Kick-off: Climate Change Project Facility in Nepal
FCG Finnish Consulting Group has been providing technical assistance to the Government and rural communities of Nepal in improving water resources management and sanitation conditions since 2006. The last project was jointly funded by the Government of Finland, the EU, and the Government of Nepal. This project ended in 2022.
Most recently, FCG was awarded the contract to design water resources and a value chain investment project called ‘Climate Resilient Landscapes and Livelihoods Project’, or CRLLP in short, to be implemented by the Ministry of Forests and Environment of Nepal. This is being funded by the Asian Development Bank.
Located in the Hindu Kush Himalaya region, bordering part of the Himalayan Mountain range, Nepal, with population of 30 million, is one of the countries that are most vulnerable to climate change. The climate change impacts already experienced in Nepal include changes in temperature and precipitation which range from droughts in the low-land Terai region to melting glaciers and reduction in snowfall, as well as changes in the amounts and intensity of rainfall contributing to floods and landslides in the mid-hills and downstream. The impacts on Nepalese life and livelihoods include increased water insecurity (water stress, drying of water sources, drought, floods), forest fires, damaged infrastructure, reductions in agricultural production and food insecurity, among many others.
The need for financing to build the nation’s adaptive capacity and resilience is USD 27 billion by 2030, according to the National Adaptation Plan which was completed in 2021. For comparison the Gross Domestic Product of the country was USD 36 billion in 2021. If equally divided the adaptation actions would constitute 7,5% of the GDP (in 2021).
Various countries and development financing institutions, including the Asian Development Bank (ADB) in the forefront, are committed to financing the building of the country’s adaptive capacity through investments in climate resilient infrastructure and livelihoods support. The most recent work in this aspect is the Climate Resilient Landscapes and Livelihoods initiative, which is currently in preparation phase with Technical Assistance provided by FCG. The expected value of the investment project under design is USD 35 million, with geographic focus in the western region of Nepal in the Karnali and Sudurpachim provinces.
“The inception mission has provided a good start for the project, and we have established good working relations between the ADB, the Ministry and the FCG team. We have agreed on the critical issues in good understanding with the Client i.e., defining the scope of the designs and kick-starting the climate risk and vulnerability assessment. Also, the need for the investments in principle were confirmed during the tour in the provinces. The visit also confirmed that there is a range of opportunities to build communities’ resilience on climate change impacts”, FCG Sustainable Development Manager Sini Pellinen comments.
The investment project is designed to improve water resources and land management. Water resource development includes developing small-scale water infrastructure like drinking water systems and irrigation systems. The development of land management will encompass plantations, run-off management, ground water recharge and nature-based disaster risk management. This includes protection from floods and landslides. In addition, the project will improve nature-based value chains, including medicinal and aromatic plants as well as non-timber forest products, bioenergy, and ecotourism. The investment project also encompasses the capacity building aspect through research, training and knowledge sharing initiatives.
Currently, the FCG team is fine-tuning the design scope and approaches in an inception mission together with the ADB and the government stakeholders. Over the next 10 months the task is to plan the USD 35 million investment project. This includes feasibility studies, sample designs of different types of infrastructure investments and value chain and capacity building initiatives, design of institutional and financial arrangements, carrying out due diligence (i.e. social and environmental safeguards), preparing cost estimates and procurement packages etc. The full draft loan documentation is expected to be submitted within the Spring of 2024.
