GCF Board seeks more efforts to strengthen quality of funding proposals

21 October 2016 (Indrajit Bose)

Delhi — The Board of the Green Climate Fund (GCF) at its 14th meeting held in Songdo, Republic of Korea called for more intensive efforts to strengthen the quality of funding proposals, “in order (for the proposals) to demonstrate greater potential to adapt to the impacts of climate change and to limit and reduce greenhouse gas (GHG) emissions,” that promote a paradigm shift.

This call was contained in a decision of the Board related to funding proposals at its recent meeting held from 12-14 October.

In the decision, the Board urged the “Secretariat, national designated authorities (NDAs) and focal points, and accredited entities to intensify efforts to strengthen the quality of funding proposals, in order to demonstrate greater potential to adapt to the impacts of climate change and/or to limit and reduce greenhouse gas emissions in the context of promoting a paradigm shift”.

In this regard, the Board also urged “direct access entities to make use of the Project Preparation Facility (of the GCF) to strengthen their proposals”.

In the decision adopted, the Board also expressed “concern regarding the number of conditional project approvals to date”.

The Board had considered and approved 10 funding proposals, subject to specific conditions.

Both developing and developed country Board members raised various concerns during the discussions, which spanned areas such as the process for simplified approvals; the review of the process for proposal approval; as well as a review of the independent technical assessment panel (iTAP).

Members were primarily concerned about the quality of projects, and voiced their concerns to institute a system to look at funding proposals seamlessly.

Several members also expressed their frustration that documents for the consideration of funding proposals arrived rather late and stressed that this should not be the case in the future. They also referred to various options in arriving at their decisions, including in deferring the consideration of a proposal.

In relation to programmatic approaches, the Board took“note of the views expressed on programmatic proposals, including those related to the need to seek a balance of national, regional and international programmatic funding proposals”.

The Board requested “the Co-Chairs to continue to consult on the programmatic approach with a view to conclude the policy guidelines for programmatic approach for consideration at the fifteenth meeting of the Board, noting that approvals on programmatic funding proposals at the fourteenth meeting of the Board do not prejudge the Board’s consideration of these policy decisions.”

The Board also requested the “Secretariat to modify the funding proposal template to accommodate the additional criteria of the enhanced direct access pilot phase” and also requested “the Secretariat to ensure that future proposals under the enhanced direct access modality meet all of the required elements of the enhanced direct access pilot and provide such evidence within the modified funding proposal template.”

The decision adopted resulted after a lengthy exchange of views in the Board. Some of the highlights of the Board exchanges are set out below.

Tosi Mpanu Mpanu (Democratic Republic of Congo) said that there was a real need to put in place a transparent process that gives sufficient time for Board members, civil society organisations (CSOs) and others to review proposals documents and submit comments. He added that accredited entities (AE) should be given adequate time and a formal channel to respond to comments, as well as to revise their proposals if necessary.

He also said that funding proposals and their assessments should be released at least 6 weeks prior to a Board decision, including 2 weeks for public comment by the Board and CSOs, 2 weeks for responses from AEs, and 2 weeks for all stakeholders to consider final documents. Mpanu Mpanu also recommended that the assessments of the funding proposals both by the iTAP and the Secretariat should be made publicly available to increase transparency and provide useful guidance to countries and project proponents. (Currently, on the iTAP assessments are posted online but not that of the Secretariat.)

He added that in the case where proposals were incomplete or required further due diligence to be properly evaluated, the Board should have the authority to defer approval. Mpanu Mpanu also said he was concerned that majority of the proposals were coming from international access entities and that there was a delay in disbursements of funds to entities after approval of the proposals.

Omar El Arini (Egypt) was unclear as to how proposals were selected for consideration and asked if the projects in the pipeline were in the “drawers of the AEs” or if the Secretariat invited the AEs to submit any proposal under preparation. He said that pipeline indicates where a Fund is going and the current pipeline appeared to discourage direct access entities from forwarding proposals (as most proposals were coming from international entities).

