Download INFORMATIVE NOTE ON INTERIM FINANCIAL MECHANISM AND

INFORMATIVE NOTE ON INTERIM FINANCIAL MECHANISM AND ITS
ADMINISTRATOR
The interim financial mechanism will serve to channel the financial resources that Peru will receive
for the completion of deliveries in phases I and II as described in the Joint Declaration of Intent (DoI).
CHARACTERISTICS
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To be managed by an entity that can take full fiduciary responsibility of funding from donors,
regardless of the final users of these resources. Other criteria (indicated in the next section)
must also be met. The fiduciary responsibility of the administrator may be complemented
with other fiduciary coverage procedures requested to the entities receiving resources to
implement activities, such as a Letter of Guarantee or Performance Bond, among others.
The administrator must be authorized by its internal regulations and through agreement of
the relevant governmental agencies / ministries to transfer financial resources to public and
private entities, and to hire third parties, by a request, for the preparation of specific
products, necessary to achieve the deliveries of Phase II of DoI and included in the Work
Plan previously approved.
A Coordination Committee will be formed, with balanced public-private participation
(including a seat for donors), as referred to in the DoI, with the responsibility for reviewing
and approving the work plans and budgets for the implementation of necessary activities
that contribute to the achievement of deliveries of stage II of the DoI. The agreement for
the creation of the interim mechanism should consider this committee in the decisionmaking structure of the administrator. Additionally, the work plans and budgets also need
the non-objection of Norway Government. With the approval of Norway and the
coordination committee, the Government of Norway should transfer the financial resources
to the administrator and authorize its execution through the channels established in the
work plan and following the procedures of the administrator.
The administrator must have internal policies and regulations authorizing the transfer of
financial resources to public and private entities, and the hiring of third parties by request
for the performance of specific services included in the previously approved work plan.
It is proposed that a management unit will establish cooperation agreements with public
and private entities in charge of implementing activities within the work plans. Based on
these agreements the administrator will transfer the funds (according to the approved
budget in the work plan) to entities so they may achieve these targets, by directly
implementing a work plan, or with the cooperation of third parties in charge of the
preparation of some of the needed inputs. The administrator would need to assume
fiduciary responsibility for the use of funds also by third parties.
Norway will need to, in addition to reviewing and approving work plans and budgets, review
and approve reports on the implementation of funds – for example in an annual meeting
with the administrator and the management unit/the coordination committee.
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The financial resources will be considered non-public funds always, except in the case that
they are transferred to a public entity for its execution. This means that these funds will not
be regulated by the public legal framework (including the National System for Public
Investment – SNIP) for its execution. The regulation that will apply to these funds will be the
selected administrator’s internal procedures.
EVALUATION CRITERIA
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The entity must implement the interim mechanism post-haste (target for establishment is
before COP21)
The entity must take full fiduciary responsibility for the resources disbursed by donors
The entity must have appropriate capacities in the country for the implementation of
required activities, and should preferably have experience with the SNIP mechanism
The entity must be allowed to transfer financial resources to public entities (i.e. to Regional
Governments for land titling through budgetary programs), execute through third parties or
supply the necessary services for the development of the activities As said before, the
transference of financial resources do not imply the administrator transfers the fiduciary
responsibility.
Peruvian Government must be ensured in the governance mechanism (Coordination
Committee), which should have balanced public-private participation (including a seat for
donors), as referred to in the DoI and an opening for donor participation.
The entity should maintain stability independently of governmental changes in 2016
The entity should have a country portfolio of activities similar to the activities considered in
the DoI
Experience with results-based financing would be considered a strength.
NEXT STEPS
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Selection of the interim mechanism administrator. This implies formal communication with
identified potential entities requesting the preparation and submission of formal proposals
with key information that allows the comparison of different proposals against the
evaluation criteria above described. These entities are:
o IDB
o UNDP
After that, we will proceed to the negotiation of terms of the contract based on the
approved proposal, subject to the evaluation criteria mentioned above.
Preparation of Project Portfolio. In coordination with other public entities with legal liability
vis-a-vis the Phase II deliverables of the DoI, PNCB will prepare the first six-month work plan
for the revision and approval of the Coordination Committee and the Government of
Norway.
Creation of the Coordination Committee. Prepare a proposal for the creation of the
Coordination Committee including its by-laws, for the interim mechanism for the approval
of the Peruvian and Norwegian governments and its formal inclusion in the structure of the
mechanism. A proposal for the management unit, including the entities responsible for the
preparation of work plans and budgets, should be prepared.