Climate Finance Victory: Nepal Secures $9.4M from World Bank for Forest Carbon Credits

Landmark Payment Under FCPF Marks Success of Community-Led REDD+ Program in Terai Arc Landscape

Nepal has achieved a major milestone in global climate action, receiving a payment of USD 9.4 million from the World Bank’s Forest Carbon Partnership Facility (FCPF). This funding is a direct, results-based reward for the country’s verifiable success in reducing greenhouse gas emissions from its forests.

The payment is the first under Nepal’s Emission Reductions Payment Agreement (ERPA) with the FCPF and recognizes the mitigation of approximately 1.88 million tons of carbon dioxide in the ecologically vital Terai Arc Landscape.

Pioneering Community-Based Conservation

The success is attributed to Nepal’s robust REDD+ (Reducing Emissions from Deforestation and Forest Degradation) program, which is characterized by its strong community-based approach. This model effectively brings together local communities, Indigenous Peoples, and civil society organizations to sustainably manage and restore forests in the densely populated Terai lowlands.

David Sislen, the World Bank Division Director for Maldives, Nepal, and Sri Lanka, hailed the payment as “testament to Nepal’s success in reducing deforestation, strengthening forest governance, enhancing biodiversity conservation, and expanding sustainable livelihood opportunities for local communities.”

Benefit Sharing and Future Investment

Crucially, the $9.4 million will be distributed according to Nepal’s Benefit Sharing Plan. This plan was developed through a participatory process to ensure that forest-dependent communities and Indigenous Peoples who did the ground-level conservation work directly benefit from the income generated by the carbon credits.

The funds are earmarked for further investment in:

• Continued forest restoration and management.

• Community enterprises and local livelihood initiatives.

• Climate-resilient livelihoods for forest-dependent groups.

This landmark payment not only provides a vital financial boost but also reinforces Nepal’s global reputation as a pioneer in community forestry and a leader in sustainable, inclusive resource management on the world stage.