Transcript 1st ASEAN+3 Environment Ministers meeting

The Feasibility of NCF
The case of Environment
Protection Fund, Lao PDR
By : Soukata Vichit
• Fund name: Environmental Protection
Fund
• Country:
Lao PDR
• Objective: to strengthen environmental
protection, sustainable natural
resources management,
biodiversity conservation and
community development in
Lao PDR
Governing body
Board of Directors (August 2012)
1. Deputy Prime Minister as Chairperson
2. Minister of Finance as Vice-Chairperson
3. Vice Minister of Ministry of natural resources and
Environment (Member), ,
4. Vice Minister of Ministry of Energy and Mining (Member),
5. President of Lao Women Union (Member),,
6. Vice Governor of province (Member),
7. Vice President of Chamber of Commerce and Industry
(Member),
8. President of the Association for Agricultural Production and
Processing,
9. Vice President of Science and technology Council.
Legal status:
– The EPF has been established as an autonomous
organization, both financially and administratively,
operating under the laws in Lao PDR. The EPF was
established through the issuance of Prime Ministers
Decree No146/PM dated 6 June 2005.
– The EPF can absorb all kinds of contributions from
donors and the private sector, although it cannot
access a direct fiscal transfer from line ministries due
to its off-budget nature.
Income of 2005-2010
​Sources of income
​US$
LAK (million)
7,023,000
56,184
7,000,000
56,000
UNESCO sinking fund
23,000
184
ADB endow​ment fund
5,798,194
46,386
Contributions from businesses
265,878
2,127
Interest from the capital
896,756
7,174
13,983,828
111,871
Grant
World Bank sinking fund
Total
[1]
Note: US$ 1 = LAK 8,000
Beneficiaries
•
•
•
•
Any person,
Commercial entities,
Government organizations,
Civil society entities (NGOs)
Rationale
• To secure stable source of income for the
environmental protection efforts
EPF fund and climate finance
Article 17of EPF Decree
– EPF shall establish Specialized Financing
Windows (SFW) for activities for
environmental protection, sustainable
exploitation, use and management of natural
resources within any sector.
– Government ministries, organizations and
entities may propose the establishment of a
SFW.
EPF fund and climate finance
– SFW may elect to establish their own
managerial structure, or let the Executive
Office operate and manage the window per
agreement with the entity providing the capital
contribution ..
– The creation of other funds for environmental
protection, natural resources, and/or
biodiversity conservation separate from the
EPF is not permitted. Such funds shall be
established only as SFW under the umbrella of
the EPF.
• .
EPF Financing Windows and Access to AF
-
WB
20
Grant
Contribution
End. Fund
AF
%
Interest
EPF
PICE
Sub grant
Sub grant
Sub grant
WRM
PC
PC
CBI
-Sub grant
£¤¡¾Sub grant
Sub grant
Sub grant
Sub grant
Sub grant
Land M
Sub grant
-£¤¡¾Sub grant
Sub grant
CC & A
Sub grant
Sub grant
Sub grant
ື່ ນໆ ?
ອ
Others
10
Process of establishment
• The EPF establishment is provided by the
environmental protection Law (1999) and
was initiated as one of the conditions of the
ADB Environment and Social Program
(ESP) program loan (US$ 20 million) to the
Government of Lao PDR;
• The Prime Minister Decree 146 on the EPF
establishment and operation was issued on 6
June 2005;
Process of establishment
• The Prime Minister Decree 72/PM
appointing the EPF board of directors was
issued on 1 November 2005,
• In January 2006 the EPF board adopted and
approved the EPF charter,
• The Executive Director was appointed by
mid April, and the World Bank grant was
effective.
• The process take more than 5 years
Political support
• The EPF BOD appointment was on 1
November 2005 and and the director of the
executive office
• the fund provided by April 2006. The EPF
is an autonomous organization established
by the Government and chaired by the
Deputy Prime Minister.
Resources invested in the establishment
• 5 years
• ~ 6 men month (Supported by ADB)
• Budget allocated (if any)
Legal process
• The establishment of a fund in Lao PDR
has to be provided by a law under which a
specific Prime Minister Decree on the
establishment and operation of the fund will
be issued.
Legal tools
–
–
–
–
–
–
EPF Decree
EPF Chapter
EPF Operation Manual
Technical Guideline and application form
Financial and procurement Manual
Sub grant Implementation Manual
Institutional Framework
Board of Directors
PSC of
Window/project
Inter. Advisor
(where is needed
Executive Director
Assistant to the ED (2)
Admin
Assistant
Financial Unit
Manager (1)
Project(s)
Accountant
(2)
Procurement
Officer (1)
Drivers
(2)
IT (1)
Office
Cleaner
(1)
Technical unit
Planning
Manager
(1)
Window
&
Window
& &
M&E M&EWindow
Window
& &
Window
M&E
manager
M&EM&E
manager
manager
manager
manager
Cash (1)
Provincial facilitator (s)
Human and institutional
• For the management of the EPF, the EO has
actually 15 staff with about 20% of the total
annual budget for the operation cost.
Lesson-learned: Success Factors
Different types of funds
– The EPF has proven that it is beneficial to create
a structure of a national fund that can accommodate
different types of funds.
–The EPF can serve as an institution that provide
financial service
–The EPF can directly receive the financial
assistance by a creating of a specific window
Lesson-learned: Success Factors
Standards
• The EPF manage fund according to
international standard in financial integrity
as well as social and environment safeguard
– inclusion of detailed procedures of financial
management and social environment safeguard
in the Charter and Operations Manual
– most of the grants have been managed according
to the World Bank’s standards
Lesson-learned: Success Factors
Reaching local beneficiaries
– The EPF and the Small Grant Project have been
the only initiatives that channel financial
resources to local stakeholders in the field.
Lesson-learned: Challenges
• Different types of funds
– An endowment fund was created to ensure
sustainable income to finance the operations of
the EPF, but a sustainable source of capital has
not been identified.
– Without sustainability the turn over rate of staff
occurred and may reduce confidence of donor
agencies in providing contributions to the fund.
Lesson-learned: Challenges
• Standards
– there has been a concern about the high turn
over rate.
– However, with the established system in place,
building the capacity of human resources would
be faster compared to the process of
establishing the system from scratch.
Address
• EPF Executive Office
POBox: 7647
2nd Floor, MONRE Building, Sidamduan
Road,
Vientiane
Tel: (856 21) 252739
Fax: (856 21) 252741
http: //www.laoepf.org.la.