Second Norway pay-out awaits deforestation check

A tender is out to verify the findings of a report on deforestation rates in Guyana that could see the disbursement of the second tranche of money under the Guyana-Norway forest deal by the second quarter of next year.

The Guyana REDD+ Monitoring Reporting and Verification System (MRVS) Interim Measures Report 2010 by Poyry Management Consulting Limited of New Zealand and the Guyana Forestry Commission (GFC) showed that deforestation had tripled over the past year. Despite the rising rate, Guyana qualified for the first payment under its five-year US$250M forest saving deal with Norway since the rate was still well below the interim reference level. However, the transfer of the US$30M for 2010 was an exception since third party verification of the enabling activities under the deal was not completed.

For 2011, however, payment will be based on verified performance; it is a requirement that the enabling activities and the deforestation and forest degradation measurements are reported on and subjected to independent third party verification before any 2011 disbursements are made. This payment will be based on 2009-2010 results.

In a recent email seen by this newspaper, Deputy Director of Norway’s International Climate and Forest Initiative Per Fredrik Pharo said that a tender is out for the numbers in the GFC/Poyry report to be independently verified. He said that the verification process is currently due to be completed by mid-March. “If the GFC/Poyry numbers are verified, the Norwegian decision making process regarding 2011 contributions should be completed by the end of the first quarter of next year,” he said. 

Additionally, as part of the verification process, the Rainforest Alliance is reviewing Guyana’s Annual Progress reports on REDD+ enablers under the Guyana-Norway forest deal. Guyana has completed two Annual Progress Reports: one for the period November to February 2010 and the other from March to September 2010. While he was unsure of an exact time, Pharo said that the Rainforest Alliance report will be forthcoming quite soon. 

Meanwhile, President Bharrat Jagdeo at a press conference at the Office of the President on Wednesday, expressed hope that the second tranche of funds from Norway—US$40M—would be disbursed by the end of the first quarter of next year. In Cancun, Mexico last week, Jagdeo had complained about the delay in the release of the first tranche of funds by the World Bank.

The World Bank is the Trustee of the Guyana REDD+ Investment Fund (GRIF) after being asked by the Norwegian and Guyanese governments. The GRIF is the financial mechanism for the ongoing cooperation on climate change between Guyana and Norway.

Norway will pay for Guyana’s performance on limiting greenhouse gas emissions from deforestation and forest degradation, and for progress made against governance-related indicators. Guyana will invest the payments it receives, and any income earned on them, in its Low Carbon Development Strategy (LCDS).

No money will flow directly from Norway to Guyana. Norwegian funds will be transferred to the GRIF, which will disperse funds only after consensus decisions by its board, and only to projects that are found to meet the safeguards and operational policies of the partner entities, including the World Bank, the Inter-American Development Bank and the United Nations Development Programme, which are the first institutions invited as partner entities.

Norway’s payments to Guyana may amount to approximately US$250 million over the period to 2015, depending on Guyana’s performance, according to a methodology set out by the two countries when the MOU was inked in November 2009.

According to the Joint Concept Note (JCN), the governments of Norway and Guyana have decided that the commencement and annual continuity of result-based financial support from Norway will depend on agreed progress regarding seven factors. These are: Strategic framework; Continuous multi-stakeholder consultation process; Govern-ance; Financial mechanism; Monitoring, Reporting and Verification (MRV); the Rights of indigenous peoples and other local forest communities as regards REDD+;  and the Annual Assessment and Verification.

The government in the revised LCDS has said that in 2010 and 2011, interim REDD+ revenue of between US$60 million and US$111 million in total will be invested in seven priority areas: the Amaila Falls Equity; the titling and demarcation of Amerindian Villages; the Amerindian Development Fund; the Information and Communications Technology (ICT) infrastructure; small and micro enterprise development in low carbon sectors; research, education and ICT training; and supporting institutions for the LCDS.

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