Kathmandu. Nepal’s foreign development assistance has improved significantly. The International Economic Cooperation Coordination Division of the Ministry of Finance has released the fiscal year 2081. 82 (2024). According to the Development Assistance Report of Nepal 25, Nepal has received 1.60 billion US dollars in foreign aid.
This is an increase of 15.5 percent from $1.39 billion in the previous fiscal year. The report shows that after the COVID-19 pandemic and global economic instability, the flow of foreign aid has returned to normal.
Debt burden increases, grants decrease
Although the total number of co-operatives has increased, the change in its structure has indicated new challenges. Of the total assistance, 66.9 percent ($1.075 billion) is loans. Loans now dominate Nepal’s aid portfolio, which was a grant majority 10 years ago. Foreign aid includes $34.44 million (21.4%) and technical assistance of $187.2 million (11.6%).
At a time when Nepal is set to be upgraded from a ‘least developed country’ by 2026, experts have taken seriously the decrease in grants and increase in debt. The then Finance Minister Rameshwor Khanal said in the report, “With this structural change from grant to loan, we need to be more careful in debt management and prioritization of projects.” ’
Multilateral donor agencies account for the largest contribution of assistance to Nepal (68.1%).
| donor body | Aid (US Dollar) | Mainfield |
| World Bank | 541.0 million | Infrastructure and Social Security |
| {{TAG_OPEN_b_69}Asian Development Bank | 443.2 million | Development Construction |
| Bharat | 107.8 million | Bilateral assistance (top position) |
| UK | 84.2 million | {{TAG_OPEN_span_47}Climate Change and Industrial Development |
The World Bank has almost doubled its aid from the previous year, taking the top spot. Among the bilateral partners, India is in the first position with USD 107.8 million. The UK’s aid has increased by 141.8 per cent. On the other hand, U.S. aid fell by 58.5 percent.
Nepal aims to become a middle-income country by 2030.TAG_OPEN_p_72 However, the fact that the share of foreign aid in the budget has fallen to a decade-low and that only a handful of donors (92.3% of the top 10) have a large share of foreign aid, indicating both dependency and risk.
Finance Secretary Dr. According to Dr. Ghanashyam Upadhyaya, although the subsidized loan has opened the door to big investment, the main task now is to ensure its utilization and timely payment.
