Nepal | June 25, 2019

Foreign aid commitment down nearly 30 per cent

Himalayan News Service
At a glance

Amount in Rs million; Source: MoF

Kathmandu, April 18

Foreign aid commitment dropped by almost 30 per cent in the first nine months of the current fiscal year, as inability to identify new development projects sapped the interest of development partners.

Nepal received Rs 182.75 billion in foreign aid commitment in between mid-July and mid-April of this fiscal year, as against Rs 260.56 billion in the same period last fiscal year.

“Aid commitments do not rise every fiscal year,” said Baikuntha Aryal, chief of the International Economic Cooperation Coordination Division at the Ministry of Finance (MoF). “We had received higher commitments last fiscal year. Since many of these projects — most of which are multi-year — are in the implementation phase, it is natural for aid commitment to drop this fiscal year. So, there is nothing unusual.”

His statement indicates that unless Nepal is able to identify new projects, aid commitment will not go up.

At a time when the country is trying to rise from the rubble of earthquake, there should not be dearth of new projects. But reconstruction works are moving ahead slowly, which is one of the reasons why aid commitments has failed to go up this fiscal year, other MoF officials said on condition of anonymity.

Of the total aid commitment received by Nepal in the nine-month period, Rs 116.81 billion, or almost 64 per cent, was for post-quake reconstruction and rehabilitation works. Of this amount, Rs 78.36 billion, or 67.10 per cent, will be released to the government in the form of loan, while the remaining Rs 38.45 billion will be released in the form of grants.

Foreign donors had expressed commitment to extend $4.1 billion for post-quake reconstruction and rehabilitation during the International Conference on Nepal’s Reconstruction (ICNR) held on June 25 last year.

“We hope other countries that had pledged to support Nepal during ICNR will sign agreements with government in coming days,” Aryal said.

In the first nine months of the current fiscal year, the biggest donor agency for Nepal was the World Bank, which expressed commitment to extend Rs 40.07 billion in aid. Of this amount, Rs 32.89 billion was in the form of loan and the remaining Rs 7.18 billion was in the form of grant.

Second in the league table was India, which pledged to give away Rs 33 billion in grant. This was followed by the Asian Development Bank, which expressed commitment to release Rs 31.11 billion in loan and grant.

Other major donor agencies during the nine-month period were Japan, which pledged to extend Rs 26.19 billion in grant and loan, followed by China, which expressed commitment to release Rs 23.06 billion grant and loan.


A version of this article appears in print on April 19, 2016 of The Himalayan Times.


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