The environment for governance and project implementation, including public procurement and financial management, continues to be challenging as Nepal undergoes political transition. Development operations are impeded by difficult topography, poor infrastructure, and weak institutional capacity. Frequent power cuts, strikes, and fuel shortages have also emerged as bottlenecks to Nepal’s economic growth. A more conducive environment needs to be created for private sector investments in infrastructure and industries, and for participation of diverse social groups, including the most vulnerable.

For 2013-2015, ADB operations in Nepal will continue to mainstream crosscutting themes (such as gender, governance, regional cooperation and integration, environmental sustainability, and private sector development) and fund investments in the energy, transport and urban services space.