Energy, top priority of development partner

Kathmandu, May 10: Health, education and local development have become the favourite areas of the international development partners (IDPs) supporting Nepal.

According to the Development Cooperation Reports of the last three fiscal years, the largest portion of the Official Development Assistance (ODA) had been channeled to these three sectors, while energy had been an exception in the last FY 2015/16.

 In the last fiscal, energy sector became the top sector receiving ODA followed by local development, education, health, environment, science and technology, peace and reconstruction, agriculture and road transportation.

Of 1074.06 million dollars ODA received last year, energy sector received 150.58 million dollars, local development 19.15 million dollars, education 111.55 million dollars, health 103.44 million dollars.

According to the Ministry of Finance (MoF), the reason for the energy sector becoming one of the top recipients of foreign aid is mainly due to the significant amount of ODA disbursement through the Asian Development Bank (ADB) and World Bank (WB) Group.

These two multilateral development partners have been supporting the country in Nepal-India Electricity Transmission and Trade Project and Energy Access and Efficiency Improvement Project.

Significant increment in the volume of disbursement in energy sector was a result of the Development Cooperation Policy 2014, which gave priority to infrastructure development.

Likewise, Nepal received 1020.75 million dollars ODA, 5.22 per cent less than the last fiscal.

"The health sector became the top sector receiving ODA followed by local development, education, road transportation and energy. Health receive 177.74 million dollars, local development 124.90 million dollars, education 113.68 million dollars and road transportation 86.57 dollars," read the report of FY 2014/5.

Support of the United Kingdom and United States for Nepal Health Sector Programme (NHSP) and Suahaara Project respectively had made health to top recipient of foreign aid.

Similarly, in FY 2013/14, education sector was on top in terms of receiving ODA followed by local development, health, energy and road transportation.

The education sector received 175.16 million dollars, local development 152.34 million dollars, health 115.72 dollars, energy 58.22 million dollars and road transportation 51.57 million dollars that year.

According to the MoF statistics, portion of foreign aid received as grant has been decreasing over the years.

The portion of grant was 49.64 per cent in the last fiscal while it was 57.60 per cent and 66 per cent in the fiscal 2014/15 and 2013/14 respectively.

The share of loan assistance was 35 percent, 24 per cent and 18 per cent in the last three fiscal years respectively.

According to the Organization of Economic Co-operation and Development (OECD), ODA means flows of official financing administered with the promotion of the economic development and welfare of developing countries as the main objective, and which are concessional in character with a grant element of at least 25 per cent – using a fixed 10 per cent rate of discount.

Top sectors receiving foreign aid

Rank	FY2015/16	FY2014/15	FY 2013/14
1.	Energy	Health	Education
2.	Local Development	Local Development	Local Development
3.	Education	Education	Health
4.	Health	Road Transportation	Energy
5.	Environment, Science & Technology	Energy	Road Transportation

Source: Development Cooperation Report 2015/16, MoF