ADB Grant to Help Nepal Close Labor Skills Gaps

KATHMANDU, NEPAL – The Asian Development Bank (ADB) is providing a $20 million grant to the Government of Nepal to give market-oriented skills training to thousands of aspiring young men and women who are unemployed or underemployed.

“Nepal critically needs higher and employment-centric economic growth, and the lack of skilled labor is a key constraint,” said Kenichi Yokoyama, Country Director of ADB’s Nepal resident mission. “The project will focus on improving the training for young people in the construction, manufacturing, and services sectors where there are large skill gaps.”

The grant, just approved by ADB’s Board of Directors, will help the Government of Nepal implement key aspects of its Technical and Vocational Education and Training (TVET) Policy, 2012 by improving the quality, relevance, and efficiency of the country’s technical and vocational education and training institutes.

With the grant, the Skills Development Project will provide basic level training and employment services to 45,000 people, at least 40% of whom will be women and 30% from excluded groups. Private sector training and employment service providers will be engaged through performance-based contracting to deliver the services.

The project will improve the quality and relevance of TVET by transforming 10 public TVET providers into more efficient, market-driven model institutes. In addition, 25 new fee-paying mid-level programs will be developed in the priority sectors of construction, manufacturing, and services to be delivered in the 10 model institutes and set up partnerships with industry so the institutes can respond to the needs of the market. Three hundred TVET professionals will also receive training in management, occupational skills, instructional skills, and curriculum development.

The project will also help the Ministry of Education set up financial mechanisms to fund skills development and help the Council for Technical Education and Vocational Training to restructure itself so that it can work better to answer the needs of the growing private sector in Nepal.

The $25 million, 5-year project is expected to be completed in December 2019. The Government of Nepal is providing $5 million for the project.