ADB Supports Nepal's Road Safety and Connectivity with $300 Million Loan

The Asian Development Bank (ADB) has approved a $300 million loan to enhance the transport connectivity of the Kakarbhitta–Laukahi road in Nepal, linking it to international trade routes, particularly India and Bangladesh. This project, named as South Asia Subregional Economic Cooperation Highway Enhancement Project, aims to upgrade 95 kilometers of the road from two lanes to a four-lane dual roadway, incorporating climate and disaster-resilient design features. Additionally, ADB will provide a $750,000 technical assistance grant to develop climate change guidelines and maintenance resources for the road. 

Siddhartha Bank Secures $55 Million Investment from IFC to Support SMEs in Nepal

The International Finance Corporation (IFC) has made a $55 million investment in Siddhartha Bank to support the growth of small and medium-sized enterprises (SMEs) in Nepal. The investment aims to provide access to finance for SMEs, enabling them to expand their operations, create 9,000 to 15,000  job opportunities in the next 3 years, and contribute to economic development. 

Nepal's Provincial Economies to Witness Downturn in Current Fiscal Year

The economic growth of all seven provinces in Nepal is projected to decline this year. The government's statistics reveal that the growth rate for each province is expected to be lower than the previous year. According to the provincial accounting report published by the National Statistics Office, the projected economic growth rate for Bagmati Province is 1.04 percent, which is the lowest among all provinces. On the other hand, Gandaki Province is expected to have the highest economic growth rate at 3.3 percent. The report also indicates that Lumbini Province is projected to have a growth rate of 2.1 percent, Koshi Province at 2 percent, Karnali Province at 1.9 percent, Sudurpaschim Province at 1.8 percent, and Madhesh Province at 1.7 percent.

Nepal to Export 40 MW of Electricity to Bangladesh in New Agreement

Bangladesh has agreed to purchase 40 MW of electricity from Nepal. The decision was made during a bilateral meeting between the two countries, where they discussed various areas of cooperation, including energy. The Ministry of Energy, Water Resources, and Irrigation spokesperson, Madhu Prasad Bhetuwal, confirmed that the Nepal Electricity Authority, NTPC Vidyut Vyapar Nigam Limited (India), and Bangladesh Power Development Board will sign a power sale agreement to enable the export of up to 40 megawatts of electricity from Nepal to Bangladesh. This agreement builds upon a previous understanding reached in August of the previous year, which outlined a trial period for exporting 40 megawatts of electricity from Nepal to Bangladesh. 

Auction of NPR 24.74 Billion Treasury Bills by NRB 

The Nepal Rastra Bank (NRB) is set to conduct an auction of Treasury Bills worth NPR 24.74 billion. The auction aims to raise funds for the government through short-term borrowing. The NRB's initiative is part of its ongoing efforts to manage liquidity in the market and maintain monetary stability in Nepal.

Nepal Implements MDMS to Safeguard Consumers and Revenue

The Nepal Telecommunication Authority (NTA) has implemented the Mobile Device Management System (MDMS) to regulate the use of mobile phones in Nepal and control the entry of unauthorized devices. It was set to be implemented earlier but was postponed following PM Prachanda’s directive. 

Over the past three months, approximately 1.5 million mobile devices have entered Nepal through official channels, while 3.1 million devices have entered through the grey market. An additional 42,000 devices have entered through personal channels, accounting for a small percentage of total mobile phones entering the country. The Nepal Mobile Distributors' Association (NMDA) estimates that rampant smuggling of mobile phones has resulted in an annual revenue loss of two billion rupees for the government. The MDMS, introduced as a high-tech solution, combats unauthorized mobile sales and distribution, bringing them within the revenue framework. By implementing the MDMS, the government aims to address concerns related to foreign exchange reserves and revenue decline caused by illegally imported mobile phones.

Private Sector Takes Center Stage in Nepal's Economy

A new report by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the International Finance Corporation (IFC) reveals that Nepal's private sector plays a significant role in the country's  Gross Domestic Product (GDP), with services and agriculture leading the way. The report, titled 'State of Private Sector in Nepal: Contributions and Constraints,' analyzes data from 2011-12 to 2020-21 to assess the private sector's contribution and current context. The study estimates that the private sector, including households, contributes 81.55% to Nepal's GDP across 18 sub-sectors. The number of private sector establishments has grown substantially over the past three decades, employing 85.6% of the total labor force. The agriculture and trade sectors heavily rely on the private sector for employment and growth. However, the report identifies areas for improvement, such as streamlining bureaucracy, promoting transparency, enhancing transportation services, and reducing tariffs on essential imports.