World Bank to support forest-dependent indigenous peoples and local communities

The World Bank (WB) is providing grant support of $4.5 million to strengthen the capacity of Indigenous Peoples and Local Communities (IPLCs) in Nepal’s forest sector. 

The World Bank and Rural Reconstruction Nepal (RRN) today signed a $4.5 million grant agreement to strengthen the capacity of Indigenous Peoples and Local Communities (IPLCs) in Nepal’s forest sector. The five-year Dedicated Grant Mechanism for Indigenous Peoples and Local Communities in Nepal project will help enhance the capacity of IPLCs to participate in Nepal’s Reducing Emissions from Deforestation and Forest Degradation (REDD+) processes at the local, national, and global levels for the sustainable management of forests, according to the World Bank. “This will help create livelihood opportunities and increase the income of forest-dependent communities in the Madhesh and Lumbini Provinces.”

Rural Reconstruction Nepal is the national executing agency for the project.

World Bank Operations Manager for Maldives, Nepal, and Sri Lanka Lada Strelkova and president of Rural Reconstruction Nepal Dr Arjun Karki signed the agreement. “This project supports Nepal’s Indigenous Peoples and Local Communities through a dedicated funding mechanism that will promote and protect their customary institutions that are crucial for the sustainable management of natural resources and climate resilience,” said World Bank Operations Manager for Maldives, Nepal, and Sri Lanka Lada Strelkova, after signing the agreement. “The project contributes significantly to Nepal’s transition to Green, Resilient, and Inclusive Development (GRID) for sustainable recovery, growth, and jobs.”

The DGM Nepal project aims to provide long-term benefits to IPLCs from the sustainable use of forests, including adding value to products and more active involvement in Nepal’s policy-making process.

“The project provides much-needed support to forest-dependent indigenous peoples and local communities to enhance their resilience and build livelihoods through small-scale forest and non-forest-based business and employment opportunities,” said president of Rural Reconstruction Nepal Dr Arjun Kumar Karki, on the occasion.

IPLCs are both beneficiaries and active proponents and participants in the project. During implementation, they will preside over the use of the grant resources in Nepal through a National Steering Committee (NSC) to provide strategic and leadership guidance to the RRN as executing agency. The NSC is a 14-member team of representative NGOs identified through a self-selection process with an equal representation of IPLC representatives as decision-making members.

“This project is an excellent example of the innovation and leadership of Indigenous Peoples and Local Communities in Nepal,” said Natural Resources Management Specialist at the World Bank Meerim Shakirova, on the occasion. “Notably, it demonstrates that they can lead the design and implementation of development projects, meeting the expectations of the communities they represent as well as the requirements of the World Bank, donors, and partners.”

The DGM Nepal project is funded by the Climate Investment Funds (CIF) Forest Investment Programme (FIP) implemented by the World Bank to enhance the role of IPLCs in protecting the forests they depend on.

“Indigenous Peoples and Local Communities in Nepal are a critical pillar for climate action,” co-chair of the National Steering Committee Bharati Pathak said, adding that they believe the project will improve their capacity and skills to have a greater role in forest-related decisions at the country and international levels.

“If forest-dependent indigenous peoples and local communities from Madhesh and Lumbini Provinces can generate income from forest-related activities and foster innovation through this project’s capacity building and competitive grants mechanism, it will encourage IPLCs to ensure that their traditional knowledge, norms, and values are recognized alongside with the customary law,” said co-chair of the National Steering Committee  Jagat Baram added.

Government, World Bank sign $24 million financing agreement

 The Government and World Bank today signed loan and grant agreements for the $24 million Forests for Prosperity Project ($6.1 million as grant and $17.9 million as concessional loan) that will help Nepal advance sustainable forest management.

The project will contribute to transforming Nepal’s forest sector by improving sustainable forest management and developing a strong forest-based private sector, according to a press note issued by the multilateral development partner. "These activities will result in multiple benefits for forest-dependent people in selected municipalities in Province 2 and Lumbini Province, including inclusive economic benefits, ecosystem services, and greater climate resilience," it reads, adding that it will help strengthen ongoing community-based conservation efforts while promoting inclusive sustainable use.

The agreements were signed by the finance secretary Sishir Kumar Dhungana on behalf of the government and by the World Bank country director for Maldives, Nepal, and Sri Lanka Faris Hadad-Zervos. Additionally, a project agreement was signed by the chief executive officer (CEO) of the Agriculture Development Bank Anil Kumar Upadhyaya and the World Bank country director. The Agriculture Development Bank, as a project implementation entity, will design and pilot a credit line for establishing and strengthening forest-based small and medium enterprises.

