Northern Laos Emission Reductions Payment Programme (GFLL / FCPF Carbon Fund)

Under the Governance, Forest Landscapes and Livelihoods (GFLL) programme for Northern Laos, the Government of Lao PDR (Ministry of Natural Resources and Environment, Department of Climate Change Management, and National REDD+ Taskforce) signed an Emission Reductions Payment Agreement (ERPA) with the World Bank-administered FCPF Carbon Fund in December 2020, covering six northern provinces (Houaphanh, Luang Prabang, Oudomxay, Luang Namtha, Bokeo and Xayabouly) — roughly one-third of the country's territory.

To pay the government for verified reductions in deforestation and forest degradation against an agreed forest-reference emission level, with funds intended to flow through a national and provincial benefit-sharing plan to district and village forest management.

The ERPA is worth up to US$42 million for up to 8.4 million tonnes of CO2 equivalent reduced between January 2019 and December 2024, subject to ongoing monitoring, reporting and verification (MRV).

In July 2024, Laos received its first tranche of US$16 million after the FCPF verified 3.2 million tonnes of CO2e reduced between January 2019 and December 2021 — the second country in the East Asia-Pacific region to receive an FCPF results-based payment.

The larger remaining share of the US$42 million is still contingent on further MRV, and Laos's domestic carbon-market governance is still maturing: the government was drafting its first carbon-credit regulatory decree in 2024, and unsold credits from other REDD+ projects in southern Laos suggest institutional capacity to manage and transparently disburse forest-carbon revenue nationally is not yet fully established.