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Launch of the UNNATI – Challenge Fund in Nepal

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- Private Sector Development is an important engine of economic growth, stressed Her Excellency Ms. Geelan during the formal launching ceremony of the UNNATI – Challenge Fund (UCF) in Nepal a few weeks ago. In her speech she emphasized the importance of partnerships between farmers and entrepreneurs along the value chains. She encouraged the potential applicants to come up with good proposals for the competitive process of UCF.

The UNNATI Programme is funded by the Government of Denmark and implemented under the leadership of the Ministry of Agricultural Development, Government of Nepal. The programme is implemented by ORGUT together with the United Nations Capital Development Fund (UNCDF), Department of Local Infrastructure and Agricultural Roads (Ministry of Federal Affairs and Local Development), District Technical Offices and District Development Committees, Nepal Rastra Bank, International Labour Organization, and Nepal Business Forum.

the UNNATI programme is the promotion of sustainable, inclusive growth that reduces poverty and raises living standards. The key priority is to strengthen market-based growth with a focus on reducing poverty and improving living standards with a strong focus on agriculture development.

The Programme mainly focuses on the eastern development region, targeting primarily 7 districts: Ilam, Paanchthar, Terhathum, Bhojpur, Dhankuta, Taplejung and Sankhwasabha.

UNNATI Challenge Fund (UCF) is a fund facility under the UNNATI Programme. UCF is jointly implemented by ORGUT and UNCDF. UCF has three specialised funding windows these are i) Value Chain Window (VCW) ii) Expanding Financial Frontiers Window (EFFW) and iii) Market Infrastructure Window (MIW).

The total amount of the fund facility is US$ 9,695,000 million. This facility provides competitive matching grants to agriculture value chain entrepreneurs, banks and financial institutions, private sector businesses and public sector actors, contributing towards agricultural growth and development, especially focusing on Orthodox Tea, Ginger, Large Cardamom and Dairy value chains. The fund supports innovating and saleable new ideas and interventions that bring economic benefits to the business and agriculture sector, targeting at low income people and agriculture based Micro Small and Medium Enterprises (MSMEs) in the Eastern Development Region of Nepal as direct or in-direct beneficiaries.

Each project, to be supported under this fund, will range between US $15,000 to US $500,000 (depending on the project proposal received and in line with different caps under each windows) in which applicants also need to share costs ranging from 30 percent to 80 percent.  The challenge fund will target projects with a potential to be replicated throughout Nepal, which also adds value, meets market demands and fulfils market gaps in the agriculture sector. The challenge fund will pay special attention to reducing discrimination towards women and traditionally marginalized groups.

Mr. Bhattarai, Secretary, Ministry of Agricultural Development emphasised that “Orthodox Tea, Ginger, Dairy and Large Cardamom are high value commodities and have comparative advantages with high growth potential for export promotion and import substitutions. The fund would be instrumental in developing good, innovative business and inclusive growth model thereby creating economic benefits to the agri-business groups, small and medium enterprises and co-operatives in the programme districts.” The Secretary also highlighted the Government efforts on policy reforms to create credible policy environments for private sector investment and make this sector more competitive.

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