By A Staff Reporter
Kathmandu, Feb. 26: Ministry of Finance signed an agreement with the World Bank’s Forest Carbon Partnership Facility (FCPF).
According to the agreement, the World Bank will provide 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 the Maldives, Nepal and Sri Lanka, Faris Hadad-Zervos on Wednesday.
“This scale of results-based payments for emission reductions is a first for Nepal,” said secretary at the Finance Ministry Sishir Kumar Dhungana. “This programme helps to elevate sustainable forest management and land use to the heart of Nepal’s commitment to climate-smart economic development,” he said.
“Nepal’s Emission Reductions Programme builds on more than three decades of successful community forestry,” said Faris Hadad-Zervos, World Bank Country Director for the Maldives, Nepal, and Sri Lanka. “The emissions reduction purchase is one pillar of a strategic programme on forest landscapes and climate action in Nepal. This innovative financing agreement will address the drivers of deforestation and forest degradation, helping incentivise further community action across the country.”
Nepal’s Emission Reductions Programme in 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 per cent of the country’s forest cover.
The Terai region supports some of the most productive forests, richest biodiversity and the most significant protected areas in Nepal. The region also has the highest population growth, urbanisation, and economic development in the country, especially agriculture. As a result, natural resources in the Terai face significant threats that the emission reduction programme 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 Terai region provide ecosystem services that are critical for climate resilience, including watershed protection, and drought and flood mitigation,” said Dr. Oli. He said, “This programme will help us to protect the forests that are inextricably linked to the well-being of many communities here and across the country.”
This programme 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 Programme 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 efficient economic growth – key for Nepal to build back better, and greener.