Project

REDD+ Financial Mechanism Colombia

At a Glance

Start Date Q4 2015
Funding Source Core
Approved Budget 0
Status Active
Thematic Area
  • Sustainable Landscapes

Project Rationale

Colombia is a lower middle-income country rich in natural resources, particularly those in the forest sector. Forests cover half of Colombia and are critical to the livelihoods of many Colombians and the sustainability of the country in general. However, deforestation rates in Colombia’s Amazon Basin alone reached approximately 76,721 hectares/year between 2000 and 2012, which corresponds to close to 40 million tons of CO2 emissions a year.
GGGI’s engagement with the Colombian government started in early 2013 as part of an Amazon Basin effort to promote large-scale climate change financing and to adopt green growth planning.
During COP 21 in December 2015, the Colombian government signed a Joint Declaration (i.e., a Memorandum of Understanding (MoU)) with several donor countries for cooperation on reducing GHG emissions from deforestation and forest degradation (REDD+). In addition, the agreement also encouraged sustainable development in Colombia, to be financed under a payment for performance scheme.
The MoU payment scheme is financed under two Modalities:
o Modality 1: Policy Design and Implementation
o Modality 2: Verified Emission Reductions
As part of this agreement, the Colombian government will receive USD 186 million in financing from the Norwegian government through an interim financial mechanism: the FCS. The funding will be split, with Modality 1 receiving up to USD 40 million and Modality 2 receiving up to USD 146 million for the period up to and including 2020.
Managed by the Inter-American Development Bank (IADB), the FCS will finance projects and technical assistance while following international standards on environmental and social safeguards, as well as reporting and auditing.

Building on 2015-2016 Work

GGGI’s Country Planning Framework for Colombia identifies mainstreaming of green growth into national development policies, mobilizing sectoral green growth investments, and sustainable forestry as the key areas of focus for GGGI in the medium term. In line with this, over the WPB 2015-16 period, GGGI supported the establishment of a payment-for performance scheme to reduce deforestation in the Amazon.
In 2016, GGGI provided assistance to Colombia on delivering on the Joint Declaration of Intent (DoI) with Norway to reduce GHG emissions through REDD+ by conducting design work to structure a Financial Mechanism and strengthening Colombian institutions to receive funding as part of the Financial Mechanism under the DoI. In 2017-18, GGGI continued to support the achievement of DoI milestones through policy and implementation support and the development of investment proposals submitted to the financing mechanism.

Planned Results

• Reduction in greenhouse gas (GHG) emissions
• Adaption to climate change impacts
• Improved quality of life for Colombia’s citizens
• Increased efficiency in transferring international climate financing to Colombia and improved capacity to manage funds.

Related

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