GCF Board to prioritise accreditation of national entities

Songdo, 26 October 2016 (Indrajit Bose)

Delhi — The Board of the Green Climate Fund (GCF), at its 14th meeting in Songdo, South Korea, adopted an important decision around the accreditation strategy, but could not adopt the strategy itself because the Board was of the view that the strategy needs more work.

Developing country Board members wanted to prioritize national direct access entities and pointed to the imbalance in the current accreditation process where more international entities were getting accredited and national entities were lagging behind. Following exchanges among Board members, it was decided that national direct access entities would be among those entities prioritized for accreditation in the future.

(Access to the Fund’s resources is managed through national, regional and international entities and intermediaries that have been accredited by the Board. Thus far, the GCF has accredited 41 entities, of which 23 are international entities, 10 are national and 8 are regional entities.

According to the ‘accreditation strategy’ document presented to the Board for its consideration, the situation before  the 14th Board meeting was that international entities have been accredited for larger size activities than direct access entities, with 60 per cent of international entities accredited for large size category vs 23 per cent among direct access national and regional entities.)

In the decision adopted during the Board meeting (held from 12-14 October), it was decided that future accreditation decisions by the Board “should aim to bring forward accredited entities that fill the mandate on balance, diversity and coverage and advance the objectives of the GCF, and to that end:
(i) Decides to request the Accreditation Panel and the Secretariat to establish a prioritization of entities applying for accreditation, and prioritizes in 2016 and 2017 the following, not listed in any particular order of priority:
1. National direct access entities;
2. Entities in the Asia-Pacific and Eastern European regions;
3. Private sector entities, in particular those in developing countries, seeking a balance of diversity of entities…;
4. Entities responding to requests for proposals issued by the GCF, for example including a pilot phase for enhancing direct access; a pilot programme to support micro-, small-, and medium-sized enterprises; and a pilot programme to mobilize resources at scale in order to address adaptation and mitigation;
5. Entities seeking fulfillment of conditions for accreditation; and
6. Entities requesting upgrades”;

To this end, the Board requested the “Secretariat, in consultation with the Accreditation Committee (AC) and Accreditation Panel (AP), to consider how to refine the method and criteria for prioritization for consideration of the Board at the 16th meeting of the Board”.

Prior to the adoption of the Board decision, the AC informed the Board that besides the strategy document, it was also working on another document on further development of the accreditation framework, which is meant to accompany the strategy, identify gaps and explore ways forward. The AC will present the second document to the Board at its 15th Meeting.

Some developing country Board members were of the view that the two documents should be considered together and wanted to defer the finalization of the accreditation strategy the Board’s next meeting in December this year.

However, after further consultations, it was agreed that a decision could be arrived at based on some of the recommendations contained in the accreditation strategy document and not to adopt the accreditation strategy as a whole at the 14th meeting.

In the decision adopted, the Board requested the “AC in consultation with the Secretariat, the AP and national designated authorities, and taking into consideration previous decisions of the Board, in particular decision … on country ownership and … the strategic plan for the GCF, to continue to elaborate on the draft strategy for its further consideration at the 15th meeting of the Board.”

In relation to the way ahead and to expedite the efficiency of the accreditation process, the Board: requested “the Secretariat, in consultation with the Accreditation Panel, to develop modalities for the use of third-party evidence for review by the Board by its 16th meeting”; decided to “review the fast-track process … by the 20th meeting of the Board”; requested the AP, with the support of the Secretariat, under the guidance of the AC, “to elaborate the following elements for decision by the Board at its 17th meeting in 2017: an assessment, including a gap analysis, of the Adaptation Fund’s Environmental and Social Policy and Gender policy in line with the GCF interim environmental and social safeguards and gender policy with recommendations on their potential accreditation or fast-tracking”.

The Board also decided to commence“review of the GCF initial fiduciary standards in 2017”.

Below are highlights are of some exchanges among Board members on the accreditation strategy.

