The CPN-UML and the Nepali Communist Party (NCP) have signed an agreement to jointly form and run provincial governments, outlining how leadership will be shared across the country's seven provinces.

The agreement, signed on Saturday by UML chairman KP Sharma Oli and NCP coordinator Pushpa Kamal Dahal, commits the two parties to cooperate in the provincial assemblies and establish coalition governments.

Under the deal, the UML, the largest communist party in the country, will lead the provincial governments in Koshi, Bagmati and Lumbini, while the NCP will head the governments in Karnali and Sudurpashchim.

In Madhesh and Gandaki, however, the two parties have agreed to consult with other political parties represented in the Provincial Assemblies before deciding which party will lead the government and how power will be shared.

According to the agreement, the coalition aims to address problems that surfaced during the provincial budget-making process, including disputes in the provincial assemblies, irregularities in budget allocation and unhealthy political competition.

The two parties said the agreement is intended to promote political stability, strengthen good governance, advance prosperity and accelerate provincial development through closer cooperation in the provinces.