Request for proposals for the pilot programme for REDDplus results-based payments

Transcription

1 Meeting f the Bard 30 September 2 Octber 2017 Cair, Arab Republic f Egypt Prvisinal agenda item 14(b) GCF/B.18/06 26 September 2017 Request fr prpsals fr the pilt prgramme fr REDDplus results-based payments Summary As per decisin B.17/18, paragraph (c), this dcument presents a draft request fr prpsals fr the pilt prgramme fr REDD-plus results-based payments and the related draft screcard fr cnsideratin by the Bard.

2 Page b Table f Cntents I. Intrductin Mandate Linkages t ther dcuments 1 II. Analysis f the implicatins n existing GCF plicies and prcedures Backgrund Applicatin f GCF plicies and prcedures t activities undertaken in the past Applicatin f GCF plicies and prcedures t the use f RBPs Other Plicy Matters Cnclusin 6 III. Key prcedural and technical elements 6 IV. Matters fr cnsideratin by the Bard at its eighteenth meeting 9 V. Cnsideratins fr the full peratinalizatin f REDD-plus results-based payments 9 Annex I: Draft decisin f the Bard 10 Annex II: Draft terms f reference fr the pilt prgramme fr REDD-plus results-based payments 11 Annex III: Draft screcard 20 b

3 Page 1 I. Intrductin 1.1. Mandate 1. At its furteenth meeting, the Bard, thrugh decisin B.14/03, paragraph (b), requested the Secretariat t develp a request fr prpsals (RFP) fr REDD-plus results-based payments (RBPs), including guidance cnsistent with the Warsaw Framewrk fr REDD-plus and ther REDD-plus decisins under the United Natins Framewrk Cnventin n Climate Change (UNFCCC). 2. At its seventeenth meeting, the Bard, thrugh decisin B.17/18, paragraph (b), requested the Secretariat t undertake a further analysis f existing GCF plicies and prcedures adpted by the Bard and reflect thse in the draft RFP. Paragraph (c) f the same decisin als requested the Secretariat t finalize the draft RFP fr the pilt prgramme fr REDD-plus RBPs and the related draft screcard in the light f the final analysis referred t in paragraph (b). 3. This dcument respnds t the abve-mentined request by the Bard. It prvides further analysis f the GCF existing plicies and prcedures, and presents a final draft RFP with terms f reference (see annex II) fr cnsideratin by the Bard at its eighteen meeting Linkages t ther dcuments 4. This dcument has linkages with dcuments n the fllwing: (a) Pilt prgramme fr REDD-plus results-based payments; 1 (b) Prgress n supprt fr REDD-plus; 2 (c) Supprt fr REDD-plus; 3 (d) (e) The GCF and the Paris Agreement; 4 and Further develpment f the initial results management framewrk, including the initial lgic framewrk fr REDD-plus results-based payments. 5 II. Analysis f the implicatins n existing GCF plicies and prcedures 2.1 Backgrund 5. Paragraph 35 f the Gverning Instrument cnfirms that REDD+ financing is eligible fr GCF supprt 6 and further emphasizes that A results-based apprach will be an imprtant 1 Dcument GCF/B.17/03 2 Dcument GCF/B.15/Inf.07 3 Dcument GCF/B.14/03 4 Dcument GCF/B.13/06 5 Dcument GCF/B.08/07 6 Gverning Instrument, paragraph 35 The Fund will finance agreed full and agreed incremental csts fr activities t enable and supprt enhanced actin n adaptatin, mitigatin (including REDD-plus), technlgy develpment and transfer (including carbn capture and strage), capacity-building and the preparatin f natinal reprts by develping cuntries.

4 Page 2 criterin fr allcating resurces (paragraph 51) and The Fund may emply results-based financing appraches, including, in particular fr incentivizing mitigatin actins, payment fr verified results, where apprpriate (paragraph 55). 6. In dcument GCF/B.17/13, the Secretariat nted that all Bard-apprved plicies and prcedures adpted t date were prepared n the assumptin that they wuld be applied t prjects r prgrammes which wuld be implemented in the future and did nt specifically cnsider their applicatin t activities which had already been cmpleted by the time a funding prpsal was apprved. The dcument prvided the Secretariat s initial review f the then existing plicies in this cntext. 7. Accrdingly, in decisin B.17/18, paragraph (b), the Bard requested the Secretariat t undertake a further analysis f existing GCF plicies and prcedures adpted by the Bard and reflect in the draft request fr prpsals the manner in which such plicies and prcedures wuld need t be applied r therwise cnsidered in rder t peratinalize GCF REDD-plus results-based payments prpsals. The fllwing descriptin therefre sets ut the results f this analysis. 8. The analysis undertaken cnsidered the fllwing issues: The applicatin f plicies and prcedures t activities that lead t REDD-plus results undertaken in the past (see Sectin 2.2); (a) (b) The applicatin f plicies and prcedures t the use f prceeds f the RBPs made by the GCF (see Sectin 2.3); and Other plicy issues relevant t REDD+ results based payments which may nt be adequately captured in Sectins 2.2 and 2.3 (see Sectin 2.4). 9. Recmmendatins in respect f the relevant matters are als presented fr the Bard s cnsideratin, and have been incrprated in the draft Request fr Prpsals and screcard presented as Annex III f this dcument. 2.2 Applicatin f GCF plicies and prcedures t activities undertaken in the past 10. The Secretariat has reslved that many f the Bard-adpted plicies and prcedures can be applied in full t activities undertaken in the past. Cncerns relating t their ex ante character can be addressed during the funding prpsal review prcess and at the pint f Bard apprval (e.g. by assessing the implementatin and utcme f the relevant activity against the relevant plicy r prcedure, e.g. in terms f hw the prpsed activity fits within the Risk Management Framewrk) r in the Funded Activity Agreement (in the frm f apprpriate representatins and warranties given by the accredited entity that the relevant plicies and prcedures have been cmplied with during the implementatin f the relevant REDD+ activity). 11. The Secretariat culd prvide further guidance t accredited entities (AEs) n these matters, and identify the dcuments that shuld be submitted t the Secretariat alng with the funding prpsal in rder t allw fr the relevant assessments. 12. Hwever, the applicatin f the fllwing plicies and prcedures t activities undertaken in the past may require further Bard cnsideratin: 2

