Case study: Guyana REDD-plus Investment Fund (GRIF)
The Governments of Guyana (GoG) and Norway (GoN) signed a Memorandum of Understanding1(MoU) and a Joint Concept Note (JCN) on November 9th, 2009 pledging that the countries will “work together to provide the world with a relevant, replicable model for how REDD+ can align the development objectives of forest countries with the world’s need to combat climate change.” The result of this cooperation is the Guyana REDD-Plus Investment Fund (GRIF). The GRIF aims to align national economic development with climate resilience and low-deforestation, low carbon growth by investing in low-carbon strategies identified in Guyana’s Low Carbon Development Strategy (LCDS). The GRIF channels funding and offers economic incentives to a wide range of actors to enhance national government policy frameworks and economic incentives for combating climate change. Due to its characteristics, purpose and use the GRIF can be viewed as a public finance mechanism (PFM). Public Finance Mechanisms (PFMs) or public finance instruments (PFIs) are financial support mechanisms that help governments align market actors, correct market failures and in the case of climate finance activities, help to reduce the perceived and actual risk of low-carbon and climate-friendly investments. In both general terms and when used for climate finance PFMs cover a broad range of mechanisms such as grants, loans and credit lines, guarantees and technical assistance. In the case of the GRIF the PFM takes the more unique form of a “financial intermediary mechanism for the performance-based payments from contributors to Guyana” for REDD+ activities. For the purpose of climate finance many PFMs are employed by national governments, development finance institutions and commercial banks to mobilise, in addition to public funding, private financing to accelerate the development, commercialisation, and deployment of climate-oriented projects, programmes and institutions and buildcommercially sustainable markets.The following section provides an overview of Guyana’s macro-economy and evolution of Guyana’s climate change policy with a special focus on REDD+. Section three gives an overview of the GRIF, including its funding sources, design and governance, fund administration and current operations. The GRIF’s key points and features are presented in section four. The conclusion in section four aims to present the lessons learned from the GRIF.