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By : Soukata Vichit

The Feasibility of NCF. The case of Environment Protection Fund, Lao PDR. By : Soukata Vichit. Fund name: Environmental Protection Fund Country: Lao PDR

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By : Soukata Vichit

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  1. The Feasibility of NCF The case of Environment Protection Fund, Lao PDR By : Soukata Vichit

  2. Fund name: Environmental Protection Fund • Country: Lao PDR • Objective: to strengthen environmental protection, sustainable natural resources management, biodiversity conservation and community development in Lao PDR

  3. Governing body Board of Directors (August 2012) • Deputy Prime Minister as Chairperson • Minister of Finance as Vice-Chairperson • Vice Minister of Ministry of natural resources and Environment (Member), , • Vice Minister of Ministry of Energy and Mining (Member), • President of Lao Women Union (Member),, • Vice Governor of province(Member), • Vice President of Chamber of Commerce and Industry (Member), • President of the Association for Agricultural Production and Processing, • Vice President of Science and technology Council.

  4. Legal status: • The EPF has been established as an autonomous organization, both financially and administratively, operating under the laws in Lao PDR. The EPF was established through the issuance of Prime Ministers Decree No146/PM dated 6 June 2005. • The EPF can absorb all kinds of contributions from donors and the private sector, although it cannot access a direct fiscal transfer from line ministries due to its off-budget nature.

  5. Income of 2005-2010

  6. [1] Note: US$ 1 = LAK 8,000 Beneficiaries • Any person, • Commercial entities, • Government organizations, • Civil society entities (NGOs)

  7. Rationale • To secure stable source of income for the environmental protection efforts

  8. EPF fund and climate finance Article 17of EPF Decree • EPF shall establish Specialized Financing Windows (SFW) for activities for environmental protection, sustainable exploitation, use and management of natural resources within any sector. • Government ministries, organizations and entities may propose the establishment of a SFW.

  9. EPF fund and climate finance • SFW may elect to establish their own managerial structure, or let the Executive Office operate and manage the window per agreement with the entity providing the capital contribution .. • The creation of other funds for environmental protection, natural resources, and/or biodiversity conservation separate from the EPF is not permitted. Such funds shall be established only as SFW under the umbrella of the EPF. • .

  10. End. Fund - 20% Interest • PC • WRM PICE • CBI • PC • -Sub grant £¤¡¾­- EPF Financing Windows and Access to AF Contribution • AF • WB • Grant • E P F • Land M • CC & A • ອື່ນໆ ? • Others • Sub grant • Sub grant • Sub grant -£¤¡¾­- Sub grant 10 • Sub grant • Sub grant • Sub grant • Sub grant • Sub grant • Sub grant Sub grant • Sub grant • Sub grant • Sub grant

  11. Process of establishment • The EPF establishment is provided by the environmental protection Law (1999) and was initiated as one of the conditions of the ADB Environment and Social Program (ESP) program loan (US$ 20 million) to the Government of Lao PDR; • The Prime Minister Decree 146 on the EPF establishment and operation was issued on 6 June 2005;

  12. Process of establishment • The Prime Minister Decree 72/PM appointing the EPF board of directors was issued on 1 November 2005, • In January 2006 the EPF board adopted and approved the EPF charter, • The Executive Director was appointed by mid April, and the World Bank grant was effective. • The process take more than 5 years

  13. Political support • The EPF BOD appointment was on 1 November 2005 and and the director of the executive office • the fund provided by April 2006. The EPF is an autonomous organization established by the Government and chaired by the Deputy Prime Minister.

  14. Resources invested in the establishment • 5 years • ~ 6 men month (Supported by ADB) • Budget allocated (if any)

  15. Legal process • The establishment of a fund in Lao PDR has to be provided by a law under which a specific Prime Minister Decree on the establishment and operation of the fund will be issued.

  16. Legal tools • EPF Decree • EPF Chapter • EPF Operation Manual • Technical Guideline and application form • Financial and procurement Manual • Sub grant Implementation Manual

  17. Board of Directors PSC of Window/project Inter.Advisor (where is needed Executive Director Assistant to the ED (2) Admin Assistant • IT (1) Financial Unit Manager (1) Technical unit Planning Manager (1) Drivers(2) Office Cleaner (1) ​ Project(s) Accountant (2) Procurement Officer (1) • Cash(1) Provincial facilitator (s) Institutional Framework Window & M&E manager Window & M&E manager Window & M&E manager Window & M&E manager Window & M&E manager

  18. Human and institutional • For the management of the EPF, the EO has actually 15 staff with about 20% of the total annual budget for the operation cost.

  19. Lesson-learned: Success Factors Different types of funds • The EPF has proven that it is beneficial to create a structure of a national fund that can accommodate different types of funds. • The EPF can serve as an institution that provide financial service • The EPF can directly receive the financial assistance by a creating of a specific window

  20. Lesson-learned: Success Factors Standards • The EPF manage fund according to international standard in financial integrity as well as social and environment safeguard • inclusion of detailed procedures of financial management and social environment safeguard in the Charter and Operations Manual • most of the grants have been managed according to the World Bank’s standards

  21. Lesson-learned: Success Factors Reaching local beneficiaries • The EPF and the Small Grant Project have been the only initiatives that channel financial resources to local stakeholders in the field.

  22. Lesson-learned: Challenges • Different types of funds • An endowment fund was created to ensure sustainable income to finance the operations of the EPF, but a sustainable source of capital has not been identified. • Without sustainability the turn over rate of staff occurred and may reduce confidence of donor agencies in providing contributions to the fund.

  23. Lesson-learned: Challenges • Standards • there has been a concern about the high turn over rate. • However, with the established system in place, building the capacity of human resources would be faster compared to the process of establishing the system from scratch.

  24. Address • EPF Executive Office POBox: 7647 2nd Floor, MONRE Building, Sidamduan Road, Vientiane Tel: (856 21) 252739 Fax: (856 21) 252741 http: //www.laoepf.org.la.

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