Government of Nepal and the World Bank today signed loan and grant agreements of US dollars 24 million for 'Forests for Prosperity Project' that will help Nepal advance sustainable forest management.

Of this amount, US dollars 6.1 million is grant while US dollars 17.9 million is concessional loan.

The project will contribute to transforming Nepal's forestry sector by improving sustainable forest management and developing a strong forest-based private sector. These activities will result in multiple benefits for forest-dependent people in selected municipalities in Province 2 and Lumbini Province, including inclusive economic benefits, ecosystem services, and greater climate resilience, the World Bank stated.

It will help strengthen ongoing community-based conservation efforts while promoting inclusive sustainable use.

The agreements were signed by Finance Secretary Sishir Kumar Dhungana on behalf of the Government of Nepal and by the World Bank Country Director for Maldives, Nepal, and Sri Lanka, Faris Hadad-Zervos.

Additionally, a project agreement was signed by the Chief Executive Officer of Agriculture Development Bank, Anil Kumar Upadhyaya and the World Bank Country Director. The Agriculture Development Bank, as a project implementation entity, will design and pilot a credit line for establishing and strengthening forest-based small and medium enterprises.

"Strengthening local communities, for whom forests are a traditional safety net during times of crisis, is especially important in the COVID-19 era. In the same spirit, the project will facilitate Nepal's forest-based private sector to invest in jobs and reduce dependence on timber imports. The project will also provide timely support to the institutions at provincial and local levels to strengthen natural resource governance," stated Dhungana.