A series of natural disasters and a repeated painful cycle have pushed us to reinterpret the meaning of resilience. Before August 26, 2026, Rasuwagadi/Timure was a trans-boundary trade, transit, and cultural hub, but today the flash flood claimed around 1454 lives, while turning it into a remote area, with the destruction of critical infrastructure like roads, bridges, hydropower plants and water supply. The Budhigandaki flood that hit Gorkha district on October 11, 2026 has rubbed salt into the wound caused by the Bhotekoshi mayhem.
Land use planning and its flawless implementation are a gateway to resilience. There should be an immediate and long-term integrated reconstruction plan for the flood-affected Trishuli-Betrawati-Rasuwagadi corridor. Temporary connectivity with installation of Bailey bridges for urgent relief and logistical supply is an exigency, whereas elevated road alignment, tunnels, long-span high-level bridges, and development of integrated settlement on little high and dry ground should be part of a sustainable long-term plan.
On the same note, remodeling of the powerhouse of the hydropower plants and their access tunnel, check dam construction and bioengineering application across and along the rivers, reliable cross-boundary Early Warning System, etc., should also be integral components of the government's blueprint plan. More importantly, henceforth, any new construction and reconstruction works call for inclusion of climate-proofing upfront costs to withstand future climate change impacts. Inclusion of such costs means future savings and long-term value return, as the project is less vulnerable to climatic stress.
Resource mobilisation
Fundraising and resource mobilisation are crucial for speedy reconstruction. We should have strategic multiple financial approaches for fund generation, mobilisation of resources, and modus operandi. Domestic resources and Diaspora fund mobilisation to finance and run rehabilitation and reconstruction projects under a suitable form of Public-Private Partnership (PPP), such as the Build-(Own)-Operate-Transfer BOT/BOOT framework or Hybrid Annuity Model (HAM), can be one procedure. HAM is found to be a more relevant PPP model in Indian National Highways and road construction, given its clarity and flexibility in balancing financial risks and funding accountability between the government and the private investors, and the repayment mechanism with operation and maintenance (O&M) responsibility.
A newly established autonomous entity, the 'Alternative Development Finance Fund' (ADFF) could better facilitate HAM model instead of Engineering Procurement Construction (EPC) - purely government funded model or Build-Operate-Transfer (BOT) - fully private funded Toll model for reconstruction and new construction of highways, roads, tunnels and bridges to revive the private sector confidence. It will surely help to mitigate the liquidity problem to a great degree that the Nepali banking sector is facing today.
As Nepal's budgetary structure is concerned, revenue collection is the main source, which stands at 68.26 per cent of the total budget, amounting to Rs. 1405.59 billion for F/Y 2083/84 BS. Contribution from corporate or industry-based revenue stands just around 11 per cent of the total revenue, and we are not in a position to expand it overnight. Public consumption taxes like VAT, customs, excise duties, and personal income taxes, etc., are the backbone and support more than two-thirds of the total revenue. An extra 5 per cent VAT on electricity consumption could be a latest example of it. Hence, mere CapEx allocated out of such revenue couldn’t bear multi-billion-dollar disaster-affected infrastructure funding.
In his speech delivered at the 8th convention of the UNGA, Prime Minister Balendra Shah highlighted the scale of loss and damage to both lives and property caused by a single climatic disaster for an LDC country like Nepal. Nepal has suffered a loss of a total of 10 per cent of GDP without generating global greenhouse gas emissions. Today, fund generation for rehabilitation and reconstruction remains a central issue and challenge. Expecting a significant assistance package from the 'Fund for Responding to Loss and Damage' (FRLD) could be overestimating because it also has structural limits and a cap. Under the Barbados Implementation Modalities (BIM), the FRLD has a limit to fund between $5 million and $20 million per project, and there is a bundle of formal applications (176 in waiting) to receive the fund on climate grounds by 119 countries. Surprisingly, COP27 made its release under a voluntary or solidarity-based framework rather than a legal mechanism of compensation or liability.
Financial diplomacy
The prolonged war between Russia and Ukraine, and uncertainty at crucial maritime choke points, the Strait of Hormuz, caused by the US-Iran war, have also strained our economy, slowing down growth, and fueling inflation. Thus, in this awkward situation, sheer domestic and Diaspora fund mobilization, and FRLD solidarity couldn’t ramp up our reconstruction endeavour. Nepal equally needs concessional grants and loans for speedy recovery. Before 2025, Nepal used to receive loans from the World Bank at a 0.75 per cent interest rate; given our per capita GDP growth and date nearing LDC graduation, this rate was doubled to 1.5 per cent.
On the climate front, this is the right time to show a maturity of our financial diplomacy. It would have been an amplifying message had our high-level delegates tabled the proposal on releasing a substantive amount of concessional grants and loans on the sidelines of the UNGA, along with non-debt grant-based public financing. Interest-free loans, or at or below the 0.5 per cent interest rate from international financial institutions like the WB, IMF, ADB, etc., for a repayment period of over 40-50 years, plus more FDI to establish green energy-based industries to support a noble task of 'de-carbonation' as a part of climate justice for Nepal should be our priority. One big climate platform is waiting: Nepal will not miss the chance to table this overriding proposal at the next UN Climate Change Conference, COP 31, in Antalya, Turkey, in November 2026.
(Thapa is a former senior engineer of the Nepali Army.)
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