Introducing the Agreement on Privileges and Immunities of the Green Climate Fund to the National Council, the Finance Minister called on the house members to grant privileges and immunities to Green Climate Fund (GCF). The privileges and immunities agreement serves to protect the Fund’s assets and ensure effective performance of the Fund’s activities. Green Climate Fund is a fund established within the framework of the United Nations Framework Convention on Climate Change to assist developing countries to adapt and mitigate the impacts of climate change. Green Climate Fund is viewed as the world’s largest climate action financier.
The government signed the agreement with the Green Climate Fund on the privileges and immunities on 12th November last year and the National Assembly endorsed the agreement during the last session of the parliament.
The finance minister said, granting GCF privileges and immunities would enhance fund mobilization and strengthen cooperation between the government and GCF. Currently, the government acquires the Green Climate Fund through accredited agencies including the UN agencies and the World Bank.
“Currently, the government is accessing GCF fund through accredited partners such as UN agencies and World Bank, although the national designated agency is GNHC. When that happens, we do not receive all the amount because the agencies deduct service fees which are around two to five per cent of the grant amount. Also, when the amount is granted through the agencies, we cannot allocate the grant in areas of priorities. They set policy conditions and allocates the grant,” said Namgay Tshering, Finance Minister.
To enable national driven decision, build national capacity and for the country’s ownership, the government has accredited Bhutan Trust Fund for Environmental Conservation (BTFEC) to GCF.
The Natural Resources and Environment Committee of the National Council in its review report of the agreement mentioned that delaying the grant of Privileges and Immunities might withhold post-accreditation support to BTFEC and banks. The government is also preparing to accredit Bank of Bhutan, Bhutan Development Bank and Bhutan National Bank to access concessional loan GCF for the private sector. The committee’s report states the granting privileges and immunities to GCF will facilitate the accreditation process.
The Natural Resources and Environment Committee of the National Council also said deferring the grant of Privileges and Immunities to GCF might delay the GCF supported projects on water and urban transport which amounts to USD 60 M.
As of today, GCF has approved seven projects worth close to USD 57 M. Six more projects amounting to USD 95 M are in the pipeline for Bhutan.
Phub Gyem
