Summary
Graphs and statistics
Basic Description
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Name of Fund |
Forest Investment Program | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Date created |
Date fund proposed: February 2008 as part of the Climate Investment Funds (CIFs). On May 30, 2008, in Potsdam, Germany, the MDBs, developed and developing countries and other development partners reached an agreement on the design and establishment of the SCF. Date fund made operational: Approved by Executive Directors of the World Bank on July 1, 2008, with a donors pledge meeting on September 26, 2008. The FIP was made operational in July, 2009. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Administrating organisation |
The World Bank | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Objectives |
The Forest Investment Program (FIP) is part of the Strategic Climate Fund (SCF) which is to provide financing to pilot new development approaches or to scale-up activities aimed at a specific climate change challenge or sectoral responses through targeted programs. The main purpose of the FIP is to support developing countries’ REDD-efforts, providing up-front bridge financing for readiness reforms and investments identified through national REDD readiness strategy building efforts, while taking into account opportunities to help them adapt to the impacts of climate change on forests and to contribute to multiple benefits such as biodiversity conservation and rural livelihoods enhancements. The FIP will finance efforts to address the underlying causes of deforestation and forest degradation and to overcome barriers that have hindered past efforts to do so. The FIP is designed to achieve four specific objectives (as stated in the Third Design Document, May 2009):
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Donor contributions |
Pledges: As of November 2011, FIP has received total pledges of USD 599 million. Of this total, USD 434 million has been pledged as grant resources and $165 million as concessional finance. However as of January 2012 we are lacking
information on the latest donor contributions/fund disbursements.
*The UK pledge is GBP 50 million, with up to a further GBP 50 million available contingent upon (i) operational progress of the program and (ii) the outcome of wider deliberations on interim forest financing. **The total pledge made by the US to the CIFs remains $2 billion; the allocation across the programs is indicative and based on an extrapolation of current U.S. allocations.
Deposited: A total of USD 348.34 million has been deposited as of November 2011. However as of January 2012 we are lacking
information on the latest donor contributions/fund disbursements.
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Activities supported |
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Conditions and eligibility requirements |
Country eligibility of the FIP will be based on:
CRITERIA FOR SELECTION OF PILOT PROGRAMS
Transformational impact through a few programs should be prioritized over limited impact in many programs. The number and extent of pilot programs will be proportional to the resources available, and can thus only be determined once there is a clear idea on the magnitude of contributions. The selection of pilot programs should be based on the following criteria:
FIP PRINCIPLES
The principles set out in the Governance Framework of the Strategic Climate Fund (SCF) will apply to the FIP. In addition to the general SCF principles the following principles will apply to the FIP:
CRITERIA FOR FIP INVESTMENT STRATEGIES, PROGRAMS AND PROJECTS
The following criteria are based on the initial guidance provided in the FIP Design Document as to what constitutes transformational change in the context of FIP and the need for proof of going beyond business-as-usual. The criteria are complemented by more detailed information on ways to review a proposed investment strategy, program or project. These criteria are consistent with the FIP Design Document:
(a) Climate change mitigation potential.
(b) Demonstration potential at scale.
(c) Cost-effectiveness.
(d) Implementation potential.
(e) Integrating sustainable development (co-benefits).
