FY2010
Annual ReportPartners in REDD+
Demonstrating activities
that reduce emissions fromdeforestation and forest
degradation

Copyright © 2010 by Carbon Finance Unit, World Bank Group. All rights reserved.
All photos by World Bank Photo Library/Rhett A. Butler unless otherwise noted.
On the cover, top right photo: Mayumi Terao/iStockphoto
Design by Sensical Design & Communication

Letter from the FCPF Chair
In the process of working together since we started designing the FCPF in
2006, all the parties involved—forest countries, donor countries, indigenous
peoples, civil society, the private sector and international organizations—havelearnt a lot from one another. The FCPF has provided a forum for discussions
both at international and country levels, where governments, traditional rights
holders and various stakeholders come together to discuss REDD+ strategies.
The FCPF and other programs and initiatives

ways that will benefit them the most, not in isola-

focused on REDD+ are gathering precious experi-tion but in combination with each other. The forum

ence and developing new approaches to tackle theand processes set up by the FCPF help make thisdrivers of deforestation and forest degradation.

possible.

Over the past year, the FCPF has accelerated

The next six months will bring important de-

the assessment of proposals prepared by forest

velopments in a number of areas, including thecountries on how they intend to prepare them-start of operations of the Carbon Fund. It seeks toselves for REDD+ (the so-called Readiness Preparation Proposals) and has allocated about US$40
million in grant funding to implement these. Many
more countries will be formulating and presenting their proposals in the coming year. We know
disbursements from the FCPF have been slow but
World Bank teams are working with government
counterparts to address the issues and clear theway for fund disbursement.

The FCPF and other programs andinitiatives focused on REDD+ aregathering precious experience anddeveloping new approaches.

We are keen to invite other delivery partners,
including multilateral development banks and UN
Agencies, to provide readiness services to coun-demonstrate how performance-based payments

tries under the FCPF. REDD+ poses tremendous

can incentivize fundamental changes in the way

development challenges and requires that the ca-

countries manage their forest heritage. These

pacity of all partners be harnessed using common

payments will complement investment finance forfiduciary and safeguards approaches.

REDD+, providing another good reason for coun-

In the year ahead, we also look forward to see-tries to get ready for REDD+.

ing the complementary roles of the FCPF and its
partners, the UN-REDD Programme, the Global

Inger Andersen

Environment Facility and the Forest Investment

Vice President, Sustainable

Program, crystallize in particular at the country
level. We encourage forest nations to tap into

Development, World Bank
October 2010

the support offered by these various initiatives in
FY2010 Annual Report | 1

Acronyms
AFD

Agence Française de Développement

M&E

Monitoring and Evaluation

AusAidAustralian Agency for International

MRV

Measurement, Reporting and Verification

Development

NGO

Non-Governmental Organization

CF

Carbon Fund

PA

Participants Assembly

COICA

Coordinadora de las Organizaciones Indígenas

PC

Participants Committeede la Cuenca AmazónicaREDD

Reducing emissions from deforestation and

COONAPIP Coordinadora Nacional de Los Pueblos
Indígenas de Panama

forest degradation
REDD+

Reducing emissions from deforestation and

CSO

Civil Society Organization

forest degradation, and through conservation,

DRC

Democratic Republic of Congosustainable management of forests and

FCPF

Forest Carbon Partnership Facility

FIP

Forest Investment Program

RF

Readiness Fund

FMT

Facility Management Team

R-PP

Readiness Preparation Proposal

FY

Fiscal Year (World Bank fiscal year, July 1

SESA

Strategic Environmental and Social

enhancement of forest carbon

to June 30)

Assessment

GEF

Global Environment Facility

TAP

Technical Advisory Panel

GTCRGroupe de Travail Climat REDD

UNEP

United Nations Environment Programme

IPs

Indigenous Peoples

UNFCCC

United Nations Framework Convention on

IP Program Indigenous Peoples and other Forest Dwellers
Capacity Building Program
IPACC
Lao PDR

Climate Change
UN-REDD

The United Nations Collaborative Programme

Indigenous Peoples of Africa Coordinating

on Reducing Emissions from Deforestation andCommittee

Forest Degradation in Developing Countries

Lao People’s Democratic Republic

2 | Forest Carbon Partnership Facility

WBI

World Bank InstituteTable of Contents
Executive Summary5

Achievements in Fiscal Year 2010

6

1.1 FCPF Secretariat Services

7
7
8
10

1.1.1 Meetings of the Participants
1.1.2 Building International Partnerships and Fostering Institutional Cooperation
1.1.3 Services to the Interim REDD+ Partnership 

1.2 Country Implementation Support and Advisory Services

10
11
12
13

1.2.1 Status of REDD Country Participation in the FCPF 
1.2.2 Collaboration with Partners in REDD+ Countries
1.2.3 National Stakeholder Participation and Consultation for REDD+ 

1.3 Global REDD+ Methodology Support
1.3.1 Technical Advisory Panels: Early Lessons Learned and Emerging Good Practices in R-PPs
1.3.2 Development of FCPF REDD+ Readiness Instruments
1.3.3 Advancing and Exchanging Knowledge on Key REDD+ Issues
1.3.4 Building REDD+ Capacity among Forest-Dependent Indigenous Peoples and Forest Dwellers

1.4 Fund Management and Governance
1.4.1 Fund Participation 
1.4.2 Governance Arrangements
1.4.3 Audits 

FY10 Financial Report of the Readiness Fund

13
13
15
17
17
20
20
20
23
24

2.1 The FCPF Budget Process 

24

2.2 Funding Sources 

25

2.3 Funding Uses in FY10 

25

2.4 Financial Commitments over the Longer Term 

28

Carbon Fund Development

30

Conclusions, Insights and the Road Ahead

32

FY2010 Annual Report | 3

Executive Summary
In the past year, the Forest Carbon Partnership Facility (FCPF) has strengthened its partnership of countries and stakeholders working together to reduce
emissions from deforestation and forest degradation, and foster conservation,
sustainable management of forests, and enhancement of forest carbon stocks(REDD+). Significant progress has been made in moving from a planning stage
to preparations for REDD+ “Readiness” in forested developing countries.
Eight “REDD countries” submitted formal

leveraging the lessons from other countries to

REDD+ Readiness Preparation Proposals (R-PPs)

collectively address challenges. In response to

and five submitted draft proposals, providing athis demand, the FCPF facilitated a number ofwealth of experience and information from which

regional meetings and workshops in FY10 where

the international community is learning aboutcountries were able to discuss the technical is-

REDD+. The eight countries that submitted R-PPs

sues most relevant to them. It has been a useful,were allocated funding for their proposals in Fiscal
Year 2010 (FY10), and are looking ahead towards
their implementation.
As the second year of the FCPF draws to a close,
it is clear that the issues of deforestation and forest degradation are on the minds of most parties
when discussing climate change, and that REDD+

Deforestation and forest degradation
are on the minds of most parties
when discussing climate change.

will be relied upon as a key element in fighting climate change. The FCPF has served as a platform
for bringing together 50 countries and a broad

hands-on approach and has helped strengthen

representation of stakeholders, and for engaging

the formulation of R-PPs. The FCPF’s Facility

these parties in the REDD+ agenda. This uniqueManagement Team (FMT) has also tackled otherpartnership has not only allowed participants toissues in the past year, such as further develop-

discuss opportunities and challenges to imple-

ing the R-PP template and collaborating withmenting REDD+ in their respective countries, but

partners to provide services to countries that are

has also given them a neutral and innovative spacegetting “ready for REDD+.”to put forward different solutions with the rich in-

The FCPF Readiness Fund welcomed Denmark

put of colleagues and forestry experts outside ofas a new donor in FY10 and is also now able to offer

the climate negotiations.

$200,000 grants to all REDD Participant Countries

As the FCPF has developed, new needs haveto support the formulation of their R-PPs. Look-arisen. With countries rapidly gaining experienceing ahead, many FCPF partners and stakeholders

in preparing for REDD+, there is an increased

are awaiting the results of the first independent

awareness of what the greatest challenges are andevaluation of the FCPF, which will provide valuablea growing demand for opportunities where coun-lessons learned, along with the possibility of in-tries can learn from one another’s experiences,creasing membership in the future.
FY2010 Annual Report | 5

1.

