Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal Acknowledgement

Authors: Prajwal Baral and Raju Pandit Chhetri

This report was written by the authors and coordinated by Prabin Man Singh and Dipesh Chapagain. The report was a collaborative effort, involving Oxfam staff and partner organization. It includes the findings of the research study managed by Prabin Man Singh, Dipesh Chapagain, Prajwal Baral, Raju Pandit Chhettri, Sunil Acharya and Pallab Regmi. Anthony Scott Faiia and Binay Dhital provided guidance and support throughout the process.

Many individuals and institutions contributed to this report by providing valuable information for the research and with comments and inputs on the report. Annaka Peterson Carvalho, Pieter Terpstra, Emily Wilkinson and Alice Caravani provided special contributions in conducting the research and finalizing this report. Clean Energy Nepal (CEN) and International Institute of Independent Research Pvt. Ltd (3IR) are involved in the study.

Disclaimer

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This is an Oxfam report. The affiliates who have contributed to it are Oxfam GB and Oxfam America.

© Oxfam 2014

This research work is part of a multi-country initiative called, the ‘Adaptation Finance Accountability Initiative (AFAI)’ carried out by Oxfam in collaboration with the Overseas Development Institute (ODI), World Resources Institute (WRI) and Clean Energy Nepal (CEN). Financial support for this work has been provided by the Rockefeller Foundation.

For further information on the issues raised in this report, please e-mail: [email protected] or contact Oxfam country office in Nepal.

OXFAM COUNTRY OFFICE, NEPAL Jawalakhel – 20, Lalitpur G.P.O. Box; 2500, Kathmandu, Nepal TEL: +977-1-5530574, 5542881, 5544308 EMAIL: [email protected] WEBSITE: www.oxfam.org.uk, www.oxfam.org Table of Content

List of Abbreviations...... 1 Executive Summary...... 2 1. Background of the Study...... 4 1.1. Climate Finance...... 4 1.2. Climate Finance Mechanisms and Sources...... 5 1.3. Objectives of the Study...... 7 1.4. Scope and Limitations of the Study...... 7 1.4.1. Scope of the Study...... 7 1.4.2. Limitations of the Study...... 7 1.5. Research Methodology...... 8 1.5.1. Data Collection...... 8 1.5.2. Fund Flow Study through Key Informant Interviews...... 9 1.5.3. Data Analysis and Presentation...... 9 2. Climate Change Adaptation Funding in Nepal...... 10 2.1. Total Climate Change Adaptation Funding...... 10 2.2. Types of Projects...... 11 2.3. Types of Funds...... 12 2.4. Financial Instruments...... 14 2.5. Recipient and Recipient Types...... 15 2.6. Sectorwise Distribution...... 16 3. Policy, Institutions, Governance and Fund Flow Mechanisms...... 17 3.1. National Climate Change Policy and Programmes...... 17 3.2. Major Stakeholders, Institutions and Coordination Mechanisms...... 18 3.3. Governance and Implementation...... 19 3.4. Capacity Building Component...... 20 3.5. Fund Flow Channels and Procedures...... 21 4. Climate Fund Flow in Nepal...... 23 4.1. Adaptation Projects in Nepal...... 23 4.2. Case Study of Three Adaptation Projects in Nepal...... 24 4.2.1. Case I - Least Developed Countries Fund for NAPA Projects...... 24 4.2.2. Case II – Nepal Climate Change Support Programme (NCCSP)...... 27 4.2.3. Case III – Pilot Programme for Climate Resilience (PPCR)...... 28 5. Conclusions ...... 31 List of Annex

Annex I: List of projects covered in this study...... 32 Annex II: Criteria used for further analyzing adaptation relevance of the project that was Rio Marked..42 Annex III: Year wise commitment and disbursement of adaptation fund from 2009 to 2012...... 44 Annex IV: List of Interviewees...... 44 Annex V: Questionnaire...... 45 Annex VI: Examples of climate adaptation recipient types in Nepal...... 46 Bibliography...... 47

List of Figures

Figure 1: Financial mechanisms to address climate change adaptation in developing countries...... 6 Figure 2: Donors commitment and disbursement of adaptation funding in Nepal for 2009-12 as per the Rio marker...... 10 Figure 3: Adaptation funding commitment in Nepal based on AFAI study criteria ...... 11 Figure 4: Adaptation funding commitment in Nepal based on funding source...... 12 Figure 5: Commitment by bilateral donors for adaptation funding in Nepal...... 13 Figure 6: Adaptation Funding through mechanisms inside and within UNFCCC in Nepal...... 14 Figure 7: Loan-Grant distribution of adaptation funding in Nepal...... 14 Figure 8: Major recipients of adaptation funding in Nepal...... 15 Figure 9: Sectorwise distribution of adaptation funding in Nepal...... 16 Figure 10: Governance structure and fund flow mechanism for CFGORRP...... 26 Figure 11: Governance structure and fund flow mechanism for the NCCSP...... 28 Figure 12: Governance structure and fund flow mechanism component 2 of PPCR...... 29

List of Tables

Table 1: Different funding mechanisms and governance structure of various funds in Nepal ...... 21 Table 2: Summary of three major adaptation projects (NAPA projects, NCCSP and PPCR) in Nepal...... 23 Finding the Money 1 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

List of Abbreviations

ADB Asian Development Bank AF Adaptation Fund AFAI Adaptation Finance Accountability Initiative CBO Community Based Organization CCMD Climate Change Management Division CCPCC Climate Change Programme Coordination Committee CEN Clean Energy Nepal CFGORRP Community Based Flood and Glacial Lake Outburst Risk Reduction in Nepal CIF Climate Investment Funds CRS Creditor Reporting System DAC Development Assistance Committee DDC District Development Committee DfID Department for International Development DHM Department of Hydrology and Meteorology DNPWC Department of National Parks and Wildlife Conservation DoA Department of Agriculture DoF Department of Forest DoLS Department of Livestock DSCWM Department of Soil Conservation and Watershed Management EBA Ecosystem Based Adaptation EC European Commission EU European Union FAO Food and Agriculture Organisation FINNIDA Finnish International Development Agency GCCA Global Climate Change Alliance GCF Green Climate Fund GEF Global Environment Facility GLOF Glacier Lake Outburst Flood ICI International Climate Initiative IFC International Finance Corporation LAPA Local Adaptation Plan for Action LDCF Least Developed Countries Fund MCCICC Multi-Stakeholder Climate Change Initiative Coordination Committee MDB Multilateral Development Bank MoAD Ministry of Agriculture Development MoF Ministry of Finance MoFALD Ministry of Federal Affairs and Local Development MoFSC Ministry of Forest and Soil Conservation MoSTE Ministry of Science, Technology and Environment MSFP Multi Stakeholder Forestry Programme NAPA National Adaptation Programme of Action NARC Nepal Agricultural Research Council NCCSP Nepal Climate Change Support Programme NGO Non Governmental Organisation NPC National Planning Commission NRB Nepal Rastra Bank ODA Official Development Assistance ODI Overseas Development Institute OECD Organization for Economic Co-operation and Development PMU Project Management Unit PPCR Pilot Programme for Climate Resilience PSC Project Steering Committee SCCF Special Climate Change Fund SCF Strategic Climate Fund UN United Nations UNDP United Nations Development Programme UNEP United Nations Environment Programme UNFCCC United Nations Framework Convention on Climate Change USAID United States Agency for International Development US FSF United States Fast Start Finance VDC Village Development Committee WB World Bank 2 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

Executive Summary

This report takes stock of climate change From 2009 to 2012, Nepal received a total adaptation finance committed to Nepal funding commitment of USD 538.24 million from public sources of international finance (around 53.82 billion NPR) for climate during the period 2009 to 2012. The change adaptation according to donor Organization for Economic Co-operation reports. However, the projects and programs and Development (OECD) Development examined based on the project’s criteria Assistance Committee Creditor Reporting showed that only USD 246.44 million (around System (DAC CRS) database was used as the 24.64 billion NPR) or 45.78 per cent of the total primary information source. Semi structured committed amount is fully or partially relevant interviews with key officials in bilateral to climate change adaptation. Throughout and multilateral funding agencies and the report, this amount has been taken as government ministries were also conducted. the total adaptation finance commitment to The project developed criteria satisfying Nepal during the period of 2009 to 2012. A international and national contexts to substantial share (44.39 per cent) of funding examine the ‘Rio marking’ done by the donor initially marked as adaptation relevant by agencies. Based on these criteria, projects donors was found to be not relevant to and programmes are categorized in six types climate change. Most of them were regular – pure adaptation projects (A), mitigation development projects in education and projects (M), projects contributing to both health sectors, earthquake preparedness, adaptation and mitigation (B), development and infrastructure such as road and bridge assistance projects with some activities construction projects with no evidence to contributing to climate change adaptation suggest that climate change considerations (DA-A), projects not relevant to climate had been integrated into their design and change (NR) and projects with no detailed implementation. Similarly, 8.85 per cent of information available (DNA). Total adaptation funding was for regular development support funding is further analyzed with respect to in livelihoods, sanitation, disaster response sources of funding, recipient types and sector and similar sectors, where only a few activities wise allocation. The study has also looked directly or indirectly support climate change at the fund flow mechanisms of three major adaptation. If these two project categories climate adaptation projects in Nepal viz. Pilot are summed up, 53.24 per cent of funding Programme for Climate Resilience (PPCR), initially marked as adaptation relevant appear Nepal Climate Change Support Programme to be financing regular development projects (NCCSP) and National Adaptation Programme that are usually funded through Official of Action (NAPA) projects. Development Assistance (ODA). Finding the Money 3 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

Nepal’s adaptation finance has been cent of adaptation funding is in the forest obtained primarily from bilateral sources, and biodiversity sector, followed by 26.94 which account for USD133.73 million (54.26 per cent in multi-sector projects, 16.41 per per cent) of adaptation funding. Dedicated cent in climate-induced disasters, 9.14 per climate funds such as the Climate Investment cent in agriculture and food security sector, Funds (CIF) and Least Developed Countries 3.15 per cent for capacity building, and Fund/Global Environment Facility (LDCF/ 0.01 per cent in the urban settlement and GEF) constitute USD 90.55 million (36.74 infrastructure sector. Two sectors prioritized per cent) of adaptation funding. Only 8.99 in Nepal’s NAPA - public health and water per cent of Nepal’s adaptation funding resources and energy have received no comes from multilateral sources. However, dedicated adaptation funding. Similarly, some dedicated climate funds are managed sectors such as agriculture and food security by multilateral institutions, so this figure and urban settlement and infrastructure may underestimate multilateral support. appear to be under resourced. Among bilateral donors funding adaptation projects in Nepal, the United Kingdom is the Mapping of governance and fund flow top bilateral donor followed by the United mechanisms of major climate change States of America, Switzerland, Finland and adaptation projects indicated that donors the European Union respectively. and development partners have followed conventional development assistance The total adaptation funding from outside models in use for many years. There UNFCCC financial mechanisms is USD 239.88 appears to be limited innovation and million (97.4 per cent) while the amount pioneering of new ideas for financing and from within UNFCCC financial mechanisms effective implementation of climate change is only USD 6.56 million (2.6 per cent). projects. It would be beneficial to explore Two additional projects approved by the development of new and innovative GEF in 2013, would increase funding from models for climate funding such as the UNFCCC mechanisms to USD 15.63 million. idea of a Climate Change Fund as stated in The Nepal government is the leading Nepal’s Climate Change Policy. first order recipient of climate adaptation funding, receiving USD 170.41 million Additional research to analyse the (69.15 per cent) followed by international effectiveness of climate finance and its nongovernmental organizations - 12.45 per accessible, transparent and accountable cent, national private institutions - 8.73 per utilisation is currently underway. This cent, multilateral agencies- 7.74 per cent, stocktaking study has identified several areas national NGOs- 0.91 per cent and others - for further study and analysis which have been 1.01 per cent. included in the ongoing research activities. A report presenting the conclusions and Sector wise distribution of adaptation recommendations of the ongoing research funding is highly unbalanced. 44.36 per will be published by the end of 2014. 4 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

