1. Green Climate Fund

2. Imprint Published by: Contact adelphi Caspar-Theyss-Strasse 14a
Contact
adelphi
Caspar-Theyss-Strasse 14a
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Deutsche Gesellschaft für
Internationale Zusammenarbeit (GIZ) GmbH
CF Ready Program
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53175 Bonn/Germany T F E I
Dennis Tänzler T
Dorit Lehr E T
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Although the authors take all possible care to ensure the correctness of published information, no warranty can be accepted regarding the correctness, accuracy, reliability and completeness of the content of this information.
August 2014

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4. Content
Objectives and structure
Key design elements
Resources allocation
Initial results management framework
Investment framework
Access and country ownership
Project approval process
Readiness support
Private Sector Facility

5. Objectives and structure

6. Green Climate Fund (GCF) - History
Milestones :
2009: Copenhagen Accord, COP 15: "Copenhagen Green Climate Fund” mentioned
2010: GCF formally established by COP 16 in Cancun
2011: GCF Governing Instrument adopted in Durban, during COP 17: “The Fund will be designated as an operating entity of the financial mechanism of the convention […] and will be accountable to and function under the guidance of the COP.”
2012: Decision for Songdo, Republic of Korea, as the host for GCF Secretariat
2013: Hela Cheikhrouhou selected by the Board to become the Fund's Executive Director
: Decisions to make the GCF operational during various GCF board meetings
Source: GCF 2014
Climate Funds Update

7. Objectives and structure
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0.50
Green Climate Fund (GCF) aims to promote a “paradigm shift towards low-emission and climate-resilient development pathways by providing support to developing countries to limit or reduce their greenhouse gas emissions and to adapt to the impacts of climate change.” (GCF)
More details on the GCF:
The Green Climate Fund was designated as an operating entity of the financial mechanism of the UNFCCC. It was created in 2010 at COP-16 in Cancun.
The Fund will contribute to the achievement of the ultimate objective of the UNFCCC.
The Fund will play a key role in channeling new, additional, adequate and predictable financial resources to developing countries and will catalyze climate finance, both public and private, and at the international and national levels.
The Fund will pursue a country-driven approach and promote and strengthen engagement at the country level through effective involvement of relevant institutions and stakeholders.
The Fund will strive to maximize the impact of its funding for adaptation and mitigation, and seek a balance between the two, while promoting environmental, social, economic and development co-benefits and taking a gender-sensitive approach.
The Fund will provide simplified and improved access to funding, including direct access, basing its activities on a country-driven approach and will encourage the involvement of relevant stakeholders, including vulnerable groups and addressing gender aspects.
The Fund is governed and supervised by a Board that will have full responsibility for funding decisions and that receives the guidance of the COP. The Fund established the Secretariat. The Fund has the Trustee with administrative competence to manage the financial assets of the Fund.
The Fund is located in Songdo, South Korea
The World Bank is the Fund’s Interim Trustee
Source: GCF Governing Instrument (
For further information see:
US$ 9 MILLION*
* allocated for administrative functions. Resource mobilisation process is underway.
Source: GCF 2014
Climate Funds Update

8. Why is it different? 1. Scale and Impact 2. Governance 3. Access
4. Allocation
Make a significant and ambitious contribution to global efforts to combat climate change
Promote a paradigm shift and help developing countries transform their economies and put them on a low emission and climate-resilient pathway
Country -driven and in line with countries priorities
Expected to become the main global fund for climate finance
Board comprised of an equal number of members from developed countries and developing countries
Dedicated seats for SIDS and LDCs
Recipient countries will be able to utilize direct access or access through international and regional intermediaries and implementing entities accredited by the Fund
Minimum floor for adaptation financing to SIDS, LDCs
The allocation of resources will be balanced between adaptation and mitigation activities
The allocation of resources will be based on results
Source: Xing Fu-Bertaux, GIZ 2014
GCF 2014

