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.

Nepal, World Bank sign innovative financing agreement on forests and climate change for building back greener

 The government today signed a landmark agreement with the World Bank’s Forest Carbon Partnership Facility (FCPF), unlocking up to $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 tonnes of carbon dioxide emissions in the Terai Arc Landscape, according to a press note issued by the World Bank.

The agreement was signed by the secretary of the Ministry of Forests and Environment Dr Bishwa Nath Oli on behalf of the government and the World Bank country director for Maldives, Nepal and Sri Lanka Faris Hadad-Zervos.

“This scale of results-based payments for emission reductions is a first for Nepal,” said finance secretary Sishir Kumar Dhungana, after the signing ceremony.

"Nepal’s Emission Reductions Programme builds on more than three decades of successful community forestry,” said World Bank country director for Maldives, Nepal, and Sri Lanka Faris Hadad-Zervos. "The emissions reduction purchase is one pillar of a strategic programme on forest landscapes and climate action in Nepal," he said, adding that the innovative financing agreement will address the drivers of deforestation and forest degradation, helping incentivize 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 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 program helps address.

The 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, claimed the multilateral development partner.

“Forests in the Terai region provide ecosystems services that are critical for climate resilience, including watershed protection, and drought and flood mitigation,” secretary at the Ministry of Forests  and Environment said, adding that the programme will help Nepal to protect the forests that are inextricably linked to the well-being of many communities here and across the country.

The 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, according to the World Bank.

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 $600 million in results-based financing. Emission Reductions Payment Agreements are innovative instruments that incentivise 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.

The World Bank’s Forest Carbon Partnership Facility (FCPF) is a global partnership of governments, businesses, civil society, and Indigenous Peoples' organisations focused on reducing emissions from deforestation and forest degradation, forest carbon stock conservation, the sustainable land use management, and the enhancement of forest carbon stocks in developing countries, activities commonly referred to as REDD+. Launched in 2008, the FCPF has worked with 47 developing countries across Africa, Asia, and Latin America and the Caribbean, along with 17 donors that have made contributions and commitments totaling $1.3 billion.