Nepal and World Bank Sign $100 M Agreement to Enhance Local Road Networks

This funding will improve connectivity, efficiency, resilience, and safety in Nepal’s provincial and local road networks and enhance the government's capacity to manage these infrastructures.

The Government of Nepal and the World Bank have formalized a $100 million concessional loan agreement through the International Development Association (IDA) to support the Provincial and Local Roads Improvement Program (PLRIP)-Phase 1. This funding will improve connectivity, efficiency, resilience, and safety in Nepal's provincial and local road networks and enhance the government's capacity to manage these infrastructures.

The PLRIP-Phase 1 aims to construct and maintain approximately 3,000 kilometers of all-weather roads and bridges across Sudurpashchim, Karnali, and Madhesh provinces, benefiting around one million people. Additionally, the program will build the institutional, managerial, and technical capacities of provincial and local governments for planning, designing, constructing, and maintaining road and bridge infrastructure.

The financing agreement was signed by Finance Secretary Dr. Ram Prasad Ghimire on behalf of the Government of Nepal and World Bank Country Director for Maldives, Nepal, and Sri Lanka, Mr. David Sislen. A project agreement was also signed by the Ministry of Urban Development, participating provinces, and the World Bank.

Joint Secretary of the Ministry of Finance, Mr. Shreekrishna Nepal, highlighted the program's impact: "This initiative will enhance rural connectivity, improve access to services and markets, and unlock Nepal's economic potential, reducing travel time and costs for Nepalis."

Recognizing the challenges of transport connectivity and the need for substantial investment, the Government of Nepal sees the PLRIP as essential for supporting provincial and local governments in adapting to decentralized governance. The first phase of this three-phase program will focus on three of Nepal's seven provinces and will be scaled up in future phases.

David Sislen, World Bank Country Director, noted, "The program supports Nepal's federalism agenda by empowering provincial and local governments, fostering inter-governmental coordination in the transport sector, and improving infrastructure and services for Nepalis."

The program will introduce several best practices, including five-year performance-based maintenance contracts, routine maintenance by self-help groups, community-led complementary infrastructure projects, and innovative rural transport solutions. An online monitoring and management system will also be implemented to oversee the program's progress.