Green Climate Fund Overview & Accreditation Process: Ministry Discussion 30 March 2017 Page 1
Session 1: Green Climate Fund Overview Page 2
Green Climate Fund (GCF): Overview • GCF mission: • to support a paradigm shift in the global response to climate change • to mobilize funding at scale • to invest in low-emission and climate-resilient development • The Fund pays particular attention to the needs of societies that are highly vulnerable to the effects of climate change, in particular Least Developed Countries (LDCs), Small Island Developing States (SIDS), and African States. Page 3
GCF Investment Areas Page 4
GCF Investment Criteria for Projects & Programmes (D.1-D.3) D.1: Climate Impact Potential – climate mitigation and/or adaptation impact • Specific values or best estimate of CO 2eq reduction • Total # of direct/indirect beneficiaries D.2: Paradigm shift potential – to catalyze impact beyond one-off investment • Estimates and/or details about scale-up and replication • Potential for knowledge & learning • Contribution to creation of enabling environ ment D.3: Sustainable development potential – to provide wider development, economic & social co-benefits • # of jobs created • Govt budget deficits reduced • Improved access to education, health & safety, air quality, gender sensitive development et c Page 5
GCF Investment Criteria for Projects & Programmes (D.4-D.6) D.4: Needs of recipient – vulnerability to climate change & financing needs of recipients . • Level of exposure to climate risks for beneficiary country & groups • Fiscal or balance payment gap that prevents country from addressing needs • Needs for strengthening institutions & implementation capacity D.5: Country ownership – led by country not outside donors, interests • Alignment with national strategies, priorities in mitigation or adaptation plans • Roll for local developers, partners, service providers, etc D.6: Effectiveness and efficiency – economic & financial soundness of proposed activities • Costs per tCO 2eq • Co-financing ratio (total amount of Fund’s investment as % of project • Economic financial rate of return, etc . Page 6
Readiness Programme • Funding programme to enhance country ownership and access to the GCF • Resources: Strengthening the institutional capacities of NDAs or focal points and direct access entities to efficiently engage with the Fund. • All developing countries can access the Readiness Programme • The Readiness Programme provides: Ø Up to USD 1 million per country per year. Of this amount, NDAs or focal points may request up to USD 300,000 per year to help establish or strengthen a NDA or focal point to deliver on the Fund’s requirements. Ø Up to USD 3 million per country for the formulation of national adaptation plans and/or other adaptation planning processes. (Nepal NAP proposal approved in November 2017) Page 7
Readiness Programme Funding Areas 1. Establishing and strengthening national designated authorities or focal points 2. Strategic frameworks, including the preparation of country programmes 3. Support for accreditation and accredited direct access entities 4. Formulation of national adaptation plans and/or other adaptation planning processes Page 8
GCF Total Funding Page 9
Approved Projects as of March 2017 Page 10
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Access Modalities for GCF Funding Page 14
GCF Accreditation • GCF provides funds through a wide range of institutions to finance projects and programmes. • To access funding, institutions go through a process of “accreditation,” designed to assess whether they are capable of: i. strong financial management; ii. safeguarding funded projects and programmes against any unforeseen environmental or social harm; and iii. managing GCF's resources in line with the Fund's fiduciary standards, E&S standards, and Gender Policy Entities seeking accreditation to access GCF resources will also be assessed Page 15
Accredited Entities • Accredited Entities have different characteristics: • private or public • non-governmental • sub-national • national, regional or international • Must meet the standards of the GCF • AEs carry out a range of activities, including: • Development of funding proposals • Management and monitoring of funded projects and programmes Page 16
Role of Accredited Entities • Once accredited AEs bear the full responsibility for the overall management of the projects and programmes approved by the GCF Board Prepare projects Respect country ownership Project appraisal, structuring, supervision and evaluation Reporting Page 17
Implementation Functions Implementation Functions: • Management and delivery of project/programme activities to achieve specified results, • Responsible for the project cycle management services with due diligence management of a project throughout the entire project cycle; • Accountable to donors for the cost effective use of donor funds in the implementation of project activities; and • Compensated for their services in management of the project cycle through an agency/entity fee Page 18
Execution Functions Execution Functions: • Responsibility for specific project/programme activities and acceptance of accountability for results; • Accountable to Implementing Entity (IE) and responsible for the day-to-day activities of the project; • Responsible for following all fiduciary policies and procedures of the IE as well as national policies and procedures of the beneficiary country; • Receive Project Management Cost of 5-10% to finance the execution functions of an Executing Partner/Executing Entity. Page 19
Enhanced Direct Access (EDA) Background: • Objective: To strengthen country ownership by allowing an effective operationalization of modalities with potential to enhance access by direct access entities from both public and private sector. • A pilot program ($200m for 10 pilots) • At least 4 pilots to be implemented in SIDS, LDCs and African States • An access modality for Direct Access (accredited) entities • Devolves decision making on specific activities to the direct access entity • Existing modalities require approval through the GCF board • EDA would allow for a grant process where approval lies with implementing entity • Identification, screening, assessment and selection is made at regional, national, subnational level Page 20
EDA Proposed Mechanism • Financial instruments available include grants, loans, equity and guarantees • EDA promotes a consultative multi-stakeholder approach at all levels Ø Identification and design of activities : ‘inclusion of a wide range of stakeholders including local actors, especially...vulnerable communities and those representing gender aspects, public institutions, local bodies, NGOs, CSOs SMEs” Ø Review and approval of activities : the decision making body should include civil society, private sector, and other relevant stakeholders Ø Oversight and accountability : ‘countries participating in the EDA are required to exercise oversight of the activities to ensure transparency…and should include relevant stakeholders Ø Activities Funded: Both adaptation and mitigation activities contributing to one or more of the GCF’s result areas. A significant share of small-scale activities should directly support communities or SMEs through, for example, small-scale grants or extended lines of credit. Page 21
GCF Accreditation Process Page 22
GCF Accreditation Application Stages Stage I Stage II Stage II Application (Step 2) (Step 1) 180+ received questions Board decision 260+ questions For National Entity – NDA Nomination Required to Apply Page 23
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