GCF and GIZ sign project agreement for sustainable forest management in Lao People’s Democratic Republic

The Green Climate Fund (GCF) and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH have signed an agreement with the Government of Lao People’s Democratic Republic (PDR) for a USD 79.3 million project (USD 35.2 million in GCF financing), to address a much-needed transition to the climate resilient management of forests and landscapes at scale.

As a landlocked Least Developed Country, Lao PDR is highly vulnerable to climate change impacts. Agriculture, forestry, and fisheries account for 16 per cent of the nation’s Gross Domestic Product (GDP) and climate change impacts put these sectors and the people who depend on them at risk. Recognising the urgent need to invest in climate adaptation measures, the Government of Lao PDR has included these areas as a priority in its National Adaptation Programme (NAP) and Nationally Determined Contribution (NDC).

To support the government in achieving these goals, GCF partnered with GIZ on a USD 79.3 million project (with USD 35.2 million in GCF financing) for deforestation-free development integrated with adaptation principles that eliminate financing barriers. The project will address a much-needed transition to the climate resilient management of forests and landscapes through three main pathways: strengthening land tenure security with climate-informed planning and adequate law enforcement; identifying and addressing the key drivers of deforestation; and, strengthening community resilience with a focus on village and forest conservation.

Building on another complementary project in Lao implemented by GIZ approved at the 24th GCF Board Meeting in 2019, this project will increase the resilience of local farmers and agri-ecosystems by reaching approximately 153,900 people directly and 332,990 indirectly. The project will also avoid 4.6 million TCO2eq in its four-year implementation period.

The legal agreement – called a Funded Activity Agreement (FAA) - was signed immediately following GCF’s most recent Board meeting where the funding proposal for the project was approved. 

Speaking at the FAA signing, Yannick Glemarec, GCF Executive Director said, “In less than 24 hours of approval by the Board, we are signing this agreement. This project is extremely important because it epitomises the paradigm shifts that we like to foster when it comes to forest management. It’s about removing the barriers to deforestation free sustainable development, and it will serve as a model for countless countries in the world. We would like to thank GIZ for our partnership together and for the quality of this project.”

In reference to both GCF projects being implemented by GIZ, Mr. Matthias Giegerich, Head of Department, Asia, Pacific, Latin America, Caribbean at GIZ said, “These projects aim at increasing the resilience of vulnerable communities and will help reach the country’s NDC target. The goal is to stop deforestation and prevent several million tonnes of greenhouse gas emissions, while improving the living conditions of the local population.”

Financial sustainability of the project is realised through additional funding from the Forest Carbon Partnership Facility (FCPF) Carbon Fund with the World Bank and other co-financing from supporting institutions.