Info Service on Climate Change (Mar19/02)
Kathmandu/New Delhi, 8 March (Prerna Bomzan and Indrajit Bose) – At the 22nd Board meeting of the Green Climate Fund (GCF) held in Songdo, South Korea from 26-28 February, the findings and recommendations by the Fund’s Independent Evaluation Unit (IEU) of the GCF’s Readiness and Preparatory Support Programme (RPSP) was taken note of.
The findings and recommendations of the RPSP evaluation, which were contained in a report by the IEU, revealed several interesting findings, in terms of what has worked and what has not worked in relation to the programme.
The RPSP launched in 2014 is a “strategic priority” for the GCF in terms of enhancing country ownership and access to the Fund and the Board had invited the IEU to undertake an independent evaluation at its 17th meeting in 2018.
One of the primary findings that was glaring is that “about one-quarter of eligible countries have not yet accessed RPSP grant support, for a variety of different reasons,” and that “if GCF wants to harness them, it needs more tailored approaches and a better understanding of the political, economic and social context of the individual countries if it wants to galvanize (a subset of) these countries to actively participate in the RPSP.”
It further states that “three quarters of eligible countries have so far received RPSP grant approvals” and that “demand from countries and potential DAEs (direct access entities- meaning national entities who are accredited to the GCF to receive and disburse the Fund’s resources) has also been fairly uniform across different groups of countries”. It adds further that “about 77 per cent of Small Island Developing States (SIDS), 74 per cent of Least Developed Countries (LDCs), 80 per cent of African countries, and 72 per cent of other countries (those which fall into none of the aforementioned categories) have so far received RPSP support.
The report also states that “35 of 148 eligible countries do not have approved RPSP grants” and revealed that 40% of those countries that accessed the readiness programme did not have projects that were funded by the GCF.
It further shows that the “one-size-fits-all paradigm” of the readiness programme did not meet the “differentiated needs” of countries.
The evaluation also showed that although 70% of the approved readiness programme proposals were working towards the objective of strengthening the national designated authorities (NDAs), the RPSP was still “disproportionately resource and time intensive”. It also showed that “priority” countries (defined by the IEU as Africa, SIDS and LDCs), showed “least effect on strengthening NDAs” and majority of countries do not push for direct access entities to be accredited and favour international accredited entities in accessing the Fund.
Another finding was that “CSO (civil society) participation was rudimentary” in relation to country ownership.
The overall objective of the evaluation was to “assess the effectiveness” of the RPSP as well as the “objectives of country ownership” and to “review approaches in the implementation” of the RPSP as well as “recommend gains in effectiveness, efficiency, country ownership and the likelihood of sustained impact”.
In operational terms, the evaluation aimed to contribute to “improving the approval process and timely disbursement of resources to facilitate the RPSP’s implementation” as well as to informing “deliberations about additional support for the programme”.
The reported provided three groups of recommendations for a “rethink” of the RPSP strategy. The first group focuses on “immediately required changes” towards “ensuring access, decreasing financial costs and improving the overall efficiency of the RPSP” in relation to capacity building, outreach and support as well as strengthening country programmes. The second group suggests that going forward, the RPSP must “define its vision, strategy, niche and overall targets and expected results clearly”. The third is a “strong recommendation” that the “current business-as-usual pathway discontinues” suggesting that the “new phase” of the RPSP is “customised to country needs and provide for differentiated needs while being ready-for-scale”.
The Secretariat management response was that it found “agreement or partial agreement to 95% of the IEU’s findings”. It shared that it had included the development of “Readiness Programme Phase 2” in its 2019 work programme which envisions a “fit-for-purpose” RPSP that is “outcome focused while retaining flexibility for country-specific support based on their actual needs”.
During the Board discussions, Paul Oquist (Nicaragua) emphasized on “capacity building as the core mission” of the RPSP with “more focus on the GCF” rather than a “plethora of objectives”. He underlined that “separation of accreditation (of direct access entities) from project formulation is a design flaw” so “if we could approve accreditation with project (funding), then that would help very much in overcoming the asymmetry between what it takes to do direct access entities and to do international accredited entities”.
Ayman Shasly (Saudi Arabia), in response to the evaluation, pointed out that the usage of references to the categorisation of countries as “eligible” and “priority” countries are “not something we are familiar with” since all developing countries are eligible for RPSP and urged the use of the normal jargon.
Paola Pettinari (Italy) supported the recommendations in the IEU report and agreed on the “need to rethink” the RPSP with more focus on capacity building and in-country coordination.
Christopher Tinning (Australia) stressed on making “direct access, the key focus of the GCF” and echoed Oquist’s remarks on “clearly linking” direct access accreditation with a specific proposal.
Cheikh Sylla (Senegal) said that the recommendations will not properly address the problem of a lack of in-country coordination due to multiple focal points such as focal points for the UNFCCC, the GCF and the Adaptation Fund. He proposed the need for “one focal point” like in the Montreal Protocol, to overcome the in-country coordination problem.