Achievements
in Fiscal Year 2010
The Forest Carbon Partnership Facility (FCPF) advances a mission with global
significance: to help tropical countries build capacity to reduce greenhouse gas
emissions from deforestation and forest degradation—by conserving forest carbon stocks, sustainably managing forests, and enhancing forest carbon stocks(commonly known as “REDD+”)—while supporting and testing performancebased financing approaches that demonstrate how REDD+ can work.
On June 30, 2010, the FCPF completed its

8–9, and Table 4, page 21). It is also providing asecond full year of operation. FY10 is notable forframework for the engagement of key stakehold-the transition from the previous year’s efforts to

ers within forested countries, including indigenous

lay the groundwork for FCPF operations, to a year

peoples, other forest-dependent peoples, andof dynamic, collaborative development of REDD+

local non-governmental organizations (NGOs), as

proposals and strategies in a number of forested

well as global stakeholders such as internationalcountries.

NGOs. These interactions facilitate development

The FCPF’s diversity of activities in FY10 bolsteredof equitable REDD+ strategies, and also inject

the global effort to realize REDD+ in two key areas.

valuable knowledge and experience into theFirst, through refining the FCPF framework and sup-Readiness preparation process.
Highlights from FY10 include:

The FCPF’s diversity of activities
and achievements in FY10 added
significant value to the global effort
to realize REDD+.

• Active participation and collaboration of REDD
countries, FCPF financial contributors, stakeholders and observers drove continuous improvements in the Readiness preparation process.
• Eight countries submitted R-PPs and were allocated grant funding (Argentina, Republic ofCongo, Costa Rica, the Democratic Republic ofCongo (DRC), Ghana, Kenya, Mexico and Ne-

porting the development of Participant countries’pal), and five countries presented draft R-PPs

REDD+ proposals, the FCPF helped to clarify what

(Argentina, Madagascar, Peru, Suriname andit means for a country to be “ready for REDD+.”

Tanzania).

Second, the FCPF has created a platform for ex-• A wealth of lessons has been learned aboutchange of information and experiences on REDD+

REDD+ Readiness, based on countries’ experi-among forested countries and other global stake-ences in the past year.

holders. The FCPF is providing 37 REDD Country• Several fora supported by the FCPF facilitatedParticipants and 14 Donor and Carbon Fund Par-South-South transfer of knowledge among

ticipants space to learn from one another’s efforts,

REDD countries.

share innovations and accrue expertise (see map of• The FCPF supported a number of capacity build-

REDD Countries participating in the FCPF, pages

ing activities among Indigenous Peoples (IPs).

6 | Forest Carbon Partnership Facility

1.1 FCPF Secretariat Services
Secretariat services for the FCPF are provided by

FCPF Readiness Fund. Each of these four meetingsa Facility Management Team (FMT), housed in thestrengthened the process of preparing for REDD+,World Bank. In FY10, the FMT took on a range ofhelped advance the REDD+ agendas of participat-

activities, from organizing meetings of the Facil-

ing countries, and improved the operation of the

ity’s governing body, to promoting knowledge

FCPF. Key outcomes of each of the meetings areexchange and, most importantly, fostering coop-discussed in detail in Section 1.4.2.

eration amongst diverse stakeholders and withother REDD+ initiatives.

Two of the three PC meetings were held in REDD
countries—Gabon and Guyana—helping to expose FCPF Participants directly to the experiences

1.1.1 Meetings of the Participantsof these countries in preparing for REDD+. They
also provided an excellent opportunity for forest

During FY10, the FMT coordinated the FCPF’s

stakeholders and other civil society groups in REDD

second Participants Assembly (PA) meeting incountries to engage with members of the partner-

October 2009, as well as the Participants Com-

ship. For example, on June 26, 2010, in advance of

mittee (PC) meetings in October 2009 (“PC4”),

the PC meeting in Georgetown, the FMT hosted

March 2010 (“PC5”) and June 2010 (“PC6”). These

an information exchange session for Guyana’s

meetings, including the participation of eligible

civil society stakeholders. More than 60 people

REDD Country Participants and key stakeholders

attended to learn about the FCPF and engage insuch as the Observer for Forest-Dependent Indig-

a lively discussion focused on consultations withenous Peoples and Other Forest Dwellers, wereindigenous peoples. Participants recognized differ-

made possible through financial support from theences and challenges, but also expressed optimism
FY2010 Annual Report | 7

REDD Country Participants

REDD Country Participants
The 37 tropical and sub-tropical developing
countries thus far selected by the ParticipantsCommittee of the Forest Carbon Partnership
Facility to be assisted in their efforts to
reduce emissions from deforestation anddegradation—called REDD—by providing
value to standing forests.
Argentina
Bolivia
Cambodia
Cameroon
Central African Rep.
Chile
Colombia
Congo, D.R. of
Congo, Rep. of
Costa Rica
El Salvador
Equatorial Guinea
Ethiopia

Gabon
Ghana
Guatemala
GuyanaHonduras
Indonesia
Kenya
Lao P.D.R.
Liberia
Madagascar
MexicoMozambique
Nepal

Nicaragua
PanamaPapua New Guinea
Paraguay
Peru
Suriname
Tanzania
Thailand
UgandaVanuatu
Vietnam

IBRD 36759R1
OCTOBER 2010

MEXICOGUATEMALA HONDURASEL SALVADOR NICARAGUACOSTA RICA PANAMAGUYANASURINAME

COLOMBIAPERU
BOLIVIAPARAGUAY
CHILE

ARGENTINA

This map was produced by the Map Design Unit of
The World Bank. The boundaries, colors, denominations
and any other information shown on this map do not
imply, on the part of The World Bank Group, any
judgment on the legal status of any territory, or any
endorsement or acceptance of such boundaries.

and willingness to work together. The FCPF plans to

the FCPF’s definition of REDD to match language

continue organizing some of its governance meet-

adopted by the UNFCCC1 and harmonize withings in REDD countries in FY11 and beyond.

other major REDD+ initiatives, as follows:

1.1.2 Building International Partnerships
and Fostering Institutional Cooperation
A major focus of the FCPF during FY10 was onbuilding greater cooperation and closer partner-“REDD” means REDD plus [REDD+], i.e. reducing
emissions from deforestation and forest degradation, and the role of conservation, sustainable
management of forests and enhancement offorest carbon stocks, as may be modified to beconsistent with the UNFCCC Guidance on REDD.

ships among international institutions working to

In addition, the FCPF, the UN-REDD Programmeadvance REDD+. To start, at PC4, the PC revised

and the Forest Investment Program (FIP) developed

1. United Nations Framework Convention on Climate Change (UNFCCC). 17 February 2009. “Report of the Subsidiary Body
for Scientific and Technological Advice on its twenty-ninth session, held in Poznan from 1 to 10 December 2008.” FCCC/SBSTA/2008/13 http://unfccc.int/resource/docs/2008/sbsta/eng/13.pdf

8 | Forest Carbon Partnership Facility

NEPALLAO
P.D.R.
THAILAND VIETNAM
CAMBODIAGHANALIBERIACENTRAL AFR.
REP.

ETHIOPIACAMEROON

REP. OFEQ. GUINEAUGANDAKENYAGABON CONGO
DEM. REP.
OF CONGO TANZANIAPAPUANEW GUINEAINDONESIAMOZAMBIQUEVANUATU

MADAGASCARa joint paper entitled Enhancing Cooperation andjoint platform for sharing country experiences andCoherence Among REDD+ Institutions to Support

lessons.

REDD+ Activities, which explored financing andAnother key achievement in enhancing coop-support under the three initiatives; the context anderation in FY10 was the collaborative work under-

options for enhanced collaboration at the country

taken with the UN-REDD Programme to develop

level; and suggestions for strategic collaboration

a common template for countries developing

on REDD+. As a result, the FCPF has endeavored

REDD+ Readiness proposals for both initiatives.

to coordinate support to REDD countries that are

The objective of this work has been to align pro-participants to both the FCPF and the UN-REDD

cesses in an effort to reduce country transaction

Programme and, to the extent possible, plans tocosts and improve country proposals throughcoordinate future FCPF governance meetings withcomplementary support. DRC, which helped pio-

those of the other initiatives in order to create aneer this joint submission process, was noted as

2

2. The draft presented at PC6 is available at http://www.forestcarbonpartnership.org/fcp/sites/forestcarbonpartnership.
org/files/Documents/PDF/Jun2010/2b_REDD%2BCooperation_06-22-10.pdf.

