Nepal explores lower-cost financing options from AIIB as concessional funding declines

Kathmandu, September 28, 2026 — Nepal, which has long been reluctant to mobilize significant resources from the Asian Infrastructure Investment Bank (AIIB) citing relatively high borrowing costs, has begun exploring options to use lower-cost financing available from the institution.

As concessional financing previously available from the World Bank, Asian Development Bank and Japan has gradually declined, the government has started discussions on using relatively cheaper facilities available through AIIB for eligible projects.

AIIB has said it can provide grants for project preparation and offer additional concessions on loan interest rates for eligible projects.

During a meeting in Doha, Qatar, with Finance Minister Dr. Swarnim Wagle, AIIB President Zou Jiayi said the bank could provide grants for project preparation and additional concessions on loan interest rates.

During the meeting, Minister Wagle urged the AIIB to expedite studies for the electricity distribution system improvement and expansion project and the Butwal-Pokhara road project being supported by the bank.

Wagle also called for greater cooperation with AIIB and other development partners to mobilize medium- and long-term resources for green energy, cross-border electricity transmission lines, roads and digital infrastructure.