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Business Case

Summary Sheet

Portfolio/ Business/Country Plan Summary:

The UK has a long bilateral history with Nepal, spanning over 200 years. Nepal’s geopolitical position is
critical for the UK’s Indo-Pacific strategy. The UK’s historic relations with Nepal, including traditional
military links, puts us in a unique position to establish a modern, mutually beneficial development
partnership that moves beyond traditional aid. We have shared interests with Nepal and key friendly
nations to support Green Resilient and Inclusive Development and the strategic priorities in the country’s
current Periodic Plan.

The UK in Nepal has set five campaign goals:

Goal 1: Building Democratic Resilience: We will contribute to a more open and democratic society in
Nepal through inclusive, stable and effective governance.
Goal 2: Stability and Security: Our support to capable security and rule of law institutions that protect
the rights of all people will strengthen Nepal’s stability.
Goal 3: Growth and Trade: We will support Nepal’s transition to sustainable middle-income status by
facilitating green growth, increased investment and more open trade.
Goal 4: Climate and Resilience: We will support Nepal’s actions on disaster preparedness and climate
adaptation and mitigation to promote greener, resilient and more inclusive growth, and help mobilise
climate finance to enable Nepal meet its ambitious climate targets.
Goal 5: Women and girls: We will invest in human development to promote wellbeing, reduce
preventable deaths and enhance human capital, particularly among women and girls.

As part of an evolving portfolio that respond to Nepal’s changing context and the UK’s strategic
ambitions, the Resilience, Adaptation and Inclusion in Nepal (RAIN) programme is one of BEK’s main
investments supporting Goal 4. It represents a significant portion of BEK’s international climate finance
commitments (around 37% of ICF spend in BEK’s pipeline portfolio). There are links to Goal 1
(strengthening government systems), Goal 3 (leveraging investments) and Goal 5 (with inclusion at the
heart of the programme).

Country: Nepal / Sector: Climate and Resilience

Title: Resilience, Adaptation and Inclusion in Nepal (RAIN)

Programme summary:
RAIN will (i) include technical assistance to the three tiers of Nepal’s government to develop and
implement policy, planning and budgeting systems supporting the government to adapt to climate
change and respond to natural disasters (ii) unlock additional climate finance and (iii) support early action
and adaptation efforts at community level and (iv) make social protection systems more adaptive and
shock-responsive. This will reduce losses and damages and build the resilience of vulnerable
communities at risk of hazards. An emphasis on inclusion and evidence underpins the programme. An
Internal Risk Facility ensures that the UK can respond to large scale shocks.
What is the rationale for UK Aid spending?
The programme is aligned to the International Development Strategy, the Agenda 2030 for Sustainable
Development, the Integrated Review Refresh 2023, 2023 International Development White Paper, UK
ICF, COP26 and COP27 commitments, the 2030 Strategic Framework for International Climate and
Nature Action, the UK International Climate Finance Strategy and the International Women and Girls
Strategy 2023-2030. By supporting effective investments in climate adaptation and mitigation, resilience,
disaster risk management and adaptive and shock-responsive social protection, RAIN will prevent
humanitarian need. It will build effective institutions and systems, with an emphasis on localisation,
building sustainable partnerships and investing in ‘patient development’. RAIN demonstrates our long-
term commitment to the Indo-Pacific and a strategic relationship with Nepal in a region of increasing
geopolitical relevance. The programme will build on and protect the gains of 13 years of UK support to
Nepal on climate change adaptation and mitigation, disaster resilience, and humanitarian preparedness
and response. The programme will maximise central investments and make strong connections to UK
Centres of Expertise in climate change, disaster risk management and social protection.

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Programme Value: up to £38.5m (including £3.5m Country/ Region or Sector:

unfunded Internal Risk Facility) Nepal/IIOD working on climate and
disaster resilience/humanitarian

Date of Approval of Concept 10/05/2023

Note:
Date of Approval of Business 20/12/2023
Case:
Programme Code: 400018 AMP Start AMP End Date: 30/03/2030
Date: FY
2024/5
Overall programme risk rating: Major

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Acronyms
AA Anticipatory Action RDEL Resource Departmental Expenditure
ADB Asian Development Bank Limit
REAP Risk-Informed Early Action Partnership
AG Accountable Grant
RENT Research and Evidence for Nepal in
ASRSP Adaptive and Shock Responsive Social Protection Transition
BEK British Embassy Kathmandu RoI Return on investment
CARA Climate Action for a Resilient Asia SDR Strengthening Disaster Resilience and
Responding to Humanitarian
CCA Climate change Adaptation
Emergencies in Nepal Programme
CDEL Capital Departmental Expenditure Limit SRSP Shock Responsive Social Protection
CLARE Climate Adaptation and Resilience TA Technical Assistance
COP Conference of the Parties ToC Theory of Change
SEAH Sexual Exploitation, Abuse and
CSD Climate Smart Development Programme Harassment
CSO Civil Society Organisation UNCDF UN Capital Development Fund
DFI Development Finance Institution VfM Value for Money
DHM Department of Hydrology and Meteorology WB World Bank
DRM Disaster Risk Management
DRR Disaster Risk Reduction
EW4ALL Early Warnings for All
EWS Early Warning System
E4D Evidence for Development
FCDO Foreign, Commonwealth and Development Office
GCF Green Climate Fund
GESI Gender Equality and Social Inclusion
GLOF Glacial Lake Outburst Floods
GGN Green Growth Nepal
GoN Government of Nepal
GRID Green, Resilience and Inclusive Development
HKH Hindu Kush Himalayan
ICF International Climate Finance
IRF Internal Risk Facility
ISR Integrated Social Registry
KPI Key Performance Indicators
LAPA Local Adaptation Plan for Action
LISP Local Adaptive Living Facility
LoCAL Local Infrastructure Support Programme
MDB Multilateral Development Bank
MoF Ministry of Finance
MoFE Ministry of Forestry and Environment
MoHA Ministry of Home Affairs
MIS Management Information System
MoU Memorandum of Understanding
NAP National Adaptation Plan
NAPA National Adaptation Programme of Action
NDC Nationally Determined Contribution
NDRRMA National Disaster Risk Reduction and Management
NIB Authority
NGO Nepal in Business
ODA Non-governmental organisation
ProF Overseas Development Assistance
RAIN Programme Operating Framework
Resilience Adaptation and Inclusion Nepal

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A. Strategic Case

CONTEXT

1. Nepal is one of the countries most affected by climate change, ranking number 10 over the period 2000-
2019 in terms of vulnerability.1 The country is highly exposed to the impacts of climate change and highly
vulnerable to climate risks because of its mountainous topography and abrupt ecological and climatic transitions,
aggravated by a low level of development, a reliance on natural resource-based livelihoods, and multidimensional
poverty. Global temperature rises are driving “unprecedented and largely irreversible changes” in the Hindu Kush
Himalayan (HKH) cryosphere (icy areas).2 The HKH region is warming at 2 times the global average which means
that glaciers are retreating quickly (65% faster in the 2010s than in the previous decade), snowfall days are
dwindling, and permafrost is melting. These changes will have fundamental impacts on people and nature. Water
availability will peak by 2050 and then decline. Risks of disasters will spike, and mountain landscapes will become
increasingly fragile3. Population growth increases pressure on resources4.

2. Nepal is highly vulnerable to disasters from multiple hazards across the country. Climate change has and
will continue to exacerbate the frequency and severity of acute climate hazards such as floods, landslides,
avalanches, forest fires, droughts and glacial lake outburst floods (GLOFs).5 Over 80% of hazard events are
hydrometeorological6. Nepal is also one of the most earthquake-prone regions in the world given its proximity to two
converging tectonic plates. In addition, cascading hazards are becoming more prevalent in the central Himalayas.
Primary hazards (e.g., earthquakes, avalanches, and landslides) often trigger secondary hazards (e.g., landslide
dam, debris flow, and flooding), compounding the risks to human settlements, infrastructures, and ecosystems7.

3. The impact of these disasters is significant. Impacts on land and natural resources, and infrastructure affect
human well-being, put human life at risk and threaten livelihoods (especially related to the agriculture sector and
tourism). On average, disasters cause annual economic loss up to about 2% of GDP. Between 1971 and 2015,
approximately 900 people on average (per year) lost their lives due to hydro-meteorological, geological and health-
related disasters in Nepal. For example, the 2015 Gorkha Earthquake killed 8790 people, injured 22,300 and
damaged properties worth of NPR 700 billion8. Between 2019 and 2021, 567 people were killed by landslides (with
106 people missing. In the same period thunderbolt/lightning (231), floods (178 killed and 98 missing) and fires in
buildings and homes (234) also caused deaths.9 According to ICIMOD, air pollution reduces life expectancy by 5
years on average in Kathmandu. The poor and most marginalized groups who lack the resources to adapt are
often disproportionately affected and more likely to resort to negative coping strategies. 10

4. Addressing the challenges presented by climate-induced and other hazards is a priority for Nepal. Over the
last decade, the Government of Nepal (GoN) has taken concrete steps to ensure that the country’s development
pathway is resilient to climate change and inclusive. Since 2010, it has committed to building climate resilience and
integrating adaptation in policies and planning through the development of a National Adaptation Programme of
Action (NAPA) in 2010,11 preparation of Local Adaptation Plans for Action (LAPAs) in 2012 and the launching of
Nepal’s National Adaptation Plan (NAP) process in 2015. Nepal also has a strategic action plan for disaster risk
reduction and management spanning from 2018 to 2030 12. A priority of this plan is the implementation of multi-
hazard risk assessment and mapping at various levels of governance, expanding upon the success of flood early
warning systems.

Current challenges
5. Governance and wider political context: There are a number of challenges relating to constitutional mandates,
capacity and coordination between responsible government entities. The federal transition process – which de facto
started with the election of the first local governments in early 2017 – has resulted in local governments being

1 Germanwatch. 2021. Global Climate Risk Index 2021: Briefing Paper. January 2021.
2 International Centre for Integrated Mountain Development (ICIMOD), “HI-WISE - Water, Ice, Society, and Ecosystems in the
Hindu Kush Himalaya”, June 2023.
3 ibid
4 Data from GoN National Population and Housing Census 2021 Results.
5 The number of people annually affected by river flooding could more than double by 2030 as a result of climate change.
6 Based on DRR Portal Data available at http://drrportal.gov.np/
7 Sharma, Sanjib et al, “Increasing risk of cascading hazards in the central Himalayas”, July 2022
8 NPC, 2015. Post-Disaster Need Assessment Report. National Planning Commission.
9 GoN, Ministry of Home Affairs, “Crisis to Resilience: Transforming through Disaster Risk Reduction and Management”, Position

Paper for Pacific Ministerial Conference on Disaster Risk Reduction 2022, September 2022.
10 13 T. Walker and others. 2019. Risk and Vulnerability in Nepal : Findings from the Household Risk and Vulnerability Survey

(worldbank.org)Risk and Vulnerability in Nepal: Findings from the Household Risk and Vulnerability Survey
11 Government of Nepal. 2010. National Adaptation Programme of Action (NAPA) to Climate Change. Ministry of Environment.

September 2010.
12 MoHA, 2018. Disaster Risk Reduction National Strategic Action Plan (2018-2030). Ministry of Home Affairs.

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responsible for the delivery of key public services. Financial resources and the management thereof were shifted to
provincial and local levels. However, progress across different aspects of decentralisation (resourcing, capabilities
and capacities) has been uneven.13

6. Roles and responsibilities are not fully and clearly delineated across three levels of governments in the
disaster risk management space14. Provincial governments in general are still in a nascent stage and their role in
these sectors is not yet clear. Local governments also have insufficient fiscal and human resource skills and
capacities. New and restructured staff face new systems and procedures that are not fully established and
internalized yet. There are also challenges with frequent staff turnover at all three tiers of government. Donor
implemented projects (which often introduce different types of plans and tools to address the same challenges)
often overwhelm local governments who lack the resources to coordinate and monitor these activities. Many
initiatives try to support local governments with climate-related issues, but efforts are often project-based and few
actions have been taken to systematically link local adaptation planning processes with the new intergovernmental
fiscal systems. A UK funded Research and Evidence for Nepal in Transition (RENT) study on climate highlights
discrepancies between local government leader’s perception of risk relating to climate and disasters (generally
aware) and budget allocations (limited)15. Limited fiscal, administrative and sectoral inter-governmental coordination
has led to both duplication and lack of ownership of disaster management and climate mitigation efforts. Finally,
local governments deal with numerous competing priorities within limited fiscal space.

