2014 ANNUAL REPORT FOREST CARBON PARTNERSHIP FACILITY ACRONYMS 5 FOREWORD 7 1. GENERAL INTRODUCTION 9 2. PROGRAM OBJECTIVES 11 3. EXECUTIVE SUMMARY 13 4. MAIN ACHIEVEMENTS AND RESULTS DURING THE PERIOD 15 CONTENTS 4.1. 4.2. Highlights Progress at the Impact Level 15 20 4.3. Progress at the Outcome Level 26 4.4. Progress by Output 27 5. ISSUES AND CHALLENGES 43 5.1. Disbursements 43 5.2. Country-Level M&E Frameworks and Readiness Reporting 43 6. MONITORING OF ASSUMPTIONS AND RISK 47 7. FY14 FINANCIAL REPORT OF THE FACILITY 51 7.1. Financial Overview of the Facility 51 7.2. The Readiness Fund 51 7.3. The Carbon Fund 56 7.4. Budget Approval Process 59 8. RESULTS MEASUREMENT REPORTING FRAMEWORK 61 FY14 ANNUAL REPORT Acronyms BioCF BioCarbon Fund CF Carbon Fund CFP Carbon Fund Participants C&I Criteria and Indicators COP Conference of the Parties (to the UNFCCC) CSO Civil Society Organization DP Delivery Partner DRC Democratic Republic of Congo ER Emission Reductions ERPA Emission Reductions Payment Agreement ERPD Emission Reductions Program Document THE FOREST CARBON ER-PIN Emission Reductions Program Idea Note ESMF Environmental and Social Management PARTNERSHIP FACILITY Framework FAO Food and Agriculture Organization FCPF Forest Carbon Partnership Facility Demonstrating activities that reduce emissions FIP Forest Investment Program FMT Facility Management Team from deforestation and forest degradation FY Fiscal Year (World Bank fiscal year, July 1 through June 30) IDB Inter-American Development Bank IP Indigenous Peoples ISFL BioCarbon Fund Initiative for Sustainable Forest Landscapes Lao PDR Lao People’s Democratic Republic LOI Letter of Intent M&E Monitoring and Evaluation MF Methodological Framework MRV Measurement, Reporting, and Verification NGO Non-Governmental Organization PA Participants Assembly PMF Performance Measurement Framework PC Participants Committee REDD Reducing Emissions from Deforestation and Forest Degradation REDD+ REDD plus conservation of forest carbon stocks, sustainable management of forests, and enhancement of forest carbon stocks RL Reference Level R-PP Readiness Preparation Proposal SBSTA Subsidiary Body for Scientific and Technological Advice (under UNFCCC) SESA Strategic Environmental and Social Assessment SIS Safeguards Information System SMART Specific, Measurement, Relevant and (indicators) Time-bound (indicators) TAP Technical Advisory Panel UNDP United Nations Development Programme UNFCCC United Nations Framework Convention on Climate Change UN-REDD United Nations Collaborative Programme on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries VRD Voluntary REDD+ Database 4 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 5 FY14 ANNUAL REPORT Foreword Acronyms It is an exciting time for REDD+. At the COP19 in November 2013, the adoption of the “Warsaw REDD+ framework” provided renewed momentum for the REDD+ agenda with seven decisions on the building blocks of REDD+, including REDD+ finance, institutional arrangements and methodological issues. REDD+ was indeed the beacon of progress in the negotiations. While the majority of funding for REDD+ was previously turning the commitments of the New York Declaration into directed towards readiness activities, the progress in action and results. Warsaw leveraged substantial new pledges from donors However, make no mistake, to overcome the underlying for multilateral initiatives that are piloting results-based market, policy, and governance failures that drive payments for emission reductions from land use programs at deforestation and forest degradation, immense political will, scale, such as the Forest Carbon Partnership Facility (FCPF). backed with commitments from the highest level, as well as Having been designed to provide practical insights and significant on-the-ground changes will be needed. Reforms knowledge to inform evolving UNFCCC decisions on REDD+ will need to reach far beyond the forest sector to decouple and to pilot results-based demonstration activities on the agricultural commodity growth and infrastructure expansion ground, the FCPF Carbon Fund made major progress on its from deforestation. learning-by-doing path towards REDD+ at scale. My hope is that climate finance can offer a lever to In December 2013, the approval of the Methodological support the transformation that is needed; that it can Framework for the FCPF Carbon Fund marked a significant incentivize countries to undertake ambitious land use development as it unlocked financing from an international reforms, to overhaul governance, and to catalyze much policy initiative by providing the operational structure for needed private capital to boost far-reaching investments to implementing results-based financing at scale. It also change the way land is managed. Innovative partnerships prompted momentum for innovation as countries competed with the private sector are crucial too, and the appetite of to present their ideas for land-based carbon innovation at the private sector for partnerships is now stronger than ever scale to the Carbon Fund. with more corporate commitments on non-deforestation The momentum was carried forward and culminated in commodity supply chains being made. the Climate Summit in September 2014 and delivered the I'm optimistic that the multi-stakeholder partnerships New York Declaration on Forests. This was the first time that the FCPF represents can carry forward the renewed that a critical mass of developed and developing country momentum created for REDD+ and contribute its share to world leaders, CEOs of companies, leaders of Indigenous take forests, land use and REDD+ to the next level. We need Peoples and Civil Society partnered around the goal of ending to seize the power of partnerships at global, national and deforestation by 2030. The World Bank stands firmly behind local levels to take the action needed to transform rural the declaration and the impressive pipeline of large-scale landscapes and economies, bring prosperity to the poor and emission reduction programs that countries have developed make a difference in the global climate change trajectory. under the FCPF Carbon Fund will play an important role in Ellysar Baroudy Coordinator, Forest Carbon Partnership Facility 6 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 7 FY14 ANNUAL REPORT 1 General Introduction The 2014 Fiscal Year (FY14) report follows the structure of the Forest Carbon Partnership Facility (FCPF) Program Level Monitoring and Evaluation (M&E) Framework, adopted by the Participants Committee (PC) at its 14th meeting in March 2013. The M&E Framework is designed to keep track of the Facility’s performance in a way that helps ensure lessons can be learned and adaptive management is possible at the Facility level. In line with the M&E Framework’s Performance Measurement country-specific assessment of readiness progress. Framework (PMF), this year’s annual report provides As the FCPF’s main focus has been on readiness and information on the main achievements related to the on laying the ground for future REDD+ activities and piloting intermediate impacts, outcomes (aligned with the four FCPF performance-based payment systems, it is somewhat objectives), and outputs (short-term results), which together limited in its ability to report on longer-term and impact- provide a strategic overview of the FCPF (see Figure 1). level indicators at this stage. (Impact assessments will be Specific, Measurable, Achievable, Relevant and Time-bound part of the independent evaluations as planned in the M&E (SMART) indicators have been developed at the level of impact, Framework.) With the new reporting structure framework outcome, and output to track the progress of the FCPF. The in place as of last year, it is still a period of transition to the targets for each indicator have been designed in a way that fully integrated new format. As a result, a limited number ensures results can be achieved within the life span of the of countries have started using the new reporting structure Facility. This report also builds on the reporting structure and this report includes the information currently available at the country level, which began last year—moving away and, for some indicators where portfolio-wide data was not from reporting on activities only and allowing for systematic, available, country examples are provided. Figure 1: Result chain of FCPF interventions Outputs Outcome Oth er sup REDD por + Readiness Assessment t Framework 47 Intermediate REDD+ Impact preparedness plan Efforts successfully undertaken by countries with FCPF Progress Global regime that support to achieve provides incentives for Impact towards readiness emission reductions REDD+ and benefit from Increased capacity of REDD+ IP and local CSO Biodiversity Boundary of M&E framework Momentum for good conserved Models for sustainable governance of SFM, livelihoods respective policy reforms and biodiversity Engagement for and multi stake-holder sustainable livelihoods participation ER standards of forest communities and guidelines Sustainable or Globally recognized enhanced livelihoods ER- Programs agreed of forest dependent REDD+ standards people Increased CF funds including Private ER Performance- sector investment based payment systems effectively Reduced emissions demonstrated from deforestation ER-programs timely and forest degradation Reduced implemented from FCPF, greenhouse countries now make Knowledge management + especially CF-Pilots gases up the FCPF REDD+ communication strategy Knowledge gained Country Participants. Knowledge products Additional REDD+ from FCPF used by disseminated investments international REDD practitioners Active South- South learning + EDD er R t Strong FCPF and Othsuppor REDD+ visibility 8 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 9 FY14 ANNUAL REPORT $830m 2 Program Objectives The Forest Carbon Partnership Facility (FCPF) is a global partnership of governments, businesses, civil society, and Indigenous Peoples (IP), focused was the total amount raised by FCPF’s on reducing emissions from deforestation and forest degradation, forest two funding mechanisms—the Readiness carbon stock conservation, the sustainable management of forests, and Fund and the Carbon Fund. the enhancement of forest carbon stocks in developing countries (activities commonly referred to as REDD+). As stated in its charter, the FCPF pursues four strategic funds have raised $830 million. objectives: The Readiness Fund supports participating countries • To assist eligible REDD+ Countries in their efforts to in the development of REDD+ strategies and policies, achieve Emission Reductions (ER) from deforestation references emission levels (REL), measurement, reporting and/or forest degradation by providing them with and verification (MRV) systems, and institutional capacity financial and technical assistance in building their to manage REDD+, including environmental and social capacity to benefit from possible future systems of safeguards. The Readiness Fund became operational in 2008 positive incentives for REDD+; and has a capital just under $360 million. The Carbon Fund builds on the progress made in • To pilot a performance-based payments system for readiness and is designed to pilot performance-based ER generated from REDD+ activities, with a view to payments for ER from REDD+ programs in a small number of ensuing equitable sharing and promoting future FCPF countries. The CF became operational in 2011 and has a large-scale positive incentives for REDD+; capital of about $470 million. • Within the approach to REDD+, to test ways to The FCPF has grown to 47 developing countries (18 in sustain or enhance livelihoods of local communities Africa, 18 in Latin America and the Caribbean, and 11 in the and to conserve biodiversity; and Asia-Pacific Region) and 17 financial contributors (comprising developed countries, private sector participants, and one Non- • To disseminate broadly the knowledge gained in Governmental Organization (NGO)). It has six categories of the development of the Facility and implementation observers, including IP and Civil Society Organizations (CSO). of Readiness Plans and ER Programs. The core of the FCPF’s inclusive governance structure is The FCPF has two separate but complementary funding formed by the Participants Assembly (PA) and the Participants mechanisms—the Readiness Fund and the Carbon Fund Committee (PC). (CF)—to achieve its strategic objectives. Together the two 10 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 11 FY14 ANNUAL REPORT 3 Executive Summary In its sixth year of operation, the Forest Carbon Partnership Facility (FCPF) made tremendous progress shaping a diverse portfolio of landscape-level programs for the Carbon Fund that can generate high-quality and sustainable emission reductions at scale, deliver environmental and community benefits, and cultivate important lessons. The adoption of the Methodological Framework for the to participate in the partnership’s inclusive governance Carbon Fund in December 2013 marked the important structure. It also confirms the partnership’s cooperative spirit milestone that spurred competition from REDD+ countries and central role in the REDD+ community. to present early ideas and full-fledged Emission Reduction The caliber of new R-PPs presented also demonstrated Program Idea Notes (ER-PINs). In FY14, seven new and to what extent new countries are able to build on the wealth diverse ER-PINs were selected bringing the total to eight of knowledge generated by countries with more advanced ER-PINs, and thus filling the pipeline for the Carbon Fund by REDD+ readiness. Four more of these front-runner countries two-thirds within half a year. advanced to the mid-term stage in FY14, providing a wealth In FY14, the Carbon Fund attracted high interest from of lessons on REDD+ readiness implementation for other REDD+ countries and additional country observers joined countries in the partnership. Across the portfolio of REDD+ meetings to participate in the unique opportunity the countries substantial progress was made to advance from meetings provided to learn about countries’ experiences in R-PP endorsement to readiness preparation grant signature designing large-scale, cross-sectoral, multi-institutional and implementation. An additional 13 grants were signed, programs that bring public and private sector partners including five through new Delivery Partners IDB and UNDP, together around forest conservation and sustainable land use. more than doubling the total number of countries that have As the Carbon Fund is moving towards operationalization and reached this second readiness milestone in FY14. eventually implementation of programs, its role will become Looking ahead to FY15, REDD+ countries will have even more relevant in generating on-the-ground, practical to focus on operationalizing both their emerging REDD+ insights for piloting performance-based mechanisms for strategies, as well as their proposals for large-scale REDD+ REDD+ and informing international negotiations in the programs. At the readiness stage, that means building UNFCCC process. multi-sectoral national REDD+ strategies that prioritize key Remarkable progress was made under the Readiness drivers of deforestation and forest degradation and propose Fund as well. A record number of 13 Readiness Preparation actionable strategy options to address the underlying barriers Proposals were assessed by the Participants Committee, such as natural resource rights, land tenure, and governance. allocating a total of just under $50 million of readiness grant For Carbon Fund countries, this means turning ER-PINs +11 funding to REDD+ countries. A financial contribution from into actionable programs which can leverage public and Norway of almost $100 million to the Readiness Fund made private sector expertise and financial support and thus build it possible to select all 11 countries that had demonstrated investment packages that will generate emission reductions interest and qualified into the FCPF. At the end of FY14, the and ultimately results-based finance. Meanwhile, the FCPF FCPF grew to 47 REDD+ Country Participants, 45 of which FMT will focus on finalizing the legal and business standards have endorsed R-PPs, demonstrating the high interest from and processes to support carbon finance transactions at scale countries to benefit from the partnership’s track-record and providing customized technical support to countries. of cross-country collaboration and capacity building and countries were selected into the FCPF in FY14. 12 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 13 FY14 ANNUAL REPORT 4 Main Achievements and Results During the Period 4.1. Highlights Building on the progress made in the past two years, a landmark decision was made in December 2013 to adopt the Methodological Framework for the Carbon Fund that provides a global standard for REDD+ transactions at scale. It also completes the important progress made by the FCPF of 13 R-PPs was endorsed by the PC and an additional 13 in the last two years putting in place the set of frameworks countries reached the next readiness milestone and signed that govern the Facility and guide countries in their REDD+ readiness grant agreements. This brings the total number activities. With the Readiness Assessment Framework, the of R-PPs endorsed to 45, well exceeding the PMF’s target of M&E Framework, and Methodological Framework for the endorsing over 30 R-PPs by 2015. Furthermore, it brings the Carbon Fund endorsed, the FCPF advanced crafting and total number of countries implementing readiness activities putting in place the remaining building blocks for successful to 22, more than doubling last year’s total. The increased results-based carbon finance. The business process, numbers also reflect 11 new countries that were selected document templates, and most importantly, the General into the Facility in FY14: Belize, Bhutan, Burkina Faso, Côte Conditions for Emission Reductions Payment Agreements d’Ivoire, Dominican Republic, Fiji, Nigeria, Pakistan, Sudan, (ERPA)—the legal underpinning for large-scale carbon Togo, and Uruguay. By end of FY14, $191 million in readiness transactions—were significantly advanced and are scheduled grant funding had been allocated, and nearly $90 million to be endorsed in FY15. had been made available with signed grants, leveraging at Meanwhile as countries acted to design and present least $81 million in non-FCPF investments in readiness (this five new early ideas and eight new ER-PINs to Carbon reflects country reporting which is not exhaustive). Fund Participants, seven additional ER-PINs from Chile, New contributions to the FCPF increased. Committed DRC, Mexico, Ghana, Nepal, the Republic of Congo, and and pledged funds to the Facility increased to about $830 Vietnam were selected into the Carbon Fund pipeline by million. This includes an additional financial contribution the end of FY14. The FCPF prioritized extending country- from Norway of almost $100 million to the Readiness Fund, tailored technical support to countries as they designed now at $358 million, and a pledge from the United Kingdom and developed their program ideas and further advanced of £45 million to the Carbon Fund, now at $470 million. important analytical work in support of technical aspects Maintaining the FCPF’s commitment to social inclusion, of REDD+ at scale. More specifically, tools were advanced multiple efforts to build capacity and raise awareness to guide countries in developing reference levels and forest of the Common Approach have been taken, including monitoring systems, as well as to assess different REDD+ applicable policies and procedures on environmental and cost elements. social safeguards, information sharing, and grievance and The significant progress in the Carbon Fund also had a accountability mechanisms. More specifically, three regional positive effect on REDD+ readiness progress. The process of workshops with stakeholders in South America, Latin $191m designing concrete and actionable REDD+ programs helped America and Francophone Africa were held in FY14. Further, countries to refocus and prioritize REDD+ readiness activities. locally-implemented projects under the IP/CSO Capacity Four additional countries (Costa Rica, Ghana, Indonesia, and Building Program continued to advance implementation Nepal) reached mid-term stage of readiness and annual evidenced by the disbursement of $510,480 or 45 percent of progress reports from countries indicate that implementation total committed amounts. is overwhelmingly proceeding as planned. A record number in readiness grant funding had been allocated by the end of FY14. 