Siddhartha Highway Upgrade in Budget Without Secured Funding; Govt Seeks Concessional Loan from AIIB

Kathmandu, Aug 28 (Nepalytix) — Nepal’s government is pushing ahead with plans to upgrade the Siddhartha Highway into a dedicated double-lane corridor, despite lacking secured funding, according to officials.

The project was announced in the FY 2082/83 budget by Finance Minister Bishnu Poudel, but no capital allocation was guaranteed. With financing still unresolved, the government is now reaching out to donor agencies for concessional loans to cover the estimated NPR 19.75 billion cost.

Officials at the Department of Roads said several donors have been approached, with the Beijing-backed Asian Infrastructure Investment Bank (AIIB) showing the strongest interest in financing the upgrade. “We have requested donors, and AIIB has expressed primary interest,” one department official said.

The detailed project report (DPR) has already been completed, estimating NPR 9.37 billion alone for tunnels and viaduct construction along the 157-km Pokhara–Butwal stretch. The government plans to complete the upgrade within five years.

Tourism promotion and regional economic expansion were cited as key reasons for including the project in the budget. However, with Nepal’s capital spending under pressure and fiscal consolidation policies in place, the government has been unable to secure internal funding, leaving donor support critical to the project’s execution.

Analysts warn that repeated announcements of large-scale infrastructure without financing clarity risk undermining investor confidence, while concessional foreign loans may raise long-term repayment burdens.