KATHMANDU: Nepal is among 28 countries to receive a debt service relief amounting to EURO 4.299 million (NPR 582 million) through a European Union (EU) contribution of EURO 183 million to the ‘Catastrophe Containment Relief Trust’ (CCRT) set up by the International Monetary Fund (IMF).
The CCRT aims to provide debt service relief on instances of disasters and catastrophes to the poorest and most vulnerable countries.
Jutta Urpilainen, European Commissioner for International Partnerships, said: “Through this contribution to the CCRT, Team Europe continues to stand in solidarity with its most vulnerable partners. In this difficult period, the resources freed up can provide social services for the most vulnerable people, such as access to essential healthcare and education for young people, including girls.”
EU Ambassador to Nepal Nona Deprez said, “We are happy to share the good news and believe that the debt relief will create a fiscal space enabling Nepal to move to a green, resilient and inclusive recovery from the COVID pandemic.”
Ambassador Deprez added the debt relief for Nepal is in line with the European Commission President, Ursula von der Leyen’s Global Recovery Initiative, which called for linking investments and debt relief to the Sustainable Development Goals (SDGs).
The EU supports its partner countries in maintaining their commitment and path towards the Sustainable Development Goals despite dire financial situations. Debt levels were already high before the crisis.
In many countries, they are becoming unsustainable due to public expenditure required to address the COVID-19 pandemic. More than half of low-income countries are in high risk or already in debt distress.
The EU alongside the development partners community has been supporting Nepal in its green, resilient and inclusive recovery from the adverse impacts of the pandemic. The announcement of an aid package of Euro 75 million (NPR 9.8 billion) in April last year was a move in the same direction.
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