9. Resource mobilization underway!
Current status update
Confirmed the completion of eight essential requirements to receive, manage and disburse finance (as listed in Annex XXII of the decision B.05/17):
Structure, fiduciary principles, environmental and social safeguards
Investment and financial risk management framework
Initial results areas and results management framework
Procedures for accrediting implementing entities and intermediaries
Policies and procedures for the allocation of Fund resources
Proposal approval process, including criteria for programme and project funding
Initial modalities for the operation of the Fund’s mitigation and adaptation windows and the Private Sector Facility
Three accountability mechanisms
Resource mobilization underway!
Source: GCF decision B.05/17

10. Key design elements

11. Initial results management framework
Key design elements
Resources allocation
Initial results management framework
Investment framework
Access and country ownership
Project approval process
Readiness support
Private Sector Facility
Source: GCF 2014

12. Resources allocation

13. Resources allocation
50:50 balance between mitigation and adaptation over time;
a floor of 50% of the adaptation allocation for particularly vulnerable countries, including least developed countries (LDCs), small island developed States (SIDS) and African States;
geographic balance and a reasonable and a reasonable and fair allocation across a broad range of countries, while maximizing the scale and transformational impact of the mitigation and adaptation activities of the Fund;
maximize engagement with the private sector, incl. through a significant allocation to the Private Sector Facility;
sufficient resources should be provided for readiness and preparatory support;
all allocation parameters should be determined in grant equivalents;
…to be reviewed no later than 2 years from the start of allocation of resources.
Source: GCF decision B.06/06

14. Initial results management framework

15. Initial results areas Mitigation Afforestation / REDD+
Energy efficiency of buildings and appliances;
Sustainable forest management to support mitigation and adaptation including afforestation and reduction of forest degradation;
Energy efficiency of industrial processes;
Low-emission transport;
REDD+ implementation;
Low-emission energy access;
Small-, medium- and large-scale low- emission power generation;
Cross-cutting
Design and planning of cities to support mitigation and adaptation;
Adaptation
Sustainable land use management to support mitigation and adaptation;
Adaptation activities to reduce climate- related vulnerabilities;
Readiness and capacity building for adaptation and mitigation activities;
Selected flagship activities cutting across adaptation result areas;
Supporting the coordination of public goods such as “knowledge hubs”.
Scaling up of effective community-based adaptation (CBA) actions;
Source: GCF decision B. 05/03

16. Initial results management framework
Levels of logic model
Performance measured at the paradigm shift and impact levels refers to the aggregate project/programme-based results of the Fund
Inputs, activities, and outputs will be defined for each project/programme on a case-by-case basis
Results management framework should take a gender-sensitive approach and that the results should be disaggregated by gender if relevant
Further decision will be taken at the next Board meeting regarding:
approach to gender, indicators on mitigation and adaptation,
methodologies, data sources, frequency, and responsibilities for reporting
logic model for REDD+
Paradigm shift
Fund level impacts
Project / programme outcomes
Project / programme outputs
Activities
Inputs
Source: GCF decision B. 07/04
See GCF decision B. 05/03, Annex II for more performance indicators

17. Initial results management framework (mitigation)
Levels of logic model
Paradigm shift
Shift to low-emission sustainable development pathways
Reduced emissions:
through increased low-emission energy access and generation
through increased access to low-emission transport
from buildings, cities, industries and appliances
from land use, deforestation, forest degradation, sustainable forest management and conservation
Fund level impacts
Strengthened institutional and regulatory systems for low-emission planning and development
Increased number of large low-emission power suppliers
Lower energy intensity of buildings, cities and industries
Increased use of low-carbon transport
Improved management of land or forest areas
Project / programme outcomes
Source: GCF decision B. 07/04
See GCF decision B. 05/03, Annex II for more performance indicators

18. Initial results management framework (adaptation)
Levels of logic model
Paradigm shift
Increased climate-resilient sustainable development
Increased resilience and enhanced livelihoods of the most vulnerable people, communities, and regions
Increased resilience of health, and food and water security
Increased resilience of infrastructure and the built environment
Improved resilience of ecosystems and ecosystem services
Fund level impacts
Strengthened institutional and regulatory systems for climate-responsive planning and development
Increased use of climate information in decision-making
Strengthened adaptive capacity and reduced exposure to climate risks
Strengthened awareness of climate threats and risk reductions
Project / programme outcomes
Source: GCF decision B. 07/04
See GCF decision B. 05/03, Annex II for more performance indicators

