Supply of GEF 7 Medium-Sized Project, Nepal

Request for Proposals (RfP) GEF full-size project preparation, Nepal

NOTE: Due to a clerical error regarding the submission deadline for Proposals in the original RfP, IUCN has decided to accept Proposals received by 30th May 2020. Proposers who have already submitted their Proposal will also be allowed to amend and re-submit their Proposals, although this is not required. Proposals already received and not amended will be considered equally to new or amended Proposals and will in no way be disadvantaged.

If you wish to amend your Proposal, please re-send a complete amended Proposal by 30th May 2020 and notify IUCN to disregard the previous Proposal you have submitted. Such amendments must be sent from the same email address as the original Proposal.

IUCN Office for Asia, ARO

Issue Date: 16 April 2020

Closing Date and Time: 30 May 2020

IUCN Contact : Country Office Nepal mailto: [email protected] and

IUCN GEF & GCF Coordination Unit [email protected]

PART 1 – INSTRUCTIONS TO PROPOSERS AND PROPOSAL CONDITIONS

1.1. About IUCN

IUCN is a membership Union uniquely composed of both government and civil society organisations. It provides public, private and non-governmental organisations with the knowledge and tools that enable human progress, economic development and nature conservation to take place together.

Headquartered in Switzerland, IUCN Secretariat comprises around 950 staff in more than 50 countries.

Created in 1948, IUCN is now the world’s largest and most diverse environmental network, harnessing the knowledge, resources and reach of more than 1,300 Member organisations and some 10,000 experts. It is a leading provider of conservation data, assessments and analysis. Its broad membership enables IUCN to fill the role of incubator and trusted repository of best practices, tools and international standards.

IUCN provides a neutral space in which diverse stakeholders including governments, NGOs, scientists, businesses, local communities, indigenous peoples' organisations and others can work together to forge and implement solutions to environmental challenges and achieve sustainable development.

Working with many partners and supporters, IUCN implements a large and diverse portfolio of conservation projects worldwide. Combining the latest science with the traditional knowledge of local communities, these projects work to reverse habitat loss, restore ecosystems and improve people’s well-being. www.iucn.org https://twitter.com/IUCN/

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1.2. Summary of the Requirement

IUCN invites to submit a Proposal for the preparation of the full sized project and GEF CEO endorsement request for the following medium sized project: Restoring the degraded watershed and livelihoods of Lakhandei river basin through Sustainable Land Management. (GEFID 10469). The detailed Terms of Reference can be found in Part 2 of this RfP.

1.3. The procurement process

The following key dates apply to this RfP: RfP Issue Date 16 April 2020 Confirmation of Intention to Bid 24 April 2020 (Preferred)

RfP Closing Date and Time 30 May 2020, Midnight Kathmandu, Nepal (GMT +5h45) Estimated Contract Award Date 15 June 2020

1.4. Conditions

IUCN is not bound in any way to enter into any contractual or other arrangement with any Proposer as a result of issuing this RfP. IUCN is under no obligation to accept the lowest priced Proposal or any Proposal. IUCN reserves the right to terminate the procurement process at any time prior to contract award. By participating in this RfP, Proposers accept the conditions set out in this RfP.

Proposers must sign the “Proposer’s Declaration” and include it in their Proposal.

1.5. Queries and questions during the RfP period

Proposers are to direct any queries and questions regarding the RfP to the above IUCN Contact. No other IUCN personnel are to be contacted in relation to this RfP.

Proposers may submit their queries no later than 30 May 2020, Midnight Kathmandu, Nepal (GMT +5h45).

As far as possible, IUCN will issue the responses to any questions, suitably anonymised, to all Proposers. If you consider the content of you question confidential, you must state this at the time the question is posed.

1.6. Amendments to RfP documents

IUCN may amend the RfP documents by issuing notices to that effect to all Proposers and may extend the RfP closing date and time if deemed appropriate.

1.7. Proposal lodgement methods and requirements

Proposers must submit their Proposal to IUCN no later than Midnight Kathmandu, Nepal (GMT +5h45) on 30 May 2020 by email to: [email protected] and [email protected]. The subject heading of the email shall be RfP – GEF 7 Nepal MSP - [Proposer Name]. Electronic copies are to be submitted in PDF and native (e.g. MS Word) format. Proposers may submit multiple emails (suitably annotated – e.g. Email 1 of 3) if attached files are deemed too large to suit a single email transmission.

IMPORTANT: Submitted documents must be password-protected so that they cannot be opened and read before the submission deadline. Please use the same password for all submitted documents. After the deadline has passed and no later than 8 am Kathmandau, Nepal (GMT +5h45) on 31 May 2020, please send the relevant password to the same email address as used for submitting your Proposal. This will ensure a secure bid submission and opening process. Please DO NOT email the password before the deadline for Proposal submission.

Proposals must be prepared in English and in the format stated in Part 3 of this RfP.

1.8. Late and Incomplete Proposals

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Any Proposal received by IUCN later than the stipulated RfP closing date and time, and any Proposal that is incomplete, will not be considered. There will be no allowance made by IUCN for any delays in transmission of the Proposal from Proposer to IUCN.

1.9. Withdrawals and Changes to the Proposal

Proposals may be withdrawn or changed at any time prior to the RfP closing date and time by written notice to the IUCN contact. No changes or withdrawals will be accepted after the RfP closing date and time.

1.10. Validity of Proposals

Proposals submitted in response to this RfP are to remain valid for a period of 90 calendar days from the RfP closing date.

1.11. Evaluation of Proposals

The evaluation of Proposals shall be carried out exclusively with regards to the evaluation criteria and their relative weights specified in Part 3 of this RfP.

PART 2 – THE REQUIREMENT

Background on the project

Following approval by the CEO of the Global Environment Facility (GEF) of the Project Preparation Grant (PPG) of USD 50, 000 value , IUCN will implement the project development phase of the following medium- sized project: Restoring the degraded watershed and livelihoods of Lakhandei river basin through Sustainable Land Management..

This project will be funded through the land degradation focal area of the GEF, up to USD 1.5 million and is expected to mobilize USD 7 million in co-financing.

The approved project is presently in the form of a concept (Project Identification Form (PIF) in Annex 1. Following the project approval cycle of the GEF, this PIF must now be fully developed into the following required documents: • IUCN-GEF Project Document (ProDoc) including all annexes (budget, work plan, M&E plan, procurement plan, co-financing letters, gender analysis and action plan, relevant ESMS documents) • Government of Nepal - Ministry of Forests and Environment's technical endorsement letter • Government of Nepal - Ministry of Finance (NDA)'s endorsement letter • GEF CEO Endorsement Request (CEO-Doc)

The project concept is in Annex 1 of this RfP.

Terms of Reference

The Consultants who will be awarded this contract will be responsible for preparing the GEF CEO Endorsement request and the Project Document including all annexes for the above-mentioned project. This will consist of the following:

1) Scoping and consultation - Conducting situation analysis, including socio-economic and socio-political analysis, analysis of the policy, institutional and legislative framework (including land tenure), and of local governance of natural resources and respective rights (data should reflect the conditions of the project site, wherever relevant) - Conducting analysis of the targeted agriculture value chains, of relevant aspects of the insurance sector and the finance sector (e.g. microfinance and other relevant financing instruments for agriculture and targeted value chains) - Preparing stakeholder analysis (including at project site level) for planning stakeholder involvement for designing the project (see IUCN ESMS Guidance Note)

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- Conducting consultation with relevant stakeholders including consultation with local government (Lalbandi Municipality 12, 13 and 14 of Sarlahi district; and Marin Rural Municipality 3, 4 and 5 of Sindhuli district), Provincial government (Province 2 and 3, and Federal government levels for policy formulation, implementation, monitoring and mainstreaming lessons learned from the project; and document the consultations appropriately; - Identifying potential project partners, including the executing agency, existing projects on the ground and those proposed, and proposing collaboration and synergies with these projects - Confirming co-financing opportunities - Undertaking mapping of target areas, identification of sites and target communities - Preparing preliminary risk analysis - Drafting logical framework with disaggregated gender indicators values, the theory of change and the baseline for the GEF Core indicators of the project - Conducting inception workshop for the project preparation phase

2) Project design

2.a) Problem analysis - Verifying the brief information provided in the PIF and analyse in detail including: . Watershed restoration problems in the LRB . Root causes of Lakhandei watershed degradation, including climatic and anthropogenic factors . Consequence of watershed degradation on LRB . Barriers to restoration of degraded watershed (barriers to adaptation)

- Tentatively, there are four outcomes and 11 outputs as follows to be delivered by the project. 1. Improved land and landscape governance and empowered river basin management institutions 1.1 Systems for monitoring land degradation within the watershed established 1.2 Community participation in watershed management increased 1.3 Strengthened policies to supporting sustainable watershed management

2. Sustainable land management options for degraded watershed restoration scaled-up 2.1 Best practices in sustainable land management and watershed restoration assessed 2.2 Validated SLM practices as watershed restoration options are demonstrated at selected sites 2.3 Successfully demonstrated SLM practices as restoration options are rolled out at wider scale along the Lakhandei river basin

3. Enhanced public and private sector investment in watershed restoration through SLM practices and associated 3.1 Market based options for SLM product based value chain development assessed value chain development 3.2 Communities are capacitated on SLM product based value chain development 3.3 Market-based incentive mechanism for watershed restoration developed and established

4. Rural communities revitalised for sustainably managing watersheds 4.1 Economic, social and environmental benefits generated by SLM interventions assessed 4.2 Youth motivated and engaged in key landscape restoration activities

In consultation with the federal, provincial and local level stakeholders, analyse and identify the pertinent activities to be carried-out by the project to deliver the already envisaged outcomes and outputs of the project.

2.b) Analysis of Baseline Scenario - Tentatively, there are 13 baseline projects identified in the PIF. In addition to them, analyse and evaluate in detail the baseline scenario, related activities and projects, including co-financing - From this evaluation of projects recently closed or currently under implementation, draw lessons and recommend ways to leverage from their best practices. - Conduct detailed gap analysis to justify the GEF incremental cost reasoning

2.c) Refinement of the theory of change and logical framework - Identify and establish the baseline status of the performance indicators

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- Work-out with the government of Nepal (MOFE) the logical framework and obtain endorsement from the government

2.d) Institutional arrangement - Design project implementation mechanism - Design coordination mechanism between the three tiers of the government on the execution of project activities - Analyse and propose required office set-up and human resources at PMU and site levels

2.e) Risk analysis - Identify relevant project risks (operational/technical, political, financial, reputational etc.) - Identify and propose mitigation measures

2.f) Gender analysis and action plan (following IUCN Gender Equality and Women’s Empowerment Policy, GEF Policy on Gender Equality and GEF Guidance to Advance Gender Equality) - Undertake a gender analysis - Prepare gender action plan and ensure the project responds to gender equality objectives

2.h) Monitoring and evaluation plan - Prepare a monitoring and evaluation plan, including the establishment of the baseline for the GEF core indicators of the project taking into account gender responsiveness - Prepare project performance management framework

2.i) Stakeholder engagement - Prepare a stakeholder engagement plan for ensuring public involvement during project implementation including in relation to project monitoring and evaluation (see respective Guidance Note for details)

2.g) Project budget - Design detailed work plan for the project period and annual workplan for the first year - Develop detailed budget - Prepare procurement plan

2.j) Project design approval In close coordination with IUCN: - Organize and conduct inception workshop and get approval of the design methodology - Organize and conduct stakeholder consultations at the site level and obtain consent letters from the local government - Organize and conduct a technical validation workshop at the Provincial level and obtain approval of the project coordination mechanism from the provincial government - Organize and conduct regular meetings of the Project Steering Committee (PSC) formed by the MOFE for regular policy feedback - Organisze and conduct validation workshop at the national level and get the project design document approved by the PSC

3) Environment and Social Management System (ESMS) - Providing relevant information for the ESMS screening of the project in respect to the IUCN Environmental and Social Management System (ESMS) as documented in the ESMS Manual, ESMS Standards, Guidance Notes and Screening Questionnaire, available on the ESMS site - Implementing social and/or environmental assessments as prescribed by the ESMS Screening Report and developing adequate measures for avoiding or mitigating risks, in consultation with relevant stakeholders and in particular with project affected groups - Preparing an Environment and Social Management Framework (ESMF) or Environment and Social Management Plan (ESMP), as instructed by the ESMS Screening Report and following the Guidance Note ESMP - Coordinating with IUCN ESMS team

Project team and qualifications

The following expertise is expected to be available between the experts who will compose the team: - Sustainable land and watershed management expertise - Experience in community management and community based development

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- Understanding of the natural resources management policy environment in Nepal - Project design and implementation, including monitoring and evaluation - Experience with gender analysis and gender-sensitive project design - Expertise in Environmental and Social Impact Assessment and other safeguard instruments - Financial Management, including procurement - Experience in structuring large ecosystem restoration projects and initiatives, including those funded the GEF - Experience in Nepal (Project area is Lakhandei River Basin) - Fluency in English and understanding of Nepali.