7. The need for climate finance is significant. The NAP has assessed the need for $47.4 billion in adaptation
investment until 2050 to address the adaptation resilience gap in the country. However, the NAP estimates that
Nepal can only contribute US$1.5 billion until 2050, while the rest of $45.9 billion has to be attracted from external
sources, especially from international sources, preferably all grant funding. It has been difficult for Nepal to mobilize
development and climate finance for strategic and scaled-up investment in climate adaptation. Potential sources
and mechanisms for filling the financing gap can be identified, including domestic budgets, climate funds,
international public finance from multilateral institutions and bilateral development partners, and private sector
investment from both domestic and international sources. However, while Multilateral Development Banks (MDBs)
bilateral development finance institutions (DFIs) have increased the share of adaptation finance in their climate
finance, there remain challenges in mobilising private sector investment in adaptation. There is a need for more
predictable finance as well as agile approaches and financing tools to provide an integrated and transformative
stimulus that will trigger a paradigm shift toward adaptation and resilience. This is needed to comprehensively
support the country’s climate change adaptation goals together with mitigation co-benefits.

8. The GoN has identified the challenges of accessing funds like the Green Climate Fund (Green Climate
Fund). Like many applicants globally, their experience is that its application systems are too slow, complex and
resource intensive. Helping the Green Climate Fund achieve its potential has been identified as one of the FCDO’s
central priorities. RAIN will support the GoN to access this funding. The Nepal Climate Finance Strategy and Action
Plan (2022-2032) also identifies the need to create an enabling environment for the private sector to support the
implementation of adaptation and mitigation policies, strategies, and action plans. This issue will be outside RAIN’s
scope, but BEK is developing a portfolio wide climate financing strategy and linkages will be ensured.
9. Vulnerability and social exclusion. Disasters do not affect populations equally and often disproportionately affect
the most economically and socially vulnerable people. There are different, often intersecting, types of vulnerability
associated with households in Nepal16. The first relates to income poverty. Nepal’s poverty rates have declined but
the number of people who fall in the near-poor category (i.e., living on less than USD 2 per day) is 56 per cent of
the total population17. Second, historical and structural exclusions with regards to caste, ethnicity, gender, age,
ability, and geography present another form of vulnerability18. For example, in Nepal, people from indigenous
communities, Dalits and minority religious groups tend to be over-represented amongst the chronically poor and
tend to have higher mortality rates.19
10. Gendered differences in disaster outcomes tend to reinforce existing inequalities. ‘Patriarchal risks’ - often
rooted in the prevalence of extreme forms of gender-based discrimination, the structurally inferior role ascribed to
women and girls, restrictions on women’s economic activities, and the reliance on the male breadwinner - increase

13 Boex et al. “Nepal Sector Federalization Study Postscript: Concluding observations, lessons and recommendations”. Internal
BEK paper. 2023.
14 Oxford Policy Management, “Delineation of Roles and Responsibilities in DRR”, 2020
15 RENT, “Early findings: Perceptions and Action on Climate Change in Nepal’s Wards and Municipalities”, Internal FCDO paper,

2023.
16 Lovell, E et al, “Building resilience for all: intersectional approaches for reducing vulnerability to natural hazards in Nepal”, ODI,

2019.
17 Social Science Baha, “Resilient Social Protection for an Inclusive Development”, 2019.
18 For example, research by The Asia Foundation on post-earthquake reconstruction found that three years into the recovery, Dalits

were “left behind” compared to their high-caste counterparts in the reconstruction and recovery phase. See: “Dalits Left Behind as
Nepal Slowly Recovers”, 2017.
19 Social Science Baha, “Resilient Social Protection for an Inclusive Development”, 2019.

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the vulnerability of women who do not have male support 20. People with disabilities are also disproportionately
affected by emergencies. A 2023 Humanity and Inclusion (HI) study on impact of climate change on persons with
disabilities in Nepal found that they are a uniquely vulnerable population due to lack of access to timely and inclusive
early warning information and a reluctance to evacuate to shelters due to logistical and transportation constraints
as well as safety concerns. The research also showed gaps and omissions in terms of inclusion of persons with
disabilities in local climate governance.21 In addition, they also face issues with accessing quality healthcare during
a crisis and are also more likely to experience higher levels of mortality and morbidity.22
11. Shocks, including climate and economic – affect these groups most. This can push them to take actions
that further entrench their situation (‘negative coping strategies’ 23). At the same time, women and girls,
indigenous groups, people with disabilities and marginalised people are frontline responders and critical agents of
change to drive adaptation action24.

12. Social protection systems are not shock responsive or adaptive. Nepal has a large portfolio of social protection
programmes which cover about a third of the population. Despite this, about 20.1 million people in Nepal remain
without social protection and the support is often not reaching the poorest and most vulnerable. There is broad
consensus on the need to make social protection in Nepal more adaptive and shock-responsive to ensure more
efficient and inclusive delivery of relief and recovery. However, in practice there are several challenges. Social
protection programmes in Nepal are managed by multiple agencies without an overarching policy framework.
Programmes and systems in social protection and disaster risk management are not linked. Delivery of social
protection and relief and recovery programs continues to be hampered by fragmented information systems.
Currently, each programme has its own information system, identification, and enrolment process; there is no
integrated database of households linked to programmes leading to inefficiencies in data collection and
management, gaps in coverage and challenges in delivering disaster response. Policies and laws relating to social
protection in Nepal also do not take an adequate intersectional approach which considers the forms, types and level
of power relationships between different groups of men and women.

13. With a geography spanning from the plains of the Terai to Mount Everest, the variability of natural hazards
varies tremendously within Nepal. World Bank research looking at the key climate change hazards (river flooding,
heat exposure, drought, landslides and air pollution) affecting Nepali households highlights the varying distributional
impact of these hazards and coping ability.25 Development is generally uneven across provinces. This underlines
the need for spatially targeted investments by all levels of government to mitigate the welfare impacts of diverse
climate change hazards.

Emerging policy frameworks provide opportunities for new approaches:

14. Risk-Informed Early Action Partnership and Early Warning for All: The GoN’s National Disaster Risk Reduction
and Management Authority (NDRRMA) joined the Risk-Informed Early Action Partnership (REAP) as part of COP26
commitments26. The REAP initiative aims to make more than 1 billion people safe globally from disasters by 2025.
NDRRMA is committed to REAP and is drafting a concept note on multi-hazard early warning systems and multi-
hazard risk assessment diagnostics. They are committed to developing a national framework for early action as per
the National Disaster Risk Financing (DRF) Strategy 2021 and the Disaster Risk Reduction National Strategic Action
Plan 2018-2030. Nepal is also part of the global initiative on Early Warnings for All (EWS4ALL) launched at COP27.
NDRRMA will formulate an EWS4ALL roadmap to achieve national coverage for early warning 27. They will
identify policy, technical and financial gaps (at all three tiers of government) across the four pillars of early warning:
risk knowledge, forecasting and monitoring, risk communication, and preparedness for response.
15. GRID framework: Under the ownership of the Government of Nepal, the Green, Resilient, and Inclusive
Development (GRID) approach is supported by developing partners - convened by the World Bank and the UK - to
align financial and non-financial support across all sectors included under the GRID banner. In September 2021, 14
Development Agencies committed to invest in GRID compatible programmes based on GRID priority transitions.28
Following the impacts of the Covid-19 pandemic and the war in Ukraine, the GRID provides a pathway to establish
a sustainable framework for green and inclusive growth and addressing climate change. Nepal is uniquely placed
to address these challenges though an integrated approach across government, reflecting its natural resource base,

20 Ibid.
21 Humanity and Inclusion (Handicap International), “Persons with disabilities and climate change in Nepal - Humanitarian impacts
and pathways for inclusive climate action”, 2023.
22 WHO. Guidance Note on Disability and Emergency Risk Management for Health. 2014
23 These include high-interest borrowing, defaulting on exiting loans, reductions in consumption, sale of household and productive

assets, withdrawal of children from school and sexual exploitation in exchange for food and money.
24 UK Government, “Together for People and Plant - UK International Climate Finance Strategy”, March 2023.
25 Mattio Amadio et al, “Climate risk, exposure, vulnerability and resilience in Nepal”, 2023.
26 Press Release: NDRRMA joins REAP, 2021.
27 Press Release: EWS4ALL Initiative, 2022.
28 ADB, Australia, EU, Finland, France, Germany, IMF, Korea, Norway, Switzerland, UK, UN, USAID, WB [Observer: AIN-

Association of INGOs]
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social context and institutional structures and it will be the first country to pioneer the GRID approach. GRID provides
an opportunity to tailor Nepal’s development needs and objectives integrating environmental integrity, building
resilience and ensuring inclusion across all areas of the economy, while meeting climate goals and restoring
momentum on the Sustainable Development Goals.

UK RESPONSE TO DATE

16. RAIN will build on 13 years of UK support to Nepal on climate change adaptation and mitigation, disaster
resilience, post-earthquake reconstruction and humanitarian preparedness and response. The British
Embassy Kathmandu (BEK) currently has two programmes in the climate and disaster resilience space. The Climate
Smart Development Programme (CSD, 2016-2025) supports national policy reform, demonstrates adaptation and
mitigation actions on the ground, and leverages public and private climate financing. The Strengthening Disaster
Resilience and Responding to Humanitarian Emergencies in Nepal Programme (SDR, 2017-2025) aims to reduce
risk and build resilience to natural hazards in Nepal. The “Post-Earthquake Reconstruction Programme”, which
closed in 2022, focused on building back better and making long-term investments that stimulate resilience against
future disasters.
17. RAIN will protect the gains from these investments. Key lessons from previous programmes which have
informed programme design include:
a) It is critical to work with all three tiers of government and local partners to ensure local ownership,
coherence and sustainability. Co-creation with the government takes longer but is essential to maximise
government ownership.
b) Given the complexity of processes and incremental change in capacity, governance interventions should be
grounded in context, informed by political economy analysis, and take multi-sectoral and multi-stakeholder
approach to design and implementation given that climate and disaster resilience is a cross-cutting concern.
c) Flexibility and patience: longevity of interventions and patience can lead to more significant impact. Flexibility
and the ability to adapt and change direction when things do not work or new opportunities arise are
important.29
d) Monitoring and strategic learning for the programme is essential for ensuring programmes remain adaptive
to their context. Prioritisation of activities must be evidence-based. Support to strengthen government capacity
and implementing agencies to use research effectively is vital to ensure adaptation and disaster risk
management measures are based on robust scientific evidence.
e) BEK has supported the development and implementation of Local Adaptation Plans of Action (LAPAs) through
the Nepal Climate Change Support Programme. In the final phase of this support and going forward under
RAIN, we will shift to a mainstreaming approach focusing on making local annual and multi-year development
plans climate (and disaster) resilient. This is because while the LAPA projects have benefited vulnerable
communities, the approach was found to be too projectized and lacking sustainability once funding ended.
f) CSD and SDR were designed as “sister programmes” and shared policy support and monitoring and learning
functions. However, synergies between the two programmes could have been optimised further.
g) Inclusion needs to be at the heart of interventions. For example, the Post Earthquake Reconstruction
Programme made efforts to ensure the poorest were not left behind by directing support towards the most
vulnerable populations in earthquake affected areas through specific socio-economic interventions and
improving access to government services and support (including connecting people to social security
allowances). Explicit focus on the most vulnerable is important to ensure a robust understanding of who is left
behind. This is a dynamic process as needs and contexts continue to evolve through the course of
programmes.
h) Multi-year resilience programming is essential. RAIN will focus on early warning, anticipatory and early
action and interventions which help avoid negative coping strategies which erode resilience. It is important to
keep people above the poverty line during crises.
i) The cost of development and overall resilience building is increasing given the increased frequency,
unpredictability and scale of climate-induced natural hazards.
j) Efforts to operationalise localisation through the Start Fund Nepal model have led to strengthened capacity of
local and national non-governmental organisations. Empowering local actors has recognised the
importance of local knowledge and cultural understanding and improved humanitarian interventions’
relevance, efficiency and impact. The pooled consortia approach has led to building credible partnerships
with local governments and strengthened broader coordination among NGOs to prioritise geographies and
communities based on needs and gaps when impacted by small to medium scaled disasters.

