|Project title||Sector||SCP practice|
|Bio-Energy Project||Wood-based industry||Sustainable Supply Chain Management|
|Green Homes||Building materials industry||Sustainable Supply Chain Management, Creating Demand for Better Products|
|Lead Elimination Project||Chemical sector||Cleaner Production|
|Lokta Handmade Paper||Wood-based industry||Product design for sustainability|
|METABUILD||Fabricated metals industry, Building materials industry||Sustainable Supply Chain Management|
|PPP for 4Gs||Chemical sector||Waste Management|
|SEID - Sustainable and Efficient Industrial Development||Cross cutting issues||Creating Demand for Better Products, Product design for sustainability|
|Sustainable Carpet and Pashmina||Textile and leather industry||Cleaner Production|
|VSBK – Vertical Shaft Brick Kiln||Building materials industry||Cleaner Production|
Mr. Raju Babu Pudasaini
Under Secretary and NPM PPCR Component 3 Output 2,
Ministry of Population and Environment,
Singha Durbar, Kathmandu, Nepal
Under SWITCH-Asia’s regional Policy Support Component, UNEP’s main partner in Nepal is the Ministry of Environment. The following areas have been identified as priority for capacity building and policy support on SCP.
SCP in Nepal is still mostly an issue of improving the access to basic necessities for the majority of the population, securing livelihoods, and eradicating malnourishment and poverty. The country contributes insignificantly to global environmental problems at the moment and it is a fairly sustainable society from an environmental perspective. However, a number of basic human needs remain unmet and require urgent and collective action.
Better SCP policies are urgently needed, both to better meet the needs of the poor and to address negative impacts of consumption. Sustainable consumption and production is not a luxury that stands in conflict with poverty eradication; on the contrary – it is an approach that aims to make the best possible use of available resources for meeting human needs, both today and in the future. It is clear that Nepal needs capacity strengthening in many areas related with SCP policy development and implementation.
Specific areas that could be considered for future capacity strengthening include:
- Expansion of the energy efficiency centre for industry to include broader sustainability aspects. This could later evolve into something similar to a national cleaner production centre. There seems to be interest in establishing a body of this kind, both in the Ministry of Industry and in the Federation of Nepalese Chambers of Commerce and Industry, but further consultation with key stakeholders is needed.
- Strengthening of the existing organizations working on alternative energy and energy efficiency. Existing activities have good structure, clear agendas, and strong networks. Additional resources, especially on the demand side (efficient use of cooking fuel in rural areas and energy efficient housing in cities), are likely to increase their contribution to sustainable development.
- Establishment of a basic system for green public procurement, limited to a few strategically selected products and services. This could provide incentives for producers and increase the availability of more sustainable products on the market.
- Intensified agricultural research on organic and low-input production practices suitable to the diverse geography of Nepal. Increased capacity for extension services would also need to be considered, as well as capacities for testing and certification.
- Strengthening of the capacity of rural communities to make value-added goods from local materials and products, and improved capacity of these communities to access domestic and foreign markets.
- Awareness campaigns on consumer rights, also including sustainable consumption.
Status of SCP policy framework
The government of Nepal consists of 26 line ministries and the National Planning Commission (NPC), which is the apex body for overarching planning and policy coordination. At the overarching policy level, the government has for a long time been developing and implementing plans with a five-year cycle, and more recently with a three-year cycle.
Three-Year Plan Approach Paper
The most recent plan is the Three-Year Plan Approach (2013/2014 – 2016/2017). It focuses on an employment-oriented, inclusive and equitable broad based economic growth through contributing in poverty alleviation and establishment of sustainable peace.
This national strategy focuses mostly on climate adaptation, Nepal has adopted the notion of green development and plans to adapt to the adverse impacts of climate change by making human activities and development process environment-friendly as per the concept of green development.
