Norway forest payments snagged by unspent funds

Guyana is unlikely to receive another tranche of payments from Norway under their forest protection partnership for this year because most of the money already disbursed remains unspent.

Director of Norway’s International Climate and Forest Initiative Per Fredrik Ilsaas Pharo confirmed statements by former Norwegian Minister of the Environment Erik Solheim that the money already disbursed into the Guyana REDD+ Investment Fund (GRIF) must be spent before more could be released. “It is correct that according to general rules for disbursement of funds set by the parliament, money cannot be disbursed until a significant portion of the money in the GRIF is utilized,” Pharo said. “This is a technical aspect of the parliament’s general rules, and not special for Guyana,” he added.

The Memorandum of Understanding (MoU) signed between Guyana and Norway in 2009, provides for the provision of REDD+ results-based payments from Norway. Guyana can be paid up to US$250 million up to 2015 for results achieved in keeping its deforestation and forest degradation below an agreed level and progress on REDD+ enabling activities.

Norway has already paid US$69.8 million into the GRIF on the basis of the 2009 and 2010 performances. The GRIF is a fund for the financing of activities identified under Guyana’s Low Carbon Development Strategy (LCDS). It is overseen by the World Bank. It had been reported by the Government Information Agency in June that Prime Minister of Norway, Jens Stoltenberg at the Rio+20 summit had indicated that Guyana would receive another US$40M and later this year, US$60M.

Per Fredrik Ilsaas Pharo

Thus far, Guyana has proposed seven projects for financing under the GRIF and the last report from the World Bank in June revealed that the GRIF Steering Committee up to that point had only approved US$5.94 million of the funds to the Inter-American Development Bank (IDB) for disbursement to Guyana for the institutional strengthening project in addition to preparation fees and project administration fees to the various partner entities. The total amount green-lit for disbursement amounted to US$9.17 million, with US$61.1 million remaining available for projects. Norway had also channelled US$1.06 million to Conservation International for preparatory work as pass through funds for the Guyana Forestry Commission.

“As trustee, the World Bank has transferred all funds requested by the Project Entities; there are no outstanding transfer requests,” Angela Gentile, Head of Communications for the Concessional Finance & Global Partnerships division of the World Bank told Stabroek News last week.

Meanwhile, Pharo noted that money is now being released for projects. “Guyana has set out in its LCDS an ambitious array of investments to create a green economy in Guyana, which provide the basis for the need of money from the GRIF. The money Guyana has received to date is now being released into LCDS investments, starting with investments like the low carbon small and medium business fund and the Amerindian Development Fund. Guyana and Norway both expressed their view that GRIF needs to be continually improved to work for the two countries’ needs and to help us learn lessons that will help countries all over the world,” he said.

Asked whether Oslo is satisfied at the pace with which projects have been submitted for funding, Pharo said that challenges have been encountered but he was confident that a solution is within reach. “As with all aspects of this partnership, because we are leading the way, we have encountered challenges.

That goes for the GRIF as well. We are confident, however, that a workable solution is within reach, and that there is real opportunity – on this and on other aspects of the partnership – for significant progress in 2013,” he said.

“There is ongoing dialogue between the two countries related to the GRIF and we believe important steps have been taken. We hope that significant parts of the challenges will be resolved by the end of 2012 or in the first half of 2013,” the head of Norway’s forests and climate initiative said.

Of the seven projects proposed by Guyana, the Institutional Strengthening project is the most advanced. The overall objective of this US$7M project is to enhance national institutional capacity in Guyana to address the impacts of climate change, ensure the effective implementation of the LCDS, and meet its commitments under interim REDD+ partnerships. These commitments include avoided deforestation measures that translate into the avoidance of carbon dioxide emissions.

The specific objectives of the project are  to strengthen the technical and administrative capacity of the principal institutions responsible for implementing the LCDS, namely the Office of Climate Change (OCC), the Project Management Office (PMO) and the Guyana Forestry Commis-sion (GFC); and develop and implement a Monitoring, Reporting and Verification system on a national level. The funds have been approved and the project is being implemented.

The Amerindian Develop-ment Fund (ADF) is also moving ahead with US$1.88M approved for the first phase of the US$6M project which is being implemented in partnership with the United Nations Development Programme (UNDP). This first phase will see 15% of the 180 Community Development Plans (CDPs) being funded while the full Project Proposal is developed concurrently. The ADF will provide funding to support the socio-economic development of Amerindian communities and villages, through the implementation of their CDPs.

Meanwhile, in relation to the Amerindian Land Titling project, approval from the GRIF Steering Committee is expected this month while approval for the Micro and Small Enterprise Develop-ment and Building Alternative Livelihoods for Vulnerable Groups was expected last month.

With regards to the Cunha Canal Rehabilitation project, the full project proposal is being completed and GRIF SC approval is expected in the first quarter of next year. A feasibility study has been completed for the Biodiversity Research Centre which is expected to follow on from the current World Bank ‘University of Guyana Science and Technology Support Project.’

In relation to the seventh and biggest project, the Amaila Falls Hydroelectric Project, the GRIF project document is being drafted in parallel with ongoing project due diligence by the IDB. US$80M in equity is expected to be contributed via the GRIF to this project.

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