14 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 15 FY14 ANNUAL REPORT Large-scale Programs in the Carbon Fund Pipeline This year, REDD+ countries have been making strides in developing large-scale REDD+ program Mexico: proposals that have the potential to transform rural landscapes. As of the end of FY14, the Carbon Building on more than 10 years of experience in sustainable forest management, Mexico’s program for a Community- Fund pipeline includes programs in Chile, Costa Rica, Democratic Republic of Congo, Ghana, Based Landscape Approach to Reduce Greenhouse Gas (GHG) Emissions aims at transforming the management of forests at the territorial level, and even goes a step further to take an integrated approach at the landscape level. Under Mexico, Nepal, Republic of Congo, and Vietnam. These eight programs take a landscape-level the FCPF Carbon Fund, Mexico has committed to broaching a community-level program spanning five states and almost approach engaging actors in agriculture, energy, transport, land, mining, and forestry to achieve 30 million hectares of land. Working in conjunction with the Forest Investment Program (FIP), the program will generate climate-smart land use, protect forests, restore degraded land, and improve local livelihoods. The incentives for rural communities to sustainably reduce deforestation associated with carbon emissions over time. The Carbon Fund pipeline remains under development in FY15. program will scale up the lessons learned from previous experience and give continuity to the management of natural resources at the landscape level. Chile: Chile’s program to reduce emissions from degradation in temperate forests is a cornerstone for the national forestry Nepal: strategy. This program—which spans 16.5 million hectares over 5 regions in Chile—takes action to address the Reaching a population of seven million people, 80 percent of which are forest dependent, the emission reductions three main drivers of deforestation and degradation: illegal logging, forest fires and replacement of native forests by program in Nepal’s Terai Arc Landscape is poised to transform the landscape and many communities in the program exotic plantations. The Government of Chile is committed to the development of this large-scale program to reduce area. The main drivers of deforestation are unsustainable and illegal wood harvesting, overgrazing, forest fires, land deforestation and forest degradation by improving forest management and focusing on cross-sectoral issues which conservation (encroachment, resettlement). The Government of Nepal is committed to this landscape-level program impact areas with most forest cover. Among the distinguishing elements of the program, which will serve as a reference which is estimated to generate 14 million tons of CO2 emission reductions in five years. This program will provide point for other countries, is the high-level support from the private sector. substantial learning value for Nepal and for other REDD+ programs globally, as it is testing the community-based forest management model as a building block for scaled up REDD+ programs. The government is dedicated to making this REDD+ initiative successful in reducing emissions, improving forest governance, and enhancing the livelihood of forest Costa Rica: dependent communities. Costa Rica’s emission reductions program takes a national level approach to achieving and sustaining carbon neutrality and contributing to poverty reduction by expanding an inclusive forestry and agroforestry-based development model. Working with government agencies—led by the National Forestry Financing Fund (FONFIFO) coordinating between the emission reductions program and the national REDD+ strategy—as well as wood and environmental services providers and buyers, the program uses avoided deforestation activities and activities to enhance carbon stocks to target the drivers of deforestation: domestic demand for wood and the conversion to agricultural land. Since 1997, Costa Rica has had a Payment for Environmental Services Program (PESP). This emission reductions program builds on this progress of the PESP as part of the national REDD+ readiness strategy. Democratic Republic of Congo: The Maï-Ndombe Emission Reductions Program is a jurisdictional program which serves as a pilot for green growth in the Congo Basin and significant climate action on the African continent. The Government of DRC is committed to this innovative large-scale program integrated in DRC’s national REDD+ strategy framework. Aligned with the investments of Forest Investment Program (FIP) and Congo Basin Forest Fund (CBFF), the Maï-Ndombe Emission Reductions Program includes a balanced combination of enabling activities (strengthening governance, capacity building, local level land- use planning, securing and modernizing land tenure) and sectorial activities (reduce impact logging, agroforestry, fire management) over 12.3 million hectares of land in DRC. The program represents a unique a partnership to secure a long- term public and private commitment to reducing deforestation and finance for delivering emission reductions, poverty reduction and sustainable development at scale. Ghana: Ghana’s Cocoa Forest REDD+ Program is the first REDD+ program in the world to focus on an ecological landscape that is defined by the production of a globally important agricultural commodity—cocoa—which is responsible for significant emissions in the landscape. The program seeks to significantly reduce emissions driven by expansion of cocoa into forest areas, coupled with illegal logging. By tackling these drivers, Ghana aims to secure the future of its forests and significantly improve income and livelihood opportunities for farmers and forest users across the program area. Ghana’s Forestry Commission and Cocoa Board are committed to jointly pursuing a programmatic, landscape strategy to reduce deforestation and forest degradation in the Cocoa Forest Mosaic Landscape. 16 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 17 FY14 ANNUAL REPORT Republic of Congo: The emission reductions program proposed by the Republic of Congo is a collaborative public-private partnership with Congolaise Industrielle des Bois (CIB) (owned by Olam International), the leading logging concessionaire in the country. Program activity is built around addressing the drivers of deforestation and degradation based on sustainable forest management in the logging sector and avoiding unplanned deforestation from shifting slash and burn agriculture in the program area. These interventions have substantial non-carbon benefits that support the national vision for a green economy building on sustainable management of natural ecosystems, participatory management and the fight against poverty. The emission reductions program works hand in hand with the national REDD+ strategy. Vietnam: The North Central Agro-Ecological Region is a landscape that is economically, environmentally and socially significant. The jurisdictional program impacting six provinces in the Northern Annamite Mountains aims to make substantial achievements through catalytic carbon finance for sustainable forest-agriculture. Vietnam’s emission reductions program works across key sectors driving deforestation and forest degradation (agriculture, infrastructure; shifting cultivation; unsustainable forest harvesting; illegal logging) which can serve as a paragon of green growth for Vietnam and the wider Association of Southeast Asian Nations (ASEAN) region. The Government of Vietnam is committed to these interventions working with civil society and development partners. 8 large-scale emission reductions programs selected into the Carbon Fund by end of FY14. 18 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 19 FY14 ANNUAL REPORT 4.2. Progress at the Impact Level In the following sections, progress is reported based on indicators at impact, outcome, and output level in line with the Performance Measurement Framework (PMF) as per the FCPF’s Monitoring and Evaluation (M&E) Framework that was adopted in March 2013. Several indicators including those related to emission reductions program implementation under the Carbon Fund (CF), are not yet applicable. Accordingly, they are not referred to in the narrative below. Moreover, some indicators require that information be generated at the country level and aggregated at the portfolio level. However, as a large number of REDD+ countries transitioned to the new reporting format for the first time in FY14, and are still at early stages of REDD+ implementation, data is not consistently available to allow a quantitative analysis across the portfolio. Instead available anecdotes and examples from countries have been provided. The FCPF Facility Management Team (FMT) expects to be able to report comprehensively at the portfolio level and provide some quantitative analysis in forthcoming reports. Please refer to Section 8 (Results Measurement Reporting Framework) for a tabular aggregation of targets and outputs. Impact-level Results 1.1: The FCPF has contributed to the of the Readiness Assessment Framework in March 2013 and the design of a global regime under or outside UNFCCC that adoption of the Methodological Framework for the Carbon Fund provides incentives for REDD+ in December 2013. Over the past year, important progress has also been made Impact-level indicator 1.1.B: Examples of how FCPF learning with the development of the legal underpinning for large-scale and experience has fed into UNFCCC REDD+ decisions carbon transactions for REDD+, e.g., the General Conditions In 2014, the United Nations Framework Convention on Climate for Emission Reductions Payment Agreements (ERPA), the Change (UNFCCC) Ad Hoc Group on Durban Platform (ADP) preparation of the business process for the Carbon Fund, organized a number of Technical Expert Meetings to focus on including a template and approval processes for ER-Program scaling up actions in areas of high mitigation potential with a view Idea Notes (ER-PINs), ER-Program Documents (ERPDs), and to achieving high emission reductions in the pre-2020 period. Emission Reductions Payment Agreements (ERPAs). The World Bank in its role as trustee of the FCPF was invited as one of the keynote speakers in the Technical Expert Meeting on Land Use that took place on June 11, 2014, as part of the ADP. BOX 1: FCPF FRAMEWORK DOCUMENTS Building largely on the experiences of the FCPF, the keynote Impact-level indicator 1.3.A: Examples of non-participant R-PP development process also provides leverage to convene a provided an overview of the state of financing, technology transfer The Readiness Assessment Framework guides REDD+ countries that have adopted FCPF standards in their own broad range of national stakeholders across different sectors to and capacity-building, including the role of partnerships, and countries on how to measure and communicate their REDD+ process identify strategy options to address drivers of deforestation. major opportunities for investment and challenges. relative progress on REDD+ readiness, and builds The exceptionally high quality of the set of new R-PPs A decision was made at the 14th Participant’s Committee on the foundation and multi-stakeholder platforms presented at PC16 and PC17 also demonstrated that new meeting (PC14) in March 2013, to reopen the FCPF to new REDD+ Impact-level Results 1.2: Reduced emissions from created during the readiness preparation phase. In countries are able to build on the wealth of knowledge that has countries. In order to qualify for consideration, non-participant deforestation and forest degradation from FCPF, addition to documenting country’s readiness progress, been generated by FCPF participant countries over the past countries were expected to demonstrate national commitment especially CF portfolio countries the self-assessment report or Readiness Package years. The inclusion of the 11 new countries in FY14 strengthened to REDD+ by preparing a Readiness Preparation Proposal (R-PP) (R-Package) resulting from the readiness assessment the partnership’s cooperative spirit and confirms its central role This impact-level result is not yet applicable. and carrying out a consultative stakeholder process as per FCPF also captures lessons learned, assesses remaining in the REDD+ community. standards, without receiving dedicated financial support from gaps, and identifies activities required to be able to Impact-level Results 1.3: FCPF has catalyzed the creation of the FCPF. Eleven non-participant countries, including Belize, transition to the implementation of performance- Impact-level indicator 1.3.B: Common Approach recognized standards for REDD+ Bhutan, Burkina Faso, Côte d’Ivoire, Fiji, Dominican Republic, based activities. successfully implemented The FCPF is a global partnership initiative of 64 partners that Nigeria, Pakistan, Sudan, Togo and Uruguay adopted the common The Methodological Framework for the Carbon has pioneered a framework for reducing deforestation and FCPF standards, carried out consultations, and developed and The Common Approach has been designed to provide the World Fund provides a global standard for REDD+ transaction forest degradation—a major potential contribution to climate presented their R-PPs for formal assessment by the Technical Bank and the other FCPF Delivery Partners (DPs) with a common at scale and will guide the piloting of results-based change mitigation by developing countries—through (i) finance, Advisory Panel (TAP) and the Participants Committee (PC) at 16th platform for risk management and quality assurance in the carbon finance transactions through the FCPF technical support, and knowledge sharing; and (ii) piloting of Participants Committee meeting (PC16) in Geneva, in December REDD+ readiness preparation process, using the safeguard Carbon Fund. The ambition of the CF is to test large- results-based finance for emission reductions from REDD+ 2013 and at the 17th Participants Committee meeting (PC17) in policies of the World Bank as a minimum acceptable standard. scale approaches that require a mix of policies and programs at scale. The FCPF has enabled developing countries Lima, in July 2014. All eleven countries were selected into the In the few FCPF countries that are piloting the Common investments, integration with national development to follow a structured and stepwise approach to develop a FCPF and were allocated $3.8 million each to support REDD+ Approach and that have started with the implementation of strategies, use of innovative financial structures, and strategic framework, build technical capacity, and promote an readiness preparation. FCPF-financed readiness preparation activities, the initial results multi-stakeholder engagement. The CF thus moves inclusive and broad-based process to manage forests more However, when countries prepared their R-PPs there was are promising. For example, Guatemala has recently refined beyond the project-based approach that most REDD+ sustainably. In the process, the Facility has helped set standards not sufficient funding available in the FCPF Readiness Fund the Terms of Reference to be used for the implementation of transactions in the voluntary markets have relied on for REDD+ and informed the UNFCCC process since its to select all. Nevertheless, countries viewed the consultative Strategic Environmental and Social Assessment (SESA) and to date. The experiences made in the Carbon Fund inception at the Conference of the Parties (COP) to the UNFCCC exercise of R-PP development and the thorough technical review preparation of the Environmental and Social Management are expected to inform the development of a REDD+ in Bali. processes by the TAP and PC as an opportunity to potentially be Framework (ESMF), and Peru has undertaken a number of system under the UNFCCC. In the last two years, the FCPF contributed to the selected into the FCPF, but also to attract other bilateral and mutually reinforcing consultation activities based on a robust and establishment of global standards for REDD+ with the adoption multilateral funding. These countries recognize that adopting an inclusive Stakeholder Engagement Plan. Both of these countries 20 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 21 FY14 ANNUAL REPORT are working with the Inter-American Development Bank (IDB) as Approach specifically, and social inclusion more generally, Table 1: Amount of non-FCPF investments* their Delivery Partner. three regional workshops were held in FY14. These were the Amount of non-FCPF investments received under R-PP process Amount of non-FCPF investments received for implementation Otherwise, in FY14, there have been multiple efforts to build last three of a series of five workshops that started in FY13. A of ER Programs (e.g., FIP, bilateral donors, private sector), if capacity and raise awareness of the Common Approach, including workshop in Bogota, Colombia, held in December 2013, brought REDD+ Country Source Amount provided relevant applicable policies and procedures on environmental and social together stakeholders from six South American countries— Cambodia UN-REDD $4,001,050 REDD+ Country Source Amount provided safeguards, information sharing, and grievance and accountability Chile, Colombia, Guyana, Paraguay, Peru, and Suriname. A Government of Japan (JICA) $14,000,000 Burkina Faso FIP $30,000,000 mechanisms. To support capacity building on the Common second regional workshop was held in Antigua, Guatemala, in Chile Government of Switzerland $1,800,000 FIP DGM $4,500,000 January 2014, and brought together stakeholders from eight (NAMA Forest) Latin American countries—Argentina, Costa Rica, El Salvador, Democratic FIP $60,000,000 IADB $190,000 Republic of Guatemala, Honduras, Mexico, Nicaragua, and Panama. A third FIP DGM $6,000,000 Empresa Minera Barrick Zaldivar $137,500 Congo regional workshop was held in Brazzaville, Republic of Congo, Norway $2,500,000 in May 2014, and brought together stakeholders from seven Costa Rica Government of Germany (GIZ) $2,000,000 Congo Basin Forest Fund $25,000,000 Francophone African countries—Burkina Faso, Cameroon, Côte UN-REDD $250,000 (CBFF) d’Ivoire, Democratic Republic of Congo, Madagascar, Republic of Government of Norway $105,000 OIBT $600,000 Congo, and Togo. (NORAD) COMIFAC $305,000 In addition, other events raised awareness about key Government of US (USAID) $500,000 Ethiopia Norway (for Oromia REDD+ $3,000,000 elements of the Common Approach—for example, a training Government of Costa Rica $250,000 readiness program) workshop of the National REDD+ Safeguards Committee in Republic of UN-REDD $4,000,000 Norway (official pledge) $50,000,000 Antigua, Guatemala, from January 20–24, 2014, and the global Congo Norway (for national $10,000,000 Climate, Community & Biodiversity Alliance (CCBA) workshop for Government (State) $600,000 readiness performance) REDD+Social and Environmental Standards (SES) development in COMIFAC (Regional REDD+ $650,000 Project and Regional Project Ghana Japanese Funded Forest $7,800,000 Merida, Mexico from July 15–16, 2014. Elements of the Common MRV) Preservation Programme Approach, such as the SESA/ESMF, are also being taken into (FPP) Technology Transfer account in approaches and tools that are being developed by the Democratic UNDP $3,110,690 and Support for trend United Nations Collaborative Programme on Reducing Emissions Republic of analysis of forest land FAO $2,926,450 Congo change, Forest resource from Deforestation and Forest Degradation in Developing UNEP $1,346,060 map, biomass and C-Stock Countries (UN-REDD) Programme. Examples include UN-REDD’s Ethiopia Government of Norway $5,000,000 estimation and Capacity Country Approach to Safeguards Tool (CAST) and its Benefit and building Risks Tool (BeRT). Government of UK (DFID) $5,000,000 GIZ Supporting Ghana in $638,525 Finally, to support countries and DPs with risk management Ghana Gordon and Betty Moore $148,063 Forest Monitoring based on as per the Common Approach, the FMT is developing a Foundation for stakeholder German Remote Sensing consultations and biomass map safeguards and SESA/ESMF online learning module that will be Technology launched in FY15. Guatemala Government of US (USAID) $200,000 FIP $50,000,000 IUCN $20,000 FIP DGM $5,500,000 Impact-level Results 1.4: FCPF has catalyzed