The Asian Development Bank (ADB) has given the green light for a concessional loan of $100 million (equivalent to 13.29 billion Nepalese rupees) aimed at bolstering Nepal’s financial management.
This substantial concessional loan is intended to promote the strengthening of financial management and decentralization efforts in the country. According to ADB, these funds can be allocated to various aspects of public finance management, debt management, and national planning management.
Chandan Sapkota, a Management Economist, highlighted the positive impact of ADB’s concessional loans on Nepal’s capital spending capacity. He stated, “This ADB program is expected to boost both the quantity and quality of capital expenditure, enhance the resilience of public enterprises against financial risks, foster financial transparency and efficiency through digitization, mobilize more resources from development financial institutions, and facilitate gender and climate-responsive project implementation.”
ADB has been actively assisting Nepal in improving its expenditure and debt management practices for an extended period. This comprehensive program encompasses the approval of financial risk and strategy reports and their subsequent implementation, increased transparency in debt management, execution of annual debt plans, governance and management enhancements in public institutions, and the implementation of a medium-term public financial management reform strategy.
Rachana Shrestha, an ADB public management expert, emphasized the program’s role in institutionalizing and operating public services, aligning with the constitutional framework that strengthens financial federalism. She added, “It will play a supportive role in strengthening local governance, delivering robust services, and driving policy reforms.”
These initiatives will empower municipalities to revise and update property tax rates, boost revenue generation, implement gender and climate-responsive medium-term spending frameworks, and enhance the management of public investments.