FY2010 Annual Report | 9

benefitting significantly from review by both the

Ultimately the partnership would be replaced by,

FCPF and the UN-REDD Programme.

or folded into, a future UNFCCC mechanism including REDD+.

1.1.3 Services to the Interim REDD+
Partnership

The World Bank and the UN were requested tojointly provide secretariat services to the REDD+
Partnership, building on the extensive coopera-

At the Oslo Climate and Forest Conference ontion between the organizations through initiatives

May 27, 2010, more than 50 countries launched thelike the FCPF, FIP and the UN-REDD Programme.

new interim “REDD+ Partnership.” Approximately

At PC6, the PC authorized the FMT to provide$4 billion was pledged to support developing

some secretariat services—shared with the UN-

countries in their efforts to reduce emissions from

REDD team—to the REDD+ Partnership, with theforest loss during 2010–2012. The partnershipcaveat that these additional services should be

is intended to allow developing and developed

differentiated from the usual work of the FMT andcountries to act now to implement REDD+, build-

not detract from the FCPF itself. The FMT is being

ing on the political momentum from Copenhagen.

strengthened to take on these added tasks.

1.2 Country Implementation Support and Advisory Services
Technical assistance to REDD countries is the

Support, comprised of Readiness preparationcore product of the FCPF Readiness Mechanism.

support and fiduciary and safeguard assistance

The FCPF provides two types of country levelfrom World Bank country teams; and (2) Country

technical assistance: (1) Country Implementation

Advisory Services, comprised of the coordination

Figure 2. Formulation Grant Disbursement
by REDD Country Participant(in US$ thousands)

Figure 1. Status of REDD Countries
FY09
R-PP Funding
Allocated 3
by the PC

FY10

Disbursed
8$0

Informal R-PP
2 5
Presentations
Participation
Agreements
Signed33

Countries
Selected

2

37

Costa Rica

$139

DRC

$177

Ethiopia
Gabon
Ghana

$100

Guyana

$0

Kenya

$0

Lao

$50

Liberia

$75

$0
$200

Nepal

$91

Rep. of Congo$87

Uganda$40

Vanuatu$0

TOTAL $959 disbursed

10 | Forest Carbon Partnership Facility

Undisbursed$200

and feedback of FMT staff and World Bank forestry
experts on country documents and other aspectsof country readiness work. Visits to REDD+ countries have been vital to these efforts, because they
provide direct, multidisciplinary technical support
to REDD+ countries “onsite” as they formulate
their unique R-PPs. In addition, in an effort toprovide closer technical assistance to countries,

In FY10, the emphasis in FCPF
country services shifted away fromselecting REDD Country Participants
to developing R-PPs.

the FMT has posted a staff member in the WorldBank’s Country Office in Kinshasa, DRC. This has
allowed the FMT to intensify interactions with thethem, with cumulative numbers from the inception

governments of Congo Basin countries and otherof the FCPF through June 30, 2010.

national and regional forest stakeholders, and has

Many of these REDD Participant Countries werealso facilitated World Bank support to the national

also awarded Formulation Grants of $200,000 to

REDD+ Readiness preparation processes.

support the development of their R-PPs. As presented in Figure 2, of the 13 countries with signed

1.2.1 Status of REDD Country
Participation in the FCPF

Formulation Grant Agreements, nine were actively

In FY10, the emphasis in FCPF country services

FCPF “dashboard,” a reporting tool that was

shifted away from selecting REDD Country Partici-

developed during FY10 and contains country-

pants and signing new Participation Agreements

by-country information on Readiness preparation

to the next important phase: developing R-PPs.

progress. After presentation by the FMT and PC

This shift is evident in the data on R-PPs presented

discussion of the dashboard, it has been agreed

in Figure 1. The chart lists the key milestones andthat the dashboard will be updated regularly andthe number of REDD Countries that have achieved

made available to all on the FCPF website.3

disbursing the funds as of June 30, 2010.
More of this information is available on the

3. The FCPF dashboard can be viewed at http://www.forestcarbonpartnership.org/fcp/node/283

FY2010 Annual Report | 11

1.2.2 Collaboration with Partners in
REDD+ Countries

society organizations and the private sector. The
R-PP is serving as a tool to coordinate different
interventions by such organizations in support ofIn FY10, the FCPF took steps to further broaden

REDD+.

the global partnership of the FCPF, with new in-

As an example, in FY10, the PC allocated fund-terested REDD countries as well as international

ing to DRC to implement its R-PP, and the FCPF

organizations and institutions.

and UN-REDD Programme have been coordinat-

At PC5, the PC noted expressions of interesting their support to the country in its Readiness

to observe FCPF governance meetings by several

efforts. As part of the preparation of its nationalcountries not currently participating in the FCPF—

REDD+ strategy, DRC will implement a series ofincluding Bhutan, Guinea, Nigeria and Sudan—andseven pilot projects tackling the main causes ofin FY11 will consider options for including new ob-

deforestation in different regions of the country soservers in the FCPF process. In addition, to foster

as to generate initial lessons to feed into the strat-cooperation among the international REDD+ initia-

egy. These projects will be financed by the Congo

tives, the PC invited FIP pilot member Burkina Faso

4

Basin Forest Fund, which has expressed strong

to observe future PC meetings, as a step toward

interest in aligning its assistance to DRC with theinclusion of all five FIP pilot members in the FCPF.

ongoing Readiness process. A grant from the

The FCPF has also been fostering coopera-

International Tropical Timber Organization for ca-tion on REDD+ Readiness with various organiza-

pacity building on carbon stock measurement will

tions from different sectors, including financial

directly support the early efforts to implement theand technical partners to REDD+ countries, civil

country’s measurement, reporting and verification

4. See the Climate Investment Funds “Summary of the Co-Chairs Forest Investment Program Sub-Committee Meeting,”
March 17, 2010, at http://www.climateinvestmentfunds.org/cif/sites/climateinvestmentfunds.org/files/Summary%20
of%20Co-Chairs%20FIP%20SC%20March%202010%20FINAL.pdf.

12 | Forest Carbon Partnership Facility

Many of the FCPF countries began
to engage indigenous peoples,
ensuring that their needs andrealities are taken into consideration
in REDD+ Readiness processes.

(MRV) system. A strong partnership has also
been forged with national civil society, organizedaround the Groupe de Travail Climat REDD, which
has been participating in the implementation of
all components of Readiness, including the planfor consulting with stakeholders on the national
REDD+ strategy, and analytical studies (such as
the study on causes of deforestation).

1.2.3 National Stakeholder Participation
and Consultation for REDD+

to country preparation efforts. Accordingly, the
FCPF provides financial and technical support toongoing stakeholder participation in the design,

The FCPF strives to convene and balance theformulation, review and implementation of REDD+

diverse interests involved in REDD+ activities instrategies.

order to ensure that REDD+ is implemented in

In FY10, many of the FCPF countries began toa sustainable way. Engaging the participation ofengage indigenous peoples, ensuring that theirstakeholders—including indigenous peoples,needs and realities are taken into consideration

other forest-dependent communities, civil society

in planning for REDD+. Some countries, includingorganizations, the private sector and other REDD+

DRC, Kenya, Panama and Uganda, have included

initiatives—is a crucial element of FCPF-supported

representatives of indigenous peoples and civil

activities. Because these stakeholders often havesociety organizations in their National REDD+

unique knowledge and understanding of tropicalTechnical Working Groups as formal elements offorests, and of the drivers and underlying causes

their management framework for designing andof deforestation, their inclusion also adds value

implementing activities.