29 Oxford Policy Management. “Lessons learned from the FCDO Policy and Institutions Facility, Nepal”. 2023.
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k) All disaster risk reduction measures, including nature-based solutions, hybrid approaches and
engineered solutions should be considered systematically to ensure that the best set of measures to reduce
risks for the long-term are selected.
l) Support for institutional mechanisms to assess and respond to greater uncertainty and changing disaster risk
patterns is needed, taking a multiple hazard approach.

STRATEGIC FIT AND RATIONALE FOR UK INTERVENTION

18. By supporting effective investments in climate adaptation, resilience, disaster risk management and
adaptive and shock-responsive social protection, RAIN will help prevent humanitarian need. It will focus on
building effective institutions and systems, with an emphasis on localisation, building sustainable partnerships and
investing in ‘patient development’. These focus areas and this approach firmly support Nepal’s own vision for green,
resilient and inclusive development (GRID30). RAIN will therefore contribute to BEK’s efforts to build a modern
partnership which enables the Nepal to set and follow its own development path. We will continue to engage closely
with GoN throughout the programme mobilisation and implementation phases.
19. RAIN demonstrates our long-term commitment to the Indo-Pacific and a strategic relationship with Nepal
in a region of increasing geopolitical relevance. Building on UK investments as outlined above, RAIN will
continue efforts to strengthen climate and disaster resilience. But as Nepal approaches graduation from Least
Developed Country (LDC) status, our partnership is evolving, with our support shifting away from front line service
delivery and an increased focus on systems strengthening.

20. Inclusion is at the heart of the programme. This aligns with the FCDO International Women and Girls Strategy
2023-2030. The strategy sets out the UK’s ambition to support women and girls impacted by crises and shocks,
including climate change and invest in key ‘enablers’ such as access to social protection. The strategy also highlights
our approach to integrating gender and social inclusion (GESI) objectives into our climate finance programmes and
strategies, enabling women and girls to be drivers of locally led adaptation and supporting their leadership in a just
transition to a green and inclusive economy.

21. The programme will maximise central investments and make strong connections to UK Centres of Expertise
in climate change, disaster risk management and social protection. RAIN will collaborate with and complement
the regional Climate Action for a Resilient Asia (CARA) programme and the central Climate Adaptation and
Resilience (CLARE) research programme. Through CARA, FCDO is funding the International Centre for Integrated
Mountain Development (ICIMOD) to demonstrate and scale up nature-based solutions for climate change
adaptation and green mountain livelihoods; developing the capacity of the government to monitor air quality and
design and implement policy responses to reduce air pollution; and supporting regional cooperation and
policymaking and the mobilisation of investment in the Hindu Kush Himalaya mountainous parts of Nepal, Bhutan,
Bangladesh and India. CARA is also funding activities in Nepal by ADB through the Community Resilient Partnership
Programme, by the World Bank through the Resilient Asia Programme (on air quality, thermal comfort and cooling
and hydromet capacity through the South Asia Hydromet Forum), and by UNDP through the Climate Finance
Network. CARA will also explore partnerships with the UK Met Office on building the capacity of the Department of
Hydrology and Meteorology (DHM) on short term and seasonal weather forecasting for risk informed decision
making alongside strengthening existing partnership with the NDRRMA on muti-hazard early warning system for
early action. Research and evidence from CLARE on the economics of climate finance will inform the climate action
elements of RAIN.

22. RAIN is an integral part of BEK’s portfolio with synergies and opportunities to maximise impact. The Local
Infrastructure Support Programme (LISP) is improving Nepal’s local and provincial governments’ delivery of
infrastructure services with an ambition of increased resilience and infrastructure services provision for remote and
vulnerable communities. Green Growth Nepal (GGN) and Nepal in Business (NIB) will also work on mobilising
climate finance but focusing on private and ODA backed commercially minded institutions. The Evidence for
Development (E4D) programme works with all layers of Government to promote and support evidence-based
planning and decision making, including on climate, resilience, and nature. It also generates research products on
Government officials’ as well as general public's awareness of climate issues that is relevant for RAIN. RAIN will
also emphasize strategic learning throughout the programme lifecycle and have close links with E4D’s successor
programme (under design).

23. RAIN focuses on influence and policy reform. It will leverage strategic partnerships with the World Bank and
Asian Development Bank, complementing central initiatives such as the Bridgetown Initiative to reform and green
the global financial system and the UK’s objective of supporting ADB’s transformation into Asia’s climate bank.

30
Nepal’s Green, Resilient and Inclusive Development (GRID) approach was initiated by the UK and World Bank and adopted by the GoN and
development partners in 2021 to guide long-term green growth and build resilience to climate and other shocks.

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PROPOSED UK INTERVENTION

Programme focus and components

24. RAIN will strengthen Nepal’s climate change adaptation and disaster risk management efforts and help
make social protection systems more adaptive and shock responsive. At the impact level, RAIN will build the
resilience of vulnerable groups and communities to climate risks and other hazards through increased capacity to
prevent, adapt to, anticipate and absorb climate and other shocks.

25. The programme takes a systems-strengthening approach and will focus on the following outcome areas:
A. GoN uses its own fiscal resources and access to international climate finance to meet the goals of Nepal’s
National Adaptation Plan.
B. Enhanced capacity (at government and community levels) to understand climate and disaster risks and
incentives to integrate climate and disaster resilience into planning, policy, and investment decisions across
all affected areas of society and economy, including through effective channelling of adaptation finance to
the local level.
C. Social protection systems are adaptive, shock responsive and effective in reaching the most vulnerable
communities.
D. People are safer from disasters through improved accessible early warning systems and preparedness and
strengthened delivery mechanisms and early action to reach those who need it most. Impact of shocks is
reduced.

26. To deliver these outcome areas, the programme will offer the following interlinked components. It is important to
note that RAIN envisages a combination of implementing partners who will be expected to collaborate, share
learning and work towards shared outcomes (see Table 1).

Table 1: Components and outcome areas

Component (Budget) Description Outcome areas

I Technical Assistance Technical assistance for three tiers of government to strengthen A, B, D
and Strategic policy and institutions for climate and disaster resilience (with
Learning Unit links to component D on social protection). It will include a
Strategic Learning Unit which will work across the RAIN portfolio
to enable strategic learning, foster coordination and take an
adaptive management approach for RAIN.

II Mobilising adaptation Linked to components I and III, this component will help mobilise A, B
finance and domestic and international climate finance to enable Nepal to
strengthening meet its ambitious climate targets and support climate
systems for its adaptation initiatives in Nepal. It will include support for
decentralised establishing a financing mechanism for mainstreaming climate
deployment change into regular planning, budgeting and budget execution.

III Community This component will empower communities to establish B, C, D

resilience, adaptation, localised, sustainable mechanisms for resilience building,
early action and adaptation and early warning and early action, and inclusion.
inclusion This will include supporting strong participation of communities
in the design, implementation of local development plans that
integrate adaptation and resilience. Until 2026, this will include
continued support to Start Fund Nepal to ensure a responsibly
paced transition away from humanitarian response to small and
medium-scale crises.

IV Adaptive and shock This component will provide technical assistance for the C, D
responsive social development and implementation of the Shock Responsive
protection (ASRSP) Social Protection (SRSP) Guidelines, support for strengthening
information systems for ASRSP and policy analysis and
dialogue.
V Internal Risk Facility BEK is transitioning away from providing support to small and Humanitarian
(IRF) medium-scale disasters. This IRF could be activated to enable response
BEK to help respond to a large scale (for Nepal) shock if the
GoN requests assistance.

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Approach to inclusion

27. Inclusion is at the heart of the programme. The design team has considered the relevant commercial,
management and governance arrangements required to make this work. This is set out throughout this Business
Case. Text box 1 below gives some illustrative examples of what this means in practice.

Text box 1: The “I” in RAIN:

RAIN will place inclusion at the heart of the programme. GESI considerations will be mainstreamed alongside the delivery of
targeted interventions to ensure the most vulnerable and excluded groups in Nepal are reached and not left behind - including
women and girls, persons with disabilities, children, elderly and marginalised ethnic groups, indigenous communities, Dalits and
minority religious groups.
Specific examples include:
1. The delivery of Technical Assistance at the provincial and local levels will help to build capability and awareness on climate
and disaster-resilience decision-making, helping to ensure the most vulnerable groups are not excluded when shocks occur.
Evidence, strategic learning, and best practice will be generated to understand what interventions are most effective at
supporting the most vulnerable.
2. Funding delivered through a consortium of international, national, and local organisations will promote and scale up
community resilience and direct resources to the most excluded social groups. A specific focus on Civil Society Organisations
(CSOs), who are often first responders within the community, will help to promote targeting and meaningful participation and
of the most vulnerable and further unlock funding for local CSOs, Women’s Right Organisations and Disabled Persons
Organisations in Nepal. Specific awareness raising and capacity building on specific risks such as Sexual Exploitation, Abuse
and Harassment (SEAH) will help protect the most vulnerable women, children and person with disabilities who are most
exposed to safeguarding risks in an emergency context.
3. The focus on early action will help to build the resilience and adaptive capacity of social excluded communities to natural
hazards at the provincial and local level. The construction of safe shelters, flood resilient housing and tailored early warning
and evacuation messages that considers gender, disability and SEAH, will ensure the most vulnerable have access to safe,
inclusive, and timely support that meets their needs and prevents negative coping mechanisms.
4. The provision of technical assistance to the social protection sector will help to make Nepal’s social protection systems more
adaptive and responsive to shocks. This will build the resilience of the most affected and excluded persons (i.e. female
headed households, persons with disabilities, elderly and ethnic and lower caste groups) before, during and in the aftermath
of a crisis.

In addition, GESI will be considered throughout the lifecycle of the programme. RAIN will:
• Track progress on GESI measures systematically, including at annual review and project completion stages. During the
inception phase of the programme a GESI analysis will be carried out to strengthen the evidence base and understanding
of the most vulnerable and at-risk communities.
• Establish a GESI Advisory Group, made up of prominent GESI activists, thought leaders and academics to advise on RAIN
objectives and act as a challenge function to ensure interventions are adequately considering GESI and targeting the most
vulnerable.
• At a minimum the RAIN will disaggregate data by sex, age and region, and where possible by disability.
• Within tendering documentation (i.e. Terms of Reference and request for proposals) RAIN will explicitly request
demonstration of provisions which promote GESI and ensure suppliers have dedicated GESI expertise and technical
staff that are budgeted. This will help to ensure activities are inclusive.
• Encourage all RAIN suppliers and partners to consider diversity and inclusion within the make-up of their teams and
ensure fair and open recruitment practices are practiced.
• Consider SEAH risks and ensure robust mitigations are in place to ensure beneficiaries and programme staff are
protected from SEAH.

Geographic targeting:

28. Prioritized geographies: RAIN will offer technical assistance to inform national policy development and
implementation. For interventions at the subnational level, RAIN will focus on BEK’s three priority provinces:
Madesh, Karnali and Lumbini. However, we will consider government recommendations to working in the remaining
four provinces based on national priorities on adaptation actions31. A multi-disciplinary analysis confirms that BEK’s
three priority provinces are particularly vulnerable to climate- and/or disaster (different hazards). Each province has
a different starting point and specific challenges and any interventions will be tailored accordingly.

