The Arctic Council Project Support Instrument (PSI) is a financial initiative focusing on actions to prevent and mitigate pollution of the Arctic. The instrument is administered by NEFCO and the fund provides financing for priority projects approved by the Arctic Council.
The PSI mechanism provides financing for pollution prevention, abatement and elimination, including climate change mitigation as well as abatement and elimination of the release of hazardous substances such as persistent organic pollutants (POPs) and mercury. Focus areas are for example the sectors of short-lived climate pollutants including black carbon, hazardous waste management and destruction of polychlorinated biphenyls (PCB) and pesticides.
All financed projects are to be action-oriented. The PSI financing is primarily intended for project preparation activities, such as project identification and concept development, pre-feasibility studies, environmental impact assessments and business and financing plans, preparation of tender documents, tendering and evaluation. Also specific measures in the implementation phase of pilot and demonstration projects, including supplies of equipment and services, may be financed.
PSI funding is provided, depending on the type of project, in the form of grants, contingent grants and other revolving instruments such as loans on concessional terms. Financing may be requested by Project Steering Groups, project owners or other relevant stakeholders.
The purpose of PSI financing is to help mobilize and channel financing for specific priority projects of the Arctic Council. PSI financing can be provided for small-scale projects and to leverage additional financing enabling more extensive pollution mitigation undertakings. The Arctic Council member states are Canada, Denmark (including Greenland and the Faroe Islands), Finland, Iceland, Norway, Russia, Sweden and the US. In addition, indigenous peoples’ organisations are permanent participants of the Council.
The PSI is open for contributions from Arctic Council members, observers and other interested parties. Interested parties that pledge money formalise their commitment through an individual funds administration contract between NEFCO and the respective contributor. The current contributions to the PSI funds in the form of deposits, pledges and indications stand at EUR 15.9 million.
The Arctic Council established the PSI in 2005 and the financing mechanism is expected to become operational in the near future. The Arctic Council and NEFCO are considering both already approved projects as well as new projects for financing.
For further information, please contact:
Special Adviser, Environment and Technology
+358 10 6180 632
+358 50 3113684