Background of the 1 Study

1.1 Climate Finance

The term ‘climate finance’ has been very sources – both public and private. Since widely used, especially in the context of then, it has been a subject of interest for international climate change negotiations. many researchers and think tanks to study There is, however, no internationally agreed the flow of climate finance or at least track it upon definition of climate finance, because at different levels. Climate finance directed of contestation about what projects towards adaptation to climate change has actually qualify as ‘climate change projects’ become more of an interest, particularly and whether or not corresponding funding/ in the context of developing and least finance is climate change related (CPI, 2011; developed countries like Nepal. Nakhooda et al., 2013). It is within this context that a multi- A growing body of literature (Clapp et al., country initiative called the ‘Adaptation 2012; Caruso and Ellis, 2013) has defined Finance Accountability Initiative (AFAI)’ was climate finance as the amount of money launched in December 2012. The initiative flowing towards reducing greenhouse aims to create and pilot adaptation finance gases, supporting activities that help tracking and monitoring tools with civil vulnerable population adapt to the society groups in Nepal, Uganda, Zambia negative impacts of climate change and and the Philippines. As a first step, Oxfam promoting low carbon and climate resilient in Nepal with its partner organization development. The debates on climate Clean Energy Nepal (CEN) conducted this finance received greater traction in the “Stocktaking Study on Climate Change international climate change negotiations, Adaptation Finance in Nepal” with the particularly after the 2009 Copenhagen aim of taking stock of climate change conference where developed countries adaptation projects and programs currently made a collective commitment to mobilize being implemented in Nepal. In addition USD 30 billion as ‘new and additional’ to this, the study mapped out governance resources for 2010-2012 and pledged to and fund flow mechanisms of three major mobilize long-term finance of USD 100 adaptation projects ongoing in Nepal using billion a year by 2020 from a variety of a case study approach. Finding the Money 5 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

1.2 Climate Finance Mechanisms and Sources

“The United Nations Framework Convention et al., 2013). For example Germany’s on Climate Change (UNFCCC) (1992, Art. International Climate Initiative (ICI) funded 4.3), the Kyoto Protocol (1997, Art. 11.2), partly through the sale of national tradable the Bali Action Plan (2007, Para 1e), and the emission certificates and the Adaptation Copenhagen Accord (2009, Para 8) all call Fund financed through a two per cent for developed countries to provide, ‘new levy on the sale of emission credits from and additional’ climate change financing the Clean Development Mechanism of the to developing countries (Ballesteros and Kyoto Protocol (Nakhooda et al. 2013). Moncel, 2010; p.1)”. Similarly, the Cancun Agreement (Decision 1/cp. 16, Para 95) There are various sources of international took note of the collective commitment by adaptation finance and there might be some developed countries to provide new and overlap between different funding sources. additional resources approaching USD 30 For instance several dedicated climate funds billion for the period 2010-2012. This means are managed by multilateral organizations; that climate finance, whether adaptation or international NGOs receive part of their mitigation, should be ‘new and additional’ funding from bilateral donors, etc. The to Official Development Assistance (ODA) different sources of funding are divided into according to various definitions (Nakhooda five general categories as follows:

An institution representing a donor country. Depending on the donor, aid can be handled by an Embassy or equivalent, a national Bilateral development agency, etc. Examples such as Embassies, UKAID, USAID, Institution: European Union, etc. are considered as bilateral institutions in this study.

An organization whose membership is made up of member governments, who collectively govern the organization and are Multilateral its primary source of funding. Examples are World Bank, Asian Institution: Development Bank (ADB), UN Agencies, etc.

Funds dedicated to finance climate change activities in developing countries. They are administered by UN bodies under the UNFCCC Framework, such as the Adaptation Fund (AF), Green Climate Fund (GCF), Least Developed Countries Fund (LDCF) through Global Environment Dedicated Facility (GEF); or administered by the Multilateral Development Banks Climate Fund: (MDBs) such as the Climate Investment Funds (CIF), or administered by bilateral development agencies such as the International Climate Initiative (ICI), or by national institutions in the case of National Climate Trust Funds, e.g. Amazon Fund or Indonesia Climate Change Trust Fund (ICCTF). 6 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

A non-governmental organization that operates in different countries International and whose headquarter is not located in the host country. Examples NGO: include WWF, CARE, Oxfam, etc. A donor that does not represent a government or multilateral organization and is created by an individual person or a group of Private persons to provide assistance to developing countries. Examples Foundation: include the Rockefeller Foundation, Bill and Melinda Gates Foundation, etc.

An illustration of these different funding mechanisms is given in figure 1 below.

Financial Mechanisms to address Climate Change Adaptation in Developing Countries

Financial Multilateral Special Funds Mechanism of Bilateral Channels, Mechanism of Channels Outside Outside the Kyoto Protocol INGOs & Private the UNFCC Foundations the Convention Convention

Global Climate Green Climate Adaptation MDBs and UN RED Environment Investment Funds Fund (GCF) Fund (AF) Government Programme Facility (GEF) (CIF)

Special Climate Least Developed Clean Strategic Trust Fund Change Fund Countries Fund Technology Climate Fund (SCCF) (LDCF) Fund (CTF) (SCF)

Pilot Program for Scaling UP Forest Investment Climate Resilience Renewable Energy Program (FIP) (PPCR) Program (SREP)

Figure 1: Financial mechanisms to address climate change adaptation in developing countries Finding the Money 7 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

1.3 Objectives of the Study

The major objective of this study i. To take stock of climate change is to take stock of climate change adaptation projects and programmes adaptation finance in Nepal from currently being implemented in Nepal various international public sources and using various international public study their governance and fund flow sources of funding. mechanism. The specific objectives of ii. To study the governance and fund flow the study are: mechanisms of three major climate change projects (PPCR, LDCF and NCCSP/ LAPA) currently being implemented in Nepal using a case study approach.

1.4 Scope and Limitations of the Study

1.4.1 Scope of the Study 1.4.2 Limitations of the Study

This study has analyzed climate change This stock taking study has the following adaptation/resilience projects only and limitations. thus, projects related to climate change mitigation, technology transfer and general i Projects and programmes not included in development projects are beyond the the OECD DAC database have not utilized scope of this study. In doing so, the study the Rio marker to indicate adaptation has covered projects from 2009 to 2012 that relevance. The adaptation relevance of were in the implementation phase as well these projects were examined based on as those approved for funding during that the criteria developed by the study. period. The study tracked public funding ii. Some of the multi-country projects only, and private sources of funding do not state the commitment amount (except from private foundations) was not specifically for Nepal. Such projects are, included. This study has primarily focused thus, not considered for the detailed on three large projects namely, PPCR, study. LDCF and NCCSP/LAPA for the study of the governance and financial flow mechanisms at the national level. 8 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

1.5 Research Methodology

1.5.1 Data Collection Principal (primary) policy objectives are The OECD CRS (Creditor Reporting System) those which can be identified as being fundamental in the design of the activity and DAC (Development Assistance and which are an explicit objective of the Committee) database were used as the activity. They may be selected by answering primary source of funding information. the question “would the activity have been The DAC annual aggregates database undertaken (or designed that way) without this objective?” provides comprehensive data on the volume, origin and types of aid and other Significant (secondary) policy objectives are those which, although important, are not one resource flows. The CRS database provides of the principal reasons for undertaking the detailed information on individual aid activity. activities, such as sectors, countries, project The score not targeted means that the descriptions etc. After an initial short listing activity has been screened against, but was of country projects (or regional ones where found not be targeted to, the policy objective. Nepal is one of the project countries), [Reproduced: OECD, 2011; p.5] all climate change adaptation related projects were further shortlisted based on the Rio marker that the donors use. The For the donors that do not report to the Rio marker give an indication whether OECD, various sources of information were adaptation is the ‘primary’ objective of used to produce a comprehensive list the project or programme (marked as of climate change projects. The sources 2), whether adaptation is a ‘significant’ included International Aid Transparency objective (marked as 1) or whether the Initiative (IATI) Registry, individual websites programme does not address adaptation at of Multilateral Development Banks (MDBs), all (marked as 0 or not marked at all). Use UN Development Assistance Framework of the Rio marker to track climate change for UN agencies, Aid Data website, etc. adaptation related aid started in December The Government of Nepal’s Development 2009 (OECD, 2011). Therefore the projects Cooperation Report (Fiscal Year 2011/12) studied are from 2009 onwards, although and Ministry of Finance’s Aid Management some donors did not utilize the Rio marker Platform were extensively used to validate for projects from January to December and update this database. 2009. In addition, 2009 has been taken as the starting year for this study because A draft study report was shared with the developed countries made a historic pledge key reviewers. A consultative workshop of new and additional climate finance at to share preliminary findings was also the 15th Conference of the Parties (COP15) organized with stakeholders on 28 February in Copenhagen in the same year. 2014, in Kathmandu, Nepal. Comments Finding the Money 9 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

and feedback from the reviewers and that, it also served the purpose to validate consultative workshop are incorporated in the database that had been prepared as the this final report. first step. The final database used for the further analysis is presented as Annex I of 1.5.2 Fund Flow Study through this report. Key Informant Interviews 1.5.3 Data Analysis and

After the finalization of initial database, Presentation a list of stakeholders to be consulted for key informant interviews was completed Followed by validation of the initial database (see Annex IV for stakeholders consulted through key informant interviews, standard and Annex V for the questionnaire used). data visualization techniques such as bar This process was mainly used to study the charts, pie charts, tables, etc. were chosen to governance and financial flows of three best present the existing data. Both Microsoft major climate adaptation projects in Nepal Excel and STATA were used as the statistical - PPCR, LDCF and NCCSP/LAPA. Further to software to analyse and present the data. 10 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal Climate Change Adaptation Funding 2 in Nepal

2.1 Total Climate Change Adaptation Funding

From 2009 to 2012, Nepal has received a total funding commitment of USD 538.24 million (around 53.82 billion NPR)1 for climate change adaptation according to donor reports (refer to Section 1.5.1 for Rio marker). The figure 2 shows that the adaptation commitment was highest in 2011.

375.78 350 300 250 200 150 100 80.40 47.88 46.06 44.81 50 34.18 3.43

Adaptation finance (million USD) finance Adaptation 0 Commitment Disbursement Commitment Disbursement Commitment Disbursement Commitment Disbursement

2009 2010 2011 2012 Figure 2: Donors commitment and disbursement of adaptation funding in Nepal for 2009-12 as per the Rio marker

1 USD 1 = NPR 100 has been used as the currency exchange rate throughout this study. Finding the Money 11 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

The increased climate adaptation support In addition to the above amount, the multi- from 2009 corresponds with 2009’s country projects (where Nepal is one of Copenhagen conference where developed the recipient countries) constitute a total countries made a collective commitment commitment of USD 52 million over the of USD 30 billion as ‘new and additional’ same time period (refer to Annex I for the climate finance for 2010-2012. list of national and multi- country projects). Since it is not clear how much of that USD The detailed annual segregation of 52 million has been committed exclusively commitment and disbursement amounts is for Nepal, these projects are not included in attached as Annex III. the further analysis.

2.2 Types of Projects

The list of projects that the donors marked iv. Development assistance projects with as adaptation relevant (with Rio marker 1 some activities contributing to climate or 2) was further examined using a set of change adaptation: DA-A criteria satisfying both international and v. Projects not relevant to climate change: national adaptation context (see Annex II). NR Six types of projects have been identified vi. Projects with no detailed information based on those criteria. available: DNA i. Pure adaptation projects: A The figure 3 gives the distribution of total ii. Mitigation projects: M funding commitment in six categories iii. Projects contributing to both adaptation listed above (total for 2009 to 2012). and mitigation: B

8.85% 44.39% A USD 141.91 M USD 0.96 B USD 104.53 19.42% DA-A USD 47.65 NR USD 238.90 DNA USD 4.29

0.18% 26.36% 0.80%

Figure 3: Adaptation funding commitment in Nepal based on AFAI study criteria (USD millions) 12 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

A substantial share (44.39 per cent) of funding be mitigation relevant instead, and focused initially marked as adaptation relevant by on activities such as renewable energy and donors was found to be not relevant to energy efficiency promotion projects. climate change. Most of them were regular development projects in education and Results in figure 3 shows that only 45.78 health sectors, earthquake preparedness, per cent of the committed amount is and infrastructure such as road and bridge totally or partially relevant to climate construction projects with no evidence to change adaptation according to the criteria suggest that climate change considerations developed by this AFAI study. It comprised had been integrated into their design and of pure adaptation (A) and both adaptation implementation. Similarly, 8.85 per cent and mitigation (B) projects combined is of funding was for regular development USD 246.44 million (24.64 billion NPR). support in livelihoods, sanitation, disaster Throughout the report, this amount response and similar sectors, and where only has been taken as the total adaptation few activities directly or indirectly support finance commitment to Nepal during the adaptation to climate change. If these two period of 2009 to 2012 unless otherwise project categories are summed up, 53.24 mentioned specifically. It should, however, per cent of funding initially marked as be noted that the relative balance between adaptation relevant come out to be regular adaptation and mitigation activities for development projects that are usually funded projects under the category ‘B’ cannot be through ODA. Similarly, the analysis shows determined in this report because detailed that 0.18 per cent of funding initially marked financial breakdown of such projects is not adaptation relevant by donors was found to publicly available.