Jeremiah Garwo Sokan (Liberia) welcomed the recommendations of the evaluation and for highlighting “capacity building” which is key at the NDA level in terms of increasing absorptive capacity, national coordination, developing funding proposals and helping national institutions begin the process of accreditation.
RPSP revised work programme and forward budget
order to address the core IEU recommendations, the GCF Secretariat
proposed that the revised RPSP incorporate the following features:
The vision for the revised RPSP aspires to “ensure that by 2025 all GCF recipient countries have developed the necessary enabling environment, including increased institutional capacity and robust country strategies, to implement transformational projects and programmes in line with national climate change priorities and GCF result areas, including as elaborated in updated NDCs (nationally determined contributions) and NAPs (national adaptation plans)”.
proposed five objectives supporting that vision are as follows:
(ii) Strategies for climate finance implementation: Ambitious strategies implemented to guide GCF investment based on analyses of emissions reduction potential and climate vulnerability and risk and in complementarity with other sources of climate finance;
(iii) National adaptation plans and/or adaptation planning processes: National adaptation plan (NAP) and/or other adaptation planning processes formulated to catalyse public and private adaptation finance at scale;
(iv) Paradigm-shifting pipeline development: Country priority-aligned and paradigm-shifting concept notes and funding proposals submitted by countries with least capacity, including LDCs, and direct access accredited entities, and;
(v) Knowledge sharing and learning (cross-cutting): Increased levels of awareness, knowledge sharing and learning that contribute to countries developing and implementing transformational projects in low-carbon and climate-resilient development pathways.
The proposed new or improved operational modalities included (i) country readiness assessments and country readiness plans (ii) multi-year allocation grants (iii) standardized packages of readiness support (iv) direct support to NDAs (v) enhanced institutional support to direct access accredited entities and (vi) sector-specific planning and project preparation technical clinics.
The current status of RPSP portfolio and pipeline included 244 approved proposals with 103 requests in the pipeline.
The Board allocated USD 190 million to date, out of which USD 9 million was remaining with the current pipeline amounting to USD 130 million. The 2019 budget request proposed was USD 122.5 million for 25 new NAP/adaptation planning requests; 50 new readiness requests (40 for single year, 10 for multi-year); 5 structured dialogues; 1 global NDA/direct access entity conference and for technical assistance and trainings.
Paul Oquist (Nicaragua) reiterated the importance of “results” with regard to “strengthening of the NDAs” recalling the IEU findings of 40% of the RPSP “not leading to projects”, further suggesting for “policy changes” in that direction.
Sue Szabo (Canada) stressed that countries should be “ready” with a “wider climate rationale” and “climate finance in general”. She expressed concerns on “overly standardized processes” and the need for taking a look again at the “outcomes and outputs in the shorter and medium term sense”.
Mathew Haarsager (United States) welcomed the updated RPSP strategy.
Ronald Jumeau (Seychelles) said that “getting proposals into the GCF pipeline remains a substantive challenge” pointing out that “in the current pipeline, only 4.2% of the requested amount of funding is for SIDS”. He expressed support for “multi-year programming” and “direct support to NDAs and direct access entities”.
Roelof Buffinga (Netherlands) said that the strategy and vision was “ambitious” enquiring whether the “Secretariat sees any capacity constraints in its implementation”.
Stefan Schwager (Switzerland) welcomed the “envisaged outcome-based orientation” and stressed the “importance of a monitoring framework”. He believed that the programme “should be revised upon conclusion of the replenishment of the GCF’s resources because it might set some slightly new strategic objectives to the Fund”, further suggesting an evaluation of the programme so that it is “ready for each replenishment cycle” .
Hans Olav Ibrekk (Norway) commented on a “stronger emphasis” towards “creating an “enabling environment for investments from the private sector”.
Wenxing Pan (China) questioned about “what is the better approach to be adopted” given the issue of there not being even a single direct access entity in some countries on the one hand, hence requiring more assistance, while on the other hand, there are “limited resources”. He said that therefore, more focus is probably required on already accredited entities to “bring more tangible results”.
Ayman Shasly (Saudi Arabia) enquired about the amount of money disbursed, given complaints about delays in release of funds.
The decision on the revised RPSP work programme and the 2019 budget was adopted on the last day of the Board meeting, following incorporation of comments received.
The Board decided that the “Secretariat may accept multiple-year readiness requests, allocating up to USD 3 million for three years, while committing no more than USD 1 million per country per year, which is in addition to the national adaptation plans and/or other adaptation planning processes allocation”. It further approved “an additional amount of USD 122.5 million to be made available for the execution” of the RPSP.
Other policies adopted by the Board included a policy on the restructuring and cancellation of funding proposals which have been approved and criteria indicators for the GCF investments. These are elaborated below.
