Green Climate Fund (GCF) Sabin Basnyat Senior Energy Efficiency Specialist/ Transport Lead April 2, 2019
Introduction to G CF GCF is a global fund created to support the efforts of developing countries to respond to the challenge of climate change. GCF was set up in 2010 by the 194 countries who are parties to Country driven the UNFCCC , as part of the Convention’s financial mechanism. The Fund seeks to promote a paradigm shift to low ‐ emission Risk Climate appetite impact and climate ‐ resilient development , taking into account the to unlock focus ideas needs of nations particularly vulnerable to climate change impacts. We have a special focus on LDCs, SIDS, and African states Paradigm Public+ (min. 50% of overall GCF adaptation funding). shift private GCF’s activities are aligned with the priorities of developing countries through the principle of country ownership. A key innovation is to use public investment to stimulate private finance through the Fund’s dedicated Private Sector Facility .
G CF ’s Accreditation F ramework GCF works through a network of Accredited Entities (AEs) to channel its resources for projects and programs. AEs comprise private and public, non ‐ governmental, sub ‐ national, national, regional or international entities. Accreditation is a fit ‐ for ‐ purpose due diligence process ensuring our partners share the same objectives as GCF, and that they have extensive experience and a strong financial and managerial infrastructure. Mandate & track record Project size Alignment with GCF’s objectives Micro (<USD 10M) At least three years of operations Small (USD 10 ‐ 50 M) Medium (USD 50 ‐ 250M) F iduciary functions Large (>USD 250M) Basic E nvironmental & social safeguards Specialized A/I ‐ 1 (potential high impact) • Project management B/I ‐ 2 (medium impact) • Grant award • On ‐ lending/blending (loans, equity, guarantees) C/I ‐ 3 (minimal or no impact)
Building Global Partnerships A Diverse Network China Direct Access of Partners 84 accredited Private Sector entities International Access
What kind of support GCF provides? • Readiness funding • Project preparation facility (PPF) • Funding proposals (FP) • Request for Proposals (RfP) • Simplified Approval Process (SAP)
Holistic Integrated Mobility Planning What do we look for? (HIMP) Additionality of Strong Climate 8 Results Areas Compliance with GCF Funding Rationale GCF Policies Climate Impact of Fiduciary standards Why GCF? Risk Management Projects must crowd ‐ in investment is key Energy Scientific evidence to Transport ESS additional financing on M&E Criteria provided top of GCF Gender Policy Legal Standards Buildings, Cities, Ecosystems Industries Country Driven Six Investment Completeness of Approach Criteria documentation Livelihoods of Health, food 1. Impact Potential people & comm. and water Alignment with NDCs Feasibility study security 2. Paradigm Shift Potential Early country (NDA) Financial Model 3. Sustainable development Project Timetable engagement potential Gender Analysis No ‐ objection letter 4. Recipient needs Environmental studies 5. Country ownership Forests and Infrastructure No ‐ objection letter land use 6. Efficiency & effectiveness
Readiness funding cap per country per year USD 1 million • NDA strengthening • Support for direct access entities (DAE) • Country support for • Strategic frameworks, including country programmes, • concept notes, • pre ‐ feasibility studies USD 3 million cap per country (not per year) • National adaptation plans (NAP) and / or other adaptation planning processes
Project preparation funding $1.5M cap per request • Support for project/ programme development • Especially micro ‐ to ‐ small size projects • Accredited entities submit requests • Especially direct access • No ‐ objection letter from NDA/focal point • Executive director approves requests
What is Project Preparation Facility (PPF) To support project and programme preparation, especially for • micro ‐ to ‐ small category projects All accredited entities (AEs) , especially direct accredited • entities, can request support from the PPF • Each request will be subject to a cap of USD 1.5 million • Proposals developed with PPF resources should be submitted to the Board within two years after the PPF request was approved
What are the eligible PPF activities? 1. Pre ‐ feasibility and feasibility studies, as well as project design; 2. Environmental, social and gender studies; 3. Risk assessments; 4. Identification of programme/project ‐ level indicators; 5. Pre ‐ contract services, including the revision of tender documents; 6. Advisory services and/or other services to financially structure a proposed activity; and 7. Other project preparation activities, where necessary, provided that sufficient justification is available.
Examples of Transport PPF Bhutan Indonesia Entities World Bank/ Green Technology PTSMI Center Korea Title Green Transport System Intregrated BRT Components Electric Bus fleet Hybrid/ PHEV/ EV buses Route Infrastructure Route Infrastructure Non Motorized transport Non motorized transport Smart bus system with GPS, payment, information PPF Amount $1,258,000 (GCF ‐ $788,000 ) $1,526,543 (GCF ‐ $526,311)
How is the funding proposal process
GCF ‐ ADB ‐ Green BRT Karachi Modal Shift towards 0 ‐ emission mass transit coupled innovation on technology and financing Project Description › The BRT will use 0 ‐ GHG emission biomethane hybrid buses a world first. › Produce its own biogas from cattle waste to √ cover 100% of the methane demand from BRT › Pakistan buses. › Public Procurement for Private Sector Operation Co ‐ financing ESS Climate Impact › Bulk procurement of buses to be leased to Ratio Mitigation 1 : 11 A Private operators on a full TCO basis 2.6 MtCO2e (lifetime) › Capacity building for the TransKarachi ( Main Sources (USD mil) GCF financing going towards bus operator for the Province of Singh) on; • Incremental cost of the GCF Loan 37.2 › Operation and Maintenance buses • Installation of Bio ‐ gas › Bus Control system – Hub management GCF Grant 11.8 facility system • Climate proofing the road • Last mile connectivity › Bus routing systems and information ADB 442 management Govt of Pakistan 92.5 › Smart fare collection system (Grants) › Bus station management system Total 583.5
Thank You If any questions please email: sbasnyat@gcfund.org
Investment Framework Criteria • Contribution to the shift to low ‐ emission sustainable development Impact pathways potential • Contribution to increased climate ‐ resilient sustainable development • Innovation • Contribution to the creation or strengthening of knowledge, collective learning processes, or institutions Paradigm shift • Sustainability of outcomes and results • Potential for strengthened regulatory frameworks and policies • Potential for expanding the proposal’s impact • Expected positive environmental impacts Sustainable • Expected positive social and health impacts development • Expected positive economic impacts potential • Potential for reduced gender inequalities
Investment Framework Criteria •Scale and intensity of exposure of people, and social/economic assets to risks Needs of the •Comparably high vulnerability of the beneficiary groups •Level of social and economic development of the country and target population recipient •Opportunities for the GCF to overcome specific barriers to financing •Opportunities to strengthen institutional capacity in relevant institutions •Objectives are in line with priorities in the country’s national climate strategy Country •Experience and track record of the Accredited Entity or executing entities in key elements of the proposed activity ownership •Stakeholder consultations and engagement •Financial adequacy and appropriateness of concessionality Efficiency •Cost ‐ effectiveness (mitigation only) and •Potential to catalyse and/or leverage investment (mitigation only) •Expected economic/financial internal rate of return Financial viability in the long run effectiveness •Application of best practices and degree of innovation
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