𝐖𝐨𝐫𝐥𝐝 𝐁𝐚𝐧𝐤 𝐂𝐨𝐦𝐦𝐢𝐭𝐬 $𝟑𝟎𝟎 𝐌𝐢𝐥𝐥𝐢𝐨𝐧 𝐭𝐨 𝐀𝐝𝐯𝐚𝐧𝐜𝐞 𝐒𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐚𝐥 𝐑𝐞𝐟𝐨𝐫𝐦𝐬

…𝒕𝒉𝒆 𝒇𝒊𝒗𝒆-𝒚𝒆𝒂𝒓 𝒑𝒍𝒂𝒏 𝒕𝒂𝒓𝒈𝒆𝒕𝒔 𝒑𝒓𝒊𝒗𝒂𝒕𝒆 𝒔𝒆𝒄𝒕𝒐𝒓 𝒈𝒓𝒐𝒘𝒕𝒉, 𝒊𝒏𝒇𝒓𝒂𝒔𝒕𝒓𝒖𝒄𝒕𝒖𝒓𝒆 𝒅𝒆𝒗𝒆𝒍𝒐𝒑𝒎𝒆𝒏𝒕, 𝒂𝒏𝒅 𝒄𝒍𝒊𝒎𝒂𝒕𝒆 𝒓𝒆𝒔𝒊𝒍𝒊𝒆𝒏𝒄𝒆

By Kinzang Lhamo & Yeshi Dolma

The World Bank has announced a $300 million Country Partnership Framework (CPF) for Bhutan covering 2025 to 2029. The initiative aims to support the country’s ambition to attain high-income status by 2034 by focusing on private sector development, climate resilience, and infrastructure enhancement. These priorities align with Bhutan’s 13th Five-Year Plan.

The CPF builds on Bhutan’s long-standing development partnership with the World Bank and is introduced at a time when the country is working to recover from the economic impact of the COVID-19 pandemic and pursue structural reforms. Designed to align with Bhutan’s 10x GDP growth strategy, the CPF targets areas with potential for sustained growth through policies that are innovative, inclusive, and environmentally sustainable.

At the core of the framework is a new $300 million investment that includes a major infrastructure project: a 14-kilometer road link between Tareythang and the proposed Gelephu Mindfulness City in southern Bhutan. The route is intended to function as a trade and transit corridor, improving connectivity for rural and semi-urban populations. Of the total funding, $154 million will be provided as grants and $146 million as highly concessional loans, reflecting the World Bank’s support for Bhutan’s long-term development goals.

“This partnership reflects our bold vision to transition into a high-income country within the next decade,” said Finance Secretary Leki Wangmo at the CPF launch. “It embodies the aspirations of our people and reinforces our commitment to working with strategic partners like the World Bank. We are focused on implementation, coordination, and tangible results.”

A major emphasis of the CPF is private sector development. Currently contributing under 30 percent of GDP, Bhutan aims to increase private sector participation to 60 percent by 2029. The framework will support reforms to attract foreign direct investment, improve access to finance, reform state-owned enterprises, and strengthen property rights. Key sectors include agribusiness, tourism, digital services, and renewable energy.

Martin Raiser, World Bank Vice President for the South Asia Region, stated, “This framework is about scale and impact. We aim to support better opportunities for a quarter of Bhutan’s population and enhance resilience for a third. It is built to address the big questions of jobs, innovation, and inclusive development.”

He also acknowledged the work of teams involved in strengthening the World Bank’s engagement in Bhutan and highlighted the acceleration of project implementation and inter-agency collaboration. As Raiser prepares to assume a new role in Europe, he reiterated his commitment to Bhutan’s development goals.

Bhutan’s exposure to climate-related risks, including glacial lake outburst floods and unpredictable monsoons, has made resilience a priority. The CPF includes support for climate-smart agriculture, disaster risk management systems, and improved water governance. These measures aim to enhance the safety and livelihoods of over 250,000 people. The framework also offers technical and financial assistance to help Bhutan meet its Paris Agreement commitments and sustain its environmental leadership.

Cecile Fruman, Acting Director, noted the role of the Country Economic Memorandum, developed alongside the CPF, in identifying how Bhutan can use its hydropower capacity for broader economic diversification. “Hydropower can power industries and also finance them,” she said. “We need to think beyond energy exports, to jobs, innovation, and value creation. This is especially vital in tackling challenges like youth migration and underemployment.”

Fruman also mentioned discussions underway with the Bhutanese government on a proposed partial credit guarantee scheme to expand private sector lending. Though not finalized, the program is seen as a potential mechanism to improve access to finance for small businesses and startups.

The third pillar of the CPF focuses on closing infrastructure gaps to promote inclusive growth and digital transformation. Planned investments in energy, transport, and ICT aim to link communities to markets, services, and job opportunities. Enhancing digital public services and promoting fintech innovation are part of this component, particularly for remote and rural areas.

Minister of Finance Lyonpo Lekey Dorji underlined the importance of a focused investment strategy. “In our 10x GDP vision, we are not spreading resources thin. We are targeting impact,” he said. “Private investment, climate leadership, and infrastructure, that is our triangle of transformation. Even in hydropower, we are moving away from government-led projects to private-led, diversified energy portfolios that include solar, wind, and thermal.”

He also outlined ongoing reforms such as a simplified Goods and Services Tax (GST) policy designed to be corruption-resistant, predictable, and inclusive. In coordination with the Royal Monetary Authority, fiscal and monetary policies are being aligned to support investment and entrepreneurship.

“This is Bhutan’s decade,” Lyonpo said. “If we do not act now, when will we? The CPF gives us the partnership, the capital, and the global knowledge to move forward with purpose and confidence.”

The CPF was formulated through national consultations involving government bodies, parliamentarians, civil society, youth groups, and the private sector. More than 1,600 Bhutanese participated in an online survey, highlighting job creation, gender inclusion, climate action, and financial access as key concerns. These priorities reflect the expectations of youth, women, and rural entrepreneurs.

The CPF adopts a “One World Bank Group” approach, drawing on the expertise of the World Bank, International Finance Corporation (IFC), and Multilateral Investment Guarantee Agency (MIGA). It also complements efforts by development partners such as UNDP, ADB, and the EU, avoiding overlap in areas like technical education and local governance.

The World Bank also maintains a watching brief on the proposed Gelephu Mindfulness City project, which has been billed as a bold new urban development vision. While not directly involved at this stage, the World Bank has expressed openness to future collaboration should the project align with CPF priorities.

With Bhutan’s ambitions clearly mapped and the CPF providing a guiding framework, the road to high-income status by 2034 is both challenging and within reach. The partnership offers more than funding, it brings global experience, policy innovation, and shared responsibility for results.

As Bhutan prepares to implement its vision with renewed energy, the World Bank’s strategic commitment serves as both an endorsement and a catalyst. The $300 million investment is not just a number, it is a promise to help a small Himalayan nation dream big, act bold, and redefine its future.