Strengthening Subnational Public Management (ADB-36172-064)

  • Nepal
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • Asian Development Bank (ADB)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Aug 4, 2016
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
  • Law and Government
  • Technical Cooperation
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 0.50 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ ADB website

Updated in EWS Jun 26, 2020

Disclosed by Bank Aug 5, 2016

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.


The Constitution of Nepal has introduced fiscal federalism, giving powers to all three levels of government to enact laws, prepare budgets, impose taxes, and collect own-source revenues. A critical aspect of fiscal decentralization is that the provincial and local governments have revenue-raising powers through taxation. To improve the subnational revenue mobilization, the government needs to undertake a thorough assessment of (i) the revenue generation potential of subnational governments; (ii) appropriate tax policies, including the design of acts, codes, and procedural manuals for local government taxes based on the ability to pay the principle; and (iii) requirements to expand tax administration systems that are based on information and communication technology (such as a municipal administration and revenue system) to streamline tax administration and collection, and link such systems with broader governance, PFM, and anticorruption objectives.

The new Constitution also recognizes the need to address the vertical and horizontal imbalances among federal, provincial, and local levels of government. A permanent constitutional body, the National Natural Resources and Fiscal Commission, has been proposed to determine the appropriate levels of fiscal transfers and revenue distribution among the three government tiers, and recommend equalization grants. It is critical to assist the government to (i) establish the commission with a clear institutional structure, function, and mandate; and (ii) provide the necessary technical and capacity building support, specifically in relation to principles of intergovernmental fiscal transfers, including the design of a devolution formula.

Another important dimension of fiscal decentralization is the establishment of a suitable framework and mechanism for onlending to subnational governments. To maintain overall fiscal discipline, the framework must have clear terms and conditions; enforceable rules, regulations, and procedures for onlending to subnational governments and repayment; and obligations and responsibilities between the central and subnational governments.

For improving transparency in PFM and reducing fiduciary risks at the subnational level, there is a need to strengthen (i) integrated financial management; (ii) accounting and reporting systems; (iii) electronic government procurement (e-GP) system, including the nationwide roll-out; and (iv) internal, external, and technical audit systems by building on and deepening the reforms of SPMP I.


In light of the above, the rationale for the PATA stems from the need to carry out a comprehensive assessment of PFM issues at the subnational government level to identify policy options for (i) addressing the weaknesses and revitalizing the institutions designed under SPMP, and (ii) providing institutional development and capacity building support to the government to successfully manage the transition to fiscal federalism.


Capacity and readiness of the government to adopt fiscal federalism enhanced (the Constitution of Nepal 2015; Government of Nepal''s Thirteenth Plan, FY2014- FY2016; Good Governance Act of 2008; and Ministry of Finance budget for FY2017)


A consulting firm will be recruited to provide 21 person-months of international consultants and 15 person-months of national consultants, including (i) tax specialists and a team leader, (ii) intergovernmental fiscal transfer specialists, (iii) public sector budget specialists, (iv) capital market specialists, (v) internal and external audit specialists, (vi) technical audit specialists, and (vii) information and communication technology, and management information system specialists. A change management specialist will be recruited as an international individual consultant for 3 person-months. The consultants will be recruited using quality and cost-based selection method with a quality cost ratio of 90:10 at an expected cost of $450,000. The consultant outputs are assessment reports with policy recommendations and capacity building support. Stakeholder consultation workshops will be held at least quarterly to present findings and solicit feedback. The expected cost of the workshops and training is $40,000.


not applicable

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

TA 9150-NEP: Strengthening Subnational Public Management
Technical Assistance Special Fund US$ 500,000.00

Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.


The Accountability Mechanism is an independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an Asian Development Bank-financed project. If you submit a complaint to the Accountability Mechanism, they may investigate to assess whether the Asian Development Bank is following its own policies and procedures for preventing harm to people or the environment. You can learn more about the Accountability Mechanism and how to file a complaint at:


Responsible ADB Officer Akin, Cigdem
Responsible ADB Department South Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SARD
Executing Agencies
Ministry of Finance
Mr. Surya Prasad Pokharel, Under Secretary, Ministry of Finance
The Government of Nepal Singha Durbar Kathmandu, Nepal

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How it works