The Consultant or team of consultants will have to demonstrate a track record of designing successful ecosystem restoration projects in the region for at least a period of 5 years, including working with donors such as the GEF, the World Bank, UN agencies and other relevant donors.

Deliverables - Baseline study - GEF CEO endorsement request as per GEF template - GON MOFE endorsement - GON NDA/MOF endorsement - IUCN project document including all annexes as per IUCN template (upon request) i. Budget ii. M&E plan iii. Work plan iv. Procurement plan v. Input to the ESMS Screening Questionnaire vi. Environment and Social Impact Assessment (if relevant) vii. Environment and Social Management Framework or Plan (if relevant)

The deliverables will have to be the result of extensive stakeholder consultations, which will have to be detailed in the consultants’ methodology and work plan. This will include inception workshop, extensive stakeholder consultations on sites, and validation workshop(s), to be defined in the consultants’ methodology and work plan.

Period of consultancy

The consultancy is expected to commence on 15 June 2020 and follow the tentative schedule below, which will be discussed and agreed upon between IUCN and the Consultant at the inception of the assignment:

Deliverables Timeline More detailed work plan for the preparation phase 25 June 2020 Baseline studies, draft logical framework and theory of change for 15 July 2020 consultations within IUCN Draft proposal (including all annexes) and CEO endorsement request 20 September 2020 available for IUCN regional and global programmes involved Revised proposal available to Government and IUCN for Proposal Review 30 September 2020 Meeting IUCN response to GEF Secretariat review and technical clearance (w/ 1 – 15 October 2020 support from consultants)

Budget

There will be two components of the proposal preparation. 1. Draft Proposal Preparation 2. Finalisation of the proposal

This RfP is for the draft proposal preparation for which the allocated budget is US$ 40,000. The proposal will be finalised by IUCN.

Schedule of Payments

The detail of the financial proposal is to be submitted in the tables in Section 4. The required details include the daily or weekly rate of each member of the project team, the estimate of the number of days/weeks of

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input required, the unit costs of flights and estimate of the number of flights, and an estimate of the number of days in-country with unit daily subsistence costs.

The total fee estimate will then be used as the basis for the schedule of payments, with expenses recoverable at cost with proof of purchase (bills) and usage (tickets) up to the estimated amounts as a maximum.

The following schedule of payments relates to the total fee estimate only:

Contract signature 20% Approval by IUCN of baseline studies, draft logical framework and theory of change 20% Approval by IUCN of draft proposal (incl. annexes) and CEO endorsement after internal consultation 20% Approval by IUCN of full project documentation before submission to GEF 20% GEF CEO endorsement 20%

The budget requested for the preparation of the project will have to be aligned with the budget allocated for the draft proposal preparation mentioned above (US$ 40,000).

Travel

The contract will require the Consultant to travel to the region as agreed with IUCN. Cost of travel will be provided in the bid and will have to comply with the IUCN policy on travel.

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PART 3 – THE EVALUATION MODEL

There is a fixed cost (US$ 40,000) allocated for the preparation of the draft of this proposal. Hence, the selection of proposal will be based on the quality of the technical proposal.

The evaluation involves the following six criteria based upon the information provided in the submitted proposal documentation:

Project Team Composition 30% Methodology and Work Plan 20% Experience in Sustainable Land Management and watershed management 15% Experience with GEF or other related donor 10% Experience in Environmental and Social Impact Assessment 10% Gender analysis and gender-sensitive project design 10% Familiarity with the project site 5% Total 100%

Note: Preference will be given to a consultancy firm/NGO registered in Nepal. There should be at least one international level expert with experience on restoration of degraded watersheds.

PART 4 – INFORMATION TO BE PROVIDED BY PROPOSERS

By participating in this RfP, proposers are indicating their acceptance to be bound by the conditions set out in this RfP.

This Part details all the information Proposers are required to provide to IUCN. Submitted information will be used in the evaluation of Proposals. Proposers are discouraged from sending additional information, such as sales brochures, that are not specifically requested.

Each of the following must be submitted as a separate document, and will be evaluated separately

4.1. Declaration

Please read and sign the Declaration which can be downloaded from this link and include this in your proposal.

4.2. Technical information/Service Proposal

Bidders are required to submit the following details in their technical proposal: a) Project Methodology – describing in adequate detail how the Consultant intends to undertake the project delivery, justifying the approach described (maximum of 4 pages); b) Project Team with the roles assigned – identifying Team Leader, Deputy team leader (who can be one of the experts), Consultation Facilitator, Watershed and Forest Management Expert, Agricultural Expert, Evaluation and Data Specialist, Environmental and Social Safeguard Expert, GIS and Mapping Expert, Procurement and Enumerators; The proposed experts must have at least master's degree in their field of expertise. c) CVs of all project Team Members (maximum 2 pages per CV); d) Activity Work Plan – using weekly/monthly intervals for the activities and tasks identified in the Project Methodology; e) Staffing Work Schedule – identifying days/weeks of input of staff identified in the Project Team, for the activities identified in the Activity Work Plan in the weeks/months they are estimated to occur; f) Evidence of similar projects undertaken within the last 5 years – where this experience is provided by sub-consultants this needs to be clearly identified as such; g) Minimum three years audit report of the consultant, and sub-consultants if any proposed h) References –contact details of three referees familiar with the bidder’s experience relevant to the PPG i) Comments and suggestion on the Terms of Reference

4.3. Pricing information

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This clause sets out the information necessary for Proposers to furnish rates and prices as consideration for delivering the Requirement under any resultant Contract.

Prices include all costs

Submitted rates and prices are deemed to include all costs, insurances, taxes, fees, expenses, liabilities, obligations, risk and other things necessary for the performance of the Requirement. Any charge not stated in the Proposal as being additional, will not be allowed as a charge against any transaction under any resultant Contract.

Applicable Goods and Services Taxes

Proposal rates and prices shall be inclusive of all taxes to be paid in Nepal by the Consultant.

Currency of proposed rates and prices

Unless otherwise indicated, all rates and prices submitted by Proposers shall be in USD.

Rates and Prices

Staff Input Budget Total Days/Weeks Expert Description Day/Week Rate Sub-Total Fee Input Team Leader Expert 1 Expert 2

TOTAL n/a

Expenses Budget Expense Description Unit Rate Quantity Sub-Total International travel 1 International travel 2 Domestic travel 1 Domestic travel 2 Daily Subsistence Other 1 Other 2 Other 3 TOTAL n/a

4.4. Non-price commercial information

Bidders are required to provide the following: • Certificate of registration of company • Evidence of taxation system (PAN/VAT)/tax clearance certificate the company is governed under • Where sub-consultants are to be used, clearly identify the individuals involved by providing Letters of Intent or Association signed by both parties; and • Evidence of sub-consultants being covered by the lead company professional insurances • A copy of last three year’s audited financial statements or equivalent

PART 5 – PROPOSED CONTRACT Draft template along with Travel Policy can be shared upon request to interested bidders who will confirm their interest in submitting a bid.

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PART 6 – DEFINITIONS For the purposes of this Request for Proposal (RfP) the following definitions apply: Contract Means any contract or other legal commitment that results from this Request for Proposals. Contractor Means the entity that forms a Contract with IUCN for provision of the Requirement. Instructions Means the instructions and conditions set out in Part 1 of this Request for Proposals. IUCN Means IUCN, International Union for Conservation of Nature and Natural Resources. IUCN Contact Means the person IUCN has nominated to be used exclusively for contact regarding this Request for Proposals and the Contract. Proposal Means a written offer submitted in response to this Request for Proposals. Proposer Means an entity that submits, or is invited to submit, a Proposal in response to this Request for Proposals. Requirement Means the supply to be made by the Contractor to IUCN in accordance with Part 2 of the RfP. RfP Request for Proposals

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Annex 1 – Project Identification Form Approved by the GEF CEO

PART I: Project Information Project Title: Restoring the degraded watershed and livelihoods of Lakhandei river basin through Sustainable Land Management. Country(ies): Nepal GEF Project ID: GEF Agency(ies): IUCN (select) (select) GEF Agency Project ID: Project Executing Ministry of Forests and Environment Submission Date: Entity(s): Nepal GEF Focal Area(s): Land Degradation Project Duration (Months) 48

A. INDICATIVE FOCAL/NON-FOCAL AREA ELEMENTS (in $) Programming Directions Trust Fund GEF Project Financing Co-financing (select) LD-2-5 GEFTF 1,000,000 7,062,500 LD-1-3 GEF TF 555,505 Total Project Cost 1,555,505 7,062,500

B. INDICATIVE PROJECT DESCRIPTION SUMMARY Project Objective: To achieve LDN in dryland landscapes creating enabling environment to support scaling up and mainstraming SLM and LDN (in $) Project Component Project Trust GEF Co- Component Project Outputs Type Outcomes Fund Project financin s Financin g g 1. Adaptive Technical 5. Improved 5.1 Systems for 84,846 411,600 Land assistance land and monitoring land Governance landscape degradation governance within the and watershed empowered established river basin 5.2 Community 141,410 686,000 management participation in institutions watershed management increased 5.3 Strenghthened 56,564 274,400 policies to supporting sustainable watershed management

2. Scaling up 6. Sustainable 6.1 Best practices in 106,057 514,500 best land sustainable land practices of management management and SLM options for watershed degraded restoration watershed assessed restoration 6.2 Validated SLM 424,229 scaled-up practices as 2,057,800 watershed restoration options are demonstrated at selected sites

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6.3 Successfully 176,762 857,400 demonstrated SLM practices as restoration options are rolled out at wider scale along the Lakhandei river basin 3. Investments 7. Enhanced 7.1 Market based 63,634 308,700 in watershed public and options for SLM restoration private product based sector value chain investment development in watershed assessed restoration 7.2 Communities are 152,722 740,800 through capacitated on SLM SLM product practices and based value associated chain value chain development development 7.3 Market-based 38,181 185,200 incentive mechanism for watershed restoration developed and established

4. Watershed 8. Rural 8.1 Economic, social 50907 246,900 restoration communities and stewardship revitalised environmental in rural for benefits societies sustainably generated by managing SLM watersheds interventions assessed 8.2 Youth motivated 118,784 576,200 and engaged in key landscape restoration activities Subtotal GEFTF 1,414,096 6,859,500 Project Management Cost (PMC) GEFTF 141,409 201,750 PPG 50,000 Agency fee 144,495 Total Project Cost 1,750,000 7,062,500 For multi-trust fund projects, provide the total amount of PMC in Table B, and indicate the split of PMC among the different trust funds here: ( )

C. INDICATIVE SOURCES OF CO-FINANCING FOR THE PROJECT BY NAME AND BY TYPE, IF AVAILABLE Type of Co- Investment Sources of Co-financing Name of Co-financier Amount ($) financing Mobilized Recipient Country Government Ministry of Forests and Environment In-kind (select) 6,887,500 IUCN IUCN Nepal Country Office In-kind 150,000 FNCCI Agro-Enterprise Center, FNCCI In-kind 25,000

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Total Co-financing 7,062,500 Describe how any “Investment Mobilized” was identified.