1.3 Global REDD+ Methodology Support
Building on the advances of the previous year, in
FY10 the FCPF continued to:

1.3.1 Technical Advisory Panels:
Early Lessons Learned and Emerging
Good Practices in R-PPs

1. finance and coordinate the independent Technical Advisory Panels (TAPs) to provide multi-

Considerable work to support development of

disciplinary, expert review of REDD countries’

REDD+ methodologies among FCPF member

R-PPs;

countries was carried out by the multidisciplinary

2. develop the fundamental elements of REDD+

group of scientific and technical experts constitut-

Readiness preparation, and incorporate theseing the TAP. The FCPF relies on an extensive ros-elements into templates and guidance docu-

ter of experts—nominated by FCPF Participants,

ments to organize and facilitate the Readiness

Observers, and the FMT—from which it assembles

preparation process;teams to review and provide technical guidance

3. ensure consistent cooperation and informa-

for country R-PP submissions.

tion exchange with other global forestry andIn FY10, eight REDD+ countries developed and

REDD+ programs, and with entities developing

submitted final R-PPs for review by the TAP and fivemethodologies; andREDD+ countries submitted draft R-PPs—an ac-

4. build REDD+ capacity among forest-dependent
indigenous peoples and forest dwellers.

celeration of process under the FCPF. A total of 15
countries have submitted draft and/or final R-PPs
FY2010 Annual Report | 13

since the FCPF’s start. An important innovation
during FY10 is that each R-PP was also reviewed
by a working group of PC representatives in advance of PC meetings, to provide early feedback tocountries and also streamline the meetings. Table
1 summarizes this evolution and the role the TAP
and the PC working group reviews played, and thedecision by the PC meeting regarding funding.
Although every country addresses REDD+
within unique environmental, social, economic

in its R-PP to launch itself into credible, equitable

and institutional circumstances, with 15 R-PPs now

REDD+ Readiness preparation. These lessons anddeveloped, the FCPF participants and TAP experts

good practices are summarized below for eachare beginning to see early lessons and “good prac-

R-PP component, to help guide upcoming work

tices” about what a country needs to incorporate

by REDD+ countries.

Box 1: Early Lessons Learned and Emerging Good Practices in R-PP

Component 1: Organize and Consult, Stakeholder

agriculture, infrastructure, regulatory policies, andConsultation and Participation

investments in forestry/conservation if possible.

• R-PPs should foster the emergence of continuous• Review of the country’s existing forest law, andmulti-stakeholder engagement processes that begin

relevant legal and regulatory aspects, should clearlywith widely sharing basic information about REDD+

identify any unresolved issues with respect to land

and the R-PP process, and then move into full consul-

tenure rights.

tation and participation by stakeholders over time.
These processes need clear objectives and outputs

Subcomponent 2b: REDD+ Strategy Options

that are widely communicated and incorporated into

• REDD+ frameworks are now being designed within a

R-PP development.
• Information needs to be communicated to stakeholders in ways they understand, including meetings
with oral communication, translation into relevant
languages, and explanations of terms.
• Many R-PPs (e.g., Nepal, Tanzania, Ghana) now list
meetings and consultations, who attended, outcomesfrom the consultations, and next steps.

national vision for sustainable resource management,
protection of ecosystems and biodiversity, low-carbon
development, and climate change adaptation.
• REDD+ policy actions should be identified by linking
land use factors driving deforestation/degradation,and changes in land use, policy or program incentives
that would reduce the impact of these drivers.
• Regional approaches/programs may be needed ina country with diverse land use practices, drivers ofComponent 2: Prepare REDD+ Strategy

deforestation, or local institutional arrangements for

Subcomponent 2a: Assessment of Land Use, Forest

managing natural resources. e.g., Nepal’s R-PP.

Policy, Governance• Both historical and contemporary dynamics of the

Subcomponent 2c: REDD+ Implementation Framework

principal drivers of deforestation and forest degrada-• The strengths of established, functioning social and le-tion, and their underlying causes, should be explained,

gal institutions should be leveraged wherever feasible,

by region. This should be holistic, incorporating

rather than relying on the creation of new ones.

14 | Forest Carbon Partnership Facility

1.3.2 Development of
FCPF REDD+ Readiness
Instruments

to date, FCPF Participants, Observers, and UNREDD Programme staff provided feedback on
ways to improve the R-PP template, with an eye
toward developing a single, common format for

The R-PP has emerged as ause by both FCPF and UN-REDD countries. In

framework for national REDD+

addition, considerable effort and progress were

Readiness development. The ex-made to mainstream the World Bank’s Strategic

perience gained by participants,

Environmental and Social Assessment (SESA) in-

the TAP, and the FMT through thestrument into the R-PP. In the context of the FCPF,

many R-PP reviews, as well as through continued

the SESA can help to incorporate environmental

exchange of information within the FCPF and withand social considerations into the Readiness pro-other REDD+ initiatives, has greatly improved thecess by assessing the underlying causes of defor-

quality of the R-PPs.

estation and identifying environmental and social

Throughout the year, based on experiencerisks associated with a country’s REDD+ strategy.

• Many countries are assessing whether current laws
and regulations pertaining to land tenure and ownership rights to lands and carbon adequately clarify
these issues for REDD+ actions.
• Many countries are evaluating use of a national

Component 4: Design a Monitoring System• Design and implementation of national MRV systems
are likely to take several years, so a stepwise approach
may be needed.
• Independent monitoring of national forestry gov-

tracking system to manage data on sub-national andernance can be a valuable element of a country’s

national REDD+ activities, ownership and exchange

overall monitoring framework. Verification shouldof REDD+ benefits, and integration with the eventual

be the responsibility of an independent third party.

MRV system.

e.g., Tanzania’s R-PP calls for substantial independent
monitoring activities that will need to be blended with

Subcomponent 2d: Assessment of Social andgovernment-led MRV programs.

Environmental impacts• At PC6, Ghana and DRC presented helpful illustrationsof how they are undertaking SESA activities to assess

Component 5: Schedule and Budget• R-PP budgets are well above previous estimates—social and environmental impacts. R-PPs of Mexico

averaging $13 million for the first 11 R-PPs —but are

and Nepal also offer ideas.

less clear about how much funding has been secured
and how funding gaps would be closed.

Component 3: Develop a Reference Scenario• Most countries are developing reference scenarios

Component 6: Design a Program Monitoring andbased on future reference projections as well as

Evaluation (M&E) Framework

historical data. Consensus on methods is urgently• A good M&E framework is likely to include: schedule,

needed.
• Construction of reference scenarios for multiple

activities to be conducted and results/outputs to beachieved in each time period, and allocation of funds

ecological or political regions within a country allows

and personnel to be assigned for each activity.

tailoring to deforestation drivers and linking to the• R-PP implementers could monitor their own perfor-

monitoring of REDD+ policies specific to sub-national

mance and ensure adherence to funding levels andcircumstances.

schedules. An independent third party may be valuable for verifying M&E schedules and goals are met.

FY2010 Annual Report | 15

Table 1: TAP and PC Working Group Reviews of Country R-PPs during FY10
FY09
REDD+ Country

PC3(in Switzerland)

FY10
PC4
(in Washington)

Argentina

PC5(in Gabon)

PC6(in Guyana)

Reviewed by TAP

Reviewed by TAP,
PC working group;
allocated funds

Latin America & the Caribbean

Costa Rica

Guyana

Reviewed by TAP,
PC working group;
allocated funds
Reviewed by TAP;
allocated funds

MexicoPanama

Reviewed by TAP,
PC working group;
allocated funds
Reviewed by TAP;
allocated funds

Peru

Reviewed by TAP,
PC working group

Suriname

Reviewed by TAP

DRC

Reviewed by TAP,
PC working group
Reviewed by TAP,
PC working group;
allocated funds

Ghana

Reviewed by TAP

Reviewed by TAP,
PC working group;
allocated funds

Kenya
Africa

Reviewed by TAP,
PC working group;
allocated funds

Asia & Pacific

Madagascar

Reviewed by TAP,
PC working group

Republic of
Congo

Reviewed by TAP,
PC working group;
allocated funds

Tanzania

Reviewed by TAP,
PC working groupIndonesia

Reviewed by TAP;
allocated funds

Nepal

16 | Forest Carbon Partnership Facility

Reviewed by TAP,
PC working group;
allocated fundsphoto by Ranjith Menon

1.3.3 Advancing and Exchanging
Knowledge on Key REDD+ Issues
Knowledge exchange activities among REDD+
countries continued to gain momentum in FY10.
The FMT and World Bank staff organized a variety of REDD+ workshops, and the FCPF also cofinanced several collaborative South-South discus-

The FMT and World Bank staff
organized a variety of REDD+
workshops, and the FCPF also cofinanced several collaborative SouthSouth discussion opportunities.

sion opportunities through a $1 million grant fromthe Global Environment Facility (GEF) for REDD+
capacity building that was approved in FY09.

enable their organizations to have a strong voice

These activities emphasized South-South knowl-in REDD+ Readiness preparation strategies andedge exchange to help countries strengthen theirprograms.5 The IP Program has aimed to support

