Nepal and Germany have enjoyed a warm and friendly relationship since establishing diplomatic relations in 1958. Throughout Nepal’s political journey, Germany has remained a trusted partner, standing alongside the country through challenging times, including the devastating earthquake of 2015 and the COVID-19 pandemic. What began as German cooperation in technical training and financial assistance has since expanded to encompass a wide range of sectors, including power generation, agriculture, urban development, cultural heritage preservation, education, health, small business development, and renewable energy. Ram Kumar Kamat of The Himalayan Times spoke with German Ambassador to Nepal Udo Eugen Volz about the evolving partnership between the two countries and the prospects for further cooperation. Excerpts:
What are the areas of cooperation that Germany is focusing in Nepal at present?
Today, German development cooperation with Nepal is concentrated around three core areas: sustainable economic development, climate and energy, and health. This cooperation is delivered through complementary German institutions, including the KfW Development Bank, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), and the Physikalisch-Technische Bundesanstalt (PTB). Together, they represent different dimensions of a long-term partnership: financing investment, strengthening institutions and skills, supporting businesses and public systems, and developing the standards and quality infrastructure needed for sustainable economic activity.
How has Germany supported Nepal’s energy sector?
Energy provides a particularly visible example of how our partnership has evolved. Our financial cooperation has supported Nepal’s hydropower development, including the Marsyangdi projects, at a time when expanding electricity generation was fundamental to Nepal’s economic development. Today, the emphasis extends across the energy system from renewable generation and decentralised energy solutions to transmission, energy efficiency and electrification. The Chilime–Trishuli 220 kV transmission project, jointly financed by Nepal, Germany through KfW, the European Investment Bank and the European Union, is designed to evacuate hydropower from the Trishuli corridor into the national grid. This transmission line, especially the substation 3B, was badly hit by the Bhotekoshi flash flood in August this year. Workers who were on the construction site when the flood hit are still missing; I’d like to express my condolences to their families and the affected population in the area. More recently, the Lekhnath–Damauli 220 kV transmission project, supported through KfW, is strengthening the network needed to integrate electricity generated in western Nepal. We had engaged very early in Nepal in hydro power production building dams and turbines to produce hydro power and in the recent years we have moved on to transmission this is second step. And most recently distribution is taking place.
Power generated from hydel stations is supplied through transmission lines to the consumers. Nepal is quite a big country when it comes to transmission lines. You have to go across long distances to make sure that you can cover all areas and supply them. The partnership has also reached communities and households through decentralised renewable energy. Solar systems, photovoltaic solutions and biogas have helped expand access to cleaner energy in areas where extending the central grid is difficult.
More recently, cooperation has increasingly embraced the next stages of Nepal’s energy transition, including energy efficiency, electric mobility and cleaner cooking. The direction is clear: cooperation is moving from individual energy projects towards a more resilient, efficient and sustainable energy system.
In recent years we have also added activities promoting solar energy in Nepal. There has been a programme financing solar panels for businesses to make their production more reliable to supply electricity and also to reduce the cost for business. Secondly, for solar energy we also now use it to compliment hydropower so that existing hydropower stations may add solar panels. This is also a reflection of the two seasons that you have for renewal power productions- rainy season and the period after that. The dry season is beneficial for solar energy.
How has Germany supported Nepal’s effort to achieve the goals of sustainable development?
As regards, sustainable economic development, there is an important part of the programme referring to agriculture that takes into account climate change and different conditions for crops. Now in phase two GRAPE (Green Resilient Agricultural-Centred Private Sector Economic Development) focusses on market access for farmers. Under the GRAPE 1 programme, efforts were made to help small scale farmers increase their production and now under the second phase is more about business ideas and how to make it work as a business to take their products to the market and to sell and increase the production that they have achieved in the meantime. Another area is E vehicles. So, providing charging stations for E vehicles in Kathmandu and outside and also supporting public transport with many buses running on electricity, so these are the three main areas we are focusing on.
How is Germany supporting Nepal’s health sector?
Germany has supported Nepal’s health sector, including health facilities and post-earthquake reconstruction, while more recent programmes focus on hospital and health-system management, digital health information systems, health financing, maternal and newborn care, and more equitable access to quality healthcare.
Under the assistance programme for energy, sustainable development and health, the German government has pledged a total of 37 million Euros for a period of two years. This was agreed in June this year. Negotiations were held in Kathmandu and this is for the period of 2027-28 so every two years, we negotiate for another two years period.
How has Germany supported Nepal in the aftermaths of Bhotekoshi floods?
Today, our partnership is being tested once again by circumstances of great difficulty. The devastating Bhotekoshi–Trishuli floods of August 2026 caused extensive loss of life and damage to communities, bridges and critical infrastructure in the Rasuwa–Nuwakot corridor. Germany responded with emergency humanitarian assistance and has subsequently mobilised a broader package of support. As announced in September, Germany pledged €8.05 million in assistance, comprising more than €500,000 in emergency relief supplies, €200,000 in direct humanitarian assistance through civil-society organizations, and €7.35 million in development cooperation implemented by GIZ, focusing on health, energy, water supply and climate- and disaster-resilient infrastructure. Germany is also contributing through European and multilateral mechanisms supporting the wider humanitarian response.
