After gaining success in handing over leasehold forests in Ramechhap, DEPROSC-Nepal advocated with GTZ Lamjung that leasehold forestry could serve as a strong watershed development approach for the upcoming Middle Marsyangdi Hydropower Project in the catchment area of the Marsyangdi River. Although DEPROSC-Nepal proposed implementing the programme throughout the areas covered by the Annapurna Conservation Area, the Government approved the programme for only four VDCs.

The primary objective of the project was to raise the income level of local people and improve the condition of degraded forest land, thereby contributing to watershed conservation. Moreover, LFUGs and local communities mobilized local resources to promote productivity and improve livelihoods. DEPROSC-Nepal was engaged in social mobilization and in providing technical assistance during the process of handing over forest land on lease to the beneficiaries and up taking various livelihood improvement measures.

The main scope of the project included identifying beneficiaries living below the poverty line, identifying degraded forest land, obtaining community consensus regarding group members and land allocation, demarcating the land with the support of the District Forest Office, preparing operational plans for the forest user groups, obtaining the required recommendations from the VDCs, registering the user groups with the District Forest Office as Forest User Groups, and facilitating the approval and handover process of the leased land.

Moreover, DEPROSC-Nepal integrated leasehold forestry with income generating activities (vegetable and fruit cultivation and livestock raising were also supported), improved health and sanitation, small water projects, and improved access to finance through the promotion of savings and credit groups/cooperatives and the institutional development of LFUGs by federating them into Self-Help Groups (SHGs).