(Source: here / non official translation)
Climate resilient planning: a tool for long-term climate adaptation
This recently adopted national strategy focuses mostly on climate adaptation, but it also includes a section on mitigation. It points out that Nepal is currently making only an insignificant contribution to climate change but states that the country is determined to develop in a climate friendly manner. It stresses the need for low carbon infrastructure and transportation, expansion of renewable energy sources, and efforts to protect forests
The Nepal Trade Integration Strategy
The Strategy is the product of an effort led by the Ministry of Commerce and Supplies (MoCS), Government of Nepal (GoN), with financial and substantive support from United Nations Development Programme (UNDP), the Government of Finland, the UK Department for International Development (DFID), the International Finance Corporation (IFC), and the International Trade Centre (ITC). Objectives and Actions identified in the NTIS 2010 closely aligns with those identified in Nepals three-year Development Plan. The NTIS has included natural products as a priority sector for Nepal.
Preparation of 13th Three-Year Renewable Energy Sector Plan (2013/14-2015/16)
Alternative Energy Promotion Centre (AEPC) is a national executing agency of renewable energy programme and projects in Nepal under the Ministry of Science, Technology and Environment (MoSTE). With the mandate of policy and plan formulation, technology innovation, resource mobilization and coordination and quality assurance, the mission of AEPC is to make renewable energy a mainstream resource through increased access thereby, contributing to the improvement of living conditions of people in Nepal. AEPC is implementing a National Rural and Renewable Energy Programme (NRREP), a single programme modality for the promotion and dissemination of renewable energy technologies under various sub/components and units from mid-July 2012 to mid-July 2017.
The Consumer Protection Act - 1998
Section 6 of Act assures and recognizes six rights of the consumer out of eight rights recognized globally. The Act has not included the right to basic needs and the right to a healthy environment.
The Supreme Court of Nepal in Surya Prasad Sharma Dhungel v. Godawari Marble Industries (1995) has ruled that right to healthy environment is a fundamental right to life.
Resource consumption and production
Main Resource Consumption and Resource Efficiency Indicators (2010)
|Subject Area||Total||Per person||Per USD$ of GDP|
|Domestic Material Consumption, DMC
(tonnes, tonnes per capita, kgr per 1USD$)
(kilotonnes,tonnes per capita, kgr per 1USD$)
|Total Primary Energy Supply, TPES
(Petajoules, Gigajoules per capita, Megajoules per 1USD$)
(Trillion litres, Kilolitres per capita, Litres per 1USD$)
|Population density 2015
(UNESA 2012 revision), population per sq.km
|GDP per capita (USD), 2013 WB||694.1|
|HDI Rank (2013) UNDP||0.54|
|Arable land (hectares per person) WB 2012||0.08|
|Forest cover in % (2010), UNSTATS||25|
|Material intensity (2010)UNEP||8.22|
|Per-capita energy use (kg of oil equivalent per capita) 2011, WB||383|
|Energy intensity (total primary energy consumption per USD of GDP) 2011, EIA||8,497.49|
|GHG intensity (2010) UNEP||3.18|
|CO2 emissions (metric tone per capita), 2010, WB||0.1|
|Number of Middle Class consumers % (2010), ADB||23|
|Number of people with income < 2USD/day (PPP, USD, %), 2010, ADB||77|
Trends in Resource Consumption and Resource Efficiency Indicators (1970-2010)
In panel a) Nepal’s GDP grew considerable faster than any of the other indicators, followed by DMC and TPES, thence population, with GHG emissions growing at the slowest rate. Panels b) and c) indicate that the strong growth in GDP was not accompanied by much growth in either DE per capita, or MF per capita. The latter actually contracted markedly from 1990 to 2000, before recovering to 1990 levels by 2010. The mix of materials indicated in panel c) was much more strongly oriented towards mineral resources rather than biomass, indicating a significant structural shift towards a more industrialized status. Panels d), e) and f) show decreases in intensities on all material, energy, and GHG based indicators with the exception of adjusted EI. Material and energy consumption per capita increased on both conventional and footprint based measures, while both measures of GHG emissions per capita decreases. Footprint based measures of material consumption are significantly lower than DMC based ones, and footprint based measures of energy consumption are a small fraction (generally less than 25%) of TPES based measures.
