…Norway says financial safeguards must be ensured for funds release
The government says it plans to use funds from the forest-saving deal with Norway to help build the Amaila Falls Hydro Project, put solar panels in every Amerindian home and demarcate Amerindian lands, none of these projects have yet reached a committee which has to approve financing.
As a result, no financing has yet reached Guyana, and Norway is claiming that this has to do with the fact that the system being set up to channel the money is a new one and there have to be safeguards in place, including ensuring the money will be spent for the intended purpose.
Regarding the Amaila Falls Hydroelectric project, Norway said that while the project is listed under the LCDS, it has not been submitted to the relevant Steering Committee for assessment and approval for financing.
According to the Norwegian Government, the first transfer of funds (US$30 million) to the Guyana REDD Investment Fund (GRIF), was made according to the agreement with the World Bank and was disbursed for the fund to start operating.
“As of now, no funds have been disbursed from the GRIF,” the Royal Ministry of Environment stated.
Regarding the Amaila Falls Project, Norway said, “It will only be submitted once Guyana and the IDB have complied with all their requirements.
“If the financing of equity is presented to the Steering Committee, IDB’s assessment will be used by Norway as the base for assessing GRIF support,” Norway stated.
It said that the reference by the civil society grouping to “allegations in the independent press of corruption and malfeasance” cannot easily be refuted without substantiation.
Funds from the GRIF are only disbursed on approval by the Steering Committee, and they are channeled through the Partner Entities, which are the Inter-American Development Bank (IDB) and the United Nations Development Programme (UNDP) and the World Bank.
According to Norway, the timing of disbursements into the GRIF does not change this.
“Getting the modalities and modus operandi of the GRIF sufficiently established, and thus getting projects approved by the GRIF Steering Committee, has taken longer than expected,” the Ministry of Environment stated.
It said that a reflection of getting a new system to work, “including with respect to the application of fiduciary, environmental and social safeguards.”
Norway’s statement, coming from the Royal Ministry of Environment in Norway in response to an eight-point list of concern submitted by a group of civil society activists and two Parliamentarians.
On March 24, members of Guyana’s civil society and two Members of Parliament sent a letter to Erik Solheim, Norway’s Minister of the Environment and International Development. The letter raised “eight key problems with the operation of the Memorandum of Understanding between the governments of Guyana and Norway”.
Two months later, Solheim replied, “It will not be possible to go into the details of your letter here”.
On May 20, 2011, another letter was sent to Solheim requesting a detailed reply to the eight points raised in the first letter. A detailed response was issued on Thursday, in which the Norwegian government asserted that the Government of Guyana and the Guyanese people are in charge of this country’s development and this includes the implementation of the Guyana Low Carbon Development Strategy (LCDS) and the Reduced Emissions from Deforestation and Forest Degradation (REDD+) agenda.
Norway has pledged to give to Guyana US$250 million to pursue the LCDS under the context of the REDD+, the system being devised at the international level to get rich governments to pay poor countries to keep their forests standing.
“Norway has entered into a partnership with Guyana to support its efforts to maintain a low rate of deforestation and forest degradation and improve forest governance.
“In the process we hope to contribute to the creation of a global model for such partnerships,” the Royal Ministry of Environment stated.
Reacting to the concerns of the civil society grouping, the partnership is very much in progress.
“It is not perfect, but we are breaking new ground and learning and adapting as we go. We will continue to improve the partnership over time,” it was stated.
Six projects have been prepared by the Government of Guyana and are currently being reviewed by the respective Partner Entities.
Regarding civil society concerns that deforestation appears to have increased, not decreased, Norway has admitted this, but has sought to rationalize its decision to justify the release of funds. Norway said it entered into a partnership with Guyana to create a model that could be used for High Forest Cover Low Deforestation countries.
“The objective is to avoid leakages that would lead to deforestation pressures moving to countries with currently low deforestation, like Guyana, when current high deforesters start to reduce their rates.”
At deforestation rates as low as those observed in Guyana, Norway said even very small deforestation events will cause significant percent changes in the deforestation rate.
Norway said that together with Guyana the intention is to quickly disincentivizing any systematic upward trend in Guyana’s deforestation rates.
Based on the revised numbers, which Norway said was generated as an intrinsic element of the Partnership, an incentive structure for that purpose was put in place.
This incentive structure implies payments start to fall rapidly at 0.056 per cent deforestation, and cease completely at 0.1 per cent.
“By any measure, this is exceptionally ambitious,” Norway stated.
Regarding safeguards, Norway said the safeguards to be applied will be those of the IDB, the World Bank or the UNDP, dependent on which institution will be Partner Entity for the relevant project.
The application of high standards when it comes to fiduciary, environmental and social safeguards are to be applied to all projects funded from the GRIF, Norway said.
Norway also said transparency is essential to the partnership and said its efforts to provide adequate and timely information will continue.
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