5 Page 3 (a) Interim Envirnmental and Scial Safeguards. 7 The interim Envirnmental and Scial Safeguards (ESS) standards f the Fund, which were designed t ensure that prjects and prgrammes were implemented cnsistent with defined standards, were adpted by the Bard in decisin B.07/02 (Octber 2014). Given that mst, if nt all, activities whse achieved results are envisaged t be paid under the pilt prgramme will have cmmenced prir t the adptin f the ESS standards and thus wuld nt have cnsidered the GCF interim ESS standards in their design and implementatin, it will be necessary t describe hw the measures t address and respect the Cancun safeguards in the REDD+ activities have been implemented in a manner cnsistent with the applicable GCF ESS standards. The Secretariat recmmends that in relatin t the ESS Standard: 8 (i) (ii) AEs shuld, at the time f submissin f the funding prpsal, prvide an assessment describing the extent t which the measures undertaken t identify, assess, and manage envirnmental and scial risks and impacts, in the cntext f the relevant REDD+ activities and results, were cnsistent with the applicable GCF s interim ESS standards. The Secretariat shuld take such assessment int accunt as part f its verall cnsideratin f the funding prpsal against the screcard, cmplementing the cuntry s wn assessment f hw the Cancun safeguards were addressed and respected in the REDD+ activities, befre recmmending the prpsal t the Bard fr apprval; and The GCF shuld have the right in the relevant FAA t undertake investigatins in relatin t cmplaints and grievances raised by affected stakehlders and exercise apprpriate remedies during the implementatin perid. (b) Gender plicy. The Gender Plicy fr the GCF and Gender Actin Plan (Gender Plicies), 9 which were designed t ensure that gender aspects were mainstreamed int prjects and prgrammes, were adpted in decisin B.09/11 (March 2015). Fr the same reasns set ut in paragraph 12(a), the Gender Plicies are unlikely t have been cnsidered during the implementatin f such activities. The Secretariat recmmends that in relatin t the Gender Plicies, the recmmendatin prpsed in paragraph 12(a) abve shuld apply mutatis mutandis. (c) Interim plicy n prhibited practices. The Interim Plicy n Prhibited Practices 10 (IPPP), which was designed ensure that GCF Prceeds are nt used t finance r supprt prhibited practices, was adpted in decisin B.12/31 (March 2016). While the IPPP did nt exist at the time that many f the eligible activities began and/r cmpleted implementatin, it is reasnable fr the GCF, in the discharge f its fiduciary respnsibilities, t expect that the IPPP wuld have been cmplied with during the implementatin f the relevant prject r prgramme. The Secretariat recmmends that in relatin t the IPPP: (i) Ntwithstanding that the IPPP was adpted after the start and/r cmpletin f the implementatin f the relevant activity, the relevant accredited entity must 7 In respect f REDD+ RBP mechanism, the UNFCCC Cancun Safeguards must be cmplied with in full as set ut in Sectin III. Therefre, a cnsideratin must be made f the necessity f requiring cnsistency r cmpliance with tw sets f envirnmental and scial safeguard plicies. 8 A similar apprach is recmmended fr the Indigenus Peples Plicy which is intended t be presented t the Bard at its nineteenth meeting. The envisined GCF-wide Indigenus Peples plicy prvides a framewrk fr ensuring that activities are develped and implemented in a way that fsters full respect f indigenus peples dignity, rights, identity, aspiratins cnsistent with the Cancun safeguards (iii) and (iv). 9 Decisin B.09/11 10 Decisin B.12/31 3

6 Page 4 (d) (ii) demnstrate that thrugh the implementatin f the activities that lead t the REDD+ results, n prhibited practices ccurred during the implementatin perid, thrugh delivery f an apprpriate due diligence reprt submitted alngside the funding prpsal, and give a representatin in the related FAA t this effect; and The GCF shuld have the right in the relevant FAA t undertake investigatins and exercise apprpriate remedies in relatin t allegatins f prhibited practices during the implementatin perid. Mnitring and Accuntability Framewrk. The Mnitring and Accuntability Framewrk 11 (MAF), which sets ut the principles fr the institutinal and prject level mnitring that is expected frm accredited entities, was adpted in Nvember 2015, at B.11. In relatin t prject-level reprting and mnitring, the annual perfrmance reprting, including financing management reprting regime set ut in the MAF which envisages the submissin f reprts every year during implementatin, des nt make sense in relatin t activities that have been cmpleted by the time that the funding prpsal is submitted t the GCF. The Secretariat recmmends that in relatin t prject-level reprting and mnitring: (i) Fr the activities undertaken in the past, the MAF will nt apply as these ccurred prir receiving GCF funding. 2.3 Applicatin f GCF plicies and prcedures t the use f RBPs 13. Unlike typical investment-type prjects, where the GCF prvides funds fr an activity in the future, under the RBP funding mdality, funds prvided by the GCF are in respect f results achieved by an activity in the past. In this cntext, cnsideratins arise in relatin t what GCF prceeds shuld be used fr and, in particular, whether any f the GCF s plicies and prcedures shuld apply t the use f such prceeds by the recipients. 14. Unlike investment prjects, there may be n identifiable prject, prgramme r activity fr which RBP prceeds will be used at the time f submissin f a funding prpsal. As the RBPs prceeds are paid fr the results f past activities, the Secretariat cnsiders that such lack f defined clarity with respect t the future use f RBP prceeds is acceptable. 15. Ntwithstanding this, hwever, the Secretariat cntends that this des nt mean n GCF plicies and prcedures are applicable t the use f such prceeds. Instead, a fit-fr-purpse apprach shuld be adpted. (a) Interim ESS standards. With respect t the ESS standards, the accredited entity shall undertake the apprpriate level f due diligence, thrugh an envirnmental and scial management framewrk (ESMF) that will be bradly described in the funding prpsal, including the types f activities that may be supprted by the RBP prceeds, the prcesses that will be undertaken t manage the envirnmental and scial risks and impacts, the plicies, laws and regulatins that will be applied, the descriptin f further detailed assessments and management plans fr the activities that will be supprted nce they becme knwn, the cnsultatin and stakehlder engagement prcess that will be fllwed, and the grievance redress mechanisms that will be used r established. 11Decisin B.11/10 4