29. Selection of partner local governments within the provinces will be based on climatic, vulnerability,
economic and social criteria. For example, local governments that are expected to be particularly vulnerable to
climate change and shocks will be prioritised. Available budget and value for money will also be considered. Other
donor and FCDO/BEK programmes will also be accounted for to avoid duplication and maximise synergies.

31 As the appraisal case below sets out, RAIN includes a climate finance component and will seek to leverage other development
partners’ funding. Initiatives unlocked through this component – guided by government and other stakeholders’ priorities – may
include interventions in other parts of Nepal.
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30. Key sectors and sub-groups: Within the selected geographies, to select subgroups, households and individuals,
we anticipate that a mix of strategies will be used by partners (including taking into sectoral vulnerability and
poverty). National census data and vulnerability assessments will inform targeting and National Adaptation
Plans will inform the sectors for the priority areas and local governments. Categorical targeting (e.g. targeting
women led programmes, indigenous peoples and marginalized local communities, people with disabilities, youth)
could also be used for some activities. Detailed work on how interventions will be tailored to target groups and vice
versa will be carried out during the inception phase with implementing partners.

31. The impact of all interventions will be spread beyond the target groups through the dissemination of ideas
and evidence within and between local governments and communities. Ideas could be scaled and replicated.
Evidence will also inform policy and decision making at the federal, provincial and local levels.

ASSURANCE OF COMPLIANCE WITH UK LAW

32. International Development Act 2002: The programme will support the primary aim of poverty reduction, promoting
low carbon climate-resilient development and building resilience against natural hazards in Nepal.

33. Gender Equality Act/Public Sector Equality Duty: RAIN will comply with the Gender Equality Act and the Public
Sector Equality Duty (in the Equality Act, 2010). This will be achieved by taking gender and social inclusion issues
and analysis into account during the design process, in implementation of the programme and through monitoring
and evaluation. The programme team will draw on the BEK GESI mainstreaming strategy to promote high standards
of GESI mainstreaming across the programme components and over its lifetime. It will contribute to the delivery of
the International Women and Girls Strategy 2023-2030 and is aligned with women and girls elements of the IDS,
including the principle of leaving no one behind.

34. RAIN will adhere to ‘do no harm’ principles, not worsen inequality, and support the practical needs of marginalised
groups. This will involve ensuring that all programme partners have (a) based their programme design on sound
gender and social inclusion (GESI) analysis, including consultation with affected groups, (b) a credible plan to
monitor the engagement of - and impact on - differentiated social groups (to be determined by the GESI analysis),
and (c) mechanisms for ensuring that any adverse impacts of the programme can be both identified and addressed.
RAIN will consider gendered impacts on vulnerability, participation, dissemination, response and power and
decision-making through its programming.

35. Protection (physical, legal and social) will be one of the priority sectors for FCDO in the event of a humanitarian
emergency which triggers the Internal Risk Facility. The British Embassy Kathmandu will ensure adequate local
GESI analysis is conducted, and that GESI is captured within assessments and coordination mechanisms. Any
response via the IRF will also work with BEK’s wider Security and Justice programme which focuses on the wider
protection architecture.32 Gender and disability disaggregated data will also be collected where appropriate, as well
as data on wider dimensions of vulnerability and social exclusion.

36. Counter-Terrorism Act: RAIN will comply with domestic law and international sanctions on terrorist financing. We
will draw upon FCDO expertise to adhere to best practices, including thorough and rigorous due diligence of all
partners that receive programme funding.

37. Safeguarding considerations: The UK prioritises safeguarding and do no harm principles in all its work through
systems and processes, programming, and advocacy. The programme will have a cautious appetite for
safeguarding risks. Safeguarding will be an integral part of the design and delivery and ongoing monitoring and
review processes. The UK will ensure that interventions do not sustain unequal power relations, reinforce social
exclusion and predatory institutions, exacerbate conflict, contribute to human rights risks, create or exacerbate
resource scarcity, climate change and/or environmental damage, or increase communities’ vulnerabilities to shocks.
Partners’ commitments to safeguarding will be scrutinised at the due diligence and selection stages. They will be
kept under review throughout the delivery of the programme. Partners will be expected to regularly assess
safeguarding risks and reflect this in their risk registers with required mitigation controls, focusing on detection,
prevention and reporting of any safeguarding related cases.

38. First tier partners will be reminded of their responsibility to ensure appropriate safeguarding standards have been
cascaded down the delivery chain and to provide evidence that standards have been shared and all partners are
clear about those expectations. Protection and safeguarding are core components of FCDO’s accountability to
affected populations, and we will require partners to put in place systems to enable grievances and safeguarding
issues to be reported and investigated, including feedback loops to update people on the outcome of investigations.

32 The BEK Security and Justice Programme aims to establish more representative and accountable security and justice institutions
for better policing in Nepal, tackle Gender Based Violence, address exclusionary practices to provide quality services to GBV
survivors.
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We will encourage partners to commit to adopting a comprehensive safeguarding practice and culture and we will
expect partners to have policies around safeguarding, whistleblowing, human resources, risk management, the
code of conduct and governance and accountability. This will include the requirement for partners to take reasonable
steps to prevent the sexual exploitation, abuse and harassment of any vulnerable person involved in RAIN.
Commitments to safeguarding will be integrated in any agreements with partners. Ongoing monitoring will verify the
implementation of agreed protocols, combined with periodic reviews to learn from and strengthen measures.

39. Further specific actions for safeguarding will be identified and included in the inception phase and in the governance
arrangements for implementation.

40. Climate and environment: This programme will deliver positive impacts for the climate and environment. It will
contribute to global efforts on climate by working on adaptation and resilience. The programme will not invest in
fossil fuels, fossil-fuel based agricultural inputs or other activities that may undermine commitments to reducing
carbon emissions as per the Paris Agreement. We will use interventions to promote climate smart thinking within
the Government of Nepal (GoN) and implementing partners. The programme will help meet Nepal’s Nationally
Determined Contribution (NDC) targets as per the NDC Implementation Plan and Long-Term Strategy (LTS) aligned
with the national Climate Change Policy 2019 and the National Adaptation Plan (NAP).

41. Suppliers will be required to adhere to equivalent FCDO Programme Operating Framework requirements in relation
to environmental and climate standards. In tendering for delivering specific aspects, suppliers will be required to
demonstrate their commitment to the global climate challenge, including their efforts to ensure environmental
efficiencies and potential offsetting.

42. RAIN will be eligible for ICF (approximately 85-90% of the total budget). It will help GoN and development partners
build resilience against all natural hazards and at-risk communities to adapt to the impacts of climate change in
Nepal. The business case design process will identify which ICF key performance indicators (KPIs) the programme
will contribute to and assess the areas where BEK can influence policies to attract and deploy climate finance.

43. Partnership principles: BEK produces an annual Partnership Principles Assessment (PPA). The Partnership
Principles are enshrined in the overarching Development Partnership Arrangement between the UK and GoN. They
will also be discussed, agreed and reflected in the Memorandum of Understanding and will inform decisions on
disbursements of UK’s official development assistance (ODA), including possible financial aid. Details of how we
will manage fiduciary risk if financial aid is utilised are set out in the Financial Case.

44. Disability: The programme will contribute to the implementation of the FCDO Disability Inclusion Strategy. This
includes ensuring persons with disabilities are not excluded from programmes and that proactive measures are
taken by FCDO and partners to maximise inclusion and ensure their substantial and meaningful participation
throughout the program. Disaggregated data on disability will be collected.

45. Risk: BEK has a comprehensive risk management infrastructure as set out in the Management Case. Controls,
tools and processes were developed in response to recommendations in audits by the Internal Audit Department
(the latest received in August 2023) and the National Audit Office. A BEK risk advisory group has been established
to continually support BEK in adopting best practice from the Centre and improve how risk management is observed
and discussed across BEK. The RAIN management team will fully engage with this and ensure a strong risk register
is in place. We will also test and adapt activities over time, ensuring they are kept within BEK’s risk appetite. Further
details on risk management are provided in the Management Case and attached risk register.

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B. Appraisal Case
46. The Appraisal Case explores how we will address the need in the Strategic Case in a way that optimises value for
money. It appraises feasible options of what interventions to fund and how to deliver them to achieve the objectives,
including high level commercial choices. It critically appraises evidence and considers delivery mechanisms. It
concludes with a summary Value for Money (VfM) statement for the preferred option.

THEORY OF CHANGE

47. The theory of change (ToC) for RAIN delineates that exposure to risks from natural hazards will be
heightened over time due to the impact of climate change in Nepal, thereby increasing shocks. These
shocks will exacerbate existing vulnerabilities for the most marginalised and excluded. The ToC states that
these vulnerabilities at the community level will benefit from increased coping capacity through investment in
improved climate adaptation (CCA), climate finance, disaster risk management (DRM) and adaptive and shock
responsive social protection (ASRSP) systems. It assumes that these systems can be strengthened through a
combination of inputs targeted at federal, provincial and local levels:
• Technical assistance for GoN at three tiers of government to help strengthen systems in areas of CCA,
climate finance, DRM and ASRSP (on planning, budgeting, policy implementation, expenditure, information
management) and improve inter-governmental coordination.
• Support to help access international and bilateral climate finance for adaptation.
• Catalytic co-financing, including possibility of financial aid (through the climate finance and/or ASRSP
components).
• Use of evidence, innovation, science and technology.
• Targeted interventions at the community-level.

48. The ToC assumes that IF this package of support is effective, evidence-based and innovative and complemented
by longer-term broad BEK influencing work beyond the programmatic intervention THEN communities in climate-
vulnerable and disaster-prone areas in Nepal will be able to act early, have strengthened resilience to withstand
shocks and the impact of shocks will be reduced.

49. Details are set out in the ToC diagram overleaf (Figure 1). The ToC will be refined during the first year with
implementing partners and continuously reviewed, including the assumptions. This is important because it is
increasingly acknowledged that systems change is not linear.33 Systems in the context of this programme include
individuals, institutions, organisations, networks and rules and procedures, with multiple interactions within and
between these levels. This implies a large proportion of uncertainty in outcomes, and a non-linear relationship
between interventions and results.

33For example: USAID, Country Systems Strengthening: Beyond Human and Organizational Capacity Development
(usaidlearninglab.org), 2012.
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Figure 1: RAIN Theory of Change

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EVIDENCE OF EXPECTED OUTCOMES AND IMPACT

50. Table 2 below sets out the strength of evidence for the proposed interventions.

Table 2: Strength of evidence

Intervention Strength of Evidence & Narrative

Capacity building High need, but low evidence.
including embedded
technical assistance and Institutional strengthening, capacity building (including technical assistance to support
institutional strengthening. implementation of climate adaptation options) and investments in climate sensitive sector e.g. water
(increasing efficiency of implementation)34. Examples include an impact assessment of capacity
building and training in climate sensitive sectors for India and Vietnam, estimating Benefit Cost Ratios
(BCRs) for technical assistance from 13:1 to 28:135, although the scale was low.

Some of the best buys for adaptation are ‘soft’ options, i.e. information, capacity building and
institutional strengthening. These are areas where FCDO has a strong comparative advantage and
thus a recommendation is to strengthen the focus on these, noting these options are particularly
effective when introduced in portfolios (or packages) with ‘hard’ options. This could include support
to country Governments to do their own mainstreaming (as well as FCDO’s focus on ICF integration).
There is scope and a need for FCDO to support partner governments with technical and institutional
capacity building for adaptation. Many cost-effective adaption interventions outlined below are reliant
on capacity and effective coordination at multiple levels of government due to the cross-cutting nature
of climate change.

Evidence from Nepal

Six years into navigating decentralised governance structures, Nepal still faces a lack of political
settlement to define devolved roles and responsibilities to raise revenue and manage fiscal resources
effectively at the federal, provincial and local levels. A patient approach is a prerequisite to working
with the Government of Nepal (GoN) at all spheres of government to build and sustain the capacity
to develop, endorse and implement plans on disaster resilience and climate adaptation.

