World Bank Approves $300M for Bhutan’s Jobs, Trade, and Connectivity Goals

The newly adopted CPF is closely aligned with the priorities outlined in the Royal Government of Bhutan’s 13th Five-Year Plan, reinforcing the nation’s vision to reach upper-middle-income status by 2029.

The World Bank’s Board of Executive Directors has endorsed a transformative development blueprint for Bhutan with the approval of a new Country Partnership Framework (CPF) for Fiscal Years 2025–2029 and $300 million in financing to enhance regional trade and connectivity. This dual initiative aims to accelerate inclusive economic growth, create sustainable job opportunities, and build climate-resilient infrastructure while preserving Bhutan’s rich cultural and ecological heritage.

Supporting Bhutan’s 13th Five-Year Plan

The newly adopted CPF is closely aligned with the priorities outlined in the Royal Government of Bhutan’s 13th Five-Year Plan, reinforcing the nation’s vision to reach upper-middle-income status by 2029. Central to this framework is the commitment to creating more and better jobs, especially for vulnerable and marginalized groups including women, youth, and disadvantaged communities. The strategy embraces Bhutan’s development philosophy of Gross National Happiness, aiming for equitable and holistic progress.

“Good jobs are the cornerstone of development. The central focus of the new CPF is helping to create more and better jobs at a time when the country is facing high levels of youth unemployment and outward migration,” said Cecile Fruman, Acting World Bank Country Director for Bhutan.

Mobilizing Private Sector Investment and Reform

The CPF emphasizes unlocking the power of the private sector to catalyze economic transformation. It seeks to improve Bhutan’s investment climate in job-rich sectors such as:

• Agribusiness and renewable natural resources

• Tourism, creative and digital industries

• Micro, small, and medium enterprises (MSMEs)

By enhancing access to finance, digital payments systems, and infrastructure, the CPF will strengthen market ecosystems and encourage innovation-led growth.

“Unlocking the potential of the private sector...is essential for driving job creation and economic progress in Bhutan,” stated Imad N. Fakhoury, Regional Director for South Asia at the International Finance Corporation (IFC). “Through the CPF, we aim to mobilize private capital, foster public-private partnerships, and attract foreign direct investment to empower youth and women and enhance resilience.”

Enhancing Human Capital and Climate Resilience

The CPF also puts a strong emphasis on human development, supporting improvements in healthcare, education, and skills training as prerequisites for meaningful employment.

At the same time, recognizing Bhutan’s status as the world’s first carbon-negative country and its vulnerability to climate change, the CPF prioritizes:

• Climate-resilient infrastructure

• Renewable energy expansion, especially hydropower

• Urban infrastructure improvements

• Enhanced energy access

This dual focus ensures Bhutan’s development remains both environmentally sustainable and economically viable.

$300 Million for Regional Connectivity under ACCESS Phase 2

In parallel with the CPF launch, the World Bank has also approved $300 million in financing under the Accelerating Transport and Trade Connectivity in Eastern South Asia (ACCESS) Phase 2 program. This investment will fund Bhutan-specific efforts to:

• Improve regional trade and transport infrastructure

• Enhance digital connectivity

• Support trade policy and institutional reforms

Notable components of the ACCESS Phase 2 project in Bhutan include:

• Implementation of a National Single Window system to streamline trade processes

• Construction of the Gelephu–Tareythang Road, a vital corridor in the Southern East-West Highway

• Reduction of import/export clearance times by 25%

• Travel time reduction along the project corridor by 70%

Of the $300 million, $154 million is provided as grants, reducing the financial burden on the government while still enabling critical infrastructure development.

Wide-Ranging Consultations and Future Outlook

The CPF is the result of extensive stakeholder consultations conducted across Bhutan, engaging voices from government, civil society, academia, the private sector, media, and international development partners. This participatory approach ensures that the framework reflects the aspirations and needs of the Bhutanese people.

With this ambitious framework and associated financing, the World Bank Group is reaffirming its commitment to support Bhutan’s journey towards inclusive prosperity, regional integration, and climate resilience. The partnership not only addresses the pressing challenges of unemployment, climate risks, and connectivity gaps, but also lays the foundation for a sustainable and empowered future.