Finance Minister Dr. Swarnim Wagle is leading a Nepali delegation to Washington D.C. for a two-day visit to discuss critical issues including post-Bhote Koshi flood reconstruction, Nepal’s exit from the Financial Action Task Force (FATF) grey list, and broader economic cooperation. The delegation departed on Friday night at the invitation of Ajay Banga, the president of the World Bank Group.
The visit, scheduled for October 5 and 6, 2026, aims to engage with international development partners and US officials on expanding economic assistance and mobilising further support for Nepal’s development goals. A primary objective is to attract investment from development partners and the private sector to create jobs and economic opportunities through crucial infrastructure projects, such as roads and power transmission lines.
Addressing post-flood reconstruction
A significant focus of the discussions will be the reconstruction efforts following the devastating Bhote Koshi flood, which occurred on August 26, 2026. The National Disaster Risk Reduction and Management Authority (NDRRMA) initially estimated the damage to exceed Rs 387 billion. The flood caused extensive destruction, including 37 motorable bridges (33 completely washed away, 4 partially damaged) and 68 suspension bridges. Tragically, 5,285 people remain missing as a result of the Bhote Koshi-Rasuwagadhi flood and subsequent monsoon-related disasters.
The total estimated cost for reconstruction and recovery from the Bhote Koshi flood is Rs 723 billion. The World Bank has already pledged Rs 25 billion in emergency assistance for Nepal. During the visit, Minister Wagle is expected to hold talks with representatives from the World Bank and the US government to secure additional aid for these urgent reconstruction initiatives.
Tackling the FATF grey list
Another critical agenda item is Nepal’s efforts to exit the Financial Action Task Force (FATF) grey list, a list of countries under increased monitoring for strategic deficiencies in their anti-money laundering and counter-terrorist financing regimes. Nepal was first placed on the grey list in 2008, removed in 2014 after implementing reforms, but was re-included in February 2025 due to ineffective implementation of anti-money laundering standards.
The FATF has provided Nepal with a six-point action plan to address these strategic weaknesses, with a deadline for implementation by February 2027. Exiting the grey list is crucial for Nepal to enhance its international financial credibility, attract foreign investment, and facilitate smoother trade transactions, thereby positively impacting the overall economy and creating employment opportunities.
Boosting investment and economic ties
During his visit, Finance Minister Wagle is scheduled to hold high-level meetings with senior officials from the World Bank Group, the US Treasury Department (the national treasury of the United States), and the US International Development Finance Corporation (DFC), a US federal government development finance institution. He will also meet with leading private sector investors to explore avenues for increased foreign direct investment.
The United States has provided development assistance to Nepal since 1951. The Millennium Challenge Corporation (MCC) board approved an additional $50 million for the Nepal Compact in December 2024, bringing the total budget to $747 million. Furthermore, the World Bank Group’s Country Partnership Framework for Nepal (FY2025-2031) aims to provide approximately $2.7 billion to support Nepal’s development goals and improve living standards.
While the visit is expected to yield progress on these fronts, specific commitments or agreements for additional reconstruction aid and investment expansion remain to be seen. The full timeline for the complete reconstruction of Bhote Koshi flood-affected areas and the effective implementation of the FATF’s six-point action plan also present ongoing challenges.