Experience from the National Housing and Settlements Resilience Platform (NHSRP), Post
Earthquake Reconstruction (PURNIMA), Nepal Urban Resilience Project (NURP), Nepal Climate
Change Support Programme (NCCSP) and the Policy and Institutions Facility (PIF) suggest that
working with local, provincial and federal governments on resilience and adaptation in a nascent
federal structure requires patience, trust building and time. Having embedded staff within the
government systems, experts stationed outside the ministries to provide technical advice or a mix of
both is required to deliver activities on behalf, together with or in some cases for the government,
given the lack of technical capabilities.

Adaptive Social Protection High Potential Adaptation Buy

Adaptive social protection often highlighted as having potential. Option to adapt social protection
systems include: shock-responsive adaptation (tweaking design/piggybacking existing programmes;
expanding existing programmes (topping up support to beneficiaries or adding beneficiaries); or
aligning with humanitarian systems. Some ex ante appraisal in UK programmes (to climate smart
social protection), but lower evidence base than for Social Protection.

Nepal evidence:
A key challenge in Nepal is the intersection of predictable chronic or seasonal poverty and
vulnerability with rapid-onset and acute shocks. Although social protection plays an increasing role
in tackling chronic and seasonal poverty and wider vulnerability and exclusion, recent disasters in
Nepal, such as the 2015 earthquake and, more recently, COVID-19, highlight how making social
protection more flexible and adaptive could allow a more effective and efficient development and
humanitarian response.3637 Although Nepal’s new Constitution guarantees social protection for the
poor and vulnerable, social assistance is fragmented, with many eligible populations not receiving
entitled benefits and limited in reach compared to other countries. Within the Social Security
Allowance (SSA) Scheme, there are five cash transfer programs to different groups by the local
governments through the Ministry of Finance (MoF) and the Department of National ID and Civil
Registration.
A 2019 Overseas Development Institute (ODI)I-led study looked at the potential of Nepal’s SSA
schemes to support emergency flood response. It found that coverage of the flood-affected

34 Watkiss and Cimato. London School of Economics/Grantham Research Institute. “Economics of Adaptation and Climate-
Resilient Development: Lessons from Projects for Key Adaptation Challenges”, 2016.
35 Mullen, J., Gray D., de Meyer, J, “Evaluating the impact of capacity building by AICAR”, 2015.
36 World Bank, Strengthening Links between Social Protection and Disaster Risk Management for Adaptive Social Protection in

Nepal, 2018.
37 International Labour Organization, “Social Protection Responses to COVID-19 in Nepal”, 2021.

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population using the existing SSA beneficiary list would be relatively low. An analysis of the 2016
Nepal Household Risk and Vulnerability Survey (NHRVS) data shows that only 25% of the flood-
affected population receive a Social Security Allowance (SSA) (ODI, 2019).38 Another case study
investigating the floods in the Bardiya district found that only 7% of SSA flood-exposed individuals
are likely to be SSA beneficiaries. The study also highlights the need to go beyond cash-based action
and argues that combining cash interventions with non-cash action to meet the requirements for
anticipatory relief can be more effective. The research concludes that “combining social protection
and anticipatory action in the context of floods would contribute to social protection that is both
sensitive to shocks and aids climate resilience overall”.39

Anticipatory Action Great Humanitarian Buy

Growing evidence suggests that robust early warning systems based on credible scientific weather
forecasts and preparedness and anticipatory action protocols can add significant value in increasing
community resilience and reducing the need for humanitarian assistance. Return of Investment (RoI)
analysis for early action saves US$ 34 per dollar invested in immediate response. It limits the
damages caused by a natural hazard on vulnerable communities (75% damage reduction) and
assets (50% damage reduction on crops and cattle) and decreases long-term recovery needs40.
However, further investment is required to build the capacity of local actors and governments to act
before a climate-related shock using credible weather forecasts.

Anticipation, responding to forecasts and early warning has high potential but more research and
robust methodologies are called for.

Early Warning Systems, Great Climate Adaptation Buy

e.g. Early warning and early action can save lives and livelihoods and protect assets worth at least ten
flood times the cost of early interventions41. Early warning systems (EWS) have helped decrease deaths,
warning losses, and damages from hazardous weather, water, or climate events. However, significant gaps
exist in forecasting, risk communication, and community action42.

To be successful, EWS should address social inequalities through an intersectional approach to all
EWS programming, which includes going beyond binary considerations of gender and being
intentional and strategic from the beginning. EWS needs to be integrated into a broader disaster risk
reduction and management strategy, recognizing the implications of climate change on at-risk
communities, and harnessing the opportunities that EWS provides as vehicles for wider social
change43.

Good Evidence, Strong Cost Effectiveness. Good evidence of high Benefit Cost Ratios. Very positive
gender as well as poverty benefits, provided these users are considered in communication and use.
Benefits increase under future climate change. However, investment needs to be along whole EWS
chain (i.e. from forecasting to users) to deliver benefits and require institutional capacity and
government ownership. Further, not sufficient to reduce all damages on its own (residual damages)
so should be part of wider package of interventions.

Investments that Great Adaptation Buy

enhance
preparedness to High benefit to cost ratios with studies reporting the highest (~10:1) of all DRR interventions. Benefits
disasters, e.g. delivered through reduction in damages. Focused on current, but provides additional benefits for
shelter facilities, future increases in trends from climate change. Very positive gender as well as poverty benefits.
evacuation plans However, not sufficient to reduce all damages on its own (residual damages), so should be part of
wider package of interventions.

Return on Investment (ROI) analysis that forecasted both quantitative savings and qualitative
benefits achieved by investing in emergency preparedness in Nepal on strengthening logistics
capacity. The saving amounts to approximately USD 15 cents for each dollar invested over 12 years.
For remote trail mapping, one dollar invested resulted in a net saving of USD 21.86 over an
investment period of 10 years44.

Enhanced weather Great Adaptation Buy

and climate
services including Includes weather forecast (e.g. up to 10 day) and seasonal forecasts (e.g. seasonal rainfall outlooks).
equipment Reviews show good benefit to cost ratios, across a range of sectors (agriculture in particular, but also

38 Overseas Development Institute, “The potential of Nepal’s social security allowance schemes to support emergency flood
response | ODI: Think change”, 2019.
39 Red Cross Climate Centre, “Fostering anticipatory action on floods through social protection in Nepal”, 2020.
40 World Food Programme (WFP), Forecast based Financing in Nepal, A return on Investment Study, 2019
41 Risk Informed Early Action Partnership (REAP), Early Action: The State of Play, Executive Summary, 2022
42 Press Release, Early Warnings for All, n.d.
43 Practical Action, Towards effective Early Warning Systems: Impact and Lessons from Nepal and Peru, 2023.
44 World Food Programme (WFP), Return on Investment: Logistics Infrastructure and Remote Trail Mapping in Nepal, 2019

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(infrastructure), energy, transport, water), with Clements identifying 16 studies in Africa or Asia. Higher quality
forecasting, forecasts are more likely to be used in India and substantially improve farmer profitability. A synthesis
dissemination and of the BCRs (including in rich countries) identified a range from 2:1 up to 36:145. A number of ex-post
uptake (weather evaluations find positive impacts for seasonal climate forecasts and weather forecasts on yields for
value chain) several sub-Saharan African countries.46

Investment in Benefits arise from the use of information to improve decisions (value of information/quasi-option
hydro-meteorology value).
equipment,
monitoring and However, to deliver benefits, needs to be investment along whole weather chain (i.e. from supply to
information (e.g. users) not just meteorological infrastructure. They can have positive gender as well as poverty
river flows) benefits, but only if access to information and training for these groups is included in design and
implementation. Related: Agronomic ICT information dissemination interventions also identified as a
high potential buy for achieving Economic Development for the Poor.

There is a critical need for effective and timely climate related information services in South Asia
because of the requirement to cater to comprehensive social needs, to mitigate and reduce economic
losses and to support countries in adapting to the impacts of climate change and extreme events,
especially in Nepal47.

Great Adaptation Buy

Pathways for Transforming Weather, Water, and Climate Services study distilled lessons from
Nepal's Pilot Program on Climate Resilience (PPCR) in identifying, designing, and implementing
hydrometeorological and climate services investments. Evidence suggests that national Hydro-Met
agencies improve data resources, institutional arrangements, capabilities, service design and service
feedback to develop, deliver, and strengthen hydrometeorological and climate services 48.

Early low regret option with high BCRs. The ratio of the economic benefits (calculated as avoided
losses) to the costs of national hydro-meteorological services modernization programs vary between
2.1 to 14.4 for some European and Asian countries.49 Similar issues to weather and climate services
above, i.e. requires investment along whole information value chain.
Soft measures e.g. Great Adaptation Buy - Good Evidence, Strong Cost-Effectiveness:
ecosystem based Flood
Protection and Prevention A systematic review50 of flood risk management appraisal (27 studies) found BCR of 5 to 1 for flood
related risks. Further European review containing 110 observations on investments/projects from 32
studies and databases in 16 European countries found mean BCR of 6 (but median of 3): this also
found Hard flood control (4:1) had higher BCR than soft flood control (1.6:1) – however, other studies
find the reverse (i.e. soft BCRs > hard). This highlights site and context specificity. Some studies
highlight the higher benefits from portfolios that combine hard and soft options.

Climate impact modelling literature finds high BCR for future climate change, for sea level rise and
urban floods, but positive BCRs only in some areas (i.e. only urban coasts, and not all urban cities).
Distributional benefits varied – can help protect poorer areas, but such areas may be a lower
prioritisation for infrastructure due to lower asset value.

Enhanced maintenance Mixed Adaptation Buy

regimes
Several studies highlight enhanced maintenance regimes, notably for drainage and sewage systems,
but also for roads. Similar benefits likely for most infrastructure in relation to climate extremes.
However, benefits of enhanced maintenance already known but remain underfunded in LDCs,
because of barriers, thus very challenging to deliver (continually over time) in practice.

RAIN will be able to draw on experience from the NCCSP project which has initiated the use of
operational and maintenance funds. Municipalities will also have an asset management plan in place
to help identify the condition of infrastructure and track maintenance. We will monitor the
effectiveness of this intervention.
Other Nature Based Mixed Buy: Ecosystem based adaptation, i.e. use of natural systems to prevent impacts (including
Solutions forestry)

Mixed Buy: Conservation and protection of natural habitats / ecosystem services (adaptation for
ecosystems) (including forestry)

45 Clements, J et al, “The Value of Climate Services Across Economic and Public Sectors”, 2013.
46 Vaughan et al, Evaluating agricultural weather and climate services in Africa: Evidence, methods, and a learning agenda”, 2019.
47 Vellingiri, et al, Evidence Review: Options Analysis for a Regional Climate Change Programme to Deliver More Effective Climate

Services, Early Warning and Disaster Risk Reduction. 2015

48 World Bank, Pathways for Transforming Weather, Water and Climate Services in Nepal.2021
49 World Bank, 2008. Cited in FCDO Best Buys for Climate change paper.
50 Mechler, “Reviewing estimates of the economic efficiency of disaster risk management: opportunities and limitations of using

risk-based cost–benefit analysis”, 2016.

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If RAIN interventions consider nature-based or eco-system-based adaptation interventions, the

evidence relating to the specific intervention will be assessed in the specific context on a case-by-
case basis and we would use the strategic learning unit or an external evaluation to monitor such a
in intervention’s effectiveness closely. This would be a small part of the overall programme.

Internal Risk Facility Responding early can also save money and reduce the severity of a crisis, as illustrated by a study
that looked at the economics of resilience and early response in USAID investments in Kenya,
Ethiopia and Somalia. This found that investing in more proactive response to avert humanitarian
crises could reduce the cost to international donors by up to 30%. This is equivalent to savings of
US$1.6 billion when applied to U.S. Government spending over the last 15 years in Kenya, Ethiopia
and Somalia alone. When avoided losses are incorporated, savings increase to US$4.2 billion. An
earlier study funded by the UK found that multiyear funding can improve preparedness and response
times and therefore save money and reduce the severity of the crisis. The greatest savings were
identified in Ethiopia were smarter WFP procurement, purchasing at the optimal time, saved between
18 -29% less than if they bought in the heat of an emergency.

