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Performance-based financial mechanisms: Dryad in Cameroon
October 21st 2015, San Salvador1
Dryad – What is it?A financial mechanism designed to enhance viable community forest enterprises (CFEs) with sustainable livelihoods and environmental benefits through performance-based public finance and support mechanisms.
Rests under 3 main structures:
1. Financial tools
2. Performance indicators
3. Reporting and monitoring technology
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ICRAF (fund manager)
Regional Coordinator
Regional Coordinator
Regional Coordinator
Regional Coordinator
Regional Coordinator
CFE
CFE
CFE
CFE
CFE
CFE
CFE
CFE
CFE
CFE
CFE
CFE
CFE
CFE
CFE
Releases Intellectual Property to
TMP Systems
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The role of local NGOs
Selected NGOs play a fundamental part in Dryad’s success.
• Find CFEs that require funding
• Help with the application for grants
• Provide technical assistance for reporting and monitoring
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How are projects approved?• Regional Coordinator provides expense and revenue projections
• Fund manager uses this to produce a discounted cash flow model (DCF)
• Dryad software tests all assumptions in the model including macro factors
• Fund Manager project approval depends on passing two tests:
– CFE must be profitable at year 5 in 80% of simulations
– Funding requirement must be payable in stages, with 10-35% up front and the remainder in equal monthly payments
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Performance Indicators
Commercial
Social
Environmental
Health of the community
Health of the forest Health of the business
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Measuring Performance
Year One Year Two Year Three Year Four
100%
75%
50%
25%
25%
50%
75%
Performance Reporting
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Reporting Technology
TMP Systems designed and created the Field Monitoring System (FMS) for Dryad
• Portable technology for self-reporting
• Small learning curve for CFEs
• Used for establishing a baseline
• Open-source technology
Dryad – Current progress• Cooperation between TMP Systems the World Agroforestry
Centre (ICRAF)
• Project funded by UK DFID (Department for International Development)
– GBP 5.7 million ( ≈ USD 8.8 million) over 5 years (July 2015 – July 2020)
• Currently being implemented in Cameroon
– In the process of selecting Regional Coordinators and Implementing Organizations
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How about REDD+?
• Dryad does not exclude REDD+
• It can be tailored for conservation, but requires long term commitment
