Germany and Nepal sign a €10 million agreement to nurture green recovery and inclusive development

By Laxman Datt Pant

Germany and Nepal sign a €10 million agreement to nurture green recovery and inclusive development

In order to nurture green recovery and inclusive development in Nepal, on March 24 the Federal Republic of Germany and the Government of Nepal (GoN) signed a grant agreement valued at EUR 10 million.

The financial and technical cooperation agreements were signed in by Shree Krishna Nepal, Joint Secretary at the Ministry of Finance of Nepal, and Roland Schaefer, Ambassador of Germany to Nepal, on behalf of their respective governments.

In addition to promoting isolated solar mini-grids to provide reliable and clean electricity to the rural population of Nepal, this initiative aims to support the private and public sectors to expand grid-connected solar farms, solar irrigation, and industrial rooftop solar panels in semi-urban areas for inclusive economic growth.

According to a press statement issued by the Embassy of Germany in Kathmandu, the technical cooperation component of this agreement intends to improve the capacity of the public and private sectors to plan and implement these projects while the financial component aims to provide investment support.

Stating that the signing of the agreements reflects Germany’s solidarity with Nepal in these economically challenging times and also supports the worldwide efforts in tackling climate change, Roland Schaefer remarked, “Energy is a key-factor enabling economies to grow, but the sector is also one of the biggest emitters of greenhouse gas worldwide.” With this agreement, Germany joined Nepal’s development partners (DPs) in their joint commitment to support the GoN’s Relief, Recovery, and Resilience Plan (RRRP) to enable a green recovery and inclusive development, especially after the COVID-19 crisis, he added.

In December last year GoN and its DPs agreed to support Nepal’s RRRP to enable a green, resilient and sustainable recovery.

  • One of the major donors to Nepal’s development initiatives, Germany began its development cooperation back in 1959
  • The most recent Nepal-German Negotiations on Bilateral Development Cooperation took place in September 2018 in Berlin
  • Energy, transmission lines, and infrastructure development remain as major areas of German support in Nepal
  • Germany is also providing technical assistance to support the GoN’s initiatives to fight COVID-19
  • The cultural agreement between Nepal and Germany signed in 1992 helped to restore cultural sites of Nepal
  • Following the earthquakes in 2015 in Nepal, Germany provided immediate relief equivalent to EUR 3.5 million
  • Similarly, the German Government pledged the support of EUR 30 million for reconstruction works primarily in the health sector
  • An estimated EUR 120 million was mobilized by the non-governmental and private sectors to support those people affected by the earthquake
  • Nepal and Germany established a bilateral consultation mechanism in July 2019

The technical and financial agreements signed on March 24 are part of the German Climate Technology Initiative (DKTI), an initiative that aims to disseminate climate and environment-friendly technologies. DKTI aims to contribute to substantial reductions in greenhouse gas emissions in developing countries. With these new projects, the total volume of bilateral technical and financial cooperation to Nepal from Germany amounts to around EUR 1 billion since the cooperation began in 1959.