SUMMARY OF SHORT-LISTED OPTIONS FOR APPRAISAL

51. 3 options are appraised below: (1) A do nothing/counterfactual, (2) streamlined continuation of a projectized
delivery approach and (3) a more integrated climate, disaster resilience and ASRSP approach with a focus on
systems-strengthening, strategic learning and with a greater focus at the subnational level.

Option 1: Do nothing/counterfactual

52. Climate change adaptation and access to climate finance: No action will mean that millions of people (mostly
poor and marginalised) will continue to be exposed to a range of climate change impacts to which they have very
limited ability to adapt. The Nepal government will continue to allocate its own funds to climate change and attain
funding from international sources. However, to date, the government’s climate expenditure has not been used
effectively. Several multilateral organisations and donors fund climate adaptation efforts. However, the scale of
funding is insufficient.
53. No intervention will mean that any partnership on climate and environment between the UK and Nepal will be
smaller, more sporadic and less ambitious. CARA will work on climate change in Nepal as part of the regional
programme. The British Council will continue with some relevant campaigns, and the Chevening scholarships will
help identify some future leaders in this field.
54. Disaster risk management: No further investment in disaster risk management will be a missed opportunity to
strengthen the institutional capacity of the newly established National Disaster Risk Reduction and Management
Authority (NDRRMA). The UK, alongside other development partners, has worked patiently to strengthen the
NDRRMA in the last five years and has been an influential partner. However, NDRRMA is yet to be fully empowered
with adequate technical staff and financial resources to fully execute its functions and responsibilities.. With no
bilateral programmatic interventions, BEK would still advocate for a clear delineation of roles and responsibilities
but is likely to have less influence.
55. Lack of interventions in building community resilience, strengthening early warning systems and promoting early
action might reverse the UK's influence on critical global commitments towards Risk Informed Early Action
Partnership (REAP) and Early Warnings for All (EWS4ALL) initiatives which we jointly promoted during recent CoPs.
No bilateral support is likely to reduce the UK's influence and ability to shape policies that matter to Nepal in terms
of strengthening Nepal's growing capacity for emergency preparedness and response.

Option 2: Streamlined continuation of current CSD / SDR interventions with a projectized delivery approach

56. This option would see a streamlined continuation of the projectized delivery approach taken in the predecessor
programmes. Figure 2 below shows an overview of components/individual projects of both programmes as well as
other climate and resilient BEK programmes managed by the Climate and Resilience Team. Both CSD and SDR
have evolved significantly over time, with some components closing early or being managed by other teams within
BEK. Components were also added to the SDR programme to deliver BEK’s COVID-19 response. During the lifetime
of both programmes, BEK managed over 20 different projects with more than 30 first tier partners. Lessons from
annual reviews and management experience show that our next phase of programming must reduce complexity in
our interventions to increase effectiveness and reduce management burden and costs to FCDO.

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Figure 2: Overview of individual programmes and partnerships within CSD and SDR

57. This option would see the continuation of the approach taken in the predecessor programmes (projectized
delivery) but streamline components. There would still be relatively distinct components as set out below. The
budget per component would be much lower budgets than that of predecessor programmes. There would still be a
gradual exit from responding to small and medium humanitarian crises in line with the BEK ODA prioritisation
decisions of November 2022. An ASRSP component and Internal Risk Facility would be added in line with the
approved Concept Note. DRM efforts would remain focused at the federal and policy development level. There
would still be a significant proportion of financial aid to incentivise climate adaptation and mainstreaming. Technical
assistance would focus on ensuring efficiency and completion of FA funded projects.

58. Compared with the predecessor programmes, only the components most aligned to the objectives in the approved
Concept Note would be taken forward. We assume that the following components and sub-components would be
continued (or reinstated) in some form.

Option 3: Integrated climate, disaster resilience and ASRSP programme through systems strengthening approach

59. This option takes a more fully integrated nexus approach to climate change, disaster risk management and social
protection, recognising shared concerns and objectives (see Figure 3 below).

Figure 3: The Climate Change Adaptation, DRM and Social Protection Nexus

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60. The major shifts (in emphasis) as compared to BEK’s approach to date are:
• Systems-strengthening: This option has a stronger focus on strengthening systems with an ambition to
consider individuals, networks and institutions and recognition that capacity building focused on any or all of
these elements can affect the system. Systems are complex (in that there are many overlapping relationships)
and adaptive (in that each is constantly changing in relationship to others). A working definition for a “strong”
system is borrowed from USAID: “A ‘strong’ system is one that is “robust, coherent, integrated, self-organizing,
self-driven and resilient. Strengthening a system implies improving its characteristics and increasing its ability
to address these challenges”51.
• Moving away from a projectized approach: As indicated in the lessons learned of the strategic case, a
projectized approach leads to a lack of sustainability of interventions and presents coordination challenges.
• Mainstreaming: In line with GoN’s own strategy, we will shift to a focus on mainstreaming climate and disaster
resilience aspects in local development plans (to avoid a proliferation of additional tools and plans which can
overwhelm local governments and therefore be less effective).
• Focus on accessing international climate finance: With a reduced budget compared with predecessor
programmes, this option focuses on leveraging additional international climate finance.
• Less financial aid: CSD included a considerable financial aid component. This will be reduced but some
catalytic financial aid may be considered both to support GoN engagement and because experience from
previous programmes suggests value in introducing performance-based financing.
• Transitioning away from responding to small and medium-scale crises: This is in line with BEK’s 2022
ODA prioritisation process a. It recognises the need for increased government ownership and increasing
capacity.
• Subnational working: Interventions at all three tiers of government are envisaged to support federalism.
• Strategic learning and evidence: There will be an emphasis on strategic learning and evidence, with
proposed partners expected to share and coordinate accordingly.
• Approach to TA: We will learn from analysis presented by BEK’s evidence partners on the different types of
technical assistance and tailor our approach accordingly, likely taking a mixed approach (included embedded
and demand-led models) which supports patient development.

61. This option would include 4 components as well as an Internal Risk facility and 2 insourced staff. The components
and objectives are described in detail in Table 4 below.

Table 4: Option 3 Components and objectives

Component 1: Technical Assistance and Strategic Learning Unit

This option would offer a Technical Assistance Facility which will support all three tiers of government and would
include embedded technical assistance. An adaptive approach would be taken to be able to take advantage of
emerging opportunities. A Strategic Learning Unit will also be part of this component and work across the RAIN
portfolio.
1.1 Support GoN to strengthen the policy and institutions for climate and disaster resilience, using a range of
tools and methods including policy co-creation, evidence development, consultations, legal drafting,
institutional reviews and supporting Nepal’s international engagement.
1.2 Support GoN to integrate climate change and disaster resilience into planning, policies and major
investments using their own fiscal resources (coordinating with Component 2A below).
1.3 Improve mainstreaming and intergovernmental coordination.
1.4 Strengthen the evidence base and capability to use climate and disaster-resilience decision-making at
provincial and local levels.
1.5 Increase domestic and international climate finance for Nepal’s climate priorities. This could include support
for pipeline development for funds like the Green Climate Fund and support to implement Nepal’s climate
finance strategy.
1.6 Establish a Strategic Learning Unit which will work across the RAIN portfolio and coordinate/enable
strategic learning and adaptive management.
Component 2: Climate Adaptation and Finance
In this option the programme would adapt to invest in the best opportunities in an evolving context and by taking into
account strategic learning from ongoing initiatives. Two current promising options are set out below. Components 1
(from the systems perspective) and 3 (subnational work with communities) will also contribute to climate adaptation
and could be scaled up.
Component 2A – Multilateral Agency
An agreement with Government for this project is in an advanced stage, with a pilot due to start in 2024, aligning with
timelines for RAIN. We would consider providing catalytic financial aid to co-finance implementation.

51 USAID, “Country Systems Strengthening: Beyond Human and Organizational Capacity Development”, 2012.
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2.1 Increase the sustainability and resilience of local economies and communities by establishing a
performance-based climate resilience financing mechanism (PBCRG) for the vertical integration of the NDC
and NAP processes in Nepal.
2.2 Increase local governments’ access to climate finance to implement climate change investments in Nepal.
2.3 Contribute to the establishing of a standard and internationally recognized country mechanism of
performance-based climate resilience grants in Nepal.
Component 2B – Multilateral Bank
The establishment of a financing facility has ambitions of “large scale transformative and integrated initiative to bridge
the financing, capacity, institutional and technical gaps needed to implement the NAP and adaptation measures
mentioned in the 2nd NDC and GRID”. This will be financed if there is agreement and approval by GoN.

2.4 The Facility will act as a predictable financing pool (of climate and development finance) and a stimulus
package, providing accessible financial and knowledge solutions to respond to urgent climate change
adaptation needs.
2.5 Create a long-term financing source for adaptation initiatives, and promote mitigation, biodiversity and food
security as co-benefit, with clear rules, providing a reliable and predictable source of finance for resilience
initiatives.
2.6 Offer a blended pool of financing sources, technical support and knowledge solutions that will catalyse and
leverage international and in-country (i) financing resources, and (ii) adaptation knowledge and practices
for upscaling, replication, and integration.
2.7 Develop bankable climate adaptation projects developed, including consulting services for design-review-
advice, technical support related to safeguards and due diligence, MRV for climate ratings etc.
2.8 Explore loss and damage financing component to focus on addressing climate induce impacts and assisting
people who are already suffering from the effects of climate change.
Component 3: Early Action, Community Resilience and Adaptation
Component 3A - Early action, Community Resilience and Adaptation consortium
3.1 Strengthen early action and early warning systems through:
i. Use of science, technology and innovation to improve access to weather forecasting and multi-
hazard early warning for at risk communities and improve the implementation of anticipatory action
and disaster preparedness plans.
ii. Development and delivery/implementation of early action protocols for multiple hazards with
specific triggers and thresholds.
iii. Improved risk communication, coordination and information management on multi-hazard early
warning at provincial and local levels.
iv. Establishment of early warning systems in smaller river systems in Madhesh province by working
with high-risk communities.
3.2 Build resilience and adaptive capacity of communities to natural hazards (such as floods, landslides,
droughts, heat waves and cold waves) at the provincial and local level by:
i. Using innovative interventions on forecast based early action and exploring co-financing with local
and provincial governments.
ii. Conducting feasibility of risk transfer mechanisms and adopt new approaches to reduce losses
and damages from climate-induced shocks.
iii. Constructing safe shelters (gender sensitive, disability friendly and safe in terms of risks of Sexual
Exploitation, Abuse and Harassment) and flood resilient housing and promoting nature-based
solutions for flood and landslide protection.
3.3 Supporting localisation and inclusion through:
i. Helping marginalised and vulnerable communities who are landless to access government services
(eg. by making them aware of relevant legal provisions and available services and providing
support to obtain critical life documents needed to access services).
ii. Gender sensitive and disability inclusive programming including women and girls and work with
socially excluded communities ensuring they have access to early warning messages and
evacuation.
Component 3B – Start Fund Nepal
3.4 Respond to underfunded small and medium scale crises in Nepal through consortium of international,
national and local NGOs.
3.5 Build capacity of local NGOs who are often first responders. This should include FCDO priorities such as
specific risks of Sexual Exploitation Abuse and Harassment (SEAH) when shocks occur.
3.6 Use and build evidence of anticipatory action approaches in Nepal.
Component 4: Adaptive and Shock Responsive Social Protection
4.1 Following the approval of Shock Responsive Social Protection Guidelines provide technical assistance to
implement the Guidelines, including:
i. supporting amendments to existing social protection programs,

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ii. orientation on SRSP guidelines to provincial and local governments,

iii. capacity building for SRSP at federal and local levels,
iv. support to pilot the SRSP guidelines on a small scale to demonstrate proof of concept.
4.2 Strengthen information systems for SRSP, including:
1. Support for development of core Integrated Social Registry (ISR) system with an interoperability
platform and its roll out.
2. Strengthening of Bipad Portal (disaster management portal) by adding a household module to help
identify affected households and monitor delivery of relief and recovery, including reconstruction
and linking early warning to Bipad Portal.
3. Training and capacity building.
4. Modification to information systems of existing social protection systems for them to manage scaled
up programs.
4.3 Support a range of analytical works to support policy dialogue and promote adaptive and shock responsive
social protection in Nepal, including institutional analysis to promote integration of climate resilience into
social protection programming, particularly cash for work and linkages with early warning systems.
Component 5: FCDO Programme Management
5.1
Component 6: Internal Risk Facility (unfunded – value to be approved in business case is up to £3.5m)
6.1 Agreements with partners selected based on humanitarian preparedness plans. To be delivered through
combination of MoUs with UN agencies and AGs with I/NGOs.

