Nepal's top donors: China doubles aid in just 4 years

Nearly a week after a devastating 7.8-magnitude earthquake hit Nepal, humanitarian aid continues to pour into the South Asian country. According to the U.N. Office for the Coordination of Humanitarian Affairs, bilateral and private donors have contributed $22 million toward the earthquake response, representing just 5 percent of the U.N.’s $415 million appeal over the next three months. The second-poorest country in Asia after Afghanistan, Nepal was reliant on external financing for a quarter of its public expenditures even before the earthquake. In 2013-14, Nepal’s foreign aid receipts topped $1 billion, a jump of 8 percent from the previous year. Prior to the earthquake, Nepal’s government recorded aid receipts from 41 development partners. Only in December, the Millennium Challenge Corp. announced plans to develop a compact with Nepal, its first with a South Asian country. In an effort to rationalize Nepal’s highly fragmented aid sector, the country last year unveiled a new development cooperation policy imposing a minimum threshold — $ 5 million for grants and $10 million for concessional loans — on its foreign aid receipts. In 2013-14, nearly two-thirds of Nepal’s foreign aid receipts came as grants, compared with 18 percent in the form of loans. Nepal’s new development cooperation policy also urges the country’s development partners to invest their grants in rural infrastructure development and social development, and their concessional loans in physical infrastructure, agriculture and tourism. Based on recently released aid disbursement figures for 2013-14, below, Devex ranks the top aid donors to Nepal and takes a closer look at their budgets and priorities, including in the earthquake reconstruction. Strikingly, we found that China, a major contributor to earthquake relief efforts, has more than doubled its foreign aid to Nepal since 2010 – the latest evidence of a Chinese aid surge to South Asia. Emerging donors, led by India and China, accounted for 9 percent of Nepal’s foreign aid receipts in 2013-14. World Bank ($276.8 million) The single-biggest donor to Nepal, the World Bank accounted for over a quarter of the country’s foreign aid receipts in 2013-14. Last year, the bank approved a new country partnership strategy centered on two pillars: increasing economic growth, as well as promoting inclusive growth. The World Bank’s largest active contributions to Nepal are $130 million for the School Sector Reform Program and $130 million for the Grid Solar and Energy Efficiency Project. The World Bank has been supporting several efforts to aid in the earthquake reconstruction, including a structural damage assessment and a rapid needs assessment. Asian Development Bank ($155.6 million) In its 2013-17 country partnership strategy for Nepal, the Asian Development Bank plans to direct 85 percent of its assistance toward three core sectors: energy, transport and urban services. The remaining 15 percent will be set aside for education and agriculture. The biggest donor to road transport in Nepal last year, ADB’s largest commitment in the sector is $49 million for the Subregional Transport Enhancement Project. ADB has announced a $3 million grant for earthquake relief efforts and a further $200 million in new resources for the first phase of rehabilitation. United Kingdom ($151.1 million) Over the course of its 2011-2016 operational plan for Nepal, the U.K. Department for International Development has allocated 28 percent of its resources for governance, followed by health (23 percent) and climate change (20 percent). DfID’s largest active programs in Nepal are the second phase of the Nepal Health Sector Program valued at 77.7 million pounds ($120.3 million) and the Nepal Local Governance Support Program valued at 70.1 million pounds. The largest bilateral donor to Nepal for nearly a decade now, the United Kingdom has announced 15 million pounds in rescue and relief assistance, including 5 million pounds to match public donations to the U.K. Disasters Emergency Committee’s earthquake appeal. The United Kingdom has also activated its Rapid Response Facility, a network of preapproved specialist aid groups. European Union ($51.6 million) The European Union’s 2014-2020 multiannual indicative program for Nepal directs 41 percent of EU aid spending to sustainable rural development, followed by education (38 percent) and democracy and decentralization (21 percent). EU aid spending in Nepal through 2020 is slated to triple over the previous period. The EU’s largest disbursement for Nepal in 2013-14 was $15.3 million for the School Sector Reform Program, which is jointly funded by the World Bank. In addition to dispatching humanitarian and civil protection experts, the European Commission has also made available 3 million euros ($3.5 million) in assistance to address urgent needs in the aftermath of the Nepal earthquake, including clean water, medicine, emergency shelter and telecommunication. India ($47.8 million) In its largest aid commitment to Nepal, New Delhi has made a multiyear commitment of $136.7 million in assistance toward its small development projects scheme, which focuses on infrastructure development and capacity building in the areas of education, health and community development. More recently, however, Indian Prime Minister Narendra Modi has hinted that the Modi government’s development priorities in Nepal will be transport infrastructure, information and communications technology, and energy. A long-standing development partner of Nepal, India has drawn praise for its rapid and all-out humanitarian response to the earthquake. According to the Associated Press, India has sent the most assistance so far, deploying 13 aircraft and more than 500 rescuers to its northern neighbor. U.S. Agency for International Development ($45.4 million) While the U.S. Agency for International Development’s Nepal mission channels the bulk of its assistance through the U.S. Global Health Initiative, it also manages programming for two of the other U.S. presidential development initiatives: Feed the Future and the Global Climate Change Initiative. Three-quarters of USAID Nepal’s budget is tied to the three presidential initiatives, while the remainder is set aside for basic education and biodiversity. USAID’s largest health project in Nepal is the five-year, $46 million Suaahara project for good nutrition. On Monday, April 27, USAID announced an additional $9 million in earthquake relief assistance to Nepal, on top of the $1 million in funding announced over the weekend. USAID has also dispatched a pair of search and rescue teams from its Disaster Assistance Response Team or DART. China ($41.4 million) The only major donor to record steady increases in aid to Nepal, China has more than doubled its assistance to the country since 2010. Earlier this year, China announced plans to increase aid to Nepal even further — by fivefold — to commemorate the 60th year of bilateral relations between Beijing and Kathmandu. China’s biggest aid commitments to Nepal include $129.2 million for the Upper Trishuli 3A Hydroelectric Project and $62.9 million for the procurement of aircraft from China. China has announced $3.3 million in earthquake relief assistance to Nepal, and at the same time, dispatched a 62-strong search and rescue team to the country. Japan ($40.6 million) Poverty alleviation, peace building and socio-economic infrastructure are priority areas for Japanese aid to Nepal, according to the Japanese government’s latest country assistance policy for Nepal. In 2013-14, Japan’s single-largest aid disbursement to Nepal was $20.7 million for the Bishesor Prasad Koirala Highway, followed by $3.4 million for forest preservation. In addition to dispatching dozens of search and rescue experts, Japan has also announced $8.4 million in earthquake relief assistance to Nepal. Check out more funding trends analyses online, and subscribe to Money Matters to receive the latest contract award and shortlist announcements, and procurement and fundraising news.