Finland's relations and development cooperation in Nepal
Finland's development cooperation in Nepal promotes economic development and digitalisation, strengthens climate-resilient management of natural resources and improves access to clean drinking water and sanitation. Developing inclusive teaching remains a central focus of cooperation.
Nepal has taken important steps towards democracy. Deep-seated corruption and a lack of prospects experienced by young people sparked large youth-led demonstrations in autumn 2025, leading to the appointment of a provisional government. Early elections were held in March 2026. The Rastriya Swatantra Party (RSP) won a landslide victory in the elections, and power changed hands. Led by Kathmandu’s former mayor, the party represents generation Z and its frustration with traditional parties.
Even though Nepal has seen a significant decrease in poverty in recent decades, a fifth of the population still live in extreme poverty. Many Nepalese suffer from discrimination based on caste, gender, ethnic background or place of residence. As a mountainous country, Nepal is exceptionally vulnerable to natural disasters and climate threats.
Finland and Nepal have long-standing relations largely based on development cooperation. Finland has supported Nepal’s forestry sector, water supply, sanitation and hygiene improvement, and the education sector since the 1980s. Finland is working with other donors to promote Nepal’s efforts to achieve the UN Sustainable Development Goals, and to graduate from a Least Developed Country (LDC) status in 2026.
Outcomes of Finland’s development cooperation with Nepal in the period 2021–2024
Finland’s country programme for bilateral development cooperation with Nepal focuses on strengthening sustainable economic development and partnerships, improving the sustainable management of natural resources and climate resilience, and promoting an inclusive education system for all.
Finland’s development cooperation country programme in Nepal 2025–2028
In the previous programming period in 2020–2024, Finland’s support focused on improving access to clean water and sanitation, developing the education system and improving the opportunities for women and disadvantaged groups to exert influence.
Finland’s development cooperation promotes sustainable economic development and partnerships
Finland provides development cooperation in Nepal to strengthen the country’s sustainable economic growth and diversify its economic structures and to increase partnerships between the two countries. Nepal is moving towards a digital, climate-resilient and increasingly market-driven economy. Finland supports this transition by strengthening the entrepreneurial activities and employment of women and young people and by developing the green economy and climate-resilient value chains. Finland promotes growth within Nepal’s private sector and cooperation with Finnish companies through different forms of development cooperation and the Team Finland network’s support.
Expected outcomes: Sustainable economic development and increased partnerships
- The green economy and climate-resilient value chains become stronger
- The digital transition improves services, transparency and productivity
- Finnish-Nepalese economic, development and business cooperation deepens
Ongoing programmes and projects
- Finland allocates EUR 4.5 million in support for UN Women's Nepal country programme in 2023–2027. The project focuses on supporting the entrepreneurial activities and livelihoods of women. Read more: UN Women Nepal.
- Finland, in partnership with the EU, contributes EUR 2 million in 2025–2026 to the Cities4Women project implemented through UNOPS. Read more: Cities4Women Nepal.
Economic development and partnerships are also promoted by these projects:
- Sustainable WASH for all (SUSWA) promotes digital water management solutions and collaboration with Finnish partners, such as a university of applied sciences.
- Local Adaptation to Climate Change (LACC) promotes small-scale entrepreneurship and cooperatives based on natural resources.
- In addition, education sector projects promote digital solutions in education.
Finland’s development cooperation supports sustainable management of natural resources
Finland’s support to Nepal aims to strengthen climate resilience in both rural and urban areas and to ensure sustainable, equal and inclusive services and management of natural resources. Nepal is highly susceptible to climate risks, which have a particularly strong impact on disadvantaged groups. Finland supports the capacity of local governments to respond to climate risks by improving water supply, sanitation, natural resources management, the climate resilience of cities, and disaster preparedness.
Expected outcomes: Sustainable management of natural resources and strengthened climate resilience
- Water supply, sanitation and the management of natural resources are more sustainable and inclusive
- Local and urban services are climate-resilient and capable of responding to growing risks
- Women, persons with disabilities and disadvantaged groups take part in decision-making and make their voices heard in the planning of natural resources and climate policy
Ongoing programmes and projects
- Sustainable WASH for All (SUSWA). The bilateral water, sanitation and hygiene project taking place in Nepal’s remote Karnal province from 2021 to 2027 continues Finland’s close project cooperation with Nepal and the EU. Finland contributes EUR 9 million to the project, the European Union’s contribution is EUR 10.1 million. Read more: SUSWA (Nepal).
- Local Adaptation to Climate Change (LACC). The bilateral natural resources project, which is implemented between 2024 and 2029, focuses on the sustainable use of natural resources and the development of climate measures at the municipal level. Finland contributes EUR 13 million to the project, the European Union’s contribution is EUR 18 million. Read more: LACC (Nepal).
- Towards sustainable groundwater management and improved water supply services in Nepal (NEAS+). The aim of the NEA+ project is to enhance the sustainable management of groundwater resources and improve water supply and sanitation services in Nepal. Finland’s contribution totals EUR 1.5 million for 2026–2029. This is a joint project between the Finnish Environment Institute and the Geological Survey of Finland, and it is funded through the Institutional Cooperation Instrument (ICI). Read more: NEAS+ GTK and NEAS+ SYKE.