Table 5 - Summary Scoring

Equity and Support and Management

Effectiveness Sustainability Strategic Fit Weighted
Inclusion engagement Burden Score
30% 15% 15% 15% 15% 10%
Option 1 1 1 1 1 1 5 1.4
Option 2 3 3 3 3 3 4 3.0
Option 3 4 5 4 5 5 3 4.4

Conclusions

62. Option 1 (doing nothing) does not align with BEK climate and development objectives, the UK government’s
International Climate Finance strategy and would harm the UK’s reputation given the strong commitment to support
Nepal’s Climate adaptation ambitions.

63. Option 2 can deliver on most of BEK’s ODA prioritisation decisions and, if we add a component on social
protection, make good contributions towards the stated outcome areas in the ToC. However, it does not achieve
BEK’s systems strengthening and portfolio approach ambitions and risks missing synergies between
components. The GoN may prefer the higher proportion of financial aid in this option, but it does not align with BEK’s
trajectory for support in Nepal.

64. Based on the scoring table below Option 3 is the most suitable option. Compared with BEK’s previous climate
and disaster resilience portfolio (spread across both predecessor programmes), this option is much reduced in
complexity (from more than 20 components to 5), maximises synergies between interlinked thematic areas, enables
the coordination and strategic learning that is required to inform an adaptive management approach and shifts
towards strengthening systems at all three tiers of government. While the adaptive management approach and
interlinked nature of the components requires significant management resources, we judge this to be manageable
as the mobilisation of RAIN will coincide with the closure of existing programmes managed by BEK’s Climate and
Resilience Team. The Commercial and Management cases below set out the management, oversight and
government arrangements which be required to manage this programme effectively.

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OVERVIEW OF COMPONENTS IN PREFERRED OPTION

65. Figure 4 below provides an overview of core components (excluding the FCDO management and the unfunded
IRF) in the preferred option and the textboxes below give some illustrative examples undertaken in each. The
interaction and coordination between all components will be vital to success.

Component 1: Technical Assistance and

Strategic Learning Unit Component 2: Climate adaptation and finance.

Delivered through contract with commercial Delivered initially through LoCAL with
supplier financial aid and later GREFF via MoUs

Component 3: Early Action and Adaptation.

Component 4: Adaptive and Shock Responsive
Delivered through a consortium and Start Fund Social Protection via MoUs.
Nepal through Accountable Grant

Figure 4: Overview of RAIN component

Textbox 2: Technical Assistance and Strategic Learning Unit

• This facility work across relevant GoN stakeholders on (i) mainstreaming climate change and disaster
resilience in relevant processes, planning and budgets and (ii) institutional strengthening.
• Federal Government Engagement: Support the federal ministries (MoF, MoHA and MoFE) and authorities
(NDRRMA) to identify critical gaps in implementing approved policies using domestic finance and enhance
collaboration and coordination to access international climate financing for mitigation, resilience and adaptation.
• Provincial and Local Government Engagement: Systems strengthening through embedded staff at the
provincial level connected with select local governments helping governments design and endorse (where
applicable and demand led) and implement disaster resilience and climate adaptation policies into actionable
plans using their own fiscal resources and international climate finance.
• Accessing Climate Finance: Work with federal government and line ministries to support processes to develop
proposals to access climate finance.
• Coordination Support: Work closely with the early action, resilience and adaptation consortium, support in
accessing performance-based climate resilience grant mechanisms grants (in coordination with LoCAL) and
shock responsive and adaptive social protection themes across all RAIN components.

Strategic Learning Unit: Embedded within the TA Facility will be a unit to help manage strategic learning and
monitoring for the overall portfolio (RAIN). This will enable an adaptive and flexible management approach which
is informed by data and evidence. This unit will collate evidence and identify demand led opportunities to pursue
collaborative policy reforms to bring systemic change at the federal, provincial and local levels by utilising
evidence and knowledge from implementation. They will help connect the dots between different RAIN
interventions, provide guidance on log frames, portfolio and component specific value for money indicators
informing cost effectiveness and support BEK on organising steering, programme board and portfolio meetings.

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Textbox 3: Climate adaptation and finance

RAIN will invest its resources in the most strategic way to leverage additional climate finance and support a
sustainable performance-based climate resilience grant system. Initially, RAIN will support the LoCAL pilot. The
BEK team may fund Green and Resilience Financing Facility (GREFF) if there is GoN buy-in. Use of catalytic
financial aid will be considered (e.g. to supplement the LoCAL work with budget support).

Local Climate Adaptative Living Facility (LoCAL)

LoCAL aims to pilot a performance-based climate resilience financing mechanism (PBCRG) to sustainably build
resilience and adaptive capacity of communities by working with local governments on:

• Inclusive, effective and accountable climate adaptation mainstreamed planning and budgeting
processes at the local government level, with investments implemented and linked with the PBCRG (including
grants).

• Establishing an effective performance-based climate resilience grant system (finance mechanism with
climate targeted annual performance assessments) in Nepal. This will also be able to attract from other
development partners.

• Implementing activities aligned with National Adaptation Plan (NAP) and Nationally Determined
Contributions (NDC) eligible for adaptation investments.

Nepal Green and Resilience Financing Facility (GREFF)

Consider contributions if approved and agreed by Government of Nepal (GoN).

Textbox 4: Early Action, Community Resilience and Adaptation Consortium

Through this component, RAIN will help (i) strengthen GoN’s preparedness systems for effective response, using
innovative anticipatory action approaches, (ii) enhance community resilience using adaptation interventions and (iii)
promote inclusion in these areas.

Early Action: Establish and strengthen early warning systems for multi-hazards,, improve weather forecasting for
multi-hazards, risk communication using mobile technologies, improve capacity of provincial and local emergency
centers with search and rescue equipment, installing digital boards and fostering coordination.

Community Resilience and Adaptation: Safe shelters (resilient to multi-hazards and GESI friendly), flood resilient
housing, risk insurance, agricultural inputs and water management to improve livelihoods, bio-dykes and
embankments for flood protection, elevated handpumps and prepositioned stocks.

Inclusion and Localization: Ensure marginalized and vulnerable at-risk and landless communities, indigenous
people, (including women and children), people with disabilities, can access government services. Build capacity of
civil society and community-based organizations to respond to small and medium scale disasters.

Shock Responsive Social Protection: Engage with local governments to strengthen social protection systems by
enrolling people into the existing systems. Work closely with other RAIN components to advocate for vertical and
horizontal expansion to provide coverage to protect at risk communities from shocks.

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Textbox 5: Adaptive and Shock Responsive Social Protection (ASRSP)

This theme will adopt a patient approach to reform social protection systems in Nepal to ensure that the most
vulnerable and marginalised are included and make the system adaptive and shock responsive with predictable
financing from the government.

• Support patient policy reform in social protection to endorse and implement the Shock Responsive Social
Protection (SRSP) guidelines including amendments to the Social Security Allowance and Prime Minister’s
Employment Program (PMEP) guidelines and roll out at the provincial and local levels with adequate capacity
building.

• Pilot the applicability of the SRSP guidelines at the local level and invest in strengthening information systems
by interlinking household datasets within the Disaster Information Management System – BIPAD portal and
explore opportunities to scale up, where appropriate

• Generate evidence by conducting research and diagnostic assessments on institutional capacity to implement
adaptive and shock responsive social protection programs in Nepal and engage with components 1 and 3 of
RAIN to jointly advocate, influence and inform government’s policy on social protection.

SENSITIVITY ANALYSIS

66. To guard against optimism bias and consider risks inherent in delivery, sensitivity analysis was included
in multicriteria analysis discussions across the 3 shortlisted options. The design team considered the
assumptions in the theory of change, including pace and realism for each intervention across 5 areas: (i) likely
effectiveness, (ii) equity and inclusion, (iii) support and engagement, (iv) sustainability, (v) ability to achieve scale
and/or transformation. The preferred option retains the strongest VFM proposition. Other key risks and mitigation to
delivery are explained in the management case.

67. Below is a summary of the scenarios that were considered by component, with important mitigation actions:
• The technical assistance facility does not have the right political clout within the bureaucracy to advance policy
reform at pace and scale envisaged. Based on past experience, the partnership with the multilateral
development banks and other donors can help leverage reforms. A patient approach will be taken and wider
BEK influencing efforts will support.
• Variable local governments are not able to mobilise a performance-based financing mechanism to deliver
climate spend. CSD supported local governments on projects, which has laid the groundwork for higher
performing local governments to access this finance. RAIN will work with subnational governments that can
demonstrate the benefits of this financing, as well as select a few that require a more involved approach to
system strengthening.
• The Early Action and Adaptation consortium is disconnected from government financing mechanisms, which
may challenge the sustainability of results. All RAIN components will be interlinked, with active efforts to
maximise synergies through coordination and knowledge sharing and working towards shared outcomes.
• Shock responsive social protection work is not at the required scale to support transformation change (eg.
delays to guidelines) and there are no opportunities to go beyond shock responsive and move towards an
adaptive approach.
• Humanitarian resources will not be mobilised quickly enough to respond to a large-scale disaster. The Internal
Risk Facility and BEK’s Humanitarian Preparedness and Response Plan have been developed in close
consultation with FCDO’s Humanitarian Response Group and has drawn on lessons from the 2015 earthquake
and experience from other humanitarian crises the FCDO has responded to. Humanitarian intervention criteria
have been identified and a response plan is in place as well as mechanisms for quick decision-making.

68. Adjusting the multi-criteria analysis for some downside risks only for the preferred option still resulted in
the preferred option offering the highest weighted score. This is driven by the simplification of the programme
compared to the current portfolio, which is targeted on the most important areas for strengthening Nepal’s own
government systems.

ENSURING VALUE FOR MONEY

69. The programme will have its own Strategic Learning Unit which will likely draw on monitoring, reporting and
evaluation from partner organisations and conduct monitoring and strategic learning evaluations through the
embedded technical assistance facility to generate data and evidence on other parts of the programme as well as

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assess interactions between components and identify opportunities for improvement. Independent evaluations will
be considered as required. In addition, value for money indicators will be tracked and some included in the logframe.
• Economy. Key Cost Drivers will be monitored in each of the components and transparently reported on. This
will include:
o Cost of programme management (including overheads) – this will be capped.
o Local/ International TA / Consultant Benchmarking of costs.
o Unit costs associated with TA to federal government vs provincial government vs local governments:
including travel/administration, expenses and fees etc.
• Efficiency
o Working jointly across BEK programmes: evidence of collaborative working
o Working jointly across components: evidence of collaboration between implementing partners across
interrelated components.
o M&E reports that track for how outputs are being delivered. With a clear separation of approach for
parts of components that are working in an adaptive way (TA facility) vs more traditional delivery of
outputs.
• Cost-Effectiveness
o Evidence of improved climate policymaking and delivery.
o Cost per grants as appropriate.
o Cost per $ climate finance leveraged at local and federal levels.
• Equity
o Indicators tracking inclusivity of interventions (i.e. £ climate finance investments in geographies where
GNI per capita is below the LDC threshold)
o Monitoring of the targeting on individuals for pre agreed financing / anticipatory action.
o Tracking the inclusivity and progress of adaptive social protection systems

70. If triggered the Humanitarian IRF component would monitor VfM with a focus on speed, quality,
appropriateness, and cost. Where possible data on beneficiaries reached will be sought with a disaggregation by
characteristics of beneficiaries for equity purposes.

