ADB Fully Committed to Supporting Nepal’s Priorities and Reform Agenda

On the occasion of the 60-year partnership between Nepal and the Asian Development Bank (ADB), ADB President Masatsugu Asakawa recently visited Nepal. Serving as ADB President since 2025, Asakawa was also a special advisor to Japan’s Prime Minister and Minister of Finance. Visiting Nepal amid a new political environment, he signaled the beginning of a new chapter in ADB’s collaboration with the country.

During his two-day visit to Kathmandu, he met with Prime Minister Balendra Shah, reaffirming ADB’s commitment to supporting the government’s ambitious reform agenda and to increasing assistance. The visit also saw the signing of two major loan agreements worth $165 million (approximately NPR 2.5 billion).

In this context, Janardan Baral conducted a special interview with ADB President Asakawa to discuss the primary objectives of his visit, various aspects of the long-term Nepal-ADB partnership, and his vision for Nepal’s economic development:

After the 2015 earthquake, former ADB President Takehiko Nakao visited Nepal in 2016. Ten years later, you have come. What is the main purpose of your visit? What achievements can Nepalese expect?

Personally, this visit is a great opportunity for me. I first visited Nepal as a backpacker student in 1990. Since then, the changes in the country have been astonishing. I was eager to witness this transformation myself.

My visit had several objectives. Most importantly, we are deeply grateful for the 60-year partnership with Nepal. Building on this strong foundation, we want to further expand and strengthen our future cooperation. Especially, we aim to leverage the momentum for reform, stability, and resilience in Nepal to advance effective collaboration.

Second, we want to ensure that our commitments deliver real and tangible results in Nepal. Under Prime Minister Balendra Shah’s leadership, the government is focusing closely on citizens and measurable outcomes.

In this context, our assistance is being expanded. I have committed to providing $240 million in concessional loans by 2029. This support aligns closely with the government’s priorities and reform agenda. In meetings with country leaders, I expressed our strong support for intensive partnership and the reform agenda. I also assured full coordination between our strategy and the government’s priorities.

A visible outcome from this visit was my inspection of the renewable energy grid at the Nepal Electricity Authority. This grid has been modernized using cutting-edge technology. I also visited the World Citizen Secondary School, rebuilt with safe infrastructure and now operated as a digital and AI-friendly institution.

During meetings with the Finance Minister, loan agreements worth $165 million were signed between the Nepalese government and ADB. Of this, $115 million will be spent on water supply and sanitation, while the remainder will be invested in modernizing customs and logistics sectors to enhance Nepal’s trade efficiency.

Nepal is a founding member of ADB. The partnership began in 1968 with a technical assistance grant and in 1969 with a concessional loan for aviation development. Today, ADB is Nepal’s largest development partner. How do you evaluate this partnership? What would you consider its greatest achievement?

It is difficult to identify a single greatest achievement of our partnership because we have worked across many sectors. We take pride in being Nepal’s largest development partner. To date, our total assistance has exceeded $900 million, with an active portfolio of $390 million.

We have supported all major sectors in Nepal, so it’s hard to give a simple answer to your question. However, in my view, our main achievement is collaboratively building a strong foundation for Nepal’s future development.

In particular, by investing in inclusive and resilient infrastructure such as transport and energy, we have connected underserved communities to services and opportunities, delivered development benefits to the poorest citizens, and laid the groundwork for inclusive and sustainable economic growth.

Certainly, we have also made significant contributions in education and other areas. Going forward, we will continue prioritizing infrastructure that yields direct benefits to people and support further inclusive and sustainable development.

Nepal is a new federal republic, and following the youth movement last September, significant political changes occurred. How do you see Nepal’s economic transformation over the next decade? Can an increase in ADB assistance be expected?

I am excited by the tremendous potential of Nepal’s young generation. The current government has a strong policy mandate and unprecedented opportunity for transformation. However, if quality employment is not increased, social conflicts may arise.

Therefore, we prioritize the government’s efforts to create quality jobs for youth. This requires investment in infrastructure, education, and skills training. Development of the private sector must be emphasized, and policy reforms should foster an environment attractive to private capital.

We are happy to support the government’s economic initiatives. Our flagship results-based lending program, “REACH” (Reform to Accelerate Investment and Scale Employment), aims to create a market-friendly environment, attract private capital, and accelerate digitalization across all sectors of the economy.

ADB and the World Bank have jointly developed a National Partnership Framework for Nepal and are increasing collaboration on projects. What outcomes can be expected from this cooperation between the two multilateral development banks?

For the first time in Nepal, ADB and the World Bank have jointly prepared a coordinated national partnership strategy and framework. These two banks together account for 70% of Nepal’s total development assistance. This joint initiative is expected to deliver more impactful results with fewer resources.

I currently lead the “REACH” project, which operates within a fully mutual dependency structure between the two banks. Possibly for the first time in global development finance history, such a practice is being implemented. It will reduce unnecessary duplication and delays, providing partners the convenience of working with a single institution.

Under this arrangement, ADB is responsible for the design, implementation, and supervision of the project. Another project focused on digital transformation is following a similar model. This enables more efficient and effective collaboration, lowering transaction costs for countries.

I also chair the group of heads of major multilateral development banks, including the World Bank, Inter-American Development Bank, and European Bank. I am committed to making the MDB community more efficient and effective for member countries. We are working to establish integrated systems to eliminate duplication and enhance coordination.

Photo: Chandrabhadur Ale