(f) Safeguards. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Funds disbursed to date |
The total amount approved is USD 61.96 million and the total amount disbursed is USD 11 million in administrative costs, and USD 3 million as investment plan and project preparation grants, as of January 2012. 178.4 million has been endorsed in investment plans, but only USD 42.24 million has so far been approved. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Uptake and projects supported |
At the Meeting of the FIP Sub-Committee in Cape Town, South Africa in June 29 and 30, 2011, six pilot countries (Burkina Faso, Ghana, Democratic Republic of Congo, Indonesia, Lao PDR and Peru) have requested preparatory grants to support them in developing their investment plans. As of January 2012, four countries, Burkina Faso, the Democratic Republic of Congo, Lao PDR and Mexico have submitted investment plans for review and have received endorsement by the FIP Sub-Committee. The remaining pilot country governments are in the process of developing their investment plans. The following is the agreed level of funding for the eight pilot countries, taking into account the current pledges to the FIP:
i. Brazil and Indonesia: USD 50-70million ii. Democratic Republic of Congo and Mexico: USD 40-60million iii. Ghana and Peru: USD 30-50million iv. Burkina Faso and Lao PDR: USD 20-30million PRE-PROGRAMMING PHASE
In June 2010, the FIP Sub-Committee approved the FIP Investment Criteria and Financing Modalities as well as the FIP Operational Guidelines. With the approval of these two documents, the programming at the country level is underway.
The development of a Dedicated Grant Mechanism for Indigenous Peoples and Local Communities has been completed (see 'Other information', below). Joint Missions have been scheduled for all participants, and as of May 2011, reports from 2 such missions, to Burkina Faso and DRC, were available on the FIP website http://www.climateinvestmentfunds.org/cif/FIP_Joint_Missions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Proposed life of fund |
The fund follows the 'sunset clause' of the CIFs. ''The CIF design includes a sunset clause which enables closure of funds once a new financial architecture has become effective under the UNFCCC regime' (CIF Website).
The fund is an interim measure for the MDBs to fill an immediate financing gap and therefore includes a specific sunset clause linked to the agreement on the future of the climate change regime. Pending final agreement on the future of the climate change regime, the SCF (and its related programs) will provide financing to pilot new approaches with potential for scaled-up, transformational action aimed at a specific climate change challenge or sectoral response. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Further information |
For all documentation on FIP, see http://www.climateinvestmentfunds.org/cif/node/5 All FIP financial information can be found in the Trustee Reports. Report on "International Practices in Small Grant Programs for Indigenous Peoples and Local Communities" commissioned by FIP http://www.climateinvestmentfunds.org/cif/sites/climateinvestmentfunds.org/files/Report%20on%20Granting%20Programs%20October%202010.pdf |
Fund Governance
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Decision-making structure for fund disbursement |
FIP SUB-COMMITTEE Consistent with the SCF Governance Framework, the SCF Trust Fund Committee established a Sub-Committee for the FIP to oversee the operations and activities of the Pilot Program. The FIP Sub-Committee is the decision-making body responsible for overseeing and deciding on the operations and activities of the FIP. Composition of the FIP Sub-Committee
FIP Sub-Committee decision-making is by consensus. Members of the FIP Sub-Committee serve for one year terms, and may be reappointed. All pilot countries under the program, members of the MDB Committee and the Trustee may attend the FIP-SC as active observers. Active observers for the FIP Sub-Committee include: a) representatives of the FCPF secretariat, the Global Environment Facility, UNFCCC and the UN-REDD technical secretariat; and b) the following representatives to be identified through an open and inclusive self-selection process: · 4 civil society representatives; · 2 indigenous peoples representatives; and · 4 private sector representatives. Members of the FIP Sub-Committee and Observers can be found here. Functions of the FIP-Sub-Committee The FIP-SC will be responsible for: · agreeing upon the number of country or regional pilot programs; · approving the terms of reference for, and the composition of, the expert group; · appointing the members of the expert group; · approving elaborated criteria for selection of country or regional pilots and guidance to be followed by the expert group; · selecting pilot countries taking into consideration recommendations of the expert group; · approving elaborated programming priorities and operational criteria; · approving financing terms and modalities for the FIP, including those for private sector activities; · endorsing further development of activities in investment strategies for FIP financing; · approving FIP financing for programs and projects; · ensuring complementarity between activities foreseen for the FIP and activities of developing countries, relevant regional organizations and initiatives and other development partners active in the field of climate change