D. INDICATIVE TRUST FUND RESOURCES REQUESTED BY AGENCY(IES), COUNTRY(IES), FOCAL AREA AND THE PROGRAMMING OF FUNDS Country/ (in $) GEF Trust Programming Regional/ Focal Area GEF Project Agency Total Agency Fund of Funds Global Financing (a) Fee (b) (c)=a+b IUCN GEFTF Land Degradation LD STAR Allocation 1,555,505 139,995 1,695,500 Total GEF Resources

E. PROJECT PREPARATION GRANT (PPG) Is Project Preparation Grant requested? Yes No If no, skip item E.

PPG AMOUNT REQUESTED BY AGENCY(IES), TRUST FUND, COUNTRY(IES) AND THE PROGRAMMING OF FUNDS Country/ (in $) GEF Trust Programming Regional/ Focal Area Agency Total Agency Fund of Funds Global PPG (a) Fee (b) c = a + b IUCN GEF TF Nepal Land Degradation LD STAR Allocation 50, 000 4, 500 54, 500 Total PPG Amount 50, 000 4, 500 54, 500

F. PROJECT’S TARGET CONTRIBUTIONS TO GEF 7 CORE INDICATORS Provide the relevant sub-indicator values for this project using the methodologies indicated in the Core Indicator Worksheet provided in Annex B and aggregating them in the table below. Progress in programming against these targets is updated at the time of CEO endorsement, at midterm evaluation, and at terminal evaluation. Achieved targets will be aggregated and reported at anytime during the replenishment period. There is no need to complete this table for climate adaptation projects financed solely through LDCF and SCCF. Project Core Indicators Expected at PIF 1 Terrestrial protected areas created or under improved management NA for conservation and sustainable use (Hectares) 2 Marine protected areas created or under improved management for NA conservation and sustainable use (Hectares) 3 Area of land restored (Hectares) • 1,000 ha plantation in degraded lands • 500 ha plantation along the river side • 2,000 ha farmland in the upstream • 5,000 ha farmland in the downstream 4 Area of landscapes under improved practices (excluding protected • 4316 ha community managed areas)(Hectares) forests under improved management

5 Area of marine habitat under improved practices (excluding NA protected areas) (Hectares) 6 Greenhouse Gas Emissions Mitigated (metric tons of CO2e) • Estimated Annual carbon stored: 31,590 t CO2 e (Ref:Winrock International, FLR CARBON STORAGE CALCULATOR) https://www.winrock.org/flr-calculator/ 7 Number of shared water ecosystems (fresh or marine) under new or • 2 lakes in Sindhuli improved cooperative management • Lakhandei river in Sarlahi

8 Globally over-exploited marine fisheries moved to more sustainable NA levels (metric tons)

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9 Reduction, disposal/destruction, phase out, elimination and NA avoidance of chemicals of global concern and their waste in the environment and in processes, materials and products (metric tons of toxic chemicals reduced) 10 Reduction, avoidance of emissions of POPs to air from point and non- NA point sources (grams of toxic equivalent gTEQ) 11 Number of direct beneficiaries disaggregated by gender as co- • 19,498 beneficiaries out of benefit of GEF investment 49,366 people of upstream of Lakhandei watershed (Sarlahi) and users of Lakhandei watershed of Sindhuli districts • 70% women beneficiaries

Provide additional explanation on targets, other methodologies used, and other focal area specifics (i.e., Aichi targets in BD) including justification where core indicators targets are not provided. The project targets to contribute in maintaining globally significant biodiversity and the ecosystem goods and services that it provides to society by improvement of management of landscapes covering 12,816 hectares. Enable the relevant implementation actors and mechanism to ensure achievement of Aichhi target 14 and 15.

The project targets to contribute in meeting LDN targets set by GoN. by adopting sustainable land management in 7,000 hectares farmlands and 5816 Hectares forests and range lands including 4,316 Hectares community managed forests.

G. PROJECT TAXONOMY Please fill in the table below for the taxonomic information required of this project. Use the GEF Taxonomy Worksheet provided in Annex C to help you select the most relevant keywords/ topics/themes that best describe this project.

Level 1 Level 2 Level 3 Level 4 Influencing Transform policy and regulatory environments (multiple selection) (multiple selection) Models Stakeholders Local communities (multiple selection) (multiple selection) Capacity, Capacity Development (multiple selection) (multiple selection) Knowledge and Research Gender Equality Gender mainstreaming (multiple selection) (multiple selection) Focal Land degradation (multiple selection) (multiple selection) Area/Theme Rio Marker (multiple selection) PART II: PROJECT JUSTIFICATION 1a. Project Description. Briefly describe: 1) the global environmental and/or adaptation problems, root causes and barriers that need to be addressed (systems description); 2) the baseline scenario and any associated baseline projects, 3) the proposed alternative scenario with a brief description of expected outcomes and components of the project; 4) alignment with GEF focal area and/or Impact Program strategies; 5) incremental/additional cost reasoning and expected contributions from the baseline, the GEFTF, LDCF, SCCF, and co-financing; 6) global environmental benefits (GEFTF) and/or adaptation benefits (LDCF/SCCF); and 7) innovation, sustainability and potential for scaling up.

1) Watershed management problems, root causes and barriers

A) Land degradation in Nepal

The UN Convention to Combat Desertification (UNCCD) defines land degradation as the “reduction or loss of the biological or economic productivity and complexity of rainfed cropland, irrigated cropland, or range, pasture, forest and woodlands”. Land degradation has become a major problem for both environmental sustainability and poverty reduction across the world and in dryland areas in particular. Nepal is naturally highly vulnerable to different forms of mass-movement and soil erosion on mountain slopes and flooding and siltation in the low-land area. The major reasons for such vulnerability are highly rugged mountainous topography, active tectonics and highly concentrated Monsoon precipitation. Agriculture Development Strategy (2015-35) has recognised that about 3.2 million ha of the total land is

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degraded that needs to be restored1. The status indicates that out of 5.828 million hectare of forest land, 36 percent is degraded, out of 2.969 million hectare of agriculture land, 10 percent is degraded and out of 1.75 million hectare of pasture land, 37 percent is in degraded status. The breakdown of land degradation is presented in the following table. It is often reported that the situation is further worse in the watersheds of major river basins; however the detail breakdown is not available. Degraded Total land Percentage of SN Land Use Category Area (m ha) area (m ha) degraded land Forest (poorly managed) 2.100 5.828 36.02 2 Agriculture (poorly managed slopping terraces 0.290 2.969 10.00 3 Pasture/rangeland (degraded) 0.647 1.75 37.00 Areas damaged by floods and landslides (1984- 4 2003) 0.106 11.551 0.92 5 Forest encroachment 0.119 5.828 2.04 Nepal 3.262 11.551 28.24

Government of Nepal (GoN) decided to participate in LDN TSP on 6th March 2016 and committed to set national voluntary LDN targets. The GoN, as a party to the UNCCD, launched LDN TSP at the workshop held in Kathmandu on 30th January 2017. For setting the LDN baseline, the LDN working group agreed to use default data as provided by the LDN TSP. The details of the sources of data were provided in the methodological note shared by the GM/UNCCD. As per the default data, there was a decline in forest area with declining productivity whereas for shrubs, grasslands and sparsely vegetated areas and cropland/agricultural land, there is gain in the area but decline in productivity2.

Nepal will implement the Agriculture Development Strategy (ADS 2015) which has outlined broad strategies and flagship programmes for agricultural and related sectors in Nepal and the Forest Sector Strategy and National Biodiversity Strategy and Action Plan (NBSAP), 2014.

Based on the land degradation data and degraded watershed area of Nepal, the LDN hotspots of Nepal were identified representing seven river-basins namely 1. Ghuari; 2. Burhi-Gandak; 3. Lakhandei; 4. Kali Gandaki/ Seti/Marsyangdi; 5. Karnali, 6. Seti/Karnali/MuguKarnali; and 7. Karnali.

As envisioned by the LDN Target, government will develop the transformative projects based on the current LDN baseline and identified degraded areas to reduce the formidable pressure on land, by maintaining a state of health and productivity of the lands. Furthermore, through LDN targets Nepal will aim to address SDG 15 through activities such as poverty reduction, soil and water conservation, and sustainable use of natural resources climate change adaptation and mitigation and livelihood improvement. It is in line with the LDN target, the Ministry of Forests and Environment and NDA/Ministry of Finance requested IUCN to develop a proposal for the restoration of degraded Watershed of Lakhandei watershed that covers Sarlahi and Sindhuli districts. This proposal is based on this decision.

B) General background of the Lakhandei watershed

Lakhandei watershed (LWS) - Lakhandei River and its Tributaries: Lakhandei river originates from Siwalik hill of Sarlahi district at an elevation of 820 meters above the sea level and meets the Bagmati river at Katra of Muzaffarpur district, India. The length of the river channel in Nepal is 68.35 km. Watershed area of Lakhandei river covers 317.7 km2 out of which 107.3 km2 (33.7%) falls in Chure, 57.1 km2 (18%) falls in Bhabar and 153.3 km2 (48.3%) falls in Terai areas with 68.35 km length of the main river channel3. Chure hills of Lakhandei river basin (LRB) are also used by the local inhabitants of the watershed as well as by the farmers of Marin Rural Municipality 3, 4 and 5 of Sindhuli district. In Sarlahi districts, Lalbandi Municipality 12, 13 and 14 are along the LRB. Hence Lakhandei

1 National capacity self-assessment for Global environment management: Thematic assessment report: land degradation. Ministry of Environment, Science and Technology. 2008

2 Final Report of the Land Degradation Neutrality Target Setting Programme In Nepal. Government of Nepal, Ministry of Forests and Environment. 2018

3 District Soil Conservation Office, Sarlahi (2017): Integrated Watershed Management Plan of Upper, Lakhandei River, District Soil Conservation Office, Sarlahi district

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riverbasin dagradation and management in this proposal refers to Lalbandi Municipality 12, 13 and 14 of Sarlahi district; and Marin Rural Municipality 3, 4 and 5 of Sindhuli district.

The upper LWS is situated in Siwalik hill which covers 31,773.5 ha land. Geologically, the LWS is divided into 4 major parts such as the upper Siwalik with 8,995.27 ha (28.31%), the middle Siwalik with 2,263.61 ha (7.12%), the lower Siwalik with 1,918.58 ha (6.04%) and recent deposit and Terai plain areas with 18,596.1 ha (58.53%). The upper, middle and lower Siwaliks are composed of conglomerate and boulder, sand and silt beds, medium to coarse grained sandstone and mudstone and fine grained greenish sandstone and siltstone with mudstone, respectively. This region is very fragile and highly sensitive to water erosion.Forests of Chure and Bhabar range of Lakhandei river basin (LRB) are heavily degraded and are sparse and in poor condition. Soil and gravel eroded from the upper, middle and lower Siwaliks during rainy season are deposited in recently deposited Bhabar and plain areas. The annual sediment yield of the Lakhandei River is estimated as high as 178,000 cubic meters per year (Adhikari, 2013). Terai belt of Lakhandei river greatly suffers from flooding during torrent rainy days in monsoon season.

The upper Lakhandei watershed comprises 131.7 km2, in which 89.7 percent lies at Chure hills. The upper watershed of the river is 36 kilometers far from the district headquarter, Malangwa. Its elevation ranges from 80 meters to 820 meters from the mean sea level. Partially, it covers 8 Municipalities of Sarlahi district namely Lalbandi, Hariyon, Haripur, Barahathawa, Kabilasi, Chakraghatta, Kaudena and Malangwa.