investment in IADB $100,000 Guatemala IADB $500,000 REDD+ (CF, and grants) Guyana Government of Norway $3,110,690 Indonesia Government of Germany (KfW) $29,371,000 Guiana Shield Facility $490,000 Government of Germany (GIZ) $22,348,000 Impact-level indicator I.4.A: Amount of non-FCPF investments under R-PP process in Participant countries and for Government of Germany (KfW) $627,000 FIP $105,000,000 implementation of ER Programs (e.g., FIP, bilateral Nepal Government of US (USAID) $1,136,600 FIP DGM $6,500,000 donors, private sector) Government of UK (DFID/SDC) $1,467,500 Lao PDR Government of Germany (KfW) $12,770,000 The R-PP process, as supported by the FCPF, has helped Government of Finland $780,000 Government of Germany (GIZ) $5,683,000 countries leverage additional external funding to finance the cost Government of Japan $360,000 FIP $30,000,000 of readiness activities. As per the FCPF’s criteria, development of FIP DGM $4,500,000 Nicaragua Government of Germany (GIZ) $100,000 the R-PP entails a participatory and inclusive process, requires FAO $5,000 Mexico FIP $60,000,000 government ownership, and encourages transparency. The Peru Gordon and Betty Moore $735,916 FIP DGM $6,000,000 process has therefore gained donors’ confidence and attracted Foundation Peru FIP $50,000,000 additional funds to cover the costs of REDD+ readiness, which often exceed grant funding available from the FCPF Readiness Government of Germany (KfW) $8,045,000 FIP DGM $5,500,000 Fund. The table below provides examples of non-FCPF Tanzania Government of Norway (Civil $17,000,000 TOTAL $594,015,525 investments received under the R-PP process and at the stage of Society Organization program) *It should be noted that figures are based on country reporting and may not be ER program development. Figures in Table 1 below are based on Uganda Government of Austria $830,286 exhaustive. progress reporting by countries and may not be exhaustive. TOTAL $81,022,806 22 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 23 FY14 ANNUAL REPORT Impact-level Result I.5: The FCPF has generated momentum legal platform for carbon markets as well as an obligation for REDD+ in Indonesia. The creation and operationalization requirements).The regulation also establishes the Technical to address governance and transparency issues and policy energy producers using fossil fuels to seek compensation for of the REDD+ Agency is an important milestone for REDD+ Unit for REDD+ as a subordinate to the two Ministers of reforms related to sustainable forest resource management their GHG emissions. The new law relates to the existing Forest implementation in Indonesia as it triggers the second phase Environment and Agriculture, and sets institutional aspects and and REDD+ Law 101-96, which itself has been reinforced through laws of performance-based funding as per the climate change responsibilities of the Technical Unit for REDD+. With technical establishing the Programa de Incentivos Forestales (PINFOR) partnership between the Government of Norway and Indonesia. assistance from the FCPF, the government prepared the decree Impact-level indicator I.5.B: Number of policy reforms initiated, and Programa de Incentivos para Pequeños Poseedores de In December 2013, the Government of Mozambique adopted in a highly participatory fashion and with active collaboration completed or underway complying with REDD+ standards in Tierras de Vocación Forestal o AgroForestal (PINPEP) forest a new regulation (Decree 70/2013) that establishes rules and from national NGOs, research centers, and the private sector. Participants’ country, potentially include issues of land tenure incentive programs, which have given rise to more than 300,000 procedures to guide investments in REDD+ and defines the In December 2013, the Government of Liberia and the While FCPF Readiness Grant funding is making important hectares of forest protection, reforestation and agroforestry legal treatment of REDD+ demonstration projects (that is, legal European Union (EU) entered into a Voluntary Partnership contributions to REDD+ Readiness, it must be seen as an establishment under a nationwide program with more than jurisdiction to grant permission for REDD+ projects, legal nature Agreement (VPA), a bilateral trade agreement central to the fight element within larger, dynamic national processes. In many 900,000 beneficiaries. Of the two incentive programs, PINPEP of carbon credits). The regulation standardizes the requests against illegal logging. Under the VPA, Liberia is developing a countries, FCPF REDD+ readiness funding is essential to is especially inclusive and innovative in that it supports forestry from the private sector, NGOs, and communities for permits to system to verify that its timber exports are legal and the EU has promote capacity building, analytical work, social inclusion activities by smallholders without land title, on areas as small undertake REDD+ projects and eventually trade carbon credits agreed to accept only licensed imports from the country. processes, and highly technical work related to forest carbon as 0.1 hectares, thus promoting participation and economic that derive from these projects. More specifically, the regulation In February 2014, the Government of Chile prepared a assessments and monitoring. While these activities support and development of the poorest and most vulnerable groups, deals with the process and competencies for granting formal request to the UNFCCC Secretariat nominating the feed policy reform processes in support of REDD+, initiation and including Indigenous Peoples and women’s groups. Guatemala such permits (for example, safeguards and consultation National Forest Corporation (CONAF) as the national REDD+ completion of policy reform requires collective action across also has a number of new initiatives under preparation to focal point in response to the REDD+ decision adopted at the strengthen the existing forest governance framework and help 19th Conference of the Parties (COP19) in Warsaw, which 12/2013 sectors and leadership at national and sub-national levels that go beyond the leverage of FCPF readiness grant funding. As achieve GHG emission reductions in the forest sector. One invited countries to designate national focal points or national such, the following examples provide a snapshot of important example, the proposed PROBSOQUES Law, currently before designated authorities for REDD+. As per Chile’s National progress made in FY14 on policy reform that guides and informs the Congress of Guatemala, will help scale up existing forest Forest and Climate Change Strategy, REDD+ is managed at REDD+, but that must be viewed in the context of broader incentive programs, by devoting 1 percent of the national budget the national level by the National Advisory Team on Climate national processes. to incentivize the establishment of an additional 40,000 hectares Change and the Forest and Climate Change Board under the In July 2013, the Government of Guatemala adopted the of natural forest protection, reforestation and agroforestry. Ministry of Agriculture. Under the Forest and Climate Change In September 2013, Indonesia’s President Yudhoyono signed Board, CONAF is responsible for the Technical Secretariat and Framework Law on Climate Change, which creates a legal Methodological Framework approved framework that enables the use of the forest sector as a Presidential Regulation No. 62/2013 establishing the REDD+ specifically for its Forestry Governance Climate Change Unit. Agency. The REDD+ Agency will report directly to the President by Carbon Fund Participants. The tasks of the Forest and Climate Change Board include greenhouse gas (GHG) emission reductions mechanism. The new law reinforces Guatemala’s institutional and political and will be tasked with coordinating, synchronizing, planning, coordination of sector activities and decisions on reduction of commitment to REDD+ and, in Articles 20 and 22, creates a facilitating, managing, monitoring, overseeing, and controlling emissions caused by deforestation and degradation. 24 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 25 FY14 ANNUAL REPORT Outcome-level Result 3: Engagement of all stakeholders biodiversity, regulation of flow, quality, and quantity of water PINs for presentation to the Carbon Fund. Several countries (governments, CSO, IP, private sector, delivery partners) to for human consumption and irrigation, pollination services received technical assistance for designing reference levels and sustain or enhance livelihoods of local communities and to and biological control for coffee cultivation, wood production forest monitoring systems for their future REDD+ programs conserve biodiversity within the approach to REDD+ on forest plantations and through natural management of and for presentation in their ER-PINs. Technical assistance was primary and secondary forests, and bioenergy. There are facilitated with the draft version of the decision support tool for Outcome-level indicator 3.A: Design of national REDD+ also ongoing efforts to incorporate other non-carbon aspects reference level and MRV design that is expected to be launched strategies, monitoring systems and ER Programs addresses associated with REDD+ into the information system. in FY15. indicators for enhancement of livelihoods of local communities At global level, countries have been following two parallel and for biodiversity conservation. discussions on non-carbon benefits of REDD+ ongoing in 4.4. Progress by Output The Democratic Republic of Congo’s (DRC) National REDD+ different forums of the UNFCCC. As part of the Subsidiary Output 1.1: Readiness Assessment Framework is agreed upon Framework Strategy, developed through national multi- Body for Scientific and Technological Advice (SBSTA), and disseminated stakeholder processes, demonstrates how indicators for the countries have been requesting clarity on the type of non- enhancement of livelihoods and biodiversity conservation carbon benefits and related methodological issues. Also, as Output-level indicator 1.1: Existence of published assessment can be incorporated into the national approach to REDD+. part of the discussion on results-based finance, countries framework on Readiness Package Considering the importance of growth and poverty are exploring ways to incentivize non-carbon benefits. The As per the target set in the FCPF M&E Framework, the alleviation for the DRC, a national prescriptive framework challenge that remains is the difficulty to monitor and attribute Readiness Assessment Framework was adopted at the for implementation of REDD+ has been developed that aims a wide range of potential non-carbon benefits. PC14 in FY13. In FY14, several countries confirmed that In early 2014, the Ministry of Lands and Natural Resources to guarantee REDD+ co-benefits. The national framework the Readiness Framework has proven useful for tracking in Ghana, the Ghana Cocoa Board, and the Forestry Commission incorporates environmental and social considerations, in Outcome-level Results 4: Knowledge gained in the development progress throughout the entire readiness phase, and not took the groundbreaking decision to work as co-proponents for full compliance with the Cancún Agreements and associated of the FCPF and implementation of Readiness Preparation just at the time of submission of the Readiness Package. landscape-scale, cross-sectoral, multi-institutional, public- international standards. The current version of these national Proposals (under the Readiness Fund) and emission The assessment criteria for each of the nine readiness private approach to transform the cocoa sector in Ghana. The standards, which were designed in a participatory manner, reductions programs (under the Carbon Fund) broadly shared, subcomponents are particularly useful benchmarks for a proposed Cocoa Forest REDD+ Program represents the first include seven principles, 25 criteria, and 43 indicators as disseminated and used by international REDD+ practitioners country’s self-assessment of readiness progress at mid-term. time that the Cocoa Board and the Forestry Commission have well as means of verification tailored to specific national In FY14, Costa Rica, Ghana, Indonesia, and Nepal applied the agreed to work together. The high level political commitment circumstances. For proper management, monitoring, Outcome-level Indicator 4.A: Number of new countries/ Readiness Assessment Framework as a tool for stock-taking afforded to envisioning, developing, and endorsing the program reporting, and evaluation of these standards, a Safeguards stakeholders requesting to become FCPF members/observers to inform their mid-term review and focus readiness activities provide a timely and potentially transformative opportunity Information System (SIS) has been developed through a In FY13, 17 countries (Belize, Bhutan, Burkina Faso, Burundi, going forward. for the sustainability of the forestry and the cocoa sector. SESA. The SIS will be fully integrated into the National REDD+ Chad, Côte d’Ivoire, Dominican Republic, Fiji, Jamaica, Nigeria, The conceptualization of the program has generated a lot of Registry to simplify implementation by project developers. Pakistan, Philippines, Republic of Sudan, South Sudan, Sri Output 1.2: Countries demonstrate an adequate plan to achieve momentum on REDD+ in Ghana and led to an unprecedented More broadly, the 2012 National REDD+ Framework Strategy Lanka, Togo, and Uruguay) expressed interest in joining the preparedness for REDD+ funding engagement and representation from the National House is integrated into national development policy and envisages FCPF after the PC decided to reopen the partnership to new of Chiefs in the process. The program was endorsed by the more sustainable land use and the stabilization of the forest countries. In FY14, 11 of the above countries (Belize, Bhutan, Output-level Indicator 1.2.a: Number of R-PPs endorsed by PC Ghana Cocoa Board, the National House of Chiefs, the Ministry cover at 63.5 percent of the national territory by 2030. Burkina Faso, Côte d’Ivoire, Dominican Republic, Fiji, Nigeria, In FY14, a record number of 13 R-PPs—from Belize, Bhutan, of Finance, the Ministry of Lands and Natural Resources, the The REDD+ Task Force has developed Principles, Criteria Pakistan, Republic of Sudan, Togo, and Uruguay) submitted Burkina Faso, Côte d’Ivoire, Dominican Republic, Fiji, Forestry Commission, cross-sectoral advisory bodies including and Indicators for REDD+ Safeguards in Indonesia (PRISAI) their R-PPs for consideration for selection into the FCPF. All Madagascar, Nigeria, Pakistan, Paraguay, Sudan, Togo, and the Environmental and Natural Resources Advisory Council, the which consist of 10 governance, social, and environmental 11 countries were selected into the FCPF and are proceeding Uruguay—were endorsed by the PC, bringing the total number private sector (including Olam, Touton, and the Produce Buying safeguard principles. PRISAI’s principles are based on with the World Bank’s due-diligence review prior to signature of R-PPs endorsed to 45, well exceeding the PMF’s target of Company (PBC)), farmer associations, multiple international UNFCCC guidance, and translate the safeguards approach of REDD+ Readiness Preparation Grants. endorsing over 30 R-PPs by 2015. This means that all 45 active and national civil society groups, and various research and from the Cancun Agreement into the Indonesian context. It countries of the total 47 REDD+ countries1 participating in the academia institutions. has been tested in Berau, Central Kalimantan, and Jambi. Outcome-level indicator 4.B: Examples of utilization of/or FCPF have now met this important milestone in the stepwise This work is continued by the REDD+ Agency. Concurrently, reference to FCPF knowledge products approach to REDD+ readiness. Total grant resources allocated 4.3. Progress at the Outcome Level the Ministry of Forestry, with the support of FCPF and GIZ, The Guide to the FCPF Readiness Assessment Framework in FY14 to these 13 countries for REDD+ readiness preparation Outcome-level Result 1: Efforts successfully undertaken by has developed a Safeguards Information System for REDD+ continues to be the most utilized knowledge product to inform sum up to just short of $50 million. countries with FCPF support to achieve ER from deforestation (SIS REDD+), which includes the SESA and ESMF as well countries at different stages of readiness preparation. Although In FY13, the TAP and PC noted the continuous increase and/or forest degradation, and to benefit from possible future as PRISAI. The two initiatives serve different purposes, but no country has advanced to the point of preparing a Readiness in the quality of R-PPs, which reflects countries’ improved systems of positive incentives for REDD+ (Readiness Fund) have the potential to be integrated. The SIS builds on existing Package, countries have used the Assessment Framework to understanding of essential REDD+ readiness elements. In safeguards systems and was tested in Central Kalimantan and plan readiness preparation activities, including development FY14, the TAP emphasized that the submissions in FY14 This outcome-level result is not yet applicable. East Kalimantan provinces. A web-based information system of relevant progress monitoring systems (i.e., countries that present the strongest set of R-PPs ever submitted, confirming is under development for the integration of the SIS. recently signed readiness grants), to take stock of readiness the mutually reinforcing learning process of the FCPF. TAP Outcome-level Result 2: Selected FCPF countries demonstrate In Costa Rica, FONFIFO has advanced the development progress and inform the roadmap to readiness (i.e., countries reviewers noted, among other things, that the budget focus in key elements (carbon accounting, programmatic elements of a Safeguards Information System (SIS). As part of the at mid-term stage), and to support prioritization and refocus of the recent R-PPs has shifted away from technical components and pricing) of performance-based payment systems for development process, a review of 35 indicators to address readiness preparation activities for countries advancing towards related to Reference Levels and Measurement, Reporting, ER generated from REDD+ activities with a view to ensuring the seven Cancun safeguards was completed. The National readiness. and Verification (MRV), toward the analytical, strategic, equitable benefit sharing and promoting future large-scale Biodiversity Institute for Tropical Agronomist Research and In FY14 technical support shifted to providing customized institutional, and participatory elements of developing national positive incentives for REDD+ (Carbon Fund) Training Center (InBio-CATIE) is also working to identify support to countries that were preparing early ideas or ER- REDD+ strategies. This outcome-level result is not yet applicable. and quantify co-benefits, which may include protection of 1 Two countries are currently not active in the FCPF: Bolivia and Gabon. 