Actual mobilization stood at only Rs 49.09 billion against the annual target of Rs 270 billion
KATHMANDU, Feb 12: The government received a commitment of foreign assistance worth Rs 205.84 billion in the first six months of the current fiscal year, more than three-fold of the amount pledged in the same period in the last fiscal year.
The records with the Ministry of Finance (MoF) show that development partners pledged the aforementioned amount for assistance during mid-July 2024 and mid-January 2025. Of the total amount, Nepal will be receiving Rs 151.40 billion in loans, which makes up 73.40 percent of the pledged amount.
In the review period last year, the donor agencies pledged to provide a total of Rs 59.97 billion, out of which Rs 20.27 billion (33.80 percent) was grants. The remaining amount of Rs 39.70 billion was pledged in concessional loans.
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The UK, Japan, Germany, China and Norway stood as the major donor countries in the first half of the current FY. Likewise, the European Union, World Bank (WB) and Asian Development Bank (ADB) were among the multilateral donors.
In the review period this year, the government inked an agreement to receive a notable amount of the development funds in grants. While signing 16 agreements, the donor agencies pledged to provide grants of Rs 54.76 billion to the government.
Six agreements were signed for energy development, while five were related to infrastructure development. The amounts pledged in these two sectors stood at Rs 56.41 billion and Rs 40.37 billion, respectively.
Nepal has been relying largely on loans and grants provided by the donor agencies for its development projects. The WB has expressed its commitment to provide loans of USD 150 million (Rs 20.13 billion) as a budgetary support to the government.
The ADB stood as the largest potential donor organization. The multilateral donor has pledged to provide USD 868 million in total. Of the amount, the ADB will be providing USD 37 million in grants to the Himalayan country.
Apart from energy and infrastructure development, the government has plans to mobilize the foreign assistance received during this period in climate financing and social sectors.
The government has set a target to mobilize development assistance worth Rs 270 billion in the current FY. Despite receiving the huge amount in commitment by the donor agencies, the actual realization in the review period was pretty low. According to the MoF, the government received only Rs 49.09 billion, an 18.18 percent of the annual target in the first six months.
A MoF official said the government has been facing challenges in the delay of actual realization due to lack of project preparations on time. In many cases, the bilateral and multilateral donors are even found dilly dallying in reimbursement of the pledged amount.
The MoF in its mid-term budget review has stated that the ministry has to manage adequate funds through cash transfer, due to the government’s failure in receiving the amount pledged by donors on time. The MoF in this regard has sought to manage adequate amounts in counterpart funds for the donor funded projects.