There are 6 main tributaries of Lakhandei River which are Daieni khola, Matar khola (Hattisude), Narayan khola, Bahuni khola, Atrauli khola and Chapini khola. The Chapini khola join Lakhandei River just below the East-west highway. Atrauli khola and Chapini khola are located in Hariwan Municipality and other tributaries are located in Lalbandi Municipality. These tributaries do not have perennial source of water and therefore, water flowing is seen only during rainy seasons. However, change in rainfall pattern with some torrent rainfall due to the effects of climate change have resulted in landslides in the upstream —degraded Churia hills, and sedimentation and heavy flooding in downstream. The river water hidden under deposited sediment debris in midstream again become visible in the downstream of the East-west highway.

Landuse: Land of Lakhandei watershed is used for agriculture, forest, shrub-lands, grass/meadow and river bed/water etc. Crop land is 58.2 percent followed by sparse forest (18.1%), degraded forest (13.9%), dense forest (2%) and others (7.8%). As presented in the Table below, the land use of Lakhandei watershed areas. Forest of Chure and Bhabar range of Lakhandei river basin was sparse with poor condition. Several patches of shifting cultivation as well as landslides were also observed in Churia hills resulting massive soil erosion during rainy season creating sedimentation and flooding problems in mid and downstream areas of the watershed. Holding is small and fragmented, which was 0.69 ha per household.

The major livestock of the watershed are cattle, buffalo, goats and sheep, pigs and poultry. In 2012, there were 6,905 cattle, 5,654 buffalo and 31,445 goats and sheep in Lakhandei watershed4. The main grazing areas of these animals are forest, shrub lands, range lands and community grazing areas around the village. Free and open grazing is common in the Chure hills following sedentary herding systems in which ruminant livestock such as cattle, buffalo, goat and sheep etc make daily grazing in forests or range lands or community grazing lands, and return in cattle shed or paddock at every evening. However, after August month dry animals live in forests for up to 1 month. Livestock of Hariharpur Gadhi -7 and 8, and Marin- 3, 4 and 5 wards of Sindhuli district are also grazed in this watershed area. The sedentary livestock population consists of working oxen, dry cows, dry buffaloes, goats and sheep etc.

Population: There were 19,752 households in 2011 census out of which 1,856 households were in Chure, 3,117 households were in Bhabar region, and the rest (14,779) of the households were in Terai region. The population of the Lakhandei River watershed areas is estimated to be 139,016 with 52.1:47.9 male:female ratio5.

The major ethnic groups of the watershed include Bhramin, Chhetri, Madhesi, Dalit and indigenous communities.. In the upstream - Tamang, Magar, Dalit, Newar and Bhramin and Chettri are in majority, while Yadav, Dalit, Koiri, Muslim, Teli, and Tharu are in majority in the downstream of the watershed. The population density of Chure, Bhabar and Terai was respectively 194, 608 and 543 persons per km2. Higher population density in Bhabar region have

4 DSCWM, 2012. Integrated Management Plan for Lakhandei River Systems, Sarlahi district, Department of Soil Conservation and Watershed Management, Babarmahal, Kathmandu, Nepal.

5 DSCWM, 2012. Ibid

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extremely high pressure on natural resources of the Siwalik hills resulting upstream environment degradation in Lakhandei watershed of Sarlahi district.

Majority (>68%) of the users of the Churia hills of Lakhandei river basin both in Sarlahi and Sindhuli districts are Tamang, Magar, Majhi, Newar and disadvantaged communities. In Bhabar and Terai regions, the population of ethnic and disadvantaged groups is lower with 45 percent and 28 percent, respectively.

As most of the people in Chure hills were migrated from neighbouring hill districts, more than 90 percent of them are living without land ownership certificate. They have small and fragmented land holding – about 0.69 ha per household.

Livelihoods: Agriculture is the major occupation of the people living in Lakhandei watershed. Majority (69.3%) of the people are involved in agriculture followed by wage labour (27.7%) and only 3 percent in government and other services. However, majority (79.5 percent) of the total population were having food unsecured problem.

Socio-economic status: Poverty is high (56%) in the in the Lakhandei watershed. There are 38 percent households belonging to medium poverty and a mere 6 percent households falling in well- off group. Reports show that 49 percent of the total population in Lakhandei River basin were illiterate followed by 32 percent, 12 percent, 4.5 percent, and 0.5 percent of the total population who have received primary, secondary, higher secondary school and university level education, respectively. Lack of employment opportunity has led to a high rate of outmigration from the watershed.

Gender issues: Peoples of the Lakhandei watershed area reported that 85 percent of women in their communities are involved in agriculture and livestock sector. Women’s contribution is therefore critical in the agriculture and livestock sectors to achieve food security. However, they generally do not have the same access to land, water, seeds, training and credit as men. In general, men perform heavy physical labour such as ploughing, levelling of terraces, threshing of rice, etc. Women are involved in tedious and time-consuming work such as weeding, harvesting and milling. More men of the upper watershed were employed outside, leaving more women in charge of the household and farms. This phenomenon, called “feminization of agricultural labour force”.

C) Watershed restoration problems

In the Lakhandei watershed also, there has been a loss of value over time, including the productive potential of forests and agricultural lands and water. It has been accompanied by marked changes in the hydrological behaviour of the Lakhandei river system resulting in droughts during winter and summer and floods and inundation during monsoon. Land degradation (both forests and agricultural) has become a major problem for both environmental sustainability and poverty reduction in degraded Lakhandei watershed areas.

Lakhandei river originates from Siwalik hill of Sarlahi district at an elevation of 820 meters above the sea level and meets the Bagmati river at Katra of Muzaffarpur district, India. The length of the river channel in Nepal is 68.35 km. Watershed area of Lakhandei river covers 317.7 km2 out of which 107.3 km2 (33.7%) falls in Chure, 57.1 km2 (18%) falls in Bhabar and 153.3 km2 (48.3%) falls in Terai (District Soil Conservation Office, Sarlahi (2017) areas with 68.35 km length of the main river channel. Chure hills of Lakhandei river basin (LRB) are also used by the local inhabitants of the watershed as well as by the farmers of Marin Rural Municipality 3, 4 and 5 of Sindhuli district. In Sarlahi districts, Lalbandi Municipality 12, 13 and 14 are along the LRB. Hence Lakhandei riverbasin dagradation and management in this proposal refers to Lalbandi Municipality 12, 13 and 14 of Sarlahi district; and Marin Rural Municipality 3, 4 and 5 of Sindhuli district.

The upper Lakhandei watershed is situated in Siwalik hill. In this watershed, there is 31,773.5 ha land which is mainly used for agriculture, forest (shrub lands, grass/meadow) and river bed/water etc. Forests of Chure and Bhabar range of Lakhandei river basin are heavily degraded and are sparse and in poor condition.

The annual sediment yield of the Lakhandei River Basin is estimated as high as 178,000 m3 per year6. The soil erosion and land degradation problems in the Chure region of the Lakhandei River are not only affecting the uplands areas of the watershed, but also affecting downstream by converting the productive agriculture lands into waste lands. The

6 Adhikari, B. R. (2013) Flooding and Inundation in Nepal Terai: Issues and Concerns, Issue Number 12, Hydro Nepal.

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Lakhandei river in the downstream is very narrow, and therefore, flooding and water logging problems in downstream have been severe. In view of its severe flooding impact, Lakhandei river is known for flooding in Terai.

Root caueses of Lakhandei watershed degradation Degradation of watershed has stemmed from the loss of natural vegetation primarily. In the Lakhandei watershed, it was found being caused by forest degradation as well as deforestation (DFD. It has been reported that the shrub land area increased by 126% during the period of 1979-94 while forest area decreased by 24% in the same period. Higher increase in the proportion of shrub land contiguous with continuing decrease in overall forest area gives a clear picture of the state of deforestation and forest degradation in Nepal7. In general, the DFD is considered as the main drivers of watershed degradation. Both climatic and non-climatic factors have caused the DFD as follows. a) Climatic factors (climate change impacts) Climate change has resulted into decreasing number of rainy days and occasional torrent rainfall leading to “too much water during rainy season and too little water during dry season”. Landslides and gully formation are found in the upstream and floods in the plain areas during rainy days are very high in the Lakhandei watershed areas. Evapo- transpiration rate has also increased in the degraded agricultural and forest lands. Decreasing water-holding capacity of soil due to low organic matter contained in soil has contributed to increasing runoff and decreasing rate of water seepage into the soil.

The vegetation pattern of forest has also changed due to climate change. Changing composition of forest is aggravated by decreasing density of bamboo, sal (Shorea robusta) and Khair (Acacia catechu) in the forest. There has been drying out of water sources in the upstream of the watershed and low volume of water in river during rainy season. There has been heavy soil erosion, sedimentation and flooding during torrential monsoon rain leading to several disasters such as landslides, floods and inundation. Spread of invasive species and other unwanted plants has also occurred. b) Non-climatic factors (anthropogenic impacts) Impact of climate change on the watershed has been further aggravated by the anthropogenic factors. In the past (some 15-20 years ago), due to increased population pressure, there has been several impacts on forest. The major impacts were accorded to8 a) high reliance on forests for subsistence use, b) illegal harvest, c) unsustainable harvesting practices, d) overgrazing, e) infrastructure development, f) resettlement, g) forest fire, h) encroachment, and i) spread of invasive species. As a result, community dependency on forest further increased thereby further degrading the forest which continued cycle after cycle until people finally started migrating, leaving the agricultural land also abandoned. The rate of land abandonment has been as high as 44 per cent in the hills9.

In the recent past (last 5-10 years; more intensely from 2010's), Nepali youth are going abroad for the sake of employment. A total of 512, 000 active youth are estimated to enter Nepal’s labour market annually10. Nepal can absorb about 200,000 to 250,000 labour annually in its regular and planned economic activities. Hence, Nepal needs to create another 250,000 to about 300,000 employment opportunities annually11. In its recent survey report, UNDP has reported that Nepal needs to create 286,900 employment every year to keep even the current level of employment12. As Nepal could not create the required jobs in the country, more than 300,000 youth are going abroad in search of employment. Quoting the latest labour force survey, Ministry of Finance, Government of Nepal13 (2018) has reported that unemployment rate in Nepal is 2.3 percent and under-employment rate is as high as 30 percent. Similarly, the youth underemployment rate is 35.8 percent. Currently, 1,500 Nepali youth have been going abroad daily for foreign employment. About 20% of the total household have left villages in the upstream, and about 33% of the total households have left their village temporarily with their children to work in brick factories in cities after Dashai and Tihar festivals

7 Narayan Dhital. 2009. Reducing Emissions from Deforestation and Forest Degradation (REDD) in Nepal - Exploring the Possibilities. Journal of Forests and Livelihoods. 8(1) February 2009 8 Rai, R.K.; Nepal, M.; Karky, B.S.; Somanathan, E.; Timalsina, N.; Khadayat, M.S.; Bhattarai, N. (2017) Costs and benefits of reducing deforestation and forest degradation in Nepal. ICIMOD Working Paper 2017/5. Kathmandu:

9 Dahal, G. R., Pandit, B., & Shah, R. (2017). National Assessment of Abandoned/underutilized Agricultural Land in Nepal. FAO Technical Cooperation Programme, TCP/NEP/3602. IUCN Nepal. 10 Economic Survey 2017-18. Ministry of Finance, Nepal. 2018

11 UNDP, 2013. MEDEP Phase IV - Project Document. UNDP, Nepal

12 World Bank 2018. The Jobless Growth. South Asia Economic Focus Spring 2018.

13 MOF 2018. Ibid

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(October). In many hill regions, outmigration for foreign employment has caused acute shortage of labour causing land abandonment leading to land degradation14. The degraded agricultural lands cannot be brought to production immediately witin a year or two in the case of acute national need.

Poverty and food insecurity is another factor contributing to Lakhandei Watershed degradation.- Majority (79.5%) of the total households in the watershed were food insecure as a result of which many of them have started harvesting wild food products from the forests and river banks. For example: before 30 years, there were plenty of bamboo bushes along Lakhandei river bank in the upstream. Presently, it is disappearing due to the harvesting of young bamboo shoot to prepare “Tama”. As a result, there has been landslides, gully formation and stream bank cutting by flood waters in the upstream and silt deposition in midstream and flooding in the downstream.

