This week, the Green Climate Fund (GCF) Board convenes in Zambia for its final meeting of the year. Zambia is a milestone meeting for the GCF Board, as a pipeline of projects is expected to emerge.
After initially accrediting seven institutions earlier this year, the Board has now accredited 20 entities (including five national institutions) that the GCF will channel money through, and this is this first time it is faced with approving proposals for specific activities. Are these proposals ambitious enough? Do they contribute to a paradigm shift in developing countries? Or do they fall short?
These questions, among others, are some of the most important that the Board will face this week. Four issues in particular will be important to prioritize:
1) Approve high-quality proposals that indicate the kind of paradigm-shifting activities that the GCF should support.
The Board will have eight project proposals to consider at the meeting, covering a range of adaptation and mitigation activities, from climate-resilient infrastructure in Bangladesh to distributed renewable energy in Rwanda and Kenya. It is encouraging to see a strong emphasis on adaptation (at least six of the proposals have an adaptation dimension to them) and a focus on energy efficiency and energy access in mitigation. The Board should consider each of these proposals individually to determine how innovative they are, how well they contribute to a paradigm shift, what added value the GCF brings by financing them, whether relevant standards and safeguards have been considered, and whether the activities clearly articulate a path for success. For example, in some proposals it is unclear to what extent affected stakeholders have been consulted in the design stages of the project. Others articulate innovative approaches, but need further detail on how financial structures will be operationalized, and who will be responsible for certification, monitoring and more. The Board should explore the strengths and weaknesses of each proposal and focus on approving high quality projects in order to set a good precedent from the outset.
2) Strengthen national institutions to access climate finance.
The GCF was founded on principles of country ownership and direct access. This means that strengthening national institutions, both in terms of their ability to access finance and their capacities to plan and implement transformational activities, must be a priority for the Fund. However, of the 20 institutions that the GCF can channel funds through, only five are national developing country institutions. The GCF needs to achieve a balance of working with national institutions and international or multilateral institutions. Supporting more effective readiness activities is critical to achieving this balance. National implementing entities encounter significant hurdles in meeting fiduciary standards, environmental and social standards, and gender policy considerations. The lack of coherent and coordinated policy frameworks that can guide the development of transformational pipelines is also a challenge that readiness efforts need to address.
In Zambia, it’s important that the Board:
Explicitly address the question of balance in the accreditation strategy and connect this to improvements to the readiness programm;
Request the Secretariat to work closely and coordinate with other readiness partners so that it is adding value to national readiness efforts, which will require increased Secretariat capacity; and
Increase support for the readiness programme by $14 million, recognizing the need to disburse readiness funding more efficiently than the trend this year (only two of 17 committed requests have been disbursed).
3) Ensure transparency and participation in approving proposals and accreditation applications.
The GCF has recently begun providing more access to information, but accreditation and proposal approval processes still need improvement. For example, information pertaining to accreditation applications and proposals are only released two or three weeks before a Board decision, which undermines meaningful stakeholder engagement and informed decision-making. In order to improve current processes, the GCF should:
Aim to be the “gold standard” for transparency and stakeholder engagement in accreditation and proposal processes;
Disclose information about accreditation applicants at early stages so that the Secretariat can conduct appropriate consultations and due diligence. This includes informing the public when a potential entity applies, formalizing a practice of disclosing which applicants are under consideration at a given Board meeting, and having public comment periods for applications; and
Make proposals and concept notes publicly available with comment periods before the GCF conducts its internal due diligence. This practice is consistent with the Adaptation Fund. In addition, due diligence assessments should also be available for public review.
4) Establish a clear process for developing a Strategic Plan for the GCF.
The GCF needs a strategy to effectively spend the $10 billion that countries have committed to it. With so many institutions channeling climate finance, the GCF has an opportunity to identify what is unique about its role, and how it can improve or add to what countries are already doing. For example, achieving a paradigm shift in developing countries requires more than simply identifying a good climate project or programme. It requires understanding the development, investment and climate context of a country, aggregating and prioritizing activities with potential, and identifying the financial arrangements that will maximize impact. The GCF needs to decide the situations in which it will play a catalytic role in financing, where it can invest in shifting behavior, and where complementary actions will make the difference in achieving transformation. While this requires further assessment on national and regional levels, the Board should, at a minimum, commit to developing a plan and establish a process to execute it between now and the next Board meeting in 2016.
The Board is also expected to consider the GCF’s monitoring and accountability policy and a final information disclosure policy, both of which are important issues that should not be given short shrift.
The Zambia Board meeting is a significant milestone before the UN climate talks in Paris. The international community is looking forward to the first batch of proposals, and for the GCF to show that it can deliver finance to developing countries. Will the proposals communicate ambition and transformation? Will the Board commit to improving readiness efforts to support national institutions? Will we see the beginnings of a paradigm shift? Or will it just be business as usual?