𝐖𝐨𝐫𝐥𝐝 𝐁𝐚𝐧𝐤 𝐔𝐧𝐯𝐞𝐢𝐥𝐬 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐜 $𝟑𝟎𝟎𝐌 𝐒𝐮𝐩𝐩𝐨𝐫𝐭 𝐏𝐥𝐚𝐧 𝐭𝐨 𝐁𝐚𝐜𝐤 𝐁𝐡𝐮𝐭𝐚𝐧’𝐬 𝐇𝐢𝐠𝐡-𝐈𝐧𝐜𝐨𝐦𝐞 𝐀𝐦𝐛𝐢𝐭𝐢𝐨𝐧𝐬 𝐛𝐲 𝟐𝟎𝟑𝟒

…𝒕𝒉𝒆 𝒑𝒍𝒂𝒏 𝒂𝒊𝒎𝒔 𝒕𝒐 𝒉𝒆𝒍𝒑 𝑩𝒉𝒖𝒕𝒂𝒏 𝒂𝒄𝒉𝒊𝒆𝒗𝒆 𝒉𝒊𝒈𝒉-𝒊𝒏𝒄𝒐𝒎𝒆 𝒔𝒕𝒂𝒕𝒖𝒔 𝒃𝒚 2034 𝒕𝒉𝒓𝒐𝒖𝒈𝒉 𝒕𝒂𝒓𝒈𝒆𝒕𝒆𝒅 𝒓𝒆𝒇𝒐𝒓𝒎𝒔 𝒂𝒏𝒅 𝒊𝒏𝒗𝒆𝒔𝒕𝒎𝒆𝒏𝒕𝒔

By Kinzang Lhamo and Yeshi Dolma

The World Bank Group has announced a $300 million strategic support plan for Bhutan under its new Country Partnership Framework for 2025 to 2029. The initiative aims to support Bhutan’s objective of reaching high-income status by 2034 by focusing on private sector development, climate resilience, and infrastructure improvements, which are key priorities in the country’s 13th Five-Year Plan.

The partnership marks a continuation of Bhutan’s long-term collaboration with the World Bank and comes as the Himalayan kingdom works to recover from the economic impacts of the COVID-19 pandemic while undertaking structural reforms. Aligned with Bhutan’s national development vision and its strategy to increase gross domestic product tenfold, the framework is designed to support growth through innovative and environmentally sustainable policies.

Central to this framework is a $300 million project that includes significant investment in infrastructure. This includes a new 14-kilometer road connecting Tareythang to the planned Gelephu Mindfulness City in southern Bhutan. The road is expected to serve as a vital trade and transit corridor, improving connectivity for rural and semi-urban communities and supporting regional integration. Of the total funding, $154 million will be grants and $146 million will be provided as highly concessional loans, reflecting the World Bank’s support for Bhutan’s long-term growth and resilience.

Finance Secretary Dasho Leki Wangmo, speaking at the launch event, said, “This partnership reflects our vision to transition into a high-income country within the next decade. 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.”

The framework places strong emphasis on expanding private sector participation, which currently contributes less than 30 percent to Bhutan’s GDP. By 2029, the aim is to increase this to 60 percent. The CPF supports reforms to attract foreign direct investment, improve access to finance, reform state-owned enterprises, and strengthen property rights. The focus is on sectors such as agribusiness, tourism, digital services, and renewable energy.

Martin Raiser, World Bank Vice President for the South Asia Region, highlighted the expected impact of the framework: “We aim to support better opportunities for a quarter of Bhutan’s population and enhance resilience for a third. This partnership addresses key challenges related to jobs, innovation, and inclusive development.” He also acknowledged the work of teams deepening engagement with Bhutan and reaffirmed his commitment to the country’s development as he prepares to take on a new role in Europe.

Climate change poses a significant challenge for Bhutan, with risks such as glacial lake outburst floods and unpredictable monsoon patterns. The CPF includes measures to improve the livelihoods and safety of over 250,000 people through climate-smart agriculture, disaster risk management, and enhanced water governance. It also supports Bhutan’s efforts to meet its international environmental commitments under the Paris Agreement.

Acting Director Cecile Fruman explained the role of the Country Economic Memorandum, developed alongside the CPF, in identifying ways to leverage Bhutan’s hydropower resources for economic diversification. “Hydropower can power industries and also finance them,” she said. “We need to think beyond energy exports to create jobs and innovation. This is especially important for addressing youth migration and underemployment.” She also noted ongoing discussions with the Bhutanese government on a potential partial credit guarantee scheme to increase private sector lending, which could benefit small businesses and startups.

A third focus of the framework is closing Bhutan’s infrastructure gaps to support inclusive growth and digital transformation. Planned investments include energy, transport, and information and communication technology infrastructure to connect citizens with markets, services, and employment. Improving digital public services and promoting fintech innovation are also priorities to enhance productivity and digital access, especially in remote areas.
Finance Minister Lyonpo Lekey Dorji emphasized a targeted approach: “In our strategy to increase GDP tenfold, we are focusing resources on impact. Private investment, climate leadership, and infrastructure form our triangle of transformation. Even in hydropower, we are shifting from government-led projects to private-led and diversified energy portfolios including solar, wind, and thermal.”

He also outlined upcoming reforms, including a simplified Goods and Services Tax policy designed to be transparent and inclusive. In coordination with the Royal Monetary Authority, fiscal and monetary policies are being aligned to create a more supportive environment for investment and entrepreneurship.

Lyonpo concluded, “This is Bhutan’s decade. The Country Partnership Framework gives us partnership, capital, and global knowledge to move forward with confidence.”

The CPF was developed through extensive consultations involving government agencies, parliamentarians, civil society, youth groups, and the private sector. More than 1,600 Bhutanese participated in an online survey, helping to shape the framework’s emphasis on job creation, gender inclusion, climate action, and access to finance.

The framework adopts a “One World Bank Group” approach, drawing on expertise from the World Bank, the International Finance Corporation, and the Multilateral Investment Guarantee Agency. It also complements the efforts of other international organizations such as UNDP, the Asian Development Bank, and the European Union, avoiding duplication in sectors like technical education and local governance.

The World Bank is monitoring the proposed Gelephu Mindfulness City project, a new urban development initiative. While not currently involved, the Bank has expressed openness to future collaboration if the project aligns with CPF priorities.

Bhutan’s path to achieving high-income status by 2034 faces challenges, but the CPF provides a clear framework to guide progress. The World Bank’s strategic support offers not only financing but also policy expertise and shared responsibility for outcomes.

As Bhutan prepares to implement its development vision, the $300 million commitment signals sustained international engagement to support the country’s economic transformation.