World Bank to provide USD 50 mn budgetary support

The World Bank will soon be providing USD 50 million (mn) or around Nu 4 billion (bn) budgetary support to the government.

The budgetary support will come in the form of soft or concessional loan as part of the concessional loan window to Bhutan. The interest rate will be minimal.

The support is unique as in it is not tied to projects like other loans and so the government will have flexibility to use it for capital expenditure.

The money, however, cannot be used for current expenditure.

However, to be eligible to get the money Bhutan has had to do some reforms required by the World Bank. One is an updated and slightly more liberal External Commercial Borrowing (ECB) guidelines and then allowing carbon markets.

The former has already been done by the Finance Ministry while the latter is being worked on by the Department of Environment and Climate Change.

The money will be welcome for the government at time of high fiscal deficit and tight revenue.

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