Project Name Fiscal Sustainability and Green Recovery Program (Subprogram 1)
Project Number 56010-001
Country / Economy Bhutan
Project Status Active
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 4229-BHU: Fiscal Sustainability and Green Recovery Program (Subprogram 1)
Concessional ordinary capital resources lending US$ 37.35 million
TA 6971-BHU: Fiscal Sustainability and Green Recovery Program (Subprogram 1)
Technical Assistance Special Fund US$ 1.00 million
Operational Priorities OP1: Addressing remaining poverty and reducing inequalities
OP2: Accelerating progress in gender equality
OP3: Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability
OP5: Promoting rural development and food security
OP6: Strengthening governance and institutional capacity
Sector / Subsector

Public sector management / Public expenditure and fiscal management

Gender Effective gender mainstreaming
Description The coronavirus disease (COVID-19) severely impacted economic activities and fiscal balance in Bhutan. Economic growth was decelerating even before the onset of the pandemic. In response to the crippling effects on lives, livelihoods, and healthcare, the government announced a series of fiscal and monetary relief measures to mitigate the impact on economy and households. The government has outlined its medium-term post-pandemic strategy for a sustained, inclusive, and green economic recovery in the upcoming 13th Five-Year Plan. The proposed program aims to support the government's post-pandemic economic vision by strengthening domestic resource mobilization (DRM), promoting private sector development, and supporting foundation for green economic recovery over the medium term.
Project Rationale and Linkage to Country/Regional Strategy Bhutan's gross domestic product (GDP) growth averaged 5.5% between FY2011 and FY2019. National poverty rate decreased from 23.0% in 2007 to 8.2% in 2017. Large state-led investment in hydropower sector sustained high-growth rate and impressive poverty reduction over the last 2 decades. The overall macroeconomic framework remains sound with high GDP growth rate, modest inflation rate, low fiscal deficit, macroprudential-focused monetary policy, and adequate foreign exchange reserves. The country's risk of debt distress is assessed as moderate. Bhutan is expected to graduate from United Nation's least developed country category in 2023 and it aspires to become a high-income country by 2030 with targeted per capita income of $12,375. It implies a $10 billion economy with an annual real GDP growth rate of 10.0% over the next 10 years, much higher than $2.5 billion economy in FY2021 and an average 5.4% growth rate between FY2011-FY2019.
Project Outcome
Description of Outcome
Progress Toward Outcome
Implementation Progress
Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Thimphu
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Procurement not applicable
Responsible ADB Officer Sapkota, Chandan
Responsible ADB Department South Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SARD
Executing Agencies
Ministry of Finance
Concept Clearance 02 Jun 2022
Fact Finding 03 May 2022 to 23 May 2022
MRM 12 Aug 2022
Approval 17 Oct 2022
Last Review Mission -
Last PDS Update 17 Oct 2022

Loan 4229-BHU

Approval Signing Date Effectivity Date Closing
Original Revised Actual
17 Oct 2022 18 Oct 2022 26 Oct 2022 31 Dec 2022 - 31 Dec 2022
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 37.35 Cumulative Contract Awards
ADB 37.35 07 Jan 2023 37.35 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 07 Jan 2023 37.35 0.00 100%

TA 6971-BHU

Approval Signing Date Effectivity Date Closing
Original Revised Actual
17 Oct 2022 01 Nov 2022 01 Nov 2022 30 Sep 2025 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,000,000.00 0.00 0.00 0.00 0.00 0.00 1,000,000.00 07 Jan 2023 8,035.69
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