Cancellation and restructuring policy
The policy on restructuring and cancellation sets out the mechanism for decision-making in relation to an approved funding proposal in certain circumstances. These circumstances include situations where there has been failure to fulfil the conditions to be met prior to the execution of the funded activity agreement (FAA) within the time frame established by the accreditation master agreement (AMA); a request for an extension of the time frame established by the AMA to fulfil the conditions to be met prior to the execution of the FAA; a request for a waiver of a condition imposed in the approval decision; and a request for a change to an approved funding proposal or restructuring of a funded activity.
The policy states that in the case of failure to fulfill the conditions within the required period, the approval of the relevant funding proposal (FP) shall no longer be valid upon the expiration of such period. However, an accredited entity (AE) may request an extension of the period to fulfil the conditions. If extension is sought, “the ED (GCF’s Executive Director) shall be entitled to approve such an extension except in circumstances where the Board has explicitly reserved the right to grant such extension in the relevant approval decision,” the policy stipulates. Also, the ED may grant only one extension. The Board is to consider requests for any subsequent extensions requested by the AE. In cases where the ED does not approve the extension request, the AE has the option to request the Board to consider its extension request.
In cases where an AE proposes a change to an FP, after approval and before the signing of the FAA, the AE is required to notify the Secretariat in writing of the relevant change, and the written notification must include written evidence of consultations with the national designated authority (NDA) or focal point.
The policy sets out what could be a major change or a change other than a major change. The policy tasks the Secretariat to determine whether a change is a major change and outlines procedure for approval of a major change and other changes. For changes that are not major, the ED shall have the authority to approve such changes, the policy states.
For major changes, it is mandatory for the AE to consult with the NDA or Focal Point and seek written confirmation from them whether the restructuring proposal affects the status of the funding proposal no-objection letter.
The policy adopted applies to all funding proposals approved by the Board, and not to activities financed under the Readiness and Preparatory Support Programme and the Project Preparation Facility.
Investment criteria indicators
The Board adopted the following investment criteria indicators for a pilot period of one year, with the caveat that all the indicators would take into consideration the different country contexts and that the idea behind the proposed indicators was not a “pass-fail” test, but rather to see how a project is trying to deliver impact and make a paradigm shift:-
Mitigation impact potential indicator: project lifetime emission reductions (in tonnes of carbon dioxide equivalent). Under this, project proposals should describe the expected reductions in emissions resulting from the GCF intervention.
Adaptation impact potential indicator: Project proposals should accompany a description of “the expected change in loss of lives, value of physical assets, livelihoods, and/or environmental or social losses due to the impact of extreme climate-related disasters and climate change in the geographical area of the GCF intervention”. Proposals should also refer to the number of direct and indirect beneficiaries of the project.
Paradigm shift potential indicator: Necessary conditions indicator. Under this, project proposals are expected to “identify a vision for paradigm shift as it relates to the subject of the project. The vision for paradigm shift should outline how the proposed project can catalyse impact beyond a one-off investment. This vision for longer-term change should be accompanied by a robust and convincing theory of change for replication and/or scaling up of the project results, including the long-term sustainability of the results, or by a description of the most binding constraint(s) to change and how it/they will be addressed through the project”.
Sustainable Development Potential Indicator: Co-benefits indicator. Under this, the proposals must identify at least one positive co-benefit in at least two of the four coverage areas. The coverage areas include economic co-benefits, social co-benefits, environmental co-benefits; and gender empowerment co-benefits.
Needs of the recipient indicator: Barriers to climate-related finance. Under this, project proposals should “describe the country’s financial, economic, social and institutional needs and the barriers to accessing domestic (public), private and other international sources of climate-related finance. The proposal should outline how the proposed intervention will address the identified needs and barriers.”
Country Ownership Indicator: Two indicators were adopted under country ownership: Alignment with NDCs, relevant national plans indicator, and/or enabling policy and institutional frameworks; and explanation of engagement with relevant stakeholders, including NDA indicator.
Efficiency and effectiveness indicator: For mitigation projects, the indicators adopted included cost per tonne of carbon dioxide equivalent (where projects should give the cost per tonne of carbon dioxide equivalent of the GCF intervention); ratio of co-financing (where projects should indicate the ratio of co-financing mobilized relative to the GCF contribution); and expected rate of return (where projects should provide an estimate of the expected rate of return). For mitigation and adaptation projects, the indicator adopted was ‘application of best practices’ (where projects are expected to describe how the proposal applies and builds on the best practices in the sector).
The Board also agreed on some ground rules in relation to the indicators: the indicators will initially apply to the “projects under implementation”; by the next meeting of the Board, the Secretariat will “create guidelines to assist AEs in implementing the indicators”; and by the 25th meeting of the Board, the indicators will be used as part of the information related to the consideration of funding proposals.
Edited by Meena Raman