Establishment Of Sustainable Finance Mechanism

This subcomponent aims to secure financial resources to sustain biodiversity conservation initiatives established under the Project. To ensure the proper management and maintenance of the facilities established by the Project, recommendations for user fees, entrance fees, taxes, and establishment of funds will be made and enforced by the Project to the extent possible.

Options for the Forest Department to maintain the facilities established and to enhance the sustainability of activities through the involvement of the local communities will be explored. This component will be implemented by the PMU with the support of consultants. Details of the mechanism will be prepared by the Project upon execution.

The followings are the ideas for the sustainable finance mechanism:
  • Establishing rules which will allow JFMCs, EDCs, and PSS's to collect and/or share fees with the Forest Department for non-consumptive use of nature and biodiversity such as ecotourism
  • Developing Funding Mechanism such as the Sikkim Biodiversity Trust Fund by attracting contributions from entities such as hydro-electric companies which rely heavily on nature resources as well as from the civil society through state-wide campaigns
  • Proposing of earmarking some of the existing state revenues such as those from the sales of gravel and the state's share of hydro-electricity generation for biodiversity conservation
  • Examining and applying international financial schemes for environment protection, such as those on biodiversity conservation and climate change.

Schemes such as the Global Environment Facility (GEF) may be relevant for enhancing activities initiated by the Project. The Reducing Emission from Deforestation and Forest Degradation (REDD), the mechanisms of which are currently being discussed in the climate change negotiations, is relevant to Sikkim, as it basically aims to discourage the exploitation of existing forests by providing adequate compensations. The development of the REDD and other relevant schemes will be monitored and considered for application in Sikkim.