Nepal Seeks More Concessions from World Bank during IDA Meeting

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Nepal Seeks More Concessions from World Bank during IDA Meeting

KATHMANDU: The Government of Nepal has initiated lobbying with the World Bank to secure more concessional assistance, anticipating the loss of various concessions once the country upgrades from the status of least developed country in 2026. The country aims to achieve sustainable development goals and secure additional concessional resources for large infrastructure projects. This lobbying effort is taking place at the 21st Replenishment Meeting of the International Development Association (IDA) under the World Bank Group, which began in Kathmandu on Tuesday.

The International Development Association (IDA) is working with donors and borrowing countries to replenish resources that will be used to deliver on global development goals during the ongoing meeting from June 18-21. The World Bank has indicated that IDA will aim to raise the highest amount of resources within a three-year period.

As the host country, Nepal is taking initiatives to secure more concessional resources from IDA. In the opening session on Tuesday, Prime Minister Pushpa Kamal Dahal emphasized that Nepal requires more support to achieve its various goals. Despite integrated efforts for inclusive economic development, there is a shortage of financial resources for sustainable development goals (SDG), nationally determined contributions (NDC), and sustainable infrastructure development due to resource constraints and increasing debt obligations.

The Sustainable Development Goals encompass various socio-economic development targets, while the NDC outlines steps to mitigate the impact of climate change.

Prime Minister Dahal stated that the government's priority is to mobilize private capital, attract foreign investment, boost economic activity, and increase internal revenue, as domestic resources alone are insufficient for these purposes.

As Nepal transitions to a developing country status in 2026, securing concessional loans may become challenging. Therefore, Nepal is emphasizing the need for subsidized loans. "Concessions are very important for an underdeveloped country like Nepal," Prime Minister Dahal remarked.

During the four-day meeting, officials from the Ministry of Finance, Nepal will focus on obtaining more aid and subsidized loans. Nepal's upgrade to a developing country status will be followed by a five-year transition period to bolster its economic standing.

"During this time, Nepal needs more assistance than the concessional loans currently available annually," an official stated, "And we will take the initiative at this meeting."

Nepal will advocate for aid to be allocated to specific programs rather than projects, granting the government more flexibility in implementation. Prime Minister Dahal emphasized the importance of program-based assistance, noting that this approach enhances the ownership and engagement of the beneficiary country with the support of donors.

At the meeting, Axel Van Trotsenberg, senior managing director of the World Bank, noted that IDA acts as a mediator between donor and beneficiary countries to mobilize financial resources. "This meeting will decide how to proceed in a planned manner for the next decade, not just now," he said.

Sangita Shrestha, a businesswoman, highlighted that although Nepal is rich geographically, culturally, and ecologically, it is highly vulnerable to natural disasters and climate change effects. She urged development partners and policymakers to collaborate for the effective mobilization of financial resources for sustainable development in high-risk countries like Nepal. According to the Ministry of Finance, more than 200 representatives from 61 countries, including high-ranking officials like Axel van Trotsenberg, are participating in the meeting.

During the meeting, concessional loans, grant aid, priority areas, policy frameworks, outcome blueprints, and the financial resources required will be discussed with donor countries for the period from July 2025 to June 2028. Officials also mentioned that there is a schedule for on-site visits to nine projects in Nepal related to education, drinking water, reconstruction, energy, climate, and other sectors, supported by the World Bank.


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