and forests; · ensuring that the FIP program builds in provisions for evaluating the performance and effectiveness of FIP investments and for developing full reporting criteria and a performance measurement framework; · periodically reviewing and publishing the effectiveness and impact of FIP programs and activities, and ensuring that “lessons learned” are applied to future FIP investments; and · exercising such other functions as they may deem appropriate to fulfill the purposes of the FIP. EXPERT GROUP An Expert Group has been established by the FIP-SC to make recommendations on selection of pilot programs for the FIP. The Expert Group includes eight individuals, acting in their personal capacities, chosen on the basis of their expertise, strategic and operational experience and diversity of perspectives, including knowledge of scientific, economic, environmental and social aspects of conservation and sustainable use of forest ecosystems and climate change, governance and institutional and development planning. The Expert Group members have been selected in accordance with criteria approved by the FIP-SC, taking into account professional qualifications of the experts. A list of the members of the FIP Sub-Committee's Expert Group as of August 2010 can be found in Annex 1 of this document |
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Consultations with non-government stakeholders |
In designing the Climate Investment Funds, consultations took place with potential donors and recipients, the United Nations family, other multilateral development banks (MDBs), civil society organizations, and the private sector. At a final design meeting, held in Potsdam, Germany, on May 21-22, 2008, representatives from some 40 developing and industrialized countries agreed to create the CIF. This Forest Investment Program (FIP) “will be developed based on a broad and transparent consultative process. That process will take into account country led priority strategies for the containment of deforestation and degradation and build upon complementarities between existing forest initiatives (FIP Issue Note, page 2).” INDIGENOUS PEOPLES AND LOCAL COMMUNITIES DEDICATED INITIATIVE The effective and continuous participation of indigenous peoples (IPs) and local communities in FIP pilot programs is crucial to the success of those programs, and will be highly dependent on increasing the capacity of these groups to become informed and active players in national REDD processes in general and FIP processes in particular. This need should be addressed by directly making indigenous peoples and local communities able to access specific grants for that purpose. The operation, funding modalities and governance of such a mechanism will be developed through a process involving appropriate stakeholders. A more detailed proposal will be presented to the final design meeting. Regional consultative meetings amongst indigenous peoples and local communities The FIP Sub-Committee agreed that the regional consultative meetings amongst indigenous peoples and local communities should take place in a FIP pilot country in each region. Meetings were held in Ghana, Lao PDR, Peru and Australia between November 2010 and April 2011. Further details, including presentations made at these workshops, can be found on the FIP website here http://www.climateinvestmentfunds.org/cif/node/1956 |
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How fund disbursement is reported |
Pledges, deposits and funding decisions for SCF and its subsidiary funds (PPCR, SREP and FIP) are reported to the Sub Committee in twice-yearly trustee reports. Based on the monitoring results of the MDBs, the FIP-SC will report regularly to the SCF Trust Fund Committee, and an independent joint evaluation of the operations of the FIP and its activities will be carried out after three years of operations by the independent evaluation departments of the MDBs. Results achieved through the FIP should be published and made publicly available. Full reporting criteria, including results measurement at the programmatic, country and institutional levels, will be proposed by the FIP-SC and approved by the Trust Fund Committee of the SCF. The key performance criteria should pertain to emissions reductions achieved or emissions avoided. Disclosure policy |
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Issues raised by the public |
There have been growing concerns that there is a lack of coherence among the different implementation operations of REDD+ investments, notably the FIP and the World Bank’s FCPF. As reported by the Bretton Woods Project (‘Update on the Climate Investment Funds, July 2010 Summary’), civil society and private sector observers expressed concerns that the criteria for country selection, which are almost exclusively technical, fail to take into account recipient countries' governance or absorptive capacities. Simon Counsell of UK NGO the Rainforest Foundation notes that the FIP pilot countries are at only the earliest stages of preparation work supported by the Forest Carbon Partnership Facility, which is supposed to lay the foundations for FIP activities. He says, "What actually seems to be happening under the FIP is really 'business as usual' World Bank forest sector lending – particularly for plantations and 'sustainable forest management' (i.e., industrial-scale logging of natural forests) – all under the guise of 'doing something about climate change'."
