The ecosystem based adaption (EbA) approach mobilizes ecosystem products and services to reduce people’s vulnerability and improve adaptation to climate change. The approach is being tested and promoted globally including Nepal. However, there are limited studies on why EbA faces challenges of mainstreaming and wider upscaling in developing countries' policies and practices. Based on an empirical case study from the first EbA pilot project site in Nepal "Panchase Mountain Ecological Region", expert consultation, and in-depth policy analysis, this study examines the effectiveness of interventions implemented through EbA and explores "Why" questions related to mainstreaming and upscaling of EbA in Nepal. The results showed that EbA helps to reduce climate vulnerability and enhance socio-ecosystem resilience. However, it often lacks innovativeness in addressing the risk and vulnerability associated with the changing climate. Though EbA is spelled out in most of Nepal’s climate change policies, it faces sustainability issues due to low priority, lack of a proper institutional mechanism, and inadequate budget provisions. The EbA related activities are implemented on a small scale, runs for a short period, and failed to demonstrate tangible impacts. The sustainability of the EbA practices in Nepal will be ensured, only if it is mainstreamed in the government's regular planning process, receives enough budget from the government, and has robust institutional mechanisms in place for implementing and monitoring EbA activities. The study's findings are expected to be useful for policymakers, practitioners, and development agencies to shape interventions to institutionalize the EbA approach in the developing countries.