Nepal - Public Financial Management Multi-donor Trust Fund Progress Report : January - June 2026

Overview & Synopsis

Strengthening Public Financial Management (PFM) is a critical aspect of the Government of Nepal’s (GON) strategy to improve governance, optimize the utilization of public resources, and promote inclusive development. There has been increasing interest from civil society organizations, media, the public, and development partners (DPs) in strengthening PFM to enhance the use of public resources and achieve value for money. To this end, the GON has been working closely with DPs to design and implement PFM reform initiatives at the country and sector levels. In response to the GON’s and DPs’ call for a coordinated approach to address PFM challenges, the Nepal PFM Multi-Donor Trust Fund (MDTF) was established to harmonize DPs’ support for PFM reforms. Established in December 2010, the MDTF is scheduled to close on January 31, 2028. Currently, the Trust Fund finances a recipient-executed Public Finance Management for Development Effectiveness Project (PFMDEP), approved in August 2025 and planned to be completed in July 2027. The project supports some of the key GON reforms on expenditure management under the new National PFM Reform Strategy (PFMRS) for the period of FY2025/26 to FY2029/30. Apart from the project, the Trust Fund supports several advisory services and analytics, implemented by the World Bank, aimed to strengthen transparency and accountability and PFM institutions for service delivery. The current report covers progress under these activities.