Kathmandu — The Government of Nepal signed a landmark agreement
with the World Bank’s Forest Carbon
Partnership Facility (FCPF), unlocking up to US$45 million to
support Nepal to decrease carbon emissions from deforestation and forest
degradation through 2025. With this Emission Reductions Payment Agreement
(ERPA) in place, Nepal is expected to reduce 9 million tons of carbon dioxide
emissions in the Terai Arc Landscape. The agreement was signed by the Secretary
of the Ministry of Forests and Environment,Dr. Bishwa Nath Oli on behalf of the
Government of Nepal, and the World Bank Country Director for Maldives, Nepal
and Sri Lanka, Mr. Faris Hadad-Zervos on February 24.
“This scale of results-based payments for
emission reductions is a first for Nepal,” said Finance Secretary, Mr. Sishir
Kumar Dhungana.
“Nepal’s Emission Reductions Program builds
on more than three decades of successful community forestry,” saidFaris Hadad-Zervos,
World Bank Country Director for Maldives, Nepal, and Sri Lanka. “The emissions
reduction purchaseis one pillar of a strategic program on forest landscapes and
climate action in Nepal. This innovative financing agreementwilladdress the drivers
of deforestation and forest degradation, helping incentivize further community action
across the country.”
Nepal’s
Emission Reductions Programin the Terai lowlands aims to lower rates
of deforestation and forest degradation across 2.4 million hectares of land rich
in natural resources, including 20% of the country’s forest cover. The Terairegion
supports some of the most productive forests, richest biodiversity and most
significant protected areas in Nepal. The regionalso has the highest population
growth, urbanization, and economic development in the country, especially
agriculture. As a result, natural resources in the Terai face significant
threats that the emission reduction program helps address.
This initiative will also focus on improving
community-based forest management, transferring user rights for national forests
to local communities, improving integrated land use planning, promoting
alternative sources of energy and strengthening capacity for protected area
management.
“Forests
in the Terairegion provide ecosystems servicesthat are critical for climate
resilience, including watershed protection, and drought and flood mitigation,” says
Dr. Bishwa Nath Oli, Secretary for Nepal’s Ministry of Forests and Environment.“This
program will help us to protect the forests that are inextricably linked to the
well-being of many communities here and across the country.”
This
program also leverages support from other World Bank support on sustainable
land management and social inclusion, and builds on complementary efforts
financed by the Climate Investment Funds’ Forest Investment Program and the
Dedicated Grant Mechanism for Indigenous Peoples and Local Communities.
Nepal is the fifth country in Asia-Pacific
and twelfth globally to reach such a milestone agreement with the FCPF, which
together have unlocked over US$600m in results-based financing. Emission
Reductions Payment Agreements are innovative instruments that incentivize
sustainable land management at scale and help to connect countries with other
sources of climate financing. Funding from the FCPF supports new opportunities
to conserve and regenerate landscapes and biodiversity while simultaneously
supporting more resilient, inclusive, sustainable and efficienteconomic growth
– key for Nepal to build back better, and greener.