The Asian Development Bank (ADB) has released a five-year Country Partnership Strategy (CPS) aimed at supporting the country in achieving a stronger and more inclusive economy.

According to the multilateral development finance institution, improved infrastructure for private sector-led growth, access to devolved serviced, environment sustainability and resilience are at the focal point of the partnership strategy endorsed by its directors on Friday.

Under the new strategy, the bank expects to lend an estimated $500 million to $600 million on average during 2020–2022.

“With the political stability and the federal system of governance in place, Nepal is poised to bring about the desired economic and social transformation,” said Mukhtor Khamudkhanov, Country Director of Asian Development Bank for Nepal.

“The strategy is aligned with the government’s plan of achieving higher economic growth, reducing poverty, and improving people’s lives. Nepal has seen reduced poverty and raised literacy levels in the last decade. Now, moving forward, smooth implementation of federalism, investments in critical physical infrastructure, and creating an environment for private sector investments are critical to further boost growth and reduce poverty.”

Under the strategy, the lending agency aims to support hydropower development and renewable energy, roads and air transport, logistics, and trade facilitation to strengthen domestic, regional, and international connectivity, reduce the costs of production and trade for businesses, and attract private investment.

“The Country Partnership Strategy will help support the development of cities and urban municipalities, quality education and employment-oriented skills development, and increased agricultural productivity and commercialisation to augment rural incomes. These will be targeted to benefit women and disadvantaged social groups,” said the bank.

The bank also expects to assist with policy reforms for devolved service delivery, including subnational public financial management, and sector reforms in agriculture, air transport, and water supply.

According to ADB, the strategy has been launched with consultations with government agencies at the central, provincial, and local levels, as well as with international development partners, civil society, and the private sector.

Since its establishment in 1966, the multilateral lending agency has provided around $6 billion in financial and technical assistance to Nepal. The assistance has been channelled in energy, transport, water supply and urban infrastructure services, agriculture and irrigation, and education.

In 2018, the bank has made commitments to inject new loans and grants amounting to $21.6 billion in the Asia-pacific region.