Vanuatu NDC Forest Investment Strategy (including Project Pipeline)

Vanuatu NDC Forest Investment Strategy (including Project Pipeline) Ministry of Climate Change Adaptation, Meteorology, Geohazards, Environment, Energy and National Disaster Management Private Mail Bag 9074, Port Vila, Vanuatu Phone: (678) 22068 Website: https://mocca.gov.vu Ministry of Agriculture, Livestock, Fisheries, Forestry & Bio Security Private Mail Bag 9064, Port Vila, Vanuatu Phone: (678) 33220 Website: https://malffb.gov.vu/ 1 © Ali Shaikh 2 3 CCOONNTTEENNTTSS Vanuatu’s forests and forestry sector 4 CCOONNTTEENNTTSS Vanuatu’s forests and forestry sector 5 TTAABBLLEE LLIISSTT – ……………………………………………………………………………………………. …………………………………………………………………………………………………………….. FFIIGGUURREE LLIISSTT Vanuatu’s NDC Commitments Vanuatu’s GHG emission sectors and subsectors (excluding removals) Contribution of agriculture, forestry and fishery to Vanuatu’s GDP 6 TTAABBLLEE LLIISSTT – ……………………………………………………………………………………………. …………………………………………………………………………………………………………….. FFIIGGUURREE LLIISSTT Vanuatu’s NDC Commitments Vanuatu’s GHG emission sectors and subsectors (excluding removals) Contribution of agriculture, forestry and fishery to Vanuatu’s GDP AABBBBRREEVVIIAATTIIOONNSS AANNDD AACCRROONNYYMMSS United Kingdom’s Foreign Commonwealth & Development Office 7 EEXXEECCUUTTIIVVEE SSUUMMMMAARRYY Vanuatu’s NDC Vanuatu’s ’s NDC. Vanuatu’s emissions profile 8 EEXXEECCUUTTIIVVEE SSUUMMMMAARRYY Vanuatu’s NDC Vanuatu’s ’s NDC. Vanuatu’s emissions profile 9 Opportunities Indicative Cost 2025- 2035 (US$ ) Requested Funding 2025- 2035 (US$ ) Cost of Mitigation (US$/tCO2) Average Annual Mitigation (tCO2/Yr) Total Mitigation 2025-2035 (tCO2/Yr) — — • Vanuatu’s NDC. • • 10 Opportunities Indicative Cost 2025- 2035 (US$ ) Requested Funding 2025- 2035 (US$ ) Cost of Mitigation (US$/tCO2) Average Annual Mitigation (tCO2/Yr) Total Mitigation 2025-2035 (tCO2/Yr) — — • Vanuatu’s NDC. • • 11 INTRODUCTION 12 IINNTTRROODDUUCCTTIIOONN 13 Vanuatu’s NDC Commitments Vanuatu’s national policies. The – – 14 Vanuatu’s NDC Commitments Vanuatu’s national policies. The – – 1.1. Context of the NDC forest investment strategy Vanuatu’s GHG emission sectors and s implementation of Vanuatu’s NDCs 2020, p. 33) conditional cost of achieving Vanuatu’s Revised and Enhanced NDC is 15 national financing of the necessary measures is not possible. As Vanuatu is one of the world’s Vanuatu’s (intended) NDC and are largely included in Vanuatu’s NDC Implementation Roadmap 16 national financing of the necessary measures is not possible. As Vanuatu is one of the world’s Vanuatu’s (intended) NDC and are largely included in Vanuatu’s NDC Implementation Roadmap 1.2. Goals and objectives of the NDC forest investment strategy 1.3. Summary information on primary mitigation options 1.3.1. Determination of GHG mitigation, investment and support needs 17 1.3.2. Alignment of the NDC forest investment strategy to national policies/ strategies 1.4. Implications of the NDC forest investment strategy 18 1.3.2. Alignment of the NDC forest investment strategy to national policies/ strategies 1.4. Implications of the NDC forest investment strategy 19 IINNFFOORRMMAATTIIOONN OOFF FFOORREESSTTSS AANNDD FFOORREESSTTRRYY SSEECCTTOORR 2.1. Vanuatu’s forests and forestry sector Vanuatu’s INFORMATION OF FORESTS AND FORESTRY SECTOR 20 IINNFFOORRMMAATTIIOONN OOFF FFOORREESSTTSS AANNDD FFOORREESSTTRRYY SSEECCTTOORR 2.1. Vanuatu’s forests and forestry sector Vanuatu’s INFORMATION OF FORESTS AND FORESTRY SECTOR 21 2.1.1. Forest extent and changes angrove forests. Using Google Earth, Vanuatu’s National Forest Reference (20 – Table 1. Area of forestry plantations within Vanuatu (Source: Dept. of Forests, 2000) has the largest proportion of the Vanuatu’s forest (53 percent), followed by the Mid 22 2.1.1. Forest extent and changes angrove forests. Using Google Earth, Vanuatu’s National Forest Reference (20 – Table 1. Area of forestry plantations within Vanuatu (Source: Dept. of Forests, 2000) has the largest proportion of the Vanuatu’s forest (53 percent), followed by the Mid Table 2. Reclassification of Vanuatu vegetation categories into FRA 2020 categories (FAO, 2020) 2.1.2. Trends in deforestation and forest degradation forest area change of 23,841 ha for the period 2008 to 2017, as presented in Vanuatu’s Forest 23 Table 3. Forest conversion to other land use in seven islands of Vanuatu over the period of 2008 – 2017 (Source: Rep. of Vanuatu, 2020a) 2.1.3. Proximate drivers and underlying causes of forest decline 24 Table 3. Forest conversion to other land use in seven islands of Vanuatu over the period of 2008 – 2017 (Source: Rep. of Vanuatu, 2020a) 2.1.3. Proximate drivers and underlying causes of forest decline 2.2. Contribution of the forest sector to the national economy Vanuatu’s forests provide a variety of protective 2023, Vanuatu’s forests play an important ro Forests are an important sector for Vanuatu’s national economy. In 2023 the per capita GDP of 25 to Vanuatu’s GDP (Source: World Bank, 2024) 0 5 10 15 20 25 30 19 79 19 81 19 83 19 85 19 87 19 89 19 91 19 93 19 95 19 97 19 99 20 01 20 03 20 05 20 07 20 09 20 11 20 13 20 15 20 17 Co nt rib ut io n t o G DP (% ) Years 26 to Vanuatu’s GDP (Source: World Bank, 2024) 0 5 10 15 20 25 30 19 79 19 81 19 83 19 85 19 87 19 89 19 91 19 93 19 95 19 97 19 99 20 01 20 03 20 05 20 07 20 09 20 11 20 13 20 15 20 17 Co nt rib ut io n t o G DP (% ) Years 2.3. Key forest relevant and related policies and legislations developed after the launching of Vanuatu’s National Sustainable Develop                       2.4. Key national stakeholders including other sectors is true of the sector’s stakeholders. Some stakeholders are linked to multiple sectors, for 27 presents the key stakeholders in Vanuatu’s forestry Table 4. Key national stakeholder in the forestry sector 28 presents the key stakeholders in Vanuatu’s forestry Table 4. Key national stakeholder in the forestry sector forestry. This includes administering a number of Vanuatu’s 29 30 31 2.5. Key constraints and opportunities to strengthen the enabling environment Table 5. Key Constraints and enabling environment opportunities for the forestry sector 32 2.5. Key constraints and opportunities to strengthen the enabling environment Table 5. Key Constraints and enabling environment opportunities for the forestry sector 2.6. Mitigation opportunities and investment needs Table 6. Aggregated information for forest sector opportunities Opportunities Indicative Cost 2025- 2035 (US$ ) Requested Funding 2025- 2035 (US$ ) Cost of Mitigation (US$/tCO2) Average Annual Mitigation (tCO2/Yr) Total Mitigation 2025-2035 (tCO2/Yr) 33 34 INVESTMENT STRATEGY FOR THE FORESTRY SECTOR 35 IINNVVEESSTTMMEENNTT SSTTRRAATTEEGGYY FFOORR TTHHEE FFOORREESSTTRRYY SSEECCTTOORR 3.1. Prioritizing the mitigation opportunities sector in Vanuatu’s Revised and Enhanced 1st NDC. Poten 36 IINNVVEESSTTMMEENNTT SSTTRRAATTEEGGYY FFOORR TTHHEE FFOORREESSTTRRYY SSEECCTTOORR 3.1. Prioritizing the mitigation opportunities sector in Vanuatu’s Revised and Enhanced 1st NDC. Poten 37 3.2. Financing pathway for individual mitigation opportunities Vanuatu’s Enhanced and Revised 1st NDC indicates an additional requested funding of US$ 54 38 3.2. Financing pathway for individual mitigation opportunities Vanuatu’s Enhanced and Revised 1st NDC indicates an additional requested funding of US$ 54 Table 7. Financial requirements, conditionality and requested funding 3.3. Consolidated financing pathway 3.3.1. Establishing the enabling frameworks and financing mechanisms 39 3.3.2. Timing and cost of implementation 40 3.3.2. Timing and cost of implementation Table 8. Timing of implementation 3.3.3. Monitoring and evaluation framework — — • Vanuatu’s NDC. • • 41 Table 9. Proposed executors (implementing agencies) and supporting agencies for projects 42 Table 9. Proposed executors (implementing agencies) and supporting agencies for projects         3.3.4. Promoting gender equality and social inclusion                 43 3.3.5. Safeguarding the environment 3.3.6. Consideration of economic effects 3.4. Needs for financial instruments and potential funding sources 44 3.3.5. Safeguarding the environment 3.3.6. Consideration of economic effects 3.4. Needs for financial instruments and potential funding sources Table 10. Sources of funding/financing available in Vanuatu  45 46 47 to “offset” their 48 to “offset” their RREEFFEERREENNCCEESS FAO, 2022. The State of the World’s Forests 2022. Forest pathways for green recovery and – 49 Government of Vanuatu, 2022c. Vanuatu’s National Forest Reference [2008 50 Government of Vanuatu, 2022c. Vanuatu’s National Forest Reference [2008 AANNNNEEXXEESS 51 No. F1 Action Name Sub-Sector Forestry Description Afforestation is the planting or adding of trees in an area where there was never a forest or plantation. This is a method to create a new forest. Reforestation is the replanting of trees in areas where there was once a forest which was destroyed or damaged. According to FAO, the term forest plantation includes all forests established by planting or seeding indigenous and introduced species in the process of afforestation and reforestation. The new forest communities continuously sequester atmospheric carbon through biomass production and thus make a significant contribution to climate change mitigation. According to Crafton et al. (2021) Vanuatu is no. 12 on the global list of countries where forest carbon sequestration by afforestation is most cost- efficient. Afforestation/ reforestation requires essential preliminary considerations: 1. Selection of site 2. Choice of species and method of artificial regeneration (seeding, planting of naked rooter or container plants, spacing of plants etc.) 3. Choice of soil preparation, fertilization 4. Choice of tending methods (weeding, individual plant protection, fencing) 5. Arrangement of staff The rationale for the use of afforestation/ reforestation is 1. To assist or supplement natural regeneration by establishing site adapted native tree species 2. To change the composition of tree crop 3. To develop plantations for domestics and industrial utility 4. To increase forest cover 5. To introduce non-invasive exotics with high C-sequestration potential The project relies heavily on cooperation with landowners. The communities should therefore be involved at an early stage. The project could also benefit from the involvement of schools and young people, which would improve the reach of the project and community buy-in. This project would promote the increased use of valuable timber species in plantations in Vanuatu through awareness-raising measures and targeted support. Planting forests is often a financial challenge, as long-term investments are required with only a small payoff until the plantations are harvested. Agroforestry plantations is treated under the activity F2 “Forest and Landscape Restoration”. F1 52 No. F1 Action Name Sub-Sector Forestry Description Afforestation is the planting or adding of trees in an area where there was never a forest or plantation. This is a method to create a new forest. Reforestation is the replanting of trees in areas where there was once a forest which was destroyed or damaged. According to FAO, the term forest plantation includes all forests established by planting or seeding indigenous and introduced species in the process of afforestation and reforestation. The new forest communities continuously sequester atmospheric carbon through biomass production and thus make a significant contribution to climate change mitigation. According to Crafton et al. (2021) Vanuatu is no. 12 on the global list of countries where forest carbon sequestration by afforestation is most cost- efficient. Afforestation/ reforestation requires essential preliminary considerations: 1. Selection of site 2. Choice of species and method of artificial regeneration (seeding, planting of naked rooter or container plants, spacing of plants etc.) 3. Choice of soil preparation, fertilization 4. Choice of tending methods (weeding, individual plant protection, fencing) 5. Arrangement of staff The rationale for the use of afforestation/ reforestation is 1. To assist or supplement natural regeneration by establishing site adapted native tree species 2. To change the composition of tree crop 3. To develop plantations for domestics and industrial utility 4. To increase forest cover 5. To introduce non-invasive exotics with high C-sequestration potential The project relies heavily on cooperation with landowners. The communities should therefore be involved at an early stage. The project could also benefit from the involvement of schools and young people, which would improve the reach of the project and community buy-in. This project would promote the increased use of valuable timber species in plantations in Vanuatu through awareness-raising measures and targeted support. Planting forests is often a financial challenge, as long-term investments are required with only a small payoff until the plantations are harvested. Agroforestry plantations is treated under the activity F2 “Forest and Landscape Restoration”. An up-to-date and accurate inventory of the lands and forests is an important basis for this project and requires the expansion of GIS data and analysis capacities. In addition, training and awareness-raising measures are required for the staff of the implementing agency. The activity is related to the activities “deforestation free value chains”. Outcomes Key primary outcomes  Carbon sequestration through biomass growth  Strengthened enabling environment for afforestation/ reforestation  Increased forest area through tree planting and sustainable forest management  Improved standard of living for rural communities and maximize socio-economic benefits  Secured human and financial resources for scaling up plantation forestry in Vanuatu  Measured and shared plantation forestry results and lessons  Production of timber for energetic and material use Key secondary outcomes  Promotion of biodiversity  Promotion of multiple sustainable forest functions  Increasing the quality of life of the local population  Provision of CO2-neutral raw material for sustainable supply chains Mitigation / Adaptation Potential  An average 125,000 tCO2/yr and a total of 1,250,000 tCO2 (2025- 2035)  The mitigation potential is taken from the LEDS Fiji (20 tCO2ha-1 yr- 1).  