Project Components
The NLSIP consists of four components as summarized below.

Component “A” : Strengthening Critical Regulatory and Institutional Capacity (US$ 0.313 million): The objective of this component is to strengthen the ability of the MoALD and its functionaries at the provincial, municipality and village levels by creating enabling policy and regulatory environment which contribute to the performance of the livestock sector. The intervention under this component is linked to component “B” by delivering demand driven services to the livestock producer and also to component “C” by providing adequate incentives for the private sector investments in the livestock sector. This component is organized around three other subcomponents: (1) developing, updating and operationalizing key policies, acts and regulations affecting the performance of the livestock sector, (2) strengthening the institutional capacity of the various government agencies to support the development of the livestock sector, including the carrying out of a capacity enhancement need assessment (CENA) of MoALD and its key agencies and (3) developing and establishing a dedicated livestock management information system providing updated information on extension, management and market to farmers on periodical basis.

Component “B” : Promoting Sector Innovation and Modernizing Service Delivery (US$ 21.97 million): The objective of this component is to enhance the capacity of key stakeholders along the selected livestock supply chains to develop, disseminate and adopt best practices. Most activities under this component are implemented at farm and cooperative/producer group level, and involve government agencies for improved service delivery. It also contributes to environmental sustainability and particularly GHG emission reduction through improved efficiency in animal production and increased resilience toward the negative impacts of the climate change. The component also directly addresses the issue of feed resources and their vulnerability and adaptation to climate change. This component is also organized around three other subcomponents: (1) support to producer’s organization, (2) modernizing service and input provision systems and (3) strengthening farmer’s training and extension services.   

Component “C” : Promoting Inclusive Value Chains for Selected Livestock Commodities (US$ 28.008 million): The objective of this component is to develop a more commercial-oriented approach for selected livestock subsectors and to contribute to import substitution (for dairy products and goat meat) and export promotion (for Chyangra cashmere) by improving the productivity and value addition within the targeted value chains. The component directly contributes to the PDO by supporting the integration of smallholder livestock farmers in those value chains. The component focuses on improving smallholders’ access to markets and on strengthening the backward and forward links among value chain actors. This component is expected to facilitate the active engagement of productive partnership between the various active value chain actors including finance and insurance institutions. These productive partnerships are supported through a Matching Grant (MG) mechanism by a combination of 50 % IDA grant, 20 % contribution in cash by the respective producer’s organization and remaining 30 % as short to medium term loan from the participating financial institution. The component includes two subcomponents: (1) development of productive partnerships, and (2) financing livestock value chains.

Component “D” : Project Management and Knowledge Generation (US$ 4.70 million including project preparatory fund):
This component finances all aspects of project management and implementation, including (i) strategic and operational planning, execution, M&E of project activities, (ii) compliance with safeguard (iii) implementation of public awareness and outreach campaigns; (iv) verification and reporting on project execution and impacts; (v) establishment, operationalization, and maintenance of the PMU at the center, 4 DLSUs and NLBO, Pokhara established at five different locations; and (vi) the preparation/attendance of project-related studies, workshops, and seminars generating knowledge derived from the project implementation experiences, including but not limited to mainstreaming climate-smart livestock practices, to be communicated to various public and private entities in a timely and effective manner.