7 Page 5 (b) (c) (d) (e) Gender Plicy. With respect t the GCF gender plicy, the accredited entity shall describe in the funding prpsal hw it will undertake activity-level gender assessment and actin plan nce the details f the activities becme knwn. Indigenus Peples Plicy. With respect t the prspective Indigenus Peples plicy, the accredited entity, as part f its due diligence reprt and funding prpsal, shall describe hw the activities will meet the requirements f the plicy and guided by the prevailing relevant natinal laws and/r bligatins f the cuntries directly applicable t the activities under relevant internatinal treaties and agreements. Interim Plicy n Prhibited Practices. The AE shall prvide infrmatin that assures that the activities fr implementing the plan fr use f prceeds will fllw the interim plicy n prhibited practices, such as: Undisclsed prhibited practices, including mney laundering and the financing f terrrism; imprper subsequent use f GCF prceeds in the prhibited practices; and duble payment r financing fr the same results achieved, etc. Mnitring and Accuntability Framewrk. A simplified reprting regime be established in place f that set ut in the MAF fr the use f RBPs which shuld include infrmatin n the activities undertaken with GCF funding and reprting cmpliance with the abve mentined GCF plicies. The reprting perid wuld be cnsistent with the perid f executin f the prceeds as presented in the descriptin n hw prceeds will be used (see paragraph 30). 2.4 Other Plicy Matters 16. This sectin sets ut ther plicy matters which apply t bth the REDD+ activities and the future use f RBP prceeds, as well as ther legal matters which will need t be addressed in rder t peratinalize the pilt prgramme. (a) (b) Interim Plicy n Fees fr Accredited Entities 12. While there is n practical issue applying the GCF s fee plicy t the prjects and prgrammes t be submitted under the pilt prgramme, the Secretariat prpses a delegated authrity t the Executive Directr f the GCF secretariat t define the fee fr accredited entities accrding t the expected rles and respnsibilities f the AE in relatin t RBPs, which is expected t be different t the prjects with upfrnt investment which applies the current interim plicy n fees. A detailed analysis n the fees t be paid t the AEs wuld be cnducted n a case by case basis in rder t define the fees fr RBPs. Accreditatin: Access t GCF resurces will be thrugh natinal, reginal and internatinal, public r private entities accredited by the Bard thrugh the accreditatin prcess develped in accrdance with the GCF initial guiding framewrk fr accreditatin, 13 and applied with a fit-fr-purpse apprach. 14 Entities may be accredited fr different scpes f accreditatin, e.g. size f the prject/prgramme activity, fiduciary functins and envirnmental and scial risk categry, which thereafter frm the maximum scpe within which the AE may submit a funding prpsal. In this cntext and recgnizing that there will be a REDD+ activity that has been cmpleted at the time f the AE submitting a funding prpsal that invlves the 12 Decisin B.11/10 13 Annex I t decisin B.07/02 (annex I t dcument GCF/B.07/11). 14 Annex I t decisin B.08/02 (annex I t dcument GCF/B.08/45). 5

8 Page 6 receipt and use f RBP prceeds, the funding prpsal shall fit within the AE s scpe f accreditatin. 2.5 Cnclusin 17. As the results that will be paid by the Fund under the REDD+ RBP pilt prgramme will have been prduced by REDD+ activities ccurring prir t a funding decisin being made by the GCF, the Secretariat will need t retrspectively determine the extent t which the AE can prvide assurance that the prpsal cmplies with the relevant GCF plicies and prcedures, prir t making a recmmendatin t the Bard abut a RBP. T give effect t this, the Fund: (a) (b) (c) (d) (e) will ask the AE t prvide due diligence reprts in which the AE will be required t detail hw and t what extent the relevant past activities cmplied with applicable GCF plicies and prcedures; will ask the AE t prvide an analysis with respect t legal title t results and cmpliance with Cancun safeguards, as further set ut in Sectin III; will ask the AE t give representatins and warranties in the FAA that the infrmatin in such due diligence and technical reprts is true and accurate; will have the rights t cnduct ad hc check and/r investigatins in respect f the past activities; and will have rights under the FAA t seek refund f all r part f the RBP r t exercise ther remedies in circumstances where past activities were cnducted in a manner incnsistent with the requirements f the pilt prgramme. 18. Using the infrmatin prvided in the funding prpsal, the Secretariat will assess the infrmatin against a screcard f cmpliance with the relevant GCF plicies and prcedures. Prvided that the funding prpsal is assessed as being sufficiently cmpliant with GCF plicies and prcedures, the REDD+ funding prpsal will be recmmended t receive RBP. 19. The infrmatin which the GCF shuld request frm the AE prir t apprving a Funding Prpsal are utlined in the request fr prpsal. III. Key prcedural and technical elements 20. Building n the cnsultatins 15 held and analyses cnducted by the Secretariat, sme cncrete determining factrs were identified as the basis fr each design element. These factrs are summarized belw. 21. Access mdality: Fllwing GCF plicy n access mdalities and accreditatin, the submissin f prpsals fr REDD-plus RBPs and the RBPs themselves wuld be channelled thrugh accredited entities (AEs) f the GCF, 16 with cnsent by the REDD+ natinal entity r fcal pint, where designated. 22. Financial valuatin f results: Based n the experiences f existing initiatives and extensive discussin thrughut the cnsultatin prcess, a unifrm and fixed value f USD 5 per tnne CO 2 eq is suggested fr the pilt prgramme. It is recgnized that such value may nt necessarily cver all csts f the implementatin f REDD+ activities, but wuld serve as a 15 Mre detailed infrmatin f cnsultatins is available at: 16 Gverning Instrument fr the GCF, paragraph 45. 6

