View of Kathmandu, the capital of Nepal, during the monsoon season

Nepal Great challenges, fundamental transformation and ambitious goals

After ten years of civil war (1996 to 2006), the abolition of the monarchy (2008) and the adoption of a new constitution (2015), Nepal is undergoing a fundamental political transformation. In recent years, a stable parliamentary democracy has evolved.

Nepal’s government and society are faced with the challenge of further consolidating democracy and the rule of law, establishing effective federal structures, making economic growth both sustainable and inclusive, and reducing ongoing social and regional inequalities.

At the same time, the country has to cope with the impacts of the COVID-19 pandemic and of Russia’s war of aggression against Ukraine, and adapt to the effects of global warming. According to the Global Climate Risk Index 2021, Nepal is one of the ten countries most severely affected by climate change.

Nepal also still counts as a least developed country (LDC). In the current Human Development Index (HDI), Nepal ranks 146th out of the 193 countries listed. The government has set itself the goal of making Nepal a middle-income country by 2030.

German development cooperation with Nepal

Development cooperation between Germany and Nepal is aligned with the Nepalese government’s development strategy. One particular focus is on overcoming social inequalities and enabling equal participation in political, economic and social life for vulnerable groups, especially women.

In November 2022, the Federal Ministry for Economic Cooperation and Development (BMZ) committed a further 56 million euros in support for its partner country for 2022 and 2023. This comprises 35 million euros in Financial Cooperation funding and 21 million euros in Technical Cooperation funding.

The focus of the bilateral cooperation is on the following core areas:

Sustainable economic development, training and employment
Area of intervention: private sector and financial sector development
Health, social protection and population policy
Area of intervention: health, pandemics and One Health
Climate and energy, just transition
Area of intervention: renewable energy and energy efficiency

Nepal’s economic growth in recent years has not been sufficient to reduce poverty long-term. One important objective of Nepalese-German cooperation is to ensure that economic development is socially balanced. Particular consideration is given to the needs of vulnerable population groups.

Over the past few years, the health status of Nepal’s people has improved considerably. Maternal and neonatal mortality in particular has decreased significantly. However, there are still substantial gaps between the rich and poor and between urban and rural areas. Germany’s activities in this area aim to enable better access to key healthcare services and improve the quality of medical care.

According to official figures, 90 per cent of Nepal’s inhabitants have access to electricity, but in rural areas in particular the power supply is unreliable. The country has huge potential when it comes to using renewable energies, however. Alongside bilateral projects, Germany is promoting electrification in rural municipalities as part of the multi-donor energy partnership Energising Development (EnDev).