Service on Climate Change (Nov15/07)
GCF Board agrees on terms of reference for Fund’s Strategic Plan
12 November, New Delhi (Indrajit Bose)- The eleventh meeting of the Green Climate Fund (GCF) Board agreed on the terms of reference for the development of a strategic plan for the Fund. The Board meeting was held in Zambia from 2-5 November.
Discussions among the Board members saw a lot of convergence on the importance and need for a strategic plan for the GCF to further operationalize its Governing Instrument (GI). Developing country Board members had been calling for such a strategic plan in the previous meetings.
The Board agreed on the terms of reference for developing a strategic plan, which will be considered at the next meeting of the Board in 2016.
Board members also agreed that the strategic plan would guide the GCF as a continuously learning institution in further developing its operational modalities, with a view to achieving its overarching objective to promote paradigm shift towards low-emission and climate-resilient development pathways in the context of sustainable development.
An ad hoc group of members of the Board or alternate members comprising three each from developing and developed country members would oversee and guide the Secretariat’s preparation of the strategic plan in the interim.
It was also decided that an informal meeting would be held well before the twelfth meeting that would address the strategic plan as one of the key issues for consideration. The Board requested the ad hoc group to present an initial draft and guiding questions requiring further consideration by the Board as inputs to the informal discussions of the Board.
As part of the terms of reference, the Board members agreed that the strategic plan:
The Board further agreed that the strategic plan must focus on measures such as allowing the GCF to scale up its investments in developing countries “with the objective of tapping its full potential to promote urgent and ambitious actions enhancing climate change adaptation and mitigation in the context of sustainable development, and to maximize the engagement with the private sector”.
They also agreed that the plan sets out the approach of the GCF to “programming and investing the initial resource mobilization resources, while striving to maximize the impact of its funding for adaptation and mitigation, and seek a balance between the two”.
The also agreed that the strategic plan must ensure that the “GCF is responsive to developing country needs and priorities, while ensuring country ownership, enhancing direct access, ensuring fast disbursement, implementing a gender-sensitive approach, supporting multi-stakeholder engagement, ensuring the effective use of funds and enhancing transparency”.
The terms of reference reflect the discussions on the strategic plan (see below highlights of the exchange)
The Board also invited members and alternate members of the Board, active observers and observer organizations to make submissions to the Secretariat on the elements above by 1 December 2015.
Highlights of exchange on the strategic plan
Zaheer Fakir (South Africa) said the strategic plan should be a tool to demonstrate to the global community that the GCF has a time bound plan with vision and key objectives. It should stress on the need to finance country programmes at scale, based on country needs. The accreditation process should be used to change the business as usual scenario of these entities. Fakir said the Board needed to develop a framework and process for building a strategic plan for a decision at the twelfth Board meeting. The Board needed to decide on the terms of reference for the plan which needs to include elements such as rationale, objectives, strategic goals, implementation and monitoring, evaluation, review. Fakir also called on the need to develop a working group to develop the plan between the eleventh and the twelfth board meetings. He also suggested an informal meeting of the Board in early 2016 to discuss the strategic plan.
David Kaluba (Zambia) said the GCF must focus on simplified approval process for the Least Developed Countries (LDCs) and Small Island Developing States (SIDS). He said the members must reflect on why the GCF is different from other Funds and that the Fund needs to get money to those that need it the most. “This Fund was supposed to do something different. We are behind schedule. Lives are being lost in the islands and LDCs every year. When impacts strike, it results in huge losses on the economy and lives…We need to move forward as a team with a sense of urgency,” said Kaluba.
Patrick McCaskie (Barbados) said that the strategic plan is a battle plan for a war the world is fighting against climate change. The strategic plan should outline what are the strengths of the GCF and build on them. McCaskie called for a mission statement in the strategic plan, with clear goals and objectives. He added that the GCF’s weaknesses lies in accreditation, readiness, country ownership, simplified approval process, communications and direct access. He also called for a financial plan to be supported by the resource mobilization process, stakeholder engagement and for indigenous peoples to be involved.
Jorge Ferrer Rodriguez (Cuba) said the Fund had been working for three years in anarchy. He suggested the plan should focus on project pipeline with details on resources. He called for firm financial commitments; otherwise “we will be writing a strategic plan when we do not know the full financial needs available to fulfill it”. He also said that the plan should be connected with the needs and expectations of developing countries.
Dipak Dasgupta (India) said the Board needs a guide in the form of a strategic plan and that learning by doing is essential. He said the strategic plan must be more than a conceptual plan. He said it must ensure inclusivity and stressed the importance of youth in climate actions.
