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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 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. 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 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 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.