1. Activities to be financed: For the year 2024, two modalities to be financed will be considered: a-Forest Cover Recovery, which includes the activities of Reforestation, Natural Regeneration, and Agroforestry Systems, and b-Forest Cover Maintenance, which includes Forest Protection and Forest Management. For this purpose, the following distribution is established:
| PSA Modalities | Activity | Quantity |
|---|
| Forest Cover Recovery* | Reforestation with fast-growing species | 1,000 hectares | | Reforestation with medium-growth species | 3,000 hectares | | | Forest Plantations with Short Rotation Cycles (PFTRR) | 1,000 hectares | | | Natural Regeneration | 1,500 hectares | | | Establishment of trees in Agroforestry Systems | 500,000 trees | | | Agroforestry Systems established in Forest Harvest Plantations (PPAF) | 50,000 trees | | | Mixed Systems in Agroforestry for micro-producers | 50,400 trees | | | Forest Cover Maintenance | Forest Management** | 450 hectares | *: The Fonafifo will process all entry applications submitted under the Reforestation sub-activity with species contained in the executive decrees of ban and threatened or endangered species (Decreto N° 25663-MINAE and Decreto N° 25700-MINAE and their amendments), for a maximum area of 600 hectares.
**: These refer to all entry applications for farms where the forest management plan has been completed to the satisfaction of the State Forestry Administration (AFE).
The forest protection activity will be implemented starting from the second four-month period of the year 2024, for which the corresponding ministerial resolution will be issued.
Starting from the year 2022, a mechanism derived from and financed with resources from contracts and agreements for Emission Reductions produced by forests is enabled; with a quantity of 450,000 hectares. This activity mainly recognizes the environmental service of reducing greenhouse gas emissions, but it can be supplemented with the recognition of other environmental services when resources are available for that purpose, hereinafter, CREF contracts.
The National Forest Financing Fund may vary the distribution established in the previous table, according to the availability of the budget approved for the Payment for Environmental Services Program.
If a greater allocation of resources is available, according to Article 5 of the Tax Simplification and Efficiency Law No. 8114 published in La Gaceta No. 131, of July 9, 2001, and other financial resources that Fonafifo secures for the Payment for Environmental Services, they will be distributed according to the criteria of the funders and the authorities of the Ministry or corresponding authorities.
In any case, the resources used for these purposes must be incorporated into the institutional budget or into the Trust 544 Fonafifo/BNCR.
2. Of the payment amounts per activity and other conditions:
2.1. Reforestation Activity: The conditions that will govern the processing of applications for the recognition of environmental services in the Reforestation activity are the following:
- a)The amount to be paid for fast-growing species referred to as: Gmelina arborea, Acacia mangium, Vochysia guatemalensis, and Vochysia hondurensis, shall be seven hundred eighty-three thousand six hundred forty-four colones with 00/100 (¢783,644.00) per hectare, disbursed over a period of five years. Payments will be distributed as follows: 50% the first year, 20% the second year, 15% the third year, 10% the fourth year, and 5% the fifth year.
- b)The amount to be paid for medium-growth species referred to as: Tectona grandis, Pinus sp, Cordia alliodora, Vochysia ferruginea, Eucalyptus sp, and Cedrela odorata, shall be eight hundred eighty-three thousand five hundred forty seventy- six colones with 00/100 (¢883,576.00) per hectare, disbursed over a period of five years. Payments will be distributed as follows: 50% the first year, 20% the second year, 15% the third year, 10% the fourth year, and 5% the fifth year.
- c)The amount to be paid for native species contained in Executive Decrees No. 25663-MINAE of October 8, 1996, and No. 25700-MINAE of November 15, 1996, shall be one million three hundred twenty-five thousand three hundred sixty-six colones with 00/100 (¢1,325,366.00) per hectare, disbursed over a period of five years. Payments will be distributed as follows: 50% the first year, 20% the second year, 15% the third year, 10% the fourth year, and 5% the fifth year.
- d)The amount to be paid for Forest Plantations with Short Rotation Cycles (PFTRR) for fast-growing species for packaging shall be four hundred twenty-one thousand six hundred twenty-eight colones with 00/100 (¢421,628) per hectare. Payments will be distributed as follows: 50% the first year, 25% the second year, and 25% the fourth year.
- e)The conditions that will govern the processing of applications for the recognition of environmental services in the Reforestation activity, PSA + Credit pilot project, are the following:
i. The amount to be paid for the PSA + Credit pilot project with the fast-growing species referred to as: Gmelina arborea, shall be four hundred twenty-one thousand six hundred twenty-eight colones with 00/100 (¢421,628) per hectare, disbursed in 6 installments according to the following distribution: first year 11%, second year 16%, third year 17%, fourth year 18%, fifth year 19%, and the sixth year the remaining 19% which will be paid, provided that the beneficiary has consented through a formal document.
