Nepal - Clean Air and Prosperity Project

Overview & Synopsis

Nepal Clean Air and Prosperity Project for Nepal: The development objectives are to reduce PM2.5 emissions from priority sources and strengthen air quality management. Component 1: Adopting Cleaner Production Technologies to Reduce PM2.5 Emissions will support industrial and commercial enterprises, primarily micro, small, and medium enterprises, to transition from fossil fuel and inefficient biomass combustion to cleaner options through three Sub-components. Sub-component 1.1: Building enterprise readiness for clean technology adoption will deploy a Clean Technology Implementation Support Team to provide technical assistance, outreach, and capacity building to enterprises, participating financial institutions (PFIs), and government agencies, conduct technical and financial viability assessments, prepare detailed project reports, develop pellet and briquette quality standards, and guide early operation and maintenance. Sub-component 1.2: Financing clean technology adoption will establish a Clean Industrial Technology Financial Facility offering longer-tenor loans via a Handling Bank and PFIs for electric boilers and furnaces, modern biomass boilers and furnaces with emission controls, and stand-alone emission control devices, coupled with capital grants equal to twenty percent of capital expenditure for electric systems and ten percent for biomass systems, with procedures defined in a Financial Intermediaries Operations Manual and coordinated through Rastriya Banijya Bank, the Ministry of Finance, the Department of Industry, and Nepal Rastra Bank regulations. Sub-component 1.3: Strengthening monitoring and quality control assurance will create a national management information system of boilers and furnaces, establish quality control standards and certification for approved technologies and fuels in coordination with the Nepal Bureau of Standards and Metrology, and enhance inspections by the Department of Industry and the Department of Environment to verify installation and compliance. Component 2: Strengthening Air Quality Monitoring and Management will reinforce regulatory foundations, institutional capacity, and collaboration through two Sub-components. Sub-component 2.1: Strengthening air quality monitoring and information systems, regional cooperation and partnership will repair and upgrade existing stations, add new stations to close coverage gaps, enhance data management, public access and health messaging, undertake source apportionment, build capacity at the Department of Environment and subnational levels, strengthen laboratory and black carbon monitoring capacity, partner with universities for operations and training, and routinely share validated data with the Indo-Gangetic Plains and Himalayan Foothills Air Quality Management regional platform and participate in Science Policy Finance Dialogues. Sub-component 2.2: Strengthening industrial emissions monitoring and governance will operationalize reference methods for stack measurements, procure validated measurements from accredited firms, equip regulators to verify results and inspect major sources, establish complaint response mechanisms, adopt a sustainable monitoring policy with industry financing of post-project measurements, and review and tighten emission standards for boilers, furnaces, and other sources such as brick and cement kilns. Component 3: Project Management, Monitoring, and Capacity Building will support the Project Steering Committee and Project Implementation Units for fiduciary, environmental and social standards, monitoring and evaluation, reporting, staffing, and coordination. Component 4: Contingent Emergency Response Component will provide a mechanism for rapid reallocation of funds to respond to an eligible crisis or emergency under a dedicated manual and action plan.