Forest Carbon Partnership Facility

Update on Carbon Fund Progress since CF18

Nineteenth Meeting of the Carbon Fund (CF19)

Washington DC

February 5-7, 2019

Carbon Fund Pipeline and Portfolio

DRC

Guatemala

Chile

Mexico

Ghana

RoC

Nepal

Vietnam

Peru

Costa Rica

Indonesia

Cote d’Ivoire

Dominican Rep.

Nicaragua

Lao PDR

Mozambique

MadagascarFiji

ER-PINs selected into the FCPF CF pipeline (19)

ERPD provisionally selected into the FCPF CF portfolio (1)

ERPDs selected into the FCPF CF portfolio (10)

Cameroon

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Progress since CF18

Pipeline and PortfolioCountries selected into the portfolio in CF18:

• Lao PDR was accepted into the Carbon Fund Portfolio (Resolution CFM/18/2018/1).

• Madagascar was accepted into the Carbon Fund Portfolio (Resolution CFM/18/2018/2).

• Nepal was accepted into the Carbon Fund Portfolio (Resolution CFM/18/2018/3).

Countries provisionally selected into the portfolio:

• Republic of Congo’s revised Resolution CFM/Electronic/2018/1 was adopted on November 23, 2018. The fulfilment of conditions is under review.

WBG Decision Meetings:

• Decision meetings for the FCPF program in Ghana was held in September.

• The decision meetings for Madagascar and Vietnam will be held in the coming months.

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Progress since CF18

ERPAs

ERPA signings

• DRC ERPA signed on Sept 21, 2018.

• Mozambique ERPA signed on February 1, 2019

ERPA negotiations

• Chile is currently negotiating their ERPA.

ERPA preparation workshops: • ERPA preparation workshops were held in Madagascar and Vietnam in October and

Nepal in December, bringing the total to nine.

• An ERPA preparation workshop will be held in Lao PDR in the coming months.

ERPA pre-negotiations • Ghana’s initial expectations on the ERPA term sheet have been shared with CFPs.

• Mexico has shared their Initial expectations on the draft ERPA term sheet with the Trustee.

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Progress since CF18 ERPD Technical Assessments

Technical Assessments completed for 6th batch of ERPDs:

• Assessments of Côte d’Ivoire and Indonesia’s ERPDs by the TAP and CFPs completed for presentation and potential selection at CF19.

Technical Assessments completed or underway for 7th

batch of ERPDs:

• Nicaragua’s revised ERPD will be assessed by the TAP and submitted for CFP review.

• Cameroon, Dominican Republic, Fiji, Guatemala, and Peru have submitted initial draft ERPDs to the FMT for potential selection into the Portfolio at CF20.

• CF20 is the final opportunity to submit an ERPD for potential selection into the Portfolio of the Carbon Fund.

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For Planning PurposesERPD Review Periods in 2019

ERPD review periods:

CFPs requested advanced notice on periods with intensive work loads in terms of document review.

• ERPD review periods May 2019: Review of final ERPDs from Cameroon, Dominican Republic, Fiji, Guatemala, Nicaragua and Peru for potential selection at CF20 (June 2019).

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Progress since CF18 Private Sector Engagement

Exploring collaborative opportunities with relevant networks • Workshop with IETA on designing results-based payment systems to encourage private

sector investment (March).

• Planned agroforestry workshop with the World Cocoa Foundation (May).

• Determining synergies with the (i) World Business Council For Sustainable Developmentin overlapping jurisdictions via their Soft Commodities forum, Climate-Smart Agriculture program, and Tire Industry Project/Global Platform for Sustainable natural rubber, and (ii) the Livelihoods Fund’s Fund for Family Farming and Carbon funds.

Topical deep dives and Knowledge Products to inform Private Sector strategies• Creating ERPD snapshots for all ERPDs in the Portfolio focused on most important

information for Private Sector investors and actors.

• Developing an MRV system for Carbon and commodities; these are being tested in Côte d’Ivoire and Ghana for cocoa.

• Creating a Private Sector Investment Strategy for ER Programs using analytic work done in Madagascar as a model.

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Progress since CF18 Private Sector Engagement

Program-Specific Private Sector Engagement Support• Providing support to FCPF countries on

deforestation-free value chains, targeting sectors with actual or potential drivers of deforestation.

• Initiating detailed assessments on indirect support to the Private Sector in select countries: overcoming barriers to private sector engagement; supporting companies’ commitments to implement zero deforestation pledges; supporting MRV; analyzing and testing tools; determining financial gaps; and promoting climate smart models for the selected value chains.