(Source: UNEP CSIRO Indicators for a Resource Efficient and Green Asia and the Pacific, 2015)
Key references relevant to SCP
- Central Bureau of Statistics (CBS), 2011. Rastria Janaganana 2068 Ko Praramvhik Natija (Preliminary Report of National Census 2011), Government of Nepal, National Planning Commission, Central Bureau of Statistics, Kathmandu, Nepal
UNEP's relevant activities
The information in the country profiles herein have been obtained through research with firsthand and secondhand sources. The information presented herein cannot be considered as official policy of governments or other official bodies. The SWITCH-Asia Programme cannot be held responsible for the content of the sites to which it provides links or for the availability of servers or links. Information is being continuously updated in order to maintain an up to date country profile. If you would like to contribute information for this profile or have any further comments, please send an email to: SWITCH-PSC@unep.org
SMEs in Nepal employ 1.75 million people and account for 22 percent of the country’s GDP. There are an estimated 111,442 operational SMEs, of which 63% were registered over the last decade. Only 39% of these firms have access to finance. Green financing for SMEs is still not a priority.
SMEs consist of mostly handicraft manufacturers, handmade gift suppliers, apparel manufacturers, pashmina manufacturers, tea and coffee suppliers, agricultural products exporters, and textile manufacturers. Nepal SMEs are even involved in production, supply and export of Nepalese tea and coffee, yak cheese, livestock, poultry and animal husbandry.
Main institutions providing Green Finance
- NMB Bank
- Standard Charter Bank Nepal Limited
- Mega Bank Nepal Limited
- Nepal Rastra Bank
- Siddhartha Bank
- Nabil Bank
- Nepal SBI Bank Limited (subsidiary of State Bank of India)
- Global IME Bank
- Himalayan Bank
- Bank of Kathmandu Lumbini Ltd.
- Sunrise Bank Limited
- NIC Asia Bank Limited
- Machhapuchchhre Bank Limited
- Sanima Bank
- Prabhu Bank Limited
NMB bank finances SMEs as well renewable energy such as solar, biogas, micro-hydro, and improved water mill (IWM) installer companies that can provide alternative mode of energy to our energy deprived country. NMB established a separate Renewable Energy Unit.
- Minimum - NPR 50,000*
- Maximum - NPR 1,500,000
- Minimum – NPR 100,000
- Maximum NPR 5,000,000
- Maximum 5 years
- Maximum 7 Years including moratorium period of 3 months.
Small and medium scale industries (carpet, garment, pashmina, handicraft etc); Trading sector (wholesaler & retailers/distributors, import and exporters), and the service sector (travel, tourism, cargo, hospitals, educational consultancies, etc).
- Loan amount: up to Rs.40 million
- Annual interest rate: 8 –14%
- Term: Maximum 10 years on installment basis for term loan and 1 year for working capital loan
- Loan processing fee: 0.75% of the loan amount
- Providing loans to SMEs in the industry, trade, and services sector.
- Loan amount: Rs. 0.50 Million to Rs. 60.00 Million (5 lacs to 6 crores)
- Annual interest rate: 11 – 12% for fixed term, 10.5-11.5% for working capital loan
- Term: Maximum 6 years for fixed term loan, 1 year for a working capital loan
- Loan processing fee: 0.75% of the loan amount
Loan facilities like Working Capital Loan, Term Loan, Letter of Credit, Import & Export Loan, Bank Guarantees & Auto Finance are offered as per your business needs.
- Simple to process and easy to repay.
- Available at competitive interest rates and fees & charges.
- Beneficial to small and medium scale enterprises that require credit limits of NPR 2.0 crores or less.
Provides micro-financing options for SMEs and micro enterprises to expand financial inclusion and help to build value chains. Works with NGOs, INGOS and government on entrepreneurship development, technology transfer, and building capacities.