Elaborating on the gaps,Diann Black-Layne (Antigua and Barbuda) for the AC said that under the access modality gaps, the AC had identified gaps in the areas of definitions. For example, should a private sector entity be considered a direct access or international access entity? It was also not clear under the existing accreditation framework whether national entities accredited under the direct access modality submit projects on behalf of other countries or how the accreditation of an entity relates to its affiliates, said Black-Layne.

Black-Layne said there were gaps in the accreditation policy. As a way forward, the AC proposed under the accreditation strategy to address the gaps identified by using third party evidence; prioritizing applicants from the Asia-Pacific region and private sector applicants; entities responding to request for proposals; defining and performing a coverage assessment; providing statistics on entities in the pipeline at each GCF Board meeting.

Responding to comments on prioritization, Black-Layne said that the AC went through a long process and identified statistics. “We came up with a list of entities. It is difficult to come to a consensus on the prioritization of entities,” said Black-Layne.

Jorge Ferrer Rodriguez (Cuba) said the issue was very well connected with direct access and country ownership. He said that the policy gaps identified should be addressed and that the (proposed) accreditation strategy has contradictions. “It is a fact that most entities accredited are international. There are differences between accrediting international and national entities. We need to fast-track developing country institutions. We need to have differentiation. This means two tracks are required. They cannot be in the same queue,” said Rodriguez.

He also added that international and national entities should not have the same accreditation fee.  He said the strategy must be geared towards solving the problem of the direct access entities. He also said that they needed to have a clear definition of a direct access entity and a regional entity.

Omar El Arini (Egypt) pointed to problems of accredited entities in signing the accreditation master agreements (AMA) and added that this matter was missing from the strategy and wanted this addressed.

Ayman Shashly (Saudi Arabia) said that by accrediting international organisations, the Board now needed to solve the problem (of not accrediting sufficient national direct access entities). He supported Rodriguez that there needs to be a separate track to accredit national entities. The issue, he said boiled down to trust (in the national entities).

Guo Wensong (China) said the essence of the Fund was direct access, but that there were conditions imposed. Of the 33 institutions accredited (as of the 12th Board meeting), most of them are multilateral development banks (MDBs). He added that equal opportunities should be given to all entities.

Tosi Mpanu Mpanu (Democratic Republic of Congo) said the principles of  balance and diversity should focus on direct access versus international access entities and their accreditation type/size. He also said that in the process of prioritization, direct access entities and private entities in developing countries, particularly in LDCs, Small Island Developing States (SIDS) and Africa should be given the first priority. He said that there should be a three to five year vision of the size and composition of the pool of accredited entities as a basis for prioritization. He also added that direct access entities should receive the required support to be accredited under the medium and/or large size categories and to upgrade their risk levels.

Mpanu-Mpanu also expressed concern that it may take 2 to 4.5 years to accredit entities in the pipeline and called on the AC to propose the necessary actions.

Colin Young (Belize) said that the Board needed to know what the gaps in the accreditation policy before they got into strategy, and said that accreditation strategy was key to country ownership. He said it was about getting capacity within developing countries to implement their projects and supported the prioritization of regional and national entities.

Raul Delgado (Mexico) said he shared the objective of striking diversity and balance on the type of entities to be accredited but recognized that the Secretariat was facing a challenge in managing a very large number of entities.

Cyril Rosseau (France) said it was obvious that the document needed work and there was a need for an action plan to address the gaps and amend the strategy accordingly. He stressed the importance of transparency as regards entities applying for accreditation in the pipeline.

Andrea Ledward (UK) said the strategy document offered a good set of recommendations. She suggested that local direct access entities must be prioritized since they would help assess the value add of a project. She also suggested that the Fund needs to keep track of the monitoring costs so that it had the right shape and size of the accredited entities, while ensuring efficiency.

(Edited by Meena Raman)

UNFCCC / Green Climate Fund / 14th GCF Board meeting
12 October - 14 October 2016, Songdo, Incheon, Republic of Korea
by Indrajit Bose
Songdo, 26 October 2016