26 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 27 FY14 ANNUAL REPORT Output-level Indicator 1.2.b: Number of Readiness Preparation Output-level Indicator 1.3.b: Percentage of countries that are of what is planned to more than 50 percent of what is planned Disbursement rates of countries with Readiness Table 2:  Grant agreements signed achieving planned milestones according to approved within the next quarter. See Table 2. Preparation Grants signed by end of FY14 Substantial progress was also made on this subsequent Readiness Preparation grant (> $3.4 million)  Disbursement rate major milestone. In FY14, 13 additional Readiness Preparation All of the reports from Delivery Partners (e.g., Grant Reporting Output 2.1: Standards and preparations in place for high- quality ER Programs discussed and endorsed by CF More No disburse- Grants were signed by Cambodia, Cameroon, Chile, El and Monitoring reports) for the 22 countries that have entered than plan More than 20-50% Not yet ment report- Salvador, Guatemala, Guyana, Honduras, Mexico, Mozambique, the readiness preparation stage indicate that Readiness Participants and/or PC (>100%) 50% of plan of plan disbursing ing available Nicaragua, Peru, Suriname, and Uganda. Compared to last year, Preparation Grants overall are well aligned, and progressing Output-level Indicator 2.1: Number and types of standards and Cameroon Costa Rica Chile Cambodia this more than doubled the total number of countries that had according to readiness objectives to be achieved with FCPF entered the REDD+ readiness preparation stage. As a result, support, as per approved grant agreements. management tools discussed and endorsed by CF participants DRC Ethiopia El Salvador Guatemala there are a total of 22 countries implementing their Readiness and/or PC for ER programs including: Ghana Liberia Mexico Guyana Preparation Grants, just short of the PMF’s target of reaching 24 Output-level Indicator 1.3.c: Percentage of countries that are Indonesia Nepal Honduras Readiness Preparation Grants signed by 2014. overall achieving planned milestones for subcomponent as per 2.1.a: Methodological Framework and Pricing Approach This figure also includes readiness agreements for all three country annual reporting scale Mozam- Republic of Peru Methodological Framework bique Congo countries that selected the Inter-American Development Bank As per the PMF, the target by 2015 is for 50 percent of countries (IDB)—Guyana, Guatemala, and Peru—and for two countries The Methodological Framework (MF) was adopted by Carbon Nicaragua Uganda Suriname implementing R-PPs to show performance (at the subcomponent that selected the United Nations Development Programme level) advancing with 50 percent of subcomponents rated as Fund Participants (CFP) at the Eighth Carbon Fund meeting Vietnam (UNDP)—Cambodia and Guyana—as DPs under the Readiness “further development required.” By 2018, the PMF states, 100 (CF8), in December 2013, in Paris. The adoption was a Fund. The PC approved the UNDP as the DP under the FCPF landmark decision for the Carbon Fund following an intensive 6 countries 0 countries 7 countries 3 countries 6 countries percent of countries would be expected to have progressed to 80 for Cambodia, Central African Republic, Honduras, Panama, percent of subcomponents rated at “progressing well” or above. design process. The resulting MF provides a global standard Paraguay, Papua New Guinea, and Suriname. As of FY14, the current status is as follows: 17 of the 22 for REDD+ transactions at scale. Additionally, the early guidance to REDD Country Participants for their ER Program At least another seven countries (Colombia, Côte d’Ivoire, countries with signed grant agreements are reporting progress experiences that are gained from applying it could feed into the development, including the preparation of their ER-PD, and Fiji, Lao PDR, Panama, Thailand and Vanuatu), either completed at the subcomponent level in the new reporting format or development of a REDD+ system under the UNFCCC. acknowledging the policy guidance on pricing methodologies due diligence on the final R-PP and internal review meetings submitted detailed MTRs in lieu of annual progress reporting. For the purpose of the Carbon Fund, the MF is a critical … adopted by the PC at PC12 [Twelfth Participants Committee in FY13 or are well advanced in this process. They are Six countries have overall achieved planned milestones (Costa component to guide REDD+ countries in designing their ER meeting] in Santa Marta as well as the views expressed by consequently expected to reach the milestone of grant signature Rica, DRC, Ethiopia, Ghana, Indonesia, and Liberia). Five program proposals, to inform implementation of ER programs observers at CF10, the Carbon Fund Participants note their in FY15. countries have mixed progress against planned milestone to meet CF requirements, as well as to assist Carbon Fund current willingness to pay up to $5/tCO2e.” The FMT, in coordination with the World Bank and other (Madagascar, Mexico, Mozambique, Nepal, and Vietnam). Nine Participants with the review and selection of programs into the REDD+ countries in turn are encouraged to provide signals DPs, meanwhile, focused on providing technical assistance countries are in the very early stages of R-PP implementation Carbon Fund portfolio. on their price expectations. Recognizing the need for capacity and guidance to countries to accelerate implementation and, (first year or less) and the progress at subcomponent level is The Methodological Framework was developed over a building of REDD+ countries on costs assessment and financial with it, the disbursement of funds in countries with active grant early for countries to assess although some used the new format two-year period and builds on the Guiding Principles on the analysis of their ER programs, a draft REDD+ Cost Assessment agreements. (Cambodia, Chile, El Salvador, Guatemala, Guyana, and Peru). Methodological Framework for the Carbon Fund, adopted by Tool has been developed and will be finalized in FY15. This Other countries opted to use the old reporting format, which does the FCPF PC in June 2012. The development process included should help guide discussions but it should be noted that Output 1.3: Countries progress adequately on implementation not differentiate progress at subcomponent level (Cameroon, discussions and input for the design of the MF at four CF and REDD+ is meant as an incentive mechanism and is not expected of their R-PP and Grant Agreements Honduras, Nicaragua, Suriname). Two countries did not submit PC meetings, three working group meetings, three design to provide full cost recovery for a country’s REDD+ actions. annual progress reports since October 2013 (Republic of Congo, forums, and a period open to public comments. The final MF is Output-level Indicator 1.3.a: Number of mid-term progress Uganda). a set of 37 criteria and related indicators (C&I), associated with Output-level Indicator 2.1.c: Legal documents (General reports presented by countries that follow agreed reporting five major aspects of emission reductions programs: level of Conditions, ERPA term sheet) standards and are presented in a timely manner Output-level Indicator 1.3.d: Percentage of countries with ambition, carbon accounting, safeguards, sustainable program The M&E Framework set targets for the endorsement of During FY14, four countries (Costa Rica, Ghana, Indonesia, a disbursement rate that is in line with agreed Readiness design and implementation, and ER Program transactions. The the ERPA Term Sheet, by PC14, and the General Conditions, and Nepal) presented their mid-term progress report on the Preparation Grant (> $3.4 million) disbursement plans of grant MF may be refined over time, as pilots are implemented and by PC16. The ERPA Term Sheet was endorsed at PC14 in national REDD+ readiness process at either PC16, in December agreement (up to 10% variance with plans) new lessons are learned through its application. March 2013, in Washington, DC, meeting the target. While the 2013, in Geneva, or PC17, in July 2014, in Lima. These mid-term General Conditions build on the ERPA Term Sheet, they also progress reports were complemented with reports from the Pricing Approach For FY14, of the 22 countries with grant agreements signed hinge upon the Methodological Framework for the Carbon World Bank, and in the case of Ghana also by an independent by the end of FY14, six are disbursing beyond targets, they In FY14, Carbon Fund Participants continued several rounds of Fund. Consequently, once the Methodological Framework evaluation. Additionally, Costa Rica, Ghana, and Indonesia are: Cameroon, DRC, Ghana, Indonesia, Mozambique, and discussions on the Pricing Approach for the CF. They agreed was approved in December 2013, a series of information and submitted requests for additional funding and each were Nicaragua. Seven other countries are disbursing at a rate that, under current conditions, fixed pricing is preferred, learning sessions on the implications of the Methodological allocated total additional funding of $5 million. The additional between 20-50 percent of their plan. These are Costa Rica, although this might be reconsidered, based on the possibility Framework on the General Conditions were deemed necessary funding grants are expected to be signed in early FY15. Ethiopia, Liberia, Nepal, Republic of Congo, Uganda and of having a relevant price reference. Several REDD+ countries to address questions and comments from FCPF participants. These mid-term reports included a detailed and Vietnam. Of those with signed grants, three are not yet indicated their concern that a fixed price was inconsistent with Learning and feedback sessions were offered at PC16, PC17, transparent readout on progress made and shared valuable disbursing: Chile, El Salvador and Mexico. The latter only signed the spirit of the Pricing Approach. CF9, and CF10. In addition, country-specific outreach and experiences for the benefit of other REDD+ countries. It was their grant agreement in March 2014, while both Chile and El At the Tenth Carbon Fund meeting (CF10), in June 2014, regional video-conference sessions were held to address noteworthy that all countries were encouraged to continue Salvador signed in January 2014. No reporting on disbursement in Bonn, CFPs expressed their collective view on their current questions and comments. Accordingly, endorsement of the efforts to strengthen communication and coordination rates was available from IDB and UNDP. willingness to pay, while recognizing the ultimate price is ERPA General Conditions has been scheduled for PC18 in mechanisms between central REDD+ management structures Disbursement commitments for early FY15 indicate that subject to negotiations at the time of ERPA negotiations. November 2014, in Arusha, Tanzania. and decentralized levels, including local stakeholders. many countries will be advancing from a rate of 20-50 percent Carbon Fund Participants jointly stated: “In order to provide 28 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 29 FY14 ANNUAL REPORT Output 2.2: Countries have entered in the portfolio of the CF of ERPAs can start, these countries will first need to design of certain commodities, the private sector has an increased Target: Various new examples exist with strong evidence of IP ER programs consistent with the MF and in accordance with interest in developing working relationships with the public and CSO active participation and broad community support in Output-level Indicator 2.2.a: Number of early ideas or ER the World Bank’s due diligence process. They will also need sector to address underlying constraints. Such constraints REDD+ programs/readiness by 2015 Programs presented by countries to the CF to prepare their Readiness Package and have such Readiness include the need for land policy reform, improved smallholder In Ethiopia, a national REDD+ Awareness Workshop was To date, 15 countries have presented an early idea with the aim Package endorsed by the PC before submitting their ER capacity in supply chain management, transformative shifts conducted in January 2014 involving about 400 people, to receive early feedback and expert advice on the evolving ER Program Document for potential selection into the Carbon Fund to sustainable farming practices, and improved enabling including government officials and technical staff from program ideas or a full-fledged ER-PIN with the aim of being portfolio. Based on country capacity and expected timelines environments for private sector to decouple increased different sectoral ministries, CSO representatives active in selected into the Carbon Fund pipeline (see Table 3). to progress through the Carbon Fund business process, agricultural production from deforestation. natural resources management, and specialists from research With the Methodological Framework of the Carbon Fund current indications suggest that the first ERPD submissions The FCPF is actively facilitating such public-private and academic institutions. Subsequently three regional level approved at CF8 in Paris, in December 2013, there was a to the Carbon Fund could be expected in FY16. Therefore, the partnerships. For example in Ghana the FCPF supports a awareness workshops were held in Southern Nations, Tigray, steep increase of early ideas and ER-PINs presented in FY14 feasibility of signing five ERPAs by 2015 as per target in the partnership between the national cocoa board, small-scale and Benishagul-Gumuz regions to involve decentralized compared to earlier years. At CF9 and CF10, presentations were FCPF M&E Framework is unlikely. cocoa farmers and cocoa-sourcing private sector companies. In stakeholders. Furthermore, a series of meetings and workshops made by Colombia, Cambodia, Chile, DRC, Indonesia, Mexico, Costa Rica the FCPF is engaged in a partnership between the were held at a number of universities, including Hawassa Ghana, Guatemala, Madagascar, Nepal, Peru, Republic of Output 2.3: Increased levels of private sector investment for national timber industry and the government aimed at reducing University, Addis Ababa University, Jima University, and the Congo, and Vietnam. incentivizing, testing, and supporting up-scaling of ER activities the carbon-intensity of the building sector, as part of national Ethiopian Forestry Society. Over 1,200 people in Ethiopia In FY14, seven additional ER-PINs from Chile, DRC, carbon-neutrality goals. Similarly, in Republic of Congo the representing different stakeholder groups participated and Mexico, Ghana, Nepal, Republic of Congo, and Vietnam were Output-level indicator 2.3: Number of private sector participants FCPF helps incentivize the timber industry to turn some forest benefited from these outreach activities. Most of the events selected into the Carbon Fund pipeline, in addition to Costa in Carbon Fund concessions into conservation concessions and practice reduced were also covered by national and local media outlets including Rica previously selected in FY13. Based on preliminary portfolio Target: Two new private sector participants by 2014 impact logging. radio, TV and newspapers. simulations, Carbon Fund Participants agreed to aim for With the current state of carbon markets, the interest of the In addition, at a global level, the FCPF is engaged in a In Indonesia, a well-planned, and systematic national inclusion of 10-12 ER-PINs in the Carbon Fund pipeline and private sector in buying carbon assets has diminished. As a dialogue with private sector companies that have pledged to consultation protocol was developed by the National Forestry confirmed their preference to close the pipeline at the Eleventh result the FCPF Carbon Fund is currently not actively pursuing reduce deforestation in commodity supply chains through the Council (Dewan Kehutanan Nasional, DKN), which is a semi- Carbon Fund meeting (CF11) in October 2014 assuming new private sector participants. Tropical Forest Alliance (TFA) and the Consumer Goods Forum autonomous constituent-based organization with five chambers adequate quality of ER-PINs will be presented at such time. However, the links between the FCPF and the private (CGF). comprising community groups, the private sector, government In FY14, the Democratic Republic of Congo (DRC) was the sector have been strengthened over the last year based on a representatives, civil society and academics. The new protocol second country to enter into a Letter of Intent (LOI) with the new approach taken to build private sector relationships. With Output 3.1: Enhanced capacity of IP and CSOs to engage in now serves as a basis for informing all consultation processes World Bank in its role as the trustee for the FCPF Carbon Fund. climate change impacting the bottom line of private sector REDD+ processes at the country level and is used by the Ministry of Forestry. In addition, community Many other countries selected into the pipeline are currently in business and the security of supply chains, combined with level protocols are under development and will be followed for Output-level indicator 3.1.a: (i) Number and type of examples the process of negotiating LOIs. However, before negotiations growing consumer awareness of the deforestation impact consultations with Indigenous Peoples and other local forest of in-country REDD+ actions where IP and CSOs and local dependent communities. The Council’s mission is to help communities participate actively Countries that have presented early ideas or ER-PINs to the Carbon Fund Table 3:  Country CF2 CF3 CF4 CF5 CF6 CF7 CF9 CF10 Cambodia Early Idea Colombia Early Idea Chile Early Idea ER-PIN ER-PIN Costa Rica Early Idea Early Idea ER-PIN ER-PIN Democratic Republic of Early Idea Early Idea ER-PIN ER-PIN Congo Ethiopia Early Idea Indonesia Early Idea Early Idea Early Idea Mexico Early Idea Early Idea ER-PIN Ghana Early Idea ER-PIN Guatemala Early Idea Madagascar Early Idea Nepal Early Idea ER-PIN Peru Early Idea ER-PIN Republic of Early Idea ER-PIN ER-PIN Congo Vietnam Early Idea Early Idea Early Idea ER-PIN 30 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 31 FY14 ANNUAL REPORT with the formulation of effective policies through increased has relied on the World Bank’s vendor system. Using the Intermediary organizations selected for implementation Table 4:  Meanwhile, during FY14 the Capacity Building Program communication among stakeholders and the government, vendor system, the FCPF allocated $1,732,844 to finance 25 of the capacity-building programs in FY14 and FY15 continued financing activities under Phase I of the program increased agreement on important forestry issues, and increased Projects in Asia, Latin America and Africa, of which 11 have to provide forest-dependent indigenous peoples, other forest dissemination of information on the performance of the forestry closed and 14 are currently under implementation (Phase I of Region Indigenous Peoples Civil Society Organizations dwellers and southern CSOs with information, knowledge and sector. the IP/CSO Capacity Building Program). More recently, based Africa Mainyoito Pastoralist Pan-African Climate Justice awareness on REDD+ and to engage more meaningfully in the In Costa Rica, “cultural mediators” (mediadores culturales) on suggestions from indigenous and civil society organizations Integrated Development Alliance (PACJA) implementation of REDD+ activities at the regional and country have played a key role in communicating and facilitating the to enhance their ownership of the programs, it was decided Organization (MPIDO) level. These 14 grants currently under implementation cover a understanding of the national REDD+ process. They have to discontinue the vendor system and replace it with a small Asia Indigenous Peoples' Asia Network for Agriculture broad spectrum of activities, including: strengthened the participation of Indigenous Peoples and grants system (also referred to as Phase II of the IP/CSO International Centre for and Sustainable Bioresources Policy Research and (ANSAB) • Preparing studies on the underlying causes of campensino groups in the dialogue around REDD+. Culturally Capacity Building Program). It was also agreed to use regional deforestation and related land tenure issues. Education (Tebtebba) appropriate materials and information were developed in intermediary organizations to administer the program. Based on order to reach Indigenous Peoples more broadly. To honor the an open call for submission, and review against agreed criteria, Latin Association Sotz’il Asociación Coordinadora • Carrying out trainings on community monitoring of America Indígena y Campesina de Carbon (and Non-Carbon) Stocks and development sociopolitical and cultural differences of the different indigenous six organizations were selected (see Table 4). Criteria included Agroforestería Comunitaria of Forest Inventories. groups, a consultation and participation process will be held. the organization’s representativeness, regional credibility, de Centroamérica track record on REDD+, experience in collaborating regionally, (ACICAFOC) • Developing a geographic information system in local Output-level indicator 3.1.a: (ii) Examples of resources made fiduciary and safeguards capacity, and the capacity to address communities to monitor deforestation and degradation. available to enable active participation of IP, CSOs, and local grievances and provide redress mechanisms. • Carrying out capacity building to enhance communities in national REDD+ readiness Each of the six regional intermediary organizations (for IP understanding on benefits sharing for IPs on carbon Strengthening the capacity-building programs was one of the and CSOs respectively) will be responsible for selecting and intermediaries, the World Bank has undertaken a number of and co-benefits from REDD+ mechanism and priority activities identified in the series of regional dialogues supporting small capacity-building projects within their regions. processing steps related to due diligence for small and micro indicators. with Indigenous Peoples that took place in FY13 and resulted A general set of eligibility criteria for project selection has been grants, in line with World Bank policies and procedures. The in the issuance of the Global Action Plan. Owned by Indigenous agreed upon, but regional intermediaries retain the flexibility regional intermediary organizations will receive support to • Developing indicators for monitoring environmental Peoples, the Global Action Plan provides a comprehensive and to adopt a competitive small grants scheme or, alternatively, complete the necessary fiduciary, procurement, and safeguards and social safeguards. pragmatic roadmap for the engagement between IP and the targeted regional work programs around prioritized topics or capacity building and training; as part of this process, they will During FY14, these activities have been successfully carried FCPF. themes, depending on the regional context. need to specify how they plan to administer the funds. This out at the country level and in accordance with the approved To make available resources to IP, CSOs, and local As a first step toward operationalization of the new delivery should provide the basis for the preparation and signing of the work plans, presenting only minor delays that have not been communities under the Capacity Building Program, the FMT modes and for facilitation of the flow of funds to the regional six grant agreements by the middle of FY15. obstacles to the overall implementation of the activities. 