2.3 Types of Funds

Based on the definitions of different types of projects in Section 2.2, project budgets 140 133.73 under the categories pure adaptation (A) B 120 101.13 and both adaptation and mitigation (B) were further analyzed based on funding 100 90.55 B 3.40 source, as depicted in the figure 4. 80 A 87.15 Nepal’s adaptation finance has been derived 60 primarily from bilateral sources, with 40 total amount of USD133.73 million (54.27 A 22.15 per cent) of the total funding. Dedicated 20 32.60 A climate funds such as the CIF and LDCF/ 22.15 0 GEF constitute 36.75 per cent of the total funding (million USD) Adaptation Bilateral Dedicated Climate Fund Multilateral adaptation funding in Nepal, amounting Figure 4: Adaptation funding commitment in to USD 90.55 million. Only 8.99 per cent Nepal based on funding source of Nepal’s adaptation funding is derived Finding the Money 13 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

from multilateral sources. However, some The figure 5 gives a breakdown of bilateral dedicated climate funds are implemented funding by donor countries. As a standard by multilateral institutions, so this figure practice, funding by European Union has may underestimate the level of support been kept under bilateral funding. from multilateral institutions. Among bilateral donors funding Overall, pure adaptation projects tend to adaptation projects in Nepal, the United be supported by dedicated climate funds Kingdom has stood as the top bilateral and multilateral agencies, while projects donor followed by the United State of supported with bilateral funds tend to America, Switzerland, Finland and the combine adaptation and mitigation activities. EU respectively. Taken separately, the UK All the funding from multilateral sources and is the top bilateral donor in both project 96.25 per cent of the funding from Dedicated categories – A and B. The figure clearly Climate Funds are for pure adaptation projects illustrates that the European countries whereas 75.62 per cent of the bilateral have played a major role in Nepal’s climate support is funding project contributing both change adaptation efforts. in adaptation and mitigation.

45 43.64

40

35 32.65 30 B 32.31 25

20 19.48 B 29.95 15.24 15 11.10 11.64 B 10 17.23 B B B 0.22 6.84 Adaptation Funding (million USD) Funding Adaptation A 14.59 5 11.33 A A A A A 0.65 4.80 0 2.70 2.25 10.88 UK USA Switzerland Finland EU Other

Figure 5: Commitments by bilateral donors for adaptation funding in Nepal. 14 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

Even though the issue of climate change gained international traction through Outside efforts of United Nations Framework UNFCCC Convention on Climate Change (UNFCCC), 97.34% most of the climate adaptation funding in Nepal is from financial mechanism outside the UN convention. The total adaptation

funding from outside UNFCCC financial Within mechanism is USD 239.88 million while the UNFCCC amount from within the UNFCCC financial 2.66% mechanism is only USD 6.56 million over Figure 6: Adaptation funding through the period 2009 to 2012. If two additional mechanisms inside and within UNFCCC. projects, which were approved by the GEF in 2013, are also considered (table 2), the funding from within UNFCCC mechanism mechanism within the UNFCCC through becomes USD 15.63 million. The GEF which adaptation projects have been through the LDCF is the only funding funded so far in Nepal.

2.4 Financial Instruments

Almost all climate adaptation projects in Pilot Programme for Climate Resilience Nepal are funded through grants. The only (PPCR), where component 2 (Building project consisting of a loan component is Resilience to Climate Related Hazards) and component 4 (Building Climate Resilient Communities through Private Grant Sector Participation) are comprised of 91.24% loan amounts of USD 15 and 6.6 million respectively, USD 21.6 million in total. Loan This loan amount is 26.25 per cent of the 8.76% total PPCR budget for Nepal. The figure 7 gives a quick glance of the loan-grant segregation of Nepal’s total climate adaptation funding. Figure 7: Loan-Grant distribution of adaptation funding in Nepal Finding the Money 15 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

2.5 Recipient and Recipient Types

In this particular stock taking study, project categories A and B. The first order fourteen types of first order recipients2 recipients have respectively received the have been identified. Some examples have following share of adaptation funding: been presented in Annex VI. national government agencies (RGN)-69.15 per cent, International Nongovernmental The figure 8 illustrates that the national Organizations (INGOs)-12.45 per cent, government of Nepal is the leading National Private Institutions (RPRIV)-8.73 recipient of adaptation funding in Nepal, per cent, multilateral agencies (MULT)- receiving USD 170.41 million in total. The 7.74 per cent, national NGOs (RNGOS)- national government stands atop both 0.91 per cent and others 1.02 per cent.

120

96.92 100

80 73.49

60 A B 40 30.16

Funding (million USD) Funding 21.51 19.07 20

0.52 0.005 2.25 1.63 0.87 0 RGN INGO RPRIV MULT RNGO OTHERS Recipient Type

Figure 8: Major recipients of adaptation funding in Nepal

2 Organizations or institutions that are the first recipients of international public funds 16 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

2.6 Sectorwise Distribution

For the purpose of this study, the following iii. Water Resource and Energy six thematic sectors identified in Nepal’s iv. Climate Induced Disaster National Adaptation Programme of Action v. Public Health (NAPA) have been taken as the primary vi. Urban Infrastructure and Settlement sectors to which adaptation funds may be In addition, the following cross-cutting flowing. themes have been identified:

i. Agriculture and Food Security i. Multi-sector ii. Forest and Biodiversity ii. Capacity building

44.36%

3.15% Agriculture & Food Security 9.14% Urban Settlement & Infrastructure 0.01% Climate Induced Disaster 16.41% Multisector 26.94% Capacity Building 3.15% 9.14% Forest & Biodiversity 44.36% 26.94%

16.41% 0.01%

Figure 9: Sector wise distribution of adaptation funding in Nepal

The figure 9 shows that 44.36 per cent for capacity building, almost all projects of adaptation funding in the forest and include capacity building component. It biodiversity sector, followed by 26.94 per ranges from technical and institutional cent in multi-sector projects, 16.41 per capacity to coordination and integration in cent in climate-induced disasters, 9.14 per the development process. cent in agriculture and food security sector, 3.15 per cent for capacity building, and Two sectors prioritized in Nepal’s NAPA 0.01 per cent for in urban settlement and - Public Health and Water Resources infrastructure sector. and Energy have received no dedicated adaptation funding. Similarly, sectors such Although only 3.15 per cent of the total as Agriculture & Food Security and Urban adaptation funding is allocated exclusively Settlement & Infrastructure appear to be underresourced. Finding the Money 17 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal Policy, Institutions, Governance and Fund 3 Flow Mechanisms

3.1 National Climate Change Policy and Programmes

The preparation of National Adaptation Programme of Actions (NAPA) is considered Major Elements of National Climate Change the pioneering process of shaping climate policy change work in a programmatic approach 1. Climate adaptation and disaster risk in Nepal. Finalized in September 2010, its reduction total cost is estimated at USD 350 million. 2. Low carbon development and climate Today, many of the adaptation projects resilience and programmes are alligning with NAPA’s 3. Access to financial resources and utilization nine combined project profile. 4. Capacity building, peoples’ participation and empowerment 5. Study and research The formulation of the NAPA also helped 6. Technology development, transfer and the Government to realize the urgency utilization of finalizing the Climate Change Policy. 7. Climate-friendly natural resources In March 2011, the Ministry of Science, management. Technology and Environment (MoSTE) prepared Nepal’s Climate Change Policy and it was approved by the cabinet. The policy It also incorporated some ambitious goals preparation process was participatory as a such as establishment of a Climate Change number of consultations involving various Centre for conducting climate change stakeholders were held to provide inputs to research and monitoring, and providing the initial draft. regular policy and technical advice to the Government. It further envisioned the This initiative of formulating a national establishment of a separate Climate Change climate change policy was viewed as a Fund for mobilizing and managing financial positive start by many donors, government resources, and clearly stressed that at least institutions and civil society organizations 80 per cent of the total funds available for as it envisioned to address the adverse climate change related programmes flow impact of climate change in the country. to the grassroots levels. 18 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

In 2012, the National Planning Commission are already in the implementation phase (NPC) with support from UNDP piloted and through the Ministry of Federal Affairs and introduced climate change budget code. Local Development (MoFALD). These first The Ministry of Finance (MoF) introduced phase plans are under implementation in this separate budget code in fiscal year 14 districts of Mid Western and Far Western 2013/14 national budget for the first time. Development Regions of Nepal. There are other adaptation projects implemented To further the implementation of the by different donors and government NAPA and to realize climate action on the institutions such as PPCR, Ecosystem Based ground, the MoSTE pioneered a concept Adaptation (EBA) in Mountain Ecosystem of Local Adaptation Plan for Action (LAPA) in Nepal and forest, biodiversity and and developed the LAPA framework. With agriculture related projects to develop support from the EU and DfID, 70 LAPAs were climate resilience capacity and integrate it prepared in the first phase of the project and into sustainable development.

3.2 Major Stakeholders, Institutions and Coordination Mechanisms

MoSTE is the UNFCCC focal point and A few other coordination mechanisms climate change lead agency in the country. have been established at MoSTE. Some A separate division called the Climate are project focused aimed at enhancing Change Management Division (CCMD) communication and coordination while headed by a joint-secretary has been others are focused on donor coordination. established in MoSTE. Similarly, a high- A new coordination body called the level Climate Change Council headed by Climate Change Programme Coordination the Prime Minister was formed to provide Committee (CCPCC) has been set up under political and strategic guidance on the issue the leadership of the joint-secretary at of climate change. MoSTE. This body looks like a sub set of MCCICC but has members only from the A coordination mechanism called the Multi- government institutions and major donor Stakeholder Climate Change Initiative agencies. Similarly, an inter-ministerial Coordination Committee (MCCICC) chaired steering committee is also in place while by the Secretary of MoSTE is in place to the major donor agencies have their own maintain coordination among various compact. initiatives and avoid duplication. It is a body formed with representatives from relevant The National Planning Commission (NPC) line ministries, donor agencies and civil is working to consolidate programmes society organisations. and projects under its guidance. It has also worked with the Ministry of Finance to mainstream climate change into the Finding the Money 19 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

national budgetary system. Many central of other organizations likes UN agencies, level government institutions such as the international and national NGOs have Ministry of Forest and Soil Conservation helped Nepal prepare and implement (MoFSC), the Ministry of Agriculture adaptation related projects. Development (MoAD), the Ministry of Federal Affairs and Local Development Gradually, many local level organizations (MoFALD), and related departments are and district line agencies are gearing up playing a crucial role in addressing climate to take actions on the ground. The District change and implementing adaptation Development Committees (DDC) are acting projects such as PPCR, NCCSP, MSFP, etc. as a coordinating agency for climate change activities at district level, which is also the Various bilateral donor agencies such as focal agency to coordinate development DfID, USAID, FINNIDA and multilateral activities under the MoFALD. However, development banks such as the World gaps in capacity and the need for a stronger Bank and ADB were found to be playing role of local agencies in climate change are a key role in financing and implementing being observed. adaptation projects in Nepal. A wide range

3.3 Governance and Implementation

Many stakeholders agreed that in-depth be prepared by piloting it in ten districts. A knowledge of climate change has yet to large portion of PPCR budget is allocated reach a wide audience including many for technical assistance and coordination policy makers and planners in Nepal. greatly reducing the amount available Many donors and government institutions for actual budget implementation. cautiously accept that the district and local Interviewees have expressed concerned level stakeholders have limited awareness about how such decisions are made. of climate change issues. Similarly, the majority of local level institutions are Government institutions and donor unaware of the national climate change agencies both seem to be concerned about policy and programmes. Some government the transparency and accountability of institutions argue that this is because of the projects and fund utilization. Donor the unstable government and absence of agencies seem to be concerned about locally elected bodies. the resource management and delayed implementation while on the other hand; The Nepal Government asserts that the the government has expressed concern NAPA was prepared through a participatory in the study interviews worried about the and bottom-up approach. Similarly, the donors’ control of fund utilization. NCCSP/LAPA Framework was also found to 20 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

