Role and Financing Mechanism of Environment Protection Fund

Role and Financing Mechanism of Environment Protection Fund

Background The EPF was established through the issuance of Prime Ministers Decree 146/PM, dated 6 June 2005 and decree was revised on 8 March 2017 , Ref. 94/PM. Purposes: The Environment Protection Fund was established on 6 June, 2005, as a Government entity for mobilizing different type of funds from national and international sources for supporting natural resources management and environmental protection effectively and sustainably.

EPF Organization Structure The EPF consists of : 1. the EPF Board of Director (EPF BOD) 2. the Technical Committee (TC) 3. the EPF Office (EPFO).

Current EPF Organization Structure BOD TC EPFO Admin. & Personnel Division Finance Division Procurement Division Project Operation Division

EPF Governing body • The BOD comprises the following organizations’ representatives: (11 members) • • • Minister of MONRE Vice-Minister of Ministry of Finance Vice-Minister, Ministry of Energy and Mines Vice-Minister of Planning and Investment Vice-Minister, Ministry of Agriculture and Forestry Vice-Minister, Ministry of Industry and Commerce Vice-Minister, Ministry of Education Vice-President of Lao National for Construction Vice President of Lao Women Union Vice President of Chamber of Commerce and Industry

The Technical Committee (TC) is established as EPF’s technical advisory body for the EPF project implementation. The TC is chaired by the Director of Department of Planning and Cooperation (DPC), MONRE and comprised of nine (09) members in total at Deputy Director General level:

TC members 1 Department of Planning and Cooperation (DPC) MONRE Department of Planning and Cooperation (DPC) – MAF Chair 3 4 Executive Director of EPF Office Department of Forestry MAF member 5 6 Department of Forest Inspection (DOFI), MAF Department of Natural Resource Environment Policy (DNEP), MONRE; member 7 External Finance Department, Ministry of Finance (MOF); member 8 Department of International Cooperation, Ministry of Plan (MPI); member 9 Vice Dean of National University of Lao (NUOL); member 2 Vice Chair

Sources of the EPF Fund 1 State Budget (endowment Fund); 2 Contributions under the concession agreement of investment projects according to the Electricity law, the Minerals law, and other relevant laws; 3 Direct grant aids from national and international organizations; 4 Contributions from person, legal entity, and organization; 5 Interest and profits generated from capital investments of the EPF in the bank;

Sources of the EPF Fund (Con’t. ) 6 Environmental rehabilitation fees from investment projects and activities; 7 Payment for ecosystem services; 8 Fines and indemnities of environmental damages;

Decree & Bylaw 27 Articles 45 Article 10

Legal Documents Vision up to 2030 Strategy to 2025 Five Year Business plan ( to 2020) Five Year Action Plan on Fund Raising & Communication ( to 2020) Human Resources Manual

Projects Implementation Manual

EPF Business Plan 8 Sources of fund as stated in decree EPF - PICE -Project- Projec t- Proje ct CBI -Project- Projec t- Proje ct PC -Project- Projec t- Proje ct WRM -Project- Projec t- Proje ct Agreement SLM with dono -Project- Projec t- Proje ct 1 4 Projec t- Proje ct

Financial Mechanism WB Invest ment Proje ct ��� GOL REvenu e Income PICE Proje ct CBI PC SLM ������ ������ Project Proje ������ Proj ������ ct ������ ect Admin. cost UND P WRM Proje ct 15

Principles on Management and Use of EPF Fund • Centralized and consistent with the state budget system; • Use fund according to the objective, efficiently, and effectively; • All revenues and expenditures shall be operated through the National Treasury System; accounting shall be performed in accordance with the State accounting regulation; • Effective, quick, judge, and transparent implementation and ensure achievement of the disbursement plan; • Have regular inspection and audit in line with related laws and regulations.

Application Procedure SDA continue implementation base on output of project implementation Subproject Delivery Agency Prepare proposal (EPF form) SDA submit sub project proposal to EPFO with SDA monitoring and Evaluation and reporting EPF screen then submit to Technical Committee for review and approve SDA implement project, if there is a large Procurement EPFO will assist Submit to WB for review and endorsement EPFO & SDA sign the agreement Submit to EPF BOD for final Approval

EPF 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 Bylaw and Operations Manual – Most of the grants have been managed according to the World Bank’s standards

EPF role in tapping GEF and GCF • GEF and GCF funds can be provided to the country only through the executing agencies (such as WB, GIZ, UNDP, UNEP, ADB, etc. ) acceptable to GEF or GCF. • EPF can play a key role in tapping grant fund from GEF and GCF by working closely with the agencies during the preparation and implementation of project using different funding mechanisms. • With the World Bank, under LENS 2, a GEF grant of $6. 83 million is combined with IDA grant ($4. 5 M) and IDA credit ($27. 5 M). • With UNDP, a GEF grant of $1. 2 M is channeled to PAFO of Savannakhet province. • At present, EPF is working closely with GIZ to prepare an investment project that may include $30 -40 M of GCF. GIZ is also providing a TA to strengthen capacity of EPF to be an accredited agency of GCF, hope fully in 2020. This will allow EPF to manage GCF without going through any international agency.

Thank you

EPF Address • EPF Executive Office POBox: 7647 2 nd Floor, MONRE Building, Sidamduan Road, Vientiane Tel: (856 21) 252739 Fax: (856 21) 252741 http: //www. laoepf. org. la.