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Local Governance and Community Development Programme (LGCDP) II is a national programme with an over-arching goal to contribute towards poverty reduction through inclusive, responsive and accountable local governance and participatory community-led development. LGCDP is executed by the Ministry of Federal Affairs and General Administration with technical and financial assistance of development partners. This is a national programme framework for improvement in local governance system and community development. It provides an overall framework for strengthening decentralization, devolution and improved local governance system for the effective delivery of basic services and the empowerment of citizens, especially women, children and Disadvantaged Groups (DAGs) and their institutions.

LGCDP aims to strengthen both the demand and supply side of local governance. The programme envisages empowering citizens to engage them actively with local governments and increasing the capacity of local governments to manage resources and deliver basic services in an inclusive and equitable manner besides strengthening institutional framework for decentralization, devolution and community development

Key Features

First: Phase II is seen as a key instrument in making further advances in building and extending the Ministry’s service delivery capacities at both national and local levels.

Second: It represents the means by which the sustainability of community structures such as Community Awareness Centres (CACs) and Ward Citizen Forums (WCFs) can be delivered.

Third: LGCDP II continues to provide the structures (Programme Coordination Unit, Regional Coordination Unit) for creating an environment within which a programme approach can confidently be applied.

Fourth: It will continue to provide a solid platform for managing Nepal’s transition towards federalism.

Fifth: LGCDP II will continue to provide a strong foundation for harmonizing, coordinating and steering the development efforts of government, non government and private sectors at the local level.


The overall goal of the programme is to contribute towards poverty reduction through better local governance and community development. 

The goal of the programme is aligned with the national goals of the GoN’s national plans and will contribute either directly or indirectly to their realization by empowering citizens and responding to their priority needs, while at the same time strengthening decentralized local governance systems, community development, infrastructure development, economic development and integrated service delivery.


The purpose of the programme is to improve local governance for effective service delivery and citizen empowerment.

Key Directions and Strategies

Building on the experience of Phase I, LGCDP II has undergone a number of changes in focus and approach, and they are:

  • Accountability in Local Governance {IPFC, restructured Local Governance Accountability Facility (LGAF)}

  • Improved Social Mobilization

  • Focus on Service Delivery and Resource Mobilization

  • Emphasis on Local Economic Development and Livelihood Improvement Schemes

  • Increased Emphasis on PFM and Management of Fiduciary Risk

  • Preparing for a New System of Local Governance

  • Introduction of Environment Friendly Local Governance (EFLG)

Outcomes/Key results  

LGCDP II encompasses four outcomes/key results:

  1. Citizens and communities hold their local governance actors accountable (demand side improvements)

  2. Local bodies are more responsive to citizen’s demands (supply side improvements),

  3. All citizens are provided with efficient and effective local services (Enhanced service delivery and integrated planning processes)

  4. Strengthened policy and institutional framework for devolution, sub-national governance and local service delivery (Citizen-centric policy development)

All together there are nine outputs under these four broad outcomes. The key activities of the programme are defined and elaborated by Strategic Implementation Plan as reflected through Annual Strategic Implementation Plan (ASIP) on annual basis.

Outcome 1:  Demand side improvement encompasses two outputs:

  1. Output 1: Citizens and community organizations are empowered to actively participate and assert their rights in local governance

  2. Output 2: Accountability mechanism for local governance is in place.

Outcome 2: Supply side improvements encompasses below three outputs:

  1. Output 3: LBs' access to resources increased.

  2. Output 4: Public financial management system improved

  3. Output 5: Institutional and human resource capacities of LBs and central agencies involved in local governance strengthened

Outcome 3: Enhanced service delivery and integrated planning process encompasses two outputs:

  1. Output 6: Access to and quality of local infrastructure and other socio-economic

  2. services administered by LBs are improved.

  3. Output 7: Strengthened integrated planning, budgeting, monitoring and evaluation and coordination  amongst local governance actors

Outcome 4: Citizen centric policy development encompasses two outputs:

  1. Output 8: Refined policy on local governance and improved inter-agency cooperation

  2. Output 9: Policies developed for devolution and federalism

Program Summary

Programme  Period

16 July 2013  - 15 July 2017

Executing Agency

Ministry of Federal Affairs and General Administration

Implementing Agencies

  • Local Bodies

  • Local Offices of Sectoral Ministries

Supporting Agencies

  • Sectoral Ministries

  • Non-Government Organizations

  • Civil Society Organizations

  • Private Sector Organizations

Geographic Coverage

 75 Districts, 191 Municipalities and 3,276 Village Development Committees

Development Partners

  • Multilateral Development Agencies:  ADB, World Bank, European Union

  • Bilateral Development Agencies:  DFID,  Government of Denmark, GIZ, JICA, Government of Norway, SDC, USAID,   Government of Finland


Financial Contribution

  • Government of Nepal : US$ 1061 million

  • Development Partners: US$ 236 million

  • Total                            : US$ 1297 million

Financing Modality

  • Joint Financing Arrangement (JFA) : US$ 164.9 million

  • Joint Funding for Technical Assistance  (JFTA): US$ 45 million

  • Programme Alignment Arrangement (PAA):US$ 26.1 million

Programme Components

  • Policy: Governance Reform

  • Supply: Service Delivery and Capacity Development

  • Demand: Citizens Empowerment

  • Local Development:  Socio-Economic and Infrastructure Development

Sectors of Investment

(1) Local Government Restructuring (2) Federal  Governance (3) Fiscal Decentralization (4) Fiduciary Risks Reduction (5) Results Based Management (6) Capacity Development (7) Social Mobilization (8) Child Friendly Local Governance (9) Gender Equality and Social Inclusion (10) Information, Education and Communication (11) Local Governance and Accountability Facility (12) Environmentally Friendly Local Governance (13) Vital Registration (14) Community Mediation (15) Social Security (16) Local  Community Infrastructure Development (17) Social Development (18) Local Economic Development (19) Livelihood Improvement Schemes (20) Research and Development (21) Public Financial Management