U.S. Government Cancels Millions in Foreign Aid, Including $39 Million for Nepal

The U.S. Department of Government Efficiency (DOGE) has announced the cancellation of various foreign aid allocations, totaling hundreds of millions of taxpayer dollars. Among the affected projects are two initiatives in Nepal: a $20 million program for “fiscal federalism” and a $19 million project for “biodiversity conservation.”

Other canceled allocations include $40 million for a “gender equality and women’s empowerment hub,” $32 million for the Prague Civil Society Centre, and $486 million for the “Consortium for Elections and Political Process Strengthening,” which included $22 million earmarked for Moldova and $21 million for India. Additional funds designated for political, economic, and social projects in Bangladesh, Cambodia, Liberia, Mali, Serbia, and Kosovo have also been scrapped.

This decision follows an executive order by President Donald Trump suspending all forms of foreign aid for 90 days upon taking office. As a result, various U.S. assistance programs to Nepal have been affected.

With the suspension of grants provided through the United States Agency for International Development (USAID), off-budget projects in Nepal have been particularly impacted. According to Nepal’s Ministry of Finance, U.S. assistance is only partially integrated into Nepal’s budget, meaning that projects reliant on external funding have been directly hit by this suspension.

Nepal and USAID last signed a five-year strategic partnership agreement worth $659 million on May 15, 2022. However, following Trump’s executive order, USAID notified the Ministry of Finance, non-governmental organizations, and nonprofit entities that all grant-funded programs were to be halted immediately.

In 2023, the U.S. provided $68 billion in aid to 176 countries, with Nepal ranking 16th among the recipients. The suspension of U.S. grants raises concerns about the future of Nepal’s externally funded development projects.