Government of Nepal, Ministry of Forests and Environment: National Climate Change Scenarios and Adaptation Plan ( - )

Key Chapter Title List

1. Guidance for the Country Climate Plan
2. 1. Operational Climate Needs
3. 1. Structure of Vulnerabilities
4. 2. Impacts of Heat Stress
5. 3. Environmental Challenges
6. 4. Rapid Urbanization
7. 5. National Climate Ambition
8. 6. Governance and Institutional Capacity
9. 7. Public Financial Management
10. 8. Private Sector Engagement
11. 2. Asian Development Bank's Response to Climate Needs
12. 3. Areas of Cooperation with Partners
13. 4. Country Climate Plan Table

Document Introduction

This report is a summary of the core content of the "Country Climate Plan" jointly developed by the Asian Development Bank (ADB) and the Government of Nepal. It aims to provide guidance for ADB's climate-resilient actions under the framework of the 2025-2029 Country Partnership Strategy (CPS). The report provides an in-depth analysis of the multiple climate and development challenges facing Nepal and systematically outlines the comprehensive response strategies of the government and ADB at the levels of policy, financing, investment, and technical assistance.

The report begins by pointing out that disasters triggered by various natural hazards pose a significant challenge to Nepal's long-term development sustainability, with approximately 50 out of the country's 77 districts in a state of moderate to high vulnerability. In recent years, the frequency, intensity, and impact of extreme weather events such as floods, droughts, heatwaves, and heavy precipitation have increased significantly. Geophysical hazards like earthquakes and landslides have also caused significant loss of life and economic damage. Studies predict that Nepal will warm faster than the global average, with temperatures potentially rising by 1.2°C–4.2°C by the 2080s under a high-emissions scenario (RCP8.5). The country's complex topography, high dependence on climate-sensitive sectors like agriculture and hydropower, and weak infrastructure collectively constitute its high systemic vulnerability, with the risk of glacial lake outburst floods (GLOFs) particularly on the rise.

The report details the "Operational Climate Needs" facing the country, including a series of environmental sustainability challenges such as labor productivity loss due to heat stress, air pollution, water stress, forest fires, and biodiversity loss. Simultaneously, rapid urbanization driven by administrative reclassification (the urban population share jumped from 17% in 2011 to 66% in 2021) has brought management challenges like inadequate infrastructure and environmental degradation. Nepal's national climate ambition is ambitious: its submitted Long-Term Strategy (LTS) aims for carbon neutrality by 2045 and net-zero greenhouse gas emissions by 2050. The third Nationally Determined Contribution (NDC, 2025-2035) plans for a 26.79% emission reduction, targeting 15% clean energy share and 95% of private vehicle sales being electric by 2035. The National Adaptation Plan (NAP) outlines 64 priority projects across 8 thematic areas and 4 cross-cutting themes. However, achieving these goals faces enormous financial and technological gaps. The mitigation cost for the NDC alone is estimated at USD 73.7 billion (until 2035), and the adaptation cost for the NAP is USD 47.4 billion (until 2050), far exceeding the government's expected contribution.

At the governance level, the report notes that the institutional separation between climate resilience (under the Ministry of Forests and Environment) and disaster risk management (under the National Disaster Risk Reduction and Management Authority) leads to insufficient coordination and resource wastage. Public financial management faces challenges, and there is an urgent need to significantly enhance the capacity of both the government and the private sector to access international climate finance. Private sector participation in the clean energy transition is seen as a key opportunity for emission reduction and financing access, which can be promoted through regulatory incentives and public-private partnership models.

The second part of the report elaborates on the Asian Development Bank's response strategy. ADB's operations in Nepal align with the government's "Green, Resilient, and Inclusive Development" (GRID) approach and support related policy and institutional reforms through the "GRID Strategic Action Plan (2024-2034)". ADB plans to integrate climate resilience and disaster risk management into its investment projects, policy-based loans, and technical assistance through the CPS (2025-2029). Key initiatives include supporting hydropower, grid infrastructure, and clean public transport; collaborating with the Ministry of Finance to establish a large-scale financing mechanism targeting USD 1 billion—the "Green and Resilient Financing Facility" (planned commitment in 2027)—to address financial, capacity, institutional, and technological gaps in NAP implementation; and supporting specific adaptation actions such as flood protection and all-weather roads, integrated water resource management, year-round irrigation, eco-tourism, and disaster-resilient school construction. ADB is also implementing the regional technical assistance project "Adaptation and Resilience Building in the Hindu Kush-Himalaya Region" to enhance multi-hazard risk assessment and management capabilities.

Finally, the report outlines ADB's coordination mechanisms with partners including the World Bank, UK FCDO, Japan International Cooperation Agency (JICA), and the European Union, aiming to achieve dialogue synergy and co-financing through joint strategic platforms. ADB will mobilize concessional climate finance through its own resources, partner funds, and the private sector, and will work closely with international institutions such as the Green Climate Fund (GCF) and the Adaptation Fund.

The "Country Climate Plan Table" in the report's appendix systematically aligns the CPS strategic priorities (promoting private sector-led green economic transformation, fostering inclusive human capital development and public services, enhancing environmental sustainability and climate resilience) with specific actions at three levels—upstream (policy framework), midstream (institutional and systems integration), and downstream (high-quality operations and implementation)—providing a clear action roadmap for strategy implementation.