Another important non-climatic factor is the farmers lack of knowledge, technology and financial assets to adapt to climate change.

Consequence of watershed degradation The degradation of Lakhandei watershed has impact on specifically four major ecosystems. As a result, the livelihoods of the communities has been negatively affected. The affected ecosystems and realised consequences are summarised as follows.

On agro-ecosystem: The negative impacts of climate change are observed on food crops in terms of diseases and pests such as club root of crucifiers, blight of solaneceous, rust of wheat, blast of rice and leaf spot of maize and red ants of potatoes which have become menacing leading to decreasing crop productivity15. The increasing temperature and change in precipitation pattern (delayed monsoon), increased frequency, duration and intensity of droughts, and increased heat stress have significantly resulted in prolific growth of invasive alien species affecting biodiversity; changing cropping pattern and decreased agricultural production. It has also increased appearances of new insects (mosquitoes) and vectors (citrus psylla) in higher altitudes, etc.

Landslides and undercutting by rivers has destroyed productive agricultural land in the upstreams. Likewise, flooding and increased sedimentation has reduced the productive capacity of agricultural land in the downstreams. IFAD16 reported that a total of 847,648 ha of agricultural crop land were lost between 1971 and 2007. Cultivation in sloping land leads to a high risk of soil erosion and landslides during the rainy season. The delayed rainfall (lack of rain in April-May) has negatively impacted on the maize productivity. Due to increasing drought periods, legume crops are also disappearing compared with 20-25 years ago and productivity of such crops is also reduced. Torrential rain during monsoon has eroded top soil resulting into decreasing soil productivity in the upstream and alkalinisation of the soil in the downstream due to flood.

Livestock population, specially cattle and buffalo population have declined resulting into low level of farmyard manure production. On the other had, farmers have started growing improved varieties and lost the diversity of traditional and drought tolerant varieties. The improved varieties need more manure. As a result of growing improved crop varieties in the upstream of the Lakhandei watershed using chemical fertiliser has made the soil acidic.

On forest ecosystem: The major impact is the conversion of degraded forest lands for non-forest uses thereby reducing both net forest area and natural vegetation. Other impacts include: forest degradation due to free and open grazing in community forests and uncontrolled grazing in forests, loss of biodiversity - for example: reduced bamboo, broom grass and other fodder and forage species, fragmentation of habitat due to linear infrastructure construction such as roads and hydroelectric power highways, decreasing forest products due to uncontrolled collection of forest products/overharvesting and frequent forest fire, and decreasing productivity of medicinal and edible plants due to unsustainable practices of harvesting/collection methods.

Studies have shown that to keep crop production and livestock rearing functional, certain percentage of forest needs to be maintained. Reports show that to maintain one hectare of paddy land in high hills of Nepal requires up to 50 hectares

14 Khanal, R.; Watanabe, T. Abandonment of Agri. Land and Its Consequences. Mt. Res. Dev. 2006, 26, 32–40.

15 M.N. Paudel. Consequences of climate change in agriculture and ways to cope up its effect in Nepal. Agronomy Journal of Nepal (Agron JN) vol. 4, 2016

16 IFAD, 2013. Environmental and Climate Change Assessment: Prepared for IFAD’s Country Strategic Opportunities Programme 2013-2018. IFAD

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of forest and grazing land and 3.5 hectares of forest and grazing land in the midhills17. It was reported during prefeasibility study by the communities that no such attention has been given by the local authorities in the LWS. The declining and degrading forest area has negatively impacted on agricultural productivity as well.

On rangeland ecosystem: Most of the impact on the rangeland is due to over grazing as a result of free and open grazing of unmanaged and unproductive livestock. Significance of pastoralism and its link with biodiversity has diminished because of breakdown of customary herding practices. There has been decrease in the productivity of rangeland products due to unsustainable practices of harvesting/collection, and there has been also growth of weeds and invasive species due to degradation of natural ecosystems.

On wetland ecosystem: There were two wetlands in Sindhuli district. Pancha Kanya lake located in Marin Rural Municipality-5, and Kunda Pokhari in Hariharpur Gadhi Rural Municipality-7. The main problems of these sites were sedimentation and eutrophication, and drought caused by climate change.

Barriers to restoration of degraded watershed (barriers to adaptation) Due to degradation of the watershed of LRB, the LRB communities have become vulnerable to climate change impacts such as increased frequency and intensity of rain, floods, landslides and droughts. As women, Dalits (members of the lowest caste group) and poor indigenous peoples are dependent on forests, agriculture and water resources for their livelihoods, they are more vulnerable as compared to others. The project focuses on restoring the degraded watershed thereby improving the adaptive capacity of such highly vulnerable groups. There are several restoration needs to be addressed. Nevertheless, communities are facing various barriers to address their restoration needs.

There are five types of barriers identified in the LRB which impede watershed restoration.

• Information and knowledge on land management: Inadequate data and information to inform good land management decision making. Local bodies often i) have inadequate knowledge about land use changes with respect to degrading watershed and restoration needs, ii) lack or do not have adequate restoration technology, iii) find that the process of accessing technology is expensive and cumbersome, and iv) face a gap in the translation of technology into practice (education, skill). • Governance and rule of law: The degradation of watershed is aggravated by the impact of climate change. Communities have not been put at the heart of the restoration governance. Implementation of climate-related policy is poorly coordinated between line agencies, political transition over the past 20 years and more recently the move to federalism has created some uncertainty in terms of who has authority and responsibility for climate action. In large parts of LRB, there is a limited local level presence of key institutions, lack of land tenure security is a barrier to the reutilisation of unused and underutilized agriculture land as an adaptive mechanism, and regulatory framework and institutional structures are often impediments to conducting business and using natural resources. • Social license: Women, indigenous peoples, Dalits, ethnic groups, disabled and others often have limited access to decision making for earning their livelihoods from land resources, and local political bodies and politicians often affect the decision in their favour thereby not seeking the acceptance of the project activities by society or the local community dependent on land resources. • Capacity and capability: Poverty/low income levels leading to poor affordability to new technology, out-migration of youth/men leading to a lack of full utilization of land, and poor physical access (roads) leading to poor market access. • Market and finance: Vulnerability to shocks and changes is high due to low levels of livelihood options as a result of the lack of access to finance and resources for climate change adaptation. Access to market is also difficult due to low scale of production from the restored degraded watershed. Technology and other inputs are also not easily available for climate change adaptation as a result of which farmers are constrained to adopt climate responsive new crops/varieties and techniques.. There is also lack of financial resources, lack of credit facilities and loans required for planting trees, planting improved varieties of crops (e.g., drought tolerant crop varieties), diversification of livelihoods activities, changing the timing of planting, etc. This is where the project intervention is required to ensure that the enabling environment is set in a way that it brings in finance activities that will de-risk farmers activities (inclusive finance, mobile finance / micro-insurance, etc.).

2) Baseline scenario and associated baseline projects Baseline scenario Nepal in, ‘National land degradation neutrality (LDN) targets and measures’, issued by MoFE has decided to use the global default data received from UNCCD through LDN TSP (target setting process) to assess land degradation and set baseline and targets based on the three UNCCD land based global indicators;

17 Cited by K.P. Acharya, R.B. Dangi and M. Acharya. 2011. Understanding Forest Degradation in Nepal - in Unasylva 238, Vol. 62, 2011/2

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- Land use/land cover change - Land productivity dynamic - Soil organic carbon

The summary of baseline for Nepal thus derived is as follows.

• From 2000 to 2010, 118 km2 of Forest area was converted to grassland, shrubs, sparsely grown vegetation and croplands • Net land productivity of 6,263 sq km land area (4%) is already declining out of which 13% is forest land, 42% is shrub, grassland and sparsely vegetated area, and 5% is crop land • Net land productivity of 3,693 sq km land area (3%) has shown early signs of declining net land productivity out of which 63% is forest land, 21% is shrub, grassland and sparsely vegetated area, and 15% is crop land • Net land productivity of 11,972 sq km land is in stressed condition out of which 46% is forest land, 30% is shrub, grassland and sparsely vegetated area, and 10% is crop land • From 2000 to 2010, the total area under crop has increased by 74 sq km

These National baseline figures for this proposed project will be used to derive the baseline during the full proposal preparation stage.

Baseline projects Current status of the baseline projects: Many programmes and projects that are relevant to restoration of degradetd watershed and climate change adaptation have been implemented or are still under implementation within the LRB. In all, there are five major regular sectoral government programmes, namely, agricultural extension, livestock extension, soil and watershed conservation and forest management. There are more than 15 relevant programmes/projects iunder implementation or just recently completed in the LRB districts from which many lessons and models can be customized or replicated for this proposed project. The important projects are summarized in the table below.

Project Title Location Implementation Funding Implementing Objectives Period Agency Partner Soil Nationwide Regular Nepal Local To conserve fragile soil Conservation programme of Government governments resources in a way that is Programmes the government integrated with watershed management; and conserve land productivity. Government's Nationwide Regular Nepal Local and Effective Programmatic regular Forest programme of Government provincial Forest Management management the government governments programme

Afforestation Nationwide Regular REDD+, Local To carry out readiness and programme of WB's Forest governments activities, implement Enhancing the REDD+ Cell Carbon and forest user emission reduction Carbon of the Partnership groups (FUGs) programs and demonstrate Sequestration government Facility results related to REDD+ in Nepal President Chure- Regular Nepal Local - To mitigate the damage Chure-Terai Terai programme of Government governments likely to be caused by Madhesh Madesh the government and forest user climate change and natural Conservation groups (FUGs) disasters in the Chure hills Programme and Bhavar region - To mitigate the damage likely to be caused by the water-induced disasters and to continue the flow of the environmental services - Maintain accessibility in the household use of energy, and to increase the accessibility of the residents

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Water Nationwide Government's Government of Local To prevent water induced Induced regular Nepal governments disasters Disaster programme Prevention The Nationwide Regular Nepal Local To promote agriculture as a Agriculture programme of Government governments source of livelihood and management the government employment adapting to information climate change impacts system Livestock Nationwide Regular Nepal Local To promote livestock as a Extension programme of Government governments source of livelihoods and Programme the government employment adapting to climate change impacts The Nationwide 5 years (2013- World Bank (6 Ministry of To provide critical and Agriculture 2018) million USD Agriculture timely agro-climate and management and Livestock weather information to information development farmers in order to increase system: Role productivity and reduce of ICT for losses from meteorological Climate and hydrological hazards Smart and Sustainable Agriculture Prime Nationwide 10 years (2017- Government of Ministry of Establishing special areas Minister 2027) Nepal Agriculture of major crops Agriculture About US$ Development Enhance competitiveness Modernizatio 1.307 billion in through value addition in n Project collaboration exportable agricultural with other commodities ministries Create employment opportunities by making agriculture dignified and profitable business Ensure flow of effective services through functional coordination of multi- stakeholder agencies Micro Nationwide Regular Government of Ministry of To create and develop Enterprise programme of Nepal (nearly Industry microenterprises for Development the government annual US$ 109 poverty alleviation of the Program for (after the million) target group poverty termination of Alleviation UNDP (MEDPA): supported MEDEP in 2018) Churema Haripur-9 Till now NRs150 million Mobilization To support livelihood aasrit tatha Pidari, Rastrapati by Hemanti improvement churebat Harion, Chure Nepal prabhabit Patherkot TaraiMadhesh tallo tatiye ra and Conservation upallo tatiye Lalbandi Board ati bipannghardh uriko jibikoparjan sudhar karyekaram Churia Patherkot, 2009 to 2013 Care Nepal BWSN To support livelihood Livelihood Netragunj, improvement Improvement Atrauli, Project Saspur

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Chure Haripur , Rs 1 million Jagaran To conserve Chure jaladhar Netragunj, Abhiyan management Patherkot Nepal program Churia Marin R/M FY 2074/075 Rs 30 million Rastrapati To raise awareness and Livelihood Chure Program support livelihoods Improvement Project

