15th October 2025, Kathmandu
Minister Rameshore Prasad Khanal of the Ministry of Finance, representing the Government of Nepal, spearheaded a crucial series of high-level discussions with major international partners and senior United States officials during his participation in the World Bank and International Monetary Fund (IMF) Annual Meetings in Washington, D.C.
Finance Minister Holds Discussions
These diplomatic engagements, held on the pivotal date of 29 Ashwin (October 15, 2025), aimed to solidify foreign investment, secure vital development assistance, and push for continuity in key economic reform programs as Nepal navigates a complex domestic and global economic environment.
The discussions covered a broad spectrum of critical areas, from bilateral trade and investment promotion with the United States to accelerating large-scale infrastructure projects backed by international donors. Attended by key officials, including Nepal Rastra Bank Governor Dr. Bishwanath Paudel, the meetings underscored Nepal’s commitment to improved governance and financial stability as the nation focuses on long-term sustainable growth.
Bolstering Bilateral Ties: Trade, Investment, and the US Partnership
A key focus of Minister Khanal’s agenda was strengthening Nepal’s economic relationship with the United States. During his meeting with representatives of the United States Trade Representative (USTR), the Finance Minister emphasized the need for a more robust framework to enhance mutual trade and investment flows.
The Critical Request for Nepal Trade Preference Program (NTTP) Extension
A core issue addressed was the continuity of the Nepal Trade Preference Program (NTTP). This program, introduced following the 2015 earthquake under the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA), provides duty-free treatment for specific Nepali goods, primarily textile, apparel, and travel items. This access is crucial for Nepali exporters, especially those involved in the garment and handicraft sectors, as it supports economic recovery and job creation.
The program is currently set to expire on December 31, 2025. Minister Khanal’s request for an extension highlights the Nepali government’s recognition of the NTTP’s importance in maintaining competitiveness in the U.S. market and assisting Nepal in graduating from Least Developed Country (LDC) status. The successful extension of this program would send a strong signal of continued U.S. support for Nepal’s economic resilience, ensuring that businesses and jobs dependent on these trade benefits are not immediately jeopardized at the end of the year.
Furthermore, discussions with representatives from the U.S. State Department focused broadly on strengthening overall bilateral relations, particularly exploring avenues of cooperation on mutual strategic and political interests, which directly influence the climate for U.S. private investment in Nepal.
Securing Development Capital: Engagement with Key International Donors
The Minister’s visit was instrumental in pushing forward Nepal’s infrastructure and development agenda through engagement with influential donor agencies.
The Saudi Fund: New Avenues for Infrastructure and Human Capital
During discussions with representatives of the Saudi Fund, Minister Khanal proactively encouraged increased investment into Nepal’s vital infrastructure and human development sectors. In response, the Saudi Fund representatives indicated their commitment, specifically confirming planned funding for irrigation and hydropower projects in Nepal. This is a significant outcome, as investment in hydropower is central to Nepal’s economic strategy for energy independence and export revenue, while irrigation projects are critical for enhancing agricultural productivity and food security.
JICA Projects: Accelerating Critical Infrastructure
A focused meeting with the Japan International Cooperation Agency (JICA) concentrated on accelerating the pace of ongoing, large-scale infrastructure development projects essential for Nepal’s connectivity. These projects include:
- Nagdhunga Tunnel Project: This groundbreaking project, Nepal’s first mountainous traffic road tunnel, has seen its main tunnel excavation completed as of April 2024. The Minister’s focus now shifts to accelerating the remaining interior work, such as lining and connecting equipment, to achieve full operational status quickly and relieve severe traffic congestion at the Nagdhunga pass.
- BP Highway Restoration: JICA, which previously supported the construction of the BP Highway (also known as the Sindhuli road), is crucial for its maintenance and restoration efforts. Accelerating this work ensures this vital link connecting the Kathmandu Valley to the Eastern Terai remains safe and fully functional for trade and transportation.
- Koteshwor Section Project: This involves crucial road improvement works in the heavily congested Koteshwor section of the Kathmandu Ring Road, a project essential for improving urban traffic flow and reducing logistics bottlenecks that plague the capital region.
Driving Financial Reform: Commitment to the IMF’s Extended Credit Facility (ECF)
The engagements with the International Monetary Fund (IMF) were of paramount importance for the country’s macroeconomic stability. Minister Khanal met with Krishna Srinivasan, Director for Asia-Pacific at the IMF, to review the progress and continued implementation of the Extended Credit Facility (ECF) program, a four-year arrangement that provides financial and technical support to Nepal.
Recent reports confirm the successful completion of the sixth review under the ECF, signaling continued confidence from the IMF in Nepal’s reform trajectory. The focus of the discussions on 29 Ashwin revolved around key structural reforms aimed at fortifying the financial system:
- Amendments to the Nepal Rastra Bank (NRB) Act: This is a crucial reform aimed at strengthening the central bank’s governance, independence, and accountability, a prerequisite for a resilient financial sector.
- Portfolio Reviews of Commercial Banks’ Loans: This process is necessary to address rising financial sector vulnerabilities, particularly the concerning rise in non-performing loans (NPLs) and issues within the savings and credit cooperatives sector, which pose risks to overall financial stability.
- Financial Stability and Governance: Discussions emphasized the government’s commitment to implementing structural reforms to enhance the anti-money laundering (AML/CFT) framework and improve the overall investment climate and governance structure.
The combined efforts from these high-level meetings demonstrate the interim government’s determination to leverage international partnerships to address domestic economic challenges, secure essential capital, and pave the way for political stability and long-term economic growth.
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