The Vanuatu Forest and Landscape Restoration Strategy 2020- 2030 suggests a plantation area of 12,500 ha.  40,000 rural people will directly benefit from this activity Co-benefits / SDG Linkages Potential co-benefits of afforestation and reforestation in Vanuatu include:  Reduced flood and storm risk will contribute to SDG 3 (good health and well -being), SDG 11 (sustainable cities and communities), SDG 13 (climate action), and SDG 15 (life on land)  The expansion of habitat for native plants and wildlife would contribute to SDG 15 (life on land)  Soil management and improvement would contribute to SDG 15 (life on land)  Increased production of commercial timber, and contribution to downstream timber processing industries will contribute to SDG 8 (decent work and economic growth) Investment Needs (US$) Estimated capital investment needed: US$ 42,200,000 F1 53 Estimates of the cost of the support programme are based on personal communication and literature surveys, and include the following components: Managing the program, promoting A/R on community lands and strengthening enabling conditions: US$ 700,000 Enhance and manage 6 provincial nurseries and 6 seedbanks (cyclone prove), transportation of seedlings to planting sites: US$ 1,100,000 Site preparation and planting (12,500 ha * 2000 US$/ha): US$ 25,000,000 Management incl. tending, replacement planting, thinning (12,500 ha * 1200 US$/ha): US$ 15,000,000  MRV including development: US$ 400.000 Potential Financing and Need for Financial Support and/or Financial Instruments Conditionality: 80% Requested finance: US$ 33.520.000 Potential Supporting and Financing Partners / Sources Management partners (assisting with access to finance):* • Project Planning, Development & Design: UNDP, UNIDO, GIZ, GGGI, NDC-Hub, ADB, IUCN • Project Implementation & Management: UNDP, UNIDO, GIZ, GGGI, NDC-Hub, ADB, IUCN, CIDCA Potential financing partners/sources:* • Credit Guarantee: GCF, ADB, Supplier EXIM Banks, EIB, WB/IFC • Debt and Loans: VADB, VRDB, ADB, EIB, WB/IFC, Agricultural development Fund (ADF) • Equity: Private sector companies • Non-Government Grants for investment: GEF, GCF, ADB, AU-DFAT, NZ- MFAT, WB/IFC, EIB, CIDCA, KOICA, EEAS • Grants for Technical Assistance & Capacity Building: GEF, GCF, AU-DFAT, NZ-MFAT, GIZ, CTCN, ADB, KOICA, UNDP, UNIDO, EEAS, WB/IFC *This is not a comprehensive list, as other entities are possible as well. Implementing and Supporting Entities / Stakeholders Implementing Entity / Stakeholders: - Ministry of Agriculture, Livestock, Fisheries, Forestry and Biosecurity (MALFFB), Department of Forests; Coordination of planting, incl. procurement of seedlings, and coordination of tending of planted areas Supporting Entity / Stakeholders: - Ministry of Lands and Natural Resources (MoLNR), Lands Department; facilitate and manage lands related issues - Ministry of Climate Change, Department of Environment, advise in GHG-budgeting, environmental impact assessments, MRV) F1 54 Estimates of the cost of the support programme are based on personal communication and literature surveys, and include the following components: Managing the program, promoting A/R on community lands and strengthening enabling conditions: US$ 700,000 Enhance and manage 6 provincial nurseries and 6 seedbanks (cyclone prove), transportation of seedlings to planting sites: US$ 1,100,000 Site preparation and planting (12,500 ha * 2000 US$/ha): US$ 25,000,000 Management incl. tending, replacement planting, thinning (12,500 ha * 1200 US$/ha): US$ 15,000,000  MRV including development: US$ 400.000 Potential Financing and Need for Financial Support and/or Financial Instruments Conditionality: 80% Requested finance: US$ 33.520.000 Potential Supporting and Financing Partners / Sources Management partners (assisting with access to finance):* • Project Planning, Development & Design: UNDP, UNIDO, GIZ, GGGI, NDC-Hub, ADB, IUCN • Project Implementation & Management: UNDP, UNIDO, GIZ, GGGI, NDC-Hub, ADB, IUCN, CIDCA Potential financing partners/sources:* • Credit Guarantee: GCF, ADB, Supplier EXIM Banks, EIB, WB/IFC • Debt and Loans: VADB, VRDB, ADB, EIB, WB/IFC, Agricultural development Fund (ADF) • Equity: Private sector companies • Non-Government Grants for investment: GEF, GCF, ADB, AU-DFAT, NZ- MFAT, WB/IFC, EIB, CIDCA, KOICA, EEAS • Grants for Technical Assistance & Capacity Building: GEF, GCF, AU-DFAT, NZ-MFAT, GIZ, CTCN, ADB, KOICA, UNDP, UNIDO, EEAS, WB/IFC *This is not a comprehensive list, as other entities are possible as well. Implementing and Supporting Entities / Stakeholders Implementing Entity / Stakeholders: - Ministry of Agriculture, Livestock, Fisheries, Forestry and Biosecurity (MALFFB), Department of Forests; Coordination of planting, incl. procurement of seedlings, and coordination of tending of planted areas Supporting Entity / Stakeholders: - Ministry of Lands and Natural Resources (MoLNR), Lands Department; facilitate and manage lands related issues - Ministry of Climate Change, Department of Environment, advise in GHG-budgeting, environmental impact assessments, MRV) - Ministry of Finance and Economic Management; advise on economic and financial policy, provide advice and management of financial affairs - Ministry of Tourism, Trade, Commerce and Ni-Vanuatu Business (MTTCNVB); support with all issues affecting the local population - Department of Agriculture - Department of Biosecurity - Department of Environment - Department of Climate Change - Provincial Governments - National Advisory Board on Climate Change - Vanuatu Agricultural College - Vanuatu Agriculture Research & Training Center - Private sector Local communities General timeline for Development, Financing, Implementation, and Operation Time needed for development: 1 year Time needed for securing finance: 1 year - When will the project/investment start and end: 2026 to 2035 Policy / Plan Link Key policies/Plans • Forest Policy 2013-2023 [C. Management of Planted Forest (C10), G. K. Climate Change Mitigation (K22), F. Land Use Planing (F16), G. Small- holder farmer and Community-Based Forestry (G17, G18), Q. Forest Development Financing (Q41)] • Vanuatu's Revised and Enhanced 1st Nationally Determined Contribution 2021 – 2030 [AFOLU (M13), Forestry (A32)] • Vision 2030: National Sustainable Development Plan 2016 - 2030 [ENV4, NRM (4.6)] • National Biodiversity Strategy and Actin Plan 2018 - 2030 • National REDD+ Programme • Vanuatu Forest and Landscape Restoration Strategy 2020 – 2030 Relevant Policies/International Reporting • National Communications to the UNFCCC • Global Forest Resource Assessment: Country Report Vanuatu • National Forest Reference Level (REDD+, NFMS, NFIS) Potential Business Model and Financing Strategy Given the current strain on the MALFFB budget and the severely limited financial resources of the communities, this project would be dependent on external funding. However, the long-term investments in the forest F1 55 plantations and infrastructure could be financed through the sale of timber products for domestic consumption and export. Due to the long period of time until pay-offs and the risks of biological production, A/R projects are only of limited interest to private investors. An alternative is AR projects related to the generation of CO2 certificates, primarily for the voluntary market. There may well be private interest in financing here, but the special conditions of the private market must be taken into account. Gaps & Barriers to Implementation, Including Proposed enabling mechanisms Key gaps and barriers • Land ownership with local communities • Lack of up-front support payment for A/R and high initial costs of A/R  Long-term investment, long fixation of the invested capital, long amortization periods  Risks of biological production and investment failure  Return on investment depends on growth rates of the location, the quality of timber produced, future timber prices and sales markets/export markets, and the development of the timber processing industry in Vanuatu, which are difficult to predict • Lack of suitable financial model: when loans are granted to smallholders (farmers), short payback times and high interest rates usually make long-term investments less profitable • Available capacities are limited (local knowledge, necessary infrastructure such as nurseries) Enabling mechanism • Capacity building • Technical assistance • Soft loans from banks and cooperatives (Forest Management Certificates, sawmill guarantee/Group guarantee as a collateral) to forest owners (farmers) • Micro finance • Establish link between small-forest holders, i.e. Communities/farmers and private sector (Bank, Forest Industry)- potential for blended finance • Cross-sectoral coordination with larger national development strategies and land use plans • One Map Policy: Land Use Planning including forestry activities in consultation with chiefs, landowners and communities. • Free Prior Informed Consent of all rural stakeholders for and involved in (new) forestry projects/activities • Defining carbon rights within the existing legal framework F1 56 plantations and infrastructure could be financed through the sale of timber products for domestic consumption and export. Due to the long period of time until pay-offs and the risks of biological production, A/R projects are only of limited interest to private investors. An alternative is AR projects related to the generation of CO2 certificates, primarily for the voluntary market. There may well be private interest in financing here, but the special conditions of the private market must be taken into account. Gaps & Barriers to Implementation, Including Proposed enabling mechanisms Key gaps and barriers • Land ownership with local communities • Lack of up-front support payment for A/R and high initial costs of A/R  Long-term investment, long fixation of the invested capital, long amortization periods  Risks of biological production and investment failure  Return on investment depends on growth rates of the location, the quality of timber produced, future timber prices and sales markets/export markets, and the development of the timber processing industry in Vanuatu, which are difficult to predict • Lack of suitable financial model: when loans are granted to smallholders (farmers), short payback times and high interest rates usually make long-term investments less profitable • Available capacities are limited (local knowledge, necessary infrastructure such as nurseries) Enabling mechanism • Capacity building • Technical assistance • Soft loans from banks and cooperatives (Forest Management Certificates, sawmill guarantee/Group guarantee as a collateral) to forest owners (farmers) • Micro finance • Establish link between small-forest holders, i.e. Communities/farmers and private sector (Bank, Forest Industry)- potential for blended finance • Cross-sectoral coordination with larger national development strategies and land use plans • One Map Policy: Land Use Planning including forestry activities in consultation with chiefs, landowners and communities. • Free Prior Informed Consent of all rural stakeholders for and involved in (new) forestry projects/activities • Defining carbon rights within the existing legal framework Identify what financial and non-financial incentives, disincentives can be used Financial Sustainability  The technical assistance and capacity building provided will help to implement A/R activities in a targeted manner. It will also help to increase the volume and attractiveness of financing products available for A/R by reducing the real and perceived risks associated with financing such long-term measures. Enabling, Capacity Building and Technical Assistance Needs Capacity building and technical assistance for project management, inventory, training, equipment Strengthening Vanuatu Agricultural College for providing national training =250,000 US$ Information and MRV Needs  GIS/ remote sensing/ in-situ based assessment of potential A/R sites  Investment and implementation plan for each site  Community related information  Quality assurance measures after planting and during the rotation period Assessment (monitoring) of growing stock volume and wood quality before harvest Supporting References Vanuatu Low Emission Development Strategy (LEDS) 2023 Vanuatu’s Revised and Enhanced 1st NDC Vanuatu Forest Policy 2013- 2023 Vanuatu National Sustainable Development Plan (NSDP) 2016-2030 Vanuatu Climate Change and Disaster Risk reduction Policy 2016-2030 Vanuatu NDC Implementation Roadmap Sustainable Forest Management Policy and REDD+ Programme/ strategy Grafton, R.Q., H.L. Chu, H. Nelson, G. Bonnis, 2021. A global analysis of forest carbon sequestration, OECD Environment Working Paper No. 185, Paris, France Haase, D.J., R. K. Dumroese, K. M. Wilkinson, T. D. Landis, 2016. Tropical Nursery Concepts and Practices, in: L. Pancel, M. Köhl (eds.), Tropical Forestry Handbook, Vol. 2, Springer, Heidelberg  Pancel, L., 2016. Basic Outline of Tree Plantations in the Tropics, in: L. Pancel, M. Köhl (eds.), Tropical Forestry Handbook, Vol. 2, Springer, Heidelberg F1 57 No. F2 Action Name Sub-Sector Forestry Description Forest and Landscape Restoration (FLR)) aims to restore ecological processes at the landscape level. Biodiversity, ecosystem functions and resilience to environmental change are to be restored and improved. Human well-being is improved through the restoration of ecosystem services. The implementation of FLR takes place at the landscape level, so site-level decisions need to be made in a landscape context. FLR is a flexible process based on adaptive management that responds to social, economic and environmental changes. To be successful, FLR requires the commitments of all stakeholders, which is ensured through participatory processes. Last but not least, FLR requires an appropriate monitoring program as well as a suitable learning process. FLR restores the ecological functionality of a landscape. This concerns, for example, the richness as a habitat, the ability to contain erosion and flooding, or the resilience to climate change and various natural and human disturbances. The objectives of FLR can vary. One possible goal is to restore a state or "original" vegetation that was present before the (human) disturbance. However, other strategies can also be applied. Unstoppable developments such as climate change or rising sea levels can mean that an "original" state no longer fits the changed site conditions. FLR must therefore be geared towards future developments and conditions and must not unilaterally adhere to a historical state. FLR requires a high level of knowledge of ecological processes. Where this knowledge is lacking, it must be built up. This requires permanent observation networks and a high scientific level of specialist staff. Gaps that still exist must be closed. In Vanuatu's enhanced and revised 1st NDC, various activities in the forestry sector were mentioned that can be attributed to FLR. Soil and coastal erosion is to be prevented by restoring forest cover, (climate) sensitive ecosystems are to be surrounded by strips of forest to protect them, and the unique ecosystems of mangroves, wetlands and shoreline trees are to be protected and, where necessary, restored to as natural and resilient a state as possible. One of the first steps is to draw up an overview of the areas that need to be restored and select the areas where action is most urgent. The choice of restoration objectives on individual locations is to be determined in a participatory process involving experts and the local population, among others. Measures must be planned and initiated in line with the restorative objectives. Implementation usually requires personnel with different levels of expertise. The FLR areas must be monitored using a permanent monitoring system in order to be able to counter any unexpected developments. The F2 58 No. F2 Action Name Sub-Sector Forestry Description Forest and Landscape Restoration (FLR)) aims to restore ecological processes at the landscape level. Biodiversity, ecosystem functions and resilience to environmental change are to be restored and improved. Human well-being is improved through the restoration of ecosystem services. The implementation of FLR takes place at the landscape level, so site-level decisions need to be made in a landscape context. FLR is a flexible process based on adaptive management that responds to social, economic and environmental changes. To be successful, FLR requires the commitments of all stakeholders, which is ensured through participatory processes. Last but not least, FLR requires an appropriate monitoring program as well as a suitable learning process. FLR restores the ecological functionality of a landscape. This concerns, for example, the richness as a habitat, the ability to contain erosion and flooding, or the resilience to climate change and various natural and human disturbances. The objectives of FLR can vary. One possible goal is to restore a state or "original" vegetation that was present before the (human) disturbance. However, other strategies can also be applied. Unstoppable developments such as climate change or rising sea levels can mean that an "original" state no longer fits the changed site conditions. FLR must therefore be geared towards future developments and conditions and must not unilaterally adhere to a historical state. FLR requires a high level of knowledge of ecological processes. Where this knowledge is lacking, it must be built up. This requires permanent observation networks and a high scientific level of specialist staff. Gaps that still exist must be closed. In Vanuatu's enhanced and revised 1st NDC, various activities in the forestry sector were mentioned that can be attributed to FLR. Soil and coastal erosion is to be prevented by restoring forest cover, (climate) sensitive ecosystems are to be surrounded by strips of forest to protect them, and the unique ecosystems of mangroves, wetlands and shoreline trees are to be protected and, where necessary, restored to as natural and resilient a state as possible. One of the first steps is to draw up an overview of the areas that need to be restored and select the areas where action is most urgent. The choice of restoration objectives on individual locations is to be determined in a participatory process involving experts and the local population, among others. Measures must be planned and initiated in line with the restorative objectives. Implementation usually requires personnel with different levels of expertise. The FLR areas must be monitored using a permanent monitoring system in order to be able to counter any unexpected developments. The involvement of local stakeholders must be ensured throughout the restoration process, which will take years. Outcomes Key primary outcomes  Strengthened enabling environment for FLR  Restored degraded land and forests through tree planting and sustainable forest management  Restored and increased protected