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TWN
Info Service on Climate Change (Mar24/03) GCF Board mourn loss of Board member; approves U$489.8 million for projects Kathmandu, 12 March (Prerna Bomzan): The 38th meeting of the Board of the UNFCCC’s Green Climate Fund (GCF) scheduled from 4-6 March in Kigali, Rwanda, started on a sombre note with the unexpected passing of its new Board member Daniel Machado da Fonseca (Brazil) in the evening of 3 March, prompting a full day of mourning on 4 March. Fonseca was the Head of the Climate Action Division at the Ministry of Foreign Affairs of Brazil. The Board opened on 5 March with welcome remarks by the host country’s Minister of Environment, Dr Jeanne d’Arc Mujawamariya and chaired by newly elected Milagros De Camps German (Dominican Republic), while her counterpart, Sarah Metcalf (United Kingdom) who was unable to attend was filled in by her predecessor, Victoria Gunderson (United States). Given a shortened business of only two working days, members managed to approve the high priority action items on the funding proposals and the accreditation proposals while also adopting the administrative budget and accounting framework and the GCF compensation philosophy. The decision on the GCF regional presence was also adopted with amendments to the draft text, while the agenda item on launching the third performance review of the Fund (which was considered at the tail end of the final day), was suspended due to differing views of members on the schedule, budget and scope of the review as contained in the document prepared by the Independent Evaluation Unit (IEU). Members also noted the information document on financing of results-based payments for reducing emissions from deforestation and forest degradation in developing countries (known as REDD+[plus]) which contains potential pathways forward that the Board could consider in 2024 to resolve the issue. Funding Proposals The Board approved USD 489.8 million for 11 funding proposals - the first batch of projects under the GCF’s second replenishment cycle (GCF-2) covering the period 2024-2027. It is to be noted that both developing and developed country members lamented about the low commitment authority (available resources in the GCF). Notably, Aboul-Magd (Egypt) highlighted that under USD 500 million (in relation to funding projects approved) is a “meagre” number and does not reflect “ambition” as well as the “urgency of action” needed, when “USD 16 billion” worth of projects is in the pipeline for consideration. Concerns on the low commitment authority was echoed by Pacifica F. Ogola (Kenya), Nauman Bashir Bhatti (Pakistan), Walter Schuldt (Ecuador), Karma Tshering (Bhutan), as well as by Hans Olav Ibrekk (Norway), Charlotte Just (Denmark) and Jose Perez (Spain). In response, the Deputy Executive Director Henry Gonzalez said that the commitment authority for this year is around “USD 2.3 billion” and that “USD 12.8 billion” is committed as of now in total [as part of GCF-2]. Members also shared other aspects of concern in relation to the funding proposals. Ayoub (Saudi Arabia) registered for the record on the lingering questions from his region on the delay of projects and hoped that there would be progress. He was also deeply concerned about the criteria and conditions used by the Independent Technical Advisory Panel (IATP) on project considerations and selection which are not in line with the Board’s policies specifically pointing to a funding proposal relating to Kuali Fund-GCF (see details below). Aboul-Magd (Egypt) implored to correct the imbalance of the overall portfolio between mitigation and adaptation projects especially on “cross-cutting” ones, where adaptation is “forced and exaggerated”, and not reflecting the reality on the ground which is heavily concentrated on mitigation. In the same vein, he said that the “energy” sector continued to dominate and that it is absolutely dire to ensure that other sectors are covered as well. This sectoral concern was echoed by Alejandro Solano Ortiz (Costa Rica) and Javier Antonio Gutierrez (Nicaragua). The following 11 projects/funding proposals were approved: · USD 12.5 million for ‘Akamatutu’anga To Tatou Ora’anga Meitaki (ATOM): Building a healthy and resilient Cook Islands Community – one block at a time’ by the Ministry of Finance and Economic Management of the Government of Cook Islands; · USD 25 million for ‘Building the Adaptive Capacity of Sugarcane Farmers in Northern Belize’ by the Caribbean Community Climate Change Centre; · USD 25 million for ‘Sierra Leone Coastal Resilience Project’ by Save the Children Australia; · USD 24.5 million for ‘Avaana Sustainability Fund’ by the Small Industries Development Bank of India; · USD 169.9 million for ‘E-Mobility Program’ by the Asian Development Bank; · USD 44.2 million for ‘Resilient Puna: Ecosystem based Adaptation for sustainable High Andean communities and ecosystems in Peru’ by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH; · USD 53.9 million for ‘Increase Resilience to Climate Change of Smallholders Receiving the Services of the Inclusive Agricultural Value Chains Programme’ by the International Fund for Agricultural Development; · USD 55 million for ‘Cambodian Climate Financing Facility’ by The Korea Development Bank; · USD 28 million for ‘Acumen Climate Action Pakistan Fund’ by Acumen Fund, Inc.; · USD 35.6 million for ‘Kuali Fund-GCF’ by Compañía Española de Financiación del Desarrollo S.A., S.M.E (COFIDES); and · USD 16.2 million for ‘Accelerating Solar Action Program’ by Ecobank Ghana Limited. In relation to the ‘Kuali Fund-GCF’ which