Reducing Emissions from Deforestation and Forest Degradation

Forest Carbon Partnership Facility

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

REDD Country Selection

Recap on Country

Selection

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

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)

Recap on Financial

Contributions(2)

FY09 FY10 FY11 FY12 Totals

Australia 7.5 7.5

Finland 9.0 9.0

AFD (France) 5.0 5.0

Japan 5.0 5.0 10.0

Netherlands 7.0 4.4 4.4 4.4 20.3

Norway 30.0 30.0

Spain 7.0 7.0

Switzerland 8.2 8.2

UK 2.0 3.0 5.0

USA 5.0 5.0FY Totals 85.7 12.4 4.4 4.4 106.9

Grand Total

Signed Participation Agreements - Contributions to the Readiness Fund ($m)

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

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

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

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

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

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)

Overcoming Funding

Gap(2)

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(3)

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(4)

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.