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International Partnerships


With a population slightly below 778,000, Bhutan successfully transitioned from Least Developed Country status as of December 2023.

Our partnership

The European Union is committed to assisting Bhutan in achieving sustainable and inclusive development, aligning with the United Nations 2030 Agenda, the Global Gateway Strategy, and the EU Indo-Pacific Strategy.

The partnership between the EU and Bhutan has been significantly strengthened through the recent signing of a Framework Agreement between the Royal Government of Bhutan and the European Investment Bank (EIB). This agreement paves the way for the EIB to offer sustainable financing for both physical and social infrastructure projects, responding to the needs identified by the Bhutanese government and its private sector counterparts.

The 11th Annual Consultations between the Royal Government of Bhutan and the EU, held in Thimphu on 5 May 2023, marked a constructive dialogue covering a wide range of topics, including governance and human rights, trade relations, sectoral cooperation, and various multilateral and regional issues.

Through the Neighbourhood, Development and International Cooperation Instrument (NDICI-Global Europe), Bhutan is set to receive EUR 31 million in grant funding for the 2021-2024 period. In addition, Bhutan benefits from several multi-country EU programmes.

28 OCTOBER 2022
Annual action plan 2022 for Bhutan
16 DECEMBER 2021
Annual action plan 2021 for Bhutan
8 MARCH 2022
Multiannual Indicative Programme 2021-2027 for Bhutan – decision
8 MARCH 2022
Multiannual Indicative Programme 2021-2027 for Bhutan – annex


Our flagship initiatives

Climate change, green growth for resilient Bhutan
  • Foster economic diversification of Renewal Natural Resources (RNR) sector;
  • Scale-up climate resilient approaches for sustainable management and conservation of natural resources;
  • Enhance food and nutrition security;
  • Promote inclusive and effective RNR service delivery.

Within this framework, the budget support programme for Promoting Inclusive Sustainable and Resilient Agri-Food Systems in Bhutan is dedicated to improving food self-sufficiency and nutrition security, conserving natural resources, fostering value chain enterprises, and addressing gender issues, with a budget of EUR 15 million (including EUR 1.5 million allocated for technical assistance) spanning from September 2022 to 2027.

Bhutan has been selected as one of the five pilot countries for the Sustainable Agrifood Systems Intelligence (SASI) Initiatives.

Additionally, Bhutan benefits from the IFC-EU Partnership for Accelerating Climate-Smart and Inclusive Infrastructure in South Asia (ACSIIS) programme, with a funding of EUR 18 million. This programme includes two key projects:

    1. Supporting climate smart agriculture and agribusiness, including developing market infrastructure in Punakha (facilitating agribusiness);
    2. The Bhutan SME A2F project: developing financial infrastructure services to expand MSMEs, green and gender finance.

    The recent framework agreement with the European Investment Bank (EIB) is set to leverage the European Fund for Sustainable Development Plus (EFSD+) to diversify Bhutan’s clean energy generation system, focusing on solar and mini-hydro projects.

    At a sub-regional level, Bhutan should benefit from the EU's new engagement on energy connectivity, facilitating cross-border electricity trade with India and extending to Bangladesh.

    Good governance for inclusive socio-economic development
    • Strengthen good governance through reforms in Local Governments (LG) and public service delivery;
    • Strengthen macroeconomic stability and public finance management;
    • Enhance monitoring and oversight mechanisms.

    The newly introduced budget support programme on strengthening inclusive local governance and decentralisation in Bhutan (EUR 8.3 million, including EUR 1.3 million allocated for technical assistance, 2023-2027) is designed to bolster the capacity of local government, advance decentralisation, and fortify social accountability mechanisms. It aims to improve revenue mobilisation, community engagement, and area-based development, alongside promoting gender empowerment and mainstreaming. Additionally, it supports capacity building for the women and children's division.

    Beyond this, the EU's contribution to Bhutan's public financial management (PFM) reform strategy is complemented by the country's participation in the South Asia Regional Training and Technical Assistance Center (SARTTAC). This initiative, a partnership between the IMF and member countries (Bangladesh, Bhutan, India, Maldives, Nepal, Sri Lanka), is dedicated to strengthening institutions and enhancing skills for the design and implementation of effective economic policies aimed at fostering growth and reducing poverty. It covers core IMF areas including macroeconomic and financial policies, fiscal management and policies, monetary policy and operations, financial sector regulation and supervision, and real sector statistics.

    EU support for Civil Society Organisations (CSOs) in Bhutan, which concluded in December 2022, consisted in 61 sub-granted projects that reached 200,000 direct beneficiaries, 53% of whom were women, representing approximately 26% of the country's population.

    Digital transition: a driver for change in education and public services delivery
    • Strengthen digitalisation in education nationwide;
    • Enhance efficiency, effectiveness, transparency and accountability of public services through digitalisation.

    The 'Supporting Inclusive Access to Digitalisation in Education and Skills in Bhutan' programme, set to be implemented by UNICEF (EUR 1 million, 2024-2027), is designed to strengthen systems that facilitate enriched and high-quality digital learning experiences. This initiative aims to increase the capacity of the Ministry of Education and Skills, alongside relevant stakeholders, in areas such as digital skills and literacy, cybersecurity and online safety, and the development of digital content.