Nghe An Forest Protection and Development Fund flags ERPA challenges

Nghe An Province is endowed with vast forest areas, providing a foundation for ethnic communities in mountainous regions to benefit from major policies such as forest environmental services payments and, more recently, the North Central Emission Reduction Payment Agreement (ERPA). These mechanisms have helped ease part of the daily livelihood pressures faced by local people.

However, in practice, progress has fallen short of expectations due to multiple constraints, particularly in the initial phase. Delays in disbursement directly translate into losses for local communities. Explaining the reasons, the Nghe An Forest Protection and Development Fund pointed out several challenges.

Nghe An’s natural forest area is extensive and distributed across most communes in the province. The number of beneficiaries is large, especially with forest owners being mainly households, over 38,000 families and individuals. This makes the process of building and standardizing databases complex, time-consuming, and resource-intensive. In addition, organizing training and providing guidance across localities has been difficult to implement in a synchronized and consistent manner.

Another challenge lies in the payment modalities for household and individual forest owners, as stipulated in Point b, Clause 2, Article 10 of Decree No. 107/2022/ND-CP, which requires payments to be made via bank accounts, public postal service providers, or other non-cash methods.

However, most beneficiaries of the ERPA policy in Nghe An are ethnic minority households living in remote and mountainous areas, where transportation is difficult and infrastructure remains underdeveloped. As a result, making payments through bank accounts or other cashless methods is challenging, as it takes considerable time to collect account information and complete related procedures, such as authorization documents for beneficiaries without accounts or cases where payments are received on behalf of others.

A similar issue arises with transfers through public postal service providers. In this regard, the Nghe An Forest Protection and Development Fund has proposed implementing payments in communes across six former districts: Ky Son, Tuong Duong, Con Cuong, Que Phong, Quy Chau, and Quy Hop. However, selecting a payment service provider must comply with procedures under the Law on Bidding, which has further delayed the disbursement process.

In addition, the preparation of spending plans for ERPA funds by organizational forest owners has been slow. Some entities have not fully planned the use of allocated funds due to restrictions on eligible expenditures, often overlapping with other ongoing programs and projects in the area. This has affected both the progress and disbursement rate of the Fund.

The Fund also noted that the rollout of the two-tier local government system in July 2025 coincided with the provincial approval of the 2025 ERPA financial plan (Decision No. 1720/QD-UBND dated June 16, 2025). Following this, the Fund issued notifications on fund allocations to communes (Notice No. 225/TB-NAFF dated June 18, 2025). However, at that time, many communes had not yet settled the 2024 funds or finalized their 2025 financial plans, leaving the Fund without sufficient basis for disbursement.

Furthermore, some organizational forest owners and commune-level People’s Committees declined to prepare financial plans or formally refused to receive ERPA funds. The main reasons include the limited eligible expenditure categories under Decree 107/2022/ND-CP and the relatively small funding amounts, which are insufficient to cover administrative costs, such as opening bank accounts. Consequently, the Fund has been unable to proceed with payments, leading to a backlog of undisbursed ERPA funds.

Despite numerous challenges during implementation, the Nghe An Forest Protection and Development Fund affirmed that by the end of 2025, the ERPA program had achieved notable results.

Cumulatively, total ERPA disbursement reached VND 318.6 billion out of the planned VND 356.2 billion, equivalent to 89% of the approved target. Payments were made to more than 34,000 households and communities, 64 commune-level People’s Committees (after administrative consolidation), and 21 organizational forest owners, achieving a 94% coverage rate.

On the other hand, the remaining undistributed funds held by the provincial Fund as of the end of 2025 amounted to VND 37.3 billion.

*$ 1 = VND 26,342 - Source: Vietcombank.