32 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 33 FY14 ANNUAL REPORT Steady implementation of the activities is evidenced by the determine where they stand in the readiness process in relation disbursement of $510,480, which accounts for 45 percent of to them. The target audience consisted of government officials, BOX 2: INDIGENOUS PEOPLES/CIVIL SOCIETY ORGANIZATIONS CAPACITY BUILDING PROGRAMS the total committed amount. Box 2 illustrates the results of the Indigenous Peoples, forest-dwelling communities, special-issue Capacity Building Program. groups, southern CSOs, World Bank technical specialists, FCPF Africa: Pan African Climate Justice Alliance (PACJA) o Role of FCPF in REDD+, REDD+ SESA and Delivery Partner technical specialists, and consultants for both As part of the Capacity Building Program, Pan African other safeguard measures, free prior inform Output-level indicator 3.1.b: Number of IP and REDD+ country donor agencies and governments. Climate Justice Alliance (PACJA) implemented a project consent (FPIC), CSO representatives (men/women and/or youth) that have These workshops were designed to provide an opportunity from January 2013 to June 2014, with the objective o Measurement, Reporting and Verification participated and benefitted from FCPF organized workshops/ for a range of stakeholder representatives engaged in REDD+ of enhancing the capacity of African civil society and (MRV), trainings on SESA, governance, MRV aspects/related aspects readiness at a national level from different countries to take Indigenous Peoples to participate in the evolving REDD+ of REDD+ stock, analyze lessons learned, share and constructively o Forest Carbon Trade and benefit sharing, and debates, both at national and international levels. This debate on progress and challenges regarding social inclusion The PMF targets for training IP and CSOs were easily surpassed program was implemented in Ethiopia, Kenya and o Role of CSOs on REDD+. in REDD+. It also provided an opportunity to digest the with three regional workshops on capacity building for social Uganda over a period of 18 months and some of the • The implementation of a five-day “training of latest FCPF guidance on topics related to social inclusion in inclusion in REDD+ readiness that were carried out in FY14. main achievements of the project included: trainers” program to certify 250 trainers. It is REDD+, including the Readiness Fund Common Approach to These three workshops were the last in a series of five • The participation of aproximately 300 representatives expected that these trainers will conduct “training workshops that started in FY13. The FCPF continues to place Environmental and Social Safeguards for Multiple Delivery from civil soceity organizations, local communties, of trainers” sessions at the regional level (covering high emphasis on consistently reaching out to a critical mass Partners and UN-REDD—FCPF Guidelines on Stakeholder private sector and governenment entities in 40 out of 75 districts) to raise awareness on REDD+ of IP and CSOs at a global and regional level, while building up Engagement in REDD+ Readiness with a Focus on Indigenous workshops to develop P3D model maps and to the local communities, including the established in-country capacity to expand social inclusion to sub-regional Peoples and Other Forest Dependent Communities. Based community forest inventories in Uganda, Ethiopia of regional level REDD+ networks, including, civil and local levels. on experiences during the workshops, participants were (covering four regions in the Bale Forest Mountain society organizations, government officials, and The Capacity Building for Social Inclusion in REDD+ challenged to develop country-specific measures to enhance region) and Kenya (covering the Mau and Mt. Kenya community based organizations. Readiness Workshops focused on three interrelated aspects meaningful social inclusion of REDD+ readiness in effective and Forest regions). of social inclusion in the REDD+ readiness process: (i) the feasible ways. • The participation of over 800 stakeholders in • The attendance of over 20 representatives from workshops and trainings to enhance their knowledge Strategic Environment and Social Assessment (SESA) and the Environmental and Social Management Framework (ESMF), Output-level indicator 3.1.c: Examples of IPs and REDD+ government entities, civil society, and local on climate change and REDD+, and to understand (ii) consultation, participation, and communication (C&P&C) country-CSO representation in institutional arrangements for communities to a two day monitoring and evaluation the main opportunities and challenges of REDD+ dynamics, and (iii) feedback and grievance redress mechanisms REDD+ at the national level workshop, which included a technical evaluation of implementation in Nepal. the R-PP’s for Kenya, Uganda and Ethiopia. (FGRM). The three workshops carried out in FY14 were. Governments are paying increasing attention to effective Latin America: Instituto para el desarrollo Sustentable en processes and institutional arrangements for engagement • The participation of 95 representatives from civil • December 2–6, 2013. Bogota, Colombia. The workshop Mesoamérica A.C (IDESMAC) of IPs and civil society in national and sub-national REDD+ society and government entities from Kenya (30), was attended by a broad range of stakeholders from six The objective of the project currently implemented planning and implementation. This is not only based on the Uganda (30) and Ethiopia (35) in trainings on FCPF countries in South America (Chile, Colombia, by IDESMAC is to facilitate debates that incorporate FCPF’s commitment to social inclusion, but also increasingly consultation and participaton, FGRM, SESA, and Guyana, Paraguay, Peru, and Suriname). The workshop community participation, increase social cohesion, a result of positive experiences made by countries that have ESMF. featured 46 people total, 32 of them from these FCPF and generate a territorial grounding in preparation for led the way with inclusive institutional arrangements and seen countries. • The preparation of country specific research studies the implementation of the REDD+ program in Mexico. benefits, such as constructive ways to prevent grievance, ensure on the underlying causes of deforestation covering • January 20–24, 2014. Antigua, Guatemala. The input from all stakeholders, and improve the overall public To date some of the main achievements of the project Ethiopia, Kenya and Uganda, and the carrying out of workshop was attended by stakeholders from eight perception of REDD+ processes. included: validation workshops on each one of the reports. FCPF countries in Central and South America As a result, IP are now represented in many national • The strengthening of relationships with social actors (Argentina, Costa Rica, El Salvador, Guatemala, institutional arrangements for REDD+, such as national REDD+ Asia: Nepal Law Society (NLS) on the community and regional levels. Honduras, Mexico, Nicaragua, and Panama). The technical bodies and steering committees. In many countries, From August 2013 through October 2014 the Nepal Law • The participatory community analysis and workshop featured 62 people total, with 44 of them they are actively contributing to the planning and design of Society is implementing a program with the objective sustainable development planning to set the representing these FCPF countries. REDD+ readiness implementation as well as the design of of enhancing capacity of CSOs to engage in REDD+ building stones for the achievement of this • May 12–16, 2014. Brazzaville, Republic of Congo. The REDD+ pilots and programs. In countries where IP and CSO decision-making processes at all levels and enhancing project’s goals of facilitating the participation of workshop in Brazzaville was attended by a diverse groups are not yet represented in the highest-level of national their ability to understand, use and share information forest-dependent communities in the debates on the group of stakeholders from seven FCPF countries in REDD+ committees (typically at the ministerial level), efforts about climate change, forests and REDD+. To date the national and international levels. Francophone Africa (Burkina Faso, Cameroon, Côte continue to be made by these groups for permanent inclusion project has achieved the following: • The characterization of 6,729 hectares in the d’Ivoire, Democratic Republic of Congo, Madagascar, into these top-level coordination arrangements. • The design of a curriculum to serve as REDD+ Biosphere Reserve’s region of influence. Republic of Congo, and Togo). The workshop featured While not exhaustive, the countries that are known to orientation to CSOs. The major contents of the 54 people total, with 40 of them representing these have IPs and CSOs representation as part of national REDD+ • The preparation of methodological models for technical bodies and/or national institutional arrangements for curriculum included: FCPF countries. community participation in the key debates on REDD+ include Chile, Colombia, Costa Rica, DRC, El Salvador, o Climate change and REDD+, climate change mitigation and adaptation. The main purpose of these workshops was to address Fiji, Guatemala, Guyana, Honduras, Indonesia, Kenya, Mexico, gaps in knowledge and understanding that still exist in relation o Evolution of REDD+ concept and its Nepal, Nicaragua, Panama, Peru, Republic of Congo, Thailand, to relevant aspects of the chosen themes. The workshops development, Uganda, and Vanuatu. In Ethiopia, Ghana, Liberia, and Uruguay were very participatory and hands-on, allowing participants to CSOs and local communities (in the case of African countries) interact, analyze, share and learn about the various themes and are part of these structures. 34 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 35 FY14 ANNUAL REPORT Output 3.2: Pilots have been successfully implemented on ways Output 4.1: Knowledge products and lessons from piloting Output as per PMF 4.2: Participants actively engage in South- Output 4.3: Strong visibility of REDD+ and FCPF is achieved to sustain and enhance livelihoods and conserve biodiversity of REDD+ in general and FCPF activities in particular are South learning activities developed and disseminated, in accordance with global Output-level Indicator 4.3.a: Number of neutral/positive Output-level indicator 3.2.a: Number of countries where knowledge management and communication strategy and Output-level Indicator 4.2.a: Number of S-S learning activities mentions of FCPF and REDD+ issues in different key media stakeholder engagement platforms proposed in RPPs have annual work plans and/or events connecting FCPF countries worldwide per X period taken up work and meet regularly In FY14, the FCPF Secretariat prioritized targeted and country- Several South-South learning activities took place in FY14 and During FY14 positive mentions in media increased. Sparks of The majority of countries have established or are in the process tailored support for learning and application of existing fostered active exchange amongst participants: positive media attention related in particular to the adoption of operationalizing stakeholder engagement platforms and knowledge products developed in FY13 over creation of new of the FCPF Methodological Framework, the selection of new Capacity Building for Social Inclusion Workshops: associated inclusion process to deepen participation and knowledge products. A particular emphasis was placed on countries into the FCPF Readiness Fund and Carbon Fund, collaboration with a wide range of local, subregional, and assisting countries with the understanding and use of the FCPF • Brazzaville, Republic of Congo—May 12–16, 2014 and new funding pledges to the two funds. Media attention national stakeholders relevant to REDD+. A few examples are Readiness Assessment Framework, the M&E Framework, as well • Antigua, Guatemala—January 20–24, 2014 was enhanced with online stories that were actively promoted provided as follows. as the Methodological Framework for the Carbon Fund. Several through social media channels. • Bogotá, Colombia—December 2–6, 2013 In Uganda, the ‘legitimacy’ of CSO and IP representatives learning sessions in-country, via video-conference, and an online to national REDD+ coordination arrangements is being South-South Exchanges: Output-level Indicator 4.3.b: Number of negative mentions webinar were carried out. The webinar attracted about 70 online enhanced through a self-selection process with CSOs and of FCPF and REDD+ issues in different key media participants and received very positive feedback. • Asia Regional Workshop on Linking Local REDD+ IPs drafting the criteria for self-selection to ensure that IP worldwide per year Over the last year, the FCPF continued to improve the Initiatives with National REDD+ Strategies: Jakarta, and CSO representation in national REDD+ implementation content, visual appeal and ease of navigation on its website. In Negative mentions of FCPF and REDD+ issues in different media Indonesia—June 2–4, 2014 is transparent, open and legitimate. It is expected that this parallel, the FCPF re-activated its Facebook page, which is being worldwide per year have remained fairly constant. However, it • South-South exchange and learning session on the was noticeable that particularly critical and negative mentions innovative approach will also support better information flow used as a digital knowledge tool. The FCPF activity on Facebook development of reference levels: Mexico— appear to be concentrated on a number of known media outlets down to community levels. complements its active Twitter presence. The World Bank’s January 14–16, 2014 that cater to a base of followers that drive an anti-REDD+ agenda. In Liberia, stakeholder engagement activities as part of Climate Change Twitter account (@wbclimatechange) to which the SESA process involved a diversity of CSOs and traditional FCPF contributes has 25,000 followers. Boosting social media • Joint FCPF–UN-REDD Programme Knowledge Key issues related to negative mentions continue to relate communities from all provinces of the country. The Government visibility and messaging has likewise drawn an increased number Exchange Day in the context of the UN-REDD Policy to land tenure and carbon rights, as well as proper safeguards of Liberia entrusted a stakeholder engagement specialist from of visitors to the FCPF website. Per month, the FCPF website has Board and FCPF PC meetings in Geneva, in December applications. Other negative mentions, although much less one of Liberia’s most vocal and influential environmental NGOs nearly 5,000 visits. Overall, FCPF website traffic has increased 2013 prolific, relate to the low disbursement of FCPF funds. However, to help guide and manage the engagement processes and over the past year, with a substantial amount of visitors from compared to previous years, there is increased understanding Output-level Indicator 4.2.b: Total number of participants to in general media about the role of results-based finance and effectively reach a diverse range of stakeholders. REDD+ countries, including Peru, Indonesia, Mexico, Vietnam, South-South knowledge exchange activities by category the consequently growing recognition that disbursements under In Colombia, information dissemination activities, early Colombia and Costa Rica. dialogue with key stakeholders and regional SESA workshops Introducing website analytics to monitor online visibility has Since the FCPF M&E framework was adopted by the PC in the Carbon Fund are not expected to increase significantly in the have involved approximately 288 organizations and over 1,870 provided valuable input to expand and improve the FCPF’s online March 2013, monitoring participants’ South-South knowledge very near-term, but only once emission reductions have been people that include indigenous peoples, afro-Colombian presence over the next year, to continue building content for social activities by category (female, male, youth, etc.) has been delivered, verified, and paid. Proactive outreach to key media communities, campesinos, NGOs, productive sector and media, introducing more multimedia, and offering multi-lingual carried out inconsistently. Additional PMF data management and provision of notes to editors has contributed to increasingly academia. content, i.e., translating key content to Spanish and French. capacity will need to be established in the FCPF Facility accurate reporting on the FCPF. Management Team to consistently track and report this data. BOX 3: EXAMPLES OF CSO AND IP REPRESENTATION IN NATIONAL INSTITUTIONAL ARRANGEMENTS FOR REDD+ BOX 4: SOUTH-SOUTH EXCHANGES In Peru, the two organizations representing IP, the Asociación Interétnica de Desarrollo de la Selva Peruana (AIDESEP) Workshop on the development of reference levels: The FCPF organized a technical workshop to support REDD+ Program and the Confederación de Nacionalidades Amazónicas del Perú (CONAP) serve as the Mesa Nacional de REDD+ Indígena Development in Guadalajara, Mexico, from January 14–16, 2014. The event was hosted by Conafor and supported by de Perú. The Platform is the main interlocutor between IP and all other actors involved in REDD+ in Peru. Winrock International. The objectives of the workshop were to provide technical assistance to countries in the region in designing reference levels and forest monitoring systems for future REDD+ programs, as well as potential submissions of In Chile, the Roundtable for Forest and Climate Change (Mesa de Bosques y Cambio Climatico) aims to facilitate broad Emission Reductions Program Idea Notes (ER-PIN) to the FCPF Carbon Fund. To facilitate the discussion, the FCPF tested stakeholder participation and inter-sectoral coordination at the national level that include representatives of the sectoral a preliminary version of a decision support tool for reference level and MRV design, which had been developed with funds government, indigenous peoples, civil society organizations, small farmers association, big landowners association, and provided to the FMT in the FY14 budget. academia, among others. Additionally, Indigenous Peoples are also involved the National Technical Group of Experts (Grupo Tecnico Nacional de Expertos–GTNE) composed of consultancy firms, national and internal NGOs with the aim to Workshop on linking local REDD+ initiatives with national REDD+ strategies: Together with the Ministry of Forestry of provide technical advisory support and expertise in reference to the forest sector in Chile. Indonesia the FCPF co-hosted the “Asia Regional Workshop on Linking Local REDD+ Initiatives with National REDD+ Strategies” in Jakarta, from June 2–4, 2014. This activity brought together national-level representatives of REDD+ In El Salvador, the government created a special platform (Mesa National Indigena), which includes 15 IP leaders countries (primarily from Asia but also from other regions) and representatives of entities implementing REDD+ activities representing all four indigenous areas in the country. An important milestone was reached when the Ministry of and pilot projects on the ground. Participants learned how pilot projects have informed Indonesia’s national strategy, and Environment and Natural Resources (MARN) issued a Ministerial Decree to formalize the Mesa National Indigena. shared pilot projects and national strategies within their countries. Forty participants attended the workshop, representing 13 REDD+ countries as well as districts and civil society organizations within Indonesia. 