Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The Government of Nepal and the Asian Development Bank (ADB) on Tuesday signed a concessional loan agreement for the second subprogram of the Strengthening Public Finance Management and Devolved Service Delivery Program, aimed at improving fiscal discipline and service delivery across all levels of government.
The agreement was signed at the Ministry of Finance, under which ADB will provide Nepal with a USD 100 million policy-based loan to support reforms in public expenditure management and intergovernmental fiscal systems.
According to the Ministry of Finance, the concessional loan carries a repayment period of 24 years, including an eight-year grace period. The grace period will remain in effect until February 1, 2034. During the grace period, the interest rate will be 1 percent, which will increase to 1.5 percent thereafter.
The loan agreement was signed by Finance Secretary Dr. Ghanshyam Upadhyay on behalf of the Government of Nepal and Arno Kuswa, Country Director of ADB’s Nepal Resident Mission, on behalf of the multilateral lender.
Speaking at the signing ceremony, Joint Secretary Dr. Dhaniram Sharma said the program is designed to strengthen Nepal’s public expenditure and financial management systems, while also improving intergovernmental resource mobilization and fiscal coordination among federal, provincial, and local governments.
Following the signing, ADB Country Director Kuswa and Finance Secretary Dr. Upadhyay reaffirmed their commitment to deepening cooperation and ensuring effective implementation of agreed reforms under the program framework.
The Ministry stated that the program is expected to contribute to more efficient use of public resources, improved budget formulation and expenditure management, stronger fiscal discipline, and enhanced capacity of local governments to deliver public services in a result-oriented manner.
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