- Loan up to Rs 60,000 per individual disbursed to run micro enterprise against individual collateral/security or group guarantee
- Loan up to Rs 10,00,000 per household for renewable energy projects; comprising micro-hydro, Solar home System, Solar cooker, Solar Dryer, Solar pump, Bio-gas, Improved water mill, Improved cook stove and wind energy
- Loan up to Rs 10,00,000 to run small industry to the group members against individual collateral or group guarantee
Loans designed for small and medium enterprises in: Industrial/manufacturing, retail/wholesale trading, service sectors etc. for various facilities (funded and non-funded) to meet their short-term and long-term financing needs.
Small Business Loan:
- Loan amount: Funded and Non - Funded Facility: Rs.3,00,000 to Rs. 10,00,00,000.
- Annual interest rate: competitive interest rate
- Term: up to 10 years
SME Trade and Industry Loan:
- Loan amount: Rs.10,000,000 to Rs.30,000,000
- Annual interest rate: competitive interest rate
- Term: up to 5 years
Sanima SME Loan:
- Loan amount: Rs. 10 million up to Rs. 50 million
- Term: 1 year (for working capital Loan) up to 10 Years (for Term Loan)
- Loan processing fee: Up to 0.75% on approved loan limi
Sanima Women Entrepreneur Loan (SWEL):
- Loan amount: NPR 100,000 to NPR 400,000
- Term: 2—5 years
- Loan processing fee: 1% of approved loan limit
Sanima Micro Entrepreneur Loan:
- Loan amount: NPR 100,000 to NPR 300,000
- Term: 2 – 5 years
- Loan processing fee: 1% of approved loan limit
New financing for SMEs / innovative financing mechanisms:
In 2015 IFC appointed White Lotus Centre Pvt. Ltd. as fund manager for Business Oxygen, its SME ventures fund in Nepal. IFC has committed EUR 6.61 million to this EUR 13 million sector-agnostic fund, to help SME growth and development.
Status and policies
2015 total territorial GHG emissions (excluding land use change and forestry): 6.9 MtCO2
2015 territorial GHG emissions per capita: 0.2 tCO2/person
2014 CO2 consumption emissions: 13 MtCO2
*GHG territorial emissions are Carbon dioxide emissions from the use of coal, oil and gas (combustion and industrial processes), the process of gas flaring and the manufacture of cement.
 Carbon dioxide emissions occurring anywhere in the world attributed to the country in which goods and services are consumed. For more information see: Section 2.1.2, The global carbon budget 1959-2015, Le Quéré et al. 2016.
GDP in 2015: EUR 20.18 billion
GDP composition by sector:
Agricultural products: pulses, rice, corn, wheat, sugarcane, jute, root crops; milk, water buffalo meat
Industry subsectors: tourism, carpets, textiles; small rice, jute, sugar, and oilseed mills; cigarettes, cement and brick production
Industries’ contribution to climate change
The majority of GHG emissions are released by the agricultural and energy sectors in Nepal, while the industry of GHG emissions share is rather small.
To reduce emissions from the energy sector, Nepal’s renewable energy goals are as stated in their INDC as follows:
- 4,000 MW of hydroelectricity by 2020 and 12,000 MW by 2030;
- 2,100 MW of solar energy by 2030 with arrangements to distribute it through the grid;
- Additional 220 MW of electricity from bio-energy by 2030;
- Additional 50 MW of electricity from small and micro hydropower plants;
- Increase the share of biogas up to 10% as energy for cooking in rural areas; and
- Equip every household in rural areas with smokeless (improved) cooking stoves (ICS) by 2030.
