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Participants Committee Meeting (FCPF PC 2) Gamboa, Panama, March 11-13, 2009

REDD Country Selection. Participants Committee Meeting (FCPF PC 2) Gamboa, Panama, March 11-13, 2009. PC 1 Resolution: Raise number of REDD Country Participants from 20 to 30 25 REDD Country Participants selected 14 in July 2008 (SC) 11 (6 + 5) in October 2008 (PC 1)

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Participants Committee Meeting (FCPF PC 2) Gamboa, Panama, March 11-13, 2009

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  1. REDD Country Selection Participants Committee Meeting (FCPF PC 2) Gamboa, Panama, March 11-13, 2009

  2. PC 1 Resolution: Raise number of REDD Country Participants from 20 to 30 • 25 REDD Country Participants selected • 14 in July 2008 (SC) • 11 (6 + 5) in October 2008 (PC 1) • 6: Access to full implementation grant • 5: Access to $200k preparation grant Recap on Country Selection

  3. PC 1 Resolution: Raise target size of Readiness Fund from $100 million to $150 million • Additional contributions received from • Norway: $25 million • Finland: €3.5 million • Switzerland: CHF1.1 million • Firm capital: $107 million • Sufficient for 21 REDD Countries assuming full implementation grant • Funding gap = up to $43 million Recap on Financial Contributions(1)

  4. Recap on Financial Contributions(2)

  5. Country Submissions • 12 submissions • 3 resubmissions • Central African Republic (3rd time) • Equatorial Guinea (2nd time) • Tanzania (2nd time) • 9 new submissions • Cambodia • Chile • El Salvador • Guatemala • Honduras • Indonesia • Mozambique • Suriname • Thailand • Overall quality of submissions has increased compared to previous rounds

  6. Scenario1 • Status quo: 30 REDD Country Participants • 5 more REDD Countries to be selected • No more REDD Country Participants accepted after that • Funding gap: up to $43 million (if all 30 need a full readiness grant of $3.6 million) • Pros: • Resolutions of PC 1 stand • Fund raising effort appears manageable • Cons: • Selection of the 5 is difficult • Turning down countries may not be in the spirit of the FCPF

  7. Scenario2 • Expand beyond 30, but max 37 • Selected at this PC, or • Selected at June PC, based on resubmission • Close FCPF Readiness Mechanism to new REDD Country Participants • Funding gap: $43 million + up to $5 million per additional REDD Country Participant, up to $78 million (assuming all need a full implementation grant) • Pros: • Countries with demonstrated interest in REDD participate in the partnership • Broadened FCPF support to REDD capacity building • Cons: • Increasing number of countries selected with no guarantee of financial support • Fund raising effort increases • Need to further strengthen implementation capacity of FMT and World Bank units

  8. Selection vs. Funding(1) • Selection into Readiness Mechanism does not imply allocation of a grant from the Readiness Fund • REDD Country Participants selected can start working on their R-Plans with own resources and support from partners, without $200k preparation grant • First 3 countries to submit R-Plan did so • Money is not the only benefit of participation; REDD Country Participants can start learning from other countries’ early experiences

  9. Selection vs. Funding(2) • Turning down REDD Countries based on lack of financing is not the best approach • Readiness grant of $3.6 million not needed until R-Plan approval • R-Plan preparation takes some time • But there are financial implications of selection, even without grants: Note from Approved FY09-13 Business Plan: • Secretariat & Meeting Attendance: approx. $62,500 per country during 5-yr business plan (i.e., 5 new REDD Countries = $312,500) • Country Advisory Services & REDD Methodology Support (includes TAP Reviews) of approx. $330k per country during 5-yr business plan (i.e., 5 new REDD countries = $1.65 million) •  5 new countries add $2m in costs even without grants or direct implementation support from FCPF

  10. Regardless of the final number of REDD Countries in Readiness Mechanism, there is already a funding gap • At present (25 REDD Countries selected): $18 million shortfall • For 30 REDD Countries: $43 million shortfall • Beyond 30: $43 million + $5 million per additional Country (up to $78 million) • Funding gap assumes all REDD Countries will want to access implementation grant • Generally not enough information to assume otherwise Overcoming Funding Gap(1)

  11. Strategies for overcoming funding gap: • Encourage more contributions from Donor Participants to the Readiness Fund • Seek new Donor Participants to the Readiness Fund • No allocation of $200k preparation grants for new REDD Country Participants • Such allocation would compound financial difficulties • Evidence that $200k is not key to prepare R-Plan Overcoming Funding Gap(2)

  12. Additional considerations • Encourage REDD Countries receiving funding for R-Plan preparation from other donors to volunteer to reduce their requests from FCPF • Encourage Donors to support REDD Countries outside of the FCPF (and to let FMT know) Overcoming Funding Gap(3)

  13. Proposed R-Plan approval schedule (numbers are cumulative): • By October 2009: 5-10 R-Plans • By March 2010: 10-20 R-Plans • By October 2010: 20-30 R-Plans • Proposed grant eligibility: preference given to ‘first 20’, while encouraging progress: • Until March 2010: Priority for $3.6 million grants given to first 20 REDD Country Participants selected into Readiness Mechanism • After March 2010: first come first served • No guarantee of $3.6 million grants beyond first 20 R-Plans approved – will be subject to additional resources becoming available • First 25 REDD Country Participants have guaranteed access to $200k until March 2010. Overcoming Funding Gap(4)

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