Provincial and Local Governance Strengthening Programme (PLGSP) is a flagship initiative by the Government of Nepal (GoN) aimed at enhancing policy support, institutional development, and capacity building at Provincial and Local Government (PLG) levels. The programme respects the principles of devolution and local autonomy, ensuring that it meets the specific needs of these governments while fostering cooperative federalism. Led by the Ministry of Federal Affairs and General Administration (MoFAGA) and supported by the European Union (EU), Foreign, Commonwealth and Development Office (FCDO), Swiss Agency for Development and Cooperation (SDC), Norwegian Government, and the United Nations Development Programme (UNDP), it aims to promote inclusive, accountable, and effective governance, translating constitutional commitments into practice and improving service delivery for citizens. The main goal of the programme is to attain the functional, sustainable, inclusive, and accountable provincial and local governance. In line with this goal, it has two objectives: strengthen provincial and local governance systems and procedures, and intergovernmental (IG) relationships to maximize benefits of cooperative federalism for Nepali people; and enhance the capacity of provincial and local governments to deliver services and development outcomes effectively to people. To contribute the stated goal and objectives, three outcomes, one each at federal, province and local level are designed at higher level, while three outputs are designed under each of these outcomes.

PLGSP’s implementation arrangement comprises of Programme Coordination Unit (PCU) under MoFAGA, Provincial Programme Support Units (PPSU) under Office of the Chief Minister and Council of Ministers (OCMCM), and technical assistance at provincial and local levels. Although the programme was designed to begin in July 2024 for a five-year period (2024-2029), implementation was delayed. The Programme Document (ProDoc) was formally endorsed only in February 2025, leaving less than six months of implementation timeline during the GoN’s Fiscal Year 2080/81 (from mid-July 2024 to mid-July 2025). The total budget for PLGSP in FY 2024/25 stood at NPR 1,814 million, comprising NPR 1,515 million under JFA and NPR 299 million for TA. Of this, the programme utilized NPR 801 million, representing an overall budget execution rate of approximately 44 percent. This includes NPR 657 million expenditures under JFA, NPR 144 million under TA. The combined planned budget across all seven provinces was NPR 1,012 million, out of which NPR 290 million was spent during the reporting period. These figures highlight the need for strengthening implementation planning and financial execution capacities next year and beyond. It is important to note that the programme advanced on several fronts despite these constraints.

Despite these initial delays and challenges, the programme achieved meaningful progress at federal, provincial, and local levels during the reporting period. They include:

• Local governments (LGs) now have a dedicated IT officers co-funded by PLGSP. This has strengthened digital services and improved record-keeping across all 753 municipalities.
• Provincial governments (PGs) have endorsed important laws to strengthen local governance. Sudurpashchim Province enacted a Provincial Local Service Act that has laid the foundation for a professional local civil service. Similarly, Koshi Province drafted four new laws, including two provincial Acts and two model laws for municipalities.
• PGs have been adopting new digital systems for more efficient, transparent administration. Koshi Province connected all 137 municipalities to an integrated Government Integrated Office Management System (GIOMS) to improve record-keeping and accountability. Madhesh Province introduced a personnel information system and piloted an e-Cabinet for paperless government meetings. Lumbini Province rolled out an e-procurement platform to make public spending more transparent.
• LGs are strengthening their planning and accountability systems. Many municipalities have adopted tools such as the Local Institutional Self-Assessment (LISA) and the Medium-Term Expenditure Framework (MTEF) to improve planning and monitor performance. Currently, 734 out of 753 local governments (81.22%) conduct LISA annually, ensuring systematic self-assessment. Notably, in Koshi and Sudurpashchim provinces, all 137 and 88 municipalities respectively now use LISA every year, creating a consistent approach to track progress and address local priorities effectively.
• Capacity building took place across all provinces. Over 11,700 provincial and local representatives were trained in resultsbased planning, financial management, monitoring, and inclusive service delivery. This effort is creating a more capable local workforce.
• Gender Equality and Social Inclusion (GESI) was a priority throughout. Three provinces i.e. Bagmati, Karnali, and Sudurpashchim carried out GESI audits to identify gaps, with Sudurpashchim completing 19 audits this year alone. Madhesh developed GESI action plans and trained focal persons in six districts to put those plans into practice. These efforts are making local planning more gender-responsive and inclusive, though there’s still room for improvement. • LGs launched innovative pilot projects with support from PLGSP’s Innovative Partnership Fund (IPF). Gandaki Province invested in digital education to reach rural students, Koshi supported women-led kiwi farming enterprises to boost local incomes, Lumbini piloted eco-tourism initiatives, and Karnali developed ICT-based planning tools for LGs. These community-driven projects show how small investments can create practical solutions that local governments can sustain and scale up.
• Joint monitoring visits improved transparency and feedback. Officials representing MoFAGA, PGs, Development Partners (DPs), and civil society conducted joint field visits to review progress. These collaborative reviews let local communities give feedback and helped PLGSP make quick course corrections. PLGSP even used lessons from the field to update the IPF guidelines, ensuring federal policies better align with local needs.
• Low first-year spending highlighted the need to accelerate implementation. Provinces on average used only about 12-37 percent of their budgets, except Sudurpashchim which achieved around 61 percent, mainly due to the late start. PLGSP is tackling this by strengthening planning and support so that next year more of the budget turns into tangible results.
• A unified Monitoring and Evaluation framework has been rolled out with an online Management Information System (MIS) to enable real-time tracking of results and feeding into Nepal’s first “State of Federalism” report, a major step toward evidence-based policymaking. This digital M&E system has laid the groundwork for more transparent and accountable governance across all levels.
• New collaborative platforms such as Provincial Coordination Councils and Provincial Steering Committees have been established to institutionalize regular dialogue among federal, provincial, and local officials. These forums have strengthened joint planning and problem-solving to exemplify that cooperative federalism in action and that different tier of government work together to address local needs.
• Women’s leadership in local governance is gaining momentum. Madhesh trained 132 women leaders through transformative programs, Koshi capacitated 83 Judicial Committee members. These efforts are helping bridge gender gaps and promote inclusive, representative decision-making across provinces.

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