areas in forested landscapes (including in water catchment reserves and riparian buffer zones) to protect soil and water values  Improved standard of living for rural communities and maximize socio-economic benefits from FLR  Secured human and financial resources for scaling up FLR in Vanuatu  Measured and shared FLR results and lessons Key secondary outcomes  Enhancement of biodiversity  Promotion of multiple sustainable forest functions  Increasing the quality of life of the local population Mitigation / Adaptation Potential An average 37,500 tCO2/yr and a total of 375,000 tCO2 (2025-2035) 240,000 rural people will directly benefit from this activity The mitigation potential is taken from the Vanuatu Forest and Landscape Restoration Strategy 2020-2030. It assumes restoration of 7,500 ha, which comprises of 2,000 ha assisted natural restoration outside protected areas, 5,000 ha assisted natural restoration inside protected areas, and 500 ha of mangrove restoration. A mitigation potential lower than that for afforestation/ reforestation is assumed to account for lower nutrient levels in degraded sites (10 tCO2ha-1 yr-1). Co-benefits / SDG Linkages Potential co-benefits of FLR in Vanuatu include: The expansion of habitat for native plants and wildlife would contribute to SDG 15 (life on land) Reduced flood and storm risk will contribute to SDG 3 (good health and well -being), SDG 11 (sustainable cities and communities), SDG 13 (climate action), and SDG 15 (life on land) Soil management and improvement would contribute to SDG 15 (life on land) Increased production of commercial timber, and contribution to downstream timber processing industries will contribute to SDG 8 (decent work and economic growth). F2 59 Investment Needs (US$) The cost framework was adopted from the Vanuatu Forest and Landscape Restoration Strategy 2020-2030 and the Enhanced and Revised 1st NDC. Prevent soil and costal erosion: US$ 4,200,000 Establish and manage buffer zones around climate sensitive ecosystems and enrichment planting: US$ 2,700,000 Restoration of mangrove forests, wetlands and shoreline trees: US$ 1,300,000 Potential Financing and Need for Financial Support and/or Financial Instruments Total requested finance: US$ 6,170,000 Prevent soil and costal erosion: conditionality 60%, finance required US$ 2,500,000 Establish and manage buffer zones around climate sensitive ecosystems and enrichment planting: conditionality 90%, finance required US$ 2,500,000 Restoration of mangrove forests, wetlands and shoreline trees: conditionality 90%, finance required US$ 1,170,000 Potential Supporting and Financing Partners / Sources Management partners (assisting with access to finance):* • Project Planning, Development & Design: UNDP, UNIDO, GIZ, GGGI, NDC-Hub, ADB, IUCN • Project Implementation & Management: UNDP, UNIDO, GIZ, GGGI, NDC-Hub, ADB, IUCN, CIDCA Potential financing partners/sources:* • Credit Guarantee: GCF, ADB, Supplier EXIM Banks, EIB, WB/IFC • Debt and Loans: VADB, VRDB, ADB, EIB, WB/IFC • Equity: Private sector companies • Non-Government Grants for investment: GEF, GCF, ADB, AU-DFAT, NZ- MFAT, WB/IFC, EIB, CIDCA, KOICA, EEAS • Grants for Technical Assistance & Capacity Building: GEF, GCF, AU-DFAT, NZ-MFAT, GIZ, CTCN, ADB, KOICA, UNDP, UNIDO, EEAS, WB/IFC *This is not a comprehensive list, as other entities are possible as well. Implementing and Supporting Entities / Stakeholders Implementing Entity / Stakeholders: - Ministry of Agriculture, Livestock, Fisheries, Forestry and Biosecurity (MALFFB), Department of Forests; Coordination of planting, incl. procurement of seedlings, and coordination of tending of planted areas Supporting Entity / Stakeholders: - Ministry of Lands and Natural Resources (MoLNR), Lands Department; facilitate and manage lands related issues - Ministry of Climate Change, Department of Environment, advise in GHG-budgeting, environmental impact assessments, MRV) - Ministry of Finance and Economic Management; advise on economic and financial policy, provide advice and management of financial affairs - Ministry of Tourism, Trade, Commerce and Ni-Vanuatu Business (MTTCNVB); support with all issues affecting the local population F2 60 Investment Needs (US$) The cost framework was adopted from the Vanuatu Forest and Landscape Restoration Strategy 2020-2030 and the Enhanced and Revised 1st NDC. Prevent soil and costal erosion: US$ 4,200,000 Establish and manage buffer zones around climate sensitive ecosystems and enrichment planting: US$ 2,700,000 Restoration of mangrove forests, wetlands and shoreline trees: US$ 1,300,000 Potential Financing and Need for Financial Support and/or Financial Instruments Total requested finance: US$ 6,170,000 Prevent soil and costal erosion: conditionality 60%, finance required US$ 2,500,000 Establish and manage buffer zones around climate sensitive ecosystems and enrichment planting: conditionality 90%, finance required US$ 2,500,000 Restoration of mangrove forests, wetlands and shoreline trees: conditionality 90%, finance required US$ 1,170,000 Potential Supporting and Financing Partners / Sources Management partners (assisting with access to finance):* • Project Planning, Development & Design: UNDP, UNIDO, GIZ, GGGI, NDC-Hub, ADB, IUCN • Project Implementation & Management: UNDP, UNIDO, GIZ, GGGI, NDC-Hub, ADB, IUCN, CIDCA Potential financing partners/sources:* • Credit Guarantee: GCF, ADB, Supplier EXIM Banks, EIB, WB/IFC • Debt and Loans: VADB, VRDB, ADB, EIB, WB/IFC • Equity: Private sector companies • Non-Government Grants for investment: GEF, GCF, ADB, AU-DFAT, NZ- MFAT, WB/IFC, EIB, CIDCA, KOICA, EEAS • Grants for Technical Assistance & Capacity Building: GEF, GCF, AU-DFAT, NZ-MFAT, GIZ, CTCN, ADB, KOICA, UNDP, UNIDO, EEAS, WB/IFC *This is not a comprehensive list, as other entities are possible as well. Implementing and Supporting Entities / Stakeholders Implementing Entity / Stakeholders: - Ministry of Agriculture, Livestock, Fisheries, Forestry and Biosecurity (MALFFB), Department of Forests; Coordination of planting, incl. procurement of seedlings, and coordination of tending of planted areas Supporting Entity / Stakeholders: - Ministry of Lands and Natural Resources (MoLNR), Lands Department; facilitate and manage lands related issues - Ministry of Climate Change, Department of Environment, advise in GHG-budgeting, environmental impact assessments, MRV) - Ministry of Finance and Economic Management; advise on economic and financial policy, provide advice and management of financial affairs - Ministry of Tourism, Trade, Commerce and Ni-Vanuatu Business (MTTCNVB); support with all issues affecting the local population - Department of Agriculture - Department of Biosecurity - Department of Environment - Provincial Governments - National Advisory Board on Climate Change - Vanuatu Agricultural College - Vanuatu Agriculture Research & Training Center - Private sector - Local communities General timeline for Development, Financing, Implementation, and Operation Time needed for development: 1 year Time needed for securing finance: 1 year When will the project/investment start and end: 2026 to 2035 Policy / Plan Link Key policies/Plans [linkages] • Vanuatu Forest and Landscape Restoration Strategy 2020 – 2030 • Forest Policy 2013-2023 [J. Climate Adaptation (J21), F. Land Use Planning (F16), G. Small-holder farmer and Community-Based Forestry (G17, G18)] • Vanuatu's Revised and Enhanced 1st Nationally Determined Contribution 2021 – 2030 [Forestry (A34, A35)] • Vision 2030: National Sustainable Development Plan 2016 to 2030 [ENV4, NRM (4.6)] • National Biodiversity Strategy and Actin Plan 2018 - 2030 [6.2 (FIW1), 6.2 (FIW3)] • National REDD+ Programme • National Communication to the UNFCCC • Global Forest Resource Assessment: Country Report Vanuatu • National Forest Reference Level Potential Business Model and Financing Strategy Given the current strain on the MALFFB budget and the severely limited financial resources of the communities, this project would be dependent on external subsidies. However, the long-term investments in the forest plantations and infrastructure could be financed through the sale of timber products for domestic consumption and export. Due to the long period of time until pay-offs and the risks of biological production, AR projects are only of limited interest to private investors. An alternative is AR projects related to the generation of CO2 certificates, primarily for the voluntary market. There may well be private interest in financing here, but the special conditions of the private market must be taken into account. F2 61 Gaps & Barriers to Implementation, Including Proposed enabling mechanisms Key gaps and barriers  Ongoing disputes and a lack of certainty and security over ownership, boundaries and use of the land  Coordination and collaboration between different land use and stakeholders (Forestry, Agriculture)  Capacity development of stakeholders (planning, implementing, M&E): government (human resources at national and provincial levels), local communities, NGOs and CVOs, private sectors, faith-based organizations, and major groups (youth, women, farmers)  Legal framework: Payment for Ecosystem Services, Involvement of Private Sector, Benefit Sharing System  Quality planting materials (seed and seedlings) of priority tree species, i.e., sandalwood (Santalum austrocaledonicum), whitewood (Endospermum medullosum), Nangai (Canarium indicum), natopa (Terminalia catappa) and mahogany (Swietenia macrophylla) and other preferred timber species Enabling mechanism  Cross-sectoral coordination with larger national development strategies and land use plans  One Map Policy: Land Use Planning including forestry activities in consultation with chiefs, landowners and communities  Regulations on Payment for Ecosystem Services; Benefit Sharing System  Free Prior Informed Consent (FPIC) of all rural stakeholders for and involved in (new) forestry projects/activities  Well defined benefit sharing mechanism (mitigation and adaptation benefits, water, biodiversity, tourism)  Stakeholder Consultation Guideline  Rehabilitation of leased and degraded customary land: o Land acquisition (acquire existing expired and/or degraded agricultural leases) o Redistribute the lands to small-holders  FLR Monitoring and Evaluation Framework  Introduce and promote climate change resilient tree species and varieties (see Project below) Financial Sustainability Forest Landscape Restoration activities are less attractive to investors than afforestation/ reforestation or agroforestry. This is because the costs per hectare are generally higher and the profit prospects are poorer. In addition, the risks and expected returns are difficult for investors to assess. Sustainable financing must therefore limit the higher risks and costs. This can be achieved through mixed financing models, government default guarantees or subsidies. Another option is to pool income from other activities such as REDD+, PES or tourism. F2 62 Gaps & Barriers to Implementation, Including Proposed enabling mechanisms Key gaps and barriers  Ongoing disputes and a lack of certainty and security over ownership, boundaries and use of the land  Coordination and collaboration between different land use and stakeholders (Forestry, Agriculture)  Capacity development of stakeholders (planning, implementing, M&E): government (human resources at national and provincial levels), local communities, NGOs and CVOs, private sectors, faith-based organizations, and major groups (youth, women, farmers)  Legal framework: Payment for Ecosystem Services, Involvement of Private Sector, Benefit Sharing System  Quality planting materials (seed and seedlings) of priority tree species, i.e., sandalwood (Santalum austrocaledonicum), whitewood (Endospermum medullosum), Nangai (Canarium indicum), natopa (Terminalia catappa) and mahogany (Swietenia macrophylla) and other preferred timber species Enabling mechanism  Cross-sectoral coordination with larger national development strategies and land use plans  One Map Policy: Land Use Planning including forestry activities in consultation with chiefs, landowners and communities  Regulations on Payment for Ecosystem Services; Benefit Sharing System  Free Prior Informed Consent (FPIC) of all rural stakeholders for and involved in (new) forestry projects/activities  Well defined benefit sharing mechanism (mitigation and adaptation benefits, water, biodiversity, tourism)  Stakeholder Consultation Guideline  Rehabilitation of leased and degraded customary land: o Land acquisition (acquire existing expired and/or degraded agricultural leases) o Redistribute the lands to small-holders  FLR Monitoring and Evaluation Framework  Introduce and promote climate change resilient tree species and varieties (see Project below) Financial Sustainability Forest Landscape Restoration activities are less attractive to investors than afforestation/ reforestation or agroforestry. This is because the costs per hectare are generally higher and the profit prospects are poorer. In addition, the risks and expected returns are difficult for investors to assess. Sustainable financing must therefore limit the higher risks and costs. This can be achieved through mixed financing models, government default guarantees or subsidies. Another option is to pool income from other activities such as REDD+, PES or tourism. Enabling, Capacity Building and Technical Assistance Needs Capacity building & technical assistance for planning and implementing restoration measures, tree selection, technics to remove invasive species on restoration sites Information and MRV Needs  GIS/ remote sensing/ in-situ based assessment of potential AR sites  Investment and implementation plan for each restoration activity  Community related information  Quality assurance measures after planting and during the restoration period Supporting References Vanuatu Low Emission Development Strategy (LEDS) 2023 Vanuatu’s Revised and Enhanced 1st NDC Vanuatu Forest Policy 2013- 2023 Vanuatu National Sustainable Development Plan (NSDP) 2016-2030 Vanuatu Climate Change and Disaster Risk reduction Policy 2016-2030 Vanuatu NDC Implementation Roadmap Sustainable Forest Management Policy and REDD+ Programme/ strategy F2 63 No. F3 Action Name Sub-Sector Forestry Description Agroforestry combines agriculture and forestry and describes land use systems in which perennial woody plants (trees, shrubs, palms, bamboo, etc.) and agricultural crops and/or animals are cultivated on the same land management units. This can be done in a spatial arrangement or temporal sequence. By integrating trees into the agricultural landscape, agroforestry diversifies and increases the social, economic and environmental benefits for land users. The trees covered by agroforestry include cocoa, coffee, rubber and oil palms. Agroforestry tries to balance various needs: 1) to produce trees for timber and other commercial purposes 2) to produce a supply of nutritious foods 3) to ensure the protection of the natural environment 4) to sequester carbon from the atmosphere by tree growth 5) build soil organic matter and thus soil carbon Agroforestry can be implemented in several ways: Agrosylvicultural systems refer to the use of land for the production of agricultural and forestry crops, either simultaneously or alternately by e.g. intercropping. Silvopastoral systems combine forestry activities with livestock grazing. When converting grassland to silvopastoral systems, additional carbon is sequestered in trees. The dual use of land increases overall revenue per hectare and may improve livestock productivity. Agrosilvopastoral systems are the combination of agrosilvicultural and silvopastoral systems. Windbreaks are linear plantings of trees and shrubs designed to provide economic, environmental and community benefits. The primary purpose is to slow the wind which creates a more beneficial condition for soils, crops, livestock, wildlife and people. Planning agroforestry systems involves deciding what to produce, selecting the components of the system, determining their arrangement, and deciding when and how the system components will be established and managed. Scientific and technical expertise must be brought together with local knowledge and needs. To find the optimal agroforestry system for a community, participatory processes should be used to ensure that those involved in agriculture, decision-makers and other community members (e.g. youth) are involved. The aim of this process is to identify suitable agroforestry options and select appropriate, compatible species, taking into F3 64 No. F3 Action Name Sub-Sector Forestry Description Agroforestry combines agriculture and forestry