Climate change policies
- Climate Change Policy 2011
- National Adaptation Programme of Action (NAPA) 2010
- National Framework on Local Adaptation Plans for Action (LAPAs) 2011
- Forestry Sector Strategy 2016-2025
- National Biodiversity Strategy and Action Plan (2014-2020)
- The National Water Plan 2005
- Climate Change and Gender Action Plan
- Environment-Friendly Local Governance (EFLG) Framework
International mitigation targets:
Ratified UNFCCC in 1994
Ratified Kyoto Protocol in 2005
Nepal’s INDC to the UNFCCC states:
- By 2050, Nepal will achieve 80% electrification through renewable energy sources having appropriate energy mix. Nepal will also reduce its dependency on fossil fuels by 50%.
- Nepal will maintain 40% of the total area of the country under forest cover and forest productivity and products will be increased through sustainable management of forests. Emphasis will equally be given to enhance carbon sequestration and forest carbon storage and improve forest governance.
- Nepal will develop its electrical (hydro-powered) rail network by 2040 to support mass transportation of goods and public commuting.
- By 2025, Nepal will strive to decrease the rate of air pollution through proper monitoring of sources of air pollutants like wastes, old and unmaintained vehicles, and industries.
Government financing for climate change related initiatives:
The National Rural and Renewable Energy Program (NRREP), of which part is the Central Renewable Energy Fund (CREF): responsible for subsidies and credit support to the renewable energy (RE) sector. The fund contains EUR 119.96 million, coming from international donors.
The Climate Change budget code has enabled the integration of climate change into development planning. The Government of Nepal has secured multilateral and bilateral funding to implement climate change programs. In the fiscal year 2013-14, 11 out of Nepal’s 27 Ministries have a budget allocated for climate related programs. The total climate change budget amounts to 3.1 per cent of the total GDP (NPC, 2013).  According to the 2013 GDP of EUR 18.31 billion, the financing amount for climate related programs comes to EUR 567.67 million.
 Intended Nationally Determined Contribution. More information on INDCs here: http://unfccc.int/focus/indc_portal/items/8766.php
Climate change adaptation efforts
- Nepal Climate Change Support Program (NCCSP)
- Community-based Flood Risk and GLOF Risk Reduction program
- Mountain ecosystem-based Adaptation Program
- Hariyo Ban Project (climate adaptation component)
- Multi-stakeholder Forestry Program (adaptation co-benefits)
- Nepal’s Pilot Program for Climate Resilience (PPCR): Nepal’s “Strategic Program for Climate Resilience” (SPCR) has five components:
Component 1: Building Climate Resilience of Watersheds in Mountain Eco-Regions
Component 2: Building Resilience to Climate-Related Hazards
Component 3: Mainstreaming Climate Change Risk Management in Development
Component 4: Building Climate Resilient Communities through Private Sector Participation
Component 5: Enhancing Climate Resilience of Endangered Species
Climate change impacts
Nepal is a mountainous country with a complex climate, ranging from tropical in the south and alpine in the north. There are 29 million people in Nepal, and 7.5 million (one fourth of the population) live below the poverty line, making it the fourth most vulnerable country to climate change. 83% of the population is dependent upon agriculture for a living. The area is prone to flash floods and temperature rises increase glacier melt that can cause dangerous Glacier Lake Outburst Flood (GLOF) events. The majority of the population lives in rural areas and food insecurity and land degradation worsen the impacts of climate change. Nepal’s National Adaptation Program of Action (NAPA) states that out of 75 districts, 29 are highly vulnerable to landslides, 22 districts to drought, 12 districts to GLOFs, and 9 districts to flooding. Nepal is also extremely vulnerable to earthquakes.
Main climate change impacts include:
- Changes in precipitation
- Increase in temperature
- Glacier melt/ Glacial lake outburst floods
- Soil erosion
 Nepal INDC 2016
Economic, social, and environmental impacts of climate change
The 2014 “Economic Impact Assessment of Climate Change in Key Sectors in Nepal” (agriculture, hydropower and water-induced disasters) has estimated the direct cost of current climate variability and extreme events equivalent to 1.5 to 2% of the current GDP/year (approximately EUR 190– 275 million/year in 2013 prices) and likely be 25% to 100% higher when indirect and macro-economic costs are considered.