- f)Forest Plantations established with own resources for payment by results. The amounts to be paid will be those established in subsections a, b, and c above. The amounts will be distributed as follows: upon signing the contract, 50%; twelve, twenty-four, thirty-six, and forty-eight months after said signing, 20%, 15%, 10%, and 5% respectively. The contracts will have the term provided in Article 2, subsections a and b of this resolution, but the years of existence of these plantations will be recognized; up to a maximum of 3 years after establishment.
- g)Individuals or legal entities wishing to reforest in areas larger than the limit established in the Regulation to the Forestry Law, Decreto No. 25721-MINAE and its Amendments, may apply under a special financing scheme, being able to double the limit of 750 hectares, provided that the available resources are not used by small producers. The amounts to be paid will be those established in subsections a, b, and c above.
- h)The National Forest Financing Fund is instructed to incorporate into the Payment for Environmental Services contracts in the Reforestation activity the minimum acceptable values for making payments.
The National Forest Financing Fund will use the following reference values to process the payments corresponding to each year:
Table 1. Minimum reference values for diameter (DBH) and total height (Htot), arborea, Vochysia guatemalensis*, Acacia mangium, others).
| Age (years) | VRM DBH (cm)* | VRM Htot (m)* |
|---|---|---|
| 1 | - | 3.69 |
| 2 | 8.14 | 6.85 |
| 3 | 12.08 | 10.26 |
| 4 | 14.28 | 12.39 |
| 5 | 17.69 | 15.08 |
| 6 | 19.08 | 16.74 |
| 7 | 21.11 | 17.42 |
| 8 | 22.12 | 18.02 |
| 9 | 23.02 | 18.54 |
| 10 | 23.83 | 19.01 |
Table 2. Minimum reference values for diameter (DBH) and total height (Htot) expected per year for plantations of medium-growth species (Tectona grandis, Pinus sp, Cordia alliodora, Vochysia ferruginea, Eucalyptus sp, Cedrela odorata, others).
| Age (years) | VRM DBH (cm)* | VRM Htot (m)* |
|---|---|---|
| 1 | - | 1.65 |
| 2 | 4.78 | 3.24 |
| 3 | 7.57 | 5.06 |
| 4 | 9.08 | 6.24 |
| 5 | 10.72 | 7.49 |
| 6 | 12.47 | 8.78 |
| 7 | 14.26 | 10.10 |
| 8 | 16.04 | 11.42 |
| 9 | 17.76 | 12.71 |
| 10 | 19.37 | 13.94 |
| 11 | 20.83 | 15.09 |
| 12 | 21.52 | 15.86 |
| 13 | 22.60 | 16.83 |
| 14 | 23.52 | 17.71 |
| 15 | 24.28 | 18.52 |
| 16 | 24.91 | 19.25 |
*The reference values come from permanent sampling plot data from companies that reforest, provided by the National Forestry Office (ONF), data from plots provided by Forestry Regents and recorded by Fonafifo, both data sets validated by Dr. Edgar Ortiz Malavassi, Professor at the Technological Institute of Costa Rica.
Table 3. Minimum reference values for diameter (DBH) and total height (Htot), expected per year for Forest Plantations with Short Rotation Cycles (PFTRR), for the species Gmelina arborea and other species from the fast-growing group.
| Age (years) | VRM DBH (cm) | VRM Htot (m) |
|---|---|---|
| 1 | - | 3.29 |
| 2 | 8.88 | 6.65 |
| 3 | 13.35 | 9.73 |
| 4 | 14.69 | 10.69 |
| 5 | 17.55 | 12.48 |
| 6 | 19.53 | 13.80 |
To calculate the total volume, the following equation must be used: Vtot = π/4 * (DBH)² * Htot * Ff * N Where:
Vtot = Total volume per hectare expressed in cubic meters.
π = (pi) is the ratio of a circle's circumference to its diameter in Euclidean geometry.
DBH = Diameter at a height of 1.3m expressed in meters.
Htot = Total height expressed in meters.
Ff = Form factor equal to 0.5.
N = Number of trees per hectare.
- a)The State, through Fonafifo, will acquire the environmental services that forest plantations produce, understood as provided in subsection k of Article 3 of the Forestry Law No. 7575.
