Background

UNDP Nepal is transforming the climate finance landscape by moving from fragmented projects to a systemic approach that aligns public and private capital. The focus is on establishing national finance frameworks, launching secure digital infrastructure for carbon markets, and developing innovative risk-sharing instruments to unlock investment for a sustainable future. This work is part of the UNDP Climate Finance Network, supported by the UK FCDO CARA Programme. 

What we do

Developing bankable climate projects  

• The challenge: Creating a cohesive national strategy to unlock both domestic and international investment for Nepal's climate priorities.
• The approach: Establish a national blended finance framework, developing an investment-ready project pipeline, integrating climate budget tagging (CBT) into national systems, and expanding climate insurance.
• The impact: Mobilization of public and private capital, stronger institutional capacity, and enhanced financial protection for vulnerable communities against climate-induced loss and damage. 

Developing digital carbon market infrastructure  

The challenge: Establishing a credible, transparent system to track carbon credits and attract global climate finance.  

The approach: Develop a secure digital ledger is developed to authorize, track, and manage carbon market transactions and Internationally Transferred Mitigation Outcomes (ITMOs).

The impact: Enhanced trust with global partners, prevention of double counting, and the unlocking of new climate finance for local emission-reduction projects. 

Our impact in action

Launching the National Carbon Registry  
A secure digital platform was launched to track and manage carbon market transactions. Acting as the institutional backbone of the country's carbon market, the registry prevents fraud and double counting, positioning the nation to engage in high-integrity global carbon markets under Article 6 of the Paris Agreement. 

Making climate budgets transparent
Support was provided for the development of Nepal’s first citizens’ climate budget (utilizing CBT data), improving transparency and public accountability for climate spending. The work shows that 36% of the federal budget is now climate-related, providing a clear baseline for future action.

Climate Finance Projects

UNDP Nepal's climate finance initiatives are supported by multiple sources, encompassing various projects designed to enhance the country's climate resilience and sustainability. 

Climate Finance Network (CFN)

The CFN is UNDP Bangkok Regional Hub’s primary programme on climate finance. The network brings a wide range of stakeholders including ministries of finance, regulators, accountability actors, the private sector, civil society and regional and international development partners to forge partnerships for mobilizing and managing climate finance effectively.  

CFN also aims to develop Provincial Level Climate Change Financing Frameworks (CCFFs), representing a significant Public Finance Management (PFM) reform. This initiative integrates climate change considerations into provincial planning, budgeting, the Medium-Term Expenditure Framework (MTEF), and monitoring and evaluation systems.

Strengthening the Governance of Climate Finance to Promote Inclusive Climate Resilience in Asia Pacific-Phase III (GCCF III)

GCCF-III aims to address gaps and mismatches in climate financing, institutional capacity constraints, and fiscal weaknesses, aiming to strengthen Nepal's capacity to effectively mobilize, manage, and utilize climate finance for improved climate action at all levels. 

Publications