9 Page 7 psitive incentive fr their implementatin. The table belw prvides an verview f existing practices f similar initiatives implementing REDD-plus results-based payments: Table 1: Overview f payments per tnne f CO2 frm existing REDD-plus RBP initiatives Initiative Frest Carbn Partnership Facility Carbn Fund REDD+ Early Mvers (REM) Nrway-Guyana bilateral agreement Nrway-Brazil bilateral agreement Payment per tnne f CO2 eq Subject t negtiatin t pay up t USD 5 per t CO2 eq. N additinal payment premium fr c-benefits prvided USD 5 per t CO2 eq USD 5 per t CO2 eq USD 5 per t CO2 eq 23. Eligibility perid fr results and length f the RFP: The definitin f the eligibility perid f results fr payments under the GCF has implicatins n the range f cuntries eligible fr RBPs. It affects: the ptential vlume f emissin reductins (ERs); the amunt f funding required t pay fr the eligible vlume f ERs; pssible requirements fr infrming hw the GCF envirnmental and scial safeguards and Cancun safeguards fr REDD-plus were addressed and respected in the prcess f achieving the results; the prgramming prcess; and the timing f payments. It als gives a signal t cuntries that have been investing in plicies and actin t prduce REDD+ results fllwing UNFCCC decisins. 24. In rder t meet its bjective t quickly mbilize RBP fr REDD-plus and t generate lessns, as well as t minimize the cmplexity f the prgramme and the financial expsure f the GCF, the Secretariat recmmends that this pilt cnsiders ex-pst payments fr results achieved after the time f the adptin f the Warsaw Framewrk fr REDD-plus in December 2013 and befre 31 December The prcess f evaluatin by the GCF wuld ccur n a rlling basis, s the first apprval f RBPs culd take place prir t December 2018 fr results that are already submitted in a REDD-plus Annex t the BUR r abut t be submitted, and the last apprval f RBPs fr results achieved in 2018 culd take place at the last Bard meeting f Therefre, the RFP will run frm the time f the adptin by the Bard f the RFP in early Octber 2017 until the last bard meeting f 2022 i.e. it wuld be pen fr five years. 26. Size f the RFP: The Secretariat recmmends that the RFP be utfitted with a flexible funding envelpe f up t USD 500 millin, which will cver nly a fractin f pssible eligible results, including results generated in bth the recent past and the near future. Cnsideratins fr determining the amunt include: the number f cuntries that culd participate in the pilt prgramme; the ptential vlume f ERs frm cuntries cmpliant with UNFCCC requirements t be recgnized thrugh the GCF RFP; the cst-efficiency and pprtunity t generate additinal ERs; and the available funding at the GCF. 27. As f September 2017, 25 cuntries have submitted their reference levels, and the technical analyses have been cmpleted by the UNFCCC technical assessment team and published n the UNFCCC web prtal fr 12 f them. Als, 4 cuntries have submitted REDDplus results t the UNFCCC secretariat and undergne the technical analysis. Cnsidering a perid f eligible results fr payments frm December 2013 t December 2018, it is prbable that arund 10 cuntries culd participate in the pilt prgramme. 28. Duble payment and duble financing: Duble payment refers t the risk f paying fr the same ER mre than nce. Based n the cnsultatins and analysis, the risk f duble payments will be managed in this pilt thrugh apprpriate cntrl plicies (i.e. the UNFCCC 7

10 Page 8 web prtal and ther analgus platfrms at natinal r subnatinal level in the hst cuntries). In additin, cuntries must disclse any received payments fr the results ffered as well as any pending payment requests fr thse results. Cuntries are als requested t attest that measures are in place t prevent risk f duble payments 29. Duble financing may be difficult t cmprehensively determine because f the cmplexity f determining attributin f the achieved results. While recgnizing that REDD-plus results cannt easily be attributed t specific funding, the pssibility duble financing f results shuld be mnitred. A cmbinatin f cntinuus effrts and finance is needed t achieve results and ensure its permanence vertime. Prviding infrmatin n finance, including infrmatin n supprt received directly related t results, and prviding mre detailed infrmatin n surces f finance, as required in a cuntry s biennial update reprt (BUR) t the UNFCCC, wuld facilitate the understanding f hw ex-ante and ex-pst financing is used in a cmplementary manner and wuld imprve transparency and reduce the risk f duble financing. 30. Use f prceeds: A cunty receiving REDD-plus RBPs shuld reinvest the prceeds in activities in line with their current r next natinally determined cntributin (NDC) as established under the UNFCCC Paris Agreement, REDD-plus strategies, r lw-carbn develpment plans cnsistent with the bjectives f the GCF. This will be reflected in the FAA. Cuntries are required t submit a plan detailing the use f prceeds, tgether with the Funding Prpsal. The descriptin n the use f prceeds shuld include infrmatin abut cmpliance with all relevant plicies as described in sectin II abve, as well as ther relevant applicable plicies such as the Indigenus Peples plicy, nce adpted by the Bard. 31. Ownership, legal title and implicatins n NDCs: The ERs paid fr by the GCF under this pilt prgramme will nt be transferred t the GCF. Payments shuld be recgnised n the UNFCCC website and n the apprpriate natinal website(s). Cuntries can cnsider, at their wn discretin, using ERs achieved twards their NDCs. 32. The legal framewrk in many REDD-plus hst cuntries des nt currently prvide fr tradeable carbn units. As a cnsequence, many hst cuntry laws d nt explicitly detail hw rights t carbn are allcated, and the rights and privileges the state has t such carbn. This creates challenges fr rights and bligatins in relatin t retiring results, because there may be ambiguity abut the state's rights t the result vis-à-vis thers and creates risk f duble cunting. 33. Accrdingly, hst cuntries will be expected t cvenant that n ther party has rights t the results ther than the hst cuntry and prvide infrmatin in the funding prpsal abut hw such results will be treated r used. The accredited entities will then be expected t mnitr the use f the results t ensure they are nt used fr purpses which are incnsistent with UNFCCC rules and the infrmatin prvided in the funding prpsal. 34. Scale f implementatin: As set ut in the UNFCCC guidance fr REDD-plus, the prpsals shuld be designed t achieve tnnes f ERs r enhanced remvals at natinal r, in the interim, at subnatinal level Frest reference emissin levels/frest reference levels and results: The GCF will emply a screcard (see annex III) t assess the results submitted t UNFCCC. 36. Operatinalizatin f the Cancun safeguards : There are key differences between the Cancun safeguards and the GCF envirnmental and scial safeguards standards that will need t be cnsidered in the develpment f the prpsals fr RBPs. The differences apply t bth 17 Further details n the definitin f scale can be fund in chapter 3.7 f annex II. 8