is expected to directly support smallholder farmers, Ayoub (Saudi Arabia) expressed shock upon learning about the condition proposed by ITAP which read, “The Accredited Entity shall ensure that the Kuali Fund-GCF does not invest in fossil fuel vehicles, including, without limitation, any investment in hybrid, plug-in hybrid, or “efficient” fossil vehicles, even if operated with biofuels (including gaseous as well as liquid fossil fuels)”. He pointed out that there was no logic whatsoever in imposing this condition, which restricts funding on energy efficiency as it relates to vehicles and essentially is against support for solutions that reduce emissions which is in contradiction to the ultimate objective of the UNFCCC of which the GCF was created to serve. Further, he illustrated that the co-financing is coming from the European Union who is currently debating whether such imposition should be placed in its own agriculture sector. Therefore, placing conditions and standards on small holder farmers while not applicable to one of the most advanced economies such as the EU, violates the UNFCCC principles of “equity and common but differentiated responsibilities” (CBDR). Ayoub added about the national circumstances of every country, for instance, not having the infrastructure of connecting to the grid (as compared to developed countries), which was also echoed by Aboul-Magd (Egypt), who further questioned whether such condition had been imposed in the past. It is learnt that this grave issue of the imposition of what was perceived as an unfair and illogical condition by the ITAP and which could set a precedent for others, was eventually resolved in a long drawn-out executive session (within the Board and not open to observers). The project was finally approved with the deletion of the above condition. In relation to the proposal on ‘Accelerating Solar Action Program’ in Ghana, Board member Yingzhi Liu (China) although expressing support for the content of the proposal, objected to the “unsubstantiated allegations of so-called forced labour issues in the supply chain” which he said “neither the GCF nor the multilateral development banks (MDBs) have secured evidence until now”. Since there was no consensus in approving the funding proposal, a formal vote was conducted, with all members agreeing except China. Given the majority vote in favour, the proposal was thereby approved. The Chinese Board member Liu, made a formal statement upon approval of the project, remarking that “as a multilateral platform, the GCF adheres to the principles of political neutrality, which should also apply to the accredited entities. The ESS (environmental and social safeguards) assessment should build on an objective and comprehensive basis with credible sources of evidence…”. He firmly stated that “We oppose politicising normal business cooperation, breaking international trade rules, and disrupting market order with so-called forced labour (allegations). “A favourable environment for the scale-up of renewable energy is essential. It should provide enterprises with a fair, just, and non-discriminatory market environment”, Liu added and further emphasised that “China will firmly support developing countries in addressing climate change”, he said, calling on all not to “underestimate the resolution of China that defends its dignity and interests on this matter”. Accreditation Proposals The Board approved accreditation of the following 8 entities, of which 6 are direct access entities: · ‘Banco de Comercio Exterior de Colombia S.A. (Bancoldex)’ from Colombia; · ‘Banco Nacional de Obras y Servicios Públicos, S.N.C (BANOBRAS)’ from Mexico; · ‘Cities and Villages Development Bank (CVDB)’ from Jordan; · ‘Community Development and Investment Agency of the Kyrgyz Republic (ARIS)’ from Kyrgyzstan; · ‘Nepal Investment Mega Bank Limited (NIMB)’ from Nepal; · ‘Corporacion Interamericana para el Financiamento de Infraestructura, S.A. (CIFI)’ from Panama; · ‘Terra Global Capital, LLC (Terra Global)’ from the United States; · ‘International Tropical Timber Organisation (ITTO)’ from Japan. Report on the activities of the Secretariat Prior to closing of the meeting, Aboul-Magd (Egypt) drew the attention of the Co-Chairs to the planned review of the GCF by the G20, and expressed his concerns for the record clarifying that the GCF is not accountable to outside entities but is part of the UNFCCC and hence, accountable to the COP. He also added that in the past as well, there was discomfort on such review or assessment by the MOPAN (Review of the Multilateral Organisation Performance Assessment Network) network of donor countries. ( A statement by the GCF secretariat published on 4 December 2023 reveals plans for such an independent review by the G20’s Sustainable Finance Working Group in 2024 to enhance access to the climate funds. Ayoub (Saudi Arabia) concurred with Aboul-Magd and suggested to create a committee for oversight by the Board on the external engagements of the secretariat which have been increasing over time. The Board decided to convene the next 39th meeting from 15-18 July at the GCF’s headquarters in Songdo, Republic of Korea. Co-Chair De Camps German assured that consultations will be conducted with members on items of priorities for the next meeting. Prior to the adoption of the Board’s agenda of the 38th session, members Mohammad Ayoub (Saudi Arabia) and Wael Aboul-Magd (Egypt) had expressed concerns on the lack of consultations on the agenda by the Co-Chairs, urging to follow the established rules of procedure going forward.
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