The Government Signs a One Trillion NPR Agreement with Development Partners to Support Local Governance and Community Development

KATHMANDU, (Ashwin 10, 2070) The Governments of Norway and Switzerland, together with UNICEF, UNFPA and UN Women have jointly signed a Joint Financing Arrangement with the Government of Nepal.  The NPR 1.3 trillion agreement will provide financial assistance to the Government for the successful implementation of the second phase of Local Governance and Community Development Program, LGCDP- II.  

The total estimated cost of the programme is USD1,362 million which is equivalent to NPR 1,362 billion.  The Government will contribute USD1,126 million and the development partners USD236 million.  The programme will be executed by the Ministry of Federal Affairs and Local Development and implemented through local bodies. It covers all 75 districts, 58 Municipalities and 3,915 Village Development Committees, and will run from 16th July 2013 to 15th July 2017.

The 1st phase of LGCDP was completed in July 2013 and successfully established important links between the state and citizens in the aftermath of the conflict. LGCDP I organised almost one million people, at least 50% of them women, through 40,000 ward citizen forums to hold local bodies to account. It upgraded over 8,700 km of roads, renovated 2,150 schools and upgraded 1,031 health facilities and benefitted 1.9 million households by providing community infrastructure on demand.

Considering the importance of the programme, the Government of Nepal has decided to implement the 2nd phase of LGCDP under the joint funding approach. The programme is aligned with the national development plan of Nepal which includes poverty reduction, inclusive growth, social transformation, sustainable peace and good governance as its major objectives along with an emphasis on devolution, social inclusion and meeting peoples’ demands at the local level.

After the implementation of the second phase of the programme, it is expected that citizens and communities will be able to hold their local governance actors accountable and local bodies will be more responsive to citizens’ demands. LGCDP II will benefit 2 million households by providing them community infrastructure based on bottom-up planning process. It will strengthen local governance and ensure that 90% of VDC secretaries are in position and deliver services effectively.

Through this Joint Financing Arrangement, the Development Partners have committed to the principles of harmonization and aid effectiveness by aligning with the budgetary and accountability systems and legislation of Nepal.  This will help reduce the administrative burden and minimize transaction costs so as to enhance effective implementation of the programme.

Together with Mr. Shanta Raj Subedi, Finance Secretary, Ministry of Finance of Government of Nepal, H.E. Mr. Urs Herren, Ambassador of Switzerland to Nepal; H.E. Mr. Alf Arne Ramslien, Ambassador of Norway to Nepal; Ms Hanaa Singer, UNICEF Representative; Ms. Giulia Vallese, UNFPA Representative; and Mr. Ziad Sheikh, UN Women Representative signed the Joint Financing Arrangement on behalf of their respective Governments and UN agencies. H.E. Mr. Andrew James Sparkes, British Ambassador to Nepal spoke as the donor coordinator. Other development partners including UK DFID, UNCDF, UNDP and Denmark will sign the JFA in due course.

The Government of Nepal has expressed its sincere appreciation to the Governments of Norway and Switzerland, UNICEF, UNFPA and UN Women for this commitment of assistance and continued support in the socio-economic development of Nepal.

Ministry of Finance
Singh durbar,
Kathmandu, Nepal