Finland supports inclusive teaching
In Nepal, Finland supports a high-quality, safe and inclusive education system that provides all children and young people equal opportunities for learning. Finland will continue its long-standing cooperation in the education sector by developing teacher education, strengthening learning outcomes and promoting digital learning and inclusive teaching methods. Finland is working closely with all levels of government, that is, the federal government, provinces and local government, as well as with schools and universities.
Expected outcomes: Inclusive and sustainable education system that guarantees equal opportunities for all
- Learning outcomes improve in primary and lower secondary and upper secondary education, and participation and retention especially among girls, children with disabilities and discriminated groups improves.
- Teacher education is more efficient and responds better to the needs of different learners.
- School meals programmes and the model of using local ingredients become more firmly established, supporting both learning and the local economy.
Ongoing programmes and projects
- Support to the Nepal School Education Sector Plan (SESP) in 2021–2030. About 90 per cent of the plan’s funding comes from the Government of Nepal. Finland is one of the eight partners and provides EUR 19 million in funding for the plan in 2022–2026. Read more: SESP.
- Finland is allocating EUR 4.2 million in support for UNICEF's country programme in 2023–2027. The funding is intended for the education sector to improve the quality of and access to education. Read more: Unicef Nepal.
- The Technical Support Cooperation to the School Education Sector (TECSES) project is receiving a total of EUR 10 million in 2024–2029, with EUR 5 million provided by Finland and EUR 5 million coming from the EU. Read more: TECSES.
- The school meals project funded through the World Food Programme (WFP) and the United Nations Development Programme (UNDP) is supported with EUR 620,000 in 2025–2027. Read more: School meals UNDP.
Highlights of the Results Report 2021–2024
During the 2021–2024 programming period, Nepal faced serious challenges, including the COVID-19 pandemic and natural disasters, but the country also made progress towards its objective to graduate from a Least Developed Country (LDC) status in 2026. Economic growth remained moderate. The agricultural, construction and energy sectors and remittances from abroad contributed to strengthening the economy. Despite positive development results, Nepal also faced major challenges in areas such as improving access to clean drinking water and promoting women’s literacy.
Finland’s support for inclusive, climate-resilient water and sanitation services significantly improved the living conditions in communities and strengthened resilience. More than 370,000 people gained access to clean water, and over 600 toilets were built in schools and health care institutions. Almost 45,000 people benefited from irrigation systems and 89,000 from rural advisory services. In addition, 17,000 people adopted various climate-resilient farming practices, which increased their income by 53 per cent.
In 2023, the western province of Karnali was hit by a disastrous earthquake affecting an estimated 250,000 people. Karnali is one of Nepal’s poorest regions, and the disaster increased the region’s already high vulnerabilities and undermined livelihoods and the local economy. Finland’s water projects were able to quickly respond to earthquake damage by chlorinating water systems and providing temporary toilet and hygiene services. Finland supported the continuation of schooling in the earthquake zone through the UN Children’s Fund (UNICEF). The organisation set up 56 temporary learning spaces, distributed learning materials to over 2,200 pupils and provided psychosocial support to school communities.
The proportion of the total budget allocated to the education sector by the Nepalese Government rose from 10.9 per cent to 13.3 per cent. The participation rate in upper secondary education increased from 50.9 per cent to 57.9 per cent between 2021 and 2024, and the increase in girls’ participation was significant. However, the number of studentsand the participation rate in primary and lower secondary education decreased slightly. Finland funded school meals as part of its sectoral budget support, and towards the end of the country programme period more than three million children received a daily meal at school.
Finland funded UN Women’s Nepal country programme, which promoted women’s vocational education and training and entrepreneurial activities. Nearly 18,000 women and disadvantaged people found employment, or their livelihood opportunities improved. During the COVID-19 pandemic, the programme disseminated information on citizens’ rights and on health practices regarding the pandemic and helped women and children obtain important documents and financial services. In addition, some 16,000 public authorities and decision-makers received training in themes related to gender equality and the prevention of gender-based violence.
Finland’s partners in Nepal
Finland works in Nepal as a member of the European Union and the donor community. As an EU Member State, Finland participates, among other activities, in the dialogue with the Nepalese Government, encouraging the country to promote human rights and develop good governance.
Finland also supports economic and social development in Nepal by funding UN organisations and international development finance institutions. In addition, Finland provides needs-based humanitarian assistance especially via humanitarian organisations of the UN and Finnish civil society organisations (CSOs).
Several Finnish CSOs support social development in Nepal in collaboration with local civil society actors. The support is allocated for example on teaching, health, the rights of persons with disabilities and improved food security.
Team Finland cooperation
In Nepal, Team Finland works to promote Finland’s image, showcase the country’s strengths and advance commercial and economic relations between the two countries. Nepal and Finland have a long history of development cooperation, and Finland supports Nepal with various funding instruments.
Economic cooperation between Finland and Nepal has been relatively modest so far. However, efforts are made to develop trade relations especially in sectors in which Finland has comparative advantage and which are linked to Finland’s long-term development cooperation and the experience, networks and expertise gained through it.
These sectors include education, water and sanitation, climate resilience and business development. There is also potential in cleantech (including renewable energy and smart energy solutions), ICT, digitalisation, hydropower, meteorology and urban planning. The countries have concluded an investment protection agreement.
One of Finland’s main objectives in Nepal in 2025–2028 is to strengthen commercial and economic cooperation alongside more traditional development cooperation. One way development cooperation contributes to this objective is by improving the business environment in different ways.