R-PPs and prepare for REDD+ Readiness, as well as

more inclusive and accountable national Readi-

fostering longer term South-South collaboration inness processes, and in FY10, supported REDD+

building capacity for REDD+ readiness.

capacity building activities to:

The FMT also continued its partnership with
the World Bank Institute (WBI) Carbon FinanceTelapak (Indonesia): Document the problems IPs

Assist program and the Alternatives to Slash andin Indonesia face in managing forest lands, andBurn Program of the World Agroforestry Centre to

analyze how REDD+ would affect their lands anddevelop training modules for analysis of the op-

livelihoods (see box 2, page 19).

portunity costs of REDD+ and to train trainers.
Groupe de Travail Climat REDD (DRC): Enhance

1.3.4 Building REDD+ Capacity among
Forest-Dependent Indigenous Peoples
and Forest Dwellers

capacity of forest-dependent populations to par-In FY09, the PC allocated a total of one million

Organización de Naciones y Pueblos Indígenas

dollars ($200,000 per year for FY09–FY13) to an

en Argentina (Argentina): Organize workshops

Indigenous Peoples and Forest Dwellers Capacity

to disseminate information on REDD+, basic con-

Building Program (“IP Program”) to help inform

cepts of the R-PP, forest management, and theforest-dependent peoples about REDD+ and

UNFCCC.

ticipate in consultations on the national REDD+
strategy.

5. More information on the FCPF’s Indigenous Peoples Capacity Building program is available at http://www.forestcarbonpartnership.org/fcp/node/248.

FY2010 Annual Report | 17

Table 2: FY10 Knowledge Exchange Events Financed by the FCPF
Event

Description

Workshop on REDD+ Readiness:
Forests for Climate Mitigation in theContext of National Development
Policies (Bonn, Germany, August 2009)

Organized by the Coalition for Rainforest Nations, co-financed by FCPF
with funding from a GEF grant. Focused on addressing current financial
and technical needs for REDD+ Readiness in forested countries.

Four global dialogues (17 REDD
countries,a throughout FY10)

Connected REDD country representatives via video conference to share
their experiences, opportunities and challenges, with the aim of helping
countries strengthen their R-PPs and Readiness preparation.

Workshop on SESA (Nairobi, Kenya,
February 2010)

Trained representatives of ten African and Asian REDD countriesb on the
SESA frameworkc as it relates to REDD+ Readiness preparation.

Technical Workshop on REDD+: SouthSouth Cooperation (Bogor, Indonesia,
March 2010)

Organized by the Terrestrial Carbon Group, co-financed by the FCPF
through GEF grant. Senior staff from governments of Indonesia, Brazil and
DRC met to develop a framework for mutual cooperation among the threelargest forest countries. Created “Action Plan for Cooperative Action,”including intentions for technical exchanges on community forestry, theAmazon Fund, and monitoring activities, and a program to facilitate theSouth-South partnership.

Workshop on Forests Communities
and Climate Change: Contributions
from Mexico to the REDD+ Initiative(Washington, DC, April 2010)

With GEF financing, supported participation of DRC in a workshop on
Mexico’s experiences in community forestry and REDD+, to explore therole community forestry could play in a national strategy.

Workshop of Latin American Countries
in the REDD+ Process (Cartagena,
Colombia, May 2010)

World Bank and FMT staff and representatives from nine FCPF REDD
countries in Latin America met in the first of a planned series of four
regional workshops, to share experiences and build capacity in both theprocedural and technical aspects of Readiness preparation.

a. Argentina, Cameroon, Colombia, Costa Rica, DRC, El Salvador, Gabon, Ghana, Guyana, Kenya, Liberia, Madagascar, Mexico, Republic ofCongo, Suriname, Tanzania, and Uganda
b. DRC, Ethiopia, Kenya, Ghana, Indonesia, Liberia, Mozambique, Nepal, Tanzania, and Uganda.
c. See Section 1.4.2, R-PP Template, below for detailed discussion of SESA and its role in the FCPF and Readiness preparation process.

18 | Forest Carbon Partnership Facility

Box 2: FCPF-Financed IP Capacity Building
Program in Indonesia

carry out this work. A team worked with 30 institutions
and NGOs at the national level to collate data on IPs
into one central database, and over 100 institutions at

According to the Indigenous People Alliance of Ar-

the regional level—in Sumatra, Kalimantan, Sulawesi,

chipelago (AMAN), an estimated 50-70 million of the

Papua and Bali Nusra. Participatory mapping exercises

210 million Indonesians are IPs. However, there is no

conducted throughout the country are being digi-

systematic database that profiles the IP population,

talized, and the overlaying of satellite images based on

their land and territories as well as their customary

forest classification has created thematic maps de-rights and use of forest resources.

scribing the current condition of IPs’ customary forest

In FY10, the FCPF’s IP Program supported

territory. In addition, the team has also conducted a

Telapak—an Indonesian NGO involved in REDD+

review of customary forest territorial conditions of IPs,

discussions—to (i) collect data on, analyze, and docu-

documenting the challenges IPs are facing.

ment the existence of IPs in Indonesia, (ii) scope out

Currently, Telapak is finalizing the following prod-

their land and territories as they relate to rights anducts: a documentary on this process, a policy brief

livelihoods, (iii) conduct an analysis of the implications

explaining their position on REDD+, and making theof REDD+, and (iv) identify the problems they face in

database available on various national and international

managing the customary forest territory in climate

websites. Telapak also plans a national workshop invit-

change adaptation and mitigation processes, specifi-

ing relevant stakeholders to discuss their findings, withcally REDD+.

the aim of influencing the policy dialogue on REDD+

Telapak worked in collaboration with other networksof IPs such as AMAN and Forest Watch Indonesia toand enhancing their effective participation in REDD+
processes.

FY10

FY09

Table 3: Activities of the IP Capacity Building Program from Inception through FY10

Organization

Location

AmountCommitted (US$)

Expensed(US$)

Coordinadora de las
Organizaciones Indígenas dela Cuenca Amazónica

Ecuador$49,950$49,950$0Instituto de Investigación yDesarrollo Kuna Yala

Panama$62,048$62,048$0

Indigenous Peoples of Africa
Co-ordinating Committee

Africa$69,246$69,246$0

Total from the FY09 Budget Allocation$181,244$181,244$0Telapak Perkumpulan

Indonesia$78,545$47,127$31,418

Groupe de Travail Climat
REDD de la Société Civile

DRC$70,000$35,000$35,000

Organización de Pueblos
y Naciones Indígenas enArgentina

Argentina$67,317$6,732$60,585$215,862$88,859$127,003$397,106$270,103$127,003

Total from the FY10 Budget Allocation
Cumulative Total through FY10

Outstanding
Commitments (US$)

FY2010 Annual Report | 19

1.4 Fund Management and Governance1.4.1 Fund Participation

As a result, there were 11 Donor Participants
and four Carbon Fund Participants with signed

In FY10, the FCPF Readiness Fund welcomed

contribution agreements in the FCPF by June 30,

Denmark as a new Donor Participant. Two existing

2010. With the Government of Norway as a Partici-

Donor Participants, Agence Française de Dével-pant in both funds, there were 14 distinct financial

oppement (AFD) and Australia (AusAID), also

contributors to the FCPF overall (Table 4).

made supplemental contributions.

1.4.2 Governance Arrangements

An “Extraordinary Meeting” of thePC voted to increase the numberof REDD Country and Donor andCarbon Fund Participant members of
the PC from ten to 14 each.

During FY10, the four meetings of the FCPF’s governing bodies resulted in several actions to maintain and enhance the efficiency and effectivenessof the FCPF governance structure.
PA2/PC3. At the annual joint gathering of the Participants Assembly (PA) and PC in Washington in
October 2009, an “Extraordinary Meeting” of thePC voted to increase the number of REDD Country

20 | Forest Carbon Partnership Facility

and Donor and Carbon Fund Participant membersof the PC from ten to 14 each, in order to improve
representation of the growing number of FCPF
participants.
The Partnership also continues to benefit fromthe contributions of six official observers, who
help guide the course of the FCPF. Each observer
serves a vital role in reaching out to the broader
community they represent, to exchange information on REDD+ and FCPF proceedings, and to ensure that their stakeholder group’s concerns andperspectives are voiced to the PC. Even thoughobservers do not have a formal right to vote, theprinciple of reaching decision by consensus in
the FCPF Readiness mechanism means observers
have levels of influence similar to those of voting
members of the PC.
In addition to electing the PC, the PA amended
the Charter to clarify the amendment process itself—that future amendments to the Charter canbe made only with the prior unanimous consent ofTable 4. Financial Contributors to the
FCPF as of June 30, 2010
FCPF Donor Participants
AFD (France)
Australia
Denmark
FinlandJapan

The four meetings of the FCPF’s
governing bodies resulted in several
actions to maintain and enhance theefficiency and effectiveness of the
FCPF governance structure.