36 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 37 FY14 ANNUAL REPORT FCPF REDD+ COUNTRY PARTICIPANTS 38 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 39 FY14 ANNUAL REPORT Coordinating with other REDD+ Initiatives Mechanism (CDM); the remainder was allocated to REDD+ and sustainable land management projects (including agriculture). BioCF projects have a range of different objectives, including fuel wood production, timber production, and environmental restoration. With the development of 10 CDM-approved methodologies and a variety of capacity and outreach activities, the BioCF has actively promoted the development of the forest carbon market and pioneered REDD+ has a challenging agenda given its multi-sectoral and multi- forest carbon transactions on the basis of local know-how. The BioCF delivered 80-90 percent of the carbon assets to stakeholder dimensions, and the large financial and capacity needs its Participants. Most of the carbon assets will be used to meet compliance targets under the UNFCCC’s Kyoto Protocol, which ended in 2012. involved. It is important, therefore, that development partners come In FY14 the BioCF scaled up efforts on the new Initiative for Sustainable Forest Landscapes (ISFL). Launched in FY13, together to provide a package of financial and technical assistance ISFL builds on the lessons and experience from a successful 10-year track record on project-based carbon finance in to better serve their client countries. the land-use sector. The multilateral facility promotes and rewards reduced greenhouse gas emissions from the land sector, including REDD+, more sustainable agriculture, as well as smarter land use planning and policies. ISFL will help countries identify and promote climate-smart agricultural and low-carbon land-use practices in selected geographical areas where agriculture is a major cause of deforestation. The initiative will build a portfolio of jurisdictional programs spread across diverse geographies that have significant impact and transform rural areas by protecting forests, UN-REDD Programme restoring degraded lands, enhancing agricultural productivity, and by improving livelihoods and local environments. The In FY14, the FCPF and the UN-REDD Programme continued their cooperation in providing assistance to countries to get first jurisdiction to be added to the ISFL pipeline was Oromia, Ethiopia. The BioCF is also adding a program in Zambia. ready for REDD+. There was an emphasis on in-country coordination, and joint country missions and sharing responsibility for financing readiness activities. At the global level, coordination between the FCPF and the UN-REDD Programme involved REDD+ Partnership joint scheduling of governance body meetings, the coordination of analytical and capacity-building efforts, and the joint delivery of secretariat services to the REDD+ Partnership. In FY14, several knowledge activities were planned and carried The REDD+ Partnership, for which the FCPF FMT serves as co-secretariat with UN-REDD, is an international interim out jointly, including a joint Knowledge Exchange Day organized in conjunction with the next UN-REDD Policy Board and platform for its partner countries to scale up actions and finance for REDD+. Fiscal Year 2014 marked the first year FCPF Participants Committee meeting that brought together participants and stakeholders from both initiatives to jointly of regional workshops in Asia (Palangka Raya, Indonesia), Latin America (Santo Domingo, Dominican Republic), and reflect on progress and achievements made with REDD+ readiness as well as implementation since the two initiatives Africa (Accra, Ghana). These regional workshops furthered the process of country needs assessments, strengthened became operational five years ago. the ability to take key steps in readiness, and built capacity to access REDD+ finance. Importantly, at the Palangka Raya meeting, Partners agreed to begin supporting some self-selected IP and CSO representatives. The regional workshops Progress was also made in synchronizing country reporting to the FCPF and UN- REDD Programme. To reduce reporting also provided a forum for discussion of the emerging “landscape approach” within the regional context. A capacity burden on countries, common deadlines were agreed for submission of country progress reports, and greater flexibility was building workshop was also held on the Voluntary REDD+ Database (VRD) to increase the number of African countries introduced for the few countries with dual FCPF and UN-REDD program reporting requirements. reporting on REDD+ financial flows. A working group on the VRD was later established to investigate options for continuation and improvements of the VRD. Forest Investment Program Global meetings of the Partnership were held in Bonn and Warsaw. These affirmed the 2013-14 work programmes, The Forest Investment Program (FIP) supports developing country efforts to reduce deforestation and forest degradation, and provided guidance on reports to be sponsored by the Partnership. In 2014, studies on the following topics were and promote sustainable forest management that leads to ER and enhancement of forest carbon stocks (REDD+). The commissioned: Public-Private-Partnership models of investment in forests and conservation; case studies of fast- FIP focuses on sizable investments in a smaller number of key countries in order to achieve economic transformation start finance among REDD+ countries, analysis of the VRD, and the selection of consultants for the REDD+ Partnership and generate global knowledge. The FIP is currently active in eight pilot countries (Brazil, Burkina Faso, the DRC, Ghana, Assessment. Indonesia, Lao PDR, Mexico, and Peru), all of which are also FCPF REDD+ countries (with the exception of Brazil). . Implementation at the country level is based on FIP investment plans that have been developed through a country-led process and that build on FCPF readiness or equivalent processes and draw on the R-PPs and the emerging REDD+ strategies. Coherence and cooperation across the different FIP and FCPF activities have been achieved especially in the DRC, Ghana, Indonesia, and Mexico, as governments ensure that activity planning is closely coordinated between the two initiatives. At the secretariat level, the FCPF is an observer to the FIP governing body and has shared pertinent information with the Committee, for instance, on the FCPF Readiness Assessment Framework. FIP has equally participated in the PC17 meeting in Lima, Peru and presented an update of implementation activities in FIP countries, which are also supported by the FCPF Readiness Fund. The FIP has also continued to take advantage of the established FCPF roster of experts for the independent review of investment plans prior to their endorsement by the FIP Sub- Committee. The FIP has commissioned an in-depth study on the link between FIP investment funding and REDD+ performance-based mechanisms. At the FIP Sub-Committee meeting in June 2014, it was requested to prepare a paper providing guidance on the link between FIP investment funding and REDD+ performance-based mechanisms, taking into account the REDD+ architecture, and the Warsaw Framework for REDD+. BioCarbon Fund The BioCarbon Fund (BioCF) is a public-private carbon fund, operational since 2004, that pioneers projects that sequester or conserve carbon in forest- and agro-ecosystems, mitigating climate change and improving livelihoods. The overall goal of the Fund is to demonstrate that land-based activities can generate high-quality emission reductions with strong environmental and socio-economic benefits for local communities. In the first-generation trust funds, about 80 percent of the BioCF’s resources were earmarked for afforestation and reforestation projects under the Clean Development 40 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 41 FY14 ANNUAL REPORT 5 Issues and Challenges The overall progress on FCPF outputs and outcomes as intended for the FY14 reporting period has been satisfactory. Progress was made on resolving challenges identified in the previous reporting period, including development of ERPA General Conditions and private sector engagement. The approval of the ERPA General Conditions was initially disbursement bottlenecks, the FCPF will continue to assist planned for PC16 in December 2013, but was postponed countries with a set of actions to address procurement and subject to approval of the Methodological Framework financial management challenges as presented and discussed (MF) and review of implications of the MF on the General at PC16 in December 2013 (refer to FMT Note 2013-6). Conditions. Based on progress made over the last year, the General Conditions are now scheduled for approval at PC18 in Country-level M&E Frameworks and 5.2.  November 2014 (also refer to indicator 2.1.c.). Readiness Reporting In line with a new engagement approach, the FCPF National M&E systems at the country level are fundamental has actively reached out to the private sector over the past to the robust design and implementation of national REDD+ year. Fostering public-private partnerships at the country readiness and eventual REDD+ programs. Monitoring and and program level has been a focus of the FCPF. Progress Evaluation (M&E) systems help countries keep track of has been made to connect the public sector with the private activities, results and readiness progress, and identify and sector interested in greening their commodity supply chains address gaps, shortfalls, and program underperformance as and transforming their carbon, and overall environmental, they emerge. The FCPF’s M&E Framework uses the readiness footprint (also refer to indicator 2.3.). requirements set out for each component in the Readiness While progress has also been made to address other Assessment Framework to help guide country reporting. At the previously identified challenges related to disbursement and FCPF program level, the Facility M&E Framework is designed country-level Monitoring and Evaluation (M&E) reporting, the to keep track of the performance of the Facility building on the Facility Management Team (FMT) will continue its efforts to outputs and outcomes shared through country-level progress address these additional further follow-up action in FY15. reporting. Analysis of data collected helps to ensure lesson learning and adaptive management at the Facility level. 22 5.1. Disbursements A number of countries (Nepal, Liberia, Ghana, and Kenya) The value of grant allocations to REDD+ Countries at the have developed M&E frameworks at the country level and end of FY14 was more than $190 million whilst signed grant reported positively on the impact on overall REDD+ readiness agreements represent firm commitments of almost $90 planning, implementation, and monitoring. However, at the million. This represents an increase of $8.2 million in FY14 portfolio level, progress of national level M&E frameworks has or an increase of almost 70 percent compared to the previous been slow. year. In addition, the number of readiness grants signed In FY14, the FMT continued to reach out to countries in FY14 almost doubled to a total of 22. Several countries to offer guidance and support for preparation of M&E reached mid-term status in the past year and are now in frameworks, but demand has remained low. In FY15, the FMT the process of signing additional grants of $5 million each. will solicit further feedback and suggestions from countries on It is therefore expected that disbursement will continue to challenges for timely completion of meaningful semi-annual increase significantly in the coming year. reporting. A discussion in the PC could further determine To ensure that the number of new REDD+ countries whether additional measures should be considered to improve included in the FCPF can swiftly overcome potential reporting compliance and quality. Readiness Grants signed in total by end of FY14. 42 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 43 FY14 ANNUAL REPORT FCPF supports countries efforts to achieve emission reductions from deforestation and/or forest degradation, and to benefit from possible future systems of positive incentives for REDD+. 44 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 45 FY14 ANNUAL REPORT 6 Monitoring of Assumptions and Risk An assumption in most cases indicates areas/circumstances that are beyond the control of the governance framework of the FCPF. However, tracking of assumptions is important to gauge unforeseen consequences in case the assumptions did not hold true. The following table presents a snapshot of assumptions unforeseen consequences in case the assumptions did not identified in the Logical Framework (LF) against key hold true. Reference to the impact, outcome and output impacts, outcomes and outputs, the level of risk associated where the assumption was referenced in the Logical with these assumptions, and the proposed mitigation Framework of the Monitoring and Evaluation (M&E) measure as relevant. An assumption in most cases indicates Framework is included in Column 1 of the table. areas/circumstances that are beyond the control of the A second table with new risks that were previously not governance framework of the FCPF. However, tracking of identified in the Logical Framework is also included. assumptions is important to gauge Risk: Level at which Current assumption is Original assumptions level Explanation of Mitigation referred to in LF from LF of risk risk rating measure proposed Impact 1.1 Global climate change Medium The progress in the The risk associated with this Outcome 1 negotiations under UNFCCC negotiations has been slow assumption is beyond the direct Output 2.3 remain supportive. over the last year and the control of the FCPF. The FCPF Outcome 3 timeline for decisions and continues to remain responsive Outcome 4 further guidance on REDD+ is and to inform the negotiation Across the portfolio Output 4.3 uncertain. process. completion of SESAs and Outcome 1 The incentives provided Low The risk relates to incentives No mitigation measure is ESMFs is still low. Outcome 3 Outcome 4 by REDD+ schemes are sufficient. for countries to advance to the Readiness Package, required at this stage. stakeholder engagement, and knowledge dissemination of experiences. Sufficient resources are available to countries through the FCPF, other bilateral and multilateral resources to advance to the R-Package, while maintaining adequate levels of stakeholder engagement. Outcome 1 For purposes of the N/A − The assumption does not require Readiness Fund, submission monitoring. of the R-Package by REDD+ Participants is voluntary Outcome 1 There are no extraordinary Medium The risk rating has been No mitigation measure is circumstances in the increased with the inclusion required at this stage at the country that prevent of 11 new countries in the portfolio level. submission of RPs FCPF. At the portfolio level, some countries have socio- political circumstances that could slow submission of the R-Package. However, the assumption is that not all countries will submit RPs. 46 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 47 FY14 ANNUAL REPORT Level at which Current Level at which Current assumption is Original assumptions level Explanation of Mitigation assumption is Original assumptions level Explanation of Mitigation referred to in LF from LF of risk risk rating measure proposed referred to in LF from LF of risk risk rating measure proposed Output 1.2 Plans and targets were Low/ R-PPs of all 45 active DPs are actively pursuing the Output 4.2 Events managed directly by Medium There is diversity in the Countries continue to enhance realistically assessed by Medium countries have assessed by signing of grant agreements. countries (not organized by FCPF portfolio on how communication and stakeholder technical experts before the PC. At the portfolio level, FMT itself) are timely and events are managed at the engagement capacity through approval in view of existing signing of grant agreements effectively planned to feed country level. Assessment readiness grants and other baseline capacities and has more than doubled since into the process of learning is based on feedback. Broad bilateral sources. participant countries’ FY13. The risk rating has and involve key stakeholders feedback received by the FMT contexts therefore been lowered. from country stakeholders suggests that the processes Output 1.3 The political and socio- Low The overall risk at the The diversity of REDD+ countries in country have been economic context in the portfolio level associated in the portfolio is a built-in inclusive. Participant countries with the political and mitigation measure. remains stable enough over socio-economic context for the implementation period readiness implementation New risks/previously unidentified risks that have a Mitigation measure proposed so that the capacity built remains low. bearing on annual work planning and intervention logic remains in place 1. Weak procurement capacity has delayed the start of readiness Readiness grants are recipient-executed and are supporting the Outcome 2 Interest in performance- Low The interest of donors in The risk will be monitored implementation in some countries hiring of procurement experts and/or the procurement training needs based payments remains performance-based payments continuously in the forthcoming of relevant staff of national REDD+ coordination office. Mitigation high enough schemes has been high in periods. measures proposed in FY13 were carried out and efforts in FY14 have the reporting period. In the helped countries to address bottlenecks in procurement. context of the Carbon Fund, interest in performance- based payments by REDD+ countries is evident from the submission of 7 new ER-PINs and 5 new early ideas to the CF by the end of FY14. Output 2.2 A large enough number of Low The assumption is in relation Piloting of the MF in the first few countries have the capacity to the likelihood of countries REDD+ countries is proposed to meet all standards and entering the CF portfolio. The and will provide a realistic FCPF/DP administrative risk rating is subjective and assessment of country capacity processes do not put undue based on the early feedback to meet the standards. burden on the CF operation from REDD+ countries in the course of the development of the MF. The risk rating has been downgraded to low based on capacity demonstrated by countries in the development of ER-PINs. Output 2.4 Five REDD+ countries have High The successful selection The business process (under signed ERPAs by 2015 of ERPDs will indicate the preparation) is realistic. timelines for ERPA signing and program implementation. This indicator will be monitored closely in FY14. Output 3.1 Relevant guidelines in the Low/ The first SESA reports and At the portfolio level, some Common Approach are Medium ESMFs have been completed stakeholder groups identified followed and processes and will serve other countries a need to enhance in-country such as SESA are actually for learning purposes. understanding of the SESA. implemented in countries, However, across the portfolio, Among other efforts, the FMT providing for a receptive completion of SESAs and has held additional regional- environment ESMFs is still low. level, social inclusion workshops to mitigate this gap and ensure proper SESA implementation in FY15. Further monitoring may be required at country-level. 48 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 49 FY14 ANNUAL REPORT 7 FY14 Financial Report of the Facility The value of grant allocations to REDD+ Countries at the end of FY14 was more than $190 million whilst signed grant agreements represent firm commitments of almost $90 million. 