Guyana

Guyana is one of the poorest countries in South America, and the forest is a potential source of substantial revenue. For many countries such as Guyana, the path to economic growth is through extensive deforestation. 20 per cent of the world's remaining rain forests are found in countries like Guyana. For the global fight against deforestation to be successful, it must be profitable for these countries to let the forest remain. This arrangement can contribute to economic growth while preserving most of the forest.

In November 2009 Norway and Guyana signed a Memorandum of Understanding (MoU) for financial support for the preservation of the rainforest. Through this cooperation, Norway will support Guyana with up to NOK 1.5 billion until 2015 – if Guyana successfully maintains a low rate of deforestation.

The Norwegian government believes this cooperation can serve as an example of how countries with an historically low rate of deforestation can receive financial compensation for keeping deforestation rates low. Norway's financial support is channelled through the Guyana REDD+ fund (GRIF), which is administered by the World Bank.

A leading country

The MoU is one of the first examples of performance-based compensation for reductions in greenhouse gas emissions from deforestation and forest degradation at a national level. The funds from Norway will contribute to financing Guyana's low carbon development strategy, which seeks to assist economic and social development while protecting the forests.

Guyana's low carbon strategy explains how Guyana can limit forest-based greenhouse gas emissions, convert almost the entire energy sector to clean energy, accelerate the development of low-carbon sectors and address the enormous climate change challenges the country faces. For example, 90 per cent of Guyana's arable land is threatened by changing weather conditions, and in 2005 floods destroyed infrastructure and property equivalent to 60 per cent of Guyana's gross domestic product.

A follow-up evaluation from Norad in 2010 revealed the following:

• The national interest in REDD+ is considerable, but the details are not fully understood.
• The support has stimulated and strengthened national ownership and is being discussed in many sectors.

It is recommended that a Norwegian representative help facilitate the implementation of the programme in the initial phase.

Delayed disbursement

Guyana is located on the northeast coast of South America. Transfers from Norway will constitute USD 70 million if logging in the country is kept at a low rate, according to the UN Economic Commission for Latin America, Cepal. Guyana has a rainforest the size of England. The Norwegian support for 2010 and 2011 will only become available to the Government of Guyana when the results of efforts against deforestation are documented and confirmed by Norwegian Veritas.

Guyana has not been completely satisfied with the cooperation with Norway so far. During the climate summit in Cancun, Mexico, Guyana's president criticised Norway for not having provided the promised support, despite the fact that Guyana, in his view, had fulfilled the conditions. It was not until the end of 2010 that Norway paid the first money into the fund administered by the World Bank. No documented results of the major initiative are yet available. Experts, however, have stated that the delay in payment of support from Norway has not had serious consequences for Guyana's economy.

Guyana has proposed building a hydropower plant at Amaila Falls in the rainforest. The Norwegian funds will be used to acquire shares in the power project financed by China Development Bank and of the Inter-American Development Bank.

The Norwegian Minister of the Environment and International Development, Erik Solheim, visited the country in 2010.