Nepal receives $9.4 million World Bank payment for forest carbon cuts

Nepal received a $9.4 million results-based payment from the World Bank's Forest Carbon Partnership Facility for cutting nearly 1.88 million tons of CO2 emissions in the Terai Arc Landscape, the first under the FCPF's Emission Reductions Payment Agreement framework. The community-led model offers a replicable carbon-finance precedent for forested developing nations including India.

Nepal received a $9.4 million results-based payment for verified forest carbon emission reductions from the World Bank's Forest Carbon Partnership Facility (FCPF). The payment rewards Nepal's success in cutting nearly 1.88 million tons of carbon dioxide emissions from biodiversity areas like the Terai Arc Landscape, achieved through its REDD+ Emission Reductions Program preventing deforestation and forest degradation. It is the first payment of its kind under the FCPF's Emission Reductions Payment Agreement (ERPA) framework, with Nepal meeting rigorous international criteria for performance, integrity and permanence.

Local community forest management groups, civil society organisations and Indigenous Peoples are centrally affected, having been integral to forest protection and restoration. The $9.4 million will be distributed transparently across participating groups under Nepal's officially approved Benefit Sharing Plan, ensuring forest-dependent communities benefit directly. Government agencies gain financial momentum to accelerate national forest strategies. The results-based mechanism affects other forested developing nations by providing a verified economic incentive to prioritise large-scale, measurable climate action through decentralised, locally driven efforts.

Affected stakeholders should follow Nepal's Benefit Sharing Plan, developed through participatory consultations, which directs funds to community groups and supports continued forest restoration and climate-resilient livelihoods in the Terai Arc ecosystem. Other developing nations and forested regions should examine this scalable, replicable community-led model for leveraging carbon finance under FCPF and ERPA frameworks. Project actors should ensure inclusive governance and verifiable performance to access future results-based payments for measurable emission reductions.

Key figure — Results-based payment: $9.4 million for cutting nearly 1.88 million tons of CO2 in Nepal's Terai Arc Landscape