Nepal Receives $9.4 Million for Forest Carbon Credits Under FCPF

Nepal has received a payment of $9.4 million [approximately Rs 1.33 billion] from the World Bank’s Forest Carbon Partnership Facility (FCPF) for reducing approximately 1.88 million tonnes of carbon dioxide under its REDD+ Emission Reductions Program in the Terai Arc Landscape, the World Bank said last Friday, November 14.

This is the first payment under the FCPF’s Emission Reductions Payment Agreement (ERPA), which the World Bank termed a major milestone in Nepal’s efforts to reduce emissions from deforestation and forest degradation and promote inclusive, sustainable forest management.

The FCPF is a global partnership that brings together governments, civil society, indigenous peoples, and the private sector to help countries reduce emissions from deforestation and forest degradation and strengthen sustainable forest management. 

The FCPF program in Nepal is characterized by its strong community-based approach to sustainable forestry, read the statement issued by the global lender. “Implemented across the Terai Arc Landscape — home to both rich biodiversity and a dense human population — the program brings together local communities, Indigenous Peoples, and civil society organizations to protect and restore forests while improving rural livelihoods.”

“This milestone payment is testament to Nepal’s success in reducing deforestation, strengthening forest governance, enhancing biodiversity conservation, and expanding sustainable livelihood opportunities for local communities,” the statement quoted David Sislen, World Bank Division Director for Maldives, Nepal, and Sri Lanka, as saying.

The payment will be distributed in accordance with Nepal’s Benefit Sharing Plan, developed through a participatory process that included consultations with local communities and key stakeholders. 

The plan ensures that forest-dependent communities and indigenous peoples directly benefit from the results of their efforts, the statement added. Investments will support continued forest restoration, community enterprises, and climate-resilient livelihoods — reinforcing Nepal’s global reputation as a pioneer of community forestry and participatory resource management.

“This results-based payment reflects the efforts and dedication of our forest-dependent communities, Indigenous Peoples, and the government in conserving and managing our forests. Nepal remains committed to advancing climate action through inclusive and community-led forest management,” the statement quoted Dr Rajendra Prasad Mishra, Secretary of Ministry of Forests and Environment, as saying.

As of November 2025, FCPF programs have reported more than 131 million tCO₂e in emission reductions, with 63.7 million credits issued and 46.5 million paid for—amounting to over US$232 million in results-based payments, according to the World Bank.