and describes land use systems in which perennial woody plants (trees, shrubs, palms, bamboo, etc.) and agricultural crops and/or animals are cultivated on the same land management units. This can be done in a spatial arrangement or temporal sequence. By integrating trees into the agricultural landscape, agroforestry diversifies and increases the social, economic and environmental benefits for land users. The trees covered by agroforestry include cocoa, coffee, rubber and oil palms. Agroforestry tries to balance various needs: 1) to produce trees for timber and other commercial purposes 2) to produce a supply of nutritious foods 3) to ensure the protection of the natural environment 4) to sequester carbon from the atmosphere by tree growth 5) build soil organic matter and thus soil carbon Agroforestry can be implemented in several ways: Agrosylvicultural systems refer to the use of land for the production of agricultural and forestry crops, either simultaneously or alternately by e.g. intercropping. Silvopastoral systems combine forestry activities with livestock grazing. When converting grassland to silvopastoral systems, additional carbon is sequestered in trees. The dual use of land increases overall revenue per hectare and may improve livestock productivity. Agrosilvopastoral systems are the combination of agrosilvicultural and silvopastoral systems. Windbreaks are linear plantings of trees and shrubs designed to provide economic, environmental and community benefits. The primary purpose is to slow the wind which creates a more beneficial condition for soils, crops, livestock, wildlife and people. Planning agroforestry systems involves deciding what to produce, selecting the components of the system, determining their arrangement, and deciding when and how the system components will be established and managed. Scientific and technical expertise must be brought together with local knowledge and needs. To find the optimal agroforestry system for a community, participatory processes should be used to ensure that those involved in agriculture, decision-makers and other community members (e.g. youth) are involved. The aim of this process is to identify suitable agroforestry options and select appropriate, compatible species, taking into account aspects such as soil type, microclimate, multifunctionality and harvesting. The products produced should have a high market potential or other important uses for the farmer. The assessment of the costs, benefits and market potential of agroforestry systems must be made against the background of the availability of resources such as land, labor, technology and capital. The needs and priorities of landowners (e.g. whether the products are intended for own consumption or for sale on the market) and the provision of environmental services also play a decisive role. The establishment of agroforestry systems initially involves preparation of the agroforestry site (e.g. preparation of planting holes for the seedlings, weeding, clearing, terracing, fencing, irrigation and fertilization) and the procurement of planting material. After planting, the newly established sites need to be cared for, which includes work such as replacement planting, weed control and protection of the newly planted trees. Management and monitoring includes the implementation of all management activities (e.g. seedling protection, weed and pest control, animal browsing, fertilization, irrigation, thinning, pruning, coppicing, harvesting, post-harvest), monitoring of the system (performance of agroforestry systems in terms of productivity, environmental and social outcomes, and the impact of external factors such as markets) and adjustments to the system over time. Planning the marketing of the products produced is another key element of agroforestry, where the products generated by the system are converted into income. Vanuatu has an estimated 11,500 hectares of grasslands. Switching to a silvopastoral system could sequester 2.7 tCO2e/ha. The mitigation effect of windbreaks cannot be clearly quantified. However, they contribute significantly to the success of agroforestry systems by preventing damage to crops, e.g. storm damage or drying out due to wind. They also bind atmospheric carbon through their biomass production. It is recommended to carry out accompanying studies on windbreaks, which can contribute to the improvement of tree species and the management of windbreaks. Outcomes  Improvement of food production  Diversify income sources for farmers  Provide environmental benefits by enhancing biodiversity, reduce erosion and improve air, water, and soil quality  Integrate indigenous knowledge  Sequester atmospheric carbon by tree growth and building up soil carbon Mitigation / Adaptation Potential According to UNDP (2020) an average of 31 mio. tCO2/yr and a total of 310 mio. tCO2 (2025-2035) can be expected from implementing agroforestry in Vanuatu. Co-benefits / SDG Linkages Potential co-benefits of agroforestry in Vanuatu include: F3 65 Improved agricultural production will contribute to SDG1 (no poverty), SDG 2 (no hunger), SDG 3 (good health and well -being), SDG 11 (sustainable cities and communities), SDG 13 (climate action), and SDG 15 (life on land) The expansion of habitat for native plants and wildlife would contribute to SDG 15 (life on land) Soil management and improvement would contribute to SDG 15 (life on land) Increased production of commercial timber, and contribution to downstream timber processing industries will contribute to SDG 8 (decent work and economic growth). Investment Needs (US$) Estimated capital investment needed amounts to US$ 32,600,000 and is divided between the activities as follows Agroforestry: US$31,000,000 Windbreaks: US$ 1,600,000 The investment needs have been assessed in consulting Vanuatu’s Enhanced and Revised 1st NDC, as verified by respective reports and literature sources. Potential Financing and Need for Financial Support and/or Financial Instruments Total requested finance: US$ 19,720,000 Agroforestry: conditionality 60%, finance required US$ 18,600,000 Windbreaks: conditionality 70%, finance required US$ 1,120,000 Potential Supporting and Financing Partners / Sources Management partners (assisting with access to finance):* • Project Planning, Development & Design: CIFOR-ICRAF, CGAIR, UNDP, UNIDO, GIZ, GGGI, NDC-Hub • Project Implementation & Management: UNDP, UNIDO, GIZ, GGGI, NDC-Hub, ADB, IUCN, CIDCA Potential financing partners/sources:* • Credit Guarantee: GCF, ADB, Supplier EXIM Banks, EIB, WB/IFC • Debt and Loans: VADB, VRDB, ADB, EIB, WB/IFC • Equity: private sector companies • Non-Government Grants for investment: GEF, GCF, ADB, AU-DFAT, NZ- MFAT, WB/IFC, EIB, CIDCA, KOICA, EEAS • Grants for Technical Assistance & Capacity Building: GEF, GCF, AU-DFAT, NZ-MFAT, GIZ, CTCN, ADB, KOICA, UNDP, UNIDO, EEAS, WB/IFC *This is not a comprehensive list, as other entities are possible as well. Implementing and Supporting Entities / Stakeholders Implementing Entity / Stakeholders:  Ministry of Agriculture, Livestock, Fisheries, Forestry and Biosecurity (MALFFB), Department of Forests; Coordination of planting, incl. procurement of seedlings, and coordination of tending of planted areas F3 66 Improved agricultural production will contribute to SDG1 (no poverty), SDG 2 (no hunger), SDG 3 (good health and well -being), SDG 11 (sustainable cities and communities), SDG 13 (climate action), and SDG 15 (life on land) The expansion of habitat for native plants and wildlife would contribute to SDG 15 (life on land) Soil management and improvement would contribute to SDG 15 (life on land) Increased production of commercial timber, and contribution to downstream timber processing industries will contribute to SDG 8 (decent work and economic growth). Investment Needs (US$) Estimated capital investment needed amounts to US$ 32,600,000 and is divided between the activities as follows Agroforestry: US$31,000,000 Windbreaks: US$ 1,600,000 The investment needs have been assessed in consulting Vanuatu’s Enhanced and Revised 1st NDC, as verified by respective reports and literature sources. Potential Financing and Need for Financial Support and/or Financial Instruments Total requested finance: US$ 19,720,000 Agroforestry: conditionality 60%, finance required US$ 18,600,000 Windbreaks: conditionality 70%, finance required US$ 1,120,000 Potential Supporting and Financing Partners / Sources Management partners (assisting with access to finance):* • Project Planning, Development & Design: CIFOR-ICRAF, CGAIR, UNDP, UNIDO, GIZ, GGGI, NDC-Hub • Project Implementation & Management: UNDP, UNIDO, GIZ, GGGI, NDC-Hub, ADB, IUCN, CIDCA Potential financing partners/sources:* • Credit Guarantee: GCF, ADB, Supplier EXIM Banks, EIB, WB/IFC • Debt and Loans: VADB, VRDB, ADB, EIB, WB/IFC • Equity: private sector companies • Non-Government Grants for investment: GEF, GCF, ADB, AU-DFAT, NZ- MFAT, WB/IFC, EIB, CIDCA, KOICA, EEAS • Grants for Technical Assistance & Capacity Building: GEF, GCF, AU-DFAT, NZ-MFAT, GIZ, CTCN, ADB, KOICA, UNDP, UNIDO, EEAS, WB/IFC *This is not a comprehensive list, as other entities are possible as well. Implementing and Supporting Entities / Stakeholders Implementing Entity / Stakeholders:  Ministry of Agriculture, Livestock, Fisheries, Forestry and Biosecurity (MALFFB), Department of Forests; Coordination of planting, incl. procurement of seedlings, and coordination of tending of planted areas Supporting Entity/ Stakeholders  Ministry of Lands and Natural Resources (MoLNR), Lands Department; facilitate and manage lands related issues  Ministry of Climate Change, Department of Environment, advise in GHG-budgeting, environmental impact assessments, MRV)  Ministry of Finance and Economic Management; advise on economic and financial policy, provide advice and management of financial affairs  Ministry of Tourism, Trade, Commerce and Ni-Vanuatu Business (MTTCNVB); support with all issues affecting the local population  Department of Agriculture  Department of Livestock  Department of Biosecurity  Department of Environment  Vanuatu Primary Producers’ Authority  Provincial Governments  National Advisory Board on Climate Change  Vanuatu Agricultural College  VANAUTA Agriculture Research & Training Center  Farmers  Private sector  Communities General timeline for Development, Financing, Implementation, and Operation Time needed for development: 1 year Time needed for securing finance: 1,5 years When will the project/investment start and end: 2026 to 2035 Policy / Plan Link Key policies/Plans [linkages] • Forest Policy 2013-2023 [J. Climate Adaptation (J21), G. Small-holder farmer and Community-Based Forestry (G18), Q. Forest Development Financing (Q41), S. Forestry as a Source of Income (S45)] • Agriculture Sector Policy 2015-2030 (2.2.3) • Vanuatu's Revised and Enhanced 1st Nationally Determined Contribution 2021 – 2030 [Forestry (A25)] • Vision 2030: National Sustainable Development Plan 2016 to 2030 • Vanuatu Forest and Landscape Restoration Strategy 2020 – 2030  National Livestock Policy 2015-2030 Relevant Policies/International Reporting • National Biodiversity Strategy and Action Plan 2018 - 2030 • National Communications to the UNFCCC  Vanuatu Climate Change and Disaster Risk Reduction Policy 2016 - 2030  Vanuatu Infrastructure Strategic Investment Plan 2015-2024 F3 67  National Sustainable Development Plan 2016 to 2030  Meteorology, Geological Hazards and Climate Change Act 2016 Potential Business Model and Financing Strategy Given the current strain on the MALFFB budget and the severely limited financial resources of the communities, this project would be dependent on external subsidies. Improving revenue from livestock farming could attract private investments. However, low margins and increased GHG emissions by intensifying livestock farming need to be considered. Gaps & Barriers to Implementation, Including Proposed enabling mechanisms Key gaps and barriers  Lack of up-front support payment for Agroforestry  Lack of suitable financial model: when loans are granted to farmers, they usually have a short payback time and high interest rates making long-term investments less profitable  Except for a few products, e.g. kava, kapra, cocoa, value chains for non- timber agroforestry products are poorly developed (for example, products from indigenous trees)  Limited engagement of larger commercial actors who requires larger amount of products  Inadequate extension programs to promote agroforestry  Insufficient extension services for Agroforestry models  Limited research – Productivity (including economic viability) and land use suitability for different agroforestry practices/models  Dearth of research in the scale-up process Enabling mechanism  Improving access to credit by e.g. pooled resources from agriculture sector (e.g., NDC-A7, Subsidies for small scale producers- agriculture, forestry), payment for Ecosystem Services, resources from REDD+ payments  Priority domestication of indigenous trees  Develop and clarify the roles and responsibilities of different institutions/actors for agroforestry  Strengthen the agroforestry capacity of national extension services, combined with the use of new technologies such as drones and mobile phones  Farmer-to-farmer extension service (horizontal extension)  Improve and secure tenure rights on land and trees  Defining carbon rights within the existing legal framework  Establish forest farmer associations, agricultural cooperatives  Improve farmer access to markets: market information system, promoting value chains for agroforestry products and services F3 68  National Sustainable Development Plan 2016 to 2030  Meteorology, Geological Hazards and Climate Change Act 2016 Potential Business Model and Financing Strategy Given the current strain on the MALFFB budget and the severely limited financial resources of the communities, this project would be dependent on external subsidies. Improving revenue from livestock farming could attract private investments. However, low margins and increased GHG emissions by intensifying livestock farming need to be considered. Gaps & Barriers to Implementation, Including Proposed enabling mechanisms Key gaps and barriers  Lack of up-front support payment for Agroforestry  Lack of suitable financial model: when loans are granted to farmers, they usually have a short payback time and high interest rates making long-term investments less profitable  Except for a few products, e.g. kava, kapra, cocoa, value chains for non- timber agroforestry products are poorly developed (for example, products from indigenous trees)  Limited engagement of larger commercial actors who requires larger amount of products  Inadequate extension programs to promote agroforestry  Insufficient extension services for Agroforestry models  Limited research – Productivity (including economic viability) and land use suitability for different agroforestry practices/models  Dearth of research in the scale-up process Enabling mechanism  Improving access to credit by e.g. pooled resources from agriculture sector (e.g., NDC-A7, Subsidies for small scale producers- agriculture, forestry), payment for Ecosystem Services, resources from REDD+ payments  Priority domestication of indigenous trees  Develop and clarify the roles and responsibilities of different institutions/actors for agroforestry  Strengthen the agroforestry capacity of national extension services, combined with the use of new technologies such as drones and mobile phones  Farmer-to-farmer extension service (horizontal extension)  Improve and secure tenure rights on land and trees  Defining carbon rights within the existing legal framework  Establish forest farmer associations, agricultural cooperatives  Improve farmer access to markets: market information system, promoting value chains for agroforestry products and services Financial Sustainability Financing for agroforestry projects can involve the creation and development of entirely new financing mechanisms and instruments (e.g. debt-for-nature swaps) or the adaptation and application of established financial instruments (e.g. bonds, investment funds). The advantage of adapting existing financial instruments is that the perceived risks of investing in this area are reduced, as private sector investors (as well as public and multilateral donors) are already familiar with these market-tested instruments and know how to use them. Blended finance instruments offer public financing institutions the opportunity to leverage and multiply capital flowing into sustainable forestry. Well-known approaches practiced in the past include the use of public funds to support forest conservation programs or to build