Sustainable economic development (SED) is one focal area of German Development Cooperation (GDC) in Nepal. Several projects have been implemented by GIZ, PTB and recently also by KfW within this focal area, but a topical and strategic roof was still missing. In early 2018, the Federal Ministry for Economic Cooperation and Development (BMZ) commissioned a consultant team led by Christian Schoen from Mesopartner with the task of conducting a number of analyses and drafting a concept for an SED programme which encompasses the different projects - or modules – of GDC under a joint umbrella and provides a coherent framework for future modules under technical and financial cooperation. The programme design considers the fact that Nepalese governance structures are currently undergoing a thorough change process. The current decentralisation and federalisation process in Nepal was triggered by the country’s new constitution promulgated in 2015. Regions have been replaced by newly defined provinces, and municipalities have been given extensive decision-making powers. It is not yet clear how far not only power, but also financial resources, will be devolved to the municipal level. Therefore, an SED programme implemented during an ongoing structural change process needs to be particularly flexible in design and highly adaptive – not only during the inception phase but throughout the entire programme life.