IMAGE VIA SHUTTERSTOCK
IN SEPTEMBER 2022 Nepal and the World Bank signed a $140m agreement for the Digital Nepal Acceleration (DNA) project. It would expand rural broadband, as well as modernise public data infrastructure and build cybersecurity capacity. The speeches were optimistic. Eighteen months later, according to the World Bank’s own cancellation report, not one rupee had been disbursed. The project was scrapped in 2024. Nobody accepted responsibility in public. Roughly three and a half years later, Kathmandu has signed another loan.
In April Nepal put pen to paper on a $90m co‑financing arrangement between the World Bank ($50m) and the Asian Development Bank ($40m) for the “Nepal Digital Transformation Project”. The project promises to deliver streamlined online public services to 7m citizens within five years and cut average government service‑delivery times from six hours to two. The largest chunk—$27m—goes towards strengthening data centres and hosting services. Another $15m funds business‑process re‑engineering of government services; $10m each for cybersecurity and the national identity card system; smaller tranches for a social protection registry, land administration digitisation, digital signatures and the Nagarik App citizen portal.
The project is, in its bones, a slimmer and rebranded version of what failed before. Nepal’s digital journey started in 2007 with the drafting of an E‑Governance Masterplan. Since then, donor agencies have poured loans and grants into an apparatus that has consistently absorbed money and ejected paperwork. The country sits 119th in the United Nations E‑Government Development Index, behind India and Bangladesh. Nearly a dozen donor‑financed digital projects run concurrently, with minimal coordination between them.
The DNA project’s cancellation report is a clinical document. The World Bank noted that “project preparation took place as Nepal’s digital development sector faced significant challenges”—that is the diplomatic version. What actually happened, according to Bibek Rana, a digital economy expert in Kathmandu, was red-tape trench warfare: ministries blaming each other, inter‑agency coordination “virtually absent”, provincial governments injecting political pressure over where infrastructure would be placed, and no substantial stakeholder engagement. “The project collapsed because of inter‑agency coordination failure,” Rana told the Kathmandu Post. “Instead of learning from past failures, this is still being treated as a routine IT project.”
Parliament has begun asking the same question more bluntly. Rastriya Prajatantra Party lawmaker Khusbu Oli asked the government in a recent session which committee, which policy debate and which needs assessment had preceded the decision to borrow. “Was this loan sought by the government,” she asked, “or proposed by the donors themselves?” It is an ugly question. The World Bank’s own cancellation note records that the government formally wrote to cancel the DNA project and request a successor in March 2024, so the initiative did originate in Kathmandu. But signing a new loan before conducting a transparent post‑mortem of the old one is a peculiar sequence.
The co‑financing structure at least signals institutional learning of a kind. This is the first project in South Asia under the ADB‑World Bank Full Mutual Reliance Framework, an arrangement designed to cut duplication in project preparation. The ADB loan carries 1% interest for the first eight years, rising to 1.5%, with repayment over 32 years to December 2058. The World Bank terms are 1.5% over 20 years. Neither rate is punishing. The question was never whether Nepal could afford the loan. It is whether Nepal can implement what the loan is meant to pay for.
Rana’s answer is cautious. Without Digital Nepal Framework 2.0 as a strategic anchor, he argues, the risk of “fragmented implementation and the same lack of integrated results as the past” is big. The government has shown no sign of publishing such a framework before implementation begins. What it has shown, with commendable speed, is that it can hold a signing ceremony. ■
