Kathmandu. On the occasion of International Clean Energy Day (January 26), the Alternative Energy Promotion Centre (AEPC) organized an event that featured various technical sessions. In the technical session titled “Initiatives for Carbon Reduction through Clean Energy and Carbon Markets,” participants—including representatives from the government, international organizations, development partners, and experts—emphasized the important role of clean energy, climate finance, and carbon markets in promoting a green economy and sustainable development in Nepal.
Speaking at the session, carbon market expert Prem Kumar Pokharel, addressing carbon trading and financial mobilization, stressed that carbon trading should be viewed not merely as a “green credit” but as an important financial instrument for national interest and sustainable development. Highlighting the significant potential for carbon projects in sectors such as energy, cooking systems, and electric vehicles, he noted that nature-based solutions and “removal”-type projects could fetch higher prices in international markets.
Analyzing stakeholder capacity, he pointed out that while the federal government is relatively strong at the policy level, it lacks experience in implementing Article 6 of the Paris Agreement; the private sector and local governments have low technical capacity in carbon finance; and financial institutions have yet to integrate carbon finance into their investment decisions. As immediate steps, he recommended operationalizing a national carbon registry, launching pilot projects, and enhancing the capacity of banks.
Senior energy and climate expert Mukesh Ghimire, who serves as a director at AEPC, informed that under the second NDC, expansion of electrification, cooking and heating systems, transport, and the industrial sector have been prioritized as sub-sectors. According to him, there is a target to provide electric stoves to one million households, with a plan to cover 200,000 households in the current fiscal year.
He stated that initiatives are underway to provide technical support for the preparation of local energy plans in 150 municipalities, reduce risk through a “loss guarantee” mechanism, and expand access to the Green Climate Fund and the Loss and Damage Fund. He also informed that, under the GRIPS project, a 4 megawatt-hour battery energy storage system is being constructed to support grid stability and solar energy management, and expressed commitment to scaling up such technologies over the next five years with private-sector investment.
Bidya Banmali Pradhan, Environmental Specialist at ICIMOD, highlighted the significant potential of biomass energy in Nepal’s energy sector, noting that while electricity has been given higher priority in renewable energy targets, biomass has not received the attention it deserves. According to her, Nepal has the potential to produce around 27 million tons of biomass from the agricultural sector and 16 million tons from the forest sector.
She noted that forest fires during March–May and the burning of agricultural residues during October–November have made air pollution increasingly severe, negatively affecting public health, the environment, and economic sectors such as aviation. She suggested that biomass waste could be converted into briquettes and pellets for use as industrial fuel, and recommended giving this greater priority in the NDC document. She also stated that black carbon emissions from pollution are accelerating the melting of Himalayan snow, posing additional challenges to the sustainability of hydropower.
Dr. Neven Knezevic, Head of Education at UNICEF, stated that incorporating sectors such as education, health, and social protection within the framework of Nationally Determined Contribution (NDC 3.0) is a historic and strategic step for Nepal. He noted that this approach opens new avenues for Nepal to access global climate finance, citing the example of Tajikistan, which recently received a USD 50 million grant for climate adaptation in the education sector.
Emphasizing the necessity of making schools climate-friendly and resilient, he said that when floods and landslides destroy school infrastructure, not only children’s futures but also the state’s investments are put at risk. Under the “Green School” concept, there are plans to promote renewable energy, electric cooking (e-cooking), and waste management systems, particularly plastic recycling, in schools.
He noted that following post-earthquake reconstruction, safety measures have been implemented in 26 percent of schools, stressing the need to expand these measures nationwide and to strengthen the capacity of local governments to implement climate-resilient education plans. He also expressed the view that since the primary climate-related challenge for youth is employment, the green economy can create new opportunities, and investment in the development of green skills should be increased.
At the event, Grishma Shah, Senior Energy Specialist at the Asian Development Bank (ADB), shared that the bank has been making major investments in Nepal’s hydropower, transmission, and distribution sectors. She also informed that ADB has moved forward with the investment process for the Dudh Koshi Hydropower Project. It was further noted that, in long-term partnership with the Government of Norway, grants amounting to around USD 100 million are being mobilized, along with additional investments arranged through the OPEC Fund.
Similarly, Aarti Khadki, Climate and Energy Program Head at WWF Nepal, pointed out Nepal’s heavy dependence on imports and stressed the need to prioritize electric cooking and electric vehicles to reduce reliance on petroleum products. She emphasized the importance of import substitution by maximizing the use of domestically available resources.
Speakers participating in the program concluded that if clean energy, carbon markets, policy reforms, investment, and skills development are advanced in an integrated manner, Nepal can be steered rapidly toward a green economy.
Urjasanchar