"Strengthening local communities, for whom forests are a traditional safety net during times of crisis, is especially important in the Covid-19 era," finance secretary Sishir Kumar Dhungana said, adding, "In that same spirit, the project will facilitate Nepal’s forest-based private sector to invest in jobs and reduce dependence on timber imports."

"The project will also provide timely support to the institutions at the provincial and local levels to strengthen natural resource governance," he added.

The project is a key part of the government’s Relief, Recovery and Resilience (3R) plan and Nepal’s committments to mitigate and adapt to climate change. Aligned with this 3R plan, development partners led by the World Bank and UK Foreign, Commonwealth and Development Office, coalesced around a 'Green, Resilient, and Inclusive Development' framework to mobilise investments over the next three years to secure jobs and livelihoods, build resilience, strengthen social inclusion, enhance sustainability, and promote efficiency.

"The project will support 50 municipalities, which is a starting point for inclusive climate action and inclusive green economic growth based on Nepal’s comparative advantage," World Bank country director for Maldives, Nepal, and Sri Lanka Faris Hadad-Zervos said, adding that the development partner is confident that if the project yields the expected outcomes, there will be opportunities to scale up the project and allow more people to benefit. "The project illustrates that the World Bank is honoured to be a trusted partner of Nepal as it faces three challenges at once: Covid, climate, and community opportunities."

The Forests for Prosperity Project is the first World Bank-supported forest sector investment project in Nepal in over 15 years, and the third part of a joint programmatic engagement on forest landscapes by the World Bank and Nepal. The Forests for Prosperity Project complements the ongoing technical assistance for Reduced Emissions from Deforestation and Forest Degradation (REDD+), as well as the recent signing of the Emissions Reduction Programme for the Terai Arc Landscape, the first performance-based programme addressing drivers of deforestation and forest degradation in the Terai Arc Landscape, unlocking up to $45 million through 2025 for verified emission reductions. Financing for the Forests for Prosperity Project is via the Forest Investment Program within the Climate Investment Funds (CIF). The CIF is hosted by the World Bank and funded by several development partners including Australia, Denmark, Japan, Norway, Spain, Sweden, the United Kingdom and the United States.

Building climate resilience for Nepal’s vulnerable populations

Nepal ranks as the fourth most climate-vulnerable country in the world and is highly exposed to a range of water related hazards such as floods, droughts and landslides.

Current projections predict increased climate variability and increased frequency and higher intensity of extreme events. The hazards pose enormous costs to Nepal’s economy and an estimated one percent of the country’s Gross Domestic Product (GDP) is lost to natural disasters consisting of frequent events such as floods and landslides.

Poor and rural populations including women tend to be the most vulnerable to such risks. In the climate sensitive agricultural sector, farmers need timely information on weather and climate variability to adjust their farming practices and minimize adverse impacts on rural livelihoods, agricultural productivity and food security.

The government has officially started implementation of the Building Resilience to Climate Related Hazards Project for a value of $31 million.
 Secretary at the Ministry of Science, Technology, and Environment Dr Som Lal Subedi officially initiated the Building Resilience to Climate Related Hazards project at a function in Kathmandu. Government representatives, development partners and civil society attended the programme.
The Building Resilience to Climate Related Hazards project, signed on April 30 between the government and the World Bank, aims at transition Nepal’s hydro-meteorological services into a modern service-oriented system that will build resilience today as well as adaptive capacity for the future.
It intends to enhance government capacity to mitigate climate related hazards by improving the accuracy and timeliness of weather and flood forecasts and warnings for climate-vulnerable communities. The project will also support agricultural management information system services to help farmers mitigate climate-related production risks. By strengthening hydro-meteorological data and services, the Building Resilience to Climate Related Hazards project is also likely to benefit a number of different sectors including hydropower, aviation, disaster risk management and water resources management. 

The project is part of the global Pilot Programme for Climate Resilience (PPCR).
Recognising the high levels of exposure to climate change risks, in 2009, the Climate Investment Funds (CIF) selected Nepal as one of nine pilot countries for the pilot programme.
Nepal’s Strategic Programme for Climate Resilience was developed by the government in partnership with the Asian Development Bank (ADB), the International Finance Corporation (IFC) and the World Bank.

The project is also one of the five projects identified as per Nepal’s Strategic Programme for Climate Resilience and will be implemented over a five year period through collaborative efforts between the Department of Hydrology and Meteorology under ministry of Science and Technology and Environment, and ministry of Agricultural Development.