11 Page 9 substantive cntents and the envirnmental and scial issues addressed. The cuntries applying fr RBPs will have the primary respnsibility f demnstrating hw the Cancun safeguards have been addressed and respected in the implementatin f the REDD-plus activities, during the relevant year(s) fr which payments are being applied fr, thrugh their Summary f infrmatin. The AEs, wrking with the cuntries, will prepare a dcument describing hw the GCF interim envirnmental and scial safeguards standards have been met and applied fr the REDD-plus activities cnsistent with the Cancun safeguards. IV. Matters fr cnsideratin by the Bard at its eighteenth meeting 37. The Bard may wish t prvide additinal guidance fr the future develpment f the RFP pilt prgramme, particularly n the fllwing issues: (a) (b) (c) (d) The size f the RFP pilt prgramme; The value per tnne t be awarded by the GCF t eligible ERs; The distributin f payments; and The eligibility start and end dates fr results achieved. V. Cnsideratins fr the full peratinalizatin f REDD-plus results-based payments 38. The pilt RBP prgramme will allw fr the peratinalizatin f the UNFCCC decisins fr REDD-plus and the testing f prcedural and technical elements f RBPs in the cntext f the GCF. Thrugh this pilt prgramme, it is expected that useful lessns will be learned that will feed int the develpment f a future REDD-plus RBP framewrk under the GCF. The full peratinalizatin f REDD-plus RBPs by the GCF will necessitate the analysis f ther situatins and actins beynd the lessns learned thrugh the pilt prgramme. Fr this reasn, the current RFP shall nt prejudice future RFPs r the GCF REDD+ RBP mechanism and culd be subject t review when required by the Bard. Sme f pssible future actins may include: (a) (b) (c) (d) (e) Analysis and develpment f technical and prcedural elements fr payments at different starting dates fr past and future results; Explratin f varius ther ptins fr the valuatin f REDD-plus results. Fr example, ptins ther than a single and fixed value may be explred, including variable values, reverse auctin, differentiated pricing t recgnize c-benefits, and linking the value t the assessment results against the screcard criteria by applying discunting factrs; Examinatin f varius ther ptins fr access mdality (e.g. cnsideratin f priritizing the access f REDD-plus RBPs t direct access entities); Develpment f the linkage between REDD-plus RBPs (phase 3) and the early phases f REDD-plus by, fr instance, explring ptins fr using varius financial instruments and innvative financing ptins in phase 1 and phase 2 investments that can lead t phase 3 results-based actins; and Analysis f pssible future scenaris f vlumes f ERs and ptential candidate cuntries cnsidering their prgress in fulfilling all the requirements t access t REDDplus RBPs in relatin t the available funding. 9

12 Page 10 Annex I: Draft decisin f the Bard The Bard, having cnsidered dcument GCF/B.17/06 titled Request fr prpsals fr the pilt prgramme fr REDD-plus results-based payments, (a) (b) (c) (d) (e) Takes nte f the prgress made in finalizing the draft request fr prpsals fr the REDD-plus results-based payments pilt prgramme, as mandated in the decisin B.17/18, in the frm set ut in annex II; Decides t set, fr the REDD-plus results-based payments pilt prgramme nly, the valuatin f results at USD 5 per tnne f verified emissin reductins f carbn dixide equivalent (CO 2 eq); Decides t allcate up t USD 500 millin t the request fr prpsals fr the pilt prgramme fr REDD-plus results-based payments. Decides t adpt the request fr prpsals fr the pilt prgramme fr REDD-plus results-based payments as set ut in annex II and the crrespnding screcard prvided in annex III; Requests the Secretariat t develp all crrespnding templates and guidance fr natinal designated authrities and accredited entities fr applying t the request fr prpsals n later than tw mnths after its adptin by the Bard. 10

13 Page 11 Annex II: Draft terms f reference fr the pilt prgramme fr REDDplus results-based payments I. Intrductin 1. At its furteenth meeting, the Bard requested the Secretariat t develp a request fr prpsals (RFP) fr REDD-plus results-based payments (RBPs), including guidance cnsistent with the Warsaw Framewrk fr REDD-plus and ther REDD-plus decisins under the United Natins Framewrk Cnventin n Climate Change (UNFCCC) The bjective f the RFP pilt prgramme fr REDD-plus RBPs is t peratinalize REDD-plus results-based payments and gather experience t further imprve the prcedural and technical elements f RBPs using the GCF resurces in the learning stage. 3. The pilt prgramme will run frm the launch f the RFP in Octber 2017 until the last meeting f the Bard in A minimum f 3 Cncept Ntes need t be submitted t initiate the RFP evaluatin prcess. The assessment f the cncept ntes will ccur in the rder in which they were received by the Secretariat. 4. The RFP will encmpass tw stages: in the first stage, Cncept Ntes are received by the GCF n a rlling basis after the launch f the RFP, allwing any interested cuntries t apply. In the secnd stage, cuntries that are ntified f their eligibility (accrding t the scring in sectin 1 belw) are invited t submit a Funding Prpsal t the GCF. II. Eligibility criteria 5. Prpsals must meet the fllwing criteria: (a) (b) By the time f submissin f a Cncept Nte, the fllwing infrmatin related t UNFCCC requirements, including the elements reflected in decisin 1/CP.16 paragraph 71, shuld be in place and made publicly available (e.g. n the UNFCCC REDD-plus web platfrm): (i) (ii) (iii) (iv) The Natinal REDD-plus Strategy r Actin Plan; FREL/FRL that is applied t the results perid fr which payments are requested are submitted t the UNFCCC and have undergne the Cnventin s Technical Assessment 19 f FREL/FRL; Natinal Frest Mnitring System (i.e. descriptin prvided in the BUR Annex); A safeguards infrmatin system (SIS) t infrm hw the safeguards are addressed and respected, and a summary f infrmatin n hw all the Cancun REDD-plus safeguards were addressed and respected. 20 The REDD-plus results, fr which payments are requested, are submitted t the UNFCCC in a Technical Annex f the cuntry s BUR by the time f submissin f the RBP Cncept Nte; in additin, the Technical Analysis 21 shuld be cmpleted and the reprt made 18 Decisin B.14/03 19 The FREL/FRL must be technically assess per UNFCCC Decisin 13/CP Decisin 9 CP.19 paragraph 11 and decisin 17/C P The results measured against the reference levels, must pass thrugh a technical analysis prcess per decisin14/cp19. 11

