The new Norwegian government has proposed a 400 million kroner (US$65 million) cut to the 2014 budget of its Forests and Climate Initiative under which Guyana and several other tropical rainforest countries receive money to protect their forests.
The cuts were proposed by Minister of Finance Siv Jensen and laid in the Storting (Norway’s Parliament) on Friday. Under Norway’s Climate and Forest Initiative, it was proposed that up to three billion kroner would be made available annually to prevent deforestation in developing countries. The government of former Prime Minister Jens Stoltenberg had proposed a budget of 2.9 billion kroner for 2014. However, the new Conservative government led by Prime Minister Erna Solberg, has moved to reduce this sum citing the sloth in developing concrete projects by recipient countries.
“Recipient countries have shown that they need time to develop concrete assistance projects. This indicates that the grant proposal can be reduced without incurring reduced activity. Government reduces the proposed appropriation for 2014 by 400 million to 2 512.5 million (kroner) respectively. If the need for funding for performance-based payments in 2014 will be higher, the government will propose to allocate funds in line with climate agreement,” says the budget amendment document laid by Jensen.
It has been indicated that the forests initiative will be continued until 2020. The changes will almost certainly be made because of the government’s majority. Some organisations have reportedly complained about the cuts while others have said that there is really no big difference.
Under the forest partnership with Norway, Guyana can be paid up to US$250 million for results achieved in keeping its deforestation and forest degradation below an agreed level and progress on REDD+ enabling activities. However, up to August, Norway had not deposited the US$45 million that Guyana qualified for in Year 2 of the partnership. A top official had told Stabroek News that a consensual decision was made to delay the pay-out while working on improving the financial mechanisms for funding projects.
Norway late last year had announced that it would contribute US$45 million to the Guyana REDD+ Investment Fund (GRIF) bringing the total contribution from Oslo under the Norway-Guyana climate and forest partnership to US$115 million since 2009. The GRIF is a fund for the financing of activities identified under the Government of Guyana’s Low Carbon Development Strategy (LCDS). The fund will receive up to US$250 million from Norway in performance-based payments for the period up until 2017, based on an independent verification of Guyana’s deforestation and forest degradation rates and progress on REDD+ enabling activities.
The World Bank is the trustee and is responsible for providing financial intermediary services to the GRIF.
Projects to be funded via the GRIF have been slow to get off the ground, a fact often complained about by officials in Georgetown.
More recently, an increase in deforestation has been recorded and Guyana will lose out on around US$20 million of the payment it would have received under its forest protection agreement with Norway for last year, once increased deforestation is confirmed by independent verification exercises to be completed by month end, according to Natural Resources Minister Robert Persaud.
