KATHMANDU – The Government of Nepal and the World Bank have signed loan and grant agreements for the $24 million (approximately Rs 2.8 billion) Forests for Prosperity Project ($6.1 million as grant and $17.9 million as concessional loan) to support Nepal for sustainable forestry and boost green recovery.
According to a joint statement issued on Friday, the project will contribute to transforming Nepal’s forest sector by improving sustainable forest management and developing a strong forest-based private sector.
These activities will result in multiple benefits for forest-dependent people in selected municipalities in Province 2 and Lumbini Province, including inclusive economic benefits, ecosystem services, and greater climate resilience, according to the statement.
Secretary at the Ministry of Finance, Sishir Kumar Dhungana, and the World Bank Country Director for Maldives, Nepal, and Sri Lanka, Faris Hadad-Zervos, signed the agreement.
Similarly, a project agreement was signed by the Chief Executive Officer of the Agriculture Development Bank Ltd, Anil Kumar Upadhyaya and the World Bank Country Director. The Agriculture Development Bank, as a project implementation entity, will design and pilot a credit line for establishing and strengthening forest-based small and medium enterprises, according to the statement.
“Strengthening local communities, for whom forests are a traditional safety net during times of crisis, is especially important in the COVID-19 era. In that same spirit, the project will facilitate Nepal’s forest-based private sector to invest in jobs and reduce dependence on timber imports,” Finance Secretary Dhungana quoted as saying.
The project is a key part of the government’s Relief, Recovery and Resilience (3R) plan and Nepal’s commitments to mitigate and adapt to climate change. Aligned with this 3R plan, development partners led by the World Bank and UK Foreign, Commonwealth and Development Office, coalesced around a “Green, Resilient, and Inclusive Development” framework to mobilize investments over the next three years to secure jobs and livelihoods, build resilience, strengthen social inclusion, enhance sustainability, and promote efficiency.
“The project will support 50 municipalities, which is a starting point for inclusive climate action and inclusive green economic growth based on Nepal’s comparative advantage. We are confident that if the project yields the expected outcomes, there will be opportunities to scale up the project and allow more people to benefit,” stated Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal, and Sri Lanka.