Foreign aid disbursement up 27 percent

- Post Report, Kathmandu

Jan 1, 2018-

The disbursement of foreign aid jumped 27 percent to $1.4 billion in the last fiscal year, with post-earthquake reconstruction works and humanitarian assistance consuming quite a big chunk of funds provided by foreign donors and development partners.

Of the total aid, including grants, soft loans and technical assistance, received by Nepal in 2016-17, 71 percent was contributed by five donors and development partners, namely the World Bank, the Asian Development Bank (ADB), the United States Agency for International Development (USAID), the United Kingdom and the UN Country Team, states the Development Cooperation Report unveiled by the Ministry of Finance on Sunday.

Of the total aid that was disbursed, $582.39 million (41.76 percent) was in the form of grants, $548.85 million (39.36 percent) was in the form of loans and $263.36 million (19 percent) was in the form of technical assistance. 

According to the Finance Ministry, the aid disbursement through the government’s on-budget projects stood at 73 percent in 2016-17, as against 63 percent in 2015-16. “This shows more foreign assistance flowed through the government’s coffers,” Finance Minister Gyanendra Bahadur Karki said. The country’s annual disbursement of Official Development Assistance (ODA) stood at $1.1 billion in 2015-16. Previously, the amount used to hover in the range of $960 million to $1.1 billion.

In 2016-17, the World Bank was the largest contributor to ODA in Nepal among multilateral lending agencies. The World Bank Group disbursed $346 million during the year, the ADB disbursed $253.9 million, the UN Country Team disbursed $120.7 million and the European Union disbursed $83.9 million. 

Likewise, the USAID was the largest bilateral donor for Nepal in 2016-17 with ODA disbursement standing at $134.1 million. Also, disbursement of funds provided by international non-governmental organisations (INGOs) jumped to $187 million in 2016-17 from $168 million in 2015-16. Most of the fund provided by INGOs was disbursed in earthquake affected areas. 

In 2016-17, Province 3 was the biggest recipient of ODA, with disbursement standing at $354.8 million. This is because most of the government institutions are located in the province. Next in the line of the top ODA recipient was Province Number 7 ($61.1 million), followed by Province 6 ($56.89 million).  

In the last fiscal year, 436 projects were supported by foreign donors and development partners, up from 369 in the previous year. On average, each development partner disbursed the assistance through nine counterpart ministries or agencies. 

In terms of sector-wise disbursement, education sector received the biggest chunk of ODA ($127.24 million). It was followed by local development, housing, drinking water, policy and strategy, health, urban development, road transportation, energy, agriculture, earthquake reconstruction, economic reform, social, environment, and science and technology. 


Top 5 Multilateral Donors 

World Bank Group - $345.96 million

Asian Development Bank - $253.89 million

UN Country Team - $120.72 million

European Union - $83.88 million

IFAD - $11.55 million

Top 5 Bilateral Donors

USAID - $134.05 million

United Kingdom - $128.31 million

Japan - $77.65 million

India - $59.25 million

China - $41.24 million

Top 5 ODA-recipient sectors

Education - $127.23 million

Local Development - $123 million

Housing - $112.16 million

Drinking Water - $110.09 million

Policy and Strategic - $101.75 million

Published: 01-01-2018 08:34

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