The FIP's operational guidelines were revised to include reference to both social and environmental safeguards, and to the UN Declaration on the Rights of Indigenous Peoples (UNDRIP). However, recommendations by civil society observers that the guidelines require compliance with relevant international environmental and human rights agreements were rejected. There are no specific criteria to comply with UNDRIP, nor any requirement for the free, prior and informed consent of affected indigenous peoples. The World Bank’s climate investment funds will create parallel structures for financing climate change adaptation and mitigation outside the ongoing multilateral framework for climate change negotiations and within a process dominated by G8 countries. Developing countries have long argued for greater commitments and increases in financial resources under the UNFCCC to enable them to fulfil their obligations under the Convention but have maintained that such resources should be placed under the guidance of the state parties to the Convention to ensure consistency with internationally agreed priorities and principles.
See: Celine Tan, Third World Network, ‘World Bank’s Climate Funds Will Undermine Global Climate Action’ 10 April 2008: www.twnside.org.sg/title2/finance/docs/Climate.Funds-Commentary.Revised.doc |
Relationship with Official Development Assistance
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Is donor funding considered part of official development assistance? |
Since CIF is a pooled multi-donor trust fund managed by the World Bank, an international development institution recognized as such by the DAC for the purpose of ODA eligibility, these contributions can be scored as multilateral ODA. The outgoing use of all CIF resources as concessional loans, grants, and guarantees through the MDBs can be reported by each MDB as ODA if: (a) it meets the criterion of promoting economic development and welfare; b) the grant element is at least 25 percent; and c) funds are to be used in a country included in DAC list of ODA eligible countries. |
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Financial instrument/ delivery mechanism used (e.g. grant, loan) |
The document FIP/SC.3/4, FIP Investment Criteria and Financing Modalities, has been presented to the FIP Sub-Committee. The Sub-Committee has now been invited to review and approve this document during the June 2010 meeting. Specifically, the paper outlines the following investment criteria and financing modalities:
When the FIP Sub-Committee decides on financing for a specific project or program, it will approve the proposed financing modality (grant or concessional loan), or range of proposed financing modalities (grant, concessional loan, guarantee and/or equity), in case of private sector projects or programs.
The FIP Design Document calls for a dedicated grant mechanism to be established under the FIP to provide grants to indigenous peoples and local communities in pilots to support their participation in the development of FIP investment strategies, programs and projects. Grants to indigenous peoples and local communities should be an integral component of each pilot and linked to the Forest Investment Strategy in order to ensure a comprehensive lessons learned process from local to the national level and vice versa.
The scope of activities eligible for support from the grant mechanism can be found in paragraph 25 of the March 2010 document FIP Operational Guidelines. |
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Nature of recipient country involvement |
FIP PROGRAMMING PROCESSES Governments should develop the investment strategy proposals building and expanding on earlier multi-stakeholder priority setting processes and existing planning frameworks. Those processes should be inclusive, transparent and participatory, involving sectoral ministries, development partners working in the country, including MDBs, bilateral development agencies, NGOs, indigenous peoples, forest dwellers, the private sector and other stakeholders. In preparing investment strategy proposals, governments should specify whether individual projects are to be executed by national, regional, or local governments, IPGs, community based organizations, NGOs, private enterprise and other members of civil society. A group of countries may propose to the FIP-SC a regional or sub-regional investment strategy proposal that brings together a number of country activities. A regional or sub-regional program will be considered one pilot in the program. The investment strategy proposals will be evaluated by the expert group in the process of preparing recommendations on the selection of pilot programs. The FIP-SC will decide on the final selection of pilot programs. |
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Overall consistency with the aid effectiveness agenda (i.e. the Paris Declaration) |
To be defined. |



