World Bank Group's new Country Partnership Framework prioritises jobs and resilience

The World Bank’s Board of Executive Directors discussed the new 7-year Country Partnership Framework (CPF) for Nepal on May 29, 2025. The CPF focuses on the fundamentals of job creation and building resilience to natural disasters, including those linked to climate change.

“Creating jobs is not just at the heart of our mission, it is also the lifeline that can drive Nepal’s sustainable and resilient growth,” said World Bank Country Division Director for Maldives, Nepal, and Sri Lanka David Sislen. “The CPF builds on more than 60 years of partnership between the World Bank Group and Nepal and will leverage development partner collaboration and private sector solutions to drive growth, job creation, and investments.”

Under the CPF, the World Bank Group aims to make available about $2.7 billion to achieve the CPF’s outcomes of helping create more and better jobs, strengthening connectivity and access to services, and enhancing resilience to natural disasters and climate risks.

In the immediate term, the World Bank Group will prioritize policy reform for growth, tourism, digital connectivity, and integrated urban development as engines of growth and job creation.

This will include creating a more investment-friendly environment with reforms that enable private sector-driven growth and investment; enhancing digital connectivity and access to digital government services for better productivity, governance, and service delivery; and improving the competitiveness and services of urban centers like the Kathmandu Valley and secondary cities to unlock their potential as tourist and investment destinations.

“We support Nepal in creating more and better jobs, bolstering disaster preparedness, and contributing to a sustainable future by mobilising domestic and international private capital, promoting public-private partnerships, and enhancing institutional capacity,” said regional director for South Asia at IFC Imad N Fakhoury. "The World Bank Group’s Country Partnership Framework will guide our efforts in advancing reforms that will unlock private sector investment and strengthen the business environment to make a meaningful difference in the lives of the people of Nepal."

As a cross-cutting priority, the World Bank Group will help strengthen the accountability and effectiveness of public sector institutions to improve the public sector’s capacity to deliver results for Nepal and its people.

“MIGA is committed to supporting Nepal’s development goals by providing political risk insurance and leveraging other guarantee instruments through the World Bank Group Guarantee Platform,” said director for Economics and Sustainability of MIGA Sebnem Erol Madan. “By mitigating investment risks, MIGA aims to attract private sector investments that are crucial for creating jobs and strengthening economic resilience," Madan said, adding that through the partnership with the World Bank and IFC under the new Country Partnership Framework, they aim to support Nepal to harness its assets and build a more sustainable and prosperous future.

The CPF is informed by a comprehensive analytical and evaluation program, broad-based consultations with stakeholders across all seven provinces, and the government's 16th Plan, which lays out its national development priorities.

World Bank to help scale up renewable energy options in Nepal

The World Bank today approved Strategic Climate Fund (SCF) Grant in the amount of $5.61 million and SCF Loan in the amount of $2 million to help Nepal diversify its energy sources to renewable. The SCF grant and credit support the private sector-led Mini-Grid Energy Access Project, which aims at mobilising energy-service companies in selected regions of the country to increase capacity of renewable energy mini-grids.
"One component of the project will provide credit facility to the private sector to support renewable mini-grid sub-projects, and help this sector prosper and expand,” said World Bank senior energy specialist and task team leader of the Project Subodh Adhikari. "The second component will provide technical assistance to the mini-grid sector, energy-service companies and partner banks to ensure smooth and sustainable implementation," he added.
The Project is aligned to the efforts of the government to address barriers to private sector participation in the renewable energy mini-grid sector. The Project will aim to address these barriers by successfully demonstrating new approaches that will promote public-private partnerships (PPPs). Private entities and cooperatives will be mobilised to provide electricity services to rural areas as 'energy service companies' (ESCOs). These specialised ESCOs will crowd-in the necessary technical expertise and financing capacity to develop, build, own and operate renewable mini-grid projects. They will have access to better credit terms and stronger project development support through the Project.
“This Project will tap into the vast business opportunities and technical potential for the private sector to provide more efficient and sustainable energy services in Nepal,” said World Bank country manager for Nepal Faris Hadad-Zervos. "It is directly linked to the Nepal government’s effort for greater private sector management and commercial financing through public-private partnerships, and the World Bank’s mission of maximizing all financial opportunities for development,” he added.
The Project aims at improving the overall energy supply situation in Nepal by promoting renewable energy solutions, including the opportunities to capture private sector efficiencies through PPPs. This is consistent with the World Bank Nepal’s Country Partnership Framework (CPF) that has identified unavailability of energy supply to be one of the major obstacles in investment, productivity, and livelihood opportunities. The Project will introduce conditions to gradually shift from subsidised model to a commercial business model in mini-grids, pushing for a vibrant and long-term energy market to combat it.
While enhancing the market, the Project ultimately aims at supporting rural residential and nonresidential customers, who will gain access to new or improved energy services in rural areas through renewable energy mini-grids.

