Panchase Forest Ecosystem (PFE) represents an important block of forest in the Middle Mountains, an ecological zone not well represented amongst the country's protected area system. The Panchase Forest covers an area of approximately 10-12 square kilometer and is situated at the nexus of three districts namely Kaski, Parbat and Syanja of west Nepal. The local people consider the Panchase Forest and the mountain peak (2509m) a sacred landscape and it has special religious significance for both Hindu and Buddhists. The PFE is major source of water for agricultural and domestic use in the surrounding communities, as well as the primary source area for a number of local watersheds including Phewa lake Watershed. Furthermore PFE is rich in biodiversity, home to variety of endangered wildlife (black bear, leopard) and rare and endemic plants (orchids, rhododendron). It also represents a critical link in the Chitwan-Annapurna (Protected areas of Nepal) linkage and an important component of Greater Himalayan Landscape. But the situation, in the recent year, has become increasingly threatened and even degraded in terms of its geographic extent, biodiversity richness, ecological processes and hydrological functioning.

The first phase of project was able to advocate at National Level for promotion of ecotourism and with the support of the Ministry of Cultural, Tourism and Civil Aviation has prepared master plan of Pnachase area that will focus on tourism, biodiversity conservation, infrastructure and livelihood support programme. The second phase extension of the project will include the two more VDCs, core area of Panchase watershed. The project would also strengthen local organizational and institutional capacities for good governance, promote adoption of alternative energy and developed diversified income generation activities.