Yingming Yang (China) said the scope of the strategic plan must be implementation. The plan must have a clear presentation of the developing countries’ demands of the GCF and the supply of GCF resources. There should be guidance on how to strengthen delivery capacity and the plan must focus on the capacity of the Secretariat and the Board. The plan must include how the Board will decide on policies and procedures and how they can more effectively deliver projects. He added that he saw the need for a huge discussion on the capacity of developing countries. He also spoke of the importance of country ownership of the recipient countries. He said he saw the strategic plan to be a living document subject to review on a regular basis.
Angel Valverde (Ecuador) said the Board needs to keep pushing the potential of the Fund to address climate change. The Board needs an assessment of where the Fund is situated to achieve expected results. The strategic plan is a policy tool for identifying guidance from the GI and previous decisions. The strategic plan must include timeliness and decisions on important policies, country needs and priorities, and identify policy gaps. He added that the GCF needs to fulfill the Convention’s objective. He added that the plan is a crucial element for developing countries that have highlighted financing needs in their Intended Nationally Determined Contributions (INDCs) (under the UNFCCC).
Mariana Ines Micozzi (Argentina) called for precise definitions of transformation, high-impact projects and programmes in the strategic plan. Tosi Mpanu Mpanu (Democratic Republic of Congo) spoke about the need to reflect urgency and the big picture.
Jacob Waslander (Netherlands) supported the idea of an informal Board meeting and to have a strategic direction for the Board ready by the twelfth meeting of the Board. Waslander said the Board should demonstrate what they are stand for and push for transformational change and the strategic plan could provide guidance. He added that for The Netherlands, Denmark and Belgium, the strategic plan must clarify what transformational change looks like, especially for more vulnerable countries. He stressed on the inclusion of the role of women in the plan, private finance and capacity building. He added that there should be clear terms of reference for the process.
Jose Delgado (Austria) said that results-based finance becomes a priority beyond the aspect of reducing emissions from deforestation and degradation in developing countries (REDD-plus). The GCF may find other processes helpful for informing its work.
Ewen McDonald (Australia) said he agreed with what had been said on urgency, elements for inclusion and the importance of taking a decision at the next meeting. He said the plan should be simple as it would be an important overarching document and that they must agree on the terms of reference and the timeline in Zambia.
Karsten Sach (Germany) said that Board members need to connect the dots between the GCF’s overarching goals and previous decisions and give guidance. He said they should build on the investment framework and create a pipeline for transformation, which is country-driven. He said the focus should be on strengthening institutions, planning and transparency. He supported Fakir’s proposal and said they should leave Zambia with a common vision.
Andrea Ledward (UK) said it is a good time to learn and reflect, given the funding proposals on the table. She said the terms of reference should discuss the “how” in addition to the “what.” She added that there is a need to engage with stakeholders and focus on learning and country ownership.
Arnaud Buisse (France) said that the GCF has to be made special and stressed the need to operationalize country ownership. There is need for a vision for the Fund. He said however that there is a contradiction between what was needed at the Fund level and country ownership. He added that the strategic plan needs to stay agile and improve the Fund’s engagement with the private sector. Transparency also needed to be improved.
Anders Wallberg (Sweden) supported the idea of a working group and an informal Board meeting. He suggested that inputs be got from the independent technical advisory panel (iTAP) and the accreditation panel. He added that they needed to discuss how to move the gender perspective from being gender sensitive to being gender responsive. He also said that it would be important to discuss how they promote synergies and complementarity with other funds to avoid potential overlaps.
Atsuyuki Oike (Japan) said he needed to see discussion on country ownership and involvement of private sector with respect to the strategic plan. He said the Board should consider the Sustainable Development Goals adopted recently, the Sendai Conference on Disaster Risk Reduction and the Financing for Development Conference in Addis Ababa. “The strategy needs to be realistic and we must look at the project pipeline and projects,” said Oike.
Leonardo Martinez-Diaz (US) said it was a good time to have the conversation as the Fund had matured into its second phase. The strategic plan should explain options as the Fund matures to deal with tradeoffs. It should look at how to make the fund operationally more efficient and look at staffing, readiness and all the nuts and bolts from the operations point of view. On accreditation, Martinez said that the Fund is only as good as the network of accredited entities with whom it works and the accreditation strategy needs to be integrated with the larger strategy the Board members were discussing. He also stressed on how to give the Private Sector Facility and Private Sector Advisory Group operational guidance and a new set of missions.
(Edited by Meena Raman)