Forest Carbon Partnership Facility (FCPF) Readiness Procedures July 9, 2008

Allocating Funds for Readiness Work Financing for Phase I  Upon Selection to the FCPF, each country can access US$200,000 from the Readiness Trust Fund to begin preparation of its Readiness Plan  All FCPF Readiness funds are provided as grants  Requirements:  Signing FCPF Participation Agreement (initiated immediately after selection)  Prepare and submit simple proposal for activities to be undertaken in preparing the Readiness Plan (How will your country spend the US$200,000?)

Allocating Funds for Readiness Work Financing for Phase I  Possibility of signing, at the start of Phase I, a “framework” Grant Agreement that also includes $$ for Phase II.  The objective of this option is to simplify the legal process into one step and reduce time & effort later on (i.e., one agreement to be approved instead of two; less need for an amended agreement)  Flexibility to do two (or more) smaller grant agreements remains, if a selected REDD Country does not want a larger framework agreement (due to Parliamentary difficulties or other constraints)

Allocating Funds for Readiness Work Financing for Phase II  Framework Grant Agreements enable access to additional grants of “up to US$1.8 million” for Component II (hence $2 million in total, including the initial US$200,000)  Phase II still requires detailed implementation and procurement plans that fully justify the additional amounts (per Readiness presentation)  A streamlined review process will be proposed to the Participants Committee (PC) – e.g., their Technical Advisory Panel (TAP) may provide review and guidance for this second phase, with approval only on a no-objection basis (by “virtual review”) by the PC.

Allocating Funds for Readiness Work Financing for Phase II  For REDD Countries that believe they need above US$2 million for Readiness work – opportunity will also exist to amend the Framework Grant Agreement and go above that amount.  However, it is proposed that a streamlined review process will not be possible in these cases – the PC would need to approve in a full meeting any amounts above US$2 million, based on detailed implementation plans.

Readiness defined  A REDD reference scenario established, based on historic emissions and ev. modeling. Ideally follows guidance from UNFCCC.  An economically effective, efficient and socially equitable REDD strategy formulated and vetted through a meaningful policy/stakeholder consultation process.  A monitoring and verification system designed and implemented  REDD infrastructure established:  National coordination of activities  Ownership of ER  Distribution of ER revenues, etc.

Readiness Phases and implementation Preparation of R-Plan Scoping and gap analysis Setting of objectives / defining activities Preparation of Stakeholder consultations plan Strategy development & consultation Identification of most effective and efficient strategies (incl. policy changes) Methodology work (Ref. emission level) Design of Monitoring system Identification of Investment needs Implement. of monitoring Implementation of monitoring system (co-financing from other partners needed) Implement. Of Strategy Implementation of REDD Strategy Demonstration Activities Implementation of demonstration activities and supervision FCPF Readiness FIF FCPFCarbon F. UN-REDD, bilateral donors, NGOs, foundations

Readiness Process Readiness Mechanism REDD countries prepares the Readiness Plan Definition of objectives/strategies and responsibilities First Planning Workshop Preparation of main ToRs for Plan Preparation of Consultation Plan Stock taking of existing information and assessment of knowledge gaps Identification of most effective and efficient strategies (incl. policy changes) Methodology work (Ref. emission level) Design and implementation of Monitoring system Identification of Investment needs REDD countries implement the Readiness Plan 1 st Phase (U$200,000) 2 nd Phase (up to U$1.8 million) 3 rd Phase (U$ million) R-Plan Country “ready”

Readiness Process Grant s 1.R-PIN approval by Steering Committee 2.Participants Agreement signed 3.Country provides Procurement plan for initial preparation phase 4.Signature of Grant Agreement Stock taking of existing information and assessment of knowledge gaps Setting of objectives and activities for the R-PLAN involving some key stakeholders Preparation of stakeholder consultation plan Develop TORs for initial analytical work 5. Readiness Plan submitted and approved based on no-objection by PC Preparation of Readiness Strategy REDD infrastructure Incl. SEA, stakeholder consultation Design and Impl. of monitoring activities Reference Case Setting 6. Readiness Package finalized = country is ready US$ 200,000 Up to US$ 1,800,000 Higher amounts need PC approval