The 45th board meeting of the Green Climate Fund (GCF) was underway in Dushanbe, Tajikistan on July 1. The atmosphere seemed a little different when a proposal from Nepal was discussed at the meeting. The board members, who focus on issues such as technical assessment, risk analysis and financial accountability, not only approved the ‘Project to Enhance Climate Resilience of Forest-Dependent Communities in Karnali Province, Nepal (SAP-071)’ presented by Nepal this time, but also mentioned it as an example of a project that the GCF should prioritize in the future.

They said that such a project puts into practice locally-led climate action, directly reaches the most vulnerable communities, translates policies and plans into actual implementation, enhances the capacity of local institutions. And, directly benefits the citizens most affected by climate change. These comments were not just praise for a project, but a message for Nepal – it is time to move beyond ambitious policy-making to effective implementation.

The four-year project, worth a total of US$9.2 million (about Rs 1.4 billion) including an US$8.5 million grant from the GCF to enhance the climate resilience of forest-dependent communities in the Jajarkot, Jumla, Dolpa and Dailekh districts of Karnali Province, is not the only achievement of the National Nature Conservation Trust (NTNC). It is a significant turning point in Nepal’s climate finance journey. Unlike the traditional practice of managing finance through international institutions, this project has proven the institutional capacity and credibility of Nepali institutions to mobilize international climate finance through direct access. It has opened a new chapter in the path towards putting national ownership, local leadership and implementation-oriented climate finance into practice.

The core issue of climate change is linked to climate justice . Communities that have contributed very little to global greenhouse gas emissions are facing the greatest climate risks today . The process of developing a GCF project, from concept paper approval to final approval from the board, is usually very complex, and this project was no exception. In a period of about three months, extensive consultations were conducted in various districts of Karnali, dialogue with the local level, interaction with forest-dependent communities, participation of women, indigenous peoples, Dalits and marginalized communities, technical studies, environmental and social risk assessments, financial analysis, cost-benefit studies and climate risk analysis were completed . Thereafter, revisions were made repeatedly based on detailed comments from the GCF Secretariat, independent technical reviewers and various expert groups . This process taught an important lesson – quality climate finance is not achieved by simply writing a proposal – it requires scientific evidence, institutional preparation, local participation, financial discipline and continuous learning .

The strongest foundation of this success has been collaboration. Climate change is not an issue that can be solved by any one institution or level alone. Such a complex process was only possible through continuous collaboration between the National Nature Conservation Fund, the Federal Ministry of Finance, the Ministry of Agriculture, Forests and Environment, the Karnali Province Ministry of Industry, Tourism, Forests and Environment, local governments, technical experts, community forest user groups, local civil society and community organizations, development partners, the private sector, the GCF Secretariat, reviewers and local stakeholders. The real meaning of climate finance is not the transfer of money, but building institutional coordination, trust and accountability for a common purpose.

The most important feature of this project is its locally-led approach. The concept of designing climate solutions from the outside and applying them to the community is no longer considered effective. Solutions developed in collaboration with the community are long-term, sustainable and practical. The forest-dependent communities of Karnali have accumulated knowledge, experience in resource management and practices that are tailored to the local context for generations. Sustainable adaptation is only possible when these experiences are combined with modern science and policy processes. This is why the project has placed local ownership, community participation, gender equality, social inclusion and climate justice at its core.

Understanding climate finance as just grants or financial assistance is not enough. It is an investment in the future – in human resilience, natural ecosystems, institutional capacity, good governance, livelihoods, innovation and sustainable development. For countries with high climate risks like Nepal, such finance provides an opportunity to increase adaptive capacity, restore ecosystems, reduce disaster risk, promote green development and lay the foundation for low-carbon development.

Nepal has a climate change policy, a national adaptation plan, a nationally determined contribution (NDC), a long-term strategy and the necessary institutional structures. However, the biggest challenge now is their effective implementation. Any policy is meaningful only when it brings about a direct positive change in the lives of citizens. Therefore, our focus should now be on the effective implementation of the policy.

Another important aspect is Nepal's credibility in international climate finance management. International partners do not only look at the project objectives when providing finance - financial discipline, transparency, environmental and social safeguards, risk management, results-oriented implementation and institutional capacity are also equally important. If Nepal can successfully implement this project, it will build confidence to attract a larger amount of climate finance in the coming days.

The real impact of climate finance will be seen only when it reaches the local level. For that, the planning process of local governments, the role of community organizations, technical assistance, capacity development, social accountability and transparent implementation must be strengthened. Local governments are the frontline institutions for climate adaptation. Only by providing them with adequate knowledge, resources and technical assistance can local plans be transformed into practice.

The role of forests and forest-dependent communities is extremely important in building a climate resilient future for Nepal. Forest conservation is not limited to the protection of biodiversity. It has a direct link to watershed conservation, soil erosion control, water resource management, agricultural production, disaster risk reduction, and strengthening the local economy. Therefore, forest conservation and economic prosperity can be promoted simultaneously through sustainable management of non-timber forest products and herbs, value addition, enterprise development, expansion of market access, and green employment creation. This interrelationship between climate-resilient forest management and sustainable livelihoods should be a major foundation of Nepal's adaptation strategy.

Long-term resilience is not possible through infrastructure construction alone. For that, local human resources, institutional capacity, research, innovation, technical services, knowledge exchange, technology transfer, and local leadership development are necessary. The strongest foundation to combat climate change is capable local institutions and empowered communities.

In a federal system of governance, climate action is a shared responsibility of all three levels of government. The federal government ensures policy, international coordination, and financial access. The provincial government provides regional priority setting, coordination, and technical facilitation. Local governments implement directly with the community. Only if there is clear responsibility, shared accountability, continuous coordination and institutional ownership between these three levels can climate programs be effective.

Stable policies, an investment-friendly environment, promoting green enterprises, a mixed financial system, sustainable value chains and incentives for innovation can make a significant contribution to building a climate-friendly economy. It is now necessary to actively involve the private sector in climate action. Stable policies, an investment-friendly environment, promoting green enterprises, a mixed financial system, sustainable value chains and incentives for innovation can make a significant contribution to building a climate-friendly economy. Collaboration between the public and private sectors will provide a long-term basis for local enterprises, employment and green development.

Ultimately, the core question of climate change is linked to climate justice. The communities that contribute the least to global greenhouse gas emissions are facing the greatest climate risks today. The remote settlements of Karnali, small farmers, women, Dalits, indigenous peoples, and forest-dependent families are direct examples of this reality. Therefore, the purpose of climate finance should not be limited to infrastructure construction or project implementation. At its core must be a commitment to empowering the most vulnerable communities, ensuring equitable distribution of opportunities, and ensuring equitable access to the benefits of development.