Leveraging potential: From the above mentioned current projects being implemented recently or in implementation, this proposed project is envisioned to draw several lessons and leverage from thie best practices. More specifically, this project will built upon the following practices of those projects. • Raising awareness of the community on drivers of watershed degradation and its consequences • Developing a package for livelihood improvement • Establishment and operation of weather information MIS • Planning for mitigating climate change impacts and minimizing natural disasters • Afforestation in the degraded forests • Integration of watershed management with land productivity conservation • Promoting agriculture and livestock as a source of livelihood and employment adapting to climate change impacts • Establishing climate responsive special commodity zones based on market demand • Effective forest management for forest-based enterprise development • Create and develop local resource based micro-enterprises • Establishment and operation of functional coordination mechanism of multi-stakeholders

Gaps that this project aims to fill: There are several gaps in watershed restoration. Nevertheless, this project aims to fill the following in particular. • Lack of/weak system for monitoring land degradation within the watershed • Poor community participation in watershed management • Weak policies to supporting sustainable watershed management • Best practices in sustainable land management and watershed restoration not assessed • SLM practices as watershed restoration options are not yet validated for replication • Market based options for SLM product based value chain development not assessed • Communities are not capacitated on SLM product based value chain development • Market-based incentive mechanism not yet developed for watershed restoration • Economic, social and environmental benefits generated by SLM interventions not assessed • Youth are not well motivated and engaged in key landscape restoration activities

3) Proposed alternative scenario with a description of outcomes and components of the project As significant efforts are needed to respond to drivers of watershed degradation and unsustainable land-use practices in LRB, build ecological and socio-economic resilience and diversify local livelihoods, it is proposed to assess and identify opportunities for restoring the degraded watershed and implementing sustainable land management practices in the LRB. Three scenarios were found pertinent as presented in the table below.

Baseline scenario Proposed alternative scenario How this project can contribute to the progress toward proposed alternative scenario Weak institutions Landscape management institutions Participatory and multi stakeholder SLM and (especially local level) and support mechanisms landscape restoration planning mechanisms to for participation in strengthened and capacitated to develop landscape management plans including planning and accelerate the progress in capacity development at national, provincial and implementation of achievement of land degradation local level landscape management neutrality target Capacitated local government, civil society, landscape user groups and other stakeholders in land use planning and implementation mechanisms for SLM and landscape restoration. Land management Landscape management practices are not in line mechanisms are strengthened to Best practices and mechanisms in sustainable with SLM or improved adopt and mainstream SLM and land management models will be piloted, and management principles improved landscape management documented, mainstreamed for wider uptake. and is progressing towards land

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degradation neutrality and resilient rural livelihoods Farmers/landscape Local natural resource dwellers lack capacity management/ community-based Implement the SLM and landscape restoration and resources to invest management institutions such as options and associated models in landscape CFUGs, farmers’ groups, will be restoration and SLM empowered, through a clear practices and mandate and financial and technical associated value chain resources, to lead the design and and enterprises implementation of range management principles envisioned

in SLM at the local level Landscape stewardship revitalized Capacity building of rural community to motivate and capacitated for landscape and incentivize local communities to sustainably restoration and improved livelihood manage and restore landscape

There are four components each leading to one outcome as follows.

First component deals with restoration governance. It leads to an outcome "strengthened governance of landscape management instiutions and support mechanisms". This outcome focuses on establishing an information system for watershed degradation and restoration; establishing community-based mechanism for planning, monitoring, and maintenance of watershed; and establishing knowledge management system for degraded watershed restoration. This component will consider gender and IPs rights while designing information and knowledge management systems.

Second component focuses on scaling up best practices of SLM. It leads to an outcome "scaled-up sustainable land management options for degraded watershed restoration". This outcome has focused on identification, validation and documentation of best practices in sustainable land management and landscape restoration models; demonstration of validated SLM best practices at selected sites; and rolling out of the successfully demonstrated SLM practices at wider scale along the LRB.

Third component deals with SLM investments. It leads to an outcome "increased investment by farmers and local entrepreneurs (including small,medium and large businesses) in degraded watershed restoration through SLM practices and associated value chain development". This outcome focuses on capacitating farmers and local entrepreneurs on SLM product based value chain development in eco-tourism, aquaculture and dairy products, agriculture and forestry; extending financing options to farmers and local entrepreneurs for SLM product based value chain development; and establishing incentive mechanism for financial institutions to extend their savings and credit mobilisation services to farmers and local entrepreneurs.

Fourth component deals with restoration stewardship in the LRB watershed. It leads to an outcome "revitalised rural communities sustainably managing watersheds for social, economic and environmental benefits". This outcome focuses on assessing economic and environmental benefits generated by SLM interventions; and motivating and engaging youth in key landscape restoration activities such as agroforestry.

In all the components, FPIC will be obtained in designing and implementation of the project interventions.

4) Alignment with GEF focal area and/or impact program strategies The proposed initiative directly addresses the strategic areas of the GEF in land degradation neutrality, more specifically; it addresses the proposed GEF-7 Land Degradation Focal Area that seeks to achieve the following objectives no. 1and 2 of the Land Degradation Focal Area (Support on the ground implementation of SLM to achieve LDN), and (Creating an enabling environment to support voluntary LDN target implementation). The focus will be to sustain and rebuild productive areas, mitigate the effects of drought, increase resilience and prevent migration. The project has emphasized on specific contexts in drought prone and/or fragile areas to address drivers of fragility and land and water insecurity, to reverse resource pressures, enhance or restore governance and rebuild natural resource based livelihoods and jobs. The project has tried to address the challenge of increasing evidence of the complex interactions between climate change, food and water insecurity, extreme events – such as e.g. prolonged and repeated droughts, torrential rainfall during rainy seasons resulting in soil erosion, landslides, sedimentation and flooding –, and their link to fragility, armed conflict and migration.

The project intervention will directly contribute in Nepal’s land degradation neutrality target set by GON by addressing drivers of land degradation and focusing on building of existing knowledge and integrating them with innovative practices and approaches in the proposed area (identified as priority site). The focus will be on increasing investment

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through innovative mechanisms, promoting cross sectoral enabling mechanisms and enhanced role of communities on landscape management addressing challenges of land degradation. 5) Incremental/additional cost reasoning and expected contributions from the baseline, the GEFTF, LDCF, SCCF, and co-financing In order to overcome the barriers in the restoration of degraded watershed of LRB, there are additional work to be undertaken incremental to the government's existing relevant development programmes planned to be carried-out in the LRB. Some of such work to overcome the barriers include awareness raising of community people, diversifying livelihood options, changing land use practices, conserving LRB watershed through the adoption and scaling up of SLM, investing in SLM and value chain development such as agroforestry engaging youth and local people.

The project is requesting GEF incremental assistance to achieve the long term solution of addressing Lakhandei watershed degradation in Sarlahi district of Province 2 and its users of Sindhuli district of Province 3 of Nepal. The alternative scenario funded by GEF and co-financing resources is expected to result in key modifications to the baseline scenario that will generate global environmental benefits via sustainable land management and will contribute in the achievement of land degradation neutrality. As stated in the Final Report of the Land Degradation Neutrality Target Setting Programme in Nepal (2018), LRB is one of the priority LDN watershed in the country and hence will address the country's top priority in terms of LDN.

6) Global environmental benefits (GEFTF) and/or adaptation benefits (LDCF/SCCF) Through the LDN TSP, the GoN has set voluntary targets to achieve land degradation neutrality by 2030 that will contribute towards SDG target 15.3. the GoN will put efforts in developing a land degradation-neutral world through up scaling good practices for soil conservation and watershed management as identified under sustainable land management (SLM) and developing appropriate technologies for the conservation of land and natural resources.

The alternative scenario for which funding is being requested from GEF and co-financing resources are being provided is expected to result in key modifications to the baseline scenario that will generate global, national, and local environmental and socio-economic benefits by creating the enabling environment for land degradation neutrality. The project objective is to strengthen institutions and mechanisms to accelerate progress in the achievement of land degradation neutrality in Nepal. The benefits will also be generated through piloting and scaling of SLM options in the Lakhandei watershed of the Province 2 Sarlahi district and its users from Sindhuli district for productive landscapes to deliver on ecosystems benefits to both livelihoods and biodiversity. To achieve the project objective, and address the barriers discussed, the project’s interventions have been organized into four outcomes, each with several outputs. The global environment benefits that project will contribute are; improved provision of agro-ecosystem and forest ecosystem goods and services; mitigated/avoided greenhouse gas emissions and increased carbon sequestration in production landscapes; conservation and sustainable use of biodiversity in productive landscapes; and reduced pollution and siltation of international waters.

7) Innovativeness, sustainability and potential for scaling up Innovativeness This project is innovative in the sense that it aims to address the root causes of the watershed degradation rather than attempting to protect the Lakhandei river flood affected people and their livelihoods in the plain. It aims to restore the degraded watershed and ensure that the watershed land area is fully covered by vegetation, slope is stabilised, and soil fertility is maintained such that the declined land productivity is reversed and people in the upstream return to their community and bring back the abandoned agricultural lands in to production. Likewise, the intensity and severity of floods in the downstream is minimised such that the increasing sedimentation and alkalinisation of agricultural lands in the downstream is checked. This requires an integrated approach in watershed restoration. The following approaches taken by this project will be explicitly an innovative and transformational approach in the restoration of degraded LWS. a) Contribute to poverty reduction through environmental-friendly local employment creation and income generation by soil and water conservation in agriculture and forestry by applying nature-based solutions b) Identify and validate a cost-effective watershed restoration tecnique for improving reforestation projects from an economic, environmental and technical point of view c) Developing Strategic Investment Framework for Sustainable Land Management (CSIF-SLM) in partnership with the private sector d) Put communities at the heart of the restoration governance e) Strengthen forest-farm producer organisations for the development of locally adapted options for agriculture in dry marginal areas alongside an integrated approach to SLM f) Repair ecosystem functioning by enhancing patches of vegetation that contribute to the regulation of water, materials and nutrient fluxes g) Mainstreaming forest landscape restoration in the policy framework of the provincial and local governments

Sustainability

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Technical sustainability - This project will start with raising awareness of the community and the local government on land degradation, biodiversity conservation, and climate change issues, and their impacts in enhancing resilient livelihoods. Awareness raising will be followed by capacity development of local government and communities to mainstream the tested and piloted SLM approach. With the high level of awareness and enhanced capacity of the local government and community in adopting the SLM approach, the development outcomes will continue even after the project.

Economic sustainability - This project aims to establish a sustainable financial mechanism for the management and sustainability of the dryland ecosystem services in the context of land degradation, climate change, and biodiversity conservation. In addition, the project interventions are designed to diversify sustainable livelihood options that contribute to enhance household incomes though agricultural practices, sustainable community forest management and livestock activities.

Social sustainability - This project will give due priority to gender and social inclusion in all activities wherever applicable. As a result of increased income and other benefits, communities will have increased access to better education, health and community services. They will have increased participation in community decision making thereby enhancing good governance practices. Potential opportunities for scaling-up of the project: It is envisioned through this poject that the MOFE and MOALD will gradually internalise and incorporate the proposed approach in the government's programmes through annual planning processes. Land-use planning and implementation guidelines and capacity building programmes will help to scale-up in other landscapes across the country.

Potential for Scaling-up • It is expected that this project will establish a model for the restoration of degraded watershed for improved livelihoods and climate change adaptation. • The project will build technical capacity of stakeholders and support for local institutions for stewardship and sustainability that is likely to enable scaling up of successful interventions

1b. Project Map and Coordinates. Please provide geo-referenced information and map where the project interventions will take place.

The project will be working in Wards 12,13 and 14 of Lalbandi Municipality of Sarlahi district and Wards 3, 4 and 5 of Marin Rural Municipality of Sindhuli district. The exact location of the project intervention will be identified in consultation with the communities and the Municipality authorities during the preparation of full proposal.