Jorge Ferrer-Rodriguez (Cuba) stressed that no proposal should be submitted without a no-objection letter from an NDA/focal point. He said the Board does not expect, particularly from international AEs, to receive unfinished proposals. (Ferrer was referring to a proposal from the European Bank for Reconstruction and Development (EBRD) which covered 13 countries but had no-objection letters from only 10 countries. The Board approved the proposal to only cover the countries where letters of no-objection were obtained).

Colin Young (Belize) called for strengthening country ownership in the process of forwarding proposals. He said that the projects should not be the ones that the AEs want but which the developing countries need. He also said that more time was needed to review funding proposals by Board members. Referring to the EBRD proposal, Young also said that there should be no proposals for programmatic approaches presented until the Board has agreed on a policy on the issue.

Richard Muyungi (Tanzania) said there was a need for differentiation in the consideration of the projects approval process as per the size and complexity of the projects.

Amjad Abdulla (Maldives) said that there were several policy gaps and that the GCF should learn from other existing institutions. Transparency and inclusiveness cannot be jeopardized, he stressed.

Nagmeldin Goutbi Elhassan (Sudan) said that the Board should ensure transparency and consistency and stressed that clear guidance and guidelines are required. “We need to ensure country driven-ness. If we build such systems, this will enable the Board to make informed decisions,” said Elhassan.

Henrik Harboe (Norway) called for additional options in decision-making in the consideration of funding proposals. He said options could be to propose, or reject a proposal  or even have some phased approaches to programmes.

Anton Hilber (Switzerland) said that proposals have to come to the Board a month ahead of the Board meeting; otherwise it should be considered for the following Board meeting. He also agreed that deferring the consideration of a proposal could be an option.

Lars Roth (Sweden) said concept notes of proposals being considered should be shared with the Board in certain cases for large and high-risk projects for the Board members to weigh in their input early on (rather than wait for the entire proposal to come before the Board).

Karsten Sach (Germany) said that a decent timeframe was required to consider projects. The deferring and resubmitting of funding proposals were options the Board could consider and it is not wise to have a huge set of conditions (when approving projects), he said. The lack of implementation of projects approved by the Board was a real concern.

Andrea Ledward (UK) said the review of funding proposals should consider the various stages of the approvals process to increase the number and quality of proposals coming to the Board. She added that the she was attracted to the option of the deferral of the consideration of a proposal. Ledward said she was concerned about the lack of enough direct access entities in the pipeline.

Leonardo Martinez-Diaz (US) said the Secretariat should do more of the technical vetting and if there were concerns the proposals they should not come to the Board.

He also said that there is a need to get the disclosure issue right and that the 120-day prior notice was not working yet. (He was referring to the Board’s interim information  disclosure policy where with respect to funding proposals in case of category A projects, [that comprise of activities with potential significant adverse environmental and/or social risks and/or impacts that are diverse, irreversible or unprecedented], the AE’s are required to disclose and announce to the public and, via the Secretariat, to the Board and active observers  at least120 days in advance of the AE’s or GCF’s Board decision, whichever is earlier.”

Martinez-Diaz also said that it is important that the disclosure requirement be applied to sub-activities within programmatic proposals, and added that they should move towards a creating a process where disclosure was meant to generate dialogue with civil society. He called for a better tool for transparency and suggested an online system with real time data for everyone to see the pipeline. He also said that the Board must be notified regarding the disclosure of the proposal and posting it on the website of the AE was not enough. He called for notifications of proposals to be posted on the GCF website and for the notifications to be sent to advisers to the Board members. Martinez-Diaz also called for more decision-making options in the consideration of funding proposals by the Board.

Sally Truong (Australia) also agreed on the deferral of projects for consideration as an option and to look at further defining the second level due diligence. She said that it is critical to look at the lessons learned from the Secretariat, iTAP, AE and NDAs, and added that the Secretariat should engage more with AE on what kind of projects or programmes that the Fund is seeking.

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
21 October 2016