Netherlands
NorwaySpain
Switzerland
United Kingdom
United States
FCPF Carbon Fund Participants

the PC, provided that those Participants who are
not present for the discussion (or are not membersof the PC at the time of an amendment adoption)
are notified by the FMT and do not object within
30 days of the notification.
PC4—Charter Amendments and Working

European Commission

Groups. At the fourth meeting of the PC, the PC

Germany

adopted additional Charter revisions to (1) clarify

NorwayThe Nature Conservancy

the responsibilities of the TAP in reviewing and providing guidance on R-PP submissions; (2) specify
the PC’s responsibility to develop the criteria and
FY2010 Annual Report | 21

PC working groups immediately
proved to be a valuable forum fordiscussion, both for the countries
submitting R-PPs and for PC
members serving as reviewers.

preliminary reviews by PC members are valuableadditions to the REDD+ Readiness development
process.
PC5 and PC6—Additional FCPF Delivery Partners and Programmatic Evaluation. The PC
discussed whether to add entities other than theWorld Bank as additional “delivery partners” toprovide services to REDD Country Participants,6 inorder to leverage other organizations’ comparative

procedures for grant allocation for R-PPs; and (3)advantages and enhance the delivery of services

specify the PC’s responsibility to decide on grants

to countries. At PC6 the PC established a working

provided for the preparation of a Readiness Pack-group to address how to select such partners andage by a REDD Country Participant.

clarify their expected activities and responsibili-

The PC also decided to expand its role in FCPF

ties. The potential expansion to multiple delivery

operations by establishing working groups madepartners will be discussed at PA3/PC7 in Washing-

up of country members tasked to review R-PPs

ton, DC in November 2010.

ahead of future PC meetings. These working

Also at PC6, the PC authorized the start of agroups immediately proved to be a valuable fo-

comprehensive FCPF program evaluation, to coverrum for discussion both for the countries submit-

the first two years of FCPF operations (June 2008

ting R-PPs and for PC members serving as work-

to June 2010) and be completed during FY11. The

ing group reviewers. Positive feedback from R-PP

objective of the evaluation is to provide insights

review group participants suggests that these

into the challenges of implementing a REDD+

6. “Delivery partners” are defined as entities “providing technical support to REDD Country Participants and supervising
the Grant Agreements under the Readiness Fund and Emission Reductions Payment Agreements under the Carbon
Fund.” Draft Note FMT 2010-11 “Optimizing Delivery to REDD Country Participants” March 13, 2010. http://www.
forestcarbonpartnership.org/fcp/sites/forestcarbonpartnership.org/files/Documents/PDF/Mar2010/FCPF_FMT_Note_2010-11_Readiness_Fund_Delivery_03-13-10.pdf.

22 | Forest Carbon Partnership Facility

2. How has the FCPF evolved and made progress vis-à-vis its objectives, in the context
of REDD+ developments at the global andnational level?
3. How has the FCPF coordinated and collaborated with other REDD+ initiatives?
4. Is the FCPF governance structure effective andefficient for REDD+ delivery in countries?

1.4.3 Audits
Effective in July 2010, the FCPF Readiness Fundand Carbon Fund shifted from the special audit
arrangements outlined in the Facility Charterto the World Bank Group’s Single Audit framework. This change means that rather than being
photo by Ranjith Menon

handled as an additional and separate exercise,the financial audits of the FCPF trust funds will
be folded into the umbrella of the World Bank

mechanism and suggest ways to enhance support

Group’s external audit process, enabling cost

to FCPF countries. The evaluation will address foursavings over time. While the PC had already ap-

key clusters of questions:proved a shift to the Single Audit for FY09, thesteps taken by the PC throughout FY10 enabled

1. How does the FCPF add value to REDD+

this shift to be reflected more permanently inadjustments to the Charter.

processes?

Table 5: Composition of the FY10 FCPF Participants Committee
REDD Countries

Donor and Carbon Fund Participants

Observers to the PC

Argentina

Agence Française de Développement

Colombia

Australia

Forest-Dependent Indigenous
Peoples and Forest Dwellers

Costa Rica

Denmark

International Organizations

Democratic Republic of Congo

European Commission

Non-Governmental Organizations

Gabon

FinlandPrivate Sector

Ghana

Germany

UNFCCC Secretariat

Kenya

Japan

UN-REDD Programme

MexicoNorway

Nepal

Spain

PanamaSwitzerland

Papua New Guinea

The Netherlands

Suriname

The Nature Conservancy

Tanzania

United Kingdom

VietnamUnited States

FY2010 Annual Report | 23

2.

FY10 Financial Reportof the Readiness Fund
2.1 The FCPF Budget Process

With two fiscal years of operation now complete, more experience has been
gained in planning and budgeting for the work of the Readiness Fund. However, it is evident that the FCPF Readiness mechanism is constantly evolving
along with the international REDD+ agenda. The FCPF is providing services
to a greatly expanded number of countries compared to the 20 initially envisioned, and new challenges (e.g., working with delivery partners, supporting
the REDD+ Partnership) also arise in each PC

The PC is responsible for approval of the Readi-

meeting. Financial planning will need to continue

ness Fund budget, usually in June of the preceding

to adjust in line with such changes.

fiscal year. Since it was not yet operational in FY10,

The budgets of both the Readiness Fund

there was no formal budget approval for the Car-and Carbon Fund of the FCPF are based on thebon Fund by the Carbon Fund Participants. The

World Bank fiscal year and are approved on an an-balance of this financial report therefore focuses

nual basis in accordance with the FCPF Charter.

on the Readiness Fund unless otherwise noted.
As part of approval of the Readiness Fund budget, the PC makes decisions on “Shared Costs”

The FCPF is providing services
to a greatly expanded number ofcountries compared to the 20 initiallyenvisioned, and new challenges also
arise in each PC meeting.

for activities that cut across and benefit both theReadiness and Carbon Funds. The Shared Costs
have included the FCPF Secretariat and REDD+
Methodology Support activities such as the workof TAPs, the IP Capacity Building Program and development of the R-PP. Pursuant to the Charter, theReadiness Fund pays 65 percent and the Carbon
Fund pays 35 percent of Shared Costs over time,
unless the PC decides otherwise. With the Carbon
Fund not operational, the PC issued resolutions
waiving cost sharing in FY09 and FY10 and instead
revised the annual Readiness Fund budgets tocover 100 percent of Shared Costs.
The FY10 Readiness Fund budget was approved in June 2009 at PC3 and is presented inTable 6 along with the FY09 budget and outcomesfor both years on a cash basis. The FY11 budgetof the Readiness Fund was approved in June 2010at PC6.

24 | Forest Carbon Partnership Facility

2.2 Funding Sources
Table 7, next page, presents the contributions andReadiness Fund in addition to the $53.9 million in

public pledges for the Readiness Fund by the end

cash received in FY09, bringing total cash contribu-

of FY10. Although total signed Donor Participation

tions to $86.2 million. This leaves an outstanding

Agreements amounted to $123.5 million, several

commitment of about $37.3 million from existingof the agreements included a phased contribution

signed agreements to be paid into the Readiness

into the Readiness Fund spread over a few years.

Fund in the coming years. FY10 funding sources

In FY10, $32.3 million was received into the

2.3

also include $821,000 of investment income.

