The Bhutanese Leading the way.
Most of the funding will support development projects, while the remaining borrowings will finance government reform programs
The government has planned to borrow Nu 5.6 billion (bn) from external sources during the 2026–27 fiscal year to finance project-tied and program borrowings. According to the budget document, project tied borrowings amount to Nu 3.65 bn. The largest allocation under this category is for the Pathways for Emerging Skills and Jobs Project Loan at Nu 846.750 million (mn).
The Asia Pacific Vaccine Access Facility has been allocated Nu 300.910 mn, while the Climate Resilient Omchhu River Basin Project will receive Nu 236.080 mn. The Green Power Project Readiness Enhancement Project has been allocated Nu 19.390 mn and the Green Resilience Affordable Housing Sector Project has been allocated Nu 376.420 mn. The Phuentsholing Township Development Project has been allocated Nu 385.760 mn, while the additional financing for the project amounts to Nu 266.970 mn. The Renewable Energy for Climate Resilience Project will receive Nu 12.000 mn and the Water Flagship Program Support Project has been allocated Nu 527.730 mn.
The Prior Results Bhutan Human Capital Recovery and Resilience Project has been allocated Nu 76.584 mn. The Second Additional Financing for Bhutan Human Capital Recovery and Resilience amounts to Nu 488.702 mn. The Accelerate Bhutan’s Job Transformation through Renewable Natural Resource Value Chains project has been allocated Nu 90.928 mn, while the Building Resilient Commercial Smallholder Agriculture Loan has been allocated Nu 21.435 mn.
The budget also includes program borrowings of Nu 1.96 bn. The Green Fiscal Consolidation Policy Based Loan supported by the Asian Development Bank amounts to Nu 870.000 mn, while the Development Policy Credit supported by the World Bank amounts to Nu 1.09 bn. The budget document states that total external borrowings for the fiscal year will amount to Nu 5.61 bn.
For FY 2026–27, principal recoveries are projected to cover 25.4 percent of the Gross Financing Need, while external concessional borrowings are expected to cover around 13 percent. The remaining 61.6 percent of the Gross Financing Need will be financed through domestic borrowings, including government bonds.
