KATHMANDU, August 5, 2024—The Government of Nepal and the World Bank today signed a financing agreement for a US$100 million concessional loan from the International Development Association (IDA) to improve the connectivity, efficiency, resilience, and safety of Nepal’s provincial and local road network. The project also aims to strengthen the government’s capacity to manage this infrastructure.
The Provincial and Local Roads Improvement Program (PLRIP)-Phase 1 will construct and maintain approximately 3,000 kilometers of all-weather, resilient, and safe provincial and local roads and bridges. This initiative is expected to benefit about one million people in Sudurpashchim, Karnali, and Madhesh provinces. Additionally, it will enhance the institutional, management, and technical capacities of provincial and local governments in planning, designing, constructing, maintaining road and bridge infrastructure as well as improving service delivery.
Finance Secretary Dr. Ram Prasad Ghimire signed the financing agreement on behalf of the Government of Nepal while World Bank Country Director for Maldives, Nepal, and Sri Lanka Mr. David Sislen represented the World Bank. A separate project agreement was also signed by the Ministry of Urban Development along with participating provinces.
“This program will help enhance rural connectivity, improve access to services and markets, and unlock Nepal’s economic potential in an inclusive manner while reducing travel time and costs for Nepalis,” said Joint Secretary at the Ministry of Finance Mr. Shreekrishna Nepal.
The Government of Nepal acknowledges the significant challenges related to transport connectivity and recognizes the need for substantial investment to support provincial and local governments adapting to decentralized governance. The PLRIP aims to address these issues by strengthening rural development efforts. The first phase targets three out of seven provinces in Nepal along with four local areas which are intended to be scaled up in future phases.
“The program supports Nepal’s federalism agenda by empowering provincial and local governments while promoting inter-governmental coordination in the transport connectivity sector to help improve the lives of Nepalis through better infrastructure and services,” said David Sislen.
The program will introduce several best practices including five-year performance-based maintenance contracts along with construction contracts; routine maintenance through self-help groups; community-led complementary infrastructure; pilots on alternative means of connectivity; rural transport services; approach roads; as well as an online program monitoring and management system.