Funding Uses in FY10

Based on actual expenditures, the FY10 budget

increase in the pace and level of disbursements

approved at PC3 (Table 6) was a reasonable pro-for Readiness activities compared to FY09, thejection of costs. Notably, there was a considerable

first year of operations. This increased spending

Table 6. FCPF Readiness Trust Fund Annual Budgets FY09-11 (in US$ thousands)
FY09
RevisedBudget

FY09
Actualc

FY10
RevisedBudget

FY10
Actualc

FY11
Budgeta

Services to REDD Countries$3,732$2,037$4,226$3,719$4,213

Country Implementation Support$1,194$409$1,734$1660$2,025Country Advisory Services

$873

$801

$827

$793

$959

$1,665$827$1,665$1266$1,489REDD Methodology Supportb
of which Est. Readiness Share$1,229of which Est. Carbon Fund Share$260

FCPF Secretariatb$1,335$988$1,443$1321$1,735of which Est. Readiness Share$1,432of which Est. Carbon Fund Share$303

Readiness Trust Fund Administration
TOTAL READINESS FUND

$306

$471

$484

$362

$472

$5,373$3,497$6,153$5,402$6,117

a. FY11 Budget approved at PC6, Resolution PC6/2010/8.
b. FY11 line item activities in italics are for reference only and not in the total est. budget of the Readiness Fund. They reflect PC6/2010/8 on Shared
Facility Costs, whereby the Readiness Fund will pay 100% of Shared Costs until the Carbon Fund becomes operational. Once operational, theCarbon Fund will pay 35% of the Shared Costs. An estimated start date for the Carbon Fund of January 1, 2011 is used for illustration.
c. In FY09, the Trustee identified a few accounting transactions that needed to be corrected in the budget. Though there was no overall financial
impact to the Readiness Fund, the transactions were corrected in Bank accounting systems during FY10 and are presented in this report toaccurately reflect expenditures by activity and by fiscal year.

FY2010 Annual Report | 25

Table 7: Commitments and Pledges to the Readiness Fund as of June 30, 2010 (in US$ thousands)
FY09

FY10

AFD (France)$4,600$600

Australia$9,600Denmark

FY11

FY12

Totalsa$5,200$8,000$17,600$5,800$5,800Finland$9,000Japan$5,000Netherlands$5,000

Norway$5,000Spain$7,000$7,000

Switzerland$8,200$8,200$9,000$5,000$15,300$16,400

Committed Funding$4,400$20,300$4,400$5,200

United Kingdomb
United States$10,000$500$4,500$53,900$32,300$30,200$5,200$5,000$32,900$4,400$123,500Japan$4,000$4,000Germany$24,500$24,500

Committed Funding plus Pledges$61,400$4,400$152,000

a. Amounts may vary due to exchange rate fluctuations
b. United Kingdom’s contribution is provided through the Strategic Climate FundTable 8: FY10 Readiness Program Expenditures by Activity (in US$ thousands, cash basis)
Original
BudgetRevisedBudgetExpenses(Actual)Variance$1,734$1,734$1,660$7496%Country Advisory Services

$827

$827

$793

$34

96%

REDD Methodology Support$1,082$1,665$1,266$398

76%$1,443$1,443$1,321

$122

92%

$484

$484

$362

$122

75%

$5,570$6,153$5,402$751

88%Activities

Expenserate

Services to REDD Countries
Country Implementation Support

FCPF Secretariat
Readiness Fund Administration
Total

26 | Forest Carbon Partnership Facilitywas the result of the formation of country teams
at the World Bank to provide assistance to REDD

Figure 3. FY10 Budget Performance(in US$ thousands)

Country Participants, the increased pace of work in

FY10 Revised Budget

more REDD countries and additional staff coming

FY10 Actualon board to strengthen the capacity of the FMT.
Table 8 also reflects expenditures by activity
on a cash basis. The revised budget amounted to$6.153 million, while total actual expenditures

Fund budget on a cash basis. These numbers do
not include, however, contracts which were issued
throughout the operations of the FCPF and not yet

Country
FCPF
Readiness
Implementation Secretariat Trust Fund
SupportAdministration

Country
Advisory
Services$1,266$1,665

$793

$827

$362

$484

$1,32188 percent of the revised FY10 FCPF Readiness$1,443run of $751,000. Overall, expenditures stood at$1,660$1,734amounted to $5.402 million, a variance and under

REDD
Methodology
Supportfully expensed (e.g., the IP Program contracts inTable 3), and funding commitments that were madeto World Bank country teams supporting REDD+
Readiness in specific countries.
As per Figure 3, country implementation sup-Expenses on Country Advisory Services cameport expenditures were $1.660 million or at 96

to about $793,000 or 96 percent of the FY10 bud-percent of the budget. These expenditures reflect

get for these services, which is in line with FY09

the direct assistance of World Bank county teams

costs. The majority of these costs arise from FMT,

to REDD Country Participants, including technicalforestry and social development staff advice andassistance, grant supervision and assessments

guidance to REDD countries on their programs,

provided to the PC.

including development of the R-PP, SESA and

FCPF Secretariat expenses were $1.321 million

consultation processes.

compared to the budget of $1.443 million, or 92
percent of the budget on a cash basis. This included costs for program management, organization ofannual and PC meetings, and travel costs for REDDCountry Participants. The costs also included supporting the participation of the IP Observer, hosting and maintaining the FCPF website and generalcommunications to FCPF stakeholders.
Readiness Fund Administration costs were$362,000 or 75 percent of the amount budgetedin FY10. These costs reflect the work of WorldBank staff in fund management, contributions
management, accounting, legal and other services
required by the Readiness Fund Trustee. The initial work of the first evaluation of the FCPF was
included in this budget category, however, it has
been moved in FY11 to Secretariat services, which
is a more appropriate budget category given the
broader scope of the evaluation work. In FY10,
the start-up costs for the evaluation exercise werelower than anticipated.

Table 9: FY10 Financial Statement
for the Readiness Fund(in US$ thousands)
Item

AmountBeginning Balance$50,945

Donor Contributions$32,290

Investment Income$821

Total Receipts$33,111

Expenses$5,402Grant Disbursements$959

Total Disbursements$6,361Fund Balance$77,695

FY2010 Annual Report | 27

An important element of the Readiness Fundfrom its inception has been that the Fund provides
grant funds to countries for their own management—the grants of up to $3.6 million per REDDCountry Participant in support of their own country-led Readiness work. The REDD Country Participant manages and utilizes the grant for REDD+
activities and expenses, which are reflected as
grant disbursements. Figure 2, page 10, provided
information on all formulation grant disbursements to countries. By the end of FY10, 13 R-PP
formulation grant agreements had been signedwith $2.6 million in grants fully committed. Nineof the grants were actively disbursing as of June30, 2010, with $959,000 in grant funding fully proWith the budget of REDD Methodology Sup-cessed and expensed by REDD countries. Associ-port revised to $1,665,000, total expenditures on aated expenditures on country services accounted

cash basis came to $1,266,000 or 76 percent of thefor an additional $5.8 million of support.

revised budget. These costs included all expenses

In summary, per Table 9 on page 27, at the close(consulting contracts, travel and meeting costs)of FY10, the balance of the Readiness Fund stood

related to the independent TAP supporting theat $77.7 million. Total new funds into the account

FCPF, considerable work with other REDD+ insti-

were about $33.1 million, including the donor con-tutions to coordinate and develop joint tools, suchtributions of $32.3 million and investment income

as the R-PP template and special programs such as

earned on the account balance. Total disburse-

the IP Capacity Building Program. A growing focus

ments on a cash basis were $6.4 million, with cashon knowledge management and information shar-expenditures of $5.4 million, and expenses bying, on such topics as REDD+ opportunity costs,

REDD Country Participants against their grants ofis also reflected in these numbers.

approximately $959,000.

2.4 Financial Commitments over the Longer Term
In the Charter of the FCPF, the Readiness Fund wascommitments (use of funds) made by the PC wasestablished to operate over the long term, with aaligned with the total committed funding (sources

closing date in 2020. In order to plan resourcesof funds) of approximately $123.5 million. The longover this longer time horizon, the PC issues resolu-

term business plan includes reserves for operation

tions that establish funding priorities and commit-of the secretariat by the FMT and the Trustee rolements for the coming years. These commitmentsof the World Bank over time. In addition, with new

are considered “notional” when the PC has set

funding that came in during FY10, the PC was able

aside or allocated financial resources of the Readi-

to allocate additional resources to support REDD

ness Fund that are not yet signed into formal grantCountries at PC6. The PC agreed to provide R-PP

agreements or contracts. They are converted to

Formulation Grants of $200,000 and associated“full” commitments once the grant agreements (orcountry services to all REDD Country Participants

vendor contracts) are signed by recipients and thethat did not yet have access to such funding. ThisWorld Bank as Trustee of the Readiness Fund.

provision eliminated the previous restriction of

At the close of FY10, the long term notional
28 | Forest Carbon Partnership Facility

such grants to the first 25 countries selected intothe FCPF. This allocation will actually be made only
if the grant agreement is signed by December 31,
2011 and an appropriate delivery partner can bearranged (unless the PC decides otherwise, forexample, in the case of extenuating circumstances
or a delay that is not the fault of the REDD Country
Participant).
The PC also reiterated that after PC6 all REDD

The PC agreed to provide R-PP
Formulation Grants of $200,000 andassociated country services to all
REDD Country Participants that do
not yet have access to such funding.

