generation, reducing fiscal risks, and improving the management of public enterprises.
Officials from the Ministry of Finance and the Asian Development Bank attended the agreement signing ceremony.
