Global Green Growth Institute ‘s Article 6 Climate Cooperation Fund (ACCTIF), in collaboration with Ministry of Forests and Environment (MoFE), Climate Change Management Division (CCMD), organized a workshop on “Unlocking Climate Finance: Understanding Article 6 and Financing Carbon Projects in Nepal,” in Lalitpur on February 09, 2026.
The discussion was opened by Mr. Maheshwar Dhakal, Head of CCMD, MoFE, who emphasized, “Carbon trading is an intangible trade built on trust. For Nepal to benefit meaningfully, all stakeholders must act with credibility, integrity, and collaboration.”
The workshop was aimed at strengthening Nepalese financial institutions’ understanding of Article 6 of the Paris Agreement and the bankability of carbon projects, particularly those supported by long-term Mitigation Outcome Purchase Agreements (MOPAs), and exploring how carbon revenues can be integrated into credit assessments, loan structuring, and risk management.
Minister for Forest and Environment Madhav Prasad Chaulagain, expressed the government’s commitment, saying, “We are working to make the system more efficient and transparent. The NDC 3.0 action plans will be a key stepping stone for progress.” Reflecting on the policy landscape, Dr. Govinda Prasad Sharma, Secretary, MoFE, highlighted, “While Nepal’s carbon regulation has opened avenues for international carbon trade, this market is complex and performance-driven, requiring strong preparation and capacity.”
The workshop brought together senior government officials, banking-sector leaders, private-sector representatives, and international climate finance experts – marking an important step toward mobilizing domestic finance for climate action and enabling Nepalese banks to engage in international carbon markets under Article 6. The discussion was focused on mainly on Paris Agreement and Article 6, Carbon Market Mechanism, Carbon Trade Governance in Nepal and AEPC’s experiences in Carbon Trade and others.
It is worth mention that the Paris Agreement is a legally binding international treaty on climate change adopted by 195 Parties at the UN Climate Change Conference (COP21) held in Paris, France in December, 2015. The treaty entered into force on 4th November 2016. As of 27 January, 2026, there are 194 Parties to the Paris Agreement. Article 6 of the Paris Agreement, the valuable outcome of COP sets out how countries can pursue voluntary cooperation to reach their climate targets. It enables international cooperation to tackle climate change and unlock financial support for developing countries. This means that, under Article 6, countries are able to transfer carbon credits earned from the reduction of greenhouse gas emissions to help one or more countries meet their climate targets. There are three tools which countries can draw upon under Article 6, one of which is the Paris Agreement Crediting Mechanism (PACM) – the UN’s new high-integrity carbon crediting mechanism.
The carbon crediting mechanism under the Paris Agreement allows countries to raise climate ambition and implement national action plans more affordably.
It identifies and encourages opportunities for verifiable emission reductions, attracts funding to implement them, and allows cooperation among countries and other groups to conduct and benefit from these activities.
For example, through this mechanism a company in one country can reduce emissions in that country and have those reductions credited, so that it can sell them to another company in another country. That second company may use them for complying with its own emission reduction obligations or to help it meet net-zero targets.
The Paris Agreement Crediting Mechanism can also be a source of climate finance for developing nations, with a share of proceeds going towards adaptation funding to build resilience to the inevitable impacts of climate change.
At their third session the Parties to the Paris Agreement (CMA), adopted Decision 3/CMA.3 containing the rules, modalities and procedures for a carbon crediting mechanism established by Article 6, paragraph 4, of the Paris Agreement.
The CMA also designated a 12-member body (Article 6.4 Supervisory Body) to supervise the mechanism under the authority and guidance of the CMA and be fully accountable to the CMA. (By R. P. Narayan)
