1. How to scale up PFES: Experience in Quang Nam Maximizing transparency and cost – efficiency

2. Asian Development Bank Support to PFES in Quang Nam  The Asian Development Bank is assisting Quang Nam Province to build on the successful PFES pilot by Winrock  Objective: adapt and develop the system for replication in the rest of the province and elsewhere in Viet Nam

3.  Technical support and capacity building activities between May 2012 - October 2013  Extended to include the preparation of a video and the further development of information and awareness materials

4. Focus of Support Focus on three related aspects of extending PFES in Quang Nam:  Support FPD Fund to develop a system for scaling up PFES to a provincial level  Support to the extension of PFES to the remaining 5 villages in Ma Cooih Commune  Support to the extension of the new approach to PFES in 2 communes in Song Bung 4 watershed

5. National Level  The ADB support in Quang Nam intended to provide lessons of national significance  The approach developed in Quang Nam is being consolidated into national guidelines for PFES Planning at the Provincial Level  Developed in collaboration with VNForest

6. The Policy Setting  PFES new to Viet Nam: first pilots started in 2008 following Decision 380  Decree 05 January 2008: establishment of FFPD, financial mechanism for PFES  Support from international partners: GIZ, USAID, ADB  MARD assigned as responsible ministry

7. Decree 99  Decree 99 passed in September 2010, key legislative basis for PFES dissemination nationwide  Several potential services identified: hydropower, protection of water sources, carbon sequestration, biodiversity protection  Mechanism for identifying service providers: communities in and around the forests  K-coefficient identified as means for valuing PFES forest areas

8. Lessons from the Pilots  PFES concept demonstrated as viable  Enthusiasm at all levels: local, provincial, national  Scale of challenge: 10m ha of forests, 1.5m households eligible  Oct 2012, national conference: scale of surveying of forests & contracting service providers  Key challenge: how to scale up PFES to cover whole provinces across the country

9. PFES Scaling up in Quang Nam: 2 areas of innovation  Development of a group approach to PFES at the community level, based on piloting in Ma Cooih & extension to 2 new communes in Song Bung 4 watershed  Development of provincial level planning & forest surveying based on the use of satellite imagery and GIS

10. Extended Pilot in Ma Cooih  Pilot extended to remaining 5 villages  Groups formed with strong support from local communities  Forest plots allocated based on remote sensing maps  Contracts signed & first payments made  Livelihood support activities identified

11. The Group Approach  The establishment of PFES Groups as the main organisational unit for PFES  Demonstrated successfully in 5 villages in Ma Cooih  Overcome a key barrier to PFES development, need for 1.5 million individual household contracts

12. Characteristics of PFES Groups  Households actively involved in PFES  Households from one village.  Minimum of 10 members & maximum of all the households in a village.  The groups are self-selecting  Elect a group head and a deputy head

13. Characteristics of PFES Groups  PFES management plan, protection & management of the forest and the use of PFES funds  Group sign contract with the FMU  Regular meetings of all members  Quarterly meetings with the FMU and commune authorities  A proportion (minimum of 30%) of PFES funds will be reserved for livelihood development activities

14. Advantages of a Group Approach  Cost-efficient & speedier  Empowers at the local level  Builds in community traditions  Develops social capital  Basis for community livelihoods development activities  Mechanism for accessing external support

15. Livelihoods Development  A key feature of the approach has been the more explicit inclusion of a livelihoods development component to PFES at the community level  The pilots in Ma Cooih have already seen investments in livelihoods opportunities using PFES funds

16. Provincial Plan Preparation  The key to scaling up PFES is development of efficient planning & implementation system at the province level  Must include mechanisms for identifying (1) service providers and (2) service users  Needs a sustainable mechanism for disbursing PFES funds to service providers

17. Plan Preparation  Must realistically reflect resources available to province authorities without significant external resources  In preparation for PFES implementation, provinces will need to undertake (1) capacity building and (2) an awareness and propaganda campaign to inform stakeholders about PFES

18. Outline Guidelines for Provincial PFES Plan Preparation  The lessons learnt in Quang Nam are the basis for the preparation of generic guidelines for the preparation of provincial PFES plans  Discussions on-going with VNForest to draft such guidelines

19. Provincial Plan Stages  Identify the areas involved in PFES  Identify the PFES eligible forests  Calculate the K-coefficient for different forest areas  Identify service receivers (e.g. hydropower companies) & agree payment levels

20. Provincial Plan Stages  Identify service providers: communities eligible to receive PFES payments  Calculate the levels of PFES payments to individual communes  Prepare PFES maps for each individual commune

21. Provincial Plan Preparation  Cost of & time for forest surveys a key barrier to dissemination of PFES  Overcome & improve by use of GIS: 3 outputs: 1. Identify forest area & condition in each watershed & commune 2. Categorise the forest according to the K-coefficient 3. Prepare commune maps that show eligibility & K-coefficient values of forests in the commune

22. Step 1: Identify PFES area

23. Step 2: Assess Forest Condition

24. Step 3: Calculate K-Coefficient

25. Thank you – Xin Cám Ơn Lauren Sorkin Environment & Climate Change Specialist lsorkin@adb.org lsorkin@adb.org