3.4 Capacity Building Component

When it comes to knowing the impacts of development process. On one hand, Nepal climate change on different sectors, climate needs adequate technical and institutional change is still an emerging issue because capacity building support while on the the level of awareness among various other hand, some government institutions stakeholders is still low. Integrating these feel that heavy prioritisation takes away the issues in development planning hasn’t much needed resources from addressing advanced quickly. However, the NAPA adaptation on the ground. PPCR’s component preparation process helped raise greater 3 titled ‘Mainstreaming Climate Change Risk awareness and identify gaps in the country. Management in Development’ is entirely Similarly, the Climate Change Policy also focused on strengthening MoSTE and identified technical and institutional gaps climate integration into development. UN and proposed actions to help overcome Agencies have prioritized capacity building them. in a similar approach while designing NAPA projects. NCCSP will use 20 per cent of the Most of the donor agencies seem to agree budget on institutional capacity building that the government institutions required and coordination at the central level. Such institutional strengthening and capacity arrangements raise doubts about meeting building support to effectively deliver the target of spending 80 per cent of the service to address climate change impact funds at the local level as large amount is in the country. For instance, in order to already put aside centrally for the capacity implement NCCSP effectively, UNDP is building component alone. providing technical back up to MoSTE though the ministry is directly receiving There seems to be lot of duplication in the funds from DfID and the EU. PPCR is capacity building activity at the project also prioritizing the technical assistance level. Government officials are over component heavily. stretched with the need to participate in capacity enhancement activities under Although the initial findings show that different projects. Some government 3.15 per cent of adaptation finance is officials lamented that they are invited to dedicated exclusively to capacity building, similar trainings and capacity enhancement many projects in Nepal include substantial programs under PPCR, NCCSP and various capacity building component. It ranges other projects run by different government from technical and institutional capacity institutions and NGOs. to coordination and integration in the Finding the Money 21 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

3.5 Fund Flow Channels and Procedures

International funds are channeled into the agencies and the implementing government country through various mechanisms – agencies. Some of the pertinent cases some go through the usual government of fund flow mechanisms on big climate budget (Red Book), while others just inform change projects such as PPCR, NCCSP/LAPA the government machinery. A significant and LDCF/NAPA projects are discussed in amount of funding was also found to be Chapter 4 in further detail. directly spent by NGOs, private sector and other institutions. Interestingly, many funds In the past, the Government of Nepal had that are channeled through the government created several funds and structures to have to operate through a separate finance projects for specific purposes. dedicated account although the funds are Lessons can be learnt from these funds for reflected in the national budget. Most of climate financing too. Below is the table these funds do not need cabinet approval for prepared by the Overseas Development expenditure and are easily activated based Institute on various funds and governance on the understanding between the donor structure in Nepal for further reference.

Table 1: Different funding mechanisms and governance structure of various funds in Nepal (Reproduced: Bird, 2011)

Initiative Implementation modality Governance issues Financing issues A model for long-term A National Advisory Employs current government sustainability under strong Committee oversees financial procedures. national ownership. strategic implementation, The Local Challenges in fiduciary chaired by the Secretary Governance Implementation undertaken management related to MLD and by the MLD using the national spread of Community government systems. Joint DP meetings support the programme, as local Development coordination among a broad institutional capacity is low. Programme range of development Success of the Joint Funding (LGCDP) partners. Arrangement (JFA), with donor support well aligned and harmonized. A model for short-term Legal identity created Direct flow of funds to impact, with strong results- by the 2006 PAF Act – an communities, with central based approach. autonomous Institutions budgetary support being channeled directly to Parallel initiative to LGCDP: PAF Board chaired by Poverty community Groups same goal, but with different the Prime Minister. PAF Alleviation players employing different Secretariat led by an Fund (PAF) methods. Executive Director Service provision delivered Two supporting DPs: the largely through the private World Bank and IFAD. sector and NGOs. 22 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

A model for short- Both fund overseen by Funds for the national trust fund term impact, with two a Board, Chaired by the are deposited in the Central complementary trust funds. Minister of Peace and Treasury under the terms of the Reconstruction. JFA. The Board is fully authorized A national fund and the UN to approve projects and may trust fund support different Donor Advisory Group The Nepal draw from an account in the actors (state and non-state). provides advice to the Peace Fund central bank. Board. The Multi-Donor Trust Fund Good use of websites office of the UNDP acts as the promoting transparency. administrative agent for the UN trust fund A model for long-term Joint Steering Committee Employs current government sustainability under exists for Direct Funding & TA financial procedures. strong national ownership only. Challenges have arisen over The School Implementation undertaken A Code of Conduct, the the quality of government Sector by the MoEd using JFA and the Governance financial reporting. Reform government systems. This and Accountability Action Program sector-wide approach has JFA in place with nine DPs. Plan are key documents (SSRP) developed over almost 20 that contribute to the years. governance framework for the SSRP SWAp. A Centre dependent on Legal identity created by Individual financed project international funding for the 1956 Development support, some of which is over over 80% of its funding, with Board Act - a semi- a decade old. The a focus on service provision autonomous institution. JFA for one project indicates Alternative (not a regulatory body) AEPC Board chaired by the the start of a move towards Energy Minister of Environment programmatic support. Promotion Centre (AEPC) The rural energy fund has been constrained by the challenges of limited capacity at the local level. A consortium approach with Steering Committee The funding of ‘flagship participating organizations established, chaired by the programmes’ is undertaken remaining autonomous in Secretary, Ministry of Home largely through project The Nepal implementing programme Affairs, with Secretariat financing. Disaster Risk activities, but agree to established within the Reduction contribute to a prioritized set of MoHA. Consortium actions. Good demonstration of division of labour between DPs. Finding the Money 23 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

Climate Fund Flow 4 in Nepal

4.1 Adaptation Projects in Nepal

Nepal has several adaptation projects that NCCSP/LAPA and PPCR as a model of are under implementation in the country. UN Agency, bilateral and WB managed These projects are at different stages projects respectively. Since, some of these of execution. In this study, few major projects have several components, one adaptation related funds are examined in component for each projects was chosen detail to demonstrate the governance and to demonstrate the fund flow mechanism fund flow mechanism in Nepal. It covers under each case. three projects – LDCF/NAPA Projects,

Table 2: Summary of three major adaptation projects (NAPA projects, NCCSP/LAPA and PPCR) in Nepal

S. Project NAPA Projects NCCSP/LAPA PPCR No. Elements Component 1: Building climate Project 1: Catalyzing ecosystem resilience of watersheds in Mountain restoration for resilient natural capital Eco-Regions and rural livelihoods in degraded forests and rangelands of Nepal Nepal Climate Component 2: Building Resilience to Climate-Related Hazards Project 2: Reducing vulnerability and Change increasing adaptive capacity to respond Support Component 3: Mainstreaming Program: climate change risk management in 1 Project Name to impacts of climate change and variability for sustainable livelihoods in Building development agriculture sector in Nepal Climate Component 4: Building climate Resilience in resilient communities through (Note: funding for Project 1 & 2 are Nepal approved in 2013 only) private sector participation Project 3: Community Based Flood and Component 5: Sustainable Glacial Lake Outburst Risk Reduction conservation of ecosystems and biodiversity 24 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

Component 1: USD 30.11m Project 1: USD 5.75m Component 2: USD 32.3m Project 2: USD 2.95m Component 3: USD 7.16m 2 Budget USD 21.5m Project 3: USD 6.93m (+0.95m UNDP) Component 4: USD 8.73m Total – USD 15.63m Component 5: USD 5m Total – USD 82.3m Funding DfID, the EU, 3 LDCF/GEF Climate Investment Funds (CIF) Source Cyprus Managing MoSTE and 4 UNEP, FAO and UNDP World Bank, ADB and IFC Agencies MoFALD National DSCWM; MoAD & DHM; MoSTE; MoSTE, MoAD & MoFSC; MoAD, NARC & MoSTE and 5 Implementing MoAD & Private companies; MoFSC, DHM; MoSTE & DHM MoFALD Partners DNPWC & DoF Direct Access Funding Indirect Access (World Bank, ADB & 6 Indirect Access (via UN Agencies) (Government Access IFC) of Nepal) Funding 7 Grant & Co-financing Grant Grant & Concessional Loan Modality Alignment Yes, special with national Only separate special account at the 8 account at Yes, special account at the NRB budget (Red NRB for government notice the NRB Book) UNFCCC Outside 9 Financial Within UNFCCC mechanism UNFCCC Outside UNFCCC mechanism Mechanisms mechanism

4.2 Case Study of Three Adaptation Projects in Nepal

4.2.1 Case I - Least Developed Countries Fund for NAPA Projects

The Least Developed Countries Fund Out of USD 20 million currently available in (LDCF) was established under the UNFCCC the LDCF for each least developed country, to finance a work programme designed for the GEF council has approved three projects LDCs. One of its major programme was the for Nepal to be implemented through preparation and implementation of NAPA. UNDP, UNEP and FAO. The total funding for The Global Environment Facility (GEF) is the these three projects amounts to USD 15.63 operating entity of the LDCF. million. Nepal’s NAPA is comprised of nine project profiles estimated to cost USD 350 million for its full implementation. Finding the Money 25 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

A. Implementation and Institutional Arrangement for NAPA projects-LDCF

As a focal institution, the Ministry of agencies to carry out the work. The Science, Technology and Environment implementing partners through the service (MoSTE) coordinates the LDCF projects in contractors, NGOs and CBOs, will help provide the country. It is implementing a project services at the local level. UNDP follows the ‘Community Based Flood and Glacial National Implementation Modality (NIM) Lake Outburst Risk Reduction in Nepal guidelines as agreed with the Government (CFGORRP)’ in collaboration with UNDP of Nepal. This is the standard guideline that through the Department of Hydrology UNDP follows to implement any development and Meteorology (DHM). This project aims project through the government machinery. to reduce the risk of Glacier Lake Outburst For CFGORRP, a PMU is setup at the DHM to Flood (GLOF) in the high mountain carry out the work. No new funding structure regions, particularly Imja Lake located in or set up is envisioned for climate related the Solukhumbu district and its low lying projects. For the execution of the CFGORRP areas in Mahottari district, Saptari district, project, there is a Project Steering Committee Siraha district and Udayapur district. It (PSC) headed by the secretary of MoSTE for also coordinates the other two projects providing policy and strategic advice and a – ‘Catalyzing ecosystem restoration for Project Executive Board (PEB) chaired by the resilient natural capital and rural livelihoods Director General/National Project Director, in degraded forests and rangelands of DHM, with representation from DSCWM, Nepal’ managed by UNEP and implemented DWIDP, DNPWC and UNDP is also fomed. This by MoSTE, MoAD and MoFSC and ‘Reducing project specific board, which meets quarterly, vulnerability and increasing adaptive is responsible for making decisions as required capacity to respond to impacts of climate in regards to the approval of major revisions change and variability for sustainable in the project strategy and implementation livelihoods in the agriculture sector in approaches. The steering committee plans to Nepal’ managed by FAO and implemented meet at least once a year. by MoAD, NARC and DHM. Government agencies and other institutions are called In order to enhance coordination and avoid implementing partners. duplication, GEF/LDCF implementing UN Agencies and government institutions have A special implementation arrangement also joined the Climate Change Programme has been set up at the MoSTE. A Project Coordination Committee (CCPCC) Management Units (PMU) will be set up at established at MoSTE. the respective implementing government 26 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

B. Fund Flow Mechanism

The current set up under the GEF does not allow GEF/UNDP direct access of funds by any LDCs, including Nepal. Project Steering Implementing Committee (PSC) Cooperating Agency Arrangement Instead, the projects have Ministry of Science. to be submitted via GEF Technology & Environment (MoSTE) implementing agencies Climate Change Program Coordination committee such as UNDP and UNEP. (CCPCC) FUND FLOW Ministry of Finance The UN Agencies and (Special Designated government institutions Account at the NRB) closely collaborate to Implementing Partner prepare project proposals Department ho Hydrology & Meteorology (DHM) and implement them. (Project Management Unit)

NAPA projects are designed

with co-financing from UN Responsible Partner Service Providers Agencies, government and • Ministry of Home Affairs NGOs, CBOs and local level • Department of Water Induced Disaster organizations other institutions in addition and Prevention (DWIDP) • Department of National Park and Wildlife Coordination to the funds provided by the Conservation (DNPWC) LDCF. The budget for NAPA • Department of Soil Conservation and Line of Management Watershed Management (DSCWM) projects is not necessarily Fund flow reflected in the government’s Red Book. A separate Figure 10: Governance structure and fund flow mechanism of special account is created CFGORRP for implementing agencies at the Nepal Rastra Bank (NRB)/ Central Bank of Nepal UN Agencies are using the same modality as that for other in coordination with the development projects in executing the NAPA projects in Ministry of Finance. It does Nepal. The flow chart in Figure 10 reflects the governance not require cabinet approval structure and fund flow mechanism of one of the NAPA for the fund to be used. project CFGORRP administered by UNDP. Finding the Money 27 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

4.2.2 Case II – Nepal Climate Change Support Programme (NCCSP)

The Nepal Climate Change Support Development Regions of Nepal. In late 2013, Programme (NCCSP) is aimed at supporting the project prepared 30 additional LAPAs. the poor and marginalized people facing The NCCSP supports the implementation the burden of climate change in the Far of adaptation options and build resilience Western and Mid Western Development in vulnerable sectors identified in NAPA regions of Nepal. The first phase of the project profile 1 that states – Promote‘ program is designed and implemented Community-based Adaptation through with the financial support from Department Integrated Management of Agriculture, for International Development (DfID), Water, Forest and Biodiversity Sector.’ European Union (EU) and the Cyprus However, its ultimate objective is to ‘Enable Government. United Nations Development the Government of Nepal to implement Programme (UNDP) provides technical Climate Change Policy, 2011 and develop support to MoSTE and MoFALD. and implement necessary strategies and most urgent and immediate adaptation The government prepared 70 Local actions that increase the benefits and Adaptation Plans for Action (LAPA) in 14 sustainability of public as well as public- districts of Mid-Western and Far-Western private development efforts.’

