Nepal Receives Generous Support: UK Commits $505 Million for Business and Green Initiatives

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KATHMANDU, Feb 21: The UK has committed $505 million in development grants to Nepal by 2030. The UK government made this commitment by signing two separate grant agreements related to business and green growth with Nepal during a special function held at the Ministry of Finance on Tuesday.

The grant agreements on the Nepal in Business (NIB) program and the Green Growth Nepal (GGN) program—a part of the new UK Development Portfolio—aim to help Nepal tackle the climate crisis, mobilize international finance for development, deliver economic transformation, and support governance and inclusion.

Joint-Secretary at the Ministry of Finance Shree Krishna Nepal, on behalf of the Government of Nepal, and Development Director at the British Embassy in Kathmandu Pippa Bird, on behalf of the British government, signed the agreements. The agreements were signed in the presence of Finance Minister Dr. Prakash Sharan Mahat and visiting British Minister for Development and Africa Andrew Mitchell.

“UK development support will see £400 million ($505m) in grants delivered by 2030. Impacts will include helping create 13,500 jobs, attracting more than $1 billion in investment, and supporting access to quality health and education services for two million women and girls,” states a press note issued by the British Embassy in Kathmandu.

According to the British Embassy, the new £400m development portfolio will mobilize vital private sector funding in development, tackle the climate crisis, and support economic growth in Nepal. The plan will support the creation of 13,500 jobs, help Nepal attract over $1 billion in investment, and deliver access to quality healthcare and education services for two million women and girls by 2030.

As per the agreement, the government will implement the programs worth over £70 million (Approximately Rs 11.70 billion) for a period of seven years. The grant for the NIB program is expected to help unlock Nepal’s economic prosperity by generating and addressing income poverty in Nepal. It will also support and finance small and medium-sized enterprises (SMEs) to build organizations’ effectiveness through improved management and productivity to achieve business growth and create jobs.

Similarly, the grant for the GGN program will support the Government of Nepal to increase green, resilient, and inclusive growth by expanding investment in green industries and services, improving climate-resilient infrastructures, and strengthening sustainable economic policy and facilitating economic opportunities across Nepal, according to the Finance Ministry.

In a speech at the Ministry of Finance after the signing of the Development Portfolio, Minister Mitchell set out how the UK will work with Nepal to help mobilize development funding, tackle the climate crisis, and build business to support Nepal’s expected transition from Least Developed Country status. Improved access to sustainable local infrastructure, a key element of that transition, is expected to benefit 1.7 million people across the country as a result of the UK’s new Development Portfolio.

Minister Mitchell said that the UK and Nepal share close bonds, cemented by their deep history as Nepal’s oldest partner. While mentioning that both the UK and Nepal also share an ambition to secure a more resilient and prosperous future for Nepal, he said that the new UK development portfolio will help Nepal on that journey and mobilize the funding needed to support growth and development. “This is part of a partnership fit to respond to the challenges and opportunities during the next hundred years of UK-Nepal friendship,” he added.

Also addressing the function, Finance Minister Dr. Mahat highlighted the longstanding bilateral relationships between Nepal and the UK and extended his gratitude towards the British government for its support in meeting Nepal’s development priorities. “The agreement is important for achieving Nepal’s goals of fostering economic growth, promoting sustainability, and reducing poverty. The grant programs are also important for economic transformation, climate resilience, stronger social services, and inclusion,” he said, while adding that the implementation of NIB and GGN programs would contribute to improving foreign direct investment and developing climate-friendly investment projects in Nepal.

Minister Mitchell arrived in Kathmandu on Monday on a two-day visit to Nepal to deepen the UK’s historic partnership and announce a new development portfolio. During his stay in Nepal, Minister Mitchell also held talks with Prime Minister Pushpa Kamal Dahal and Foreign Minister Narayan Prakash Saud in addition to Finance Minister Dr Mahat. Together they affirmed UK support for Nepal’s Investment Summit in April 2024 and discussed the reforms necessary to mobilize finance and attract investors.

While in Nepal, Minister Mitchell also visited the Upper-Trishuli-1 Hydropower project to see the impact of nearly $22m of British International Investment (BII) funding. This investment will provide clean and reliable energy to millions of people, while boosting economic growth by creating jobs. Supporting Multilateral Development Banks and Development Finance Institutions to adopt new business models and mobilizing more investment remains a key priority for the government.

He also saw how UK investment is supporting job creation and entrepreneurship at Upaya, Nepal’s first tech-enabled transportation logistics provider, and with the Youth Innovation Lab who are harnessing digital technology to build Nepal’s disaster resilience. Minister Mitchell saw first-hand the threats of climate change in the Hindu Kush Himalaya, and how the UK is helping Nepal manage climate risks. This includes through the £274 million Climate Action for a Resilient Asia (CARA) programme, supporting the Integrated Centre for International Mountain Development (ICIMOD) to promote a more climate resilient and inclusive Hindu Kush Himalaya.

At the One-Stop Crisis Management Centre at Lumbini Province Hospital, the Minister saw how UK funding is improving support to survivors of gender-based violence. He also discussed how the UK is supporting female entrepreneurs, thought leaders, and activists to address social exclusion of women and marginalized groups.

 

Source: Republica