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2. Stakeholders. Select the stakeholders that have participated in consultations during the project identification phase: Indigenous Peoples and Local Communities; Civil Society Organizations; Private Sector Entities; If None of the above, please explain why. In addition, provide indicative information on how stakeholders, including civil society and indigenous peoples, will be engaged in the project preparation, and their respective roles and means of engagement. The stakeholders are identified on the basis of consultation conducted in the process of development of PIF. Key local stakeholders such as District Divisional Forest Office, District Agriculture Learning Centre, Soil Conservation Office, Livestock Service Office, Municipality and Rural Municipality, climate change specialist from different Non- Government Organizations (RELIF Nepal) and International Non-Government Organization (INGOs), Community Based Organizations (CBOs), local teachers were consulted to gather information about Lakhandei River Basin areas, Information to be gathered was land degradation, its consequences and land prevention and rehabilitation measures, climate change, rainfall pattern, trend of livestock holding, and agriculture and forestry situation and problem faced on agriculture and forest sector and climate change adaptation and mitigation measures used by local peoples and possible measures to be applicable in future for watershed areas improvement to improve livelihoods of local peoples.

The Mayor, Vice Mayor and ward chairpersons and members of the Municipality and Chairperson and Vice Chairperson and ward chairpersons and members and women members and staff working in the Municipality and Rural Municipality were consulted to gather information about biophysical and socio-economic information of the Lakhandei watershed areas, land degradation and climate change, its impacts and adaptation and mitigation measures, rainfall patterns, trends of livestock holding, agriculture, forestry and biodiversity and problems faced in the agriculture and forest sector, as well as watershed management and climate change mitigation measures used by local people and possible measures to be applied in the future for improving watershed condition and livelihood of farmers.

The required information was collected through direct interaction and focus group discussions at the district level as well as site levels. In this prefeasibility study, there were more than 50 stakeholders including 14 participants from Sindhuli and Sarlahi districts; 13 participants from Lalbandi Municipality, Marin Municipality; 27 participants from four wards; and 15 key informats from Sindhuli and Sarlahi districts consulted.

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Additinally, the representative institutions of the indigenesous communities as well as resource custodians role will ensured through their representation, participation and collaboration during design, planning, execution and monitoring of the project.

The types of stakeholders and their their expected roles and means of engagement is presented in the table below. Stakeholder Name of Expected Role in the Project Group Organization/Community Local and Nepal Federation of Indigenous Be a member of the Project Steering Committee and be a indigenous Nationalities (NEFIN) collaborator in in planning, execution and monitoring of community the project activities groups, Federation of Community Be a member of the Project Steering Committee and including Forestry Users Nepal Participate in planning, execution and monitoring of the women’s (FECOFUN) project activities ensuring coordination of project groups initiatives with existing community forest users groups (CFUGs) and the participation of CFUGs where appropriate. Dalit Alliance for Natural Be a member of the Project Steering Committee to Resources (DANAR) represent the voice and concerns of the under-privileged in natural resource management Nepal Farmers Group Federation Be a member of the Project Steering Committee to (NFGF) represent the voice and concerns of the under-privileged in natural resource management National and Community Self Reliance Centre Represent the concerns of landless and underprivileged regional NGOs (CSRC) resource less communities dependent on natural resources on land tenure and access and benefit sharing Himalayan Grassroots Women’s Represent the concerns of women in natural resource Natural Resource Management management Association (HIMAWANTI) Participate in planning, execution and monitoring of the project activities Relief Nepal Represent the local concerns of the disadvantaged communities in Sarlahi and Sindhuli International International Centre for Collaborate in information sharing regarding climate organizations Integrated Mountain change and natural disasters in the projects districts Development (ICIMOD) Research Tribhuvan University Central Contribute in research on ecological functions, ecosystem institutions Environment Division services Private sector Agriculture Enterprise Section Contribute in capacity building of community members, (AEC) -Federation of Nepalese and participate in developing the knowledge sharing Chambers of Commerce and network, ensuring the involvement of its own networks Industry (FNCCI) of entrepreneurs Federation of Cottage and Small Contribute in capacity building of community members, Industries (FNCSI) and participate in developing the knowledge sharing network, ensuring the involvement of its own networks of entrepreneurs Cooperatives Contribute in arranging finance and managing product market Government Ministry of Forests and Executor institutions Environment (MoFE) Chair the Project Steering Committee and provide overall guidance for the project as national focal point for the UNCCD . Relevant Division, MoFE Member of Project Steering Committee Focal executioner of the project Participate in monitoring the project’s progress Ministry of Agriculture and Co-Executor Livestock Development Be a member of the Project Steering Committee and (MoALD) coordinate the input of MoALD departments into the project as focal point of sustainable land management

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. Soil Division, MoALD Member of Project Steering Committee Focal executioner of the project Participate in monitoring the project’s progress . Livestock Division, Member of Project Steering Committee MoALD Focal executioner of the project Participate in monitoring the project’s progress Ministry of Industry, Commerce Be a member of the Project Steering Committee and and Supplies contribute to coordinating activities at the district and local levels Ministry of Federal Affairs and Be a member of the Project Steering Committee and Local Affairs coordinate the input activities at the province and local levels Provincial Forest, Agriculture, Provinces 2 and 3 Industrry Ministries and Divisions Local Government Units Sarlahi and Sindhuli Districts Media National Television Station Contribute to broadcasting videos at national level Local FM Stations Support broadcasting FM programs at district and local levels

During the project document development phase, an indepth stakeholder analysis will be carried out by conducting a stakeholder workshop. The workshop is expected to identify stakeholders (primary, secondary and tertiary) on the basis of their potential roles and responsiblities and the impact the project will have on them.

3. Gender Equality and Women’s Empowerment. Briefly include below any gender dimensions relevant to the project, and any plans to address gender in project design (e.g. gender analysis). Does the project expect to include any gender- responsive measures to address gender gaps or promote gender equality and women empowerment? yes /no / tbd ; If possible, indicate in which results area(s) the project is expected to contribute to gender equality: closing gender gaps in access to and control over natural resources; improving women’s participation and decision-making; and/or generating socio-economic benefits or services for women. Will the project’s results framework or logical framework include gender-sensitive indicators? yes /no / tbd The project will give priority to gender and social inclusion provisions incorporated in all aspects of planning and implementation of activities. The project will ensure the involvement of women, including indigenous women in decision making regarding the identification and validation of best SLM practices and project interventions. As shown in the background information, there has been feminisation of agricultural labour force in the project site. Hence, the project will focus to ensure that women become an integral part of design and implementation as well as prioritized as beneficiaries of activities on the ground. The project aims to mainstream practical and strategic gender needs. This includes ensuring that the designed activities are culturally and socially acceptable to women. The project has made provision to include gender responsive measures to address gender gaps and promote women's meaningful representation and participation which is expected to contribute to women’s empowerment. This will be realized through gender earmarked budgeting in which at least 40 percent of allocated budget under each component will directly address gender gap and empower women.

All the project outcome and output areas will be reinforced by gender specific activities to ensure that gender issues are duly addressed. Women and women’s groups will be actively engaged by the project to ensure their proactive role in livelihood opportunities and to strengthen their capacity to participate confidently in activities. The project aims to cover 65% women as direct beneficiaries and 60% women as indirect beneficiaries.

4. Private sector engagement. Will there be private sector engagement in the project? (yes /no ). Please briefly explain the rationale behind your answer. Collaboration with the private sector: The major private sectors that project will engage are Agriculture Enterprise Section (AEC) -Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Federation of Cottage and Small Industries (FNCSI), and Cooperatives including producers' cooperatives and savings and credit cooperatives.

The proposed initiative will build capacity of the private sector and in the process will engage with local financial institutions and cooperatives on both farm and non-farm enterprises and its market value chain through its 5Ps (pro- poor public private partnership). This will promote resilient livelihoods; the options will be a range of economic activities based on ecosystem services such as eco-tourism, aquaculture and dairy products, agriculture and forestry. Through engagement with the private sector, and setting up the enabling environment and incentive structures to engage them, the project will also pave the way for a much greater scale up and replication.

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We have considered it and have made tentative estimates. There will be two types of private sector contributions. One is in-kind contribution from Agro-Enterprise Centre of FNCCI ($25,000) as mentioned in Part 1, Section C. The other type of contribution will be indirectly from the participating communities in the form of their foregone wages. There will be at least 4000 families participating in the plantation in their private lands. By assuming two days of work per month for four years of project period, this gives a total of 384300 labour days contribution. At the rate of ongoing rural market wage rate of US$ 6 per day (NRs 660/day), it amounts to US$ 2.3 million.

Facilitation for increased private sector investment in LDN-attainment, biodiversity conservation and climate change adaptation in the long term: The proposed project will collaborate with private firms and institutions to collaborate to promote dryland landscape ecosystem based enterprises in both farm and non-farm sectors. The options will be prioritized based on the cost benefit analysis. Private sector contributions will also come through their contribution in the development of land use planning process as a member of the project multi-stakeholder forum. They are expected to participate in identification and piloting of productivity enhancement, including through financing or direct investment.

The collaboration with private sector will be focused on the promotion of value chain development in eco-tourism, aquaculture and dairy products, agriculture, forestry and agroforestry in particular. Value chain development with private sector will be focused to create local environment friendly job opportunity and generation of income.

5. Risks. Indicate risks, including climate change, potential social and environmental risks that might prevent the project objectives from being achieved or may be resulting from project implementation, and, if possible, propose measures that address these risks to be further developed during the project design (table format acceptable). This proposal builds on the successes of the government's programme on watershed management and soil conservation. This proposal follows the sustainable land management approach linking upstream and downstream. Hence, many potential risks associated with project implementation are mitigated through the Ministry of Forests and Environment's (MOFE) programme monitoring systems as well as strong technical oversight. In the preliminary study, the following risks were identified. - Rating Potential Mitigation Measures Nepal has just entered into a federal system Low As a mitigating measure, the of governance. There are certain acts and project will strengthen regulations to be amended under the new climate adaptation by constitution to harmonise the authorities and supporting policy responsibilities between the three tiers of development and government in the new federal system awareness-raising. The regarding river basin management. It might project will also identify and take some time to get such regulations and support champions at all operational guidelines in place. levels, from the public and private sectors. Insufficient capacity to support emerging Medium The project will build the implementation challenges - the newly capacity of a range of formed provincial and local governments are institutions at different scales not yet fully equipped with required human and engage local resources and technical capacity. In order to communities. mitigate this risk Securing government and private sector Medium As a mitigating measure, the investment in SLM - government sector project will involve partners in budget allocation is more on direct impact developing and deploying infrastructure development with short-term financing and risk mitigation plans; and the level of awareness in the instruments that demonstrate private sector on SLM is at a rudimentary the potential for climate stage due to which it has not seen scope in adaptation to yield a high investing in SLM and climate change return on investment. adaptation. Conflict between communities and Low In order to mitigate this governments (local, provincial) over land use potential risk, the project will and natural resource planning may hamper continue collaboration and implementation. Instability, conflict, and/or consultation with communities and provincial

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tensions may then constrain project and local governments implementation. through equitable sharing platforms and maintaining objectivity. Risks such as torrential rains, landslides and Medium These are climate change flooding during rainy season and longer risks for which the entire drought during winter and summer (because project is designed to of climate change) may affect the project enhance resilience of the implementation on time. LRB and its watershed.

Detail on the category of risk, probability of occurrence, and potential impact will be analysed during full proposal development. The main risk factors will be described together with identified mitigation measures. Building on the lessons learned and consultation with the government, project will invest in community mobilization as well as capacity building for communities and officials to promote engagement and appropriate refinement of project interventions during the implementation phase. Risk mitigation measures including capacity building, strengthening institutions, regulatory frameworks and monitoring mechanisms will be incorporated.

6. Coordination. Outline the institutional structure of the project including monitoring and evaluation coordination at the project level. Describe possible coordination with other relevant GEF-financed projects and other initiatives.

