Nepal has received additional grant assistance following its decision to approve the United States aid project Millennium Challenge Compact (MCC).
The United States Agency for International Development (USAID) is providing a large amount of grant aid. The Government of Nepal has decided to accept US $ 659 million (Rs. 79.71 billion) in grants from the United States Agency for International Development (USAID).
In terms of amount, this grant is bigger than MCC. The United States Millennium Challenge Corporation (MCC) had a grant of 500 million US dollars or about 57 billion rupees to Nepal. This assistance is being spent on projects related to power transmission lines and road construction in Nepal.
But the newly approved $ 659 million grant, or about Rs 79.71 billion, remains to be decided.
According to Ishwori Prasad Aryal, chief of the international aid division at the finance ministry, the issue of which project to spend on remains to be decided.
He informed me that the issue of where to spend the money has been decided.
“It has been decided to spend on education and health in particular,” Aryal told Nepalkhabar, “but for now it should be understood as a framework agreement.”
This assistance is for 5 years. The issue of which projects to organize has not been decided yet. He said that it would be finalized later on the basis of mutual consent.
Such assistance had previously been extended to the reconstruction sector. But that was not a large sum.
The decision was taken at a cabinet meeting on Wednesday.
Wednesday’s meeting also decided to accept a $ 150 million (Rs.18 billion) concessional loan from the World Bank’s International Development Association. The government will get this concessional loan immediately.
According to Division Chief Aryal, Rs 18 billion will come in a few days. “It simply came to our notice then.
The Ministry of Finance has stated that this will be of great help in the case of weakening foreign exchange reserves.
Foreign exchange reserves are declining in the current fiscal year. Total foreign exchange reserves decreased by 16.3 percent to Rs. 1.17 trillion in mid-February 2012/13 from Rs. 1.399
In US dollar terms, such reserves declined by 18.5 percent to Rs. 9.58 billion in mid-February from Rs. 11.75 billion in mid-July, according to NRB data.
These foreign exchange reserves are seen to be sufficient to sustain the import of goods consumed in Nepal for 7.4 months and the import of goods and services for 6.7 months.
