Local Adaptation to Climate Change Despite the great progress that Nepal has achieved in most development indicators at national level, the rate of development is geographically unequal. The new federal structure promulgated in the 2015 Constitution presented an opportunity to tackle the disparities and create an enabling environment for economic growth. Karnali and Sudurpaschim are two of the provinces with lower Human Development Index. Nepal is the least&nbsp;urbanised country in Asia, with about 75% of the population living in rural areas, and 65% working on climate dependent agriculture. Climate parameters are changing, as average temperatures rise and droughts become more frequent. Precipitation is becoming erratic, with increasing floods and landslides, and impacting agricultural production, which has low levels of irrigation. Access to water and land is unequal, exacerbating exclusion of women, lower castes and indigenous peoples and creating potential for localised tensions. Existing legal frameworks for managing natural key resources, such as forests and land, &nbsp;have not fully transitioned to the new federal structure leaving entire ecosystems more vulnerable to degradation and to climate change. In addition, existing mechanisms for forest management such as community forests have prioritised certain species over others, reducing the natural biodiversity and resilience of the forests. For urban municipalities, demographic pressure and management of hazards, especially those linked to climate change, remains an important issue. Growth due to rural to urban migration, and lack of urban planning, increase the exposure of the most vulnerable people to hazards. The principal assets of Rural Municipalities are their natural resources: water, land and forests, which they have a mandate to control through local ¿Acts on Environment and Natural Resource Management¿, some of which are being currently drafted. These plans cover land, water, air, minerals, forests, fisheries, and wild flora and fauna, including ecosystem services. Local governments lack the human resources to plan and implement these acts. This action intends to support the capacity of local governments and communities to manage their natural resources in regards to adaptation to climate change. The action aims to ensure that Sudurpaschim and Karnali provinces improve the sustainability and conservation of their natural resources with regards to climate change in a participatory and inclusive manner. It takes advantage on the transformative window of opportunity of the implementation of the new federal system, where local governments have increased funding and responsibilities, but need support to maximise impact, while ensuring sustainability, community engagement and inclusion. Based on the increasing challenges of climate change, this last phase will build on the proven methodology and expand the scope into other sectors such as forestry and disaster risk reduction, under the umbrella of adaptation to climate change. The action will support local governments on a demand basis, with a combination of technical assistance and small grants for infrastructure, including natural infrastructure. To access the support, local governments will have to contribute financially, as well as adhere to principles of transparency, accountability and sustainability, and inclusion and consent of local communities. The action will target mostly rural municipalities for natural resources and disaster risk reduction, and some urban municipalities for disaster risk reduction (a limited number of urban municipalities these could be outside of the two target provinces depending on selection criteria).&nbsp;