ANTALYA, November 14: Nepal has called on developed countries and international financial institutions to provide climate finance primarily in the form of grants rather than loans, arguing that countries least responsible for global greenhouse gas emissions should not be pushed into further debt to cope with the impacts of climate change.
The call was made during a high-level side event at the Nepal Pavilion at the ongoing UN Climate Change Conference (COP31) in Antalya, where participants highlighted the growing gap between international climate finance commitments and the resources actually reaching vulnerable communities.
The discussion, titled “Unpacking Climate Finance in Nepal: Access, Quality and Equity”, was organized by the NGO Federation of Nepal (NFN) in collaboration with Oxfam. Speakers stressed that climate finance must be adequate, predictable, transparent and accessible, with priority given to grants for adaptation and addressing loss and damage.
Figures presented during the discussion showed that Nepal received around $5.71 billion in international climate finance between 2011 and 2021. However, 61 percent of the financing was in the form of loans, 38 percent as grants and the remaining one percent as equity and other investments.
The figures have renewed concerns over the growing debt burden on climate-vulnerable countries that have contributed relatively little to the climate crisis but are increasingly exposed to its devastating consequences.
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“Climate finance is not just about money; it is about justice, dignity, and survival. Nepal contributes very little to global greenhouse gas emissions, yet our communities are suffering the devastating impacts of climate change. We need grants, not loans; action, not promises; and climate justice, not charity,” said Arjun Bhattarai, president of the NGO Federation of Nepal.
The discussion brought together Arjun Dhakal, undersecretary and climate change focal person at the Government of Nepal; Neha Sharma, representing the Adaptation Fund; Dr Manish Raj Pandey, director of the National Trust for Nature Conservation (NTNC); and climate activist Harjeet Singh.
Dhakal said the choice between grants and loans should depend on the nature of projects, their requirements, the availability of financial resources and potential economic returns. He argued that grants should be prioritized for adaptation projects, many of which do not generate direct financial returns.
However, concessional loans could be considered for renewable energy, hydropower and climate-related infrastructure projects capable of generating economic benefits, he said. He also stressed the need to assess repayment periods, grace periods and the country's overall debt sustainability before accepting external loans.
Sharma highlighted the importance of strengthening national institutions to improve their direct access to international climate funds. She said institutions seeking accreditation must meet requirements related to gender equality, environmental and social safeguards, procurement and financial management.
She also highlighted the Adaptation Fund's readiness support programme, which helps national institutions build their capacity to develop and implement climate projects.
Pandey shared Nepal's experience in biodiversity conservation, access to genetic resources and benefit-sharing arrangements, highlighting the importance of institutional and legal frameworks in ensuring the equitable distribution of benefits.
Climate activist Singh argued that climate finance should be treated as an obligation of countries historically responsible for greenhouse gas emissions rather than as charity or development assistance. He criticized developed countries for failing to provide adequate resources while continuing to spend heavily on fossil fuel industries and other sectors.
He also said vulnerable countries should not have to borrow money to protect themselves from climate impacts they did little to cause, calling for greater funding for both adaptation and loss and damage.
Meanwhile, a separate high-level programme at the Nepal Pavilion focused on translating climate finance commitments into large-scale adaptation action. The programme, titled “From Climate Finance Commitments to Adaptation at Scale”, was co-hosted by the Government of Nepal and the Asian Development Bank (ADB). At the event, Sumnima Udas highlighted the Green and Resilience Financing Facility (GREFF) as a country-led platform to connect Nepal's adaptation priorities with international climate finance.
Udas stressed that international support works best when aligned with national adaptation priorities and delivered through the country's own systems. She said climate finance commitments must be translated into investment-ready adaptation programmes that deliver tangible benefits to vulnerable people. She also noted that Nepal's experience could offer lessons for other climate-vulnerable countries across the Hindu Kush Himalaya and beyond.
The NGO Federation called on governments, international financial institutions and climate finance mechanisms to improve direct access to funding and ensure the meaningful participation of civil society organizations, local governments and affected communities in climate-related decision-making.
