Nepal: Skills Development Project

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Despite a decade of conflict until 2006 followed by protracted political instability, Nepal, as of project appraisal, had made good progress in reducing poverty and achieving almost universal enrollment in primary education with gender parity. However, workers were poorly educated, and school leavers did not have the skills needed by the labor market that had a rapidly growing demand for skilled workers. The TVET system faced key constraints, including insufficient and inequitable access to TVET, poor training quality and low market relevance, and weak institutional capacity.

The Skills Development Project, approved by the Asian Development Bank (ADB) for a grant of $20 million in June 2013 was designed to address the lack of skilled labor in Nepal, which was hindering economic growth. It aimed to help the government (i) initiate strategic reforms to improve the overall management and performance of the technical and vocational education and training (TVET) system, (ii) improve the quality and relevance of  public training delivered  by the Council for Technical Education and Vocational Training (CTEVT) schools, and (iii) increase private sector engagement in training delivery and job placement.

The project’s envisaged impact was increased employability of the Nepalese workforce, and its expected outcome was the establishment of a market-responsive and social and gender-inclusive TVET system. These results were to be achieved through four outputs: (i) expanded provision of inclusive, market-oriented training, with a strong focus on gender equality and social inclusion (GESI); (ii) improved quality and relevance of TVET provision, including the enhancement of 10 CTEVT schools through a quality improvement program (QIP), the introduction of new mid-level skills programs, and the establishment of direct links to industry and employers; (iii) policy, institutional, and operational reforms, including a new TVET sector strategy and an umbrella fund for coordinated sector financing; and (iv) effective project management and monitoring and evaluation (M&E).

The project was well implemented, with project performance consistently on track. Implementation was slow initially but accelerated to achieve the project’s output 1 and 2. But Nepal’s transition to a federal system of government in 2015 disrupted the project’s foundational work on TVET sector reform. Neither the TVET sector strategy nor the new TVET fund could be approved until the new Federal TVET bill is legislated, and this affected the achievement of some targets under output 3.

Against a 45,000 target, the project trained 47,263 persons, 41% of whom were women (target: 40%), and 86% were from excluded groups (target: 30%).  Almost all these trainees participated in the level 1 courses providing foundational vocational skills training in 84 different market-demanded skill areas in construction, manufacturing, and services.  However, only 75% of the level 1 training graduates passed the competency tests, indicating the need for further quality improvement. Private providers, engaged under performance-based contracts, delivered 76% of the training, almost reaching the target of 80% private provision. The use of performance-based contracting proved successful in meeting the employment outcomes of trainees as well as the GESI targets. Graduates of training delivered by private providers passed the skills tests at a much-higher rate than graduates from public providers.

New level 2 courses offered for persons with 3 years’ work experience were completed by 5,450 participants.  While only 59% of the level 2 graduates passed the skills test, the graduates reported that on average their monthly income increased significantly after the training. Fifteen mid-level programs comprising a technical school leaving certificate in hospitality and culinary arts and 14 diploma programs in health sciences, engineering, and animal or plant science were phased in from 2014 to 2017. The first 3 intakes were below the target but the annual increase of 550 student places contributed by the new programs represented a significant strengthening of the public system. In 2019, students in the new diploma programs comprised 29% of the diploma students in all 59 CTEVT schools.

Because of QIP implementation, strategic planning and implementation, plans for revenue generation, GESI support, and facility maintenance planning have improved in the school pilots.  However, some elements were challenging, and further support is needed to help schools overcome structural obstacles including insufficient instructors and lack of resources to implement some QIP standards. More effort is also required to establish enterprise/industry linkages, deemed by some school directors as the most valuable QIP component as it helps the schools identify labor market needs and training placements.  Project management support enabled the consistent monitoring of the basic skills training, the results of which were stored in a computerized database that was merged with the Ministry of Education, Science and Technology’s (MOEST) TVET database after project completion. It also ensured more efficient financial systems, the mitigation of fiduciary risks through fiduciary reviews, and a thorough post-project evaluation that included third-party verification and tracer studies.

Substantial output deliveries, notwithstanding the stalled progress in some output 3 indicators, enabled the project to achieve its outcome targets. Third-party verification confirmed that 76% of the project’s skills training graduates, against the 75% target, were employed within 6 months after training completion.  Of those employed, 40% were women and 72% were from excluded groups. Women’s employment was concentrated in services (52%), and was surprisingly high in construction (37%). Men’s employment was mostly in construction (51%) and manufacturing (31%).  The project tracer study found that 91% of employers were satisfied with the graduates they employed, both in terms of the graduates’ theoretical knowledge and practical skills. 

Overall, the project has demonstrated the viability of its innovative, whole-cycle approach to skills development, which encompassed labor market assessments, mobilization of potential trainees, training, and employment services. Although the links to the labor market still need strengthening, the project’s success could mark the beginning of a transformation in the way training services are delivered.  The MOEST served as executing agency and the CTEVT the implementing agency.

Project Information
Project Name: 
Skills Development Project
Report Date: 
June, 2020
Main Sector: 
Project Number: 
Report Type: 
Project grant
Goal 4: Quality Education
Loan Number: 
Source of Funding: 
Date Approved: 
25 June 2013
Report Rating: