Nepal sees foreign aid commitments soar to NPR 222 billion in FY 2024-25
KATHMANDU: Nepal has witnessed a remarkable surge in foreign aid commitments, reaching nearly NPR 222 billion in the first eight months (Shrawan to Falgun) of the fiscal year 2081/82 (2024/25), according to the Ministry of Finance. This marks a significant jump from NPR 101.2 billion recorded in the same period of the previous fiscal year, reflecting growing international confidence in Nepal’s development initiatives.
The Ministry reported that loans dominate the commitments, accounting for 74.3%, while grants make up 25.7%. The energy sector leads with a 25.4% share, underscoring Nepal’s focus on hydropower and renewable energy projects. Environment and climate initiatives follow closely with 21.7%, driven by global priorities on sustainability.
Other key sectors include irrigation (12.8%), water (11.5%), disaster management (9.1%), transportation (6%), agriculture (4.3%), and social development (4.3%). The governance sector, however, received a mere 0.2% of the total commitments.
The surge in foreign aid highlights Nepal’s strategic efforts to bolster infrastructure and resilience amid global economic challenges. Analysts suggest that the increase in commitments, particularly in energy and climate sectors, aligns with Nepal’s ambition to enhance energy security and address climate change impacts. However, the heavy reliance on loans raises concerns about future debt sustainability, prompting calls for prudent financial management.
As Nepal continues to attract international support, the government faces the challenge of translating these commitments into tangible development outcomes, particularly in critical sectors like irrigation, water, and disaster management, which are vital for the country’s economic and environmental stability.
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