A. Implementation and Institutional Arrangement for NCCSP

Ministry of Science, Technology and been formed that is chaired by the Secretary Environment (MoSTE) is the lead of MoSTE. UNDP is providing technical back implementing government agency stopping to MoSTE in project execution. It will and will coordinate with the Ministry of includes technical, financial and procurement Federal Affairs and Local Development support and capacity development training (MoFALD) for implementation through to technical and management staff and District Development Committees (DDC). support units. UNDP is managing 20 per cent Implementation will be carried out with of the total budget. UNDP will support the support from other institutions including set-up of a specialized project team that will INGOs, NGOs, CBOs, local users committees implement and facilitate implementation at and private sector actors that have both central and district levels. In the 14 project comparative and competitive advantages implementing districts, pre-existing Energy in terms of long-standing field level work and Environment Unit in the DDC has been experience and co-financing abilities. modified to Energy, Environment and Climate Change Unit. A Project Management Unit (PMU) has been set up at the MoSTE to take day-to-day decisions Donors and implementing agencies of related to project management, finance and NCCSP are also the members of Climate operation. For the effective execution of Change Programme Coordination NCCSP, a Project Steering Committee (PSC) has Committee (CCPCC). 28 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

B. Fund Flow Mechanism

NCCSP will use the existing government channel to EU/DFID fund the project. EU and DfID will channel the funds Project Steering FUND FLOW through a designated Committee Ministry of Finance Implementing Agency (Special Designated special programme account Ministry of Science. Account at the NRB) Technology & created at the Ministry of Environment (MoSTE) Finance (MoF) for the sole purpose of implementing Climate Change Program Project Mgmt Unit Coordination committee UNDP Technical Support the NCCSP project, which (CCPCC) will be managed by the PMU established within the MoSTE. The NCCSP project Ministry of Federal Affairs budget is reflected in the and Local Development government’s Red Book.

This arrangement is also Implementing Partners DDC E.E Units, Local a typical donor recipient Organisations approach used for several years in executing development Coordination projects in Nepal. The figure Line of Management 11 reflects the governance Fund flow Figure 11: Governance structure and fund flow structure and fund flow mechanism for the NCCSP/ LAPA mechanism of NCCSP.

4.2.3 Case III – Pilot Programme for Climate Resilience (PPCR)

Pilot Programme for Climate Resilience (USD 50 million grant and USD 36 million (PPCR) is one of the programmes under concessional loan). However, the total the Strategic Climate Fund of the Climate budget of the project amounts only to USD Investment Funds (CIF) established to 82.3 million. ‘Initiate and support broad-based strategies to improve and integrate climate risk The Asian Development Bank (ADB), the and resilience into national development International Finance Corporation (IFC) planning.” It comprised of five components and the World Bank administer PPCR in and USD 86 million has been committed Nepal. Finding the Money 29 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

A. Implementation and Institutional Arrangement for PPCR

MoSTE is the focal Ministry for the PPCR The donor and government agencies in Nepal. MoSTE directly implements involved in implementation of PPCR are part component 3 of the project while it of the CCPCC. The formation of this body is only coordinates the other components the output of the work under component implemented by others government 3 overseen by ADB. With support from ministries and departments. The ADB the WB and ADB, government institutions and WB will administer their respective involved in project implementation have components through the government set up Project Management Units at their implementing agencies while IFC will respective agencies to carry out the work. engage with the private sector. IFC implements its work through private sectors will only inform the relevant government agencies for coordination.

B. Fund Flow Mechanism

The PPCR is funded through a mixture of grant and PPCR/World Bank concessional loan. A large Inter-Ministerial portion of the PPCR budget is Project Steering reflected in the government’s Committee (MPSC) Implementing Agency FUND FLOW Ministry of Science. Ministry of Finance budget called the Red Technology & (Special Designated Climate Change Environment (MoSTE) Account at the NRB) Book. A special designated Program Coordination account was created at the Committee (CCPCC) Nepal Rastra Bank (NRB) in coordination with the Implementing Components – Department of Hydrology & Ministry of Finance for each Meteorology (DHM) Ministry of project component. The IFC Agriculture Development (MoAD) Technical Committee Project Management Unit component doesn’t follow this -one each at DHM and MoAD process and is not reflected in the Red Book. Though the project documents Implementing Partners DDC, Local level Coordination outline the decision-making Organisations modality, some government Line of Management representatives expressed Fund flow Figure 12: Governance structure and fund flow mechanism the concern that greater component 2 of PPCR. responsibility for decisions 30 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

lies with the development partners, such pioneering of new ideas for financing and as MDBs and other donors, than with the effective implementation of climate change government. projects. It would be beneficial to explore development of new and innovative The PPCR implementation model executed models for climate funding such as the by these institutions is no different from that idea of a Climate Change Fund as stated of their business as usual model. Figure 12 in Nepal’s Climate Change Policy. Such reflects the governance structure and fund models must ensure accessible, transparent flow mechanism for component 2 of the PPCR and accountable delivery of climate finance project titled ‘Building Resilience to Climate- from the central to sub-national levels in Related Hazards’ managed by the World Bank. the spirit of National Climate Change policy A similar model is utilized by ADB. which commits that at least 80 per cent of the climate finance must be allocated for Mapping of governance and fund flow grassroots level activities. Establishment of a mechanisms of major climate change Climate Change Fund with a legal mandate, adaptation projects indicated that donors governing structure and functions as and development partners have followed envisioned by the National Climate Change their conventional development assistance policy can be a positive step forward for models in use for many years. There effective management of climate finance in appears to be limited innovation and Nepal. Finding the Money 31 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

5 Conclusions

The following points summarize the key conclusions from this stock taking study.

Based on the objective criteria developed in this study only 45.79 per cent of total financial donor commitments classified as adaptation relevant by the Rio Markings were found to be related to climate change adaptation in part or in full. Over 50 per cent of the financial commitments were found to be unrelated to adaptation and in 1 some cases not even related to climate change. This calls into question the current application and utility of the Rio markers. This requires further research.

Only 2.6 per cent of funding for adaptation projects in Nepal is from financial mechanisms within the UNFCCC regime. This opens up questions for further research to understand why there appears to be a preference to 2 provide finance outside UNFCCC mechanisms. The figures indicate that the first order recipient of adaptation funding in Nepal is national government agencies with 69.15 per cent of total funding. Major projects examined in this study are led and implemented by government institutions. However, the study interview revealed questions over government resources 3 management capacity and the extent of donor influence in these projects. These are areas that merit further research to obtain a deeper understanding of these aspects of aid governance and their implications.

