Devolving climate finance: Lessons from a Kenya-Nepal peer exchange on locally-led adaptation

This case study describes a peer-to-peer exchange between Nepal and Kenya focused on devolved climate finance and locally-led adaptation (LLA). It examines the challenges Nepal faces in accessing climate finance at the municipal level and explores how Kenya's Financing Locally-Led Climate Actions (FLLoCA) model and County Climate Change Funds (CCCF) could provide a blueprint for Nepal to empower local governments and communities in climate resilience efforts.

• Local governments in Nepal face significant barriers to accessing climate finance because they are not permitted to access international funding sources directly. Instead, the national government either manages projects or transfers funds to local bodies. While climate-related funding grew from USD 3.2 billion in financial year 2017/18 to USD 5.2 billion in financial year 2022/23, the portion of the budget directly relevant to implementing Local Adaptation Plans for Action (LAPA) has remained at 17%.
• Nepal's local climate planning is hindered by a lack of localized risk and vulnerability data, limited capacity to manage public-private partnerships or complex funding mechanisms, and the exclusion of marginalized groups from decision-making due to weak social inclusion policies and patriarchal norms.
• Kenya has implemented a devolved climate finance system through County Climate Change Funds (CCCF), which are a core part of the Financing Locally-Led Climate Actions (FLLoCA) programme. These funds are legally anchored in County Climate Change Acts/Policies and have been expanded to all 47 counties following successful pilots in Kitui, Makueni, Garissa, Wajir, and Isiolo.
• The peer exchange suggests that Nepal could improve its climate resilience by replicating the FLLoCA participatory framework. Proposed steps include establishing a country-specific climate fund, creating Provincial Climate Change Funds sourced from international donors and national budgets, and enhancing the technical capacity of local governments to manage budgets and include women and vulnerable groups in decision-making.

APA

Climate and Development Knowledge Network (n.d.). Devolving climate finance: Lessons from a Kenya-Nepal peer exchange on locally-led adaptation. https://cdkn.org/story/devolving-climate-finance-lessons-kenya-nepal-peer-exchange-locally-led-adaptation

Chicago

Climate and Development Knowledge Network. Devolving climate finance: Lessons from a Kenya-Nepal peer exchange on locally-led adaptation. n.d. https://cdkn.org/story/devolving-climate-finance-lessons-kenya-nepal-peer-exchange-locally-led-adaptation.

Wikipedia

{{cite report |author=Climate and Development Knowledge Network |title=Devolving climate finance: Lessons from a Kenya-Nepal peer exchange on locally-led adaptation |url=https://cdkn.org/story/devolving-climate-finance-lessons-kenya-nepal-peer-exchange-locally-led-adaptation |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climateanddevelopmentknowledgenetworknddevolving, author = {{Climate and Development Knowledge Network}}, title = {{Devolving climate finance: Lessons from a Kenya-Nepal peer exchange on locally-led adaptation}}, institution = {Climate and Development Knowledge Network}, url = {https://cdkn.org/story/devolving-climate-finance-lessons-kenya-nepal-peer-exchange-locally-led-adaptation}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }