The Guyana REDD+ Investment Fund (GRIF) was established today and the first payment from Norway to the Fund of approximately US$30 million* is now being processed.
The GRIF is the financial mechanism for the ongoing cooperation on climate change between Guyana and Norway. Norway will pay for Guyana's performance on limiting greenhouse gas emissions from deforestation and forest degradation, and for progress made against governance-related indicators. Guyana will invest the payments it receives, and any income earned on them, in its Low Carbon Development Strategy (LCDS).
The Governments of Guyana and Norway have asked the World Bank to act as the Trustee of the GRIF. Norway's payments to Guyana may amount to approximately US$250 million over the period to 2015, depending on Guyana's performance according to a methodology set out by the two countries in November 2009.
"Today represents a big step forward in our joint efforts to show that we can create a low deforestation, low carbon, climate resilient economy in Guyana," said Ashni Singh, Minister of Finance of Guyana. "Our two countries are forging new ground in trying to work out how REDD+ can help to reconcile the world's need for urgent action to avert climate catastrophe with Guyana's sustainable development."
On November 9, 2009, Norway and Guyana set out a joint partnership to "work together to provide the world with a working example of how partnerships between developed and developing countries can save the world's tropical forests." The partnership is based on the concept of "payment for ecosystem services" and aims to contribute to the creation of a global regime to assign economic value to standing forests.
The establishment of the GRIF took place at a short ceremony at the World Bank's headquarters this afternoon, when Norway and the World Bank signed an administrative agreement.
"Today, Guyana, the World Bank and Norway have shown the world that developed and developing countries can solve complex problems together for the good of all," said Erik Solheim, Minister of the Environment and International Development of Norway. "We have agreed on an innovative mechanism for conservation and sustainable use of rainforest. I believe our achievement shows that when we pull together, we can deliver in a way that is of benefit to countries like Guyana and to the wider world's efforts to combat climate change."
The establishment of GRIF is a core part of the partnership between Guyana and Norway. It aims to create a potential model for climate finance that ensures Guyanese sovereignty over LCDS decisions at the same time as demonstrating adherence to internationally accepted standards, such as financial, social and environmental safeguards.
Both Governments believe that the issue of safeguards must be resolved within the UNFCCC negotiations, but this issue is still being discussed as of today. To develop a globally relevant model and therefore help give insights that may advance the negotiations, the Governments of Guyana and Norway will invite internationally reputable institutions to act as GRIF partner entities, starting with the Inter-American Development Bank, the World Bank and specialized agencies of the UN that are members of the United Nations Development Group.
The safeguards of any one of these organizations, which are internationally accepted, will be used in the implementation of the Guyana REDD+ Investment Fund. As on all other aspects of the agreement, adjustments will, if necessary, be made whenever agreement on a REDD+ mechanism is reached under the UNFCCC, to ensure conformity with that agreement.
"It is very important to support climate change financing, particularly in the forestry area," said Axel van Trotsenburg, World Bank Vice President for Concessional Finance and Global Partnerships. "In this context, we are very pleased to support Norway and Guyana in their innovative results-based approach by providing the financial platform for this important initiative."
The Governments of Guyana and Norway, along with the World Bank, will release a fact sheet on the GRIF in Georgetown, Guyana next week. This fact sheet will explain the GRIF’s operations in more detail.
* The exact sum will fluctuate with the exchange rate, as Norway makes pledges in Norwegian Kroner.