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Financing bfcp 14 july 2010 gt
 

Financing bfcp 14 july 2010 gt

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    Financing bfcp 14 july 2010 gt Financing bfcp 14 july 2010 gt Presentation Transcript

    • Financing BFCP REDDeX Discussion
      14 July 2010
      All numbers are draft and US$
    • 2
      Recap
      One of four officially recognized REDD demonstration programs in Indonesia
      BFCP is an innovative forest carbon demonstration program located in the District of Berau, East Kalimantan, Indonesia;
      Multi-sectoral approach to addressing land use and deforestation
      Spans a political jurisdiction –Berau, East Kalimantan, Indonesia
      Berau is 2.2m ha – the size of Belize
      Objectives
      Develop the capacity of the Berau district government to manage a REDD program.
      Achieve emissions reductions of 10-12.5 million tons of CO2e by 2015
      Improve natural resource governance and biodiversity conservation while creating economic opportunities for forest communities and the private sector.
      Key model for:
      REDD & low-carbon development at provincial level
      Pathway to a national program - Working with GOI/GON LOI Implementation
    • 3
      Where Are We?
      Development II
      [Jan 2010 – Dec 2010]
      Development I
      [Jan 2009 – Dec 2009]
      Demonstration
      [Jan 2011 – Dec 2015]
      Scoping
      [Apr-Dec 08]
      Pilot-based strategies
      Improved forest management
      Protection forests
      Oil palm
      Land-use planning, policies & enforcement
      Monitoring & verification
      Adaptive management
      Business Plan
      Master Budget ($50m)
      Initial budget
      ($12m)
      Funding Plan – Public/Other
      Senior TNC buy-in
      GOI Engagement (Draft MOU)
      Donor Dialogue & Negotiation
      Legal Structure
      Comprehensive Agreements
      Baseline scenario and modeling approach
      Refined strategies for reducing deforestation and degradation
      Stakeholder support
      Political Support
      Situation analysis/drivers
      Rough program design
      hypothesis
      Identification of partners/
      contractors
    • 4
      Core Funding Requirement
      Our original thinking on funding needs…
      Total Core Funding Requirement (Jan 2011 - Dec 2015)*
      i.e. funding required upfront (committed to by y/e 2010) to support results and outcomes as articulated within business plan
      BFCP $50m (this number originally closer to $65m)
      TNC Global $10m
      TOTAL $60m
      Total Additional Funding Requirement (Jan 2010 - Dec 2015)
      i.e. committed to over time (2011-2015) to support additional outcomes, and further support TNC programs
      $ tbd
      Let’s focus on the core
      * All numbers draft and US$
    • 5
      Proposed BFCP Governance and Mgnt. Structure
    • 6
      $50m Budget
    • 7
      Core – Suggested Financing Sources
      Funding committed to by y/e 2010 to support core outcomes as articulated in the business plan
      It’s largely about public funding
    • 8
      Fundraising Plan – Approach
      TNC and GOI will work together to launch a joint fundraising campaign for BFCP with the goal of $2m in private funds through TNC (TNC’s capital contribution or ‘skin in the game’) and $48m in public funding.
      Initially, unlikely to be appetite for corporate financing (via emission reduction purchase agreement) – risks are many and several
      TNC makes GOI aware that it will be soliciting $5m in public funding sources for its own direct costs to support BFCP
      [TNC makes GOI aware that it will be soliciting additional private funding to support additional TNC program costs]
    • 9
      Fundraising Plan – Key Objectives
      Fully fund all program costs
      Tap into the strong interest among range of funders to support a majority of the overall costs.
      Include a TNC contribution to the BFCP trust to demonstrate our commitment to the program, but limit the TNC commitment to what is needed to accomplish this goal so our philanthropic fundraising can also support TNC operational costs
      Coordinate closely and ensure complete transparency with GOI partners regarding the overall funding plan and TNC’s commitments and approach.
    • 10
      Public Funding for REDD
      Surely this is easy…
      In Copenhagen, December 2009, six nations committed $3.5 billion for REDD implementation from 2010-2013
      • Australia, France, Norway, Japan, U.K., U.S.
      Norway has made a $1bn commitment to GOI
      Additional global REDD funding sources include:
      • German Govt.
      • Australian Govt.
      • Japan Govt.
      • Forest Carbon Partnership Facility (World Bank)
      • Forest Investment Program (World Bank)
      • UN REDD
      • Additional funding commitments may stem from COP 16
    • 11
      Public Funding - Initial Progress
      .
    • Commitments for Indonesia
      Global Commitments
      Indonesia Commitments
      Australia
      Automatic bullets
      $120 million from 2010-2013
      France
      $350 million from 2010-2013
      Automatic bullets
      Norway
      $1 billion from 2010-2013 (total of $2.7 bn over five years)
      Automatic bullets
      Japan
      $550 million from 2010-2013
      Automatic bullets
      UK
      $480 million from 2010-2013
      Automatic bullets
      US
      $1 billion from 2010-2013
      $35 million USAID program
      12
    • Commitments for Indonesia
      Global Commitments
      Indonesia Commitments
      Germany
      TBD
      $30 million
      FCPF
      Readiness Fund $180 million
      Carbon Fund
      $55 million
      $3.5 million Readiness
      FIP
      $558 million
      Indonesia selected as one of five recipient countries
      UNREDD
      $74 million
      Automatic bullets
      REDD funding for Indonesia has not yet begun to flow at the level of its potential.
      13
    • Donor Issues in Indonesia
      Lack of central leadership and coordination within GOI
      • Different approaches taken by DNPI, Bappenas, MOF, MOE
      • Competing Funds: ICCTF, MOF
      • Getting GOI to provide fundraising support (road-show, roundtable)
      Lack of a cohesive plan for scaling up REDD at the National, Province and District levels
      Donors with different interests (programs and geographies)
      Donor mentality to spend the money ‘thinly’ across a number of different initiatives.
      14
    • 15
      Additional Issues
      Transparency, accountability, safeguards, and pay-for-performance mechanisms
      Internal organizational management
      Donor relationship managers
      Forest carbon staff within HQ
      Field staff
      Fundraisers
      Single-point accountability