Regional Workshop on Options for an Innovative Climate Finance Regime for South Asia National Efforts on Climate Finance by the Government of Nepal 19 th -20 th August 2013 Delhi, India Arjun Kumar Thapa Vhisma Neupane Asha Sharma Binita Bhattarai Nepal 1

Presentation outline I. National Institutional arrangement II. Initiatives taken by the Government III. National Climate Finance Scenario IV. Ongoing projects and programs V. Issues 2

I. National Institutional arrangement a. National Planning Commission b. Chaired by the Rt. Hon. Prime Minister; Advises government on all aspects associated with periodic plans, programs, projects and foreign aid; key national institution for cross-sectoral coordination of programs Endorses development programs and budgets including climate change-related programs 3

b. Ministry of Finance focal agency for administering overall national budget, including the budget related to climate finance; Manages public finances and oversees the implementation of Annual Budget; c. Ministry of Science, Technology and Environment mandated to formulate, implement, monitor and evaluate policy, plans, and programs on environment, science and technology and climate change; NFP for the UNFCCC; Co-ordinates all climate change-related projects. 4

III. Initiatives taken by the Government Climate Change Council ◦ Chairmanship: Rt. Hon’ble Prime Minister; ◦ Provide policy guidance. Multi-stakeholder Climate Change Initiatives Co- ordination Committee (MCCICC): ◦ Chaired by MoSTE secretary; ◦ charged with improving communication and co-ordinating climate change initiatives (at program level) among concerned stakeholders. 5

PPCR, Component 3: Initiating support to develop capacity of MoSTE on accreditation process for the establishment of National Implementing Entity (NIE) for Adaptation Fund Board (AFB). Donor Compact on climate change: For donor harmonization and alignment around climate change initiatives; Provides basis for donors to act in a coordinated and coherent manner; 14 key development partners including EU, DfID, DANIDA, JICA etc. 6

Nepal Climate Change Policy, 2011 Envisions establishment of climate change fund and mobilization of financial resources from public and private as well as national and internal sources; Aims to disburse at least 80 % of available funds for climate change activities at the grass root level. Climate Change Budget Code In making clear and adequate definition of climate change in the administrative expenditure codes; A total of 83 codes were identified and classified in terms of relevance to climate change to: 7

◦ help delineate climate expenses; ◦ facilitate monitoring and effective implementation of climate change activities ◦ ensure investment for climate change programs; ◦ foster sector-wise climate activities; ◦ harmonize international support to sustain financial support needed in the long term. 8

II. National Climate Finance Scenario About 5% of the total budget of the government is directly related to CC financing; Around 25% of the overall budget is funded by donors; Around 76% of the climate change spend identified relates to adaptation activities; Around 60% to 70% of climate change expenditure is executed directly by Central Government Agencies; 9

10 Adaptation needs and resources identified by NAPA (Prioritized Projects) 1. Promoting Community-based adaptation through integrated management of agriculture water forests and biodiversity sector- US $50 M 2. Building and enhancing adaptive capacity of vulnerable communities through improved system and access to services related to agriculture development- US $ 44 M 3. Community based disaster management for facilitating climate adaptation- US $ GLOF Monitoring and Disaster Risk Reduction US $55 5. Forests and Ecosystem Management for supporting climate led adaptation innovations US $ Adapting to climate challenges in public health US $ 15 M 7. Ecosystem Management for Climate Adaptation US $ 31M

8. Empowering Vulnerable Communities through Sustainable Management of Water Resources and Clean 9. Energy Supply US $ 40M 9. Promoting Climate smart urban settlement US $ 30M Total US $ 350M 11

ON GOING PROGRAMS/PORJECTS 1. PPCR (Pilot Program for Climate Resilience) a. Building Climate Resilience of Watersheds in Mountain Eco-Regions (Administer by ADB). b. Building Resilience to Climate-Related Hazards. (Administered by WB). c. Mainstreaming Climate Change Risk Management in Development. (Administered by ADB). d. Building Climate Resilient Communities through Private Sector Participation ( Administer by IFC).

e. Enhancing Climate Resilience of Endangered Species. (Administer by WB). 2. Scaling-up 2. Scaling-up Renewable Energy Program (SREP): CIF funded; 3. Nepal Climate Change Support Program (NCCSP): EU/DfID 4. Economic Impact Assessment of Climate Change in key sectors of Nepal (CDKN/IDS/PRACTICAL ACTION); 5. Second National Communication (SNC):GEF 6. Technology Need Assessment (TNA): UNEP/GEF. 7. Community Based Flood and GLOFF Risk Reduction  UNDP/ICIMOD, Least Developed Countries Fund (LDCF), administered by GEF

IV. Some Issues Financial sustainability of current levels as well as meeting needs reflected in NAPA- challenge for Nepal; Many funding sources remain untapped due to insufficient overview and in-depth knowledge of the funds by the developing countries; lack of clarity on the sequence of actions to be taken in meeting the requirement of AFB for accreditation; 14

Funding been unpredictable and piecemeal. This has impacted on: ◦ long term national planning ◦ Commitment and ◦ delivery of resource and support to vulnerable communities; Donor compact achieve some success in improving donor co-ordination but does not bind them for financial commitments or modalities.

THANK YOU 16