The World Bank Implementation Status & Results Report Guatemala Emissions Reduction Program (P167132) Guatemala Emissions Reduction Program (P167132) LATIN AMERICA AND CARIBBEAN | Guatemala | Environment, Natural Resources & the Blue Economy Global Practice | Recipient Executed Activities | Investment Project Financing | FY 2022 | Seq No: 2 | ARCHIVED on 30-Jun-2022 | ISR52086 | Implementing Agencies: INAB (National Forest Institute), Ministry of Public Finance, Republic of Guatemala Key Dates Key Project Dates Bank Approval Date: 31-Aug-2021 Effectiveness Date: -- Planned Mid Term Review Date: 30-Aug-2024 Actual Mid-Term Review Date: Original Closing Date: 31-Dec-2025 Revised Closing Date: 31-Dec-2025 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) To make payments to the Program Entity for measured, reported and verified Emission Reductions (ER) from reduced deforestation and forest degradation, as well as the enhancement of forest carbon stocks (REDD+) in targeted areas of Guatemala, and to ensure that paid amounts are distributed according to an agreed Benefit Sharing Plan (BSP). Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Payment for Measured, Reported and Verified ERs:(Cost $52.50 M) Distribution of ER Payments According to the Benefit Sharing Plan Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions The Emission Reductions Payment Agreements (ERPA) were signed on September 13, 2021. This second ISR is based on a series of virtual meetings conducted with the Government of Guatemala under the leadership of National Forest Institute (INAB), in the context of COVID-19 related mobility restrictions. Implementation remains at initial stage as the Program is not yet effective. The Executing Entity (INAB) is duly staffed and works in close coordination with National Council of Protected Areas (CONAP), the Ministry of Environment and Natural Resources (MARN), the Ministry of Agriculture, Livestock and Food (MAGA), the Ministry of Public Finance (MINFIN) and other entities involved in the Program. These institutions have prepared the first monitoring report (MR) covering the retroactive period (from January 1st to December 31st, 2020) with Bank's guidance. The MR will be submitted by the Recipient it by June 30, 2022 and will include a Safeguards Report with information on how the 6/30/2022 Page 1 of 5 The World Bank Implementation Status & Results Report Guatemala Emissions Reduction Program (P167132) activities carried out within the Program accounting area during the retroactive period and up to September 13, 2021, are aligned with the Program’s Environmental and Social Management Framework and its requirements. Once submitted, the first MR will be validated and verified by a third-party hired by the Bank with Forest Carbon Partnership Facility (FCPF) funds. This process is expected to take about eight months, after which, if the effectiveness conditions (see below) stated in the ERPAs are met, the first payment could be made in FY23. A work package for Monitoring, Reporting and Verification, funded by the FCPF, has also supported the preparation of the first MR through technical assistance in Improving estimation of activity data and implementation of visual interpretation analysis using sampling points for the period 2016-2020. This activity was completed in June 2022. Under INAB’s leadership, related institutions have also initiated the process to comply with the effectiveness conditions. These are the submission of:  The final Benefit Sharing Plan (BSP), which will address the outstanding issues identified by the FCPF Carbon Fund Participants on the advanced draft BSP (approved prior to ERPA signing) and be will submitted to a round of consultations with Indigenous Peoples and other stakeholders;  The BSP Operations Manual;  Evidence demonstrating Guatemala's ability to transfer Title to ERs, free of any interest, Encumbrance or claim of a Third Party;  A Subsidiary Agreement between MINFIN (on behalf of the Republic of Guatemala) and INAB (Executing Entity), specifying the role of INAB in the implementation of the ER Program; and  Evidence demonstrating the consistency of Program implementation before ERPA signing (i.e., from January 1, 2020 to September 13, 2021) with the Safeguards Plans. These conditions are expected to be met prior to the deadline for effectiveness (September 13, 2022). The World Bank’s task team will continue to provide close support to the Client through virtual meetings to ensure steady progress to the completion of these conditions, MR finalization, and the initial implementation of the Program's environmental and social related mechanisms. The next implementation support mission is planned for July 2022. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Moderate Moderate Moderate Macroeconomic Moderate Moderate Moderate Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Substantial Substantial Substantial Institutional Capacity for Implementation and Substantial Substantial Substantial Sustainability Fiduciary Moderate Moderate Moderate Environment and Social Substantial Substantial Substantial Stakeholders Substantial Substantial Substantial Other Substantial Substantial Substantial Overall Substantial Substantial Substantial Results 6/30/2022 Page 2 of 5 The World Bank Implementation Status & Results Report Guatemala Emissions Reduction Program (P167132) PDO Indicators by Objectives / Outcomes PDO (To make payments to the Government of Guatemala for MRV ERs...) IN01159859 ►Volume of CO2e Emissions Reductions that have been measured and reported by the Program Entity, verified by a Third Party, and transferred to the FCPF Carbon Fund (Metric ton, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 10,500,000.00 Date 27-Nov-2020 30-Nov-2021 16-Jun-2022 31-Dec-2024 The indicator measures the Volume (i.e. ERs) aspect of the transaction. It is conditioned on the existence and operation of a National Forest Monitoring system to measure and report the ERs generated by the ER Program. All ERs generated by the ER Program during each Reporting Period are subject to Verification Comments: by an Independent Reviewer contracted by the World Bank Group in consultation with the Program Entity. The transfer of ERs requires using a Registry capable of receiving, holding and transferring ERs to the Carbon Fund. IN01159860 ►Amount of Payments made by the FCPF Carbon Fund for CO2e Emissions Reductions generated by the Program (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 52,500,000.00 Date 27-Nov-2020 30-Nov-2021 16-Jun-2022 31-Dec-2025 The indicator measures the financial value aspect of the transaction based on the pricing approach agreed between the Program Entity and the Carbon Fund. It is conditioned on the establishment of Comments: adequate financial management arrangements for the transfer of the funds from the World Bank to the Program Entity. IN01159941 ►Emission Reductions payments distributed in accordance with agreed Benefit Sharing Plan (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 27-Nov-2020 30-Nov-2021 16-Jun-2022 31-Dec-2025 The indicator seeks to capture the development aspects of the transaction. As per the General Conditions of the ERPA, ERPA payments have to be distributed based on a BSP that has been deemed acceptable Comments: to the World Bank Group. ER Monitoring Reports will have to provide evidence satisfactory to the World Bank Group that the Benefits have been shared in accordance with the BSP and the nesting approach. Intermediate Results Indicators by Components Not applicable (N/A) IN01159942 ►N/A (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target 6/30/2022 Page 3 of 5 The World Bank Implementation Status & Results Report Guatemala Emissions Reduction Program (P167132) Value 0.00 0.00 0.00 0.00 Date 29-Aug-2021 30-Nov-2021 30-Nov-2021 31-Dec-2025 Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed Not P167132 TF-B5091 USD 2.82 2.82 0.00 0.00 2.82 0%% Effective Not P167132 TF-B5092 USD 49.68 49.68 0.00 0.00 49.68 0%% Effective Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date Not P167132 TF-B5091 31-Aug-2021 -- -- 31-Dec-2025 31-Dec-2025 Effective Not P167132 TF-B5092 31-Aug-2021 -- -- 31-Dec-2025 31-Dec-2025 Effective Cumulative Disbursements 6/30/2022 Page 4 of 5 The World Bank Implementation Status & Results Report Guatemala Emissions Reduction Program (P167132) Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 6/30/2022 Page 5 of 5