Kathmandu-The loan agreement with the World Bank, cancelled after two years due to the lack of clarity on implementation, will be revised and signed again.

The government has given in principle approval to the Ministry of Finance to form a negotiation committee to secure a World Bank loan for Digital Nepal transformation. The decision clears the way for the loan process to move forward. The funds will be used to build infrastructure required for Digital Nepal.

In 2022, a loan agreement worth $110 million was signed for the Digital Nepal Acceleration project. The World Bank cancelled the agreement after two years as the project failed to move into implementation.

The loan aimed to expand broadband access, strengthen individual capacity in the digital economy, develop digital foundations, and support project management. However, there was no progress over two years. The agreement was scrapped as it was signed without adequate preparation on how and where the funds would be mobilised, or whether implementation was feasible.

Discussions are currently underway among the Ministry of Finance, the World Bank, and the Ministry of Communications to revise the agreement. The government plans to use the loan to expand the capacity of existing data centres and build new ones. It also intends to invest in digital infrastructure for public service delivery.

A data centre built with support from the South Korean government is now under government ownership, but has seen limited investment in operation and capacity expansion. The loan will also be used to integrate systems used by different government services and make them interoperable.