Crisis Response

EU provides €8.5 million for Renewable Natural Resource and Local Governance sectors in Bhutan

Brussels, 04/04/2020 - 10:37, UNIQUE ID: 200404_23
Press releases

4 April, 2020: The European Union has released €8.5 million in support of Renewable Natural Resources (RNR) and Local Governance (LG) sectors in Bhutan. The tranche release is part of the larger budget support initiative for a total value of EUR €48.8 million for the period 2017 to 2022. With the release of the 4th tranche, the EU has so far transferred EUR 29.6 million to the government. Funds are implemented directly by the Royal Government of Bhutan through the national budget.

The funds from the 4th tranche will be utilized for the following:

  • €4.5 million to the Renewable Natural Resources sector contributing to increased food self-sufficiency and sustainable management of natural resources.
  • €4 million to the Local Governance sector contributing to improved local governance and fiscal decentralisation, equitable socio-economic development and sustainable management of environment.

Commenting on the release of the tranche, H.E. Ugo Astuto, EU Ambassador to India and Bhutan “Under the Royal Government of Bhutan’s leadership, the country has made good progress in supporting the renewable natural resources sector and in fostering local governance, in line with the five-year plan. We are happy to contribute to Bhutan’s efforts in accelerating sustainable economic growth, improving service delivery and enhancing the livelihoods of all citizens. Strengthened financial and control capacities of the government  will allow even further progress in implementing Public Finance Management reform measures”

The Ambassador further added, “The EU will continue to work together with the Royal Government of Bhutan also in the framework of the current global Covid-19 crisis, assessing the medium and long-term impact of the pandemic in the country. The funds made available will offer to the Government more fiscal space to address COVID 19 needs.”

Both the projects, supported by the EU, have achieved key milestones in 2018-19.

Under the Renewable Natural Resource Sector program, the following were enabled:

  • self-sufficiency with respect to Egg and Milk production was achieved;
  • 2765 hectares were afforested and reforested in 2018;
  • about 262,949 hectares of forest area was brought under sustainable management;
  • 9,858 km of farm roads have been built;
  • 2996.5 km of irrigation channels were constructed or renovated;
  • 99 Farmers Groups and Cooperatives were registered, creating 584 employment opportunities.

In the local governance sector, the noticeable achievements include:

  • All 225 Local Governments have undertaken -
    • disseminating budgets and plans, and their implementation status
    • using integrated national M&E system as a system for planning, budgeting and reporting
  • 31 business initiatives commenced through green economic development
  • 50 Local Governments have been supported through the performance based grants
  • Over 1000 LG functionaries trained
  • Women representation in LG have increased

EU development cooperation with Bhutan

Through the Multi-annual Indicative Programme (MIP) for 2014-20, the EU provides assistance to the Bhutanese government in moving towards its goal of achieving self-reliance and inclusive socio-economic development as identified in its Five-Year Plans, under the overarching philosophy of Gross National Happiness (GNH). According to the MIP 2014-20, the support is mainly invested in: (1) Capacity development for local governments and fiscal decentralization; (2) Civil Society; and (3) sustainable agriculture and forestry. Additional support has been committed to building resilience to combat climate change, enhancing public finance management capacity, and support to trade through ITC. The EU is also funds a project implemented by the organisation Helvetas in support of Civil Society Organisations.


About the European Union (EU)

The EU, which consists of 27 countries, has the world's largest economy and its third largest population, after China and India. Though richly diverse, the countries that make up the EU (its 'Member States') are all committed to the same basic values: peace, democracy, the rule of law and respect for human rights. They have set up common institutions so that decisions on matters of joint interest can be made democratically at European level. By creating a frontier-free single market and a single currency (the euro) which has been adopted by 19 Member States, the EU has given a significant boost to trade and employment. It is also at the forefront of policies on sustainability. The EU is fighting climate change through ambitious policies at home and close cooperation with international partners. Climate action is at the heart of the European Green Deal – an ambitious package of measures ranging from ambitiously cutting greenhouse gas emissions, to investing in cutting-edge research and innovation, to preserving Europe’s natural environment.

EU-Bhutan relations

The EU has had a very strong presence in Bhutan since 1982. It works closely with Bhutan to reduce

poverty, enhance food security and strengthen the democratisation process. Both the EU and Bhutan are signatories to the Paris Agreement and are working together closely on combatting global climate change and reducing greenhouse emissions. Bhutan submitted its Intended Nationally Determined Contributions (INDC) in September 2015 towards finalisation of Paris Agreement, which was subsequently ratified by the Parliament.  



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