14 Page 12 (c) (d) (e) III. available n the UNFCCC website by the time f submitting the cmplete RBP Funding Prpsal. The scale f the REDD-plus results-based payments prpsal shuld be natinal r subnatinal. 22 Written cnsent fr participatin in the RFP prvided by the REDD-plus natinal entity/fcal pint t the UNFCCC where a natinal entity/fcal pint has been nminated by a cuntry. A n bjectin letter (NOL) prvided by Natinal Designated Authrity (NDA) at the time f submissin f the RBP Funding Prpsal. Mdality and scpe 3.1. Access mdality 6. The submissin f REDD-plus RBP Funding Prpsals shuld be thrugh existing AEs t the GCF, in crdinatin with the REDD-plus natinal entity/fcal pint t the UNFCCC, and fllwing the prcedures defined by their crrespnding Natinal Designated Authrity (NDA). In accrdance with the Bard s initial n-bjectin prcedure, apprved by decisin B.08/10, a n-bjectin letter frm the NDA /fcal pint is required fr all REDD-plus RBP prpsals. In additin, written cnsent frm the REDD-plus natinal fcal pint t the UNFCCC secretariat, where nminated by the cuntry, must be prvided Financial valuatin f results 7. A fixed value f USD 5 per tnne f carbn dixide (CO 2) equivalent f reduced emissins r enhanced remvals, fully measured, reprted and verified, cnsistent with UNFCCC methdlgical guidance and GCF requirements, will apply fr the pilt prgramme. The final amunt t be paid by the GCF per cuntry will be determined based n a cmbinatin f factrs including the screcard results and available finance fr the pilt prgramme and is subject t Bard apprval Eligibility perid fr results 8. Under the pilt prgramme, the GCF will accept fr cnsideratin the results frm a cuntry s BUR REDD-plus annex starting in 31 December 2013 (time f adptin f the Warsaw Framewrk fr REDD+) until 31 December 2018 that have been technically assessed thrugh the UNFCCC prcess Size f funding and distributin f payments 9. The REDD-plus pilt prgramme will be limited t a maximum amunt f USD 500 millin. Cnsidering a valuatin f USD 5/tCO2eq, the GCF wuld be able t pay fr up t 100 millin tco2eq emissin reductins (ERs). The maximum amunt f payments per cuntry wuld be set at 30% f the ttal envelpe (30 MtCO2eq) during the entire length f the pilt. 22 See sectin

15 Page The funds will be prvided n a rlling basis t the apprved prpsals n a first-cme first-serve basis. The payments will be prvided fllwing the steps belw: a) Step 1: AEs prpses a vlume f ERs t be cnsidered fr the pilt prgramme indicating the vlume f achieved results and the indicative vlume t be achieved in the eligible perid f results. b) Step 2: The vlume f ERs ffered is translated int GCF vlume f ERs applying the equatin belw, carbn based n the scres f sectins a) and b) f the Stage II Screcard elements (see Annex III). The resulting GCF vlume f ERs shuld nt exceed 30% f the maximum payable vlume f ERs per cuntry in the entire perid f eligible results 23 : Vlume f ERs ffered (X) Ttal scre achieved = GCF vlume f ERs Maximum scre Ttal scre achieved = scre achieved by the full prpsal in sectin 2 f the screcard in annex III Maximum scre = 27 in accrdance with the sectin 2 f the screcard in annex III c) Step 3: The resulting vlume will be translated int payments by multiplying the GCF vlume f ERs and the fixed rate f USD 5 per tnne f carbn dixide equivalent (CO2) Use f prceeds 11. Cuntries receiving REDD-plus RBP thrugh the AEs must reinvest the prceeds in activities in line with their current r next Natinally Determined Cntributins (NDCs) as established under the UNFCCC Paris Agreement, their REDD-plus strategies, r lw-carbn develpment plans. These activities must als be cnsistent with the bjectives f the GCF. Cuntries must prvide a descriptin f the anticipated use f prceeds, including the main activities t be cnducted, the agencies r relevant stakehlders invlved, the timeframe fr implementatin, and the safeguards assessment prcess, cnsistent with GCF plicies. Cmpliance with GCF plicies will be required as well as reprting n the prpsed activities Ownership and legal title 12. Ownership f the emissins reductins paid fr by the GCF will nt be transferred t the GCF. Payments shuld be recrded in the UNFCCC web prtal and recipient cuntries natinal cunterpart, and crrespnding results will n lnger be eligible fr RBPs under the GCF r in any ther arrangement. Cuntries culd cnsider at their wn discretin t use the emissin reductins twards achievement f their NDCs. The prpsals shuld indicate the measures t be taken t ensure that such emissins reductins will nt be transferred and/r used fr any ther purpses (e.g. ffsetting) Scale f the prpsal 23 A cuntry culd submit thrugh an AE mre than ne prpsal prvided that the ttal amunt f GCF payable vlume f ERs will nt exceed mre than 30% f the verall payable vlume f ERs. 13