The Ministry of Forests and Environment’s (MoFE) will serve as the Executing Agency for the proposed project.. The MoFE identified Joint Secretary will serve as the National Project Director.

A Steering Committee will guide and oversee the proposed project’s implementation. MoFE will chair the Project Steering Committee (PSC). The other members of the PSC will be: Ministry of Agriculture Development (MoAD), Ministry of Federal Affairs and General Administration (MoFAGA), Ministry of Finance (MoF) and IUCN. The National Project Director will serve as Member Secretary of the PSC. The PSC will meet every six months during the first year of project implementation and annually after that.

The Project Management Unit (PMU) will be located within the premises of the MOFE, or in another place the MOFE may provide. The PMU will be responsible for day-to-day management and administration of all project activities. The project will recruit a Project Field Officer. PMU will manage the project’s field offices with support from the respective district offices responsible for forests, agriculture, and livestock. There will be a District Level Project Information Sharing Meeting and Site-Level Project Information Sharing Meetings in every three months. The PMU will coordinate these district and site level meetings. The minutes of project information sharing meetings and other feedback and input will be submitted to PSC meetings through the PMU as required.

The MoFE, which will execute the proposed project, houses Nepal’s National Focal Points for the UNCCD, is also responsible for implementing Nepal’s NBSAP 2014-2020, and is generally responsible for coordinating all biodiversity-related initiatives in the country. The project activities will be regularly monitored by the PMU as well as periodically by the PSC.

7. Consistency with National Priorities. Is the project consistent with the National strategies and plans or reports and assessements under relevant conventions? (yes /no ). If yes, which ones and how:

The proposed project will contribute to the national policies and initiatives as follows:

Land Degradation Neutrality Target Setting Programme (2018): The proposed project is consistent with Government of Nepal (GoN) national voluntary LDN targets. The GoN, as a party to the UNCCD, launched LDN TSP at the workshop held in Kathmandu on 30th January 2017 which set the LDN target as well as priority sites. Based on the land degradation data and degraded watershed area of Nepal, the LDN hotspots of Nepal were identified representing seven river basins, the project intervention site is one of the seven basin.

National Adaptation Programme of Action (NAPA) (2010): NAPA has prioritized adaptation project profiles and long term adaptation strategies in key vulnerable sectors. This proposal directly contributes to the objectives of combined project profile 1, 2, 3, 5, 7, 8 and 9. Amongst which it will directly contribute in achieving the goal of project profile 1 and 7, (which are ‘Promoting Community based Adaptation through Integrated management of Agriculture, Water, Forest and Biodiversity Sector’ and ‘Ecosystem Management for Climate Adaptation’) both of which aims to strengthen resilient capacity of communities and ecosystems.

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National Framework on Local Adaptation Plan of Action (LAPA) (2011): LAPA framework comprises climate resilient technologies and practices. The project will work synergistically with the implementation of Local Adaptation Plan of Action at local level by integrating SLM approaches and principles in adaptation initiatives of Municipality plans and on-going work of Nepal government.

Climate Change Policy (2010): The proposed initiative considered the policy focus proposing to strengthen the resilience of the communities by strengthening resilience of ecosystems and communities. The CCP (2011) goal is to improve livelihoods by reducing the impact of degrading land, adverse impacts of climate change, and proposed its objectives to implement climate adaptation-related programmes and enhance the climate adaptation and resilience capacity of local communities for optimum utilization of natural resources and their efficient management.

National Biodiversity Strategy and Action Plan (NBSAP) (2014-2020): This initiative will contribute in achieving the NBSAP 2014-20 goals: Climate Change Strategy A: Adaptation and mitigation of the impacts of climate change on biodiversity Strategy A (CCA2-CCA5) and Strategy B: Enhancing the resilience of ecosystems, species and human communities to climate change impacts (CCB1).

National Strategy for Disaster Risk Management in Nepal (NSDRM) (2009): With the broader national vision of making “Disaster-resilient Nepal”, Government of Nepal developed the National Strategy for Disaster Risk Management in Nepal (NSDRM) on October 11, 2009. The National Strategy for Disaster Risk Management aims to reflect the paradigm shift towards enhancing disaster resiliency as part of the fulfilment of the basic right of the people. It also expresses the desire of the people and government of Nepal to reduce disaster risks to an acceptable level for safeguarding their lives, properties, development investments, cultural heritage as well as to mitigate the adverse. This initiative also supports the aims of National Strategy for Disaster Risk Management in Nepal.

Agriculture Development Strategy (ADS) (2015): ADS has clearly noted that there is 3.2 million hectares of degraded land in Nepal, out of which it aims to rehabilitate 1.6 million hectares within the time frame of ADS, i.e., by 2035. This project is very much aligned to this aim.

Forestry Sector Strategy (FSS) (2015): The Forestry Sector Strategy has envisioned eight strategic pillars and identified seven key thematic areas to achieve the vision of the Ministry of Forests and Environment which aims to achieve sustainable production and supply of forest products, improvement of biodiversity conservation, watershed and ecosystem services, increased contribution to national economy, inclusive and accountable forestry sector institutions and organizations, and climate resilient society and ecosystem. This project is directly aligned with the priorities of the FSS.

Consistency with 15th Plan and SDG: The 15th Plan acknowledges the need to enhance knowledge on effect of climate change on ecosystem and biodiversity and has emphasised on promotion of ecosystem based adaptation for increasing the resilience of both communities and ecosystem. This preliminary concept note is consistent with SDG 2 – ‘End hunger’; SDG 11 – ‘Resilient cities’; SDG 13 – ‘Combat climate change and its impacts; SDGs 14 and 15 – ‘Life below water’ and ‘Life on land’.

Nationally Determined Contributions (NDCs): Nepal has prepared its NDC in the process of implementing the decisions of the Conference of the Parties (COPs) through broad-based stakeholder consultation processes. This concept note directly addresses Nepal's NDC to maintain 40% of the total area of the country under forest cover and increase forest productivity and products through sustainable management of forests including enhanced carbon sequestration and forest carbon storage.

Forest Policy (2015): The Policy aims to base livestock quantities on the amount of fodder production and highland pasture so as to improve forest management and increase the production of fodder through community efforts. It also highlights sub-sectoral programmes relating to forests, plant resources, wildlife, biodiversity, medicinal plants, and soil and watershed conservation. According to this policy document, plantation program would be conducted in private land and community lands, and cost effective soil and water conservation and agroforestry system would be developed through action research and technology could be handed over to farmers. Soil conservation programs would be conducted adjusting forest and agriculture system for food production and food security to adapt and mitigate climate change impacts and vulnerability. Degraded national forest lands are provided as leasehold forest for agroforestry development involving private sector or individuals or group of pro-poor farmers.

Range Land Policy (2012): The condition of rangelands in Nepal is degraded due to an increasing human population, climate change, soil erosion, uncontrolled grazing, forest fire and deforestation and invasive species. The main vision of the rangeland policy is to improve the livelihoods of the rangeland dependent communities and thereby contribute to the national economy. Major objectives are to upgrade the status of the rangelands and thereby increase its

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productivity, develop and promote rangeland based enterprises and conserve, promote and utilize rangeland biodiversity in a sustainable and scientific manner thereby contributing in balancing rangeland ecosystems.

The operations recommended for rangeland management involve engaging local people in conserving, promoting the use of public rangelands, scientific grazing management, developing range land infrastructures such as water source development, and trail construction and improvement in mountain regions, improving rangelands through natural and artificial reseeding, developing and expanding rangeland-based enterprises, raising awareness on the present status and importance of rangeland management and studying the contribution of rangelands to carbon sequestration.

National Agroforestry Policy (2019): It emphasize cereal crops, pulse crops and oil seed crops based agroforestry in Terail and plain areas, tree based agroforestry in Chure hills and fragile slopy areas, fruit tree based agroforestry in mid-hills, medicinal plant and herbs based agroforestry in high hills and mountain areas, fishery based agroforestry in wet lands, lakes and water source and livestock based agroforestry in unproductive hilly areas.

Chure Area Programme Strategy and Chure Conservation Master Plan (2017): Recognising the negative impacts of Chure degradation on Bhabar and Terai area, this strategy and master plan aims to conserve and sustainably manage the resources in the Chure region, and improve the ecosystem services through mitigation of the damage likely to be caused by the climate change and natural disasters through ensuring the sustainable management of the natural resources (land, water, vegetation and biodiversity) of the Chure hills (including gullies) and Bhavar region; miitigaton of the damage likely to be caused by the water-induced disasters in the Chure hills, Dun and Tarai Madhesh Landscape, and to continue the flow of the environmental services; and maintaining accessibility in the household use of energy, and to increase the accessibility of the residents (especially from the Tarai Madhesh region) living far from the national forests, in the use of timber, wood and other energy resources.

Integrated Watershed Management Plan of Upper Lakhandei River (2017): The plan is focused on the prevailing issues, possible threats and underlying causes of Lakhandei river system focusing on the upper Lakhandei tributaries. The plan has included three programmes: conservation programme for physical improvement, conservation programme for social development and conservation programme for economic development. The plan envisions that the lives and properties around the upper river systems and its watershed are protected against natural hazards and vulnerability, and livelihoods of the citizens are enhanced.

8. Knowledge Management. Outline the “Knowledge Management Approach” for the project and how it will contribute to the project’s overall impact, including plans to learn from relevant projects, initiatives and evaluations. The project will establish LRB level system for collating data and information on global best practices, lessons learned, evidence from the field and scientific knowledge on ecosystem- and community-based approaches to restoration of degraded watershed. The project will generate baseline data and establish watershed restoration knowledge sharing and learning structures within key clusters to facilitate climate resilient planning and management of degraded watershed. The project will develop a communication and knowledge management strategy that aims to ensure the project’s findings have maximum uptake to contribute to national, provincial and local policy development. Towards this aim, the strategy will involve interactive process-oriented engagement with three key groups: 1) The project community and immediate network of partners (local government, civil society, and private sector); 2) Policy and practice at local, provincial and national levels (who may support the project and scale up lessons); and 3) Wider civil society, particularly, but not only, in Nepal (who may have an interest in the degraded watershed restoration). The project will also facilitate the exchange of tacit knowledge through interaction with other knowledge clusters in the LRB Knowledge and communication outputs will be in Nepali and English as appropriate. Wherever possible, relevant outputs will also be produced in local languages. The project will establish a management information system (MIS) in the Ministry of Industry, Tourism, Forests and Environment of Province 2. The MIS will provide a repository for a wide range of knowledge products on building the resilience of Lakhandei watershed and communities through nature- based solutions, including ecosystem-based approaches. The MIS will provide the foundation for developing knowledge products that are accessible to the public through a website, radio, television, popular media, project publications, workshops and training.

PART III: APPROVAL/ENDORSEMENT BY GEF OPERATIONAL FOCAL POINT(S)

A. RECORD OF ENDORSEMENT OF GEF OPERATIONAL FOCAL POINT (S) ON BEHALF OF THE GOVERNMENT(S): (Please attach the Operational Focal Point endorsement letter(s) with this template. For SGP, use this SGP OFP endorsement letter). NAME POSITION MINISTRY DATE (MM/dd/yyyy) Sri Krishna Nepal Joint Secretary Government of Nepal, Ministry NOV 01, 2019 of Finance

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Annex A

PROGRAM/PROJECT MAP AND GEOGRAPHIC COORDINATES (when possible)

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Annex B

GEF 7 Core Indicator Worksheet

Use this Worksheet to compute those indicator values as required in Part I, item F to the extent applicable to your proposed project. Progress in programming against these targets for the project will be aggregated and reported at anytime during the replenishment period. There is no need to complete this table for climate adaptation projects financed solely through LDCF and SCCF.

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Annex C

Project Taxonomy Worksheet

Use this Worksheet to list down the taxonomic information required under Part I, item G by ticking the most relevant keywords/ topics/themes that best describe this project.

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