Private Sector Observer• Terms of Reference for Observer role and

re-election process created.

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Progress since CF18 Measurement, Reporting, and Verification

Methodological framework• Guidance on technical corrections of GHG emissions and removals for the reference

period approved in December: this enables REDD+ Countries to improve reference levels through technical corrections on methodologies.

• Guidance on reporting periods approved in December: this set rules for defining reporting periods in ERPDs and ERPAs, ensuring alignment across ER programs.

• The FMT is planning to organize a number of webinars to explain the implications.

Verifications• Climate Focus is

supporting definition of the verification standard.

• This sets the modalities and procedures for verification under the Carbon Fund.

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Progress since CF18 Benefit-Sharing

Benefit-Sharing Note

• Guidance Note on the Preparation of Benefit Sharing Plans for REDD+ and Landscape ER Programs has been published.

• It provides Program Entities with recommendations and additional information to consider when developing Benefit Sharing Arrangements and Benefit Sharing Plans. It specifically does the following:

– Clarifies terminology related to Benefit Sharing;

– Specifies required Benefit Sharing documentation and timing;

– Provides Program Entities with recommendations and information to consider when developing their Benefit Sharing Plans, including examples of approaches that ER Programs are pursuing to date.

• The note will be updated periodically with examples and information on approaches as additional Benefit Sharing Plans are reviewed and finalized to capture any lessons learned.

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The FCPF continues collaborating with REDD+ countries to provide technical support and to help formulate policy and sector-strategies concerning land and policy-relevant analysis of women's natural and productive resources.

• Gender Mainstreaming in the National REDD+ Strategy in Costa Rica.

• Strengthening Indigenous Women’s Roles in Community Resilience and Ensuring Related Benefits in Vietnam.

• Empowering Ethnic Minorities Youths in Indigenous Products’ Value Chains in Lao PDR.

• Developing a Gender Analysis and Gender Action Plan for the REDD+ Strategy in Madagascar.

Progress since CF18 Mainstreaming Gender in REDD+

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• Continued to celebrate FCPF’s 10 year anniversary via products, stories, and events, including videos launched at PC26 featuring FCPF stakeholders and a publication marking achievements over the decade.

• Supported South-South Knowledge Exchanges focused on REDD+ Readiness and Emission Reductions Program Design hosted in Costa Rica and Burkina Faso,

• Held joint FCPF-GFOI Country Needs Assessment workshops on NFM in Ethiopia, Mexico and Cambodia.

• Held BBLs and knowledge sessions on topics such as MRV, Benefit-Sharing, and Gender, including a Knowledge Day at the last PC/PA.

• A continuous stream of strategic features and blogs to keep forests and REDD+ highly visible online.

Progress since CF18 Communications and Knowledge-Sharing

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Topics and Decisions for CF19Resolutions

Two Resolutions to be considered at this meeting:

• Decisions on whether to proceed to negotiating an ERPA for proposed ER Programs from Côte d’Ivoire and Indonesia(i.e. potential selection of ERPDs from pipeline into portfolio of the Carbon Fund)

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Topics and Discussion for CF19

• Strategic portfolio management, including estimates of delivery under both the Monte Carlo method and the new ER delivery risk assessment model.

• Updated Carbon Fund Processing Guidelines and ER Monitoring Report Template.

• Options and considerations on retroactive Emission Reductions

• Verification standards, which sets the modalities and procedures for verifications under the Carbon Fund

• Registries, including the architecture, an analysis of associated risks and legal issues, a budget, and a proposed road map of next steps.

• Analysis of ER program financing with a focus on sources and uses of funds.

Discussions at this meeting (outcomes to be captured in the Chair’s Summary where relevant):

• Sign more ERPAs -> Main Priority

• Complete due diligence and appraisal for countries selected into the portfolio.

• Continue to build country capacity for ERPA negotiations (commercial terms, contract ERs vs option ERs, etc.).

• Continue support countries in ER Program development and implementation.

• Support countries in meeting remaining indicators of the Methodological Framework (e.g., Benefit-Sharing-arrangements, ER title transfer ability, etc.), including through South-South Knowledge Exchanges.

• Leverage additional investment to finance/strengthen financial viability of ER Programs.

• Continue support to countries in development of benefit-sharing plans and safeguards plans.

• Support PC-funded gender activities focused on Carbon Fund countries and ensure continuity of IP-CSO capacity from readiness to program implementation. 15

Focus Areas of FMT for FY19

Thank

YOU

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