19. Investment framework

20. Investment guidelines
Investment framework
Investment policies
Portfolio targets
Investment guidelines
Covers all grants, concessional loans and other financial instruments extended by the Fund
Covers initial allocation parameters and targets in line with resources allocation
Covers assessment criteria and sub- criteria
Portfolio targets are as per the Resource Allocation (see slide 11 above)
Source: GCF decision B.07/06, Annex XIV

21. Investment policies
Funding projects and programmes demonstrating maximum potential for a paradigm shift towards low-carbon and climate-resilient sustainable development, consistent with initial results areas and management framework and country-driven approach
Accounted for in grant-equivalent terms based on a standard methodology
Minimum concessional funding (i.e. a grant-equivalent subsidy element) necessary to make a project or programme viable.
Intermediaries may blend the financing received with their own resources in order to increase the level of concessionality of the financing
No “crowding out” of potential financing from other public and private sources
Only revenue-generating activities that are intrinsically sound from a financial point of view will be supported through loans
Source: GCF decision B.07/06, Annex XIV

22. Investment guidelines
Initial investment guidelines will be activity-based and will be composed of the following criteria:
Impact potential
Paradigm shift potential
Sustainable development potential
Needs of the recipient
Country ownership
Efficiency and effectiveness
Impact potential - potential of the programme/project to contribute to the achievement of the Fund’s objectives and result areas
Paradigm shift potential - degree to which the proposed activity can catalyse impact beyond a one-off project or programme investment
Sustainable development potential - environmental co-benefits, social co-benefits, economic co-benefits, gender- sensitive development impact
Needs of the recipient - vulnerability and financing needs of the beneficiary country and population
Country ownership - beneficiary country ownership of and capacity to implement a funded project or programme (policies, climate strategies and institutions)
Efficiency and effectiveness - economic and, if appropriate, financial soundness of the programme/project
See more details on criteria and sub-criteria in Table 2 of the GCF Investment Framework:
7th/GCF_B07_06_Investment_Framework140509__fin_ pdf
Source: GCF decision B.07/06, Annex XIV

23. Access and country ownership

24. Access and country ownership
National Designated Authority (NDA)
Designated institution with the mandate to officially communicate with the Fund. Countries must decide what arrangements work best for them.
Need to involve the Ministry of Finance as countries can also take loans from the GCF with implications for sovereign debt
Focal Point
Designated individual or an office in the national government that has the mandate to officially communicate with the Fund.
Countries may nominate a Focal point instead of an NDA. This may be interim arrangement for countries who wish to take time to agree the optimal NDA arrangement.
Implementing Entities (IE)
Countries can work through multiple entities (international, regional, national)
The NDA nominates or endorses the IE, through which a country will access the GCF. IE must be accredited by the GCF
The Board is developing further guidance; arrangements are initial and may evolve
There is no hard deadline to nominate an NDA or Focal point (the sooner the better)
43 initial NDA or focal point designations as of August 2014
Source: GCF/B.06/07
Update on the Green Climate Fund’s Readiness and Preparatory Support Programme, July 2014
(accessed )

25. Role of National Designated Authority
Acts as the focal point for the Fund communication
Recommends to the Board funding proposals in the context of national climate change strategies and plans, including through consultation processes
Facilitates the communication of nominations of entities to the Fund
Seeks to ensure consistency of funding proposals from national, subnational, regional and international intermediaries and implementing entities with national plans and strategies
Implement the no‐objection procedure
Can develop a strategic country work program on a periodic basis, that identifies priorities for the GCF and preferred implementing entities (optional)
Source: GCF Decision B.04/05
GCF Decision B.07/03
Update on the Green Climate Fund’s Readiness and Preparatory Support Programme, July 2014

26. Accreditation process for national, regional and international implementing entities – fit-to-purpose approach
Stage I: No-objection and readiness
- determining whether applicant entities show sufficient preparedness and institutional capabilities to progress to stage II in the accreditation process of the Fund
Stage II: Accreditation review and decision
- assessing whether applicant entities meet the Fund’s applicable initial basic fiduciary standards and applicable initial specialized fiduciary standards; and have the capacity to manage relevant environmental and social risks in line with the Fund’s interim ESS and scaled risk-based approach.
- making a decision on whether the applicant entity can be granted accreditation and move on to stage III for final validation and legal arrangements
Stage III: Final arrangements
- concluding the process through the validation and finalization of formal arrangements between the applicant entity
Full accreditation cycle should be completed within six months and reviewed after five years
Source: GCF decision B07/02, Annex I