Country Participants will be equally eligible to receive a Readiness Preparation Grant of up to $3.6
million. The grants depend on the PC’s decisioncountries in their efforts. This brings the total

regarding the R-PP, the availability of sufficient

notional commitment of the Readiness Fund forcommitted funding, and regional balance among

direct grants and associated country services togrant recipients.

$68.2 million at the close of FY10.

As shown in Table 10, as of PC6, Readiness

Besides the notional commitments outlined

Preparation Grants have been notionally com-above, the FMT estimates that there is sufficientmitted to 11 REDD countries. In addition, R-PP

funding for the PC to allocate another eight Readi-

formulation grants of $200,000 are notionallyness Preparation Grants of up to $3.6 million atcommitted to an additional 25 countries. Thus,

future PC meetings. This will enable up to nineteen

thirty-six REDD countries have access to FCPF

fully funded Preparation Grants and add $28.8

grants—a considerable increase over the twenty

million to the amount of Readiness funding thatenvisioned when the Readiness Fund started inis available for REDD Country Participants. These

2008. Overall, $44.6 million has been notionally

numbers do not include any new resources thatcommitted to these country grants, with $23.6

may come in to the Readiness Fund when pledges

million in additional funding to provide the as-are converted to signed contributions, as antici-sociated country services that support REDD

pated in the coming year.

Table 10: Funds Notionally Committed to Grants and Services for REDD Country Participants(as of June 30, 2010)
Commitments

Amount per
country (US$)

NumberTotal (US$)

Preparation Grants (US$3.6m)$3,600,000

11$39,600,000

Associated Country Servicesa$811,00011$8,921,000

Formulation Grants (US$200k)$200,000

25$5,000,000

Associated Country Servicesa$586,00025$14,650,000—

36$68,171,000

Grants and Country Services
Full Support through Readiness Package

Early Support through R-PP Formulation

Total Notional Commitments to Grants and Country Servicesb

a. Country Services are comprised of an average per country share of REDD Methodology Support and Country Advisory Services, plus direct
Country Implementation Supportb. 36 REDD Countries, which may include all selected REDD Country Participants except for Tanzania, which is bilaterally funded

FY2010 Annual Report | 29

3.

Carbon Fund
Development
Beyond the work of the FCPF Readiness Fund in assisting countries to preparefor REDD+, the FCPF Carbon Fund also advanced in FY10. This second, but
critically important, phase of the FCPF serves as a vehicle through which the
FCPF will implement and evaluate pilot incentive programs for REDD+: Participant countries will receive performance-based payments for achieving verified
emissions reductions from avoided deforestation and/or forest degradation
if they have demonstrated progress in REDD+

specifically, to support REDD+ country Emission

Readiness with respect to MRV. The structure

Reductions Programs that:of these payments will build on the options for
REDD+ that are currently being discussed within• focus on results, namely high-quality and sus-

the UNFCCC process or national systems, withtainable emissions reductions including social

payments made to help address the causes ofand environmental benefits;deforestation and degradation.
The FMT organized three detailed design discussions in FY10 with existing and potential Car-• are undertaken at a significant scale, for example at the level of an administrative jurisdiction
within a country or at the national level;• are consistent with emerging compliance standards under the UNFCCC and other regimes;

The FMT organized three detailed
design discussions in FY10 withexisting and potential Carbon Fundparticipants.

• are sufficiently diverse to generate learning
value for the FCPF and other partners;• use clear mechanisms so that the incentives for
REDD+ reach those who need them;• are based on transparent stakeholder consultations; and• generate emissions reductions at a fair price.
The meetings also produced an analogous set ofbon Fund Participants, as well as some observers

goals and parameters for application of Carbon

from REDD countries, with the aim of maximizing

Fund resources to sub-national emissions reduc-the utility of the Carbon Fund and addressing any

tions programs, for example to ensure linkage to

key outstanding issues before the launch of Fundnational REDD+ strategies, and minimize the risk

operations (September 2009 in London; May 2010of deforestation and emissions leakage.

in Frankfurt; May-June 2010 in Bonn). The meet-

In addition to these detailed parameters,

ings reconfirmed the Fund’s importance and its

meeting participants agreed on several impor-objectives, and made some important refinements

tant overarching principles to guide Carbon

to its structure.

Fund deployment, ensure its linkage and com-

First, the discussions resulted in the articula-plementarity with the Readiness Mechanism, andtion of a clear set of aims for the Carbon Fund,to make it sustainable. Participants agreed that30 | Forest Carbon Partnership Facility

the Carbon Fund should play both a demonstra-

the Carbon Fund structure should be designed totion and a catalytic role in advancing emissions

attract private capital.

reduction programs; accordingly, Carbon FundAs of the close of FY10, the FCPF continued

commitments should be made early enough toits discussions of options for pricing structures ofprovide incentives to FCPF countries that achieve

REDD+ emission reductions assets, and continued

significant progress in Readiness preparation.

work to recruit private sector Participants for the

They also agreed that private capital will be es-

Carbon Fund as a key criterion for declaring thesential to make REDD+ sustainable, and thus that

Fund operational.
FY2010 Annual Report | 31

4.

Conclusions, Insights
and the Road Ahead
Two years into operation of the FCPF, the resources available for countries toprepare for REDD+ have evolved considerably. The participation, collaboration and leadership of the REDD Country Participants are driving progress toward the FCPF’s objective of building global capacity to make REDD+ a reality.
Meanwhile, the engagement of FCPF Donor and Carbon Fund Participants,
its official observers, and independent expert reviewers is ensuring that thelessons learned at each step of the way are identi-

questions of control over resource management

fied, documented and translated into institutional

and the respective decision-making processes.

improvements that enhance the FCPF and facili-

4. Promising results are emerging where countries

tate knowledge sharing across the partnership. At

are combining traditional evaluation of REDD+

the close of FY10, it is apparent that the pioneer-

strategy options with newer analytic tools thating REDD countries have greatly advanced theirfacilitate making choices among competing

individually tailored Readiness preparation strat-

options.

egies, and have also begun to serve as leaders

5. A bridge has not yet been built between theand key sources of information for fellow REDD

wealth of experiences at the local levels in man-countries that have more recently initiated theiraging forest resources and land use change,

own processes.

and REDD+ policy frameworks and incentive

Experiences in FY10 revealed a number of les-programs at the national level.

sons that can help pave the way in FY11 and be-

6. Early cooperative development on rules foryond, both as countries continue the momentum

REDD+ transactions and benefit-sharing are

in preparing for REDD+ and in laying the founda-

essential prerequisites for broad support andtion for activities under the Carbon Fund. Belowthe legitimacy of REDD+ programs.

are some of the lessons from the point of view of
the FMT:

7. Addressing methodological issues such as
reference levels and MRV are key entry requirements for REDD+ programs. In the absence of

1. The cross-cutting nature of REDD+ presents

clear policy guidance from the international

new challenges in sectoral coordination thatlevel and price signals for REDD+, countries

may be solved by embedding REDD+ strate-

can embark on a stepwise approach to building

gies in overarching policy frameworks (e.g. lowcarbon development strategies).

their capacity in these areas.
8. Early initiatives to finance REDD+ have illu-

2. Political will is required to create highly quali-

minated a paradox: In spite of the high-level

fied, cross-sectoral teams capable of resolving

international commitments to REDD+ funding,competing interests into a coherent national

moving resources to REDD+ countries throughplan for REDD+.

multilateral agencies requires due diligence3. Countries are now grappling with how to ensure
the inclusion of stakeholders in REDD+ policy
development and implementation, pointing to
32 | Forest Carbon Partnership Facility

and safeguards that take time.
9. Progress on REDD+ will stall if it is cast as a way
to solve all problems.

FY2010 Annual Report | 33

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