Investment Plan preparation, submission and approval may take up to 2 years.
Project preparation, submission and approval by the FIP sub-committee maximum 2 years.
The Forest Investment Program (FIP), is one of three targeted programs that make up the Strategic Climate Fund (SCF) of the Climate Investment Funds (CIFs).
The FIP addresses the drivers of deforestation and forest degradation by supporting developing countries’ efforts to reduce deforestation and forest degradation (REDD), while promoting sustainable forest management. FIP provides financing to developing countries for developing institutional capacity, and for public and private investments that are identified through REDD readiness strategies.
Along with supporting the public sector, FIP's Private Sector Set Asides (PSSAs) allocate concessional financing to projects that engage the private sector in sustainable forestry. The FIP’s Dedicated Grant Mechanism for Indigenous Peoples and Local Communities (DGM), is designed and led by representatives of indigenous peoples groups and local communities to set priorities and implement programs aimed at conserving their natural environment, and to enhance capacity in engaging with local, national, and international REDD+ dialogue and actions.
The FIP has four objectives:
- Initiate and facilitate transformational change in developing countries’ forest related policies and practices;
- Facilitate the leveraging of additional and sustained financial resources for REDD, including through a possible UNFCCC forest mechanism, leading to an effective and sustained reduction of deforestation and forest degradation, and enhancing the sustainable management of forests;
- Pilot replicable models to generate understanding and learning of the links between the implementation of forest-related investments, policies and measures and long-term emission reductions and conservation, sustainable management of forests and the enhancement of forest carbon stocks in developing countries.; and
- Provide valuable experience and feedback in the context of the UNFCCC deliberations on REDD.
8 donor countries: Australia, Denmark, Japan, Norway, Spain, Sweden, UK, US
FIP investments should leverage additional financial resources, including from the private sector where feasible. Co-financing from the FIP may be provided through a variety of financing instruments utilized by the MDBs for investment and development policy lending.
The CIF monitors and reports on the FIP contributions to GHG reductions, enhancement of carbon stocks, and livelihood co-benefits, such as access to finance, technical assistance, and new jobs. Projects and programs also report on other relevant co-benefits, including biodiversity and environmental services, governance, tenure, and capacity building. The FIP M&R process has a participatory approach, requiring all stakeholder groups to participate in an annual workshop to assess the progress on the performance of the implementation of their national FIP investment plan. This approach empowers beneficiaries, builds country ownership, and ensures accountability and transparency. The country-level information is complemented with annual project-level progress information from MDBs, combining quantitative and qualitative methods to collect, analyze, and generate knowledge and lessons in implementing FIP investments. The CIF Administrative Unit collects and aggregates all data and prepares an annual results report (FIP Operational and Results Report) to inform the FIP Sub-committee. The CIF is also part of the International Aid Transparency Initiative (IATI), a global open data initiative that unites organizations working on international development, ranging from government donors to regional NGOs, foundations, and trusts.
FIP is a program of SCF and is subject to SCF governance. The governance and organizational structure of the SCF includes an SCF Trust Fund Committee, SCF Sub-Committee(s), an MDB Committee, the CIF Administrative Unit, and a Trustee.
- The SCF Trust Fund Committee is established to oversee the operations and activities of the SCF. It is composed of eight representatives from contributor countries, eight representatives from eligible recipient countries, and 13 observers.
- The SCF Sub-Committee(s) are responsible for approving programming priorities, operational criteria, and financing modalities for the SCF Program. They also approve SCF Program financing for programs and projects. Decisions are reached by consensus. Each SCF Sub-Committee is composed of up to six representatives from donor countries and six representatives from eligible countries, selected on a regional basis.
- The MDB Committee facilitates collaboration, coordination and information exchange among the MDBs.
- The CIF Administrative Unit supports the work of the CIF, including the SCF.
- The Trustee is the International Bank for Reconstruction and Development (World Bank).
Recipient countries may benefit from the FIP provided they:
- Meet Official Development Assistance (ODA) eligibility criteria according to OECD/DAC guidelines;
- Have an active MDB country program (for this purpose, an “active” program means that an MDB has a lending program and/or on-going policy dialogue with the country).
Twenty-three (23) countries have been selected for the implementation of pilots (list of countries available here).