Since its establishment, TDF has received financial support in the form of loan and grant from Government of Nepal and different international donors (ADB, Word Bank, KfW, GIZ) and government. TDF has invested in different projects: i) social projects (i.e. hospital, school, public toilets, drainage), ii) utility projects (i.e. water supply and sanitation, roads, public/municipal buildings), iii) economic/revenue generation projects (i.e. bus park, commercial complex, agriculture market, parks, tourist place development, local product center) of the municipalities and small towns. As of FY 2023/2024, TDF has provided financial support of NRs. 13 billion to different municipalities and water users' committee.

TDF has been implementing technical assistance programs for the capacity building of municipalities and water users’ committees in project development, project implementation, project management, financial management, revenue improvement, and for periodic plan preparation based on demand side requirements.