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The recent implementation of Carbon Trade Regulations has opened up opportunities for the private sector to participate in the global carbon market. However, there is still a lack of information on how to engage in this trade. Over the past few years, Nepal's banking sector has been actively involved in green financing, playing a crucial role in advancing Nepal's participation in the global carbon trade.

To address this, the Global Green Growth Institute (GGGI) in Nepal, in collaboration with the 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."

During the workshop, Dr. Maheshwar Dhakal, Head of CCMD at MoFE, highlighted the importance of understanding the carbon trade market and emphasized the need for trust in this intangible trade. He stressed the importance of credibility, integrity, and collaboration among all stakeholders for Nepal to benefit from carbon trading. Dr. Dhakal also provided insights into the current global and national carbon trade scenarios, pointing out Nepal's potential to sell carbon in the global market through the private sector.

The workshop aimed to enhance the understanding of Nepalese financial institutions on Article 6 of the Paris Agreement and the bankability of carbon projects, especially those supported by long-term Mitigation Outcome Purchase Agreements (MOPAs). It also explored how carbon revenues could be integrated into credit assessments, loan structuring, and risk management. The workshop brought together key officials from Nepal's financial institutions, private sector, and government to discuss these important topics.

In his statement, Dr. Govinda Prasad Sharma, secretary at the Ministry of Forest and Environment, mentioned that the minister is focused on implementing carbon regulations to enable the private sector to participate in international carbon trading.

Dr. Sharma emphasized the complexity and performance-driven nature of the international carbon market under Nepal's carbon regulations, requiring thorough preparation and capacity building.

Minister Madhav Prasad Chaulagain of the Ministry of Forest and Environment reiterated the government's dedication to enhancing efficiency and transparency in the system, with the NDC 3.0 action plans playing a crucial role in advancing progress.

CEO Manor Kumar Gyawali of NABIL Bank expressed readiness to support and assist private entities in engaging in global carbon trading.

Anjan Shrestha, senior vice president of the Federation of Nepalese Chamber of Commerce and Industry (FNCCI), stressed the importance of the government gaining the trust of the private sector to facilitate carbon trading without restrictions.

The workshop convened senior government officials, leaders from the banking sector, private sector representatives, and international climate finance experts, signaling a significant milestone in mobilizing domestic finance for climate initiatives and enabling Nepalese banks to participate in international carbon markets under Article 6.

During a workshop on Unlocking Climate Finance: Understanding Article 6 and Financing Carbon Projects in Nepal, Dr. Mukesh Ghimire, the director of the Alternative Energy Promotion Center (AEPC), emphasized the global carbon market framework in his paper.

Ghimire's presentation focused on "Introduction to Article 6 and Carbon Markets," providing an overview of the Paris Agreement and Article 6 (6.2 and 6.4 Mechanism). He also delved into topics such as mitigation outcomes, ITMOs, Nepal's Engagement with Article 6, and its Carbon Market Framework.

In another presentation on the experience of Nepal's banking sector with climate and the potential for carbon projects, Dinesh Dulal, Chief Sustainable Energy Banking at NMB, discussed existing policies and regulations. He suggested more flexible provisions to enable the private sector to participate in climate and carbon finance.

Dulal expressed NMB's readiness to share its carbon finance experiences with other financial institutions and the banking sector.

The workshop comprised four sessions featuring presentations by Ash Sharma, Nishan Khanal, and Dr. Prem Kumar Pokharel. Sharma focused on bankable carbon projects within the context of Mitigation Outcome Purchase Agreement (MOPA). Sharma and Khanal explored financing carbon projects and opportunities for local banks. The workshop, attended by representatives from commercial banks, facilitated a better understanding of the complexities of climate and climate finance in the context of carbon trading.