The Asian Development Bank (ADB) is set to extend USD 100 million in concessional loan assistance to Nepal to support fiscal federalism, enhance public financial management, and improve budgetary systems across federal, provincial, and local levels.
The agreement was signed on Wednesday at the Ministry of Finance by Finance Secretary Dr. Ghanashyam Upadhyay and ADB Country Director for Nepal, Arnaud Cauchois, under Subprogram–2 of ADB’s Strengthening Public Financial Management and Devolved Service Delivery Programme.
The policy-based loan will serve 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 1.5 percent thereafter.
Dr. Upadhyay highlighted that strengthening financial management and service delivery is crucial for federalism, adding that the programme will enhance budget formulation, implementation, and results-based management at all three levels of government. It is also expected to improve public procurement, promote fiscal discipline, increase revenue, build institutional capacity, and empower local governments, advancing inclusive and results-oriented development.
ADB Country Director Cauchois noted that the concessional loan aims to strengthen fiscal governance and sustainability, expand fiscal space through expenditure rationalization, increase revenue, reduce fiscal risks, and improve management of public enterprises.
The signing ceremony was attended by officials from the Ministry of Finance and ADB representatives.
