proposals – Addendum

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RISK ASSESSMENT AND MANAGEMENT GREEN CLIMATE FUND FUNDING PROPOSAL | PAGE 54 OF 101 G G.1. Risk Assessment Summary The following risks have been identified: Financial risks: No relevant risk has been identified in this category. PROFONANPE has over 20 years of experience in managing, channelling, supporting and supervising project execution, with considerable success in carrying out its fiduciary responsibilities. Delay in securing co-financing, other than the endowment fund of PROFONANPE, does not affect the proposed core activities. Given that the Government of the Republic Korea is co-financing a technology-enhancing component, no risk is associated with such a grant, planned to become effective by the fourth quarter of 2016. Technical risks: The project does not include complex technologies. Natural products (pulp, flour, oils) are processed/extracted through the use of proven technologies, which the project seeks to adapt to the particular setting of the Amazon Basin and to improve through innovation and science. Operational risks: (a) Development of a negative perception of project activities or personnel by key stakeholders; and (b) difficulties in hiring proficient and experienced personnel to work in Datem del Marañón for the duration of the project. Other operational risks include: market failure and lack of local skills related to the maintenance of the bio-business’ equipment. Social risks: Potential heightening of social tensions associated with newcomers and immigrants to the province. As indicated in the analysis of threats to the area of interest, very strong external forces are exerting pressure on Datem del Marañón. These include illegal forest harvesting and cutting and/or the search for highly adaptable areas for palm oil plantations. Environmental risks: Although the project’s environmental category is “C” (very low environmental impact), other external environmental events could disrupt the project’s performance: (a) severe droughts and associated fires; and (b) large oil spills that affect swamps, aguajales, and associated ecosystems, killing vegetation and reducing production of inputs for bio-businesses. Such events could force the communities to seek other areas to harvest; this could have potential social, economic and environmental consequences. Political risks: Elections for the executive and legislative branches are to be held in 2016. Political shifts could reduce the national government’s interest in channelling resources to the project area. Performance risks: External market conditions or lower than expected demand could affect the performance of bio-businesses. G.2. Risk Factors and Mitigation Measures Selected Risk Factor 1 Description Risk category Level of risk Probability of risk occurring Development of a negative perception of project activities or personnel by key stakeholders. Although the previous project built trust with all indigenous communities, there is a potential risk for the relationship to sour with some key stakeholders. The likely consequence would be a protracted project, with Technical and operational Low (
RISK ASSESSMENT AND MANAGEMENT GREEN CLIMATE FUND FUNDING PROPOSAL | PAGE 55 OF 101 G uncertainty about the achievement of key outputs and results. Mitigation Measure(s) The project implementation team will continue with its successful strategy of entrusting all decision-making authority to the communities and acting as the principal facilitator, trainer and source for technical assistance. The Project Manager will exercise utmost respect for the communities, their customs and governance structures. Selected Risk Factor 2 Description Risk category Level of risk Probability of risk occurring Difficulties in hiring proficient and experienced personnel to work in Datem del Marañón for the duration of the project. Living conditions in the project area are difficult, communications are poor, and trips to and from Lima take two or more days each way. The area has limited health services, making health issues a major concern for those willing to work in Datem del Marañón. Under these circumstances, the pool of competent and experienced professionals is limited, and selecting the right personnel is critical. Technical and operational Mitigation Measure(s) Low (
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Meeting of the Board 2 - 5 November
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Contents Section A Section B Sectio
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PROJECT / PROGRAMME SUMMARY GREEN C
Page 8 and 9: DETAILED PROJECT / PROGRAMME DESCRI
Page 28 and 29: RATIONALE FOR GCF INVOLVEMENT GREEN
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Page 76 and 77: ANNEXES GREEN CLIMATE FUND FUNDING
Page 106: GCF/B.11/04/Add.01 No-objection let
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