EU approved €9.5 million to support local government and jobs in agriculture in Bhutan

EU approved €9.5 million to support local government and jobs in agriculture in Bhutan


Today, the European Commission’s Director-General for International Cooperation and Development, Stefano Manservisi, announced a €9.5 million budget support payment to H.E., Dr. Lotay Tshering, Prime Minister of Bhutan.  

On this occasion, Director-General Manservisi welcomed the progress that the country made in implementing its comprehensive development agenda towards achievement of the Sustainable Development Goals. The well-known Gross National Happiness concept of Bhutan builds on a sustainable green economy, which leaves no one behind. The EU is currently participating in a Round Table meeting in Bhutan’s capital Thimphu and shared this announcement with the Royal Government and international partners.

The EU support contributes to the ongoing local government and public finance management (PFM) reforms and the policies for agriculture and rural development. This will aim at reducing poverty and inequality and promoting carbon neutral development.

Performance-based grants are being rolled out to 30 local authorities providing funds for the construction of farm roads, water supply and irrigation schemes, religious sites, schools and health facilities, electrification, fencing/gates, walls and drainage. This will help increase the land area under organic and natural production, the quantity of climate change resilient seeds of cereals and vegetables supplied to farmers, and improved dairy cattle breed.

Significant progress was made in rural infrastructure, with some 13 000 acres of land brought under farm mechanisation, over 5 000 km of farm roads built and 2 600 km of irrigation channels constructed, as well as 34 irrigation storage tanks installed. The programme has also contributed to the creation of an additional 35 000 jobs in the agriculture and cottage industry under the 11th Five Year Plan.

Today’s announcement follows the Director-General’s visit in January, when Mr. Manservisi had bilateral meetings with the newly elected Prime Minister and the Minister of Foreign Affairs, Dr. Tandi Dorji, as well as other officials of the Royal Government of Bhutan.


This new support brings the total amount of assistance to Bhutan under EU development cooperation to over € 42 million for the period 2014-2020. There are two priority areas:
1) Local authorities and Civil Society and 2) Sustainable agriculture & forestry.

The assistance is complemented with thematic and regional projects in the areas of trade, environment and climate change.