- b)Specifically, the environmental services provided by plantations will be paid for according to the annual biomass growth in accordance with parameters established in this resolution. Said payments correspond to the total number of years of the agreed term; however, in order to allow the establishment of the plantation and its maintenance, it will be advanced during the first five years.
- c)Fonafifo may modify, when so requested, those contracts signed before the year 2014, that demonstrate having achieved a minimum production of 13 cubic meters of mean annual increment per hectare. For such purposes, Fonafifo may request the information it considers pertinent.
2.2. Natural Regeneration Activity: The conditions that will govern the processing of applications for the recognition of environmental services in the activity of Natural Regeneration, developed in denuded areas, without forest cover, with nearby seed sources, in areas in the process of regeneration that do not meet the definition of forest and are free of grazing; are detailed below.
- a)The amount to be paid for Natural Regeneration shall be eighty-two thousand five hundred sixty- five colones with 00/100 (¢82,565) per hectare, disbursed in five annual payments of 20% over a period of five years.
2.3. Agroforestry Systems Activity: The conditions that will govern the processing of applications for the recognition of environmental services in the Agroforestry Systems activity are detailed below.
- a)The amount to be paid shall be one thousand eighty-five colones with 00/100 (¢1,085) per tree, integrated into Agroforestry Systems and disbursed over a period of five years. Payments will be distributed as follows: 50% the first year, 25% the third year, and 25% the fifth year.
- b)The amount to be paid shall be one thousand six hundred eight colones with 00/100 (¢1,608) per tree, integrated into Agroforestry Systems, strictly with native species contained in Executive Decrees No. 25663-MINAE of October 8, 1996, and No. 25700-MINAE of November 15, 1996, disbursed over a period of five years.
Payments will be distributed as follows: 50% the first year, 25% the third year, and 25% the fifth year.
- c)The amount to be paid shall be one thousand six hundred eight colones with 00/100 (¢1,608) per tree, under the activity of Agroforestry Systems established in Forest Harvest Plantations (PPAF), financed through forest credit. Payments will be distributed as follows: 80% will be paid once the contract is signed and the trees have reached 36 months of age; the remaining 20% will be processed when the trees are 60 months of age, in the fifth year of the project.
- d)Mixed Systems in Agroforestry for small producers: The conditions for this modality are: When carrying out forest protection activities, a payment of twenty-one thousand six hundred colones with 00/100 (¢21,600) per hectare per year, for a period of five years, (here, if necessary, fractions of existing hectares will be calculated, up to the first decimal. When there are denuded areas or areas in the process of regeneration, a payment of sixteen thousand five hundred thirteen colones with 00/100 (¢16,513) per hectare per year for a period of five years will be recognized. When carrying out reforestation activities with timber or multipurpose species outside the forested area, a payment of three hundred twenty-three colones with 00/100 per tree (¢323) per year for a period of five years; a minimum quantity of two hundred planted trees or existing identified trees will be recognized, up to a maximum of two thousand two hundred trees. In this sub-activity, a single contract may be executed covering the different activities, and the term shall be five years counted from the signing of the contract.
2.4. Forest Management Activity:
- a)The amount to be paid in Forest Management projects shall be one hundred forty-three thousand eight hundred forty-one colones with 00/100 (¢143,841) per hectare, disbursed in five annual payments of 20% over a period of five years.
2.5. Forest Emission Reduction Contracts (CREF). The conditions that will govern the processing of applications for the recognition of Forest Emission Reductions are detailed below:
- a)The amount in CREF projects to be paid shall be eighteen dollars 00/100 ($18) per hectare per year. Under this scheme, the payment is retroactive once it has been verified that the emission reduction actually occurred.
- b)The maximum hectares to be contracted shall be 450,000 has for private forests; this amount may increase if external financing resources are available for this purpose.
- c)The term of the contracts may be retroactive to the year 2018, and their validity shall be until December 2024, as was agreed with the International Bank for Reconstruction and Development (IBRD), partial financier of the projects. Based on what is indicated in considering clause five of this resolution.
The National Forest Financing Fund and Trust 544 BNCR-FONAIFFO are authorized to use the national budget resources assigned to this body, specifically to the Forest Cover Recovery Modality not committed for the year 2023, to supplement a payment for the environmental service of biodiversity protection to the CREFs already signed and to those that may be signed. The procedures manual for this instrument shall determine, among others, the amount, requirements, and procedure for the respective payment.
3. Updating the amounts to pay. For subsequent annual payments, the MINAE, through a reasoned resolution, may vary these amounts and update them; likewise, it may decree extraordinary increases in the amounts to be paid, considering the budgetary availability and their inclusion in the corresponding budgets.