Norway forest $$ can’t be accessed just yet

-transfer pacts between World Bank, partner entities to be signed

Money for approved projects under Guyana’s forest preservation deal with Norway could still take some time to be released as the “partner entities” to whom the money will go are finalizing transfer agreements between them and the World Bank.

“Currently, the partner entities are finalizing the transfer agreements between them and the World Bank which have to be in place before funds can flow from the Fund to specific projects. This entails formal procedures in the relevant organisations that will still take some time”, Ambassador Hans Brattskar, the Director of Norway’s International Climate and Forest Initiative said in a statement yesterday.

Hans Brattskar

The World Bank is administering the Guyana REDD+ Investment Fund (GRIF) which is the financial mechanism for the ongoing cooperation on climate change between Guyana and Norway, in which Oslo will pay up to US$250M over five years for Guyana’s performance on limiting greenhouse gas emissions from deforestation and forest degradation, and for progress made against governance-related indicators.

Norway recently transferred the first tranche of US$30M into the Fund but the length of time it is taking for money to be released by the World Bank was recently criticized by President Bharrat Jagdeo. Jagdeo, however, has said that he is optimistic that the funds will be accessible by January, saying that the World Bank had shown greater urgency within the past few months after pressure had been put on it.

Emphasizing that the Guyana-Norway partnership is progressing and teaching valuable lessons to the world, Brattskar yesterday explained that the requirement for disbursement from the Fund to individual projects is that the government of Guyana, together with a partner entity, first submit project or programme proposals to the Fund Steering Committee. The partner entities currently comprise the World Bank, the Inter-American Development Bank, and the United Nations Development Group. The Steering Committee is chaired by Guyana and comprises representatives of Guyana and Norway. There are some observers.

“The projects cleared by the Steering Committee then need to be approved by the formal bodies of the selected partner entity before money actually flows from the Fund to individual projects”, Brattskar explained.  He said that once the partner entities and the World Bank finalize the transfer agreements, projects will soon be submitted to the Steering Committee “including assurances that the partner entities’ safeguards and operational procedures have been applied as appropriate”.

“Once this is the case, Steering Committee decision-making –including the involvement of civil society –will be as rapid as is appropriate for the various proposals. The trustee has no other formal role in the latter context than disbursing the funds to the partner entity when so ordered by the Steering Committee”, the Ambassador explained.


He said the progress on the GRIF should have been quicker but lessons were learned that can be valuable. “These lessons could help the multilaterals – and their owners, the international community – as they consider the future of performance-based climate financing”, Brattskar said. “More specifically, we should together seek new ways to combine the effective application of fiduciary, environmental, social and governance safeguards with effective disbursement and strong developing country ownership of spending priorities”, he said.

According to the Ambassador, these issues are being addressed as part of the development of a global climate change regime. “This is an important process core to current climate change debates, a priority for the multilaterals going forward, and an issue which the governments of Norway and Guyana will continue to prioritize”, he said. “Until new and improved instruments are in place, however, the Governments of Guyana and Norway as well as the World Bank as trustee and the Guyana REDD+ Investment Fund partner entities, will all do their very best to make that fund work to achieve what is most important: ensuring that the benefits of REDD+ will soon start flowing to the people of Guyana”, he said.

Brattskar had noted that Norway remains pleased with the progress being made in the climate and forest collaboration agreement with Guyana and the sustained strength of the partnership between the two countries. An area where significant progress was made is in understanding the global challenge inherent in the establishment of mechanisms to channel results-based finance. He noted that the process of identifying an appropriate design for the GRIF was challenging and took far longer than it should have. What became clear in that process was that the financing instruments currently available to the World Bank and other multilateral financing institutions are probably not ideal for performance-based climate finance purpose, he said. However, work is ongoing to remedy that, he said noting that more needs to be done.

Meantime, the Office of Climate Change here said in a statement that Guyana has fulfilled its commitment for the first tranche of funds under the Guyana-Norway MOU. It said that the independent verifications are currently being done for the second tranche of funds which is expected to be US$40M. The Steering Committee, which was established in November to oversee the activities of the GRIF, will approve the allocation of the funds provided to the GRIF for specific projects and authorize requests for the release of the funds to Partner Entities drawn from multilateral donor agencies, including IDB and UNDP.

The statement explained that each Partner Entity will provide operational services and oversight and ensure sound fiduciary management, and environmental and social safeguards in partnership with the relevant government ministry or agency executing the project. Once the Transfer Agreements are in place, the Steering Committee can enable the transfer of funds to the first projects. It means in essence that the funds are not being transferred to the Guyana Government.

The statement noted that the first priority projects being prepared for implementation and funding from the GRIF are Amerindian Land Titling and demarcation, the Hinterland Electrification Programme, institutional strengthening of key agencies involved in the LCDS and Guyana’s REDD+ initiatives, the establishing of the Amerindian Development Fund and the Amaila Falls Hydro Project.

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