Review of the Embassy’ Development Assistance Portfolio Regarding Increased Focus on Environmental Aspects (Nepal)

The Royal Norwegian Embassy in Kathmandu requested Norad to undertake a review of the Embassy's portfolio to identify possible ways and means of addressing/integrating appropriate environmental concerns in the current agreements within present framework and budgets, and for possible future phases of the various programs.

Environmental concerns must be taken into account in all Norwegian-supported development cooperation. Potential impacts on the environment must be assessed, and proposals aimed at reducing adverse effects must be integrated into all measures. Norway has an obligation to ensure that assessments of environmental and social impacts are carried out in
connection with the use of Norwegian development cooperation funds. Furthermore, it should be considered whether it is possible to integrate components that are beneficial to the environment into the measures or add them as supplements to sector programs.

This report addresses possibilities to integrate environmental concerns in existing agreements by:

• Identifying and avoiding harmful direct and indirect environmental impacts of cooperation programs in the different sectors which can undermine sustainability and counteract achieving the development co-operation objectives of poverty reduction - "do no harm".
• Recognizing and realizing opportunities for enhancing environmental conditions, thereby bringing additional benefits to development and economic activities and advancing environmental issues that are a priority for the Norway - "do good".

Conclusions and Recommendations

The Review Team offers the following general conclusions and recommendations:

• "Do no harm" is not adequately addressed in the Embassy's portfolio. For several projects/program information on the need to undertake environmental assessment is not clearly documented.
• Some scope to "do good". For each project/program the Review has identified possibilities to do good within the existing objectives and activities. These should be pursued further in the Embassy's dialogue with partners.
• Strengthen documentation of environmental considerations in appropriation documents. All ADs should include specific references to environment.
• Several of the projects/programs in the Embassy's portfolio are environment-related and should be given policy marker environment, either 2 - environment as primary objective, or 1 - significant objectives. This applies in particular to the Embassy's clean energy portfolio.
• Include environment actively in policy dialogue with the Government of Nepal. In discussions on Nepal's poverty reduction strategy the Embassy should address the poverty - environment nexus.
• Assess the potential for "do no harm" and "do good" in all development projects supported by the Embassy.

The Review Team has assessed eight projects supported by Norway; 4 energy-related, 3 governance-related and 1 education project. For each project the scope for mainstreaming of environment has been assessed and specific recommendations are provided to the Embassy to that effect, as well as actions to climate proofing of the portfolio.