US$115M in payments received so far under Guyana-Norway forest pact

– only four GRIF projects at implementation stage

Over four years into a five-year agreement between Guyana and Norway for Guyana to be paid to protect its forests, only US$115 million out of a potential US$250 million in performance-based payments has been awarded and only four projects are in the implementation stage.

The Guyana-Norway forests partnership is set to end in 2015 though officials have expressed hope that it could be extended. Thus far, Guyana has only earned US$115 million with payments last being announced in 2011. For 2012, Guyana’s deforestation rate has risen above a benchmark level and thus far there has been no announcements on the payment for that year, which is expected to be cut. Minister of Natural Re-sources and the Environ-ment Robert Persaud told Stabroek News recently that discussions are ongoing on the payment for Year 3 (2012) and are expected to be finalised soon.

Earlier this year, Finance Minister Dr Ashni Singh said that for 2013, Guyana utilised $833 million of the funds earned from under the partnership. Another $839 million was spent in 2012, bringing the total expenditure on the Norway-funded projects to $1.672 billion or approximately US$8.3 million. The Norway financing, potentially US$250 million over five years up to 2015, is being managed by the Guyana REDD+ Investment Fund (GRIF). The World Bank is the Trustee of the GRIF.

Singh subsequently told the National Assembly in his Budget 2014 presentation that four GRIF projects, with a combined approximate value of US$30 million, were in their implementation phases. Under the US$7 million Institutional Strengthening project, he said, significant progress was made towards the development of Guyana’s first national scale Monitoring, Report-ing and Verification (MRV) System. Under the US$6 million allocation to the Amerindian Develop-ment Fund (ADF), milestone disbursements were made to 26 of the initial beneficiary communities for the implementation of their development plans in promoting sustainable village economies. Under the US$5 million Micro and Small Enterprise (MSE) Development project, applications for loans with reduced interest rates have already started to be processed for entrepreneurs with business ventures in low carbon sectors. Furthermore, in the last quarter of 2013, the US$10.7 million Amerin-dian Land Titling project was approved and commenced implementation, the minister had said.

The last update provided by the GRIF website, dated April 22, said that the Institutional Strengthening project is being implemented with funds disbursed and activities are on-going. The objectives of this project are to strengthen the technical and administrative capacity of the principal institutions responsible for implementing Guyana’s Low Carbon Development Strategy (LCDS), namely the Office of Climate Change, the Project Management Office and the Guyana Forestry Commission; and to develop and implement an MRV system on a national level. The project is being implemented in partnership with the Inter-American Deve-lopment Bank (IDB).

For the ADF, micro-finance agreements were signed with 27 communities/villages in the first phase with approximately $100 million disbursed to 26 of the initial 27 communities/villages. The ADF was established to provide funding to support the socio-economic development of Amerindian communities and villages, through the implementation of their Community Development Plans (CDPs). According to the update, community and village members have been trained in business development, agriculture, poultry production and cattle rearing, aquaculture, forestry, and apiculture. “Disbursements are made in tranches depending on milestones achieved by communities/villages,” it said. US$1.8 million out of the US$6 million is currently approved with the full project document to fund the remaining CDPs in the final stages of completion. The project is being implemented in partnership with the United Nations Development Programme (UNDP).

For the MSE project, Loan Guarantee Agreements were signed with the Guyana Bank for Trade and Industry (GBTI) and Republic Bank for the loan component. This project aims to address two of the major bottlenecks that constrain the development of MSEs and the ability of vulnerable groups to build alternative livelihoods in Guyana, which are limited access to finance and limited technical and business skills.

Access to finance will be addressed through a credit guarantee facility which will be used to guarantee part of the collateral of a loan, thereby enabling an MSE to obtain a loan at an affordable rate; an interest support facility which will help with interest payments; and a low carbon grant scheme to assist vulnerable persons with viable business propositions. Lack of skills will be addressed through a training voucher scheme which will enable MSEs to obtain the skills they require at existing training institutions. Sector specific training will also be provided.

According to the update, loan applications are being processed while a Memorandum of Understanding for training was signed with two training institutions – EMPRETEC and Partners of the Americas. It said that approximately 400 persons were trained in basic business management skills, record keeping, packaging and labelling, and a special course aimed at women entrepreneurs. It said that the procurement of a marketing consultant, MIS expert, fund development administrator and skills development administrator is ongoing. The full project is for US$10 million but approval has been granted for US$5 million for the first phase. The project is being implemented in partnership with the IDB.

For the US$10.7 million Amerindian Land Titling project, the management structure has been finalised and hiring of the Project Manager, Project Support Officer, and Land Surveyor is in progress. The objective of this project is to facilitate and fast track the Amerindian land titling process.

It seeks to have land titles issued and demarcation process completed for all Amerindian villages that submit requests, including those that request extensions; strengthen existing mechanisms to deal with unresolved land issues; and improve the communication and outreach efforts of the Ministry of Amerindian Affairs. The project is being implemented in partnership with the UNDP.

Work is continuing on two other projects to bring them to the implementation phase. The full project document for the US$2 million Cunha Canal Rehabili-tation Project Full is in the final stages of completion, including finalising the project design and finalising cost and benefit analysis. The Cunha Canal Rehabilitation Project is a part of Guyana’s LCDS adaptation initiatives. It is expected that rehabilitation of the Canal will increase its discharge capacity and contribute to reducing the risks of the embankment overtopping and flooding of areas along the East Bank of the Demerara. The project is being implemented in partnership with the World Bank.

In relation to the US$2 million Biodiversity Research Centre, the World Bank has approved the proposed candidate to conduct the feasibility study following the review of the evaluation report for the competitive procurement process with contract negotiation ongoing. This project will see investment in human resources, infrastructure, facilities and equipment to develop a self-sustaining scientific research centre at the University of Guyana (UG).

There are proposals for several more projects. In his budget presentation, the finance minister said that for this year, sums totalling US$90.6 million have been allocated for continued implementation of the GRIF projects previously identified, along with new projects in the priority areas of adaptation, high potential low carbon sectors, hinterland development and low carbon infrastructure.

“Specific new interventions are expected to include ecotourism development, aquaculture development and rehabilitation works on the Cunha Canal. This second wave of projects will commence with a communication and outreach programme for the LCDS in the second quarter of this year, along with the development of a National Climate Resilience Strategy and Action Plan.

In addition, a sum of US$80 million is once again allocated to meet Guyana’s equity contribution to AFHP (Amaila Falls Hydro-electricity Project),” he had said.



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