Nepal raises Rs 26.46 billion external loans in six months

Published On: February 15, 2023 08:45 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Feb 15: Nepal received foreign loans worth Rs 26.46 billion, while mobilizing internal loans of Rs 30 billion in the first six months of the current fiscal year.

The half-yearly review of the budget for the fiscal year 2022/23 unveiled by the Ministry of Finance (MoF) on Sunday shows that the country sustained an additional loan burden of more than Rs 56 billion as of mid-January in the current fiscal year.  

Similarly, the government received foreign grants worth Rs 8.12 billion during the review period. The MoF says discussions are being held with more than two dozen different development partners for the mobilization of development assistance for the current fiscal year and upcoming fiscal year. 

The government has stepped up effortS to take Rs 39 billion concessional loan from the Asian Development Bank (ADB) to construct Kakadbhitta-Laukahi road section. Discussion with the World Bank (WB)  to get this loan is underway, according to the MoF.  

Similarly, the government is preparing to take Rs 13 billion subsidized loan each for the School Sector Reform Programme and Quality Health System Project from the World Bank. According to the MoF, the project document has already been prepared for this purpose. 

The review report also states that a subsidized loan for budgetary assistance of around Rs 13 billion will be taken from the WB under Nepal Fiscal Reforms DPC-2 Programme. Likewise, preparation is underway to take budgetary assistance worth around Rs 13 billion also for the government’s 'Finance for Growth' program. 

The ADB has already given initial consent for the implementation of the 635-MW Dudh Koshi Storage Hydroelectric Project. "The ADB has hinted to provide around Rs 75.40 billion subsidized loan for the implementation of the project. Coordination is underway to collect investment from other donor agencies in the project," mentioned the review report. 

Similarly, ground work is started to get a subsidized loan worth US $500 million (around Rs 65 billion) to construct the 1061 MW Upper Arun Reservoir-based Hydropower Project. 

In addition to this, the government is coordinating with other probable investors for the project to manage remaining funds required to undertake the project.     

For the implementation of the Customs Reform and Modernization Strategies and Action Plan, the government is in process of receiving a soft loan of around Rs 6.50 billion from the ADB.     

Moreover, the government is preparing to get a soft loan of worth Rs 13 billion from the ADB to implement the public finance management and service delivery reform programme.     

The MoF says discussions are underway to secure around Rs 14.40 billion grants from the British Government to undertake the Local Infrastructure Support Programme.     

Besides, Nepal will be receiving a loan of  Rs 1.19 billion from the ADB for the implementation of the Rural Roads Improvement Programme.     

Similarly, the process is underway to fetch 40 million euros from the European Union for the implementation of the School Sector Reform Project and projects in other areas. The government has also urged the EU to provide Rs 15.06 million grants for the support of the agricultural and rural development endeavors.     

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