27. Fiduciary standards, environmental and social safeguards
Fiduciary principles and standards
Basic fiduciary standards related to:
(a) Key administrative and financial capacities
(b) Transparency and accountability
Specialized fiduciary standards related to:
(a) Project management
(b) Grant award and / or funding allocation mechanisms
(c) On-lending and / or blending
Environmental and social safeguards (ESS)
On an interim basis, the Performance Standards of the International Finance Corporations will be adopted. ESS will be completes within a period of 3 years after the Fund becomes operational
IFC Performance Standards:
Assessment and management of environmental and social risk and impacts
Labor and working conditions
Resource efficiency and pollution prevention
Community health, safety and security
Land acquisition and involuntary resettlement
Biodiversity conservation and sustainable management of living natural resources
Indigenous people
Cultural heritage
Source: GCF decision B07/02, Annexes I, II

28. Project approval process

29. Project approval process
Preparation and
Submission
of Funding Proposal
Country / Regional Work
Program (optional)*
Generation
of Funding Proposals
Concept Development (optional)
Analysis and recommendations to the Board
Board Decision
Submission of country work programs
Compilation of country work programs
Call for funding proposals or spontaneous funding proposal submissions
Concept note submission
Feedback on the concept
No-objection
Funding proposal submission to the Secretariat
Analysis and recommendation to the Board
Board decision:
Approval
Conditional approval
Rejection
1 month
months
3 months
NDA / Focal point
Secretariat
Secretariat
IE / EE / Inter-mediary
Secretariat
NDA / Focal point
IE /
Inter-mediary
Secretariat
Board
NDA / Focal point
Technical advisory panel
Secretariat
Source: GCF decision B 07/03
* not a part of the initial proposal approval process

30. Readiness support

31. Readiness and preparatory support by the GCF
Four initial activities:
Readiness is a strategic priority: it should help to maximize effectiveness and reduce risks
It reduces possibilities that funding is not well suited to country needs, increasing the likelihood of effectiveness
US$ 30 million were provided by Germany and Korea for early readiness efforts
Detailed work programme is being developed and to be approved by the Board
Source: Update on the Green Climate Fund’s Readiness and Preparatory Support Programme, July 2014

32. Readiness and preparatory support by the GCF
43 NDA or focal point designations submitted in August 2014  countries may request readiness support to strengthen these arrangements
Reflected in the investment framework: “Sufficient support for readiness and preparatory activities”
Reflected in project approval process: readiness support upon request for country work programme development
Reflected in the accreditation process: “readiness and preparatory support in the context of direct access and the different capacities and capabilities of countries and institutions to enhance country ownership, with a view to facilitating capacity-building”
Source: GCF update on designations (accessed )
GCF 7th Board Meeting Decisions: B.07/06, B.07/03, B.07/02

33. Readiness and preparatory support by the GCF
Readiness scoping process
Source: Update on the Green Climate Fund’s Readiness and Preparatory Support Programme, July 2014

34. Private Sector Facility

35. Private Sector Facility (PSF)
… PSF implementation details to be decided at the next Board meeting
Private Sector Facility is an integral component of the Fund that will evolve over time  will be reviewed no later than 3 years after initial resource mobilization
It is reflected in the initial investment framework: “Maximize fund-wide engagement with the private sector, including through significant allocation to the PSF”
PSF implementation details will be decided at the eighth Board meeting, based on the recommendations by the Private Sector Advisory Group, with a focus on:
modalities to promote participation of private sector actors in developing countries, in particular local actors in Small Island Developing States, Least Developed Countries and Africa, and with a special emphasis on adaptation;
modalities and instruments to mobilize private resources at scale including through special financing vehicles or instruments, including risk mitigation instruments
Source: GCF decision B.07/08

36. Thank you for your attention!!!