FIJI EMISSION REDUCTION PROGRAM WB SUPPORT AS DELIVERY PARTNER World Bank Task Team – Anis Wan, Rama Chandra Reddy, Haddy Sey Carbon Fund 20 th Meeting, Washington DC, Forest Carbon Partnership Facility July 8-11, 2019
Table of Contents I. Country Context and Drivers of Deforestation and Forest Degradation II. Summary of ERP Preparation Support III. How the ERP Fits into the Bank’s Portfolio and Strategies IV. Status of Due Diligence V. Next steps and Timeline
I. Country Context and Drivers of Deforestation and Forest Degradation Fiji has 330 islands, 55% of which is • forest coverage. Over 13,000 communities depend directly on forest resources. Forest conversion • It has a population of 905,502 (WB, to 2017). Ethnic composition - 57% ITaukei, 37% agriculture Indian-Fijians, and 6 % other ethnic groups Unplanned Fiji faces challenges posed by frequent • infrastructu natural disasters and climate change, With Natural re disasters climate change, losses of 2.5 percent of GDP developme nt are expected every year and losses of 20 percent every 50 years. six direct drivers Convention Mining al logging Invasive species logging at Sawani Average annual losses due to cyclones and earthquakes (in 2010 US$) (Source: WB SCD)
II. Summary of ERP preparation support REDD+ Readiness and ERP ER-PA Negotiation and Signing; first multi- Development ER Program of ER- stakeholder Idea Note ER Program national REDD+ Program Final R-PP Ready (ER-PIN) Implementation consultations Document 2009 2012 2014 2015 2016 2017 2018 2019 2020 2024 Development of ER submission R-PP Assessment LoI signing; ER Program R-PP started Note. to Carbon Fund MTR and AF Completion The original FCPF Readiness Fund grant approved.
II. Summary of ERP preparation support World Bank support • Readiness grant of USD 3.8 million approved by FCPF and WB • Additional financing of USD 2 million approved by FCPF and WB • ER-PIN approved by FCPF and Letter of Intent signed between WB and Fiji • Readiness package endorsed at PC25 • Project Concept Review and approval by WB • The Bank team worked closely with the GoF and consultants on the overall design of the ERP , identification of the drivers and interventions, improvement of FRL, financing, and safeguards documents. • It supported Fiji in preparation of several versions of ERPD, fielded several missions, accompanied the TAP to carry out country visit and coordinate with their review, and provided day-to-day support. • The Bank provided budget support to hire technical expertise to help prepare ERP . • Accompany TAP country visit and coordinate TAP review
II. Summary of ERP preparation support Support Overall Design of the ER-Program for Fiji (~USD 1.64 million) (~ USD 36.68 million) Project Financing: USD 43.18 million for five years. (USD 4.86 million)
II. Summary of ERP preparation support ER-Program area covers the islands of Veti Levu, Vanua Levu, and Taveuni, covering 90 % of the total land mass and 94 % of the forest cover in Fiji. Veti Levu Forest Cover Vanua levu forest cover Multiple use forest Plantation forests Mangroves protection forest
III. How the ERP Fits into the Bank’s Portfolio and Strategies • Fully consistent with the Systematic Country Diagnostic (SCD, FY 2017), the Country Engagement Note for FY 2015-2017, as it aims to enhance forest productivity, and improve contribution to livelihoods and economic development. The ERP aligns with one of the three pathways/focal areas under the SCD and the CPF under preparation (FY 2019 – 2023): ER-PD supports (i) Stronger growth; sustainable natural resource (ii) Better access to services by all management and capacity building ( iii) Building resilience (climate resilience) Aligned with the Bank’s corporate commitments on Forests and Climate • Change by supporting several interventions under the WBG Forest Action Plan (FAP) Focus Areas (Sustainable Forestry and Forest Smart Interventions) and Cross-Cutting Themes (Climate Change and Resilience, Rights and Participation, Institutions and Governance).
