World Bank increases interest rate on Nepal loans to 1.5 pc

KATHMANDU: The World Bank has raised the interest rate on its loans to Nepal by 0.75 percentage point, bringing it to 1.5%, in line with the rise in the country’s per capita income.

At an orientation on the foreign aid mobilisation system, organised by the Ministry of Finance (MoF)and Nepal Association of Financial Journalists (NAFIJ), Dhani Ram Sharma, Chief of the Foreign Aid Coordination Division, said the increase, effective from July, applies to the development cooperation loans Nepal receives from the World Bank.

He added that the maturity periods for these loans, previously set at 40 and 38 years, have now been reduced to 30 years.

The Foreign Aid Coordination Division stated that future development cooperation will be pursued in accordance with the country strategies issued by the World Bank and the Asian Development Bank.

Sharma noted that development partners evaluate the quality and outcomes of all projects under Nepal’s development cooperation, meaning there are no conditions attached to project selection based on demand.

On the same occasion, the Ministry of Finance’s Under-Secretary, Dolendra Sharma, presented a paper on the practice of foreign aid mobilisation in Nepal.

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