The government and the World Bank signed two agreements totaling $200 million (Rs23.5 billion) as budgetary support to underpin a programme of critical reforms in Nepal’s financial and energy sectors. The agreement was signed during the World Bank Annual Meeting in Bali Nusa Dua, Indonesia.

Finance Minister of Nepal Yuba Raj Khatiwada reflected on the importance of past and future reforms in the financial sector as a catalyst for economic growth and sound financial governance during the signing ceremony. Similarly, the recent reforms in the energy sector are expected to support the country’s ambitious plans to produce up to 15,000 MW of electricity within the next decade.

The first agreement will finance the Fourth Financial Sector Stability Development Policy Credit with a credit of $100 million (Rs11.7 billion), the press statement of the World Bank stated.

“These two credits will complement and support the priorities of Nepal by helping strengthen the energy and financial sectors by bolstering their institutions, and by reducing vulnerabilities and increasing transparency,” said Qimiao Fan, the World Bank Country Director for Bangladesh, Bhutan and Nepal.

Under the second agreement, the World Bank will provide $100 million (Rs11.7 billion), to support the First Programmatic Energy Sector Development Policy Credit Project (DPC). This project supports key policy, regulatory and institutional measures in the sector, including: improving the financial viability of the Nepal Electricity Authority (NEA); establishing a regulatory framework that is transparent, autonomous, and accountable; encouraging electricity trade; and restructuring NEA to make it easier for the private sector to compete in the sector.

The DPC is linked to the government’s key goal of providing electricity to a hundred percent of the population. This is the first World Bank DPC for Nepal’s energy sector.  

The agreements were signed by Joint Secretary of Ministry of Finance, Shree Krishna Nepal and World Bank Country Director Fan.