Adaptive Programming

71. Evidence on adaptive programming is limited. This appraisal draws on existing relevant knowledge and
experience. During the programme mobilisation and implementation phase, we will consider measures to improve
the evidence base. This could include:
• Criteria set in advance for determining the volume of funding (scale up or down) for particular partners or
components based on performance / likelihood of success;
• Decision Points after 1 year and 2 year mark;
• Respond to learning findings and recommendations;
• Adapt interventions depending on change in evidence, context and strategy.

72. A robust M&E framework informed by strategic learning is required where there are clear markers of
success or failure which can be adapted over time. This will include challenging but not prohibitive milestones
from a menu of options. Further details are included in the Management Case below.

INTERNAL RISK FACILITY

73. Ex poste (after the event) responses can be slow, offer poor value for money and result in unnecessary
mortality and destitution. An IRF provides flexibility for RAIN so that it can scale up quickly and respond effectively
to shocks or spikes in need.
74. The RAIN IRF is designed to respond to 'large-scale for Nepal’ (but medium for the FCDO) disasters such as
widespread flooding (such as in 2008 and 2017) and a medium earthquake in Nepal (example, 2011 and 2023).
For large-scale emergencies warranting a crisis response, such as the 2015 earthquake, the RAIN IRF will not be
used as the likely cost of this would exceed the headroom in this Business Case.

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C. Commercial Case
Redacted due to commercial sensitivity.

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D. Management
75. This section focuses on governance and management arrangements and the ability to deliver. It sets out the
governance arrangements, management arrangements, how the IRF will work, the approach to monitoring and
learning, risk management and adaptive programme management. It also covers exit and closure scenarios.

GOVERNANCE ARRANGEMENTS

76. The diagram (Figure 5) and table 12 below explain the governance of the programme. This will be refined in
consultation with GoN during year 1 of the progamme. Suggested roles and responsibilities and membership are
indicative.

Figure 5: RAIN Governance Arrangement

Table 12: RAIN Management Arrangement

Management Arrangement Who Details

RAIN Steering Committee (SC) MoFE, MoHA/NDRRMA, MoF, Six-monthly. Intended to review the
other relevant line ministries, effectiveness of the programme and
subnational repræsentation guide the overall strategic direction of
and BEK the programme.
It will find synergies between interrelated
components, ensure policy work is
delivering relevant activities which is
joined up with other ongoing work in
Nepal and support national policies and
priorities.
Where necessary, agree any changes to
programme focus or activities.
MoFE and MoHA/NDRRMA to co-chair.
Secretariat: Technical Assistance and
Strategic Learning Unit

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Programme Board BEK and implementing Joint meetings every four months or
partners more often if required. The purpose of
these meetings will be to oversee the
day-to-day management of the
GEDSI Advisory Board and programme and share progress,
implementing partners coordinate interventions, enable
(government representative strategic learning and adaptive
observers as appropriate) management. Ensure appropriate
coordination and synergy between
components and across other BEK
programmes (and other development
partners as appropriate). There will also
be an emphasis on how inclusion and a
robust approach to evidence is used in
programme implementation.

MANAGEMENT ARRANGEMENTS

77. The BEK Climate and Resilience Team will have oversight and accountability of the entire cycle of the
RAIN programme. The core team will draw on expert BEK support.

78. Governance and management arrangements will give us sufficient capacity to manage the complexity of
the inter-linked components. We will include KPIs that incentivise delivery partners to work together to maximise
programme results.

79. There will also be close collaboration with BEK teams delivering other relevant FCDO programmes (across
BEK, centrally managed and regional as set out in the strategic case). This will maximise the impacts of FCDO’s
investment in local infrastructure, regional resilience and adaptation, federalisation, evidence and knowledge,
pandemic preparedness, health and other priorities. We will also work closely with Government institutions, relevant
development partners and other stakeholders.

80. The start-up phase of the programme will be demanding as potential partners will be identified through
competitive processes. Other peak periods will be during quarterly, bi-annual and annual progress reviews. The
Strategic Learning Unit embedded with the Technical Assistance Facility will assist in completing quarterly and
annual reviews.

81. RAIN will be managed through an overarching logical framework (LF) as the primary management tool. It
will be an aggregated version of individual partner logical frameworks. The LF will track progress against measurable
indicators and provide results to be used in completing Annual Reviews and Project Completion Review. The logical
framework will be updated after the final selection of implementing partners and continuously reviewed. The overall
LF will be regularly updated with input from implementing partners’ beneficiary feedback mechanisms, project
results, monitoring, reviews and with inputs from the monitoring and strategic learning component. A comprehensive
Delivery Plan will track individual interventions and overall programme performance across all elements and stages
of the programme cycle.

HOW THE INTERNAL RISK FACILITY (IRF) WILL WORK

82. The “up to amount” of £3.5m will be subject to available resources, i.e., in-country ODA allocations,
underspends at Post or Division and the Central Crisis Reserve.

83. The IRF will be managed by BEK. We will invite proposals from existing or recent partners (UN, I/NGOs or Red
Cross) based on needs, geographical location, capacities and technical expertise. These partners will have
undergone due diligence assessments. In exceptional circumstances other partners may be considered. Likely
delivery vehicles would therefore be AGs and MoUs.

MONITORING AND LEARNING

Effective monitoring and reporting and strategic and collaborative learning will be central to RAIN’s success.
The Strategic Learning Unit embedded within the TA Facility will play a central role ensuring coherence across
components. The BEK Evidence and Knowledge Hub Team Leader and Evaluation Advisor has advised that this
model can work well to facilitate the strategic learning we envisage. However, we will ensure that third party verification
is undertaken as appropriate and if – during the first year of the programme – specific evaluation questions and needs
are identified, these will be carried out independently.

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84. The Strategic Learning Unit and BEK will work with each component of RAIN to develop a log frame to track
progress at the activity, output, outcome and impact level. These will then be aggregated into the programme
log frame, which will track performance against key outputs and towards the expected outcomes. We will shape the
log frame to create the space and incentives for learning, challenge and adaptation; including through a structured
evidence and learning agenda developed in a concerted way during the inception stage, and by designing evidence
and learning KPIs and targets for SLU specifically and for other RAIN partners. Recognising that the programme
will be in the inception/mobilisation phase for the first 12 months, during year 1 we will track progress against a
series of process indicators.

85. BEK will conduct an Annual Review of the programme during each year of implementation and a Project
Completion Report at the end of the programme. The Annual Review will measure progress against the output
and outcome indicators set out in the log frame. BEK will agree financial reporting templates and reporting
frequency with the implementation partners for the programme components.

86. The Strategic Learning Unit will be used to generate management information and results data to inform
decision making. They will design a series of value for money metrics for the portfolio and specific components.
This will include key performance indicators to measure the quality of implementation by partners. The Strategic
Learning Unit will report this information to BEK on a quarterly and annual basis. In this way this Unit will support
the programme to adapt (testing, failing, learning, adapting). As part of the procurement strategy and in the ToR,
the design team will consider how to have a sufficient firewall and incentives for the provider to set out what is not
working.

87. BEK, with the support of the Strategic Learning Unit, will carry out annual GESI/Leave No One Behind
reviews. These will assess achievements against a GESI strategy that will be developed in the inception phase of
the programme. BEK has experience using these kinds of reviews from previous programmes.

88. Delivery partners will be required to disaggregate finance and results data at a minimum by geography
(provincial, local government level), age, gender and disability as part of compliance to FCDO’s commitment to
leaving no one behind. Partners will also be required to ensure effective beneficiary feedback systems are in place.

RISK MANAGEMENT
89. The overall programme risk rating is Major. The risk rating places the programme within BEK’s overall risk
appetite as receptive. The main risks are identified as follows:
• Strategy and context: A major shock could distract from the focus on resilience building. This could include
a natural disaster like an earthquake or large-scale flooding leading to a GoN request for international
assistance. Insufficient political will to prioritise resilience and climate change at the policy and implementation
level could also affect the delivery of RAIN’s objectives.
• Safeguarding: Sexual exploitation, abuse, and harassment. Women, minorities and other vulnerable groups
being excluded from programme activities. Health and safety considerations for emergency response or any
hardware construction (eg. safe shelters).
• Financial and fiduciary: Misappropriation of funds and/or assets for purposes other than those for which they
were originally granted, and fund not used for intended purposes.
• Policy and programme delivery: Challenges of intragovernmental coordination at all three tiers of
government. Limited capacity of sub-national and local governments. Frequent turnover of government staff
and a lack of continuity in leadership could impact collaboration, coordination, policy development and planning
processes. The programme needs to be mobilised quickly to minimise gaps between programmes, but
negotiations with government could take longer than anticipated.
• People: Turnover of key personnel in implementing partners

FLEXIBLE AND ADAPTIVE MANAGEMENT

90. RAIN will need to be flexible and adaptive to the changing operational and contextual environment to
manage the risks and to achieve greater impact and increased sustainability. Programme adaptation
encourages and enables delivery partners to change what is done, how it is done, and when it is done, in response
to changing needs and emerging trends.

91. Putting in place a flexible and adaptive approach for RAIN will involve:
• Ensuring data and evidence is collected in a timely way from programme interventions and external
environment to assess the need and for adaptation.
• Using data, research and learning to inform programme decisions for BEK. This will include decisions to enter
and exit from geographies, policy areas and specific projects over the lifecycle of the programme.
• Choosing flexible delivery partners and mechanisms through which they are incentivised to utilise a
collaborative approach and promote coordination.
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92. The following systems/tools will be placed in the programme to facilitate adaptive management:
• Active use of the results framework (TOC and Log Frame): This may involve encouraging delivery partners
to actively monitor changes in the assumptions, using a log frame to incentivise learning and coordination
and exploring ways to measure adaptation.
• Timely data collection and learning: All implementing partners will need to generate data and evidence to
inform programme adaptation. The Strategic Learning Unit in the Technical Assistance Facility will be
responsible for coordinating and bringing together this knowledge to enable effective decision making and
information flow between components (eg. from trials at the subnational level to policy making at the federal
level).
• Use of adaptive contracting: While each component of the programme will have budget ceilings an indicative
budget will be allocated during the start-up phase, detailed workplan and budgets will be agreed with
implementing partners on an annual basis. This will allow the programme to shift resources away from less
effective areas and activities to activities and areas that generate high VFM. Suppliers will be asked to
provide an adaptive management plan as a part of their technical bids and contract break clauses and
checkpoints will be creatively used to ensure FCDO retains flexibility in making adaptive decisions.

EXIT AND CLOSURE SCENARIOS

93. The intention is that UK bilateral support will not be required in the main intervention areas at the same
scale after the programme has finished, as the systems and capacity will be stronger for GoN to deliver its
climate adaptation and disaster risk management ambitions. The UK will have phased out support for small
and medium-scale crises over the lifetime of the programme.

94. The programme is designed to build the capacity of government to attract and make better use of
international climate finance and its own domestic resources. However, given high levels of climate and
disaster vulnerability in Nepal, the government will likely need continued access to international climate
finance and in the event of a large-scale shock may require international assistance for disaster response.
It is also possible further UK support may be needed to support climate adaptation beyond this programme
depending on how the context – globally and locally – evolves.

95. At each Steering Committee meeting Outcome and Impact target progress will be reviewed. If the programme
scores a B or lower at the Annual Review, the programme will be put immediately on a Performance Improvement
Plan. The team will take necessary action to improve performance, including pausing or changing intervention areas,
in consultation with GoN. If at the following Annual Review, a score of B or lower is achieved, there will be an in-
depth assessment of whether to close the programme.

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E. Financial Case
Redacted due to sensitivity.

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