KATHMANDU: With the aim of addressing the challenges posed by climate change and effectively mobilizing international financial assistance, the government has proposed a new procedure. The Ministry of Finance has drafted the Climate Finance Mobilization Procedure, 2082, which is currently in its preliminary phase.
The draft has been circulated to concerned stakeholders for feedback and suggestions. Once finalized and implemented, the procedure is expected to serve as a milestone in Nepal’s efforts to address the impacts of climate change.
Prepared by the International Economic Cooperation Coordination Division of the Ministry of Finance, the draft prioritizes key areas such as loss and damage, climate adaptation, emission reduction, and carbon trading.
The procedure mandates that all policy decisions and programs be aligned with the Constitution of Nepal, existing laws, the government’s international commitments, the Development Cooperation Policy, the National Adaptation Plan, adaptation plans at the provincial and local levels, Nepal’s Nationally Determined Contributions (NDCs), the Sustainable Development Goals (SDGs), and the government’s annual policies and priorities.
Although Nepal has made a minimal contribution to global climate change, the country is facing its severe consequences — drying water sources, increased floods and landslides in mountainous regions, shifting snow lines, and the gradual darkening of snow-covered peaks. There are also changes in monsoon patterns, increasing the risks of natural disasters.
The draft aims to help Nepal tackle such emerging challenges. The Ministry of Finance has stated that internal resources alone are insufficient to meet the rising costs of climate response, and therefore, expanding access to external resources has become necessary.
The ministry is issuing the new procedure under the authority granted by Section 65 of the Financial Procedures Act, 2076. The draft also envisions the establishment of a Common Climate Fund to streamline climate finance, reducing fragmentation and duplication in financial mobilization.
According to the draft, funds allocated to provincial and local governments will be provided as conditional grants. These allocations will be based on indicators such as climate risk levels, local adaptation plans, and performance evaluations in climate-related actions.
If the private sector wishes to access climate finance, the draft requires proposals to be submitted to the Ministry through a recognized institution for approval.
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