Social Sciences and Humanity Studies Academic Blog

Summary of Development Cooperation Report 2014/15

Posted in My life by Shekhar on March 14, 2017
  1. General scenario of development cooperation in Nepal
    1. Nepal receives development assistance through Multilateral, bilateral and INGOs in the form of grant, loan and technical assistance. Various modality of development assistance exist in Nepal namely program support, project support, SWAp, humanitarian assistance and budget support.
    2. The development assistance is in the form of either on-budget or off-budget. If it’s on on-budget system, it may be off treasury and on-treasury, however the recent development cooperation policy of Nepal focus on on-budget system of development assistance with relevant allocation areas of needs.
    3. New constitutions promulgated in 20 September 2015 with focus on mobilizing aid based on national need and priorities and adopting the national budgetary system
    4. The country has right to take foreign aid based on macro-economic stability


  1. Current ODA scenario in Nepal
    1. The annual disbursement of ODA is around 1 billion dollar (in average). The ODA volume represents 20% of the national budget of Nepal.
    2. Volume of overall development assistance to Nepal in 2014/15 reached USD $ 1.13 billion among which 90% was ODA and remaining 10% was INGO.
    3. Among total ODA, multilateral donors shares 45% and bilateral shares 55%.
    4. Project support (of stand-alone nature)continues to dominate the ODA in Nepal with share of 60%, while other type of support like Program support (17%), SWAP (14%), humanitarian support (5%), budget support (2%) and other (2%) are similar
    5. There has been progress in the method of budget support. Off budget shares only 35% (compare to 29% in 2015) while on-budget shares 65%. Within in on-budget, off-treasury is 34% and on-treasury is 66%
    6. Health sector receiving highest ODA followed by local development, education, road transportation and other sectors
    7. Geographical distribution of ODA seems more on district level (67%) and less on national level (33%) but the beneficiaries are not limited within in single districts in most of the projects. Among 5 development regions of Nepal, Far-western development regions (38 USD per person) receives highest ODA in terms of perCapita disbursement with lowest for western development region (20 USD per person)
    8. Among total foreign assistance, the expenditure was just 45% in 2014/15. This is lowers to previous years 51% (2013), 64% (2012) and so on. Reasons behind decrease may be incomplete reporting, low capital expenditure etc
  2. Five largest donor funded projects in Nepal
    1. Energy: Power System Expansion Project – 1360 USD million
    2. Education: School Sector Reform Program – 874.6 USD million
    3. Energy: Tanahu Hydro Power Project – 404 USD million
    4. Poverty: Poverty Alleviation Fund II – 332 USD million
    5. Health: Nepal Health Sector Programme NHSP II – 289 USD million
  3. Leading Donors and their prime sectors in Nepal
    1. The World Bank Group – education, economy reform and agriculture sector
    2. Asian Development Bank – energy, urban development and drinking water
    3. UN Team – social sectors apart from health and education
    4. USAID – health
    5. EU – local development
    6. UK – Home affairs


  1. Korea ODA in Nepal
    1. Korea made commitment of 10 million USD in 2014/15 on international conference on Nepal’s reconstruction in 2015
    2. Korea has 100% off-budget type of support to the Government of Nepal.’
    3. Korea’s ODA disbursement in Nepal shares 1.63% of total ODA disbursements in Fiscal year2014/15. The World Bank made the largest disbursement i.e. 18.43% and UK made second largest with 16.47%.
    4. Korea had 10 projects in Nepal in 2014/15 and it has been coordinating with 5 ministries for its implementation
    5. Korea index of Aid Fragmentation is 0.44. As per the index, a score of 1 represents a perfectly un-fragmented portfolio while a score of 0 represents a portfolio that is entirely fragmented. The Asian Development Bank has the highest aid fragmentation (0.06)
    6. Korea’s under Technical Assistance category of aid support, disbursed 16 million USD in 2014/15 (Mugu project; 1.5 million USD, DRC project: 356 thousand USD, Tikapur Hospital project: 768 thousand USD, NHISP project: 200 thousand, Nuwakot Health Reconstruction project: 1.4 million USD, ILO LIfE Project: 450 thousand USD etc)
    7. Trends of Korea disbursement in Nepal (2011-15) shows the mixed disbursement in volume (USD million); 22 (2011), 5(2012), 14 (2013), 9 (2014) and 17 (2015) approximately

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