What is Japan's Grant Aid?

Japan's grant aid supports self-help in the recipient country; running costs and maintenance costs must be borne by the recipient country
Japan's grant aid has been conducted based on a philosophy of encouraging self-reliance in the recipient country. Cooperation is provided for the construction of facilities or purchase of materials and equipment but not for running and maintenance expenses, consumable supplies and personnel costs, and other expenditures that are to be made after the completion of the project. These are the responsibility of the recipient country and do not fall within the scope of the grant aid.

Emphasis on basic human needs
Japan's grant aid is provided primarily for projects that directly benefit the public, such as those aimed at improving the supply of safe drinking wat er, primary health and medical care, and primary education. Grant aid is not provided for projects that might be used for military purposes.

Official request initiates process
The screening process for Japan's grant aid begins when the foreign ministry or responsible authority in the government of the recipient country submits an official request to the Japanese embassy assigned to the recipient country.

Projects must be completed within a set time period
Aid commitments are made in the form of an exchange of notes signed by representatives of the Japanese and recipient country. Projects must be completed within the same Japanese fiscal year in which the Japanese cabinet approved the project (see Flow Chart of the Grant Aid Process) or, when unavoidable, the next fiscal year at the latest.

The project's consultants and contractors must be Japanese nationals
Only Japanese nationals (physical and juridical) are eligible to be awarded the contract for the grant aid projects. The main contractor, a Japanese national, may use local or third country nationals as subcontractors. The main contractor is free to choose any subcontractor of any nationality. However, the contractors for Non-Project Grant Aid, Grant Aid for Disaster Relief, and Grant Assistance for Grassroots Projects are open to non-Japanese nationals.

Products and services may be procured from third countries
The goods and services purchased under Japanese grant aid should in principle come from either Japan or the recipient country but if the two governments deem it necessary, can be procured from a third country.

Grant aid is used to hold down debt of the recipient country
Grant aid is used to pay off the debt that would accrue to the recipient country in executing the project. For this reason, the recipient country does not receive the grant aid in cash; the funds are paid to the Japanese contractor through an account in a foreign exchange bank of Japan opened by the recipient country.

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