World Bank approves $100mn to help deepen financial sector reforms

Nepal’s quest to secure a stable path to federalism and an inclusive and prosperous future found strong support today when the World Bank Group’s Board of Executive Directors discussed a new Country Partnership Framework (CPF) for Nepal for the next five years.
The Board also approved a fourth Financial Sector Stability Development Policy Credit (DPC4) of $100 million to help Nepal continue to deepen its medium-term reform programme in the financial sector.
Nepal is undergoing a historic transition, the World Bank press note reads, adding that the new Consitution adopted in 2015 defines Nepal as a democratic, decentralised, federal and secular republic. "The country’s 2017 elections at the federal, provincial and local levels resulted in a super majority government for the first time in its parliamentary history." Welcoming the prospects of stability, the World Bank Group – in the Country Partnership Framework – pledges its support to strengthen institutions that are critical to the effective implementation of federalism, as well as innovative pathways to faster, equitable growth and accountable service delivery.
“Nepal’s transition to federalism unlocks opportunities for all citizens to participate in its development,” said the World Bank country director for Bangladesh, Bhutan and Nepal Qimiao Fan. "This represents a window of opportunity for the country to further reduce poverty, increase the income of the bottom 40 per cent, and pursue its ambitious agenda of inclusive growth and accountable service delivery,” he added.
The Country Partnership Framework notes that the federalism agenda will underpin the World Bank Group’s future programmes at the strategic, policy and operational levels. It also cautions that transitional vulnerabilities could heighten in the early days of federalism as development roles are adjusted and the new structures take root.
Against this background, the Country Partnership Framework focuses on three areas of engagement including strengthening public institutions for economic management, service delivery and public investment; promoting private sector-led jobs and growth; and enhancing inclusion for the poor, vulnerable, and marginalised groups, with greater resilience against climate change, natural disasters, and other exogenous shocks.
It priorities emerged from extensive consultations with the federal, state and local governments, development partners and key stakeholders including civil society, academia, the private sector, rural community groups and the media. This includes hearing from over 200,000 citizens across Nepal through SMS and online surveys. The framework aligns with the government’s development priorities and Nepal’s goal to graduate to middle income country status by 2030.
“This partnership strategy with the World Bank supports our goal of giving every Nepali equal access to security, justice, good governance, basic services, and an opportunity to participate in our future prosperity,” said finance minister Dr Yuba Raj Khatiwada, who is currently in the Washington DC taking part in World Bank meeting. "The new partnership strategy with the World Bank Group is focused on supporting our transition to federalism, fits squarely within our vision and underpins a Nepali-owned model.”
The Country Partnership Framework notes that Nepal will require significant financing – over and above public and development aid resources currently available – to achieve faster growth and accelerate poverty reduction in the context of its transition to federalism. The World Bank Group will apply ‘Maximising Financing for Development’ approaches to optimise the use of scarce public resources and leverage commercial private financing in Nepal. The Country Partnership Framework states that the government’s development model of growth fueled by higher levels of investment, productivity and effective public institutions to underpin private sector dynamism will require carefully calibrated reforms to draw in private investment in parallel with the implementation of federalism.
“We will expand our investments – both debt as well as equity – and advisory services for private investment in Nepal,” said International Finance Corporation’s (IFC) country head for Nepal, Bangladesh, and Bhutan Wendy Werner. "Our efforts will encourage high-quality private investors to support the government’s strategy of inclusive development.”
The Financial Sector Stability Development Policy Credit (DPC4) of $100 million, approved by the World Bank Board today, is the final in a series of financial sector DPCs that was initiated in 2013 and has since supported a government-led programme aimed at stabilising the sector by reducing vulnerabilities and increasing transparency. In this phase, the programme has focused on implementing key reforms through a strengthened legal and regulatory framework, consolidating the financial sector, placing the financial sector safety net on a firm footing and laying the ground for a further programme of reforms to broaden and deepen access to financial services for both business and individuals.