Government’s Foreign Aid Expectation for Next Fiscal Year

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Government’s Foreign Aid Expectation for Next Fiscal Year

June 8: The government has planned to bring in around Rs 300 billion from abroad through loans and grants next year to meet the budget announced on May 29. The government, which introduced a budget of Rs 1793.83 billion for the upcoming fiscal year, has set a target of receiving Rs 300 billion from the World Bank, Asian Development Bank, International Monetary Fund, and other donors since the expenditure cannot be covered by internal sources.

The government aims to receive Rs 55.46 billion out of Rs 300 billion in grants and Rs 242.26 billion in loans. The government, which seems to be focusing on bilateral grants, has emphasized on multilateral donors in obtaining loans.

The government estimates that the country will receive the most assistance from the Asian Development Bank (ADB) towards multilateral lenders in the upcoming fiscal year. The government is expecting to receive Rs 105.35 billion from ADB alone next year. Out of this, Rs 3.71 billion will be grants and Rs 101.64 billion will be loans. After ADB, the government has set a target of getting the most foreign aid from the World Bank. Next year, the target is to receive a total of Rs 85.12 billion from the World Bank including a grant of Rs 3.43 billion and loan of Rs 81.65 billion.

A maximum of Rs 5.91 billion in grants will be received from the US-funded Millennium Challenge Corporation (MCC). It is estimated that the government will receive Rs 8.53 billion from India and Rs 3 billion from China.

The European Union, OPEC, the United Nations and the International Monetary Fund are also in the list of major donors next year. The government is preparing to borrow a direct loan from some countries.

According to the Ministry of Finance, the government is preparing to receive more grants and loans from countries including India, China and Finland to mobilize resources for the upcoming fiscal year.

Similarly, the government also aims to bring in more than Rs 9 billion in grants from the United States next year. According to the Public Debt Management Office, the government has been taking loans from various donor agencies at interest rates ranging from 0.1 to 2.25 percent.

The interest rate on ADB loans is 1 to 1.5 percent per annum. OFD and Kuwait provide loans to Nepal at an annual interest rate of 2.25 percent. According to Hira Neupane, Deputy Secretary of the Debt Management Office, the loans received by the government from the donor body seems to have reached Rs 951 billion as of December 2021.


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