ADB_book_18 April.qxp - Himalayan Document Centre - icimod

areas. Similarly, the Department of Plant Resourceswhich implements activities related to plantexploration, ex-situ conservation of plant diversity,and phyto-chemical research, has low funding. TwoGovernment companies, Royal Drugs Limited andHerbs Processing and Production Center Limited,were established to produce medicines from plantsand herbs. All phyto-chemical and bio-technologicalresearch activities for their establishment wereconducted by the Department of Plant Resources.Other ministries such as Agriculture, WaterResources, Physical Planning and Works, andTransport, and the municipalities also have fundsavailable for environment-related activities. Theseinclude funds for sector-specific environmentalimpact assessment activities, some environmentallyfriendly measures (such as organic agriculture androadside planting), and solid waste management.The funds committed by the Government for theseactivities are channeled to the research agenciesconcerned through related government departments.These agencies usually have difficulties inreceiving allocated funds on time.Environment Conservation FundThe Government of Nepal established the EnvironmentConservation Fund under the EnvironmentProtection Council in 1993 to finance environmentalactivities. Section 13 of the Environment ProtectionAct 1996 has provisions to establish a fund forprotection of the environment, control of pollution,and protection of National Heritage sites. Fundsreceived from the Government of Nepal, foreigngovernments or international organizations, andother sources are deposited in this fund, which isaudited by the Auditor General of Nepal.In order to administer this fund, the EnvironmentProtection Regulations 1997 also provide for aManaging Committee under the chairmanship of theSecretary of the Ministry of Environment, Scienceand Technology. The committee has representativesfrom the National Planning Commission Secretariat,Ministry of Finance, Nepal Rastra Bank (CentralBank), Federation of Nepalese Chambers ofCommerce and Industries, and an environmentalexpert or chief of an environment-related nongovernmentorganization (NGO).Over the years, about NRs 40 million has beendeposited in this fund. So far, no donor agencies orprivate sector groups have supported this fund. Thefund was used in 1997 and 1998 by 15–20 localenvironmental NGOs from different districts of thecountry for implementing environment conservationand pollution control activities. However, due to theunsatisfactory performance of these NGOs, furtherallocation of funds was abandoned.Poverty Alleviation FundThe Government of Nepal established the PovertyAlleviation Fund (NPC 2003) in 2004 with supportfrom the World Bank; it will remain effective until2009. The main objective of the fund is to supportNepal to reduce poverty by improving the access toincome generation projects and communityinfrastructure for marginalized groups, includingenvironmental management.The Poverty Alleviation Fund has also focusedon environmental management to improve thelivelihoods of the poor and conserve the environment.It seeks to reduce poverty by (i) preventing ormitigating negative environmental impacts that mayemerge from sub-projects, (ii) ensuring the longtermsustainability of benefits from sub-projects bysecuring the natural resources base on which theydepend, and (iii) facilitating projects that increasesustainable use and improvements in localenvironmental quality and human well-being.The Fund finances demand-driven projectsunder several broad categories: income generation,infrastructure, and innovative and special programs.The fund was to be provided in the areas of livestockdevelopment, minor irrigation, agricultural development,forest products, infrastructure development,and micro enterprises. These projects should meetthe criteria of productivity, equity, and sustainability.The fund has also focused on developing “environmentalcodes of practice” consonant with WorldBank guidelines. The Codes of Practice includeenvironmental compliance requirements and bestpractice guidelines for mitigation of environmentalimpacts.National Agricultural Research andDevelopment FundThe Government of Nepal established the NationalAgricultural Research and Development Fund inDecember 2001 in accordance with the provision ofthe Working Fund Act, 1986 (B.S. 2043) to providefunding for action research in the agriculture sector.The fund will be allocated for research anddevelopment in five areas: productivity of thefarming system, crop research and extension,livestock and fisheries research and extension,sustainable utilization of natural resources andprotection of the resource base and the environment,and NTFPs and crops in the Hills.The budget for the fiscal year 2005 is NRs 70million from the Hill Agriculture Research Project,which is funded by the UK Department forInternational Development (DFID), and the CropDiversification Project. The Fund has provided a totalof NRs 24 million for the development of 15 projectsChapter 10: Environmental Financing145