Lao PDR’s Emission Reduction Payment Agreement – results based program: An Emission Reductions Program Document <https://www.forestcarbonpartnership.org/system/files/documents/LaoPDR_ERPD_FinalDraftMay.2018-Clean.pdf> (ERPD) was prepared by the Government of Lao PDR (GOL) and approved by the FCPF Carbon Fund in 2018. On December 30; 2020; Lao PDR; represented by the Ministry of Finance (MOF) and Ministry of Agriculture and Forestry (MAF) signed an Emission Reductions Payment Agreement (ERPA) with the World Bank (WB) as trustee the FCPF Carbon Fund. The ERPA included a contract volume of 8.4 million emission reductions (ERs) equivalent to US$42 million and a Call Option for up to 2.6 million additional ERs. Under the ERPA; payment for results; i.e.; ERs is made upon completion of a third-party validation and verification process of an Emission Reductions Monitoring Report (ERMR) submitted for each reporting period agreed in the ERPA. The Lao PDR ERPA has two reporting periods: Jan 2019 to Dec 2021 and Jan 2022 to Dec 2024. Benefit Sharing: Benefit Sharing is an essential aspect of FCPF ER programs and an integral part of the ERPAs. Benefit Sharing Plans (BSPs) describe the principles; processes; beneficiaries and arrangements for benefit sharing of the ER payments; the requirements for which are outlined in the FCPF Methodological Framework and the FCPF Guidance Note on Benefit Sharing. Benefit sharing shall be undertaken in accordance with Safeguard Plans and the WB Operational Policies as described in the ERPAs. Payments will only be made for verified and transferred emission reductions achieved under the ERPs; in accordance with the ERPAs; including; among others; compliance with the BSPs. The GFLL program has a BSP <https://documents.worldbank.org/en/publication/documents-reports/documentdetail/657571634612542776/lao-peoples-democratic-republic-northern-laos-emission-reductions-payments-project-benefit-sharing-plan> that was prepared by the GOL in consultation with relevant government and non-government stakeholders as well as target communities . The BSP describes the carbon benefits (monetary and non-monetary) that are directly linked to ERs; and how they will be channeled to beneficiaries. The program’s benefit-sharing arrangements engage local communities and stakeholders through the community engagement process (CEP) that results in community action plans (CAPs); one per village as a pre-requisite for the villages (a beneficiary group) to receive benefits under the BSP. The CAP serves as a document combining various safeguards frameworks and tools required under an Ethnic Group Development Framework (EGDF); Process Framework and Environmental and Social Management Framework (ESMF) applied under the ERPA operation. The CAP also incorporates provisions of incentives to key government stakeholders for their participation in greener and more resilient landscape management. First ER Monitoring Report Verification and Payments: In October 2023; a third-party Validation and Verification Body confirmed 3.2 million FCPF emission reduction units (ERs) generated from the GFLL ER Program during 2019-2021 period. The GoL had received an advance payment of US$3 million in July 2022 to cover operational costs. Following the completion of the first reporting period verification; the balance of US$13 million was made to GoL in July 2024. The total number of target villages expected to benefit from this first payment is 247. Program Implementation: 18 out of 247 target villages have received the payment.This task is to support the Bank’s oversight functions by conducting monitoring of the Program Entity (PE)’s implementation of: 1. BSP in accordance with its terms; by assessing the program operational effectiveness and efficiency in the distribution of benefits to beneficiaries; identifying key challenges and issues including implementation capacity; lessons learned and provide practical recommendations for addressing the challenges. 2. ER program activities and the PE’s compliance with the program’s safeguards/environmental and social management frameworks including Environmental and Social Framework (ESMF); Ethnic Group Development Framework (EGDF); Process Framework (PF); and Resettlement Policy Framework (RPF)for the ERP over the entire ERPA term (January 1; 2019 to December 31; 2025); as well as assessing PE’s overall safeguards management systems and its capacity.