16 Page Per UNFCCC guidance fr REDD-plus, the prpsals must accunt fr tnnes f emissins reductins r enhanced remvals at a natinal r, n an interim basis subnatinal level. Any subnatinal prgram prpsal shuld be f significant scale, ne plitical r ecsystem level dwn frm natinal scale and defined by each cuntry, demnstrating that an aggregatin f such subnatinal scales can cnstitute the natinal level (e.g. states, prvinces, bimes, etc.). Subnatinal level prpsal shuld als demnstrate ambitin t scale up t natinal level, and shuld demnstrate a cntributin t natinal ambitin fr emissins reductins, fr example, the NDC and/r the implementatin f the natinal REDD-plus strategy Frest reference emissin levels / frest reference levels (FREL/FRL) and results 14. The FREL/FRL and REDD-plus results reprted n the UNFCCC REDD-plus web platfrm will be cnsidered using the relevant criteria defined in the screcard (see Annex III), building n the UNFCCC Technical Assessment f the FREL/FRL and Technical Analysis f the BUR Technical Annex Safeguards infrmatin and assessment 15. The infrmatin prvided in the summary f infrmatin n hw safeguards were addressed and respected during the full results perid will be evaluated accrding t the criteria defined in the screcard (Annex III). In this regard, the fllwing aspects will need t be cnsidered: (i) (ii) (iii) Due diligence respnsibilities: the AEs, wrking with cuntries, will prepare an assessment describing the extent t which the measures undertaken t identify, assess, and manage envirnmental and scial risks and impacts, in the cntext f the relevant REDD+ prject r prgramme, were cnsistent with the applicable GCF s ESS standards, and the Secretariat shuld take such assessment int accunt as part f its verall cnsideratin f the funding prpsal against the screcard, and cmplementing the cuntry s wn assessment as t hw the Cancun safeguards were addressed and respected in the REDD+ activities, t recmmend the prpsal t the Bard fr apprval. The GCF will undertake its wn due diligence n the assessment; Risk categry: all GCF-financed activities, bth frm past results and future activities financed thrugh GCF, are categrized based n the levels f envirnmental and scial risks and ptential impacts. RBP prpsals will be categrized t determine the type f assessment reprt t be prepared and submitted; and Stakehlder engagement: within the parameters f GCF-financed activities fr the use f prceeds, the stakehlder engagement relates t tw types f requirements: (1) cnsultatins with affected and ptentially affected cmmunities cnducted during prgramme design, due diligence, and implementatin f the REDD-plus strategy r actin plans; and (2) the stakehlder engagement prcess that describes the actins t ensure effective cnsultatin and participatin fr perid f implementatin f the use f prceeds. Fr RBP prpsals, stakehlder engagement will frm part f the infrmatin prvided by the cuntries thrugh the UNFCCC summary f infrmatin as well as the envirnmental and scial assessment (ESA) prepared by the AEs. Infrmatin related t the stakehlder engagement prcess will 14

17 Page 15 (iv) include the identified stakehlders and hw they have participated, hw stakehlders were cnsulted, and hw infrmatin n the activities was cmmunicated. Grievance redress: Included in the stakehlder engagement prcess shuld be an peratinal mechanism t receive cmplaints and address these cmplaints effectively. The ESA will include a descriptin f the grievance redress mechanisms, r analgus system whether established as part f the REDD-plus activities r as integral t the system f the cuntry. The ESA will als specify hw the mechanisms were accessed, the cmplaints that were received, and hw these were reslved. These can all be reflected as representatins in the funded activity agreement (FAA). IV. Prpsal apprval prcess fr the REDD-plus results-based payment pilt prgramme 16. The RFP will encmpass tw stages: in the first stage, cncept ntes may be submitted t the GCF up t n a rlling basis thrugh all the perid f the RFP and befre the last disbursement at the last Bard meeting in 2022, allwing all interested cuntries that fulfilled the UNFCCC requirements 24 t request REDD-plus results-based payments. In a secnd stage, eligible cuntries (per scring f the Cncept Nte) are invited t submit a results-based payment (RBP) Funding Prpsal t the GCF. The Bard will cnsider RBP Funding Prpsals based n the Secretariats assessment and the recmmendatins frm the Independent Technical Advisry Panel (ITAP). 17. The prpsal apprval prcess will fllw the sequence prvided in figure 2 belw: Figure 2: REDD-plus RBP prpsal apprval prcess 24 Cuntries shuld have all f the elements referred t in decisin 1/CP.16, paragraph 71, in place, in accrdance with decisin 9/CP.19, paragraph 3. 15

18 Page Stage 1: Submissin f results-based payment Cncept Ntes: 18. The Cncept Nte shuld be submitted by the AE. It will be subject t the eligibility criteria as defined in chapter II abve, and shuld fllw the template develped by the GCF Secretariat fr RBP Cncept Ntes. It shuld include: - References t relevant infrmatin in the UNFCCC REDD-plus web platfrm and ther public dcumentatin as required in the UNFCCC decisins, including: The FREL/FRL that is applied t the eligible results perid fr which payments are being requested, submitted t the UNFCCC, and cnfirmatin that the Technical Assessment f a FREL/FRL has been finalized and the reprt is available n the UNFCCC REDD+ web platfrm; Evidence that the BUR Technical Annex cntaining the REDD+ results fr which payments are being requested, has been submitted t the UNFCCC and either evidence f the cmpleted Technical Analysis r an indicatin f when the Technical Analysis will be cmpleted; Evidence that the System f Infrmatin n Safeguards (SIS) is in place; Reference t the mst recent summary f hw safeguards cvering the time perid within which the results fr which payment is being requested were achieved, were addressed and respected (referred t in Appendix I f 1/CP.16) during the results perid n the UNFCCC REDD+ web platfrm; Reference t the Natinal REDD+ Strategy r Actin Plan; Evidence that the Natinal Frest Mnitring System (NFMS) is in place, with, if apprpriate, a subnatinal mnitring and reprting system (as an interim measure, in accrdance with natinal circumstances), and link t where it is described (i.e. REDD+ BUR annex); - An explanatin f the scale f the REDD+ results-based payments prpsal, which must be natinal r, as interim, subnatinal.25 - Disclsure f infrmatin n any payments received fr REDD+ results during the perid fr which payments are being requested (r payment requests pending in ther institutins/bilateral arrangements); - Written cnsent fr participatin in the RFP prvided by the REDD+ natinal entity/fcal pint t the UNFCCC where a natinal entity/fcal pint has been nminated by a cuntry. - A n bjectin letter (NOL) prvided by Natinal Designated Authrity (NDA) at the time f submissin f the RBP Funding Prpsal. 19. The Cncept Nte may include additinal infrmatin that supprts the abve required dcumentatin r n ther criteria mentined in the screcard. Fr example, evidence f nncarbn benefits accrued frm implementatin f the REDD-plus activities assciated with the reprted results may be prvided n a vluntary basis. 20. The Cncept Ntes will be assessed by the Secretariat against the eligibility criteria presented in sectin II and set ut in sectin 1 f the screcard cntained in Annex III. 25 See sectin