the regulatory capacity of forestry ministries. In the future, public funds should increasingly be used to channel private sector investment into sustainable agroforestry operations. Agroforestry has the advantage over pure forestry projects that the agricultural products lead to a return on investment after a short period of time. This buffers the long-term nature of investment activity in forestry projects and makes the sector attractive to investors and competitive with other asset classes. Enabling, Capacity Building and Technical Assistance Needs Capacity building & technical assistance for  Project management, inventory, training, equipment  Stakeholder consultation process  Management and monitoring  Marketing of the products (selecting target markets, adding value to products, getting products to prospective buyers, setting the price, and promoting the products)  Policy review on development  Legislative review on development  Access to farmlands  Access to bank credits  Accompanying studies on windbreaks, including tree species, structure of windbreaks (height, width, length, spatial composition), management, efficiency  Provide seedlings of high value timber species and sandalwood plantations. Information and MRV Needs  GIS/ remote sensing/ in-situ based assessment of potential agroforestry sites  Investment and implementation plan for each site  Community related information F3 69 Supporting References Vanuatu Low Emission Development Strategy (LEDS) 2023 Vanuatu’s Revised and Enhanced 1st NDC Vanuatu Forest Policy 2013- 2023 Vanuatu Agriculture Sector Policy 2015 – 2030 National Livestock Policy 2015-2013 Vanuatu National Sustainable Development Plan (NSDP) 2016-2030 Vanuatu Climate Change and Disaster Risk reduction Policy 2016-2030 Vanuatu NDC Implementation Roadmap UNDP Enhancing and Fast-tracking Implementation of Vanuatu’s Nationally Determined Contribution (NDC) 2020 MacFarlane, D., Shelton, M. 1986. Pastures in Vanuatu, Dept. of Agriculture, Univ. of Queensland, Australia, ACIAR Technical Report Series No. 2, 32 p. https://www.worldagroforestry.org/about/agroforestry F3 70 Supporting References Vanuatu Low Emission Development Strategy (LEDS) 2023 Vanuatu’s Revised and Enhanced 1st NDC Vanuatu Forest Policy 2013- 2023 Vanuatu Agriculture Sector Policy 2015 – 2030 National Livestock Policy 2015-2013 Vanuatu National Sustainable Development Plan (NSDP) 2016-2030 Vanuatu Climate Change and Disaster Risk reduction Policy 2016-2030 Vanuatu NDC Implementation Roadmap UNDP Enhancing and Fast-tracking Implementation of Vanuatu’s Nationally Determined Contribution (NDC) 2020 MacFarlane, D., Shelton, M. 1986. Pastures in Vanuatu, Dept. of Agriculture, Univ. of Queensland, Australia, ACIAR Technical Report Series No. 2, 32 p. https://www.worldagroforestry.org/about/agroforestry No. F4 Action Name Sub-Sector Forestry Description Improved sustainable forest management (ISFM) includes measures such as extending the rotation period, specify the minimum size of trees to be harvested, improving the productivity of the forest or soil, leaving some of the increment (trees in the growth phase) that could be harvested under normal forest management, or reducing the impact of timber harvesting by reduced impact logging (RIL). SFM involves recording the condition of the forest (forest inventory) and monitoring the measures implemented in the previous forest management period. Furthermore, the cutting rate is determined for the following years and the operational and silvicultural objectives are planned. In addition to monitoring and controlling the sustainability of timber use, the multifunctionality of forestry services such as forest nature conservation, water, soil, and climate protection and the recreational function of the forest are also analyzed and taken into account in the planning. In the course of the forest inventory, the ownership structure, boundaries and area sizes, tree species composition, tree heights and diameters, timber stock, soil condition, water balance and forest functions are recorded and used to determine, among other things, the increment and the amount of timber that can be used sustainably. The proportion of dead wood, tree diseases, the presence of regeneration and damages (by e.g. game, cyclones, invasive species) are also assessed. The forest inventory is the fundament of a forest management plan, which forms the basis for practical work in forestry operations. Sustainable forest management in Vanuatu will be improved by incorporating forest planning principles into the management of artificially established stands. This is of particular importance in view of the planned future efforts for reforestation, afforestation and forest restoration. Improved forestry planning serves to increase timber production and thus also the sequestration of atmospheric carbon through forest growth. This can significantly increase the contribution of SFM as a mitigating activity. At the same time, the other non-timber functions of forests are strengthened. The production of marketable raw wood qualities promotes the use of wood in wood products and thus an increase in the HWP C pool as a further mitigation activity. As part of this NDC activity, a comprehensive survey of the managed forest stands is to be carried out. These surveys also include tree-ring analyses for the retrospective determination of increment data. Based on the information collected, management plans will be drawn up to enable sustainable management in line with operational objectives. This includes planning for replacing Cordia alliodora which was intensively planted in the past by other F4 71 tree species. A key component of this NDC activity is training and capacity development as well as participation of local communities. Outcomes  Integrity of forest ecosystems is maintained  Negotiation processes, platforms and mechanisms for conflict solving are effective, efficient and legitimate  Land and resource right of local communities are respected  Workers are aware of sustainable management needs and goals  A fair distribution of benefits derived from forest management is discussed and accepted among concerned parties  The code of logging practice is consistently applied and adhered to  Forest managers seek to improve operational efficiency, protect the environment, and maintain biodiversity  Effective control of access and proper uses of allowed resources by corresponding institutions exist  A pool of trained personnel for RIL is established Mitigation / Adaptation Potential Mitigation potential of existing and newly established tree plantations: 120,000 tCO2 to 240,000 tCO2 annually or a total of 1,200,000 tCO2 to 2,400,000 tCO2 over 10 years Additional mitigation potential by improved SFM: 12,000 tCO2 to 24,000 tCO2 annually and a total of 120,000 tCO2 to 240,000 tCO2 over 10 years Vanuatu has a plantation area of 2910 ha and the National Forest Policy aim is to establish 20,000ha of plantations in Vanuatu over the next 20 years (Dept. of Forests, 2020). In addition, small-scale farmers also established plantations but the area cannot be accurately measured due to the small scale and scattered nature of the plantations. Depending on the annual timber growth per ha this would lead to an average annual timber volume growth over a 20 year period between 130,000 m3 (anticipated growth 10 m3/ha yr) and 260,000 m3 (anticipated growth 20 m3/ha yr). Assuming a wood density of 500kg/m3 this results in an estimated annual mitigation potential of 120,000 tCO2 to 240,000 tCO2 annually. Increasing timber production by a conservative rate of 10% would result in additional C-removals of 12,000 tCO2 to 24,000 tCO2 annually. Co-benefits / SDG Linkages Consideration of the interests of the local population contributes to SDG 11 (sustainable cities and communities) The alignment of timber harvesting volumes with local site conditions promotes SDG 13 (climate action) and SDG 15 (life on land) Increased production of commercial timber will contribute to SDG 8 (decent work and economic growth). Investment Needs (US$) Estimated capital investment needed: US$ 1,500,000 Potential Financing and Need for Financial Support and/or Financial Instruments Required funding: Conditionality 100%, 1,500,000 US$ F4 72 tree species. A key component of this NDC activity is training and capacity development as well as participation of local communities. Outcomes  Integrity of forest ecosystems is maintained  Negotiation processes, platforms and mechanisms for conflict solving are effective, efficient and legitimate  Land and resource right of local communities are respected  Workers are aware of sustainable management needs and goals  A fair distribution of benefits derived from forest management is discussed and accepted among concerned parties  The code of logging practice is consistently applied and adhered to  Forest managers seek to improve operational efficiency, protect the environment, and maintain biodiversity  Effective control of access and proper uses of allowed resources by corresponding institutions exist  A pool of trained personnel for RIL is established Mitigation / Adaptation Potential Mitigation potential of existing and newly established tree plantations: 120,000 tCO2 to 240,000 tCO2 annually or a total of 1,200,000 tCO2 to 2,400,000 tCO2 over 10 years Additional mitigation potential by improved SFM: 12,000 tCO2 to 24,000 tCO2 annually and a total of 120,000 tCO2 to 240,000 tCO2 over 10 years Vanuatu has a plantation area of 2910 ha and the National Forest Policy aim is to establish 20,000ha of plantations in Vanuatu over the next 20 years (Dept. of Forests, 2020). In addition, small-scale farmers also established plantations but the area cannot be accurately measured due to the small scale and scattered nature of the plantations. Depending on the annual timber growth per ha this would lead to an average annual timber volume growth over a 20 year period between 130,000 m3 (anticipated growth 10 m3/ha yr) and 260,000 m3 (anticipated growth 20 m3/ha yr). Assuming a wood density of 500kg/m3 this results in an estimated annual mitigation potential of 120,000 tCO2 to 240,000 tCO2 annually. Increasing timber production by a conservative rate of 10% would result in additional C-removals of 12,000 tCO2 to 24,000 tCO2 annually. Co-benefits / SDG Linkages Consideration of the interests of the local population contributes to SDG 11 (sustainable cities and communities) The alignment of timber harvesting volumes with local site conditions promotes SDG 13 (climate action) and SDG 15 (life on land) Increased production of commercial timber will contribute to SDG 8 (decent work and economic growth). Investment Needs (US$) Estimated capital investment needed: US$ 1,500,000 Potential Financing and Need for Financial Support and/or Financial Instruments Required funding: Conditionality 100%, 1,500,000 US$ Potential Supporting and Financing Partners / Sources Management partners (assisting with access to finance):* • Project Planning, Development & Design: UNDP, UNIDO, GIZ, GGGI, NDC-Hub, ADB, IUCN • Project Implementation & Management: UNDP, UNIDO, GIZ, GGGI, NDC- Hub, ADB, IUCN, CIDCA Potential financing partners/sources:* Non-Government Grants for investment: GEF, GCF, ADB, AU-DFAT, NZ- MFAT, WB/IFC, EIB, CIDCA, KOICA, EEAS Grants for Technical Assistance & Capacity Building: GEF, GCF, AU-DFAT, NZ-MFAT, GIZ, CTCN, ADB, KOICA, UNDP, UNIDO, EEAS, WB/IFC *This is not a comprehensive list, as other entities are possible as well. Implementing and Supporting Entities / Stakeholders Implementing Entity / Stakeholders:  Ministry of Agriculture, Livestock, Fisheries, Forestry and Biosecurity (MALFFB), Department of Forests; Coordination of planting, incl. procurement of seedlings, and coordination of tending of planted areas Supporting Entity / Stakeholders:  Ministry of Lands and Natural Resources (MoLNR), Lands Department; facilitate and manage lands related issues  Ministry of Climate Change, Department of Environment, advise in GHG-budgeting, environmental impact assessments, MRV)  Ministry of Finance and Economic Management; advise on economic and financial policy, provide advice and management of financial affairs  Ministry of Tourism, Trade, Commerce and Ni-Vanuatu Business (MTTCNVB); support with all issues affecting the local population  Department of Agriculture  Department of Biosecurity  Department of Environment  Department of Climate Change  Provincial Governments  National Advisory Board on Climate Change  Vanuatu Agricultural College  Vanuatu Agriculture Research & Training Center  Private sector  Local communities General timeline for Development, Financing, Implementation, and Operation Time needed for development: 1 year Time needed for securing finance: 1 year When will the project/investment start and end: 2026 to 2035 Policy / Plan Link Key policies/Plans [linkages] • Forest Policy 2013-2023 [A. Forest Assessment (A1), B. Management of Natural Forest (B2, B3, B5, B6), K. Climate Change Mitigation (K22), E. Wetlands, Coastal Areas and Mangrove Forests (E15), F. Land Use F4 73 Planning (F16), G. Small-holder farmer and Community-Based Forestry (G17)] • Vanuatu's Revised and Enhanced 1st Nationally Determined Contribution 2021 – 2030 [AFOLU (M13, M14), Forestry pp11, (A29, A30, A31)] • Vision 2030: National Sustainable Development Plan 2016 to 2030 [ENV4, NRM (4.2, 4.6, 4.7)] • Code of Logging Practice 1998 • National REDD+ Programme • National Biodiversity Strategy and Actin Plan 2018 - 2030 [6.2 (FIW1)] • Vanuatu Forest and Landscape Restoration Strategy 2020 – 2030 Relevant Policies/International Reporting • National Communication to the UNFCCC • Global Forest Resource Assessment: Country Report Vanuatu • National Forest Reference Level (REDD+, NFMS, NFIS) • Low Emission Development Strategies and Plans Potential Business Model and Financing Strategy The development of improved SFM must take place in parallel with traditional plantation management. As the additional monetary profits cannot be directly allocated to the activity, the activity is not suitable for financing by private investors. Rather, private initiatives should be attracted for afforestation, reforestation and forest restoration activities. The activity is to be promoted primarily with public funds. Gaps & Barriers to Implementation, Including Proposed enabling mechanisms • Limited/ Inadequate forest management capacity (financial, institutional, human, technical, logistics) • Data: growing stock, growth and yield; timber harvesting, AAH; tree species diversity) • Lack of forest management plans • Forest mapping (Designated functions- Production, Conservation, Special Use)  Threats/ damages due to invasive species, grazing and cyclones • High opportunity costs: Customary landowners are converting their logged forest areas for other activities, like commercial cattle ranching, or in coastland lowland areas for real estate development (Efate and east Santo) • Timber extraction is more difficult due to lack of transport infrastructure and equipment • Increased and concentrated fuelwood need F4 74 Planning (F16), G. Small-holder farmer and Community-Based Forestry (G17)] • Vanuatu's Revised and Enhanced 1st Nationally Determined Contribution 2021 – 2030 [AFOLU (M13, M14), Forestry pp11, (A29, A30, A31)] • Vision 2030: National Sustainable Development Plan 2016 to 2030 [ENV4, NRM (4.2, 4.6, 4.7)] • Code of Logging Practice 1998 • National REDD+ Programme • National Biodiversity Strategy and Actin Plan 2018 - 2030 [6.2 (FIW1)] • Vanuatu Forest and Landscape Restoration Strategy 2020 – 2030 Relevant Policies/International Reporting • National Communication to the UNFCCC • Global Forest Resource Assessment: Country Report Vanuatu • National Forest Reference Level (REDD+, NFMS, NFIS) • Low Emission Development Strategies and Plans Potential Business Model and Financing Strategy The development of improved SFM must take place in parallel with traditional plantation management. As the additional monetary profits cannot be directly allocated to the activity, the activity is not suitable for financing by private investors. Rather, private initiatives should be attracted for afforestation, reforestation and forest restoration activities. The activity is to be promoted primarily with public funds. Gaps & Barriers to Implementation, Including Proposed enabling mechanisms • Limited/ Inadequate forest management capacity (financial, institutional, human, technical, logistics) • Data: growing stock, growth and yield; timber harvesting, AAH; tree species diversity) • Lack of forest management plans • Forest mapping (Designated functions- Production, Conservation, Special Use)  