DEVELOPMENT PARTNERS PROFILES Preface International cooperation has been playing an important role in funding the gap of development finance in Nepal for decades. It is important to disseminate information on Development Partners (DPs) and their contribution to the socioeconomic development of Nepal to various stakeholders. In this context, Ministry of Finance has come up with this publication “Profiles of Development Partners”. This is a revised and updated edition of the 2014 Profiles and is intended not only to provide background information about DPs, but also to further enhance harmonization, transparency, and coordination of the assistance that Nepal receives. I believe that this publication will be useful to a wide range of audiences in understanding sources of development finance and the knowledge of the DPs which are providing support to Nepal. I would also like to note that this publication draws on the data and information contained in the Ministry of Finance’s Aid Management Platform. For the preparation of this publication, the criteria applied was to include profiles of those bilateral and multilateral DPs for which disbursement was recorded in the AMP for at least one time during the past three fiscal years. While preparing the profiles, secondary sources of data has been used wherever available. For bilateral DPs, key sources of information is compiled from various websites with information on country context, official websites of the headquarters offices and of the diplomatic missions/embassies. For multilateral DPs and vertical/global funds, official websites and those of the resident missions/offices were used as references for information. Official websites of the executing/implementing government ministries/ departments, agencies, and projects were also explored for further information. IECCD, Ministry of Finance officials reviewed each draft profile within their respective portfolios, and shared the draft profile with the Head of Agency/ Head of Office of the DP, with a request for feedback and endorsement of the profile. Effort was made to incorporate feedback received from DPs, while still maintaining consistency of format and length across all profiles. I would like to thank all DPs for their support in preparing the profiles for this publication. Let me also extend my thanks to the Effective Development Financing and Coordination (EDFC) project for its entire effort to prepare these profiles. Finally, I thank my colleagues of the IECCD of the Ministry of Finance for their contributions and efforts to review and provide inputs towards finalizing the profiles. Kewal Prasad Bhandari Joint Secretary IECCD, Ministry of Finance March 2018 DEVELOPMENT PARTNERS PROFILES i Contents Bilateral Development Partners 1 Australia 1 2 China 5 3 Denmark 9 4 Finland 12 5 Germany 16 6 India 20 7 Japan 24 8 Korea 28 9 Kuwait 32 10 The Netherlands 35 11 Norway 39 12 Saudi Arabia 43 13 Switzerland 47 14 United Kingdom 51 15 United States of America 55 Multilateral Development Partners 1 Asian Development Bank 59 2 European Union 63 ii 3 Food and Agriculture Organization (FAO) 67 4 GAVI 71 5 Global Environment Facility (GEF) 74 6 Global Fund to Fight AIDS, Tuberculosis and Malaria 78 7 International Fund for Agricultural Development (IFAD) 82 8 International Labour Organization (ILO) 86 9 OPEC Fund for International Development (OFID) 90 10 SAARC Development Fund (SDF) 94 11 United Nations Children’s Fund (UNICEF) 97 12 United Nations Development Programme (UNDP) 101 13 United Nations Educational, Scientific and Cultural Organization (UNESCO) 105 14 United Nations Peace Fund for Nepal (UNPFN) 109 15 United Nations Population Fund (UNFPA) 112 16 UN Women 115 17 World Bank Group 119 18 World Food Programme (WFP) 123 19 World Health Organization (WHO) 127 Prospective Development Partners 1 Asian Infrastructure Investment Bank (AIIB) 131 2 Green Climate Fund (GCF) 133 DEVELOPMENT PARTNERS PROFILES 1 1 Australia Country Overview and Approach to Development Cooperation The Commonwealth of Australia is the world’s smallest continent and the sixth largest country by total area. It is located in the southern hemisphere and is comprised of its mainland, the major island of Tasmania and numerous other islands in the Indian and Pacific Oceans. Australia has welcomed more than 6.5 million migrants including over 660,000 refugees during the 60 years of planned post-war migration, which has tripled its population from approximately 7 million to over 24 million (2017). About 60% of the country’s total population is concentrated in and around the mainland state capitals of Sydney, Melbourne, Brisbane, Perth and Adelaide. Overall, the nation’s urban population makes up around 90% of the total, and the average population density is 3 per km2, though it varies greatly across the country. Australia’s system of government is based on the liberal democratic tradition, which includes religious tolerance, and freedom of speech and association. Its institutions and practices reflect features of British and North American models but are uniquely