Info Service on Climate Change (Mar15/03)
GCF: Seven entities accredited to access funds
Delhi, 31 March (Indrajit Bose and Meena Raman) – On 25 March, the Board of the Green Climate Fund (GCF) approved the accreditation of seven implementing entities to access the funds of the GCF.
After in-depth discussions, the Board approved the seven entities as a package rather than going over each of the entities individually. The proposal for approving as a package was put forth by Andrea Ledward (the United Kingdom).
In considering the seven entities for accreditation, a rich exchange took place among Board members, with developing country Board members stressing the importance of accrediting national entities, rather than having a bias towards international entities.
The seven accredited entities are the Centre de suivi écologique (CSE) from Senegal, which focuses on combating desertification and protecting coastal areas; Fondo de Promoción de las Áreas Naturales Protegidas del Péru (PROFONANPE) that specializes in funding biodiversity conservation and managing protected areas; the Secretariat of the Pacific Regional Environment Programme (SPREP) based in Samoa, which focuses on protection and sustainable development of the Pacific region's environment; Acumen Fund, Inc., a social impact investment fund, that works on improving the lives of low income communities in Africa and Asia in healthcare, agriculture and clean energy and three international organizations – the Asian Development Bank (ADB), the United Nations Development Programme (UNDP) and Kreditanstalt für Wiederaufbau (KfW), which is a German government-owned development bank.
[Access to GCF resources is managed through national, regional and international implementing entities and intermediaries that have been accredited by the Board. The Governing Instrument of the Fund allows for direct access (through recipient countries nominating subnational, national and regional implementing entities) and international access for UN agencies, multilateral development banks and international financial and regional institutions. The role of an implementing entity relates to the management and oversight of project implementation, which includes the origination and preparation of a funding proposal, the subsequent management of the necessary stages of the implementation process until its conclusion (project management) on behalf of the provider of funds (the Fund), and reporting obligations.
The Board had also agreed last year that entities that are accredited to the Global Environment Facility, the Adaptation Fund and the Directorate-General for Development Cooperation-EuropeAid of the European Commission are eligible to apply under the fast-track accreditation process.]
CSE, PROFONANPE, SPREP and the Acumen Fund came through the direct access modality, while the ADB, UNDP and KfW came through the international access track. All the entities were accredited on a fast-track basis, except the Acumen Fund, which followed the normal track.
There was considerable discussion over the German development bank, KfW, which came through the international access track. Zaheer Fakir (South Africa) sought clarification over a national entity applying for accreditation as an international entity and its role and function vis-à-vis the national designated authorities (NDAs)/focal points and whether it required the endorsement of the NDA. Hela Cheikhrouhou, the Executive Director of the GCF, responded that a national development bank that operates outside its own country, under the Fund’s current policy, is able to apply for international access status.
After further exchanges, the Board, in its decision, requested “the Secretariat to inform the NDAs and focal points whenever an entity is accredited for operation in their country, and encourage the accredited entities to make contact with the NDA or focal point when they intend to operate outside the countries that nominated them.”
In its presentation to the Board, the Secretariat said it had prepared, along with the Accreditation Panel (an independent technical panel to advise the Board), the application form and checklist and instituted an online accreditation system. The Secretariat had called for applications on 17 November 2014. There were 70 applications of which 41 had submitted their applications through the online accreditation system. The Secretariat said the seven applications selected represents diversity in terms of type of organizations. According to the Secretariat, they demonstrate that they can bring about transformational change and a paradigm shift.
Referring to the seven entities, the Chair of the Accreditation Committee (comprised of 4 Board members), Jan Cedergren (Sweden) said that the selection was balanced and represented different institutions and geography. He added that it was important to maintain the balanced approach in future applications too. Peter Carter, the Chair of the Accreditation Panel said that the Panel used a variety of third party evidence, facilitated by reviews and analyses.
The Secretariat also informed the Board that of the seven entities, six were accredited through the fast track route. Several developing country Board members expressed concerns about national entities losing out to international entities in the fast track accreditation process. They also said that it was fundamental to get more national entities on board over international entities.
“At the heart of the matter is that we do not want our national entities to be crowded out by the access to fast track, which is clearly favouring international entities at this point of time. It is not about a general seeking of diversity in institutions. It is an aim (of accrediting national entities) which puts an incentive and very clear goals for the Secretariat to try and achieve that and if they do not, they are required to give us an explanation,” said Dipak Dasgupta (India).
Developed country Board members underscored the importance of balance and were concerned that this might “hold up” international organizations’ accreditation till national organizations got ready. Leonardo Martinez (the United States) said that he wanted a set of accredited entities that is well balanced and which addresses complementary services. He expressed discomfort with the Secretariat micromanaging the process, which it is “not supposed to do”.
