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On April 25, 2025, the Southasia Institute of Advanced Studies (SIAS) hosted a significant consultative session at Yalamaya Kendra, Patan Dhoka, exploring the “Opportunities and Challenges of Climate Finance for Inclusive and Resilient Development in Nepal.” The event brought together experts, practitioners, and stakeholders from government agencies, NGOs, academia, and the private sector to deliberate on pressing issues related to climate finance in the country. The session commenced with a welcome note from Ms. Gyanu Maskey, who outlined the objectives and structure of the event, comprising a presentation followed by a panel discussion.
Dr. Dilli Prasad Poudel SIAS presented a comprehensive analysis of the barriers to localizing climate finance in Nepal. Dr. Poudel emphasized the need for multi-sectoral engagement beyond a forest-centric model and highlighted inefficiencies in coordination, budget utilization, project monitoring, and data systems. The overall presentation of Dr. Poudel was focused on what factors are hindering the 80% sharing of climate finance to communities at the local level, as claimed by the National Climate Change Policy 2019 and the Local Adaptation Plan of Action 2019. He also pointed to the limited involvement of the private sector due to a low level of awareness and a bankability outlook among banks and industries.
The panel discussion, chaired by Ms. Kanchan Lama, featured distinguished speakers who shared diverse perspectives. Dr. Maheshwar Dhakal, Joint Secretary in the Ministry of Forest and Environment highlighted Nepal’s efforts through the upcoming Sagarmatha Sambaad and stressed the need to anchor climate finance in internal economic mobilization. Echoing ongoing concerns, he also reaffirmed that Nepal’s rich forest cover and vital ecosystem services continue to be undervalued in both national and international climate finance frameworks, underscoring the urgency of its recognition in global climate negotiations. Dr. Madhav Karki, Co-Founder and the President of the Centre for Green Economy Development (CGED) Nepal underscored the importance of institutional coordination and the alignment of climate finance with sustainable development goals for a systemic transformation. He reiterated that without clear communication and public understanding, climate finance would remain ineffective.
Dr. Shikha Thapa Magar, Executive Director of the Nepal Development Research Institute (NDRI), raised concerns on the absence of gender and social inclusion in the current climate finance policies. She stressed on the vulnerability of women and children, exacerbated by male migration, and advocated for bottom-up policy development. Similarly, Dr. Mani Nepal from South Asian Network for Development and Environment Economics (SANDEE) situated at International Centre for Integrated Mountain Development (ICIMOD), critiqued the top-down nature of Nepal’s climate finance strategies and called for increased accountability, inclusion, and sustainable local solutions such as rainwater harvesting.
Mr. Raju Pandit Chhetri, the Executive Director of the Prakriti Resources Centre (PRC) highlighted Nepal’s mid-tier performance among LDCs in accessing and utilizing climate finance and recommended a “follow the money” approach to enhance accountability. He emphasized Nepal’s Green Finance Taxonomy to stimulate private investment and highlighted the need to integrate climate finance discussions into national legislative processes.
The panel also discussed the limited role of the private sector. Ms. Khushbu Thapa Magar, the GCF Project Manager at the Nepal Investment Mega Bank (NIMB) emphasized the lack of private sector participation and proposed targeted awareness and subsidy programs to encourage investment in climate initiatives. Dr. Madhav Karki further pointed to the urgent need for institutional reform, improved coordination, and mainstreaming climate concerns across sectors, particularly considering the significant financial needs outlined in our National Adaptation Plan (NAP) 2021-2050 and the 2nd Nationally Determined Contribution (2nd NDC).
The session concluded with a vibrant Q&A session that brought critical issues to the fore, including the need for localized capacity building, the quantification of loss and damage, political interference in budgeting processes, and the necessity of innovative financing models. Professor Dr. Prem Sagar Chapagain from Tribhuvan University called for more tailored capacity-building efforts, particularly considering Nepal’s ecological diversity, and emphasized the need to address conceptual and institutional gaps. Mr. Daya Shrestha from NDRI and Ms. Sarina Lama from The Asia Foundation, raised important questions on the quantification of Loss and Damage (L&D), opportunities and challenges posed by reductions in development and climate aid, as well as Nepal’s transition from Least Developing Country group to Lower Middle Income Country Group. In responding, Mr. Chhetri acknowledged the complex nature of quantification of L&D, particularly non-economic L&D, and emphasized L&D being an unchartered territory for Nepal. Moreover, he stressed the need for innovative domestic funding mechanisms to cater to increasing instances of losses and damages in the country.
In their concluding reflections, Dr. Madhav Karki and Dr. Mani Nepal restated the urgency of transformation through education, behavioral change, and integrated planning. They emphasized the growing importance of migration as a climate adaptation strategy and called for a shift towards self-reliant financing. Dr. Shikha Thapa Magar highlighted the need for disaggregated, data-driven research to ensure inclusive policy-making, while Dr. Dhakal pointed to climate considerations increasingly being integrated into Nepal’s ministerial agendas.
Finally, Ms. Kanchan Lama wrapped up the session by emphasizing the need for inclusive, bottom-up approaches to governance and finance, and the importance of amplifying the voices of indigenous and marginalized groups. The event concluded on a hopeful note, recognizing that while Nepal faces considerable challenges in climate finance, there are immense opportunities for systemic reform, cross-sectoral collaboration, and the advancement of sustainable, resilient, and inclusive development.
