Access to Norway forest funds hinges on ‘concrete, realistic’ clean energy transition plan

-Norwegian envoy

Once the David Granger administration delivers a “concrete, realistic and cost effective plan” for Guyana’s transition to clean and renewable energy sources, the country will get access to funds now held by Norway and the Inter-American Deve-lopment Bank (IDB), according to Special Envoy and Director of the Norwegian International Climate and Forest Initiative Per Fredrik Pharo.

“This is not about any particular project, but about a realistic and politically anchored plan to deliver on the Government’s own stated ambition,” Pharo wrote in an Op-Ed published last Thursday in the state-owned Guyana Chronicle newspaper, where he assured that Norway is committed to supporting Guyana’s transition to clean and renewable energy sources.

The Op-Ed was a response to what Pharo described as “misleading arguments” about the Guyana Norway Agreement by Presidential Advisor on the Environment Gary Best, which were presented in January.

Per Fredrik Pharo

“Retired Rear Admiral Gary Best presents a number of misleading arguments about the Guyana Norway Agreement. Even though we do not think that his arguments present the view of the Government of Guyana, we feel compelled to respond, less serious misunderstandings are allowed to fester and erode the very basis of our partnership,” Pharo wrote.

Best, in his January 22, 2017  Sunday Chronicle ‘Towards a Good Life in a Green Economy’ column, argued that the government should have access to US$80M in from Norway payments for forest services that had been placed in an IDB holding account to cover the country’s equity in the Amaila Falls Hydropower Project (AFHP).

“Juxtaposing Guyana’s earned payments according to [Norway’s International Climate and Forest Initiative’s] records, the Trustee’s Report on the Financial Status of the GRIF and the date when the USD80m was deposited, we conclude that USD80m was in some account in Norway, at least since 2012, since by then Guyana’s total earned payments equaled approximately USD153m. The act of not paying in the earned payments into the Trustees account appears to be a breach of the Agreement since all payments earned are to be paid over by Norway into the Trustee’s account. This leads us to the question as to why and who owns or has full or shared rights over the USD80m equity?” Best stated.

“Recognising that Guyana’s earned payments commenced as early as 2010; that the Agreement requires a ‘pay in’ to the GRIF; that there is no known GRIF decision to transfer the USD80m; that there was no GRIF approved project for the USD 80m equity; that there is no GRIF project cycle for the USD 80m equity, which involves website postings for comments by stakeholders and the public; in our opinion, the US$80M equity belongs to the GoG [Government of Guyana] as earned payments. We therefore recommend that Guyana, as chair of the GRIF Steering Committee, request that the US$80M equity be paid into the Trustee’s account in accordance with the provisions of the Agreement and be programmed to a project or projects consistent with Guyana’s goal to transition its economy into clean and renewable energy use,” he added.

‘Confused’

But Pharo explained that Best seemed to be confused on the process of the disbursement of the funds and in so doing was misguided in the information he publicised.

“The Rear Admiral seems confused about the political processes of the disbursement of the latter: The 80 million USD were placed in a holding account at IDB to cover the Government of Guyana’s equity share in the Amaila Falls Hydropower Project, at the written request of the then Finance Minister, Ashni Singh, to Norway’s then Minister of Climate and Environment, Tine Sundtoft, on November 17, 2014. This is a public letter, available to anyone requesting it. In a political partnership decisions of this character are taken and agreed upon by ministers, not – as Rear Admiral Best seems to believe – a technical group at fund management level,” he noted.

“Whether the 80 million USD will remain with the IDB or is transferred to the GRIF is a practical question and relates to where the money can be put to best use in order to realise Guyana’s forthcoming concrete, realistic and cost effective plan for clean and renewable energy. It is not a matter of principle,” he further said.

He pointed out that the cornerstone of Oslo’s partnership with Georgetown is stipulated in the original Memoran-dum of Understanding (MOU) the two sides signed, dating back to 2009.

“The MoU establishes that results based funding from Norway is to be used to implement the Low Carbon Development Strategy (LCDS), the core of which was forest protection and a renewable energy transition with the Amaila Falls Hydropower Project at its heart. This is also reflected in our Joint Concept Notes (JCN) from 2012 and 2015…Rear Admiral Best ignores our MOU, and argues that the legal agreement between Norway and the World Bank regarding the Guyana REDD+ Investment Fund (GRIF) constitutes the core of our two countries’ partnership. This is not the case – and as the Rear Admiral points out, that would be absurd, given that Guyana is not a formal party to the GRIF agreement,” Pharo writes.

Pharo explained that under the Guyana-Norway partnership there are several legal agreements pertaining to the flow of funds, including the grant agreement with GRIF, an agreement with the IDB on a holding account, and smaller agreements with non-government organisations to help fast-track the partnership in specific areas. “All of these are merely technical arrangements to allow finance to flow to Guyana’s green development, in line with and subordinated to our MOU,” he added.

He said that the Granger administration has now embarked on work to take the LCDS one step further by developing the new “Green State Development Strategy,” which is a process that his country embraces because of its ambition as well as Norway’s strong support for a democratically-elected government’s right to continuously ponder the future development path of its country.

However, Pharo pointed out that shortly after the APNU+AFC won government office in May, 2015, several public statements created doubts about whether the goals of the LCDS, especially regarding Guyana’s transition to near 100 percent clean and renewable energy sources within reasonable time, would be upheld by the Granger administration. “This development made a closer consultation process and a pause in the implementation of our partnership necessary. We strongly defend the right of a government to set the development path of its country. But if that development path were to deviate from that which was the basis for our partnership, then it is not the right of a government to retain the benefits of a partnership based on commitments it no longer intends to fulfil. For this reason, while waiting for the Granger administration to clarify its position, Norway has not been in a position to make any new financial transfers or commitments to the partnership,” he explained. “The crucial point, however, is that neither have we taken any steps to terminate the partnership. On the contrary, we are working actively with the Government of Guyana to identify an agreed path forward,” he added.

It is for this reason that Pharo said that Norway continues to wait for an announced plan for a “concrete, realistic and cost effective transition” to clean and renewable energy in line with Guyana’s Intended National Determined Contributions (INDC) and the spirit of the partnership.

“Once this plan has been finalised and the new Green State Development Strategy, (including the mentioned energy transition plan) has been adopted by Guyana’s Parliament, Norway will be in the position to both transfer the 40 million USD to GRIF for results that Guyana achieved in 2013, and to put the 80 million USD currently placed in a holding account in IDB to good use to reach Guyana’s energy transition goal,” he added.

Referring to conversations on the sidelines of a UN meeting in Marrakesh last year November, between President Granger, Finance Minister Winston Jordan and Norway’s Minister of Climate and Environment Vidar Helgesen, Pharo said Norway is confident that Guyana is planning in the right direction towards a green economy.

“Crucially it will, within this framework, be up to Guyana to decide on which particular projects that merit further development, and to choose the international partners that are best equipped to support Guyana in realising these projects, in line with internationally recognised safeguards,” he said.

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