Nepal has recorded a significant increase in the inflow of Official Development Assistance (ODA), although its share within the country’s capital expenditure has notably declined.
According to the Development Cooperation Report 2024–25 released by the Ministry of Finance’s International Economic Relations Division, Nepal received ODA worth $1.60 billion in the last fiscal year—an increase of 15.5 percent compared to the previous year.
Despite this growth, the proportion of development assistance in the national budget fell to 14.5 percent, marking its lowest level in a decade. Officials attribute this decline to the government’s increased reliance on internal resource mobilization.
In the fiscal year 2024/25, Nepal secured $1.98 billion in development assistance commitments through 33 agreements with 12 development partners. Of this, 79.1 percent ($1.57 billion) came as loans, while 20.9 percent ($413.1 million) was in grants.
Loans have become the dominant source of development financing. Of the total disbursed assistance, 66.9 percent ($1.07 billion) was in loans, 21.4 percent ($344.4 million) in grants, and 11.6 percent ($187.2 million) in technical assistance.
Among multilateral donors, the World Bank contributed the most with $541 million, followed by the Asian Development Bank ($443.2 million), the International Monetary Fund ($41.8 million), the European Union ($37.7 million), and the Green Climate Fund ($15.8 million). The United Nations system mobilized $64.5 million.
Among bilateral partners, India was the largest contributor at $107.8 million, followed by the UK ($84.2 million), the USA ($67.1 million), Japan ($58.3 million), Switzerland ($30.1 million), and Norway ($26.6 million).
In terms of disbursement, multilateral partners accounted for 68.1 percent ($1.09 billion), bilateral partners for 27.9 percent ($448.4 million), and the UN system for 4 percent ($64.5 million). The top ten development partners together contributed over 92 percent of total disbursements.
Sector-wise, the largest share of development assistance—$252.8 million (15.7 percent)—went to transport, followed by education ($184 million), civil security ($170.3 million), and other economic sectors ($204.5 million).
Coordination between foreign assistance and the national budget system improved during the review period. On-budget disbursements rose by 23.5 percent to $1.36 billion, while on-treasury disbursements surged by 63.3 percent to $847.5 million. Meanwhile, off-budget assistance declined by 15.1 percent to $242 million.
