Local and Provincial Economic Development (LPED)


The overall objective of the project is:

  • The framework conditions for local economic development in selected municipalities and value chains at local and provincial level are improved.

In 2021 the project integrated co-financing from the European Union (EU) and the Ministry of Foreign Affairs of Finland for the implementation of the action Green Resilient Agriculture Productive Ecosystems (GRAPE) which aims:

  • To promote climate resilient, green economic growth of Sudurpashchim and Karnali provinces of Nepal.


The project strengthens the conditions required for economic development at municipal and provincial level as well as the research-oriented and research-based application of innovations by farmers and other value chain actors. By doing so, it strengthens income generation of marginalized households, socially disadvantaged groups, and women.

Combining the territorial economic development approach Local and Regional Economic Development (LRED) with action research, climate smart value chain development, and agricultural knowledge and information system building, the project ensures participatory planning and development.

An important partner in implementing the project is the International Centre for Integrated Mountain Development (ICIMOD). Cooperation with national and international universities and their students aims to build capacities for future challenges related to climate change and agriculture.

The project contributes to the Green, Resilient, and Inclusive Development (GRID) approach, which both the Government of Nepal (GoN) and the International Development Partners Group (IDPG) have adopted to pursue economic development with a long-term sustainability lens.

The project works in 27 municipalities of Lumbini, Karnali and Sudurpashchim Provinces in the west of Nepal.  It is being implemented under the guidance of the Ministry of Land Management, Cooperatives and Poverty Alleviation.

Financial Volume: € 18.35 Mio.


The project focuses on four fields of action:

  • Economic Governance: This field of action supports strengthening of governance structures at municipalities level with the aim of creating an enabling environment for agriculture, agriculture-based business, investment and value chain development.
  • Action research: This field of action supports the development of market oriented and site-appropriate innovation systems, in which household-based agricultural enterprises, cooperatives and MSMEs are supported by application-oriented research and capacity development for advisory services.
  • Rolling out: This field of action supports the application of sustainable approaches identified through action research (see above) on a larger scale in the target clusters of selected municipalities.
  • Up-Scaling: This field of action supports the sharing of instruments and best practices generated by the action to a larger audience of actors on provincial, national level and regional level thus supporting scaling-up of climate-resilient and water-efficient approaches in agricultural value chains.


The target groups of the project are smallholder farmers and their processing and marketing cooperatives as well as other enterprises in agriculture-based Value Chains in selected municipalities of Karnali, Sudurpashchim and Lumbini Provinces, including disadvantaged and low-income groups.


After receiving co-financing, the project has undergone major changes and its strategy is currently being adapted. The following selected achievements from the first offer are relevant to the activities and processes to come:

  • The participatory analysis of local economies of 9 municipalities completed. It contributed to development of LRED action plans and laid the foundation for developing economic development strategies of the municipalities.
  • A Business Climate Surveys (BCS) was conducted in 11 partner municipalities covering responses from 1,788 enterprises. The dissemination of the concept and the results of this survey was done at national level. The BCS methodology is currently being adapted to include climate change relevant dimensions.



Jun 2019 - Dec 2024

Commission Agency