- Only 21% of Nepal’s land is cultivatable and over 20 million people rely on small-scale agriculture.
- The impact of climate change such as changing precipitation, floods, and land degradation due to soil erosion has already decreased the amount of arable land.
- Extreme droughts and floods have caused sharp reductions in food production; and crop varieties are not adapting to these changes, increasing food insecurity (especially in Mid- and Far-Western Hills and Mountains, which are already food insecure areas). These combined climate change impacts are likely to reduce Nepal’s GDP by about 0.8% per year in 2050.
- This is the most vulnerable sector: The negative impact on the agriculture sector affects livelihoods, food security, and health. The majority of people who rely on agriculture and natural resources for livelihoods are poor smallholder famers, very exposed to climate change. Therefore building resilience to climate change events and training in climate smart agriculture, such as changing crop varieties, is vital.
- Hydroelectricity provides 90% of total electricity.
- Seasonal rainfall changes and lower river flows in the dry season mean that hydro plants cannot operate at optimum capacity, affecting electricity generation with average costs equivalent to up to 0.3% of GDP per year.
- During the dry season impacts are estimated at EUR 2.45 billion from the period 2014-2050. This only adds to acute power shortages that Nepal already faces, which will also affect business and tourism industry.
- Monsoons, floods, and landslides lead to infrastructure damage and business interruptions
- Increased health issues and spread of water-borne diseases
- The estimated annual cost of water-induced disasters is 1.5% of GDP (approximately EUR 206.16 million in 2013 prices), likely to be increased by extreme weather events.
Small and Medium-sized Enterprises (SMEs):
- Extreme climatic events like floods and storms damage infrastructure and facilities.
- There will be more interruptions to business transactions.
- Transport and logistics routes will be damaged or disrupted.
- Heightened price and market volatility.
- Impacts on employees and consumers – lack of access to basic goods and services
- Lack of water and energy availability affect operations and productions.
- Health issues from heat waves and increase of disease will cause decreases in labor and work production.
International cooperation on climate change
Status: 2017. Inclusive of grants and loans; not an exhaustible list.
No. of Projects
Program/ areas of focus
Global Environment Facility
Biodiversity, climate change, land degradation, chemicals and waste, Persistent Organic Pollutants
GEF Trust Fund,
Least Developed Countries Fund
The Nepal Climate Change Support Programme (NCCSP)
DFID, EU, UNDP
Comprehensive Disaster Risk Management Programme (CDRMP)
USAID: Global Climate Change Program
The Hariyo Ban Program reduce impacts to climate change and threats to biodiversity
Initiative for Climate Change Adaptation (ICCA)
2012 - 2017
UN REDD+ Readiness Programs
The Himalayan Community Carbon Project (HCCP), REDD+ Readiness Preparation and Support
€6.62 + Million
Forest Carbon Partnership Facility, USAID, DFID, Government of Finland, JICA
Global Climate Change Alliance
Building Climate Resilience in Nepal under Nepal Climate Change Support Programme (NCCSP)
GCCA, FSF from Cyprus, DFID
Climate Investment Funds
Pilot Program for Climate Resilience: Expansion of IFC-PPCR Strengthening Vulnerable Infrastructure Project
Climate Investment Funds -PPCR Fund
International Climate Initiative (IKI)
REDD+, climate change resilience and adaptation, ecosystems protection,
German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB)
Adapting to climate induced threats to food production and food security in the Karnali Region of Nepal
REDD+ Himalayas: Developing and using experiences in implementing REDD+ in the Himalayas
German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB)
Biodiversity conservation in the Kailash landscape (Kailash sacred landscape conservation and development initiative, KSLCDI)
German Federal Ministry for Economic Cooperation and Development (BMZ)
Promotion of transboundary management of natural resources in the Himalayas
BRACED project Anukulan
Enable the vulnerable poor, especially women and children, in Nepal to be more resilient to climate extremes and disasters
UK Department of International Development (DFID)