Kathmandu: The World Bank (WB) has increased the interest rate on its loans to Nepal, correlating with a rise in the country’s per capita income. This announcement was made during an orientation on the foreign aid mobilization system organized by the Ministry of Finance and the Nepal Association of Financial Journalists (NAFIJ).
According to National News Agency Nepal, Dhaniram Sharma, the Chief of the International Economic Aid Coordination Division, revealed that the interest rate on the development cooperation funds received from the World Bank has been raised by 0.75 percent, effective from July. This adjustment brings the new interest rate for World Bank loans to Nepal to 1.5 percent.
Sharma explained that this change applies to loans that Nepal must repay within 40 years, noting that the maturity periods of 40 and 38 years have now been shortened to 30 years. The Division aims to coordinate development cooperation in alignment with strategies outlined by both the World Bank and the Asian Development Bank.
He emphasized that development partners evaluate the quality and outcomes of projects funded by development cooperation, which means there is no requirement for project selection based on specific demands. Additionally, Dolendra Sharma, Under Secretary of the Ministry of Finance, presented a paper discussing the practice of foreign aid mobilization in Nepal during the event.