Bhutan : Fiscal Sustainability and Green Recovery Program (Subprogram 1)
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 Details
-
Project Officer
Sapkota, Chandan
Sectors Group
Request for information -
Country/Economy
Bhutan -
Sector
- Public sector management
| Project Name | Fiscal Sustainability and Green Recovery Program (Subprogram 1) | ||||||||
| Project Number | 56010-001 | ||||||||
| Country / Economy | Bhutan |
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| Project Status | Active | ||||||||
| Project Type / Modality of Assistance | Loan Technical Assistance |
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| Source of Funding / Amount |
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| 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 |
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| Sector / Subsector | Public sector management / Public expenditure and fiscal management |
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| 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 $2.5 billion economy in FY2021 and an average 5.4% growth rate between FY2011-FY2019. | ||||||||
| Impact | |||||||||
| Project Outcome | |
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| Description of Outcome | |
| Progress Toward Outcome | |
| Implementation Progress | |
| Description of Project Outputs | |
| Status of Implementation Progress (Outputs, Activities, and Issues) | |
| Geographical Location | Thimphu |
| Safeguard Categories | |
|---|---|
| Environment | C |
| Involuntary Resettlement | C |
| Indigenous Peoples | C |
| Summary of Environmental and Social Aspects | |
|---|---|
| Environmental Aspects | |
| Involuntary Resettlement | |
| Indigenous Peoples | |
| Stakeholder Communication, Participation, and Consultation | |
| During Project Design | |
| During Project Implementation | |
| Business Opportunities | |
|---|---|
| Procurement | not applicable |
| Responsible ADB Officer | Sapkota, Chandan |
| Responsible ADB Department | Sectors Group |
| Responsible ADB Division | Public Sector Management and Governance Sector Office (SG-PSMG) |
| Executing Agencies |
Ministry of Finance |
| Timetable | |
|---|---|
| Concept Clearance | 02 Jun 2022 |
| Fact Finding | 03 May 2022 to 23 May 2022 |
| MRM | 12 Aug 2022 |
| Approval | 17 Oct 2022 |
| Last Review Mission | - |
| Last PDS Update | 17 Oct 2022 |
Loan 4229-BHU
| Milestones | |||||
|---|---|---|---|---|---|
| Approval | Signing Date | Effectivity Date | Closing | ||
| Original | Revised | Actual | |||
| 17 Oct 2022 | 18 Oct 2022 | 26 Oct 2022 | 31 Dec 2022 | - | 31 Dec 2022 |
| Financing Plan | Loan Utilization | ||||
|---|---|---|---|---|---|
| Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
| Project Cost | 37.35 | Cumulative Contract Awards | |||
| ADB | 37.35 | 09 Sep 2023 | 37.35 | 0.00 | 100% |
| Counterpart | 0.00 | Cumulative Disbursements | |||
| Cofinancing | 0.00 | 09 Sep 2023 | 37.35 | 0.00 | 100% |
TA 6971-BHU
| Milestones | |||||
|---|---|---|---|---|---|
| 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 | 09 Sep 2023 | 117,990.70 |
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
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| Title | Document Type | Document Date |
|---|---|---|
| Fiscal Sustainability and Green Recovery Program (Subprogram 1): Technical Assistance Letter | Technical Assistance Letter | Nov 2022 |
| Loan Agreement (Ordinary Operations [Concessional]) for Loan 4229-BHU: Fiscal Sustainability and Green Recovery Program (Subprogram 1) | Loan Agreement (Ordinary Resources) | Oct 2022 |
| Fiscal Sustainability and Green Recovery Program (Subprogram 1): Technical Assistance Report | Technical Assistance Reports | Oct 2022 |
| Fiscal Sustainability and Green Recovery Program (Subprogram 1): Report and Recommendation of the President | Reports and Recommendations of the President | Sep 2022 |
| Fiscal Sustainability and Green Recovery Program (Subprogram 1): Initial Poverty and Social Analysis | Initial Poverty and Social Analysis | Jun 2022 |
| Fiscal Sustainability and Green Recovery Program (Subprogram 1): Concept Paper | Concept Papers | Jun 2022 |
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
None currently available.
Evaluation Documents See also: Independent Evaluation
None currently available.
Related Publications
None currently available.
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Requests for information may also be directed to the InfoUnit.
ADB Lends $37 Million to Bhutan for Fiscal Sustainability, Green Recovery
ADB has approved a $37.35 million policy-based loan to support Bhutan’s green and resilient economic recovery from the COVID-19 pandemic.
Tenders
Contracts Awarded
Procurement Plan
None currently available.