19 Page Cncept Ntes fulfilling the criteria will be invited t submit a cmplete RBP Funding Prpsal. A Cncept Nte may be resubmitted cnsidering the results f the screcard allwing imprvements after the first submissin Stage 2: Develping a GCF REDD-plus results-based payment funding prpsal: 22. A cmplete RBP Funding Prpsal shuld be submitted by the selected AE r the NDA. The cmplete Funding Prpsal shuld be submitted cnsistent with the template develped specifically fr REDD-plus RBP Funding Prpsals. In additin t the references t the dcuments requested in the Cncept Nte, the prpsal will require the fllwing additinal infrmatin: If nt already submitted in the Cncept Nte, reference t the BUR Technical Annex cntaining the REDD+ results fr which payments are being requested, and the reprt f the cmpleted Technical Analysis 26 as made available n the UNFCCC website; An indicatin f achieved results ffered t the pilt prgramme as well as indicatin f expected results t be achieved in the fllwing years f the eligibility perid. A descriptin f the alignment f the prpsals with the GCF Investment Framewrk during the full perid ver which results were generated; A demnstratin f the "prgramme utcmes (natinal r subnatinal)" and "Fund level impacts" against the initial REDD-plus Lgic Framewrk and Perfrmance Measurement Framewrk fr REDD-plus results-based payments; The ESA describing hw the activities leading t the relevant results align with the applicable and relevant requirements f the GCF interim envirnmental and scial standards (the Internatinal Finance Crpratin s Perfrmance Standards). The ESA shuld indicate hw envirnmental and scial risks have been managed, and hw the activities cmplied with the natinal requirements during the full perid f reprted results; Any additinal infrmatin n safeguards cnsidered by the cuntry t prvide sufficient infrmatin t demnstrate that each Cancun safeguards have been addressed and respected in the full perid during which results were generated; Evidence that demnstrates that the infrmatin n safeguards has been made transparently available t dmestic and ther stakehlders; A descriptin f the measures t be undertaken fr assurance that such emissin reductins, fr which payments are being requested, will nt be transferred, ffered fr payments, and/r used fr ther purpses (e.g. ffsetting); A disclsure f hw different financing (dmestic and internatinal) cntributed t the achievement f the reprted results; If applicable, a descriptin f ratinale fr use f different FREL/FRL fr ther funding institutins; 26 The results measured against the reference levels, must pass thrugh a technical analysis prcess per decisin14/cp19. 17

20 Page 18 A descriptin with any available evidence f nn-carbn benefits accrued frm implementatin f the REDD-plus activities assciated with the reprted results (ptinal); A descriptin f hw the prceeds will be used cnsistent with the cuntry s NDC and natinal REDD+ strategy, and/r lw-ghg develpment strategy including a timeline f implementatin f public and private institutins invlved as well as relevant stakehlders, it may als include a benefit sharing plan, cnsistent with the bjectives f the GCF and crrespnding ESS requirements; and If the scale f the FREL/FRL and results are subnatinal, a descriptin f hw the subnatinal scale is defined, hw it cntributes t natinal ambitin fr emissins reductins (e.g. tward the achievement f the NDC r the implementatin f the REDD-plus strategy), a demnstratin that an aggregatin f such subnatinal units can cnstitute the natinal level, and infrmatin n and hw the cuntry intends t scale its effrts up t the natinal level; 23. Supprt frm the prject preparatin facility (PPF) can be requested fr the preparatin f the RBP Funding Prpsal 4.3. Assessment f the results-based payments Funding Prpsals and distributin f payments 24. The results already achieved in the prpsals submitted will be cnsidered by the Secretariat based n the screcard included in Annex III. The indicative results t be achieved in the fllwing years f the eligibility perid will be cnsidered fr estimating ptential payments and availability f funding fr receiving prpsals. The review f the indicative results will be cnducted in a new funding prpsal with the achieved results. 25. Depending n the number f funding prpsals received, the Secretariat may take tw t fur weeks t respnd and prvide feedback t the AEs. The Secretariat may request additinal infrmatin, clarificatin, and revisin f the submissin, based n its secnd-level due diligence. 26. After the secnd-level due diligence and cmpletin f the review against the relevant sectins f screcard included in Annex III related t GCF plicies and prcedures dne by the Secretariat, the Independent Technical Advisry Panel (ITAP) will assess the funding prpsal using the screcard prvided in Annex III, sectins 2 and 3. ITAP may request additinal infrmatin and clarificatin frm the AE. The cmpsitin f the ITAP members shuld assure the relevant expertise and qualificatins with recgnized LULUCF experts t assess the prpsals against the screcard. 27. The Secretariat will prvide t the Bard f a prpsed results-based payments based n the results f the applicatin f the screcard by the Secretariat and ITAP and the apprach set ut in sectin 3.4 abve Bard cnsideratin 28. The Secretariat will submit a recmmendatin based n its review and the assessment reprt by ITAP t the Bard fr cnsideratin and ptential apprval f qualified Funding Prpsals. The Secretariat will als submit a prpsed distributin f payments. amng qualified Funding Prpsals based n the results f the applicatin f the screcard, the criteria set ut in sectin 3.4 abve. The Bard will cnsider these prpsals at every bard meeting. 18