Zaheer Fakir (South Africa) said that enabling a new paradigm means bringing on board and motivating national entities so that developing countries do not have to depend on international entities. “If we are asking developing countries to engage with GCF, we need to infuse that in our work as well. The Secretariat too should work with the mindset of promoting a paradigm shift in developing countries,” said Fakir.
Arnaud Buisse (France) suggested outreach as a measure to get more candidates.
Eventually, the Board adopted a series of decisions with respect to accreditation of national entities. The relevant parts are as follows: The Board requested “the Secretariat to pay special attention to the priority needs of developing countries, emphasizing readiness support to national and regional entities that request it…” “To ensure country ownership and promote direct access to funding” the Board requested “the Secretariat to invite national and regional entities that are operating at scale to apply for accreditation to the GCF in coordination with their NDA or focal point, …”
It also requested the “Secretariat to aim to achieve a balance of diversity, including equitable representation of different geographical/regional areas, in the list of entitles considered for accreditation in the tenth meeting…, between direct access entities, including some operating at scale, private entities, and international entities.” In addition, the Board requested “the Secretariat, in consultation with the Accreditation Panel, to provide recommendations for the fast-tracking of national, regional and private sector entities.”
The Board member from Cuba sought clarity on transparency and presentation of information about the applicants. (The practice adopted by the Secretariat was not to make the applicants public, until after their application was approved. Board members however, had prior information about who the applicants were.)
Jorge Ferrer Rodriguez (Cuba) emphasized the need to ensure transparency and wanted to know if the names of the entities could be disclosed publicly prior to their approval. He also stressed the importance of stakeholders being consulted for verification.
The non-disclosure practice also drew much criticism from civil society organisations, whose active observer representative, Brandon Wu of ActionAid pointed out that the GCF process did not reflect best practice. He cited the example of the Adaptation Fund, where the applicant is anonymous when the assessment is being conducted, but once a positive recommendation for approval is made, the name of the entity is revealed in advance of the board meeting. The CSOs also questioned the process of assessment, which they said was non-transparent.
In response to the call for transparency, on the suggestion of the Board member from the United States, the Board in the decision requested “the Secretariat to publish the assessment methodology and the questions used in the assessment of accreditation applications.”
An open-ended small group was formed following the Board exchanges to work on a decision that was finally approved.
Highlights from some interventions
Dipak Dasgupta (India) stressed that if national entities have direct access, then there is a paradigm shift. He expressed concerns that six of the seven entities came through the fast-track route and it seemed that the criteria were heavily weighted in terms of international institutions. Dasgupta wanted assurance that when the Accreditation Panel was looking at the next batch of applicants, they must focus on the absolute paradigm shift needed.
Zaheer Fakir (South Africa) questioned how the “transformation litmus test” is applied for the international actors that have had plenty of time to deliver results but have not. He asked if the entities are truly responsive to and representative of the developing countries, noting that the international entities do not need any endorsement of the NDAs.
Seconding Fakir on the question of generating transformational impact, Yingming Yang (China) stressed on capacity building and said that GCF is about institution building. He added that it is high time for the GCF to encourage commercial banks in emerging economies as regional entities and asked whether GCF had a definition for state owned enterprises. He added that by being more flexible and practical, the GCF could play a more important role by mobilizing foreign capital investment in developing countries.
Ayman Shasly (Saudi Arabia) stressed that whatever business is carried out in the GCF has to be done in the context of sustainable development. He was concerned that if it took three months to approve the entities, some of which are highly reputable, how much more time would it take to approve those that are less popular, and asked if the GCF ran the risk of disadvantaging those in the pipeline.
Tosi Mpanu Mpanu (Democratic Republic of Congo) wanted to be informed about the other entities under consideration and raised concerns about country ownership not being sacrificed, given that 19 of the 41 entities that applied for accreditation were international. Mpanu also wanted to know if applications were allowed in languages other than English, to which the Secretariat responded in the affirmative.
Nojibur Rahman (Bangladesh) said applications from LDCs, SIDs and African states should assume priority.
Andrea Ledward (the UK) was interested in the lessons learnt from the process and how the Secretariat would update any changes in the status of an organization that made them eligible for fast tracking. She said there is a need to work speedily to get more organisations on board and to institute some arrangement for interested entities to informally engage with the Secretariat on legal arrangements. She also suggested endorsing the seven entities as a package rather than going one-by-one.
Leonardo Martinez (the US) said that no other Fund had moved to accredit entities with such fast speed. Referring to the approach of the GCF on accreditation as being new and innovative, he said that it is very important to have direct access entities for the package. He added that it is very important to deliver resources, especially to the LDCs and those highly vulnerable. He wanted to ensure that the entities that are accredited face no barriers.
Arnaud Buisse (France) urged the Board to move forward in approving the seven entities. Stefan Marco Schwager (Switzerland) said the seven entities reflected balance and appreciated the fact that there was a private sector entity on board. He suggested that some of the information could be standardized and he would be interested to know how much an entity invested in climate related projects in the past.