Nepal Infrastructure Drive 2026

Nepal's 2083/84 fiscal year budget prioritizes infrastructure development with about 4 kharba rupees allocated, focusing on completing ongoing projects and promoting large-scale economic corridors called Growth Quadrilaterals. The government emphasizes private sector involvement using innovative financing models for roads, tunnels, and hydropower projects.

Nepal announced the 'Quad Project' to boost economic growth by integrating infrastructure, tourism, agriculture, and hydropower development across multiple geographic growth poles and corridors. Implementation challenges include budget shortfalls, inter-ministerial coordination weaknesses, and local-level obstructions.

Nepal launched the Nepal Clean Air and Prosperity Project with USD 57 million funding from the World Bank to reduce air pollution by cutting PM-2.5 emissions by 500 metric tons annually and greenhouse gases by 110,000 tons annually. The project includes subsidies for clean technologies and strengthening air quality institutions.

Construction started on the Ratmate and New Damauli substations and a 297-kilometre transmission line network under the MCC Nepal Compact, financed by a US$550 million US grant and a US$197 million Nepalese government contribution. These projects aim to improve electricity transmission and regional power trade.

Several major Nepalese infrastructure projects, including irrigation and highway developments, continue facing long delays, cost overruns, and repeated deadline extensions. Challenges include inadequate budgets, land disputes, and cross-border water-sharing issues.

The Nepal government reissued international bids for completing the Sun Koshi-Marin Diversion Multipurpose Project, including irrigation and hydropower components to be finished within four years. The project aims to irrigate 122,000 hectares and generate 31.07 MW of hydropower.