Opinion | Post-graduation climate finance
Summary
As Nepal graduates to a lower middle-income country, it faces reduced concessional climate financing despite growing climate risks, highlighting the need for a shift from aid to blended finance and improved policy frameworks to support climate adaptation.
Key Points
- Nepal's graduation from LDC to lower middle-income status reduces concessional climate change financing while climate risks intensify.
- Climate adaptation in Nepal has relied on grant-driven approaches, which are now constrained and insufficient for long-term needs.
- Blended finance is proposed as a risk-sharing model to mobilise private investment alongside public funds for climate adaptation.
- Policy reforms including regulatory sandboxes, institutional capacity building, and climate investment facilities are needed to enable effective blended finance in Nepal.
