Nepal Receives NPR 65.39 Billion in Development Aid Commitments in First Half of Fiscal Year

Kathmandu. In recent times, the development aid committed by donor agencies has been increasing alongside the commitments themselves. According to the Ministry of Finance, development aid commitments totaling NPR 65.39 billion were received during the six-month review period of the current fiscal year. Of this amount, NPR 19.25 billion was in grant assistance, and NPR 46.14 billion was in concessional loan assistance.

During the same period last fiscal year, development aid commitments of NPR 205.84 billion were received, which included NPR 54.76 billion in grant assistance and NPR 151.40 billion in concessional loan assistance. The Ministry of Finance stated that there is a strong possibility of a significant increase in the committed amount during the third quarter, as negotiations for three projects with the World Bank have been completed, and negotiations for one project with the Asian Development Bank are currently underway.

Regarding the status of development aid receipt, while the projection for development aid mobilization in the current fiscal year is NPR 287 billion, NPR 61.07 billion has been received up to the review period. This receipt accounts for 21.27 percent of the initial projection. The government had projected to mobilize NPR 270 billion in development aid last fiscal year, of which NPR 49.0935 billion was received during the review period, representing 18.18 percent of the projection.

Based on the available resources from foreign-aided projects currently under implementation, the Ministry of Finance indicated that there is potential for a significant increase in foreign aid if project implementation becomes more effective. According to the Ministry, available resources yet to be received include USD 2186 million from the Asian Development Bank and USD 1600 million from the World Bank. The Ministry of Finance also noted that problems persist in development aid mobilization.

The issue where actual receipts remain relatively low despite committed amounts persists due to delays in timely preparation and contract management during the implementation phase following the financial agreement for foreign aid. Furthermore, inter-agency coordination for foreign aid projects/programs is weak. The review report mentions that problems in implementation are prolonged because high-level mechanisms formed for project/program execution do not meet regularly, and in some programs, meetings are not held at all.

Refunds Pending Exceed NPR 14 Billion. According to the Ministry of Finance, at the beginning of the fiscal year 2082/83, the amount to be received as reimbursement for expenditures made from the Government of Nepal's resources for development aid was NPR 18.2428 billion. As of the end of Poush in the current fiscal year, NPR 19.15 billion had been spent, and while NPR 23.22 billion in refunds has been received, the amount pending reimbursement as of the review period stands at NPR 14.17 billion. In the same period last fiscal year, the amount pending reimbursement was NPR 13.17 billion.