7.1. Financial Overview of the Facility the account balance. Total disbursements on a cash basis during FY14 were $28.9 million, made up of cash expenditures of $9.4 Committed and pledged funds to the Readiness Fund and the million, grant disbursements of approximately $8.2 million, and Carbon Fund of the FCPF at the end of FY14 total almost $830 disbursements to Delivery Partners for grants of $11.4 million. million, with $358 million committed to the Readiness Fund and $470 million committed and pledged to the Carbon Fund (see 7.2.2. Funding Sources Tables 6 and 12). Both funds are well-resourced with committed and pledged funding more than adequately covering current a) Donor Contributions funding needs. Table 6 presents the committed contributions to the Readiness Fund balances at the end of FY14 total $750 million, made Fund as at the end of FY14. The fund continued to grow in up of $286 million in the Readiness Fund and $464 million in financial terms during FY14, with total contributions of $358 the Carbon Fund, with cash balances of $225 million in the million at the end of FY14 compared to a total as at the end of Readiness Fund and $316 million in the Carbon Fund (see FY13 of $258 million. The additional commitment from Norway Tables 5 and 11). during FY14 of almost $100 million represents almost all of this The value of grant allocations to REDD+ Countries at the increase. end of FY14 was more than $190 million (Table 10) whilst signed In terms of cash, the Readiness Fund received donor grant agreements represent firm commitments of almost $90 contributions of $54 million over the past year. This was made million. Grant disbursements from the Readiness Fund have up of $38.7 million from Norway, $13.9 million from Germany, accelerated as predicted and at the end of FY14 were $40.8 and $1.4 million from the European Commission. This brought million, including transfers to Delivery Partners other than the $90m the total cash contributions to the end of FY14 to $296.6 million. World Bank for onward transfer to REDD+ countries of $22.8 This leaves outstanding contributions of $61 million from million (Table 5). existing signed agreements to be paid by Norway ($59.6 million) and the European Commission ($1.4 million) into the Readiness 7.2. The Readiness Fund Fund in the coming years. These outstanding contributions 7.2.1. Fund Balance represent agreed phased contributions spread out over a number of years. Table 5 shows the summary financial statement for the fund from the opening of the fund to the end of FY14. The Readiness b) Investment Income Fund balance at the end of FY14 is a healthy $286 million, with available for REDD readiness a cash balance of $225 million. The difference of $61 million is Table 5 shows Investment Income figures over the life of the fund. Amounts paid into the trust fund, but not yet disbursed through signed grant represented by outstanding contributions from Norway and the (the fund balance), are managed by the International Bank for agreements. European Commission. Reconstruction and Development (IBRD), which maintains a Total Donor Contributions received to date are $296.6 million. pooled investment portfolio (the Pool) for all of the trust funds Investment income of $7.9 million brings the total receipts to date administered by the World Bank Group. The FCPF Readiness to $304.5 million. Total disbursements to the end of FY14 are Fund receives an allocated share of investment income from $79.6 million and consist of $38.8 million in cash disbursements, this Pool. The investment income for the Readiness Fund $18 million in grants to REDD+ countries, and $22.8 million in (on the Readiness Fund balance) up to the end of FY13 was disbursements to Delivery Partners for Readiness Grants to $3.9 million. Investment income for the Carbon Fund (on countries. the Carbon Fund balance) up to the end of FY13 was $2.02 Total new funds into the account during FY14 totaled about million. This $2.02 million had incorrectly been credited to $58 million, made up of donor contributions of $54 million (see the Carbon Fund. In fact, all Participation Agreements with Table 6) and investment income of almost $4 million earned on Carbon Fund Participants indicate that any interest generated 50 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 51 FY14 ANNUAL REPORT by prepaid contributions shall be channeled to the Readiness combined Readiness and Carbon Fund balances during FY14 7.2.3. Funding Uses contributions management, accounting, legal, and other Fund. In order to correct this, the $2.02 million previously of $1.96 million has been credited to the Readiness Fund. Total services required by the Readiness Fund Trustee, including the a) Cash Disbursements credited to the Carbon Fund has therefore been transferred to investment income in the Readiness Fund to the end of FY14 is development of the Monitoring and Evaluation Framework for the Readiness Fund during FY14. Investment income on the therefore $7.9 million. Cash disbursements represent all non-grant disbursements the FCPF. and total $38.8 million from the opening of the fund to the end FCPF Secretariat expenses were $1.5 million (or 108 of FY14. Table 7 shows the annual expenditures by activity, percent of budget), compared to the budget of $1.4 million. Table 5: FCPF Readiness Fund Summary Financial Statement FY14 (in $ thousands) whilst Table 8 compares the approved budget with the actual Expenditures included the standard costs for program Description Total FY14 FY13 FY12 FY11 FY10 FY09 expenditures by activity for FY14. management, organization of the annual PA and PC meetings, Beginning Balance 195,830 189,999 165,804 77,695 50,945 As the FCPF moves ahead in the implementation phase, and travel costs for REDD+ countries and some observers to annual expenditures have predictably increased in areas with those meetings. Increasingly, knowledge and learning events a focus on country support. This is the case for the REDD on REDD+ and other key partner meetings (e.g., the UN-- Donor Contributions 296,616 54,004 30,009 31,538 94,880 32,290 53,895 Methodology Support, Country Advisory Services and Country REDD Programme or REDD+ Partnership) are jointly organized Investment Income 5,881 1,960 897 924 732 821 547 Implementation Support activities. Total cash disbursements to maximize the use of participant time. FCPF Secretariat Investment Income (Transferred from for these country focused activities over the lifetime of the costs include the costs of hosting and maintaining the FCPF 2,023 2,023 the CF) fund represent 73 percent of cash disbursements, whilst website, communications to FCPF stakeholders, and expanded Total Receipts 304,520 57,987 30,906 32,462 95,612 33,111 54,442 administrative costs represent only 6 percent of total cash translation of FCPF materials. Secretariat costs at $1.5 million, disbursements. Combined the cash disbursements for these while over budget for FY14, are less than the previous year’s Cash Disbursements 38,828 9,373 8,752 5,383 6,421 5,402 3,497 country focused activities of $25.5 million with the grant costs of $1.7 million. The overspend against budget on the FCPF Grant Disbursements* 18,021 8,173 4,923 2,884 1,082 959 disbursements of $18 million and the disbursements to Delivery Secretariat costs of $108,000 is primarily due to the high costs Partners for grants of $22.8 million, these country focused of the PC/PA meeting held in Geneva, Switzerland in December Disbursements to the DPs for Grants 22,800 11,400 11,400 disbursements represent 83 percent of total disbursements 2013, held back-to-back with the UN-REDD meetings with the Total Disbursements 79,648 28,946 25,075 8,267 7,503 6,361 3,497 of $79.6 million. Administrative and Secretariat costs (which aim of achieving better coordination between the two bodies. include the cost of all Participants Committee (PC) and With the budget for REDD Methodology Support activities Fund Balance (cash) 224,870 224,870 195,830 189,999 165,804 77,695 50,945 Participants Assembly (PA) meetings, including travel costs set at almost $2.3 million for FY14, and total expenditures plus Outstanding Contributions 61,011 for REDD+ country participants and some observers) over at $1.8 million, spending was 80 percent against FY14 plans. the lifetime of the fund of $11.6 million represent less than Costs reflect the expenses of the independent TAPs supporting 15 percent of total disbursements of $79.6 million, whilst the FCPF (consulting contracts and travel and meeting costs), Fund Balance 285,882 administrative costs alone represent less than 3 percent of total including the Carbon Fund TAP, and the considerable work on *Includes $593,535 of Bank-executed grant disbursements (FY14 $138,338). disbursements. Refer to Tables 5 and 7 for details. finalizing the Pricing and Methodological Framework. The FY14 budget for the Readiness Fund net of Shared The underspend of $459,000 is primarily due to delays in Costs of $10.6 million compares to the total Readiness Fund the work on Reference Levels and Measurement, Reporting and FCPF Readiness Fund Donor Contributions as of end of FY14 (in $ thousands) Table 6:  expenditures for the year of $9.4 million (see Table 8). The fiscal Verification (MRV) systems which have been budgeted for and year therefore closed with spending at 88 percent of budget and will be completed in FY15. Participant name Total Outstanding* FY14 FY13 FY12 FY11 FY10 FY09 an underspend of almost $1.3 million. The line item for Country Advisory Services came to about Australia 23,892 6,330 7,997 9,565 Expenditures on Readiness Trust Fund Administration costs $2.3 million, or about 6 percent over the amount originally Canada 41,360 41,360 were 89 percent of budget. These administrative costs reflect budgeted in FY14 of $2.2 million. The majority of these costs the work of all World Bank staff involved in fund management, came from Facility Management Team (FMT), forestry, and Denmark 5,800 5,800 European Commission 5,417 1,365 1,364 2,688 Finland 19,966 5,261 5,749 8,956 FCPF Readiness Fund Cash Disbursements (in $ thousands) Table 7:  France 10,340 5,136 592 4,612 Activity % of Total Total FY14 FY13 FY12 FY11 FY10 FY09 Germany 52,982 13,913 13,113 25,956 Readiness Trust Fund Administration 6% 2,356 397 404 356 366 362 471 Italy 5,000 5,000 FCPF Secretariat 24% 9,256 1,515 1,690 2,056 1,685 1,321 989 Japan 14,000 4,000 5,000 5,000 REDD Methodology Support 22% 8,651 1,796 1,842 999 1,921 1,266 827 Netherlands 20,270 7,635 7,635 5,000 Country Advisory Services 19% 7,304 2,342 1,750 1,073 545 793 801 Norway 128,572 59,646 38,727 8,801 16,398 5,000 Country Implementation Support 32% 12,617 3,730 3,213 1,701 1,904 1,660 409 Spain 7,048 7,048 IP and CSO Program 5% 2,107 751 1,089 267 Switzerland 8,214 8,214 Total Readiness Fund (including Carbon Fund Shared Costs) 42,292 10,532 9,988 6,452 6,421 5,402 3,497 United Kingdom 5,766 5,766 Less Carbon Fund Shared Costs -9% (3,464) (1,159) (1,236) (1,069) United States of America 9,000 4,000 4,500 500 Total Readiness Fund 100% 38,828 9,373 8,752 5,383 6,421 5,402 3,497 Committed Funding 357,627 61,011 54,004 30,009 31,538 94,880 32,290 53,895 *Amounts may vary due to exchange rate fluctuations. 52 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 53 FY14 ANNUAL REPORT social development staff advice and guidance to REDD+ c) Grant Disbursements Table 9: FCPF Readiness Fund Grant Disbursements (in $ thousands) countries on their programs. Expenditures in FY14 included the An important aspect of the Readiness Fund is that it makes Description Total FY14 FY13 FY12 FY11 FY10 costs of three Capacity Building for Social Inclusion workshops available grant funding to countries—the grants are now up held during the year. The overspend on Country Advisory AFRICA to $3.8 million per REDD+ country—in support of country-led Services is primarily due to the high combined costs of these Cameroon 571 379 134 3 55 readiness work. The REDD+ countries manage and utilize the Social Inclusion workshops, compared to budget. grants for REDD+ activities and expenses. These are counted Democratic Republic of Congo 3,530 1,161 1,381 797 14 177 Costs for Country Implementation Support totaled $3.7 as disbursements in World Bank financial statements only million, or 93 percent of the planned budget. This line item Ethiopia 858 258 400 100 100 after the REDD+ country completes reimbursement from the reflects the direct assistance of Delivery Partner country teams Ghana 2,182 1,270 312 400 200 grant resources. By the end of FY14, 12 Readiness Preparation to REDD+ countries, including technical assistance, grant Grants were disbursing. Signed Formulation and Readiness Kenya 170 170 supervision, and assessments provided to the PC. Preparation Grant agreements represent firm commitments of Liberia 776 289 305 107 75 Overall, the largest share ($0.8 million) of the underspend almost $90 million. is due to delays in implementing the new Capacity Building Mozambique 998 911 87 Grant disbursements from the Readiness Fund have Program for Indigenous Peoples, Civil Society Organizations and Republic of Congo 1,294 481 237 381 108 87 accelerated as predicted and at the end of FY14 were $40.8 other forest dwellers (the IP and CSO Program). The principal million, including transfers to Delivery Partners other than the Uganda 166 (14) 140 40 reason for these delays is the change to a new process and World Bank for onward transfer to REDD+ countries of $22.8 structure whereby IP and CSO Communities administer the AFRICA subtotal 10,545 4,749 2,856 1,567 694 679 million (see Table 5). Capacity Building program themselves through 6 Regional Grant disbursements, excluding those through Delivery Intermediaries (three for IP groups and three for CSO groups). Partners other than the World Bank, total more than $18 million LATIN AMERICA & CARRIBEAN The budget for this Program for FY14 of $1.6 million includes at the end of FY14, an exponential increase on previous years. Colombia 200 66 134 support through contracts/grants of $1.2 million. The unspent Grants disbursed during FY14 were $8.2 million, representing balance on contracts/grants will be carried over to future Costa Rica 1,015 479 375 22 139 an increase of almost 70 percent on the previous year. Of the financial years. total grant disbursements to date of approximately $18 million, El Salvador 192 42 98 52 more than $10.5 million of these disbursements have been Nicaragua 578 378 77 123 b) Shared Costs made in Africa. The details of the grant disbursements are LATIN AMERICA & CARRIBEAN subtotal 1,985 899 550 241 156 139 As part of the approval of the Readiness Fund budget, the provided in Table 9. FCPF Charter indicates that the PC shall make decisions on all In addition, disbursements to Delivery Partners for grants Shared Costs for activities that cut across and benefit both the of $22.8 million represent six Readiness Preparation Grants of EAST ASIA & PACIFIC Readiness and Carbon Funds. In practice, the Shared Costs have $3.8 million, three each in FY13 and FY14. Indonesia 2,998 1,233 1,247 518 typically included FCPF Secretariat and REDD+ Methodology Support activities, such as the costs of travel and expenses for Lao PDR 173 123 50 Table 8: FCPF Readiness Fund REDD+ countries to attend the Participants Assembly and PC Cash Disbursements for FY14 (in $ thousands) Thailand 200 163 37 meetings and the work of the TAP. Vanuatu 127 106 21 Pursuant to the Charter, the Readiness Fund pays 65 Actual Expense Activity Budget expense Variance rate (%) Vietnam 501 501 percent and the Carbon Fund pays 35 percent of Shared Costs, unless the PC decides otherwise. The PC approved resolutions Readiness Trust 447 397 50 89 EAST ASIA & PACIFIC subtotal 3,999 1,734 1,516 576 123 50 waiving cost sharing through the end of FY11 (to reflect the fact Fund Administration that the Carbon Fund was only fully operational as of May 2011) FCPF Secretariat 1,407 1,515 (108) 108 SOUTH ASIA and paying 100 percent of the Shared Costs from the Readiness REDD Methodology 2,255 1,796 459 80 Fund. In addition, the PC agreed that cost sharing at the 65/35 Support Nepal 1,492 792 500 109 91 level would commence from FY12 onward. However, there is an Country Advisory 2,206 2,342 (136) 106 SOUTH ASIA subtotal 1,492 792 500 109 91 important caveat in Resolution PC/8/2011/8 approved in March Services 2011, in that the PC agreed to a lifetime cap of $12 million on Country Implementa- 4,023 3,730 293 93 the Shared Costs that it will charge to the Carbon Fund. This tion Support Total Grant Disbursements 18,021 8,173 4,923 2,884 1,082 959 resolution responded to the concerns of several existing and IP and CSO Program 1,571 751 820 48 potential Carbon Fund Participants that an upward limit be Total Readiness Fund 11,909 10,532 1,377 88 placed on such costs given that the PC otherwise makes all (including Carbon decisions regarding their composition and annual approvals. Fund Shared Costs) Shared Costs transferred to the Carbon Fund for FY14 came Less Carbon Fund (1,282) (1,159) (123) in close to budget at $1.2 million. Shared Costs over the lifetime Shared Costs of the Facility up to the end of FY14 stand at $3.5 million (see Total Readiness Fund 10,627 9,373 1,254 88 Tables 7 and 8). 54 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 55 FY14 ANNUAL REPORT 7.2.4. Financial Commitments over the Longer Term Table 10: S  ummary of Long-Term Uses of Readiness Funding Table11: FCPF Carbon Fund Summary Financial Statement FY14 (in $ thousands) Since the term of both funds runs until December 31, 2020 (with (in $ million, as of July 2014) Description Total FY14 FY13 FY12 FY11 FY10 FY09 Carbon Fund Emission Reductions Payment Agreement (ERPA) Committed Uses for Funds     Beginning Balance 293,275 122,283 86,390 24,700 20,356 payments expected to dominate the latter years of financial Commitments (grants) to REDD+ operations), the annual budgets need to fit into a long-term countries (47 @ $3.8 million) 178.6   financial planning framework for each fund, consistent with Donor Contributions 337,395 27,280 171,866 36,912 71,800 4,181 25,356 World Bank policies for the financial management of trust funds. Additional grant funding Investment Income to REDD+ countries that (2,023) 901 520 256 346 These policies generally require funds to be fully set aside for (transferred to RF) demonstrate significant progress commitments made by the participants as well as for meeting the on readiness (4 @ $5 million)1 20.0   Total Receipts 337,395 25,257 172,767 37,432 72,056 4,527 25,356 fiduciary obligations entered into by the World Bank as Trustee. Less grants to REDD+ countries In order to plan resources over this longer-time horizon, who did not submit R-PPs by Cash Disbursements 6,263 2,058 2,117 1,539 366 183 the PC issues resolutions from time to time to establish PC14 (2 @ $3.8)2 (7.60)   ER Payments funding priorities and commitments for the coming years. These commitments are considered “notional” when the PC Net Grant Commitments   191.0 Total Disbursements 6,263 2,058 2,117 1,539 366 183 has set aside or allocated financial resources of the Readiness     Fund that are not yet signed into formal grant agreements or less Promissory Note balances (14,658) 342 (10,000) (5,000) Administrative, Operations, and contracts. They are converted to ”full” commitments once the Country Support, of which:   81.4 Fund Balance (cash) 316,474 316,474 293,275 122,283 86,390 24,700 20,356 grant agreements (or vendor contracts) are signed by recipients FY09–FY14 Actual costs 38.8   plus Outstanding Promissory Notes 14,658 and/or by the World Bank as Trustee of the Readiness Fund, or expenditures are made. FY15 Budgeted costs 10.6   plus Outstanding Contributions 56,240 As noted above, full signed commitments amount to almost FY16–FY20 Projected costs3 30.0   plus Outstanding Pledges 76,658 $90 million. However, there has been a considerably higher level Reserve for Delivery Partner of notional grant commitments made by the FCPF to REDD+ capacity for dispute resolution 2.0   Fund Balance 464,030 countries. Table 10 provides a more complete picture of the level of these notional commitments, together with the necessary Total Uses   272.4 notional commitments to operate the fund for its full term, DRC, Costa Rica, Ghana, Indonesia. 1.  including the direct implementation support costs and associated Per Resolution PC/10/2011/1.rev, includes Bolivia and Gabon. 2.  country services costs. Steady operational budget through FY16 (including an estimate for continuing 3.  