Overview of Australia’s aid program to Nepal

How we are helping

2013/14 Actual:
$32.7 million

2014/15 Budget Estimate:
$33.9 million

Australia’s diplomatic relationship with Nepal spans over 50 years. We are supporting the Government of Nepal’s development priorities and our presence enables us to assist during Nepal’s frequent natural disasters. A more stable, prosperous Nepal has the potential to trade more and contribute to broader regional growth. Australia is the twelfth largest donor in Nepal, and will likely remain a modest donor.

Nepal is among the poorest and least developed countries in the world with slow economic growth. Widespread, entrenched inequality exists in access to basic services for minority and traditionally marginalised groups, women and those with disabilities. More than half of Nepal’s population lives in poverty. Poor access to health and education, low literacy rates, limited agricultural productivity, malnutrition and inequities resulting from traditional social structures limit Nepal’s ability to make gains in social development. This inequality has been a key driver of conflict and instability. Delivery of national services is across one of the most difficult terrains in the world.

Australian aid investments aim to expand economic opportunities for the poor and address barriers to participation and productivity. Programs target micro-enterprise development, job creation, improving access to quality health and education services and strengthening the Government of Nepal’s financial management systems. Australia works closely with the Government of Nepal and other like-minded donors in the delivery of these programs.

The strategic objectives of the program are to:

Expand economic opportunities for the poor by promoting enterprise and job creation

Australia will enable private sector development through the Micro-Enterprise Development Program (MEDEP) which aims to foster an enabling environment for private sector employment creation. MEDEP is one of the few donor initiated programs in Nepal that has a strong Government of Nepal buy-in.

Expanding economic opportunities in Nepal

Promote Nepal's human development to expand participation and productivity of the poor

Investments in Nepal’s education and health sectors will contribute to a productive work force, and will include:

  • strengthening public education through the Nepalese Government’s School Sector Reform Program by improving quality and promoting inclusion of more than 3.8 million girls and boys from poor and marginalised communities, including children with disabilities
  • targeted scholarships to Nepalese for post-graduate studies and short-courses in Australia through the Australia Awards
  • improving nutrition, child survival rates and maternal health of the poor.

Improvements to governance are central to both objectives. Australia contributes to the World Bank’s Public Financial Management Multi Donor Trust Fund to support system reform.

Given the risk of natural disasters setting back development gains, disaster risk reduction (DRR) is another important cross-cutting issue. In its education activities, Australia has contributed some of its funding to retrofitting public school buildings so they are multi-hazard resistant.

Promoting human development opportunities in Nepal

Our results

Expand economic opportunities for the poor by promoting enterprise and job creation

In 2013-14, the Micro Enterprise Development Program enabled 8,727 beneficiaries to increase their income, 70 per cent of whom were poor women. Since 1998, the program has created more than 70,000 micro-entrepreneurs and through the micro-enterprises created more than 75,000 jobs. An impact assessment report (2010) found that 80 per cent of the micro-entrepreneurs established by MEDEP continue to be active in their profession.

Promote Nepal’s human development to expand participation and productivity of the poor

In education, the School Sector Reform Program has delivered good results including increasing enrolment in basic education from 73 per cent (2009) to 86.3 per cent (2014) and gender parity in basic education enrolment. In 2013-14, Australia’s funding ($4 million) directly supported an additional enrolment of approximately 50,000 students (25,269 girls) and delivered more than 300,000 textbooks. In 2013, 89 Australia Awards (35 scholarships and 54 fellowships) were also provided to assist Nepalese to study at a range of Australian tertiary institutions.

In health, the Australian-supported Nepal Health Sector Program has made good progress on many health indicators and Nepal remains on track to meet its MDG (4, 5 and 6) targets in health. In 2013 results include a maternal mortality rate of 192 (2015 target is 134), an infant mortality rate of 44 (2015 target is 32) and an under 5 mortality rate of 47 (2015 target is 38).


Tul Bahadur BK runs a furniture making business that has received electric tools as part of the MEDEP support (credit: DFAT).
Mother Nishal Thapa brings her child to a health clinic in Pokhara, Nepal (credit: DFAT).
A student at a primary school in Pokhara, Nepal (credit: DFAT).