Technical Assistance Consultant’s Report Project Number: TA 7883-NEP January 2013 Nepal: Building Climate Resilience of Watersheds in Mountain Eco-Regions— Final Report Prepared by NIRAS Kathmandu, Nepal For the Government of Nepal This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design. I. THE DRAFT PROJECT PROPOSAL 1. I submit for your approval the following report and recommendation on (i) a proposed loan, and (ii) a proposed grant, both to Nepal for Building Climate Resilience of Watersheds in Mountain Eco-Regions Project. 2. The project1 aims to improve access to and enhance the reliability of water supply for domestic, livestock purposes and irrigation among communities living in the watersheds of Nepal river systems which are significantly vulnerable to climate change. The watersheds selected are climate sensitive and contain climate vulnerable communities. Project implementation will commence in two watersheds which lie in 6 hill districts in Far West Region: Achham, Baitaidi, Bajhang, Bajura, Dadeldhura and Doti. It may expand to adjacent watersheds. Access and reliability to water resources will be improved through a participatory program of integrated watershed management with interventions in upland areas to increase surface water storage and groundwater recharge, and to deliver water to locations where the community can use it. The communities in the project area will have more reliable water supplies in dry season. Major beneficiaries will be women and disadvantaged groups2. As the first large-scale intervention by ADB in watershed management in Nepal, the project will demonstrate participatory watershed management planning and build the capacity of all levels of the government for integrated watershed development specifically focussing on water resources. Institutional capacity for watershed planning, and for plan implementation and maintenance, will be increased by the project. Sub-watershed management committees3 will be established by drawing on the experience and resources of existing agriculture forestry and environment committees and community forest and other user groups. Training in watershed management planning will be provided to government staff. II. THE PROJECT A. Rationale 3. Watershed management is important for Nepal’s national economy to maintain upland areas as sources of water. These watershed areas comprise about 77 percent of total area and are home to just under 50 percent of total population of Nepal.4 4. The project is founded in the Nepal Strategic Program for Climate Resilience (SPCR) as well as the Government of Nepal’s (GON) National Adaptation Programme of Action (NAPA) in response to climate change, which was finalized in September 2011. CC studies in Nepal identify changes to climate patterns which will result in critical shortages of water for drinking, irrigation, and other uses. NAPA recommends urgent action to focus on effective and multi- purpose use of water resources, conservation of watershed areas and upgrading and expanding hydro-meteorological stations. NAPA proposed an environmental action plan on management of watersheds and aquatic ecosystems and priority actions for forests and biodiversity. The plan includes (i) climate change adaptation /water conservation /education /awareness program, (ii) climatically sensitive watershed management programs, including vegetation management to increase infiltration and a decrease in evapo-transpiration and improved recharge through conservation ponds and other mechanisms, (iii) community participation in the management of 1 The Asian Development Bank (ADB) provided project preparatory technical assistance. 2 Disadvantaged groups are defined in the supporting document, Gender and Social Inclusion Plan 3 The recommended structure, responsibilities and linkages for sub-watershed management committees are set out in Annex 2 of the PAM 4 Government of Nepal, 2011. National Population and Housing Census 2 watersheds to enhance climate change adaptation, (iv) control of landslides, erosion and other disturbances, (v) institutional capacity building of Government agencies at the central and local levels, and (vi) an institutional framework for coordinated and integrated development at the basin level. The Project will include these six elements. 5. Sub-watershed management plans have been prepared as pilots in 3 sub-watersheds during the PPTA period, including feasibility studies for 3 subprojects within the scope of these plans. Further sub-watershed management plans will be prepared and subprojects aimed at increasing water availability will be implemented and outcomes monitored and evaluated. Sub- watershed management committees (SWMC) will be established and involved in plan preparation and implementation. The SWMC will be linked to resource management arrangements at the district level through the District Management Committee. Project investments in infrastructure will be protected and enhanced by land use management which will increase ground cover and reduce soil erosion in the storage catchments. Actions will be taken to stabilize slopes and prevent land slips where these may affect the water sources. Planning processes have been documented and training developed. The project's interventions will be underpinned by watershed management capacity building at national, district and community levels. An awareness program on climate change issues related to water resources will be implemented at different levels. Two new District Soil Conservation Offices (DSCOs) will be set up - Achham and Bajura, the existing Dadeldhura DSCO office building will be reconstructed and additional office accommodation will be provided for the existing DSCO at Doti. 6. The project is in Nepal's confirmed project pipeline for Asian Development Bank (ADB) assistance and contributes to three of the country sector outputs, 2012–2014: (i) sustainable rural infrastructure, and (ii) accountable service delivery, and (iii) increased representation of target groups in governance structures. It is based on experience and techniques developed by DSCWM through a series of donor supported interventions, on lessons from international NGOs including International Centre for Integrated Mountain Development (ICIMOD), and on international experience in watershed management. It aims to link in with work by Nepal’s Local Adaptation Plan for Action on climate change which is being implemented at the village development committee level. B. Impact and Outcome 7. The design and monitoring framework is in Appendix 1. The expected impact will be that climate resilience in Nepal mountain communities is improved. The project’s outcome will be that communities significantly vulnerable to CC in watersheds in middle hills will have improved access to and enhanced reliability of water supply for domestic, stock and irrigation uses. By the conclusion of the project in 5 years and construction of improved water supplies, there will be improved access to water supplies of all types/uses for communities within the project area. In sub-watersheds where sub-projects target drinking water, the average time spent by women to collect water in dry season will be reduced by 50%. Water storage infrastructure will be implemented in at least 60 sub-watersheds and used for irrigated production, and 15% of forests and grazing areas will be regenerated in selected watersheds. C. Outputs 8. Three main outputs are envisaged: (i) Participatory watershed management planning to improve water security demonstrated; (ii) Subproject water storage and watershed management (that addresses the specific vulnerabilities of women and DAGs) implemented in priority 3 watersheds; (iii) Lessons for improving access to and reliability of water resources in vulnerable middle hill regions generated and used by DSCWM in strengthening its management of watersheds. 9. Watershed planning for improved water security. In each sub-watershed, the community will be encouraged to set up a sub-watershed management committee to act as a focal point for plan development and implementation. The committees will be structured so that they represent all the community in the sub-watershed. Draft sub-watershed management plans will be prepared through office studies and field inspections. The draft plans will be developed through consultation with communities at the village development committee level. Options for increased water storage and for use of improved water supplies will be discussed with these communities in the context of these comprehensive plans for managing land and water. The plans will be confirmed with the sub-watershed committees, approved by DSCWM and subprojects to improve water supplies implemented. Three pilot sub-watershed management plans were drafted during the PPTA as examples. Sub-watershed management committees will be established to discuss and confirm the 3 pilots. The pilot sub-watershed management plans will be replicated in sub-watersheds throughout the sample watershed areas, drawing on lessons learnt from implementation of subprojects. 10. Subproject water storage and watershed management. Subprojects will be designed within each sub-watershed plan as it is developed to achieve output (i).The subprojects will provide increased water storage thus improving