Nepal has signed a historic agreement to receive USD 55 million as financial assistance for climate action for reducing carbon emissions by making significant progress in forest protection. The funds to be received through the ‘International Coalition to Encourage Emission Reduction by Investing in Forest Protection (LEAF Coalition)’ was signed on 9 January, 2026 in Kathmandu.
This agreement made Nepal the first Asian country to sign an agreement with LEAF Coalition. Nepal’s government on Friday signed a landmark agreement to receive up to $55 million in climate finance from the LEAF Coalition, recognising the country’s success in tackling deforestation and expanding forest cover.
With Nepal’s entry, the total potential value of LEAF agreements with forest governments has reached more than $325 million.
The LEAF Coalition is considered a global public-private partnership initiative involving more than 30 large multinational companies and Norway, the UK, the US and South Korea. It has also been confirmed that Nepal is more committed to the long-term plan of carbon emissions to protect and restore forests through a ‘jurisdiction-based programme’.
The amount received is expected to help achieve the Nationally Determined Contribution (NDC). Similarly, it is claimed to directly benefit more than 300,000 households involved in the development of local communities, improvement of forest quality, biodiversity conservation and community forest management. Moreover, Nepal has taken a plan to support the community working in this sector with the goal of reducing millions of tons of carbon emissions from 2022 to 2026.
Nepal has also become the first country to provide adaptation-based climate support to private sector organizations working in this area; Which can be used in related schemes including Singapore carbon tax or international aviation sector. Up to 25 percent of the total support available to the private sector will be part of the associated adjustment (not counted in the national target when selling carbon).
Secretary of the Ministry of Forestry and Environment Dr.Gobinda Sharma said that Nepal becoming the first country in Asia to sign an agreement with LEAF Coalition is a great achievement. “This is an evidence that Nepal’s progress in forest conservation and expansion has received international recognition,” he said. “ The support received from LEAF will create an opportunity to reward the tribal community and everyone involved in forest protection, he added.
On the occasion, Chief Executive Officer of Emergent, Aaron Bloomgarden, said that this collaboration with Nepal has provided evidence that healthy forests can become a source of sustainable income in partnership with local communities. “LEAF buyers can now choose high-quality carbon credits from five countries on three continents,” he said.
Senior Vice President of Federation of Nepal Tribal Tribes Buddha GhartiBhujel said that the government’s consultation process on the benefit sharing plan is positive and it is expected that the benefits will reach the tribal and local communities in a fair manner. Similarly, Thakur Bhandari, President of Community Forest Users Federation of Nepal, also said that it has been confirmed that community forest users groups are at the forefront of forest protection.
During the programme, British Ambassador Rob Fenn said that this step of Nepal has shown solid leadership in the fight against climate change and the funds received from this will help in the sustainable livelihood of the community. On the other hand, Norwegian Ambassador DagnyMjøs said that Nepal has presented an example of how long-term commitment and international cooperation can have an impact.
Joint Secretary and Head of RED Implementation Center,NawarajPudasaini, SudhaKhadka, National Director of RECOFTC-Nepal and others also spoke on the occasion.
It was mentioned in the event that the forest area of Nepal, which has been damaged due to overgrazing and firewood exploitation, is being managed sustainably through the cooperation between the province-level forest office and community forest user groups. As a result, the forest area has reached more than 46 percent of the total land area and the goal is to expand it further, said government officials.
It was also said that there are 59 indigenous tribes in Nepal and they represent about 36 percent of the country’s population. Since September 2022, the government has been conducting a nationwide program on ‘Art Trees’ standards and ‘LEAF Coalition’.
In the year 2024/2025, 53 consultation programmes on benefits sharing plan, grievance and resolution mechanism, social and environmental protection measures were completed. By the end of 2025, 100 municipal-level consultations have been completed, and 50 more programs will be organized in 2026.
Along with Nepal, Costa Rica, Ghana, the Brazilian state of Para and Ecuador, the size of the amount negotiated in this way has reached about 325 million US dollars.
