Bhutan Trust Fund for Environmental Conservation

The Bhutan Trust Fund for Environmental Conservation was the world s first environmental trust fund. It was established as a collaborative venture between the Royal Government of Bhutan, United Nations Development Program, and World Wildlife Fund with an original endowment of $20 million to finance conservation programs in Bhutan. Additional funding has come from the Global Environment Facility, the governments of Bhutan, Denmark, Finland, the Netherlands, Norway, and Switzerland. In May 1996, the trust fund was legally incorporated in Bhutan under Royal Charter. Today, it is an effective conservation grant making organization autonomous of the government. The trust fund is governed by the Royal Charter of 1996 and a Management Board that was fully Bhutanised in May 2001. Tobgay Namgyal, Director of the Bhutan Trust Fund presents an overview of the trust fund, its contributions to conserving Bhutan’s biodiversity, and the future directions of the organization. The trust fund s $33 million endowment provides a minimum of $1.5 million annually in long-term financing to conserve Bhutan’s natural heritage. In return, Bhutan has pledged to maintain 60 percent of its 47,000 square kilometers under forest cover in perpetuity. The trust fund has provided for the conservation and improved management of these forested areas.

He explains how the trust fund set the foundation for effective long-term conservation by establishing the necessary legal, institutional, and technical frameworks to expand implementation capacity. In addition to international co-financing, the trust fund leveraged external financial assistance for conservation programs in five priority parks.

Its conservation grants support environmental programs of the royal government and a local non-governmental organization, the Royal Society for the Protection of Nature. The grants build local capacity to manage forests and protected areas, improve awareness and public support for conservation, and integrate economic development with environmental conservation to ensure a sustainable future for Bhutan.

As an independent grant making organization, the trust fund uses its annual investment income to finance conservation activities. Grants are awarded to eligible Bhutanese individuals and institutions based on the following objectives: support in-situ and ex-situ conservation initiatives in the entire green sector including sustainable utilization of genetic and species resources; strengthening integrated conservation and development planning through applied conservation research and monitoring of biodiversity changes; and promoting conservation education and awareness of conservation policies and issues.

Mr. Namgyal addresses a number of constraints the trust fund encounters in awarding grants. He acknowledges the challenges of engaging rural Bhutanese and that public participation is low and there is a common public perception that resources are difficult to access. He also describes examples of duplication with external donors. Afterwards, he addresses emerging environmental threats that fall outside the trust fund’s operating guidelines including rapid urbanization, industrial growth, and increasing human needs such as high population growth and increasing energy needs. Mr. Namgyal stresses the need for legal and regulatory frameworks to address new and emerging environmental threats.

He concludes by describing the trust funds future goals which will be reflected in the next strategy paper to be completed in 2002. He states that the strategy will be based on the impacts of the first five year plan and its guiding principles of ensuring donor coordination and increased participation; strengthening biodiversity information management, building on prior investments; and expanding the scope of grant making. Operationally, this will translate into an integration of conservation and rural development; biological monitoring; an increased legislative agenda; and institutional strengthening of financial management. [http://info.worldbank.org/etools/Bspan/PresentationView.asp?PID=505&EID=243]

Bhutan Trust Fund Temperate forests at higher elevations in Central Bhutanphoto: WWF-Canon / Anton Fernhout In 1991, WWF created and established the world's first conservation trust fund in the Himalayan Kingdom of Bhutan. Financed through a $1 million investment from WWF, as well as investments from the Global Environment Facility, World Bank, the Royal Government of Bhutan, and the governments of Denmark, Finland, the Netherlands, Norway, and Switzerland, the trust fund provides Bhutan with an autonomous financial mechanism through which to fund local conservation activities. The United Nations Development Program (UNDP) provided initial administrative support and has since served in an advisory capacity.

The trust fund's permanent endowment (approximately $32 million) generates at least $1.5 million annually to support biodiversity conservation programs in Bhutan. The agreement establishing the trust fund includes a legal covenant by the Royal Government of Bhutan that it will maintain 60 percent of Bhutan's convert|77900000|acre|km2 under permanent forest cover in perpetuity (a total of convert|48100000|acre|km2 protected). The trust fund has helped to finance the conservation and improved management of these forested areas, supporting activities that include:

training foresters, ecologists, natural resource managers and other professionals; surveys of Bhutan's forest resources and development of an ecological information base; review of the protected area system, and development and implementation of conservation management plans; institutional support for community management; environmental education and public awareness campaigns; and projects integrating conservation and development. [http://www.worldwildlife.org/conservationfinance/projects/bhutan.cfm]