This loan, with an 8-year grace period and a 24-year repayment period, will support Nepal's fiscal management, expenditure reform, and local government strengthening.
The Government of Nepal and the Asian Development Bank (ADB) have signed a concessional loan agreement for the second phase of the Public Finance Management and Decentralized Service Delivery Strengthening Program. The agreement was signed at a ceremony held at the Ministry of Finance today.
As per the agreement, the Asian Development Bank will provide a policy-based loan of US$100 million to the Government of Nepal for the program.
The total repayment period of the loan will be 24 years, including a grace period of 8 years. The interest rate on this loan, which will have a grace period until February 1, 2034, will be 1 percent during the grace period and 1.5 percent thereafter.
The loan agreement was signed by Finance Secretary Ghanshyam Upadhyay and Country Director of the Nepal Resident Mission, Ano Kushwa, on behalf of the Asian Development Bank.
At the agreement ceremony, Joint Secretary Dr. Dhaniram Sharma said that the objective of this program is to improve Nepal's expenditure and financial management and intergovernmental resource management.
After signing the agreement, Director Ano Kushwa and Finance Secretary Ghanshyam Upadhyay expressed their commitment to continue the cooperation continuously and more effectively.
The Ministry of Finance has stated that this program will contribute to strengthening service delivery through effective utilization of public resources. This is expected to maintain fiscal discipline, improve budget formulation and expenditure management, further strengthen local governments, and make overall development outcomes result-oriented, according to a statement issued by the ministry.