This long-term financial plan includes commitments for the additional activities), with 20% annual cuts thereafter. FCPF Carbon Fund Donor Contributions as of end of FY14 (in $ thousands) Table 12:  operation of the Secretariat by the FMT and the trustee role of the World Bank over the full term of the Fund—reflecting the fact that Fund balance at the end of FY14 is a healthy $464 million, with Participant Name Total Outstanding* FY14 FY13 FY12 FY11 FY10 FY09 the Facility is expected to be fully active through that time, even a cash balance of $316 million. The difference of $148 million Australia 18,393 5,658 12,735 when the Carbon Fund is supporting programs in selected REDD+ is represented by outstanding balances on promissory notes, BP Technology Ventures 5,000 5,000 countries and making ERPA payments. an outstanding contribution from Germany and an outstanding Table 10 shows the long-term notional commitments or pledge from the United Kingdom. Canada 5,015 5,015 5,015 planned uses of the fund. The table shows that, as of the end Total Donor Contributions received to date are $337.4 CDC Climat 5,000 5,000 of FY14 notional commitments of full grants to all 45 active million. Total disbursements to the end of FY14 are $6.3 million, European Commission 6,709 362 6,347 countries and the estimated associated costs of the fund during made up solely of cash disbursements. The Carbon Fund has its lifetime amount to more than $270 million. only been fully operational since May 2011, so there are no Germany 134,472 56,240 27,280 6,556 15,443 21,125 3,819 4,009 Total committed and pledged funding to the Readiness Fund payments for emission reductions to date. Norway 171,310 161,310 10,000 as of June 30, 2014, is approximately $358 million (see Table 6). Total receipts during FY14 were $25.2 million, including Switzerland 10,796 10,796 This level of funding is therefore adequate to meet the notional donor contributions of $27.3 million (see Table 11). Amounts paid into the trust fund, but not yet disbursed The Nature Conservancy 5,000 5,000 commitments of full Readiness Preparation Grants of up to $3.8 million to all 45 active selected REDD+ countries, together with (the fund balance), are managed by the International Bank for United Kingdom 17,940 17,940 the estimated costs of the fund during its lifetime, including the Reconstruction and Development (IBRD), which maintains a United States of America 14,000 4,000 10,000 estimated associated country services for those countries. Funds pooled investment portfolio (the Pool) for all of the trust funds are also available to provide additional grants of up to $5 million administered by the World Bank Group. Investment income for Committed Funding 393,635 56,240 27,280 171,866 36,912 71,800 4,181 25,356 for those countries showing significant progress. the Carbon Fund (on the Carbon Fund balance) up to the end Pledged Funding of FY13 was $2.02 million. This $2.02 million had incorrectly United Kingdom 76,658 76,658 7.3. The Carbon Fund been credited to the Carbon Fund. In fact, all Participation Agreements with Carbon Fund Participants indicate that any Committed Funding 7.3.1. Fund Balance interest generated by prepaid contributions shall be channeled Plus Pledges 470,293 132,898 27,280 171,866 36,912 71,800 4,181 25,356 Table 11 shows the summary financial statement for the fund to the Readiness Fund. In order to correct this, the $2.02 million *Amounts may vary due to exchange rate fluctuations. from the opening of the fund to the end of FY14. The Carbon previously credited to the Carbon Fund has therefore been transferred to the Readiness Fund during FY14. 56 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 57 FY14 ANNUAL REPORT Total disbursements on a cash basis during FY14 were just Table 13: FCPF Carbon Fund Cash Disbursements administration costs, $0.5 million of Program Development operations), the annual budgets need to fit into a long-term over $2 million, solely made up of cash expenditures. (in $ thousands) costs and $3.5 million of Shared Costs (see Table 13). financial planning framework for each fund that is consistent The total Carbon Fund expenditures for the year of $2.1 with World Bank policies for the financial management of trust  Activity Total FY14 FY13 FY12 FY11 FY10 million compares to the final budget for the Carbon Fund, funds. These policies generally require funds to be fully set 7.3.2. Funding Sources Carbon Fund 2,297 626 652 470 366 183 including Shared Costs, of $3.5 million. The fiscal year therefore aside for commitments made by the participants as well as Donor Contributions Administration closed with spending at 59 percent of budget and an underspend for meeting the fiduciary obligations entered into by the World of more than $1.4 million. Refer to Table 14 for details. Bank as Trustee. The long-term financial plan presented to the Table 12 presents the committed and pledged contributions to Program 502 273 229 Development Expenditures on Carbon Fund Administration costs were 86 Carbon Fund Participants at the Tenth Carbon Fund meeting the Carbon Fund as at the end of FY14. The fund continued to percent of budget. These administrative costs reflect the work of (CF10) in June 2014 indicated that approximately $433 million grow in financial terms during FY14, with total contributions of Shared Costs 3,464 1,159 1,236 1,069 all World Bank staff involved in fund management, contributions would be available for the purchase of emission reductions from $470 million at the end of the fiscal year compared to a total as Total 6,263 2,058 2,117 1,539 366 183 management, accounting, legal, and other services required by about nine emission reductions programs. at the end of FY13 of $388 million. The pledge from the United the Carbon Fund Trustee, including a share of the costs of the Kingdom of £45 million ($76.7 million) represents most of that development of the Monitoring and Evaluation Framework for 7.4. Budget Approval Process increase. The remainder of the increase is due to exchange rate Table 14: FCPF Carbon Fund Cash Disbursements for FY14 the FCPF. fluctuations. The budgets for both the Readiness Fund and the Carbon Fund (in $ thousands) Program Development costs were underspent against In terms of cash, the Readiness Fund received donor are based on the World Bank’s fiscal year (beginning July 1) and budget by more than $1.2 million, making up much of the are approved annually in accordance with the FCPF Charter. contributions of $27.3 million over the past year from Germany. Actual Expense underspend for FY14. Early pipeline development costs were The Participants Committee (PC) is responsible for approval This brought the total cash contributions to the end of FY14 to  Activity Budget Expense Variance Rate marginally less than budget, whilst the pipeline was deliberately of the annual budget for the Readiness Fund and the Shared $337.4 million. This leaves an outstanding contribution of $56 Carbon Fund 730 626 104 86% held back to ensure consistency with the Methodological Costs of the Facility, whilst the participants of the Carbon million from existing signed agreements to be paid by Germany Administration Framework, which was only approved in December 2013. Thus, Fund are responsible for approval of the annual budget for the into the Readiness Fund in the coming years. This outstanding Program 1,520 273 1,247 18% the anticipated Program Development costs for developing Carbon Fund as a separate trust fund. Both budgets are usually contribution represents agreed phased contributions spread out Development programs after selection into the pipeline was significantly over a number of years. approved in June of the preceding fiscal year. Shared Costs 1,265 1,159 106 92% underspent. Shared Costs came in close to budget with an To date, the PC has approved seven budgets for the 7.3.3. Funding Uses expense ratio of 92 percent. Readiness Fund for FY09-FY15, along with some revisions to Total 3,515 2,058 1,457 59% those budgets during each fiscal year. Four annual budgets Cash Disbursements 7.3.4. Financial Commitments over the Longer Term have been approved for the Carbon Fund (FY12-FY15). Informal Cash disbursements total $6.3 million from the opening of the the actual expenditures by activity for FY14. As outlined above for the Readiness Fund, since the term of both guidance was sought by the Facility Management Team (FMT) fund to the end of FY14. Table 13 shows the annual expenditures The total cash disbursements from the opening of the fund funds runs until December 31, 2020 (with Carbon Fund ERPA for developmental expenditures prior to that time (before the by activity, whilst Table 14 compares the approved budget with to the end of FY14 of $6.3 million are made up of $2.3 million payments expected to dominate the latter years of financial fund became fully operational). 3% Administrative costs represent less than 3% of total disbursements from the Readiness Fund. 58 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 59 FY14 ANNUAL REPORT 8 Results Measurement Reporting Framework FCPF and REDD+ Countries transitioned to a new reporting format in FY13. FY14 is only the second year of implementation for the new Monitoring and Evaluation (M&E) Framework, as such data is not yet consistently available from all countries to allow a quantitative analysis. Current Impact/Outcome/ Expected #/ (as of end Output and Relevant Indicators Baseline Target Year FY14) Traffic Light Impact I.1. The FCPF has contributed to the Indicators for See section 4 design of a global regime under or outside impacts 1.1 for examples of UNFCCC that provides incentives for REDD+ (1.1. to 1.5 not yet progress. not yet applicable) applicable. Impact level indicators will be assessed at the time of the independed evaluation. I.2. Reduced emissions from deforestation and As above forest degradation from FCPF, especially CF portfolio countries (indicators for 1.2 are not yet applicable) I.3. FCPF has catalyzed the creation of As above recognized global standards for REDD+ I.3.B. Common approach successfully Concept Common approach See section 4 implemented is implemented for examples of and examples/ progress. lessons learnt are used in standard setting for REDD+ SMART I.4. FCPF has catalyzed investment in REDD+ (CF, As above and grants) I.5. The FCPF has generated momentum to As above address governance and transparency issues Specific, measurable, and policy reforms related to sustainable forest attainable, relevant, resource management and REDD+ (not yet relevant) time-bound (SMART) indicators are measured Outcome 1. Efforts successfully undertaken Indicator for out- for each impact, outcome by countries with FCPF support, to achieve come 1 is not yet emission reductions from deforestation and/or applicable. and output in the M&E forest degradation, and to benefit from possible Framework. future systems of positive incentives for REDD+ (Readiness Fund) 60 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 61 FY14 ANNUAL REPORT Current Current Impact/Outcome/ Expected #/ (as of end Impact/Outcome/ Expected #/ (as of end Output and Relevant Indicators Baseline Target Year FY14) Traffic Light Output and Relevant Indicators Baseline Target Year FY14) Traffic Light Output 1.1. Readiness Assessment Framework is Outcome 2. Selected FCPF countries Indicators 2A, 2B agreed upon and disseminated demonstrate key elements (carbon accounting, and 2C for programmatic elements and pricing) of Outcome 2 are not performance-based payment systems for yet applicable. Indicator 1.1. Existence of published assessment 0 completed emission reductions generated from REDD+ framework on readiness package activities with a view to ensuring equitable benefit sharing and promoting future large-scale positive incentives for REDD+ (Carbon Fund). Output 1.2. Countries demonstrate an adequate plan to achieve preparedness for REDD+ funding Output 2.1. Standards and preparations in place for high-quality ER Programs discussed and endorsed by CF Participants and/or PC Indicator 1.2.a. Number of R-PPs endorsed by PC 36 30+ by 2015 45 Indicator 2.1. Number and types of standards and management tools discussed and endorsed by CF participants and/or PC for ER programs including: Indicator 1.2.b. Number of Readiness Preparation 7 24 by 2014 22 Grant agreements signed 2.1.a. Methodological framework and Pricing Completed Fully developed MF endorsed at Approach draft by CF7 and CF8. final version endorsed by CF8. Output 1.3. Countries progress adequately on implementation of their R-PP and Grant 2.1.b. Business processes (ER-PD, ER-PIN, ERPA) ER-PIN, ER-PD, ER- Fully developed ER-PIN and Agreements PA under development draft by CF7 and ERPD are on final version en- track but ERPA Indicator 1.3.a. Number of mid-term progress 1 7 by June 2014 5 dorsed by CF12. is still to be reports presented by countries that follow agreed endorsed. reporting standards and are presented in a timely manner 2.1.c. Legal documents (General Conditions, Term sheet and Fully defined ERPA Term Sheet is ERPA term sheet) general conditions Term Sheet draft completed, Gen- Indicator 1.3.b. Percentage of countries that 0 11/22 or 50% for ERPA under by PC14 and Gen- eral Conditions are achieving planned milestones according to (based on GRM development eral Conditions for postponed to approved Readiness Preparation grant (> $3.4 progress reports) ERPA endorsed by PC18. million) PC16. Indicator 1.3.c. Percentage of countries that are 0 Too early to Output 2.2. Countries have entered in the overall achieving planned milestones for sub assess at portfolio of the CF component as per country annual reporting scale portfolio level. Sub Component 1 to 9 See section 4. Indicator 1.3.d. Percentage of countries with a 0 60% (of countries 6/16 or 38% of Indicator 2.2.a. Number of early ideas or ER 0 10 by 2015 15 disbursement rate that is in line with agreed with signed grant those countries Programs presented by countries to the CF Readiness Preparation grant (> $3.4 million) agreements) that reported disbursement plans of grant agreement (up to (total of 22 coun- 10% variance with plans) tries have signed grants, 3 are Indicator 2.2.b. Number of REDD countries that 0 5 by 2015 2 LOI signed not disbursing, have signed ERPA 6 have not re- ported, and 7 are disbursing below the target 5) Output 2.3. Increased levels of private sector investment for incentivizing, testing, and supporting up-scaling of ER activities 62 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 63 FY14 ANNUAL REPORT Current Current Impact/Outcome/ Expected #/ (as of end Impact/Outcome/ Expected #/ (as of end Output and Relevant Indicators Baseline Target Year FY14) Traffic Light Output and Relevant Indicators Baseline Target Year FY14) Traffic Light Indicator 2.3.a. Number of private participants 2 2 new private Target it no- Indicator 3.1.b. Number of IP and REDD+ country Examples of early At least 20 men in CF sector participants longer relevant. CSO representatives (men/women and/ or youth) participation of and 20 women by 2014 that have participated and benefitted from stakeholders exist and/or 20 youth FCPF organized workshops/trainings on SESA, until FY12 reps. participated governance, MRV aspects/related aspects of and/or trained Output 2.4. ER Programs are being implemented Indicator 2.4.a. is REDD+ per country, in a in a timely manner not yet applicable minimum of 15 participant coun- Outcome 3. Engagement of all stakeholders tries by 2015. (government, CSOs, IP, private sector, delivery partners) to sustain or enhance livelihoods of Indicator 3.1.c. Examples of IPs and REDD+ Representation of IPs Examples in all See section 4. local communities and to conserve biodiversity country-CSO representation in institutional and CSOs at national REDD+ Partici- within the approach to REDD+ arrangements for REDD+ at the national level level institutional pant Countries, of arrangements institutional Indicator 3.A. Design of national REDD strategies, 0 All national See section 4 for had started to get arrangements for monitoring systems and ER Programs addresses REDD+ strate- examples. attention during R-PP national REDD+ indicators for enhancement of livelihoods of local gies, monitoring formulation process. readiness where communities and for biodiversity conservation systems and ER IPs and CSOs are programs incor- represented. porate indicators related related Output 3.2. Pilots have been successfully Indicator 3.2 b not to biodiversity implemented on ways to sustain and enhance applicable as yet conservation and livelihoods and conserve biodiversity (3.2. b. is not (pertain to ER Pro- forest community yet applicable) gram implementa- livelihood develop- tion) ment. Indicator 3.2.a. Number of countries where 7 in FY12 All countries See section 4 or Indicator 3.B Actual examples on the inherent 0 International stakeholder engagement platforms proposed in that have signed data not available social and biodiversity benefits of REDD+ and how REDD+ agenda by RPPs have taken up work and meet regularly Readiness grants at that level of they are used to inform REDD+ agenda and to 2017 is informed detail in country scale up results by documented reports. results from ER Programs. Outcome 4. Knowledge gained in the development of the FCPF and implementation Output 3.1. Enhanced capacity of IPs and CSOs to of Readiness Preparation Proposals (under engage in REDD+ processes at the country level the Readiness Fund) and Emission Reductions 3.1.b. not yet applicable Programs (under the Carbon Fund) broadly shared, disseminated and used by international Indicator 3.1.a. (i) Number and type of examples 0 Various new ex-  See section 4 REDD+ practitioners of in-country REDD+ actions where IPs and CSOs amples exist with and local communities participate actively strong evidence of Indicator 4.A. Number of new countries/ 0 A number of 11 Countries. IP and CSO active stakeholders requesting to become FCPF: new requests to participation and - Observers become: broad community - Members country - support in REDD+ observers (2015) programs/readi- country - ness by 2015. members (2015) Indicator 3.1.a. (ii) Examples of resources made N/A Examples exist Indicator 4.B. Examples of utilization of/or 0 An increasing See section 4. available to enable active participation of IPs, with evidence of reference to FCPF knowledge products number of ex- CSOs, and local communities in national REDD+ resources being amples exist by readiness made available 2015 and remains through national stable afterwards and/or bilateral until 2020 support to IPs and CSO networks to enable active participation in national REDD+ readiness. 64 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 65 FY14 ANNUAL REPORT Current Acknowledgments Impact/Outcome/ Expected #/ (as of end Output and Relevant Indicators Baseline Target Year FY14) Traffic Light Photo Credits Output 4.1. Knowledge products and lessons from Indicators for Photos courtesy of Andre Rodrigues de Aquino, Chhor Sokunthea, piloting of REDD+ in general and FCPF activities Output 4.1. are not in particular are developed and disseminated, in yet applicable. Franka Braun, Nina Doetinchem, Rhett Butler, Scott Wallace. accordance with global knowledge management and communication strategy and annual work Design by Corporate Visions, Inc. plans Output 4.2. Participants actively engage in South- south-learning activities Indicator 4.2.a. Number of S-S learning activities in FY12 TBD in work plans Shift in focus to and/or events connecting FCPF countries direct country support in FY14. Indicator 4.2.b. Total number of participants to TBD in work plans Shift in focus to South-south knowledge exchange activities by direct country category: support in FY14. - REDD+ member countries (men/women) - non-REDD+ member countries (men/women) -IP/CSO representatives from region (men/women) -Private sector representatives from region (men/women) Copyright ©by Carbon Finance Unit, World Bank Group. All rights reserved. Output 4.3. Strong visibility of REDD+ and FCPF is achieved 4.3.a. Number of neutral/positive mentions of n/a Increase in neutral Yes FCPF and REDD+ issues in different key media and positive men- worldwide per X period tions worldwide— tbd in work plans 4.3.b. Number of negative mentions of FCPF and n/a Decrease of Comparable to REDD+ issues in different key media worldwide negative mentions FY13 per year worldwide 66 FOREST CARBON PARTNERSHIP FACILITY FOREST CARBON PARTNERSHIP FACILITY 67 The World Bank 1818 H Street, NW Washington, DC 20433, USA www.forestcarbonpartnership.org