Threats/ damages due to invasive species, grazing and cyclones • High opportunity costs: Customary landowners are converting their logged forest areas for other activities, like commercial cattle ranching, or in coastland lowland areas for real estate development (Efate and east Santo) • Timber extraction is more difficult due to lack of transport infrastructure and equipment • Increased and concentrated fuelwood need • Uncertainty in forest recovery after eliminating invasive species Financial Sustainability The technical assistance and capacity building provided will help to increase the volume and attractiveness of financing products produced by plantation forestry and reduce the real and perceived risks associated with financing such long-term measures. Investments in projects that aim to intensify SFM require financing instruments that reduce the investment risks for private (institutional) investors. These could be mixed financing models or funds that spread the risks between different investment objects. Enabling, Capacity Building and Technical Assistance Needs • Policy coherence across land use sector (Forestry, Agriculture/Livestock, Settlement) • One Map Policy: Land Use Planning • Moratorium on natural forest conversion • Enhanced NFIS (see next project) • Develop Timber Legality Assurance System/Log Tracking System • Defining Carbon rights within the existing legal framework • Dedicated Forestry Research and Training Center under the Department of Forest Information and MRV Needs  In-situ based assessment of plantation sites  Tree-ring analysis and growth assessment  Community related information and participation process  Preparation of a management plan with recommendations for thinning, harvesting measures and regeneration  In-situ assessments after end of planning period for control and further planning Supporting References Vanuatu Code of Logging Practice Vanuatu’s National Forest Reference [2008 – 2017] Vanuatu National Forest Policy Department of Forests, 2000. Vanuatu country report, Heads of Forestry Meeting, Nadi, Fiji, 8-12 May 2000, Vanuatu, p. 21. https://malffb.gov.vu/index.php/department/forestry.html Pancel, L., M. Köhl (eds.) 2016. Forest Resources Planning in: Tropical Forestry Handbook, Vol. 3, Springer, Heidelberg F4 75 No. F5 Action Name Sub-Sector Forestry Description National forest information systems (NFIS) are comprehensive databases that contain valuable information about the country's forests, including data related to forest cover, species composition, ownership, management practices, and ecological conditions. These systems provide a wealth of information that can help forest managers and policymakers in making informed decisions regarding forest conservation, ecosystem restoration, and sustainable use of forest resources. Forest inventory is a major data source for NFISs. They systematic collect data on the forestry resources within a the national forest area. When forest inventories are carried out on successive occasions they provide information on both, current states and forest change. This is particularly necessary if information on the development of the growing stock and past wood utilization is to be provided for estimating sustainable wood production and changes in the C-storage of the forests. In Vanuatu national forest inventories were carried out in 1989 and 2019 to 2022. On their basis, a follow-up inventory system is developed that meets current requirements. In particular, the following methodological adjustments must be implemented for this purpose:  Survey of current information requirements and further development of the inventory system to address them  Statistical concept for linking earth observation data and field surveys for cost-efficient recording of condition and changes. This also includes update approaches that enable annual reporting without annual field surveys  Revision of the field instructions to take account of new information requirements  Development of an information system to integrate various data sources and provide user-friendly, online-based information  Education and training of staff, in particular with regard to the satellite image analysis, GIS, databases, inventory statistics, reporting, quality control, field surveys  Data collection (field surveys, satellite data analysis, quality control, training)  Data evaluation and reporting The overarching goal of this activity is to provide a national forest information system that provides targeted information for various application areas and user groups. F5 76 No. F5 Action Name Sub-Sector Forestry Description National forest information systems (NFIS) are comprehensive databases that contain valuable information about the country's forests, including data related to forest cover, species composition, ownership, management practices, and ecological conditions. These systems provide a wealth of information that can help forest managers and policymakers in making informed decisions regarding forest conservation, ecosystem restoration, and sustainable use of forest resources. Forest inventory is a major data source for NFISs. They systematic collect data on the forestry resources within a the national forest area. When forest inventories are carried out on successive occasions they provide information on both, current states and forest change. This is particularly necessary if information on the development of the growing stock and past wood utilization is to be provided for estimating sustainable wood production and changes in the C-storage of the forests. In Vanuatu national forest inventories were carried out in 1989 and 2019 to 2022. On their basis, a follow-up inventory system is developed that meets current requirements. In particular, the following methodological adjustments must be implemented for this purpose:  Survey of current information requirements and further development of the inventory system to address them  Statistical concept for linking earth observation data and field surveys for cost-efficient recording of condition and changes. This also includes update approaches that enable annual reporting without annual field surveys  Revision of the field instructions to take account of new information requirements  Development of an information system to integrate various data sources and provide user-friendly, online-based information  Education and training of staff, in particular with regard to the satellite image analysis, GIS, databases, inventory statistics, reporting, quality control, field surveys  Data collection (field surveys, satellite data analysis, quality control, training)  Data evaluation and reporting The overarching goal of this activity is to provide a national forest information system that provides targeted information for various application areas and user groups. Outcomes  An information system that integrates various forest and forestry data sources and provide user-friendly, online-based information  The current information requirements for the forest inventory are known  The inventory concept allows the combination of satellite and in-situ data to estimate the current state and changes  The equipment and infrastructure for carrying out the inventory has been procured and is operational  The staff is trained and has the skills to carry out the various tasks independently  The satellite and in-situ data has been obtained and is ready for evaluation  The data has been evaluated, a report presenting the condition of and changes in the forest in accordance with the required information requirements has been prepared, quality assurance has been completed and documented Mitigation / Adaptation Potential The mitigation and adaptation potential of this activity cannot be directly assessed. However, the activity is an essential prerequisite for controlling emissions and the storage function of Vanuatu's natural and managed forests and thus a cornerstone of national climate policy and greenhouse gas reporting. Co-benefits / SDG Linkages This activity generates additional benefits in the form of providing information to assess the progress towards sustainable forest management in Vanuatu and enabling international reporting. By monitoring Vanuatu’s forests the maintenance and enhancement of C-sinks, biodiversity, health, vitality, and provision of multiple forest functions is reviewed. The activity will have SDG-linkages with respect to SDG 13 Climate action and SDG 15 Life on land Investment Needs (US$) 7,000,000 US$ Estimated capital investment needed: US$ 500,000 Estimated development costs: US$ 1,000,000 Enabling, Capacity Building and Technical Assistance: US$ 750,000 US$ Assessments: US$ 4,750,000 Potential Financing and Need for Financial Support and/or Financial Instruments Requested Funding: Conditionality 100%, 7,000,000 US$ Potential Supporting and Financing Partners / Sources Scientific partners:* • International Union of Forest Research Organizations, Vienna, Austria  European Space Agency F5 77  NASA, US Geological Service  Commonwealth Scientific and Industrial Research Organisation (CSIRO)  New Zealand Forest Research Institute (Scion) Management partners (assisting with access to finance):* • Project Planning, Development & Design: UNFAO, GIZ, GGGI, NDC-Hub • Project Implementation & Management: UNFAO, GIZ, GGGI, NDC-Hub, CIDCA Potential financing partners/sources:* • Credit Guarantee: GCF, EIB, WB/IFC • Debt and Loans: VADB, VRDB, ADB, EIB, WB/IFC • Equity: private sector companies • Non-Government Grants for investment: GEF, GCF, ADB, AU-DFAT, NZ- MFAT, WB/IFC, EIB, CIDCA, KOICA, EEAS • Grants for Technical Assistance & Capacity Building: GEF, GCF, AU- DFAT, NZ-MFAT, GIZ, CTCN, ADB, KOICA, UNDP, UNIDO, EEAS, WB/IFC *This is not a comprehensive list, as other entities are possible as well. Implementing and Supporting Entities / Stakeholders Implementing Entity / Stakeholders:  Ministry of Agriculture, Livestock, Fisheries, Forestry and Biosecurity (MALFFB), Department of Forests; Coordination of planting, incl. procurement of seedlings, and coordination of tending of planted areas Supporting Entity/ Stakeholders  Ministry of Lands and Natural Resources (MoLNR), Lands Department; facilitate and manage lands related issues  Ministry of Climate Change, Department of Environment, advise in GHG-budgeting, environmental impact assessments, MRV)  Ministry of Finance and Economic Management; advise on economic and financial policy, provide advice and management of financial affairs  Ministry of Tourism, Trade, Commerce and Ni-Vanuatu Business (MTTCNVB); support with all issues affecting the local population  Department of Agriculture  Department of Biosecurity  Department of Environment  Provincial Governments  National Advisory Board on Climate Change  Vanuatu Agricultural College  Vanuatu Agriculture Research & Training Center General timeline for Development, Financing, Implementation, and Operation Time needed for development: 3 years Time needed for securing finance: 0.5 year When will the project/investment start and end: 2025-2035 Policy / Plan Link Key policies/Plans F5 78  NASA, US Geological Service  Commonwealth Scientific and Industrial Research Organisation (CSIRO)  New Zealand Forest Research Institute (Scion) Management partners (assisting with access to finance):* • Project Planning, Development & Design: UNFAO, GIZ, GGGI, NDC-Hub • Project Implementation & Management: UNFAO, GIZ, GGGI, NDC-Hub, CIDCA Potential financing partners/sources:* • Credit Guarantee: GCF, EIB, WB/IFC • Debt and Loans: VADB, VRDB, ADB, EIB, WB/IFC • Equity: private sector companies • Non-Government Grants for investment: GEF, GCF, ADB, AU-DFAT, NZ- MFAT, WB/IFC, EIB, CIDCA, KOICA, EEAS • Grants for Technical Assistance & Capacity Building: GEF, GCF, AU- DFAT, NZ-MFAT, GIZ, CTCN, ADB, KOICA, UNDP, UNIDO, EEAS, WB/IFC *This is not a comprehensive list, as other entities are possible as well. Implementing and Supporting Entities / Stakeholders Implementing Entity / Stakeholders:  Ministry of Agriculture, Livestock, Fisheries, Forestry and Biosecurity (MALFFB), Department of Forests; Coordination of planting, incl. procurement of seedlings, and coordination of tending of planted areas Supporting Entity/ Stakeholders  Ministry of Lands and Natural Resources (MoLNR), Lands Department; facilitate and manage lands related issues  Ministry of Climate Change, Department of Environment, advise in GHG-budgeting, environmental impact assessments, MRV)  Ministry of Finance and Economic Management; advise on economic and financial policy, provide advice and management of financial affairs  Ministry of Tourism, Trade, Commerce and Ni-Vanuatu Business (MTTCNVB); support with all issues affecting the local population  Department of Agriculture  Department of Biosecurity  Department of Environment  Provincial Governments  National Advisory Board on Climate Change  Vanuatu Agricultural College  Vanuatu Agriculture Research & Training Center General timeline for Development, Financing, Implementation, and Operation Time needed for development: 3 years Time needed for securing finance: 0.5 year When will the project/investment start and end: 2025-2035 Policy / Plan Link Key policies/Plans • Forest Policy 2013-2023 [A. Forest Assessment (A1), B. Management of Natural Forest (B2) B5), K. Climate Change Mitigation (K22)] • National REDD+ Programme • Global Forest Resource Assessment: Country Report Vanuatu • National Forest Reference Level • Vanuatu's Revised and Enhanced 1st Nationally Determined Contribution 2021 – 2030 [Forestry (A27)] • National Communications to the UNFCCC • Vanuatu Forest and Landscape Restoration Strategy 2020 – 2030 • Code of Logging Practice 1998 • National Biodiversity Strategy and Actin Plan 2018 - 2030 Relevant Policies/International Reporting • FAO Global Forest Resources Assessment  IPCC secretariat Potential Business Model and Financing Strategy Forest inventories do not represent a business case per se. However, the information that is entered into forest information systems can have a market value. For example, information on future timber volumes can represent important planning parameters for capacity planning and thus investments. However, this value should not be capitalized on the market, as the timber market in Vanuatu is still developing and information should therefore be freely available to all market participants. Gaps & Barriers to Implementation, Including Proposed enabling mechanisms Key gaps and barriers  Harmonization and calibration of existing data/sources (National Communications, REDD+ Forest Reference Level, FAO-FRA Country Report)  Data on growing stock, forest growth and yield  Quantification of removals from natural forest (Forest Land remaining Forest Land)  Data on forest degradation and associated forest carbon emissions  Data on emission factors/carbon pools, e.g., SOC stock, changes in SOC, and other Land Use (Crop Land, Grass Land)  Scattered islands- distance between northern- and southernmost islands is about 1300 km, 86 different islands, logistical challenges for wall-to-wall survey/monitoring  Cyclone-prone areas  Laboratory facilities (GIS/RS lab for activity data; soil, wood, litter samples- testing and analysis)  Trained and permanent available workforce  Availability of capacities, equipment and tools F5 79  A system for institutional and technical memory of entire NFIS processes development and implementation Enabling mechanism • NFIS beyond REDD+ NFMS and inclusion of Timber Tracking System, Community Based Forest Monitoring, and other existing monitoring systems • Information on afforestation and reforestation (location, area, year, tree species) established by industry and farmers • Provide industry and public with updated resource data for planning and development purposes Financial Sustainability Since no marketable demand can arise from the inventory, no sustainable financing is possible from the inventory. Similarly, the information system should not be used to generate profits, as the information should be accessible free of financial claims. In addition, forest monitoring should be seen as a task for the common good that is financed through taxes. This activity is therefore dependent on cross-financing. At a later stage, when a functioning timber market has been established, a levy could be collected for the forest inventory, for example from the sale of timber. Similarly, there is a high potential for the acquisition of resources from REDD+, CBD and other sources. Enabling, Capacity Building and Technical Assistance Needs Listing of Enabling, Capacity Building and Technical Assistance needs:  Training, incl. training abroad (US$ 750,000)  Consultation on inventory methods (US$ 500,000)  Consultation on data analysis, reporting and information management (US$ 500,000) Information and MRV Needs The financial sustainability of a forest information system must be ensured by the public sector in order to guarantee its independence and its focus on promoting the common good. Supporting References Baldwin, P.J, A.J. Mathias, D.J. Wood, J.A. Bellamy, J.K. Vanclay, 1992. Vanuatu National Forest Inventory, in G. Wood, B. Turner (eds.): Integrating forest information over space and time, IUFRO Conference 1992, Canberra, Australia Nationally Determined Contributions (NDC) Implementation Roadmap 2019 Pancel, L., Köhl, M., 2016: Tropical Forestry Handbook, Vol. 1 – Vol. IV, Springer, Heidelberg, 3633 p Köhl, M., S. Magnussen, M. Marchetti, 2006: Sampling Methods, Remote Sensing and GIS Multiresource Forest Inventory, Springer Verlag, Heidelberg, 403 p. F5 80  A system for institutional and technical memory of entire NFIS processes development and implementation Enabling mechanism • NFIS beyond REDD+ NFMS and inclusion of Timber Tracking System, Community Based Forest Monitoring, and other existing monitoring systems • Information on afforestation and reforestation (location, area, year, tree species) established by industry and farmers • Provide industry and public with updated resource data for planning and development purposes Financial Sustainability Since no marketable demand can arise from the inventory, no sustainable financing is possible from the inventory. Similarly, the information system should not be used to generate profits, as the information should be accessible free of financial claims. In addition, forest monitoring should be seen as a task for the common good that is financed through taxes. This activity is therefore dependent on cross-financing. At a later stage, when a functioning timber market has been established, a levy could be collected for the forest inventory, for example from the sale of timber. Similarly, there is a high potential for the acquisition of resources from REDD+, CBD and other sources. Enabling, Capacity Building and Technical Assistance Needs Listing of Enabling, Capacity Building and Technical Assistance needs:  Training, incl. training abroad (US$ 750,000)  Consultation on inventory methods (US$ 500,000)  Consultation on data analysis, reporting and information management (US$ 500,000) Information and MRV Needs The financial sustainability of a forest information system must be ensured by the public sector in order to guarantee its independence and its focus on promoting the common good. Supporting References Baldwin, P.J, A.J. Mathias, D.J. Wood, J.A. Bellamy, J.K. Vanclay, 1992. Vanuatu National Forest Inventory, in G. Wood, B. Turner (eds.): Integrating forest information over space and time, IUFRO Conference 1992, Canberra, Australia Nationally Determined Contributions (NDC) Implementation Roadmap 2019 Pancel, L., Köhl, M., 2016: Tropical Forestry Handbook, Vol. 1 – Vol. IV, Springer, Heidelberg, 3633 p Köhl, M., S. Magnussen, M. Marchetti, 2006: Sampling Methods, Remote Sensing and GIS Multiresource Forest Inventory, Springer Verlag, Heidelberg, 403 p. No. F6 Action Name Sub-Sector Forestry Description The timber value chain is a network of processes and players that bring wood products from forest to consumer. It involves everything from wood production and logging in forests to transportation, manufacturing and distribution to customers. Value chains place the use of the renewable raw material wood in an environmentally and climate-friendly context: atmospheric carbon is stored in wood through forest growth and shifted from the forest into wood products through wood harvesting and manufacturing. The production of wood-based materials consumes less energy and therefore generates fewer CO2 emissions than needed for comparable non-wood products such as steel, cement or plastic. At at the end of their lifetime wood products can be converted into other products (cascade use) or used to generate fossil-free energy. The aim of this project is to initiate a pilot study to demonstrate the advantages and feasibility of timber supply chains. This is to be done with various modules: Module 1: timer scaling and grading. A classification system for harvested timber will be designed that allows sorting into commercial classes based on timber characteristics (e.g. dimension, curvature, taper, defects). This facilitates price calculation and timber trading, increases resource efficiency and ensures that timber is put to the highest possible use. Module 2: A logistics chain is set up to transport the logs for processing, which is particularly important for transportation between islands. Modul 3: Pilot workshops for wood processing are being set up. The focus here is not on the production of sawn timber but on higher-quality end products. At the same time, the investments and the necessary technical requirements should remain manageable. Pilot plants for the following products are conceivable:  Glued beams: short wooden beams are fitted with wedge-shaped tines that interlock and are then glued together. This process allows lengths of up to 15 m to be produced  Plywood panels: logs are veneered, the veneers are dried, laid crosswise (biaxially) on top of each other, glued and pressed under the influence of heat. Special presses enable the production of any shape.  Timber pallets are made from boards and squared timber that are nailed or screwed together, and are manufactured using simple woodworking machines such as log band saws, cross-cut saws and planing machines.  Sandalwood oil: Vanuatu has the best sandalwood qualities in the world after India, but only small capacities for sandalwood oil. The formation of a cooperative for the production of sandalwood oil should be promoted. The F6 81 production process essentially consists of processing the raw wood into fine wood chips and distillation. A pilot plant is to be set up. A vocational training system must be set up to develop manual skills. Outcomes A logistics chain for timber transportation is developed and implemented A timber assortment (grading and scaling) instruction has been drawn up and is used in the timber trade Pilot workshops for glued beams, plywood panels, timber pallets and sandalwood oil are set up and operational Development and implementation of an education plan for vocational training for the requested skilled in timber manufacturing is designed and the training at vocational training centers takes place Mitigation / Adaptation Potential The emission savings resulting from this activity cannot be directly quantified. However, it enables the transition to a net-zero society (e.g. by wood-based construction in the residential and tourism sectors), as emissions from fossil fuels are effectively reduced. For every cubic meter of wood used, an average emission saving of 1 to 2 tons of CO2 can be expected. Assuming an annual harvest of 30,000 m3 this would result in 30,000 to 60,000 tCO2. Around 1000 people will directly benefit from this activity by bringing them into employment Co-benefits / SDG Linkages Potential co-benefits of sustainable timber value chains in Vanuatu include: SDG 11 (sustainable cities and communities), SDG 13 (climate action), and SDG 15 (life on land) Increased timber manufacturing and contribution to downstream timber processing industries will contribute to SDG 8 (decent work and economic growth). Investment Needs (US$) Estimated capital investment needed: 1,500,000 US$ US$: US$ 50,000: Guidelines for timber assortments US$ 250,000: Transportation logistic chain US$ 900,000: Construction and equipment of pilot operations, incl. buildings, machines, storage areas, infrastructure (water, electricity, road access etc.), costs for repair and maintenance US$ 300,000: Development and running of a vocational training infrastructure) F6 82 production process essentially consists of processing the raw wood into fine wood chips and distillation. A pilot plant is to be set up. A vocational training system must be set up to develop manual skills. Outcomes A logistics chain for timber transportation is developed and implemented A timber assortment (grading and scaling) instruction has been drawn up and is used in the timber trade Pilot workshops for glued beams, plywood panels, timber pallets and sandalwood oil are set up and operational Development and implementation of an education plan for vocational training for the requested skilled in timber manufacturing is designed and the training at vocational training centers takes place Mitigation / Adaptation Potential The emission savings resulting from this activity cannot be directly quantified. However, it enables the transition to a net-zero society (e.g. by wood-based construction in the residential and tourism sectors), as emissions from fossil fuels are effectively reduced. For every cubic meter of wood used, an average emission saving of 1 to 2 tons of CO2 can be expected. Assuming an annual harvest of 30,000 m3 this would result in 30,000 to 60,000 tCO2. Around 1000 people will directly benefit from this activity by bringing them into employment Co-benefits / SDG Linkages Potential co-benefits of sustainable timber value chains in Vanuatu include: SDG 11 (sustainable cities and communities), SDG 13 (climate action), and SDG 15 (life on land) Increased timber manufacturing and contribution to downstream timber processing industries will contribute to SDG 8 (decent work and economic growth). Investment Needs (US$) Estimated capital investment needed: 1,500,000 US$ US$: US$ 50,000: Guidelines for timber assortments US$ 250,000: Transportation logistic chain US$ 900,000: Construction and equipment of pilot operations, incl. buildings, machines, storage areas, infrastructure (water, electricity, road access etc.), costs for repair and maintenance US$ 300,000: Development and running of a vocational training infrastructure) Potential Financing and Need for Financial Support and/or Financial Instruments Requested financing: 1,500,000 US$ The funding is too ambitious for the MALFFB's budget. It is therefore necessary to finance the entire investment requirement from external sources. After the model phase, when the pilot workshops have proven their success, this activity is an excellent precondition for private investments. The return on investment will be relatively quick, and favorable conditions can be created for the high initial investments through low-interest loans, tax reductions or joint ventures. Potential Supporting and Financing Partners / Sources Management partners (assisting with access to finance):* • Project Planning, Development & Design: GIZ, GGGI, NDC-Hub • Project Implementation & Management: GIZ, GGGI, NDC-Hub Potential financing partners/sources:* • Private sector, e.g. venture capital, revenue loss insurance • Credit Guarantee: GCF, ADB, Supplier EXIM Banks, EIB, WB/IFC • Debt and Loans: VADB, VRDB, ADB, EIB, WB/IFC • Equity: private sector companies • Non-Government Grants for investment: GEF, GCF, ADB, AU-DFAT, NZ-MFAT, WB/IFC, EIB, CIDCA, KOICA, EEAS • Grants for Technical Assistance & Capacity Building: GEF, GCF, AU- DFAT, NZ-MFAT, GIZ, CTCN, ADB, KOICA, UNDP, UNIDO, EEAS, WB/IFC • Manufacturers of woodworking machinery can offer discounts if they have successful pilot projects for their product marketing. *This is not a comprehensive list, as other entities are possible as well. Implementing and Supporting Entities / Stakeholders Implementing Entity / Stakeholders:  Ministry of Agriculture, Livestock, Fisheries, Forestry and Biosecurity (MALFFB), Department of Forests; Coordination of planting, incl. procurement of seedlings, and coordination of tending of planted areas Supporting Entity / Stakeholders: - Ministry of Lands and Natural Resources (MoLNR), Lands Department; facilitate and manage lands related issues - Ministry of Climate Change, Department of Environment, advise in GHG-budgeting, environmental impact assessments, MRV) - Ministry of Finance and Economic Management; advise on economic and financial policy, provide advice and management of financial affairs - Ministry of Tourism, Trade, Commerce and Ni-Vanuatu Business (MTTCNVB); support with all issues affecting the local population - Ministry of Education and Training (MET) F6 83 General timeline for Development, Financing, Implementation, and Operation Time needed for development: 1 year Time needed for securing finance: 1 year When will the project/investment start and end: 2026 to 2035 Policy / Plan Link Key policies/Plans • Forest Policy 2013-2023 [L. Forest Industries- Sector Modernization (L24, L25, L26), M. Production (M27, M28), N. Marketing and Trade (N30, N31, N32)] • National Biodiversity Strategy and Actin Plan 2018 -2030 • National REDD+ Programme • Low Emission Development Strategies and Plans • Vision 2030: National Sustainable Development Plan 2016 to 2030 • National Industrial Development Strategy: Shaping the Future of Value Addition in Vanuatu 2018-2022 Relevant Policies/International Reporting • Vanuatu's Revised and Enhanced 1st Nationally Determined Contribution 2021 – 2030 • National Communication to the UNFCCC • Global Forest Resource Assessment: Country Report Vanuatu Potential Business Model and Financing Strategy Value chains promise a rapid return on invested capital and are therefore particularly suitable for private investors. The risks associated with previously unknown business activities can be mitigated through loss of earnings insurance. High profit expectations can also attract venture capital. Private investment could also be promoted through favourable loans. The limited financial resources render external subsidies necessary to establish the favourable framework for investments, e.g. vocational training or infrastructure development. Gaps & Barriers to Implementation, Including Proposed enabling mechanisms Key gaps and barriers  Skills gap  Knowledge and capacity of forest managers and timber product processors  Lack of adequate, and existing rudimentary domestic processing facilities  Lack of market intelligence (economic and financial opportunities and business management)  Limited and costly access to finance largely related to perceived commercial risk  Due to its remoteness and small population Vanuatu faces challenges in training and retaining talent/ educated staff  Poor linkages between companies and with foreign investors F6 84 General timeline for Development, Financing, Implementation, and Operation Time needed for development: 1 year Time needed for securing finance: 1 year When will the project/investment start and end: 2026 to 2035 Policy / Plan Link Key policies/Plans • Forest Policy 2013-2023 [L. Forest Industries- Sector Modernization (L24, L25, L26), M. Production (M27, M28), N. Marketing and Trade (N30, N31, N32)] • National Biodiversity Strategy and Actin Plan 2018 -2030 • National REDD+ Programme • Low Emission Development Strategies and Plans • Vision 2030: National Sustainable Development Plan 2016 to 2030 • National Industrial Development Strategy: Shaping the Future of Value Addition in Vanuatu 2018-2022 Relevant Policies/International Reporting • Vanuatu's Revised and Enhanced 1st Nationally Determined Contribution 2021 – 2030 • National Communication to the UNFCCC • Global Forest Resource Assessment: Country Report Vanuatu Potential Business Model and Financing Strategy Value chains promise a rapid return on invested capital and are therefore particularly suitable for private investors. The risks associated with previously unknown business activities can be mitigated through loss of earnings insurance. High profit expectations can also attract venture capital. Private investment could also be promoted through favourable loans. The limited financial resources render external subsidies necessary to establish the favourable framework for investments, e.g. vocational training or infrastructure development. Gaps & Barriers to Implementation, Including Proposed enabling mechanisms Key gaps and barriers  Skills gap  Knowledge and capacity of forest managers and timber product processors  Lack of adequate, and existing rudimentary domestic processing facilities  Lack of market intelligence (economic and financial opportunities and business management)  Limited and costly access to finance largely related to perceived commercial risk  Due to its remoteness and small population Vanuatu faces challenges in training and retaining talent/ educated staff  Poor linkages between companies and with foreign investors  Disjoint, fragmented supply chains  Insufficient economies of scale and pooling of resources  High regulatory and logistical costs of trade  High