Australian. The Federal Government is based on a popularly elected parliament with two chambers, the House of Representatives and the Senate. Each has virtually equal powers in approving the passage of legislation. The Prime Minister is appointed by the Governor-General, who by convention under the Constitution must appoint the Parliamentary leader of the party, or coalition of parties, which has a majority of seats in the House of Representatives. This majority party or coalition becomes the government, with Ministers appointed from both chambers to serve in the Cabinet or outer ministry. Members of the House of Representatives seek re-election each time there is a federal election. Senators are elected for a six- year term and in an ordinary general election, only half of the Senators face the voters. Australia’s six states and two territories also have their own legislative bodies. Known as one of the greatest agricultural, mining and energy producers in the world, Australia has a very open and diverse economy, with a highly educated workforce and extensive service sectors. In 2015, Australia entered its 25th year of uninterrupted annual economic growth, averaging 3.3% a year. The service sector is the largest component of the Australian economy, accounting for around 60% of Gross Domestic Product (GDP) and four out of five jobs. The country is growing as an important financial center, with sophisticated service sectors and strong regulations. It is also one of the top five merchandise exporters, the 11th largest country in terms of international tourist arrivals, and the third largest in investment fund assets. In 2015, it ranked second in the world in Human Development Index (0.939). 2 AUSTRALIA Australia had allocated US$ 3.8 billion in Official Development Assistance (ODA) in Fiscal Year (FY) 2016/17 through the Department for Foreign Affairs and Trade (DFAT) and Australian Aid, for promoting prosperity, reducing poverty, and enhancing stability in the world, especially in the Indo- Pacific region where it invested 90% of its bilateral and regional aid. The aid program was focused on seven main investment priorities: Infrastructure and Trade (15.2%), Agriculture Fisheries and Water (8.6%), Effective Governance (22.1%), Education (19.0%), Health (13.0%), Building Resilience (15.2%), and General Development Support (6.8%). However, Australian aid fell to 0.22% of GNI in FY 2017/18 the lowest level in Australia’s history — due to significant cuts to its foreign aid program as a part of general budget savings. Diplomatic History Nepal and Australia established diplomatic relations on 15 February 1960. Australia opened its residential Embassy in Kathmandu at the level of Chargé d’Affaires in 1984, which was subsequently upgraded to the Ambassadorial Level in 1986. Nepal established its residential Embassy in Canberra in March 2007 which was formally inaugurated in September 2007. In addition, Nepal also has Honorary Consulates General/Consulates in Brisbane, Melbourne, Sydney, Perth and Adelaide. On 20 May 2003, the Governments of Nepal (GoN) and Australia concluded a Memorandum of Understanding (MoU) on Development Cooperation, discussed in the next section. Australia maintains its Australian Embassy in Bansbari, Kathmandu. Mr Peter Budd is the Ambassador to Nepal (21 March 2017-present). Development Cooperation Strategy for Nepal; Overview of Past and Current Cooperation Though Australia included Nepal in its development cooperation program in 1979, the assistance actually began following the establishment of diplomatic relation in 1960. At that time, Nepal was receiving assistance from Australia in such areas as forestry, livestock development and manpower training. The MoU agreed in May 2003 between the GoN and the Government of Australia (GoA) provides for cooperation in development programs in line with Nepal’s goals of economic development. Community development, human resources development, and health are the sectors targeted for Australian support, with good governance, human rights, gender, and environment identified as cross-cutting areas of focus. In FY 2015/16, Australia’s total ODA budget to Nepal was US$ 33.7 million, slightly more than the previous FY (US$ 27.2 million). However, the amount for FY 2016/17 was US$ 33.9 million. FY 2015/16 comprised more ODA compared to the previous and following years due to addressing three main objectives focused on education, enterprise and job creation as well as specific targeted post- earthquake recovery investments. Since FY 2007/08, Australia has been supporting the GoN’s Education for All (EFA) program and its follow-on program, the School Sector Reform Plan (SSRP), through a pooled funding arrangement with other Development Partners. Australia provided a total of approximately US$ 14.63 million (AUD 19 million) in grant assistance to the program over the period FY 2009/10 to FY 2013/14. The program has contributed to improving quality and access and promoting inclusion of more than 3.8 million DEVELOPMENT PARTNERS PROFILES 3 children to attend public schools.