Trustee receives second installment of GRIF amounting to US$38M
ON July 18, 2011, the World Bank, as Trustee of the Guyana REDD Investment Fund (GRIF), received the second installment of the Norway funds in the amount of NOK 213 million, or approximately US$38M, and as a result, there is now approximately US$68 million available for funding decisions by the Steering Committee. This is according to an update from the World Bank on the current status of the GRIF. The last Steering Committee meeting took place on May 12, 2011, and was co-chaired by Guyana and Norway.
“On June 16, 2011, the Steering Committee approved the concept note for the Institutional Strengthening in Support of Guyana’s Low Carbon Development Strategy (LCDS) project, and agreed to finance project preparation by the Inter-American Development Bank (IDB). The objective of this project is to enhance Guyana’s institutional capacity to address the impacts of climate change, ensure the effective implementation of the LCDS, and meet its commitments under interim REDD+ partnerships. US$305,000 has been transferred from the Trustee to the IDB, the Partner Entity for the preparation of this project,” the World Bank update said.
“The GRIF is a fund for the financing of activities identified under the Government of Guyana’s Low Carbon Development Strategy (LCDS). The Government of Norway has committed to provide up to US$250 million to the fund up to 2015, based on independent verifications of Guyana’s deforestation and forest degradation rates and progress on REDD+ enabling activities,” the update said.
On the objectives of the GRIF, the World Bank update said that pending the creation of an international REDD+ mechanism, the GRIF represents an effort to create an innovative climate finance mechanism which balances national sovereignty over investment priorities with ensuring that REDD+ funds adhere to the financial, environmental and social safeguards of Partner Entities.
“The GRIF will receive payments for forest climate services provided by Guyana, and transfer these payments and any investment income earned on these payments, net of any administrative costs, to partner entities to carry out projects that support the implementation of Guyana's LCDS,” the update said.
“The World Bank acts as Trustee. It receives payments from donors, holds them in a trust fund and then transfers them to the partner entities responsible for carrying out the projects. The World Bank does not make decisions involving project funding. All funding decisions are made by a Steering Committee comprised of representatives of the Governments of Norway and Guyana. The World Bank, as Trustee, transfers funds to partner entities once projects are approved by Norway and Guyana, and the partner entities have requested the funds,” the World Bank said.
The GRIF Partner Entities are the Inter-American Development Bank (IDB), United Nations Development Program (UNDP), and the World Bank. The update said that Partner Entities carry out projects if requested by Guyana and approved by the GRIF Steering Committee. “To date, the World Bank has not been requested by Guyana to carry out any GRIF projects,” it said.
“The World Bank supports innovation and the search for new mechanisms to support global priorities such as climate change. We are pleased to support this pioneering initiative between Norway and Guyana by providing a well-tested platform as a financial intermediary. We expect that it will provide learning experiences in a challenging and evolving field – “REDD+” – which will go beyond Guyana and Norway to the wider international community,” the World Bank said in the update.
It said that the World Bank as Trustee is not involved in the establishment or verification of performance indicators; as these are agreed between Norway and Guyana. It noted the Partner Entities and GRIF Secretariat will track and report on results. “The World Bank as Trustee does not report on project-level results. It reports only on the financial status of the fund,” the update said.
According to the update, the social and environmental safeguards and operational policies and procedures of the organization serving as Partner Entity for a given project will apply for that project. “For example, if the World Bank as Trustee transfers funds to IDB to implement a project, the policies and procedures of the IDB would apply,” the update stated.
The World Bank explained that the GRIF funds could be used to finance any project that is included in Guyana's LCDS, is approved by the Steering Committee, and developed in compliance with the Partner Entity's safeguards and other policies.