How can Nepal and Germany strengthen economic cooperation, particularly in renewable energy, tourism, and technology?
If you take a look at the figures first, the overall trade between Nepal and Germany amounts to almost 70 million euros which has been rather stable in recent years. Currently, there is an export surplus for Nepal in the trade with Germany. One has to consider the geographical distance between Nepal and Germany. These are countries of two different continents so it is not the same as if you were dealing with a neighbour much closer by, to look at that aspect as well so it is stable but not dynamic at the moment. As regards investment, we are all aware that the Government of Nepal is working to improve the investment climate in the country. Foreign investors come to invest in a country and it is an indicator whether the local private sector is flourishing and whether the local businesses do invest and if there is stimulation for the businesses. I think Nepal at the moment also faces a situation where businesses are looking as to where things are going, how the government is going to implement its promises of or say announcements to provide better conditions for private sector. If it works for national private sector, I think it will also become more interesting for foreign investors. It is not an easy task because one thing is to get ready for providing the framework to put conditions in place but you also have to compete with other destinations and that means you have to face a competition at international level and I would say that communication to address these issues is evolving in Nepal.
What role is Germany playing to address environmental challenges in the Himalayan region and the issues of climate justice for the countries like Nepal that suffer the consequence of climate change?
There have been clear commitments by the signatories of the Paris Agreement and European countries for example including Germany are aware of the responsibility in this area and the German Government has been active in supporting climate effect mitigation for many years. I can give you figures for 2025. About 11 billion euros were made available for climate change mitigation. These are partly grants, partly loans and partly private sector engagement. I think it is very important to see participation from public sector and private sector as well. And we have programmes run by the German Government and also institutions and NGOs working in Nepal have been benefitting from what we call international climate initiative which is a government programme. It has been in place for many years. The requirements to respond to climate change are enormous. A lot has to be done in the country and internationally. The transition to a climate neutral economy is a task that countries like Germany have taken on but of course to turn a big industry or a strongly industrialised country like Germany into climate neutral takes a lot of investment on the one hand and on the other, we are making our contribution to international initiatives and assistance for climate change mitigation.
What is your message to other countries about Nepal’s claims related to climate fund?
There have been replies by other countries including Germany immediately after the recent floods, for relief assistance and we also increased our development cooperation, especially in the area of energy.
Definitely we know the challenges of climate change can only be tackled jointly. If countries and big economies don’t take part in these efforts, then it will always be a limited effect and limited success and that’s why it is important to work with all the countries to be part of this. Now Nepal is facing completely an unexpected situation as extreme damage happened and many lives were lost.
How does the fall of the Berlin Wall continue to shape our understanding of freedom, political division, and the possibility of overcoming barriers in today’s world?
Thirty-seven years after the fall of the Berlin wall, it’s still a very strong symbol for hope that things can improve. One may say that in these 37 years, the world has changed, the world has moved on, we are facing a different situation today. Nevertheless, we should not forget this peaceful revolution. Major changes came about peacefully and the revolution deserves to be remembered for its very nature and will always be a decisive moment in German and European history. It does not only mean we could overcome the separation within Germany but also within Europe so for us, it is an extraordinary big date and a big event and we cannot overestimate the effects it had on Germany. This is one of the impressive features I would say that this happened because the people decided to take to the street peacefully in growing numbers and without being intimidated in the adverse situation when they faced resistance, they did not give up the protests and they joined the protests again and again. We called them Monday demonstrations in East Germany so we learnt by this that change is possible that improvement of overcoming a big divide is possible. It can be done peacefully and violence does not have to be a means to solve such issues.
What steps can Nepal take to attract more German tourists and encourage greater cultural exchange between the two countries?
Nepal is an interesting market for German tourists. Most people know that many Germans like mountaineering. There was ra eduction in the number of German tourists in Nepal after COVID-19 pandemic but we have caught up again and now the number is almost equal to the number that existed before the COVID-19 period. Now we have approximately 30,000 German tourists in Nepal every year which of course amounts to around three per cent of the total tourists that visit Nepal. You should not overestimate the impact of German tourists but it is a very reliable source market for Nepal. And Tourism is a very competitive market. As you can see also with the events in Nepal last year, tourism is very sensitive to developments in a country either due to the political situation or in case of a natural disaster. If it is hit by increased prices, increased flight fares also have impacts on many travellers. But overall, I think Germany and Nepal are doing quite well in this. It is encouraging to see that Nepal has decided to brand itself for wellness in 2027, making it year of wellness in Nepal and I am sure it is also part of Nepal’s presentation at the ITB Berlin (International Travel Trade Show) in March next year. Every year, we see a good number of Nepali travel agencies and Nepal Tourism Board presenting themselves to the global market.
What new initiatives or areas of cooperation can Nepal expect from Germany in the coming years?
There are more and more Nepalis wishing to study and work in Germany and also to receive professional training. I would say this is an area that has gained increased importance and will continue to do so between our countries.. If this is going to increase and continue in the next two years, this may increasingly shape our relations because a growing community of Nepalis in Germany will have an impact. There are 11,000 Nepalis at the moment. As the number will increase, they will be very active and this community cold become a very important factor in our relations.
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