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Nepal to Sign Major Environment Deal with World Bank

The ERPA will also reward Nepal’s community-based forest management efforts to reduce carbon stock from foreign management activities.



Nepal to Sign Major Environment Deal with World Bank

Nepal is all set to sign an agreement with the World Bank’s (WB) Forest Carbon Partnership Facility (FCPF) in December 2019 after ten years of preparing for the same.

The FCPF will help Nepal unlock potentials worth USD 45 million until 2025.

The deal titled Emissions Reduction Payment Agreement (ERPA) will help Nepal stakeholders including government, communities and concerned persons reduce deforestation and forest degradation.


The ERPA will also reward Nepal’s community-based forest management efforts to reduce carbon stock from foreign management activities.

With support from the carbon fund, Nepal expects to sell 9 million tons of carbon dioxide equivalent (CO2e) worth USD 5 per ton of CO2e and earn a total of USD 45 million.

Forest Carbon Partnership Facility in Nepal

According to REDD+ Joint Secretary and Chief Dr. Buddhi Sagar Poudel, the deal will be signed next month.

REDD stands for Reducing Emissions from Deforestation and Forest Degradation and was established in Nepal in 2009 to facilitate the above process in the country.

Seven key activities will be undertaken by officials in Nepal under the scheme concerning emission reductions programs areas, including:

  • Improvements in community-based forest management
  • Transfer of national forests to communities and collaborative forest user groups
  • Promotion of private sector forestry through improved access to finances and inputs

Nepal is currently working to arrange three major documents for the agreement signing, including:

  • Benefit-sharing Plan
  • ERPA Term Sheet
  • ERPA Reversal Mechanism

According to Environment Specialist at World Bank Nepal Office Anu Rajbhandari, the agreement is highly important to Nepal as it works to curb climate change and upgrade the livelihoods of local communities.

She adds that the program would complement two other existing major Nepal-World Bank projects – the Forest for Prosperity Project and Dedicated Grant Mechanism, designed for indigenous communities.


The agreement will need to be signed as soon as the World Bank supported program’s second phase of readiness grant for Nepal REDD+ expires in June 2020.

Nepal received a grant worth USD 3.6 million for REDD+ in 2009, and the second funding was provided in 2013.

Both grants were mobilized for REDD+ readiness activities in 13 tarai region districts’ emission reductions program areas and scale up readiness activities across the country.

“With the completion of the readiness phase, we are graduating to receive the Carbon Funds,” said Dr Sindhu Prasad Dhungana, Planning Division Chief at the Ministry of Forests and Environment.

Nepal is the fourth country to sign the deal after the Democratic Republic of Congo, Ghana and Mozambique.

About FCPF

Forest Carbon Partnership Facility

The FCPF is a global network of governments, businesses, civil societies, and indigenous people’s organizations dedicated to reducing emissions from deforestation and forest degradation, and promoting conservation, sustainable management of forests, and enhancement of forest carbon stocks.

It is partnered with 47 countries and 17 donors.

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