WASHINGTON, May 1, 2025—The World Bank’s Board of Executive Directors today discussed a new Country Partnership Framework for Bhutan covering FY25-29 and approved $300 million in financing to help improve regional trade and connectivity.
The Country Partnership Framework (CPF), aligned with the Royal Kingdom of Bhutan’s 13th Five Year Plan, focuses on creating more and better jobs and accelerating economic growth while safeguarding Bhutan’s unique cultural and natural heritage. It will help increase private investment, enhance climate resilience, and build resilient infrastructure for better connectivity. All these efforts will help create more and better jobs for the citizens, particularly for women, youth and disadvantaged groups.
"Good jobs are the cornerstone of development. The central focus of the new CPF is helping to create more and better jobs at a time when the country is facing high levels of youth unemployment and outward migration, said Cecile Fruman, Acting World Bank Country Director for Bhutan. “This framework will support the government to achieve its ambitious growth and development aspirations by unlocking private investment and supporting reforms to create quality jobs and opportunities.”
It focuses on improving the investment climate in job-rich sectors such as renewable natural resources, agribusiness, tourism, digital and creative industries. It also aims to facilitate access to finance and payment systems to further expand the market potential of these sectors. The strategy will also support health, education and skills development, which are preconditions for job creation.
“Unlocking the potential of the private sector, alongside the public sector, is essential for driving job creation and economic progress in Bhutan,” said Imad N. Fakhoury, Regional Director for South Asia at IFC. “Through the CPF, the World Bank Group will focus on partnership with the Royal Government of Bhutan on critical reforms that enable and mobilize private investment. Moreover, we will help identify and create opportunities across sectors such as sustainable energy; digital economy; hospitality and tourism; agribusiness; and micro, small, and medium enterprises. By leveraging public-private partnerships, mobilizing private capital, and attracting foreign direct investment, we aim to empower women and young people, boost resilience, and pave the way for a prosperous future for Bhutan.”
Bhutan is the world’s first carbon-negative country, but it is highly vulnerable to climate risks. The CPF will support efforts to enhance climate resilience and build resilient infrastructure, as well as improve energy access. It proposes a considerable increase in support to infrastructure financing to improve transport and digital connectivity, urban infrastructure, and support to the government’s ambitious plans to increase hydropower and other forms of renewable energy generation.
The CPF is informed by extensive consultations with key stakeholder groups in Bhutan, including the government, the private sector, civil society, think tanks, academia, media, development partners, and citizens.
In recent years, the World Bank Group engagement in Bhutan has increased significantly. The new CPF envisions a substantial increase in support to match the government’s development and growth ambitions, including reaching upper-middle-income country by 2029.
The World Bank Board of Executive Directors also approved $300 million financing for the Accelerating Transport and Trade Connectivity in Eastern South Asia (ACCESS) Phase 2.
The Project will help improve regional trade, transport and digital connectivity along selected corridors in Bhutan through strategic investments in digital systems for trade, green and resilient infrastructure, and policy and institutional strengthening. This includes a National Single Window for Trade and construction of the Gelephu to Tareythang Road, a critical road link along the Southern East-West Highway. It will help reduce import/export clearance time by 25 percent and travel time along the project corridor by 70 percent. Of the $300 million financing, $154 million is in the form of grants.