Sector wise distribution of funding is highly unbalanced as one sector has received 44.36 per cent of funding and another only 0.01per cent. Both of these sectors are among the six priority sectors in the NAPA. Two priority sectors in the NAPA have zero funding. It is important to further analyse why certain sectors are attracting more 4 funding and what an appropriate balance among sectors would be. Mapping of governance and fund flow mechanisms of major climate change adaptation projects indicates that donors and development partners have followed conventional development assistance models in use for many years. It would be beneficial to explore development of new and innovative models for climate funding such as 5 the Climate Change Fund as outlined in Nepal’s Climate Change Policy. Nepal’s climate change policy states that 80 per cent of the climate finance must be allocated for grassroots level activities. The projects covered under this study were at their initial stage of implementation, which made it 6 difficult to fully assess this aspect. It is an area that requires further research and monitoring. A Multi-stakeholder coordination mechanism called the MCCICC is established at MoSTE. In addition to this, several other donor and programme/project level coordination committees exist. These multiple mechanisms are creating confusion among line ministries and implementing agencies. It would be beneficial to examine the 7 potential benefits of more streamlined coordination mechanism for all stakeholders. Tracking the effectiveness of climate finance in reaching local communities and fulfilling government policy is 8 beyond the scope of this study. However, it is important for future studies to examine this issue. It was beyond the scope of this report to differentiate climate finance from ODA. However, there is a need of internationally agreed criteria to define climate finance so that it can be accurately and transparently tracked. This is also necessary for donors to comply with their commitments under current agreements, particularly that 9 climate finance is new and in addition to ODA. 32 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal MULT Recipient Recipient type RGN RGN RGN RGN MULT RGN MULT MULT MULT RGN Not Specified RGN RGN *IM Recipient DSCW DHM & MoAD MoSTE *IM IFC *IM UNDP UNDP UNDP *IM Other. MoSTE MoSTE Disbursement Disbursement year 2011 2011 *IM 2012 2011 2011 2011 2012 2011 2011 2010 2010 *IM 2013 210000 Total Total Disbursement (in USD) 180000 *IM 837251 *IM *IM *IM 59652 *IM 200000 36985.53949 284832.7259 *IM 11041158 2011 Commitment year 2011 2011 2012 2011 2011 2011 2011 2011 2011 2010 2010 2010 2010 230000 Total Total Commitment (in USD) 28167000 31000000 7163000 300000 8730000 5000000 63500 6300000 200000 816000 3082.501931 10880000 10744000 Multi-Sector Sector Multi-Sector Climate Induced Climate Disaster Capacity Building Multi-Sector Multi-Sector Forest and Forest Biodiversity Climate Induced Climate Disaster Climate Induced Climate Disaster Multi-Sector Multi-Sector Multi-Sector Multi-Sector Multi-Sector A Revised Criteria AFAI by Study A A A A A A A A A A A A A 2 Adaptation Adaptation Marked by donor 2 Not marked Not marked 2 2 2 Not marked 2 2 2 2 Not marked Not marked Design of national Strategic Programmes Programmes Strategic Design of national (SPCR) (phase 1 Resilience Climate for funding) Project name Project Building Climate Resilience of Resilience Building Climate Eco-Regions in Mountain Watersheds 1 - PPCR Component (ADB) Building Resilience to Climate Related Related Climate to Building Resilience 2 - PPCR Component Hazards Mainstreaming Climate Change Risk Climate Mainstreaming - PPCR in Development Management 3 Component Preparatory grant for PPCR Component 4 PPCR Component for grant Preparatory Building Climate ResilientBuilding Climate Sector Private through Communities 4 (IFC)Participation - PPCR Component Enhancing Climate Resilience of Resilience Enhancing Climate Species (World Bank) - PPCR Endangered 5 Component Community Based Flood & Glacial Based Flood Community Outburst Lake Risk Reduction - Project – LDCF Grant Preparation Community Based Flood and Glacial Lake and Glacial Lake Based Flood Community Outburst Risk Reduction – LDCF National Adaptation Programme of Programme Adaptation National Change – LDCF Climate Action to Support to GCCA - For NCCSP Support - For GCCA to Nepal Climate Change SupportNepal Climate - ADHOC SUPPORT Programme Support to GCCA - For NCCSP Support - For GCCA to Nepal Climate Change SupportNepal Climate Resilience - Building Climate Programme in Nepal Dedicated Dedicated Fund Climate Donor type Dedicated Dedicated Fund Climate Dedicated Dedicated Fund Climate Dedicated Dedicated Fund Climate Dedicated Dedicated Fund Climate Dedicated Dedicated Fund Climate Dedicated Dedicated Fund Climate Dedicated Dedicated Fund Climate Dedicated Dedicated Fund Climate Dedicated Dedicated Fund Climate Bilateral Bilateral Bilateral Bilateral Donor name Projects National Climate Investment Funds Climate Climate Investment Funds Climate Climate Investment Funds Climate Climate Investment Funds Climate Climate Investment Funds Climate Climate Investment Funds Climate Climate Investment Funds GEF GEF GEF Cyprus United Kingdom United EU United Kingdom United Annex I: List of projects covered in this study I: List of projects covered Annex Finding the Money 33 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal Not Specified RGN RGN RGN RGN RGN INGO IOTH INGO RGN RGS RGN RGN RPRIV RPRIV Other. MoSTE MoFSC MoFSC MoFSC MoFSC TMI International International Maize and Wheat Centre Improvement (CIMMYT) WWF in sub- partnership with CARE, NTNC and FECOFUN Ministry of Education Kathmandu valley supply water board management Ministry of Local Development Department of Water Supply and Sewerage Federation of Federation Nepalese Chambers and of Commerce Industry Federation of Federation Nepalese Chambers and of Commerce Industry 2010 2012 2013 2013 2013 2011 *IM *IM 2011 *IM *IM *IM *IM 2013 2013 44932.97297 300000 1999492 3417487 8173172 1422912 *IM *IM 9000000 *IM *IM *IM *IM 3660921 1013669 2010 2012 2012 2011 2011 2011 2011 2011 2011 2011 2011 2011 2009 2011 2009 *IM 300000 13718897 17226529 32310178 3400000 259999 700000 29947097 65500000 80000000 *IM 45100000 20000000 1510000 Multi-Sector Multi-Sector Forest and Forest Biodiversity Forest and Forest Biodiversity Forest and Forest Biodiversity Forest and Forest Biodiversity Multi-Sector Agriculture and Agriculture Security Food Forest and Forest Biodiversity Multi-Sector Water supply Water and other municipal infrastructure and services Multi-Sector Water supply Water and other municipal infrastructure and services Agriculture and Agriculture Security Food Agriculture and Agriculture Security Food A A B B B B A A B NR NR NR NR A A 2 Not marked Not marked Not marked Not marked Not marked 2 Not marked Not marked 1 1 1 1 1 1 Nepal Climate Change SupportNepal Climate CHANGE FOR CLIMATE -COST Programme ADVISER Target Resource Assignment to to Assignment Resource Target of NCCSP component TA complement Multi Stakeholder Forestry Programme Programme Forestry Multi Stakeholder phase (MSFP) transition Multi Stakeholder Forestry Programme Programme Forestry Multi Stakeholder (MSFP) Multi Stakeholder Forestry Programme Programme Forestry Multi Stakeholder (MSFP) REDD-Forestry and Climate Change and Climate REDD-Forestry TF 094724) FCPF Funds Trust (World Bank Improving the Resilience of Vulnerable Vulnerable of the Resilience Improving Change - Climate to Groups Population (ICI) Initiative Climate International Hill Maize Research Programme (HMRP) Programme Hill Research Maize Hariyo Ban (Green Forests) Programme Forests) Ban (Green Hariyo School Sector Programme Kathmandu Valley Water Supply Water Kathmandu Valley Project Improvement Support for Targeted and Sustainable Targeted Support for Highly for Programmes Development Groups Marginalized Second Small Towns Water Supply and Water Towns Second Small SectorSanitation Project High Mountain Agribusiness and High Agribusiness Mountain (HIMALI) Improvement Livelihood Project TA - High Mountain Agribusiness and - High Agribusiness Mountain TA (HIMALI) Improvement Livelihood Project Bilateral Multilateral Bilateral Bilateral Bilateral Dedicated Dedicated Fund Climate Bilateral Bilateral Bilateral Multilateral Multilateral Multilateral Multilateral Multilateral Multilateral United Kingdom United UNDP Finland Switzerland United Kingdom United World Bank World Germany US FSF US FSF ADB ADB ADB ADB ADB ADB 34 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal RGN MULT MULT RGN MULT MULT MULT MULT MULT RGN MULT DNGO MULT DNGO DNGO DNGO DOTH DNGO Ministry of Irrigation UNDP UNDP (Direct Execution) *IM UNDP (Direct Execution) FAO UNDP (Direct Execution) UNDP UNDP (Direct Execution) MoSTE *IM NGOs and civil society Multilateral Multilateral Organisations CARE Österreich CARE Österreich CARE Österreich Indirect Belgium specified general/not USC Canada *IM *IM 2011 2012 2011 2012 2011 2012 2011 2011 2011 2011 2011 2010 2011 2011 2010 2010 *IM *IM 2706759 749225 74460 241385 41415 490598 44122 152146 9441 309533.636 125139.0434 14344.37086 7855.951057 139914.9317 343009.2715 46243.44787 2012 2011 2011 2009 2011 2010 2011 2009 2011 2011 2009 2011 2011 2010 2011 2011 2010 2010 11000000 2706758.72 2879439 749272 76301 103890 41415 490598 45000 170122 26000 419920.553 309533.636 *IM 73971.07898 *IM *IM 387944.0885 Agriculture and Agriculture resources natural Disaster RiskDisaster Management Environmental Environmental policy and administrative management Disaster RiskDisaster Reduction Environmental Environmental policy and administrative management Climate Induced Climate Disaster Agriculture and Agriculture Security Food Disaster Relief Disaster Environmental Environmental policy and administrative management Multi-Sector Urban Settlement and Infrastructure Multi-Sector Disaster Disaster & Prevention Preparedness Climate Induced Climate Disaster Climate Induced Climate Disaster Climate Induced Climate Disaster Agriculture Industry DA-A DA-A DA-A DA-A DA-A A A DA-A DA-A A A DA-A DA-A A A A DA-A DA-A 1 Not marked Not marked Not marked Not marked Not marked Not marked Not marked Not marked Not marked Not marked 1 1 2 2 2 1 1 Water Resources Project Preparatory Preparatory Project Resources Water Facility Comprehensive Disaster Risk Disaster Comprehensive (CDRMP) Programme Management Disaster RiskDisaster Programme Management Disaster RiskDisaster Reduction the National at Nepal II Level- Disaster RiskDisaster Reduction Enhancing capacities for climate change climate Enhancing capacities for & disaster Capacity for Climate Change Climate Capacity for Koshi Early Recovery Project (KERP) Koshi Early Recovery Project Koshi Early Recovery Project Action Plan to Climate Change Climate to Action Plan Cities and Climate Change Initiatives Cities and Climate TEAR Australia ANCP Partnership TEAR Australia WFP Disaster Management Exercise Exercise Management WFP Disaster Capability NGO/EU co-finance: Disaster prevention prevention NGO/EU co-finance: Disaster Western in areas in rural programme groups marginalized Nepal for NGO/EU co-finance: SAMRAKSHAN - prevention community based disaster Nepal Western and preparedness, NGO/EU co-finance: Disaster prevention prevention NGO/EU co-finance: Disaster Western in areas in rural programme groups marginalized Nepal for Appui logistique à l’enseignement et à l’enseignement Appui logistique de capacité renforcement l’agriculture, civile dans le Kalkide la société districte USC Canada - Programme 2010-2015 / - Programme USC Canada 2010-2015 - Programme USC Canada Multilateral Multilateral Multilateral Multilateral Multilateral Multilateral Multilateral Multilateral Multilateral Multilateral Multilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral ADB UNDP UNDP UNDP UNDP UNDP UNDP UNDP UNDP UNDP UNHABITAT Australia Australia Austria Austria Austria Belgium Canada Finding the Money 35 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal DNGO DNGO DNGO RNGO RNGO RNGO RNGO RNGO RNGO DNGO DNGO DNGO RNGO DNGO RNGO DNGO RNGO RNGO RNGO DPRIV USC Canada USC Canada USC Canada ISET - Nepal *IM *IM *IM *IM *IM *IM *IM *IM *IM *IM *IM *IM *IM *IM *IM Skovdyrkerforeningen 2010 2010 2010 2011 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011 57804.30984 104057.4646 23121.72394 6321 101190.3963 340414.193 170395.7416 741421.0538 233173.1189 84084.11541 4442.580668 63140.80899 349759.6784 46362.64897 39220.84742 1595179.549 174879.8392 174879.8392 170395.7416 837197.93 2010 2010 2010 2011 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011 484925.2572 872869.3458 193972.0443 *IM 101190.3963 340414.193 170395.7416 741421.0538 233173.1189 84084.11541 4442.580668 63140.80899 349759.6784 46362.64897 39220.84742 1595179.549 174879.8392 174879.8392 170395.7416 *IM General Environment Protection Agriculture Multi-Sector Multi-Sector Disaster Disaster & Prevention Preparedness Disaster Disaster & Prevention Preparedness Forestry Basic Health Unallocated / Unallocated Unspecified Agriculture Unallocated / Unallocated Unspecified Trade Policies & Policies Trade Regulations Government & Government Civil Society- general Unallocated / Unallocated Unspecified Unallocated / Unallocated Unspecified Government & Government Civil Society- general Agriculture Multi-Sector Multi-Sector General Environment Protection DA-A DA-A DA-A A DNA DNA DNA DNA DNA DNA DNA DNA DNA DNA DNA DNA DNA DNA DNA NR 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 USC Canada - Programme 2010-2015 / - Programme USC Canada 2010-2015 - Programme USC Canada USC Canada - Programme 2010-2015 / - Programme USC Canada 2010-2015 - Programme USC Canada USC Canada - Programme 2010-2015 / - Programme USC Canada 2010-2015 - Programme USC Canada Forest and Water Management for for Management Water and Forest Change Mitigating the effects of Climate in the Middle Nepal Hills, *IM *IM *IM *IM *IM *IM *IM *IM *IM *IM *IM *IM *IM *IM *IM A Step Closer: SupportingA Step development in the Karnali Zone Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Canada Canada Canada Canada Denmark Denmark Denmark Denmark Denmark Denmark Denmark Denmark Denmark Denmark Denmark Denmark Denmark Denmark Denmark Denmark 36 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal INGO RGN *IM *IM RGN *IM *IM RGN RGN *IM *IM INGO *IM *IM *IM ROTH *IM DGO MULT DNGO DNGO NATIONAL NGOs NATIONAL *IM *IM *IM *IM *IM Other Public sector (donor, sector (donor, Public other) recipient, Public sector(donor, sector(donor, Public other) recipient, OTHER OTHER International NGOs International Other Other Other Governments Other Other, Finnish Finnish Other, Meteorological Institute UNICEF Finnish NGO, Maailman NGO, Finnish WWFLuonnon Säätiö, Suomen Raha Finnish NGO, Maailman NGO, Finnish Luonnon WWFSäätiö Finland 2011 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 2011 2011 2010 2010 2011 2011 2010 2010 2010 2010 *IM 88211.92053 47562.91391 60774.83444 54429.13907 51619.86755 685792.9922 38092.32481 33286.98554 42533.37041 *IM 727364.1824 61735.2614 496668.3709 132132.1325 121572.3721 103124.0522 691592 *IM *IM 308388.0795 2011 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 2011 2011 2010 2010 2011 2011 2010 2010 2010 2010 215280 *IM *IM *IM *IM *IM *IM *IM *IM *IM *IM *IM *IM *IM 205298.0132 682668.2425 262381.8131 645245 12980132.45 1324417.219 *IM Capacity Building Energy Energy Energy Energy Energy Agriculture Energy Energy Energy Energy General Environment Protection Energy Water Supply & Water Sanitation Unallocated / Unallocated Unspecified General Environment Protection Unallocated / Unallocated Unspecified Climate Induced Climate Disaster Water Supply & Water Sanitation General Environment Protection Multi-Sector B NR NR NR NR NR NR NR NR NR NR M M NR NR DA-A NR A DA-A DA-A A 2 1 1 1 1 1 1 1 1 1 1 2 1 1 1 1 1 2 1 1 2 Strengthening the role of Non State of Non State the role Strengthening Change policy on Climate Actors in South Asia and enhancing formulation global influence their capacities to change negotiations climate Renewable energy project energy Renewable Renewable energy project energy Renewable Renewable energy project energy Renewable Renewable energy project energy Renewable *IM Contribution to the Preparation of the the Preparation to