regulatory burden Enabling mechanism  Establishing domestic processing facilities capable of processing the full range of commercial species  Timber/Log Grading Standards/Manuals aligning with internationally accepted practices and standards  Expand vertically integrated cooperative models  Management extension services to forestry producers  Guidelines to establish novel joint-ventures among community-based enterprises and industry/investors  Environment/Forest friendly green building codes  identify what financial and non-financial incentives, disincentives can be used Financial Sustainability The technical assistance and capacity building provided will help to make timber processing an important contribution to Vanuatu’s national economy. Perceived risks associated with financing can be mitigated by offering low-interest loans or reduced tax rates. Enabling, Capacity Building and Technical Assistance Needs  Introduce Green Procurement Policies  Promoting domestic timber use more widely in construction  Provisions which require relevant companies/enterprises to disclose forest/climate effects throughout their value chain (climate related financial disclosures)  Developing handbooks/manuals to develop and ensure high quality forest products  Evaluate and reform the existing training offerings to medium and small enterprises Information and MRV Needs  Legality and Sustainability Assurance Systems  Effective NFIS (including functioning REDD+ NFMS, MRV)  Functioning forestry database system at provincial level forest authorities Supporting References Vanuatu Low Emission Development Strategy (LEDS) 2023 Vanuatu’s Revised and Enhanced 1st NDC Vanuatu Forest Policy 2013- 2023 Vanuatu National Sustainable Development Plan (NSDP) 2016-2030 Vanuatu Climate Change and Disaster Risk reduction Policy 2016-2030 National Industrial Development Strategy: Shaping the Future of Value Addition in Vanuatu 2018-2022 Vanuatu NDC Implementation Roadmap Sustainable Forest Management Policy and REDD+ Programme/ strategy F6 85 No. F7 Action Name Sub-Sector Forestry Description The future management of forests must address a variety of challenges that require a wide range of new knowledge. This can only be achieved by intensifying research. The current research unit of the Department of Forestry is not in a position to do this with its current personnel and technical equipment. The aim of this activity is to expand forest research in Vanuatu in order to obtain urgently needed and reliable data. Priority should be given to applied research. The following research priorities are to be pursued:  Studies on climate-change and site adapted native and exotic species, including genetic appraisal and tree improvement, with special attention to invasive species risks  Better understanding of native species of Vanuatu, both in terms of natural regeneration processes and growth rates as well as establishment and growth under plantation conditions  Growth and yield studies for plantation forests by setting up permanent, long-term observation plots, including Soil improvement  Restoration options for degraded sites, including mangroves, wetlands and sites overgrown by invasive species  Regeneration studies, recovery studies and monitoring post logging areas, as well as carrying out studies of logging operations for achieving timber sustainability  Silvicultural management in natural forests with special attention to the CBD ecosystem approach  Traditional and non-traditional management practices to identify appropriate methodologies for sustainable utilisation of mangroves in order to achieve greater ecological, social and economic benefits  Economic studies to assess the way in which plants and trees serve societal needs and possibly enhance the earning capacity of the rural population In addition to appropriate infrastructural measures, laboratory, IT equipment and other equipment is required to carry out the necessary research activities. Experimental areas in the field must also be set up and continuously maintained. Outcomes  Research infrastructure established  Permanent and temporary staff recruited  Permanent observation plots established  Research trials in mangrove and natural forest ecosystems established  Scientific Advisory Board established  International cooperation established F7 86 No. F7 Action Name Sub-Sector Forestry Description The future management of forests must address a variety of challenges that require a wide range of new knowledge. This can only be achieved by intensifying research. The current research unit of the Department of Forestry is not in a position to do this with its current personnel and technical equipment. The aim of this activity is to expand forest research in Vanuatu in order to obtain urgently needed and reliable data. Priority should be given to applied research. The following research priorities are to be pursued:  Studies on climate-change and site adapted native and exotic species, including genetic appraisal and tree improvement, with special attention to invasive species risks  Better understanding of native species of Vanuatu, both in terms of natural regeneration processes and growth rates as well as establishment and growth under plantation conditions  Growth and yield studies for plantation forests by setting up permanent, long-term observation plots, including Soil improvement  Restoration options for degraded sites, including mangroves, wetlands and sites overgrown by invasive species  Regeneration studies, recovery studies and monitoring post logging areas, as well as carrying out studies of logging operations for achieving timber sustainability  Silvicultural management in natural forests with special attention to the CBD ecosystem approach  Traditional and non-traditional management practices to identify appropriate methodologies for sustainable utilisation of mangroves in order to achieve greater ecological, social and economic benefits  Economic studies to assess the way in which plants and trees serve societal needs and possibly enhance the earning capacity of the rural population In addition to appropriate infrastructural measures, laboratory, IT equipment and other equipment is required to carry out the necessary research activities. Experimental areas in the field must also be set up and continuously maintained. Outcomes  Research infrastructure established  Permanent and temporary staff recruited  Permanent observation plots established  Research trials in mangrove and natural forest ecosystems established  Scientific Advisory Board established  International cooperation established Mitigation / Adaptation Potential The activity has no direct mitigation effects. However, the research activities will lay the foundations for reduction activities, e.g. in the management of plantations, the restoration of mangroves and degraded areas and the sustainable silvicultural management of natural forests, which could be in the order of 100,000 tons of CO2/yr in the long term. Co-benefits / SDG Linkages Co-benefits of the action are increasing the research capacities within Vanuatu, facilitating scientific exchange with the international research community The activity will have SDG-linkages with respect to SDG 4 Quality education, SDG 13 Climate action, and SDG 15 Life on land. Investment Needs (US$) The total estimated capital investment needed amount to 10,750,000 US$, of which Estimated development costs: 750,000 US$ Enabling, Capacity Building and Technical Assistance: 10,000,000 US$ Potential Financing and Need for Financial Support and/or Financial Instruments Vanuatu can contribute US$2,250,000 of its own funds in the form of salaries, land, buildings and other infrastructure. The remaining financial support needed amounts to 8,500,000 US$. Potential Supporting and Financing Partners / Sources Scientific partners:* • International Union of Forest Research Organizations, Vienna, Austria • Center for International Forest Research (CIFOR), Bangor, Indonesia Management partners (assisting with access to finance):* • Project Planning, Development & Design: UNDP, UNIDO, GIZ, GGGI, NDC-Hub, ADB, IUCN • Project Implementation & Management: UNDP, UNIDO, GIZ, GGGI, NDC-Hub, ADB, IUCN, CIDCA Potential financing partners/sources:* • Credit Guarantee: GCF, ADB, Supplier EXIM Banks, EIB, WB/IFC • Debt and Loans: VADB, VRDB, ADB, EIB, WB/IFC • Equity: private sector companies • Non-Government Grants for investment: GEF, GCF, ADB, AU-DFAT, NZ- MFAT, WB/IFC, EIB, CIDCA, KOICA, EEAS • Grants for Technical Assistance & Capacity Building: GEF, GCF, AU-DFAT, NZ-MFAT, GIZ, CTCN, ADB, KOICA, UNDP, UNIDO, EEAS, WB/IFC *This is not a comprehensive list, as other entities are possible as well. F7 87 Implementing and Supporting Entities / Stakeholders Implementing Entity / Stakeholders:  Ministry of Agriculture, Livestock, Fisheries, Forestry and Biosecurity (MALFFB), Department of Forests; Coordination of planting, incl. procurement of seedlings, and coordination of tending of planted areas Supporting Entity/ Stakeholders  Ministry of Lands and Natural Resources (MoLNR), Lands Department; facilitate and manage lands related issues  Ministry of Climate Change, Department of Environment, advise in GHG-budgeting, environmental impact assessments, MRV)  Ministry of Finance and Economic Management; advise on economic and financial policy, provide advice and management of financial affairs  Ministry of Tourism, Trade, Commerce and Ni-Vanuatu Business (MTTCNVB); support with all issues affecting the local population  Ministry of Education and Training (MET)  Department of Agriculture  Department of Biosecurity  Department of Environment  Provincial Governments  National Advisory Board on Climate Change  Vanuatu Agricultural College  Vanuatu Agriculture Research & Training Center General timeline for Development, Financing, Implementation, and Operation Time needed for development: 0,5 year Time needed for securing finance: 1 year When will the project/investment start and end: 2025 to 2035 Policy / Plan Link Key policies/Plans • Forest Policy 2013-2023 [J. Climate Adaptation (J21), C. Management of Planted Forest (C10)] • Vanuatu's Revised and Enhanced 1st Nationally Determined Contribution 2021 – 2030 • Vanuatu Forest and Landscape Restoration Strategy 2020 – 2030 Relevant Policies/International Reporting • Agriculture Sector Policy 2015-2030 • National Biodiversity Strategy and Actin Plan 2018 - 2030 • Vision 2030: National Sustainable Development Plan 2016 to 2030 Potential Business Model and Financing Strategy Carrying out forest research is a public commitment and a public task to strengthen the forest sector and safeguard the environment. No comparative advantage for companies should arise from research activities in the current state of the forestry sector in Vanuatu. Research is value- free, should be freely accessible and should therefore be sustainably funded by the public sector. F7 88 Implementing and Supporting Entities / Stakeholders Implementing Entity / Stakeholders:  Ministry of Agriculture, Livestock, Fisheries, Forestry and Biosecurity (MALFFB), Department of Forests; Coordination of planting, incl. procurement of seedlings, and coordination of tending of planted areas Supporting Entity/ Stakeholders  Ministry of Lands and Natural Resources (MoLNR), Lands Department; facilitate and manage lands related issues  Ministry of Climate Change, Department of Environment, advise in GHG-budgeting, environmental impact assessments, MRV)  Ministry of Finance and Economic Management; advise on economic and financial policy, provide advice and management of financial affairs  Ministry of Tourism, Trade, Commerce and Ni-Vanuatu Business (MTTCNVB); support with all issues affecting the local population  Ministry of Education and Training (MET)  Department of Agriculture  Department of Biosecurity  Department of Environment  Provincial Governments  National Advisory Board on Climate Change  Vanuatu Agricultural College  Vanuatu Agriculture Research & Training Center General timeline for Development, Financing, Implementation, and Operation Time needed for development: 0,5 year Time needed for securing finance: 1 year When will the project/investment start and end: 2025 to 2035 Policy / Plan Link Key policies/Plans • Forest Policy 2013-2023 [J. Climate Adaptation (J21), C. Management of Planted Forest (C10)] • Vanuatu's Revised and Enhanced 1st Nationally Determined Contribution 2021 – 2030 • Vanuatu Forest and Landscape Restoration Strategy 2020 – 2030 Relevant Policies/International Reporting • Agriculture Sector Policy 2015-2030 • National Biodiversity Strategy and Actin Plan 2018 - 2030 • Vision 2030: National Sustainable Development Plan 2016 to 2030 Potential Business Model and Financing Strategy Carrying out forest research is a public commitment and a public task to strengthen the forest sector and safeguard the environment. No comparative advantage for companies should arise from research activities in the current state of the forestry sector in Vanuatu. Research is value- free, should be freely accessible and should therefore be sustainably funded by the public sector. Gaps & Barriers to Implementation, Including Proposed enabling mechanisms Key gaps and barriers • Human resources (Researchers, Lab and Nursery technicians) • Research infrastructure (Nurseries, permanent observation plots, laboratory facilities and equipment • Seed and planting materials Enabling mechanism • Dedicated Forest Research and Training Center under DoF • A core group of Research officers should be given long-term employment perspectives to avoid inconsistent approaches and discontinuities in research programs  Attractive employment and career potential should be opened up for young scientists, for example through stays abroad, qualification opportunities and self-directed work  Provide means for attending international conferences to stimulate research exchange  Research projects, especially species trials, have to be adequately recorded  Long-term funding has to be secured, as growth and ecological processes in forests are long-term in nature.  Installing an international advisory board for forest research Financial Sustainability The financial sustainability of research must be ensured by the public sector in order to guarantee its independence and its focus on promoting the common good. Enabling, Capacity Building and Technical Assistance Needs The following enabling, capacity building and technical assistance needs are to be addressed:  Infrastructure (e.g. buildings, laboratories, IT, measurement instruments)  Training and capacity building  Setting up research exchange  Strengthen the Research Council  Exchange of international plant material  Material transfer agreements with international research institutions and development partners  Solar driven irrigation for agroforestry systems and nurseries Information and MRV Needs Most important information needed to track progress of implementation relate to human resource capacities, research facilities, management systems, network and outreach, and knowledge system development. Most important data needed to track performance relate to research grants, recognition and credibility, scientific output, human capital output, and services output F7 89 Supporting References Pretzsch, H., 2009, Forest dynamics, Growth and yield, Springer, Heidelberg Köhl, M., et al., 2021. Sustainable management of logged tropical forests in the Caribbean to ensure long-term productivity, FAO, Forestry Working Paper no. 27, Rome Hayes, D.C., et al., 2014. USDA Forest Service Experimental Forests and Ranges Research for the Long Term, Springer, Heidelberg Glass, D.J., 2014, Experimental Design for Biologists, Cold Spring Harbor Laboratory Press,U.S F7 90 Supporting References Pretzsch, H., 2009, Forest dynamics, Growth and yield, Springer, Heidelberg Köhl, M., et al., 2021. Sustainable management of logged tropical forests in the Caribbean to ensure long-term productivity, FAO, Forestry Working Paper no. 27, Rome Hayes, D.C., et al., 2014. USDA Forest Service Experimental Forests and Ranges Research for the Long Term, Springer, Heidelberg Glass, D.J., 2014, Experimental Design for Biologists, Cold Spring Harbor Laboratory Press,U.S © Ali Shaikh Vanuatu NDC Forest Investment Strategy (including Project Pipeline) Ministry of Climate Change Adaptation, Meteorology, Geohazards, Environment, Energy and National Disaster Management Private Mail Bag 9074, Port Vila, Vanuatu Phone: (678) 22068 Website: https://mocca.gov.vu Ministry of Agriculture, Livestock, Fisheries, Forestry & Bio Security Private Mail Bag 9064, Port Vila, Vanuatu Phone: (678) 33220 Website: https://malffb.gov.vu/