III. How the ERP Fits into the Bank’s Portfolio and Strategies: Fiji’s Portfolio and New Development WB and IFC have significantly expanded their support for Fiji and the Pacific, with World Bank funding to the region tripling since 2016. WB opened a new office in Suva, Fiji as a regional hub delivering more than one billion Fiji dollars’ worth of projects across six countries in sectors including transport, aviation, information and communications technology, education, disaster resilience, fisheries, health and education, among others. Attorney General and Minister for Economy, Aiyaz Sayed-Khaiyum said: Revolutionary Green Bond, hospital PPP , and newly-announced affordable housing partnership are examples of recent innovations that have come about after the WB strengthened its engagement with Fiji. Since July 1, 2019, Fiji is IDA eligible through the Small Island Economies Exception, with a national IDA allocation of US$ 27 million per year. Fiji can also access other IDA windows, including the Crisis Response Window (excluding the Private Sector Window), while retaining access to IBRD (headroom depends on the loan).
III. How the ERP Fits into the Bank’s Portfolio and Strategies: Fiji’s Portfolio and New Development Active: WB & IFC WB Pipeline
III. How does ERP fit into the Bank’s portfolio and strategies Leveraging of Other Investments: REDD+ Readiness Financing Funding Agency Grant amount Disbursement % Committed # (Mil. USD) (USD) disbursement (USD) FCPF 5.8 2.35 41 0.68 GIZ 0.58 0.33 56.90 0 GoF 0.68 0.50 73.5 0
III. How does ERP fit into the Bank’s portfolio and strategies Leveraging of Other Investments: Programmatic Approach The draft financing plan estimates a total ERP budget of US$ 43.2 million for the implementation time period 2020-2024 . Carbon Fund finance USD 12.6 million. 43.2 million Private sector Government financing is Budget USD expected to 13.3 million. contribute about USD 8.4 million 2020- International 2024 financing USD 8.9 million
III. How does ERP fit into the Bank’s portfolio and strategies Analytical and Policy Support The Bank’s program of analytical and advisory work has complemented a small number of IBRD and TF lending operations and helped to identify new engagement opportunities. IFC engagement has continued to grow leveraging both Investment Services and Advisory Services. FY2019 FY2020- 2017 2014 FY2015- 2024 IDA election 2017 CEN SCD exception CPF
III. How does ERP fit into the Bank’s portfolio and strategies Coordination with Development Partners WB works in closer partnership with many of the region’s key bodies, including the Pacific Islands Forum Secretariat, the Pacific Community (SPC), and the University of the South Pacific (USP), GIZ, as well as other development partners, including CI, WWF , EU, etc. to deliver even stronger development outcomes.
IV. Status of Due Diligence: PCN Review and SORT PCN Feedback and SORT ratings Systematic Operations Risk Rating Tool Feedback from PCN Review: (SORT) It was agreed to strengthen the Risk Category Rating justification for the selection of ERP area in the PCN. 1. Political and Governance M The team should also consult FMT on 2. Macroeconomic M the option of interim advance 3. Sector Strategies and Policies M payment to help with financial flow. An advanced draft BSP should be 4. Technical Design of Project or S available prior to ERPA signing and Program the final BSP should be ready after ERPA signing for the purpose of 5. Institutional Capacity for S distributing the benefits during Implementation and implementation Sustainability The processing timeline is endorsed and 6. Fiduciary L it will be track 2. It was authorized to move forward. 7. Environment and Social H 8. Stakeholders S 9. Financial S S OVERALL
IV. Status of Due Diligence Safeguards Environmental & Social Risk is High. Advanced SESA, Environmental and Social Management Framework, Resettlement Policy Safeguard Policies Applicable Framework and Process Framework, were prepared Environmental Assessment OP/BP 4.01 YES for REDD+ Strategy through a highly consultative Natural Habitats OP/BP 4.04 YES process. They are being reviewed by the World Forests OP/BP 4.36 YES Bank Regional Safeguards Secretariat for review, and will be disclosed once finalized. Anticipated to Pest Management OP 4.09 YES be cleared by World Bank by the end of July 2019. Physical Cultural Resources OP/BP 4.11 YES Indigenous Peoples OP/BP 4.10 YES . The benefit sharing plan is required before ERPA Involuntary Resettlement OP/BP 4.12 YES signature, however the benefit sharing mechanism Safety of Dams OP/BP 4.37 NO in the ERPD provides a comprehensive roadmap on Projects on International Waterways NO benefit sharing and provides an outline of the OP/BP 7.50 benefit sharing plan and its expected completion. Projects in Disputed Areas OP/BP 7.60 NO
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