Contribution Strategy Development Nepal Agricultural Renewable energy project energy Renewable Renewable energy project energy Renewable Renewable energy project energy Renewable Renewable energy project energy Renewable VSBK Vertical Shaft Brick KilnsVertical and other VSBK SCP Sustainable Construction Practices Supply of Computer and Office Supply of Computer Equipment Regional Solid Waste Management Management Waste SolidRegional in Nepal Project Project preparation in Nepal preparation Project Strengthening of Environmental of Environmental Strengthening in Nepal Administration Project preparation in Nepal preparation Project Increased Capacity of Hydro Capacity of Hydro Increased Servicesmeteorological ICI-project Sanitation and Water for all in the for Water and Sanitation Change in Nepal of Climate context Integrating Sexual and Reproductive Sexual and Reproductive Integrating Health and Biodiversity NGO Support / Integrated river basin river NGO Support / Integrated Koshi River at management Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral EU EU EU EU EU EU EU EU EU EU EU EU EU Finland Finland Finland Finland Finland Finland Finland Finland Finding the Money 37 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal Not Specified DNGO DNGO RPRIV DNGO DNGO DNGO DGN DGN INGO MULT DGN DGN DGN DGN DGN DGN DNGO Other Finnish NGO, Maailman NGO, Finnish Luonnon WWFSäätiö Finland Finnish NGO, Maailman NGO, Finnish Luonnon WWFSäätiö Finland Public sector Public institutions Donor country-based NGO Donor country-based NGO Donor country-based NGO GIZ GIZ International NGO International UNDP, UNEP, IUCN UNEP, UNDP, GIZ GIZ GIZ GIZ GIZ GIZ Cesvi 2011 2011 2010 2010 2010 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 *IM 1189752.739 225165.5629 4565.56 101986.75 5548.22 1675791.3 40155.38 2144751.4 199385.0667 690000 81896.75 1738.15 2143.63 161290.32 111227.75 *IM 86536.05967 2011 2011 2010 2010 2010 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 869860.9566 *IM 874723.1788 4565.56 688741.72 643944.66 625695.22 13908124.3 40155.38 264746.94 3372637 837197.93 *IM 1738.15 2677.68 81896.75 4938.04 199385.0667 Forest and Forest Biodiversity Forest and Forest Biodiversity General Environment Protection Multi-Sector Multi-Sector Multi-Sector Government & Government Civil Society- general Government & Government Civil Society- general Government & Government Civil Society- general Agriculture and Agriculture Security Food Multi-Sector Multi-Sector Basic Health Multi-Sector Government & Government Civil Society- general Energy Energy General Environment Protection B B M B DA-A DA-A DA-A NR NR A A NR NR NR NR M M DA-A 1 1 1 1 1 1 1 1 1 2 2 1 1 1 1 1 1 2 Forest Resource Assessment in Nepal Assessment Resource Forest NGO Support / Participatory natural of livelihoods, development management resource NGO Support / Reducing poverty in and equitable innovative through Nepal, carbon fin Dialogue with Business about Poverty Dialogue with Business about Poverty Reduction Change and Climate Local initiative for Food Security Food for initiative Local (LIFT) Transformation Integrated rural development and nature and nature development rural Integrated conservation, Nepal Initiating and Supporting a Process Initiating and Supporting a Process of the Human Implementation towards in Nepal Food Right to Sub National Governance Sub National Promoting Independent Media Promoting Increasing climate change resilience of change resilience climate Increasing in Humla and communities vulnerable Jumla districts, Nepal Ecosystem Based Adaptation in Based Adaptation Ecosystem Mountain Ecosystems Management and Leadership Training Training and Leadership Management - Support Mountain Development for in the Processes ongoing Reform to - Hindukush – Pamir Himalaya Health Sector Support Programme Rural development Rural Management and Leadership Training Training and Leadership Management - Support Mountain Development for in the Processes ongoing Reform to - Hindukush – Pamir Himalaya Biomass Biomass Community-based land and forest land and forest Community-based in the Sagarmatha management Park National Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Finland Finland Finland Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Italy 38 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal RGN DGN DGN DGN DOTH DNGO DNGO INGO DNGO DNGO DNGO DNGO DNGO RNGO IOTH DNGO DNGO *IM RNGO RNGO Ministry of Foreign Ministry of Foreign Affairs KOICA KOICA KOICA KDI School of and Policy Public Management Redd Barna Norge Redd Barna Norge EMiS - Environmental EMiS - Environmental in the Movements South Framtiden i våre i våre Framtiden hender FORUT - for Solidaritetsaksjon utvikling Framtiden i våre i våre Framtiden hender Utviklingsfondet Utviklingsfondet *IM CGIAR Inter cooperation Inter Inter cooperation Inter *IM Centre for for Centre and Environmental Policy Agricultural Extension Research, and Development (CEAPRED) CEAPRED 2010 2010 2010 2010 2011 2010 2011 2010 2010 2011 2011 2011 2011 2011 2010 2010 2010 2011 2010 2010 6836780.97 10852 13444 9100 419920.553 11580.77591 349644.0424 93455.86897 56745.80197 -9642.43657 9713.449666 130392.8916 *IM 1108327.322 *IM 1483447.78 959048.6238 33969.91023 307284.9333 287714.5871 2010 2010 2010 2010 2011 2010 2011 2010 2010 2011 2011 2011 2011 2011 2010 2010 2010 2011 2010 2010 6836780.97 10852 13444 9100 6321 11580.77591 86536.05967 *IM 56745.80197 349644.0424 *IM *IM 130392.8916 2254283.138 47952.43119 *IM 6713340.366 *IM *IM 2263354.752 Forest and Forest Biodiversity Climate Induced Climate Disaster Post-Secondary Post-Secondary Education Health, General Post-Secondary Post-Secondary Education Disaster Disaster & Prevention Preparedness Disaster Disaster & Prevention Preparedness General Environment Protection Communications Agriculture Communications Agriculture Agriculture Climate Induced Climate Disaster Agriculture Agriculture Agriculture Agriculture Agriculture Agriculture B A NR NR NR DA-A DA-A NR NR DA-A NR NR NR A DA-A NR DA-A NR NR DA-A 2 2 2 1 1 1 1 1 1 1 2 1 1 2 1 1 1 1 1 1 Forest Preservation Programme Preservation Forest Climate Change and Disaster Prevention Change and Disaster Climate Analysis of COMS Data of COMS Analysis Eco-village Planning and Maintenance Planning Eco-village Master’s Programmes for International International for Programmes Master’s Students Disaster RiskDisaster Reduction – Nepal Disaster RiskDisaster Reduction – Nepal UF - Water management Water UF - Fredskorpset personnel exchange Fredskorpset Gender and Women’s Rights - Women’s Gender and and livelihood Empowerment Peace Corps, FK Norway, personnel FK Norway, Corps, Peace exchange Peace Corps, FK Norway, personnel FK Norway, Corps, Peace exchange Peace Corps, FK Norway, personnel FK Norway, Corps, Peace exchange River Protection Works in East Chitwan Works Protection River SSMP Sustainable Soil Management SSMP Sustainable Soil Management SSMP Sustainable Soil Management SSMP Sustainable Soil Management Vegetable Seed Project Vegetable Vegetable Seed Project Vegetable Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Japan Korea Korea Korea Korea Norway Norway Norway Norway Norway Norway Norway Norway Switzerland Switzerland Switzerland Switzerland Switzerland Switzerland Switzerland Finding the Money 39 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal *IM *IM IOTH IOTH DNGO *IM RNGO *IM *IM MULT RGN Not Specified *IM *IM *IM *IM *IM *IM *IM DGN Not Specified Not Specified Not Specified *IM *IM CGIAR CGIAR Inter cooperation Inter *IM LI-BIRD *IM *IM UNDP Third Country Third Government co-(Delegated operation) Other. Other. Other. OTHER Other. Other. Other. Other. Donor Government Other. Other. Other. 2011 2011 2010 2010 2010 2010 2010 2010 2011 2010 2011 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011 2011 2011 578841.2985 901713.2552 474729.0688 300227.2945 1476934.881 893780.5697 220705.8598 75951.85576 681920.6492 509652.5097 86258.76884 155673.5907 179.2895753 248239.6139 1544401.544 1361239.552 14012704.9 10031.13514 1984151.398 201601.4672 6799.855723 37600.94582 3850895.495 2011 2011 2010 2010 2010 2010 2010 2010 2011 2010 2011 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011 2011 2011 *IM *IM 3884146.926 *IM *IM *IM *IM *IM 563570.7845 *IM 376362.6162 *IM *IM *IM *IM *IM *IM *IM 14853780.8 201601.4672 16030.7791 124047.7076 56075.66528 Agriculture Agriculture Agriculture Agriculture Forestry Unallocated / Unallocated Unspecified Agriculture Agriculture Multi-Sector Capacity Building Capacity Building Capacity Building Agriculture Transport & Transport Storage Multi-Sector Multi-Sector Multi-Sector Transport & Transport Storage Transport & Transport Storage Multi-Sector Disaster RiskDisaster Management and Earthquake Disaster RiskDisaster Management and Earthquake Disaster RiskDisaster Management and Earthquake NR NR NR NR NR NR NR NR NR A A A NR NR NR NR NR NR NR A NR NR NR 1 1 1 1 1 1 1 1 1 2 2 2 1 1 1 1 1 1 1 2 2 2 2 Vegetable Seed Project Vegetable Vegetable Seed Project Vegetable NARC/CIMMYT Hill Project Maize NARC/CIMMYT Hill Project Maize NSCFP N-S Community Forestry Project Forestry NSCFP N-S Community Coordination OfficeKathmandu Coordination Home garden Project Home garden Small Actions South Asia Power Plant Extension SCECO Plant Power Multilateral Organisation for Support for to Organisation Multilateral Change Programme Climate Support Change Unit Climate to Consultancies Climate Change Climate Consultancies Procurement of Goods for Agricultural Agricultural of Goods for Procurement Support Plan Programme Perspective Non Budget Support Rural Reconstruction Sector & Rehabilitation Programme Development SDC Agriculture Construction of Rural Bridges Construction of Rural Capital -Programme Rural Access Programme - Capital Programme Access Rural Consultancies Rural Reconstruction Rural Consultancies Sector & Rehabilitation Development Programme Consultancies Rural Access Programme Programme Access Rural Consultancies II Phase Global Climate Generation Global Climate Risk Consortium Support UN Secondment to coordinate Nepal Risk coordinate to UN Secondment Reduction Consortium Support Build Earthquake to Resilience Costs in Nepal - Design Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Switzerland Switzerland Switzerland Switzerland Switzerland Switzerland Switzerland Switzerland Switzerland United Kingdom United United Kingdom United United Kingdom United United Kingdom United United Kingdom United United Kingdom United United Kingdom United United Kingdom United United Kingdom United United Kingdom United United Kingdom United United Kingdom United United Kingdom United United Kingdom United 40 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal RNGO INGO *IM *IM *IM *IM IPRIV *IM *IM Not Specified RGN DOTH Not Specified *IM DGN DNGO DNGO DNGO DNGO RNGO s) s) ngo ngo and civil society Non-governmental Non-governmental ( organisations and civil society Non-governmental Non-governmental ( organisations Other. Other. Other. Other. IMC Worldwide IMC Worldwide Ltd Other. Other. Other MoSTE University of Colorado University *IM *IM AusAid USC Canada USC Canada USC Canada USC Canada ISET-Nepal 2011 2010 2011 2011 2011 2011 2011 2011 2011 2011 2012 *IM *IM *IM 2012 2011 2011 2011 2011 2011 1727046.621 5011583.012 1227505.835 34198.66945 376362.6162 8070575.665 743344.0205 672640.3655 843.9083039 104427.9416 750000 *IM *IM *IM 101276 35870.99383 89677.48458 71741.98767 1546.860783 424820.5439 2011 2010 2011 2011 2011 2011 2011 2011 2011 2011 2012 2011 2011 2010 2012 2011 2011 2011 2011 2011 843.9083039 *IM 12023.08432 *IM *IM 508185.2677 12810530.91 *IM *IM 419669.766 2000000 6000000 1900000 12000000 101276 *IM *IM *IM *IM *IM Capacity Building Transport & Transport Storage Transport & Transport Storage Multi-Sector Transport & Transport Storage Transport & Transport Storage Multi-Sector Transport & Transport Storage Transport & Transport Storage Multi-Sector Multi-Sector Climate Induced Climate Disaster Multi-Sector Food security Food Water Security Water Agriculture Multi-Sector General Environment Protection Industry Research and Research Publication Multi Country ProjectsMulti Country NR NR NR NR NR NR NR NR NR DA-A A A A NR A DA-A DA-A DA-A DA-A A 2 1 2 1 1 1 1 1 1 1 Not marked Not marked Not marked Not marked Not marked 1 1 1 1 1 Climate Change Conference in Dakar Change Conference Climate Strategic Partnership Agreement With With Agreement Partnership Strategic Nepal HELVETAS DFID Nepal - Strategic Programme Programme DFID Nepal - Strategic Review Construction of Rural Bridges Construction of Rural Capital -Programme Consultancies & Project Expenses Rural Expenses Rural & Project Consultancies II Phase Programme Access Impact and Research Evaluation Rural Access Programme - Capital Programme Access Rural Consultancies Rural Reconstruction Rural Consultancies Sector & Rehabilitation Development Programme Non Budget Support Rural Reconstruction Sector & Rehabilitation Programme Development Research into long term impacts long term of into Research in the Koshi hills of Nepal development Initiative for Climate Change Adaptation Climate for Initiative Security and Glacial Melt Environmental Adaptation in Asia Adaptation Food assistance programmes assistance Food South Asia Water Initiative - Climate - Climate Initiative Water South Asia Change and Water USC Canada - Programme 2010-2015 / - Programme USC Canada 2010-2015 - Programme USC Canada USC Canada - Programme 2010-2015 / - Programme USC Canada 2010-2015 - Programme USC Canada USC Canada - Programme 2010-2015 / - Programme USC Canada 2010-2015 - Programme USC Canada USC Canada - Programme 2010-2015 / - Programme USC Canada 2010-2015 - Programme USC Canada Publication and Dissemination Support and Dissemination Publication Change in South Climate to : Adaptation Asia Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral United Kingdom United United Kingdom United United Kingdom United United Kingdom United United Kingdom United United Kingdom United United Kingdom United United Kingdom United United Kingdom United United Kingdom United United States United US FSF US FSF US FSF Australia Canada Canada Canada Canada Canada Finding the Money 41 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal INGO INGO IOTH DGN INGO INGO DNGO MULT MULT International NGOs International International NGOs International Other, institutions Other, GIZ University, college college University, or other teaching institution, research or think-tank institute Clean Air Initiative for for Clean Air Initiative Asian Cities PRIO - International PRIO - International Research Peace Oslo Institute, World Bank World UNDP 2011 2011 2011 2011 2011 2011 2011 2011 2011 691660.178 36126.25139 254118.7848 4938.04 165439.6559 19172.6439 267637.2979 1070549.192 104134.8477 2011 2011 2011 2011 2011 2011 2011 2011 2011 27880000 *IM 294559.2325 5548.22 988179.3366 9713.449666 *IM 3013643 104134.8477 Dev. Food Aid/ Food Dev. Security Food Ass. Industry Forestry Multi-Sector Water Supply & Water Sanitation General Environment Protection Water Supply & Water Sanitation Water Supply & Water Sanitation General Environment Protection A M B B DA-A M DA-A DA-A A 2 1 1 1 1 2 1 1 2 2009-2010 Global Programme On 2009-2010 Global Programme Development For Research Agricultural (ARD) Sustainable & Efficient Industrial Bhutan and Nepal (SEID) Development Capacity building of forest inventory inventory Capacity building of forest in Nepal and methods and techniques Vietnam Capacity Building for sustainable urban Capacity Building for in Asia - City Development development Asia (CDIA) for Initiative PRIO-BIPSS collaboration on Water Water on PRIO-BIPSS collaboration in Bangladesh & Southscarcity Asia Peace Corps, FK Norway, personnel FK Norway, Corps, Peace exchange PRIO-BIPSS collaboration on Water Water on PRIO-BIPSS collaboration in Bangladesh & Southscarcity Asia WB SAWI (South Asia Water Initiative) Water (South Asia WB SAWI Climate financing and aid effectiveness Climate Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral EU EU Finland Germany Norway Norway Norway Norway Sweden *IM=Information Missing Website Bank World Website, UNDP Oxfam Nepal, ODI-WRI, IATI, Website, CRS 2010, 2011, DCR 2011/12, GCCA ICIMOD, CFU, AMP-GoN, of data: ADB, Sources 42 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

Annex II: Criteria used for further analyzing adaptation relevance of the project that was Rio marked

As a standard, following definitions have been used throughout the study as a basis for separating adaptation from mitigation projects. Those projects which fit into both of these definitions have been marked ‘Both Adaptation and Mitigation’ while those falling into none of these definitions have been marked ‘Non-climate change relevant’ projects.

Adaptation: “Adjustment in natural or human systems in response to actual or expected climatic stimuli or their effects, which moderates harm or exploits beneficial opportunities” (IPCC, 2001).

Mitigation: “An anthropogenic intervention to reduce the sources or enhance the sinks of greenhouse gases” (IPCC, 2001).

Yes (√) Relevance/Marking Part of the project documentation Project Type Definition or No (corresponding to Rio that validates the definition1 (×) Marking definition) Title of the project clearly shows adaptation √ 2 relevance Goals, objectives and outcome clearly show √ 2 Meets IPCC 2001 adaptation relevance A (Pure adaptation) definition of √ Description of the project clearly shows adaptation √ 2 adaptation relevance The project clearly meets the NAPA’s priority √ 2 adaptation goals (a national yardstick) DA-AR (development assistance projects Some activities The project is not explicitly climate change with some activities meet IPCC 2001 relevant but has some activities in the project √ √ 1 contributing towards definition of documentation which meet the IPCC definition climate change adaptation of adaptation adaptation) 1 or 2 (the categorization of Meets IPCC 2001 Title, goals, objectives, outcome or description mitigation projects into 1 or M (Mitigation) definition of √ √ of the project show mitigation relevance 2 is beyond the scope of this mitigation study) Meets IPCC 2001 The project has only some components of B (both adaptation definition of both adaptation and mitigation according to √ √ 1 and mitigation) both adaptation the definition, but not as the primary goal or and mitigation objective of the project. NR (climate change Meets IPCC 2001 The project has no single adaptation or not relevant with definition of × mitigation activity that satisfies the IPCC √ 0 no adaptation and adaptation or definition mitigation activities) mitigation Finding the Money 43 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

Step by step process undertaken to classify the adaptation projects*: 1 All projects were listed with the corresponding donor marking (0, 1 or 2). If the title of the project clearly showed adaptation relevance, 2 it was directly marked ‘2’. If the title was not clear, but goals, objectives and outcome of the 3 project clearly showed adaptation relevance, it was again marked ‘2’. If step 3 didn’t give a clear idea about the project, the detailed project description was looked at. If the project description showed clear adaptation relevance, it 4 was again marked ‘2’.

A stratified sampling was done to list a number of projects where revised marking (based on steps 2, 3 and 4) differed from donors’ original marking. These projects were scored against Nepal’s NAPA-priority-adaptation goals as a national yardstick to determine adaptation relevance. If the projects clearly fell under NAPA priorities, they were marked ‘2’ and if not, relevance was double 5 checked with steps 2,3 and 4 again. This final step ensured the robustness of the applied methodology to determine adaptation relevance.

*Steps 2, 3 and 4 were repeated for identifying and marking other categories of projects (M, DA-AR, B and NR) in a similar way. 44 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

Annex III: Year wise commitment and disbursement of adaptation fund from 2009 to 2012

Year Type Adaptation finance (in USD) Commitment 47875870 2009 Disbursement 0 Commitment 80401427 2010 Disbursement 46058612 Commitment 375784610 2011 Disbursement 44814237 Commitment 34181897 2012 Disbursement 3428111 Commitment 538243804 Total Disbursement 94300960

Annex IV: List of Interviewees

S. No. Name Organisation 1 Dr. Sabita Thapa Department of International Development (DfID) 2 Ms. Anupa Lamichhane and United National Development Programme (UNDP) Ms. Shanti Karanjit 3 Mr. Arjun Kumar Thapa Ministry of Science, Technology and Environment (MoSTE) 4 Mr. Sury Bahadur Singh Asian Development Bank (ADB) 5 Mr. Anil Pokhrel and World Bank Ms. Stephanie Borsboom 6 Ms. Moon Shrestha Ecosystem Based Adaptation in Mountain Ecosystem Project 7 Ms. Anupa Pant International Financial Corporation (IFC) 8 Mr. Akhanda Sharma Ministry of Science, Technology and Environment (MoSTE) 9 Mr. Shib Nandan Prasad Shah Ministry of Agriculture Development 10 Dr. Rishi Ram Sharma Department of Hydrology and Meteorology (DHM) 11 Dr. Jagannath Joshi Department of Soil Conservation and Watershed Management (DSCWM) 12 Mr. Batu K Uprety Individual Expert and Former Joint Secretary, MoSTE Finding the Money 45 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

Annex V: Questionnaire

A. Budget 6 The government policy says 80 per cent of the funds should go to the local level. 1 What is the total budget of the project? Is this possible in your project? If yes, 2 Verify the total pledge supported how and if not, why? amount for adaptation work, if given. 7 Is the project in line with Nepal govern- B. Financing related questions ment’s climate change policy? Or NAPA priority themes? 1 What is the priority of the climate change project? What are the areas covered? 8 What would be the ideal structural set- up in implementing climate adaptation 2 What is the funding for climate change projects? adaptation or mitigation (or both)? 9 What are the main challenges of the cur- 3 Is the support loan or grant (or both)? If rent structure for implementing adapta- loan what is the interest rate? tion projects? 4 Is the support additional to ODA? 10 Are there any other funding structures C. Governance and Structure you see more appropriate e.g. Global Fund in Nepal, Poverty Alleviation Fund 1 How is the money channeled into the (PAF), etc.? country? What are the institutions through which the funding is flowing? 11 What is the monitoring mechanism in Bilateral or multilateral, or both? the funded project? 2 Who are the implementing institutions – 12 How do you ensure transparency and government, private or NGOs? Are there accountability in the project? coordination systems in place? If so, how 13 How is gender issue addressed in the do they work? funded project? 3 How is the project linked to other adap- D. Enhancing the capacity of the tation projects? government 4 Views on governance and structural set up: how decentralized is it? 1 How is the project building the capacity of the government – local to national? 5 How is the funding channeled to the local level, how do the communities benefit? 2 Is the project helping build new institu- Do they participate in funding disburse- tions or structure in implementing adap- ment decisions? tation actions? 46 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

Annex VI: Examples of climate adaptation recipient types in Nepal

Recipient types Examples of Recipients MULT Multilateral World Bank, ADB, UNDP, IFC, FAO, UNEP, etc. RGN Recipient National government agencies such as Department of Soil Government Conservation and Watershed Management, Ministry of Science, National Technology and Environment, etc. RGS Recipient Kathmandu Valley Water Supply Management Board Government Sub-National RNGO Recipient NGO Institute for Social and Environmental Transition (ISET) – Nepal, Local Initiative for Biodiversity, Research and Development (LI-BIRD), Centre for Environmental and Agricultural Policy Research, Extension and Development (CEAPRED), etc. RPRIV Recipient Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Private ROTH Recipient - Other DGN Donor KOICA, GIZ, AusAid, etc. Government National DGO Donor Finnish Meteorological Institute Government Other DNGO Donor NGO CARE Österreich, USC Canada, ReddBarnaNorge, WWF SuomenRaha, Cesvi, etc. DPRIV Donor Private Skovdyrkerforeningen DOTH Donor Other KDI School of Public Policy and Management, University of Colorado, etc. INGO International The Mountain Institute, Clean Air Initiative for Asian Cities, etc. NGO IPRIV International IMC Worldwide Ltd Private IOTH International International Maize and Wheat Improvement Centre (CIMMYT), CGIAR, Other etc. UNSP Unspecified Unspecified Finding the Money 47 A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

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50 Finding the Money A Stock Taking of Climate Change Adaptation Finance and Governance in Nepal

Cover Photo: Conservation pond, Nawalparasi, Nepal Source: Oxfam archive

This conservation pond was constructed to enhance adaptive capacity of farmers to adopt to water shortage in the community.

OXFAM COUNTRY OFFICE, NEPAL Jawalakhel – 20, Lalitpur G.P.O. Box; 2500, Kathmandu, Nepal TEL: +977-1-5530574, 5542881, 5544308 EMAIL: [email protected] WEBSITE: www.oxfam.org.uk, www.oxfam.org