Updates from Day 1 of the 36th GCF Board Meeting

From The Asian Peoples’ Movement on Debt and Development (APMDD)
Scan the QR code above or click here to access the full copy of CSO updates for the 36th Board Meeting of GCF.

DAY 1 – 10 July 2023

The 36th Board Meeting of the Green Climate Fund is happening from 10th to 13th July, 2023 in Songdo, South Korea. The first day of the meeting opened with the Co-chairs from the US and Pakistan welcoming new BMs and recognizing the valuable contributions of the outgoing ones. The BM from Spain also made an intervention to acknowledge how the Board is making progress in achieving gender balance, as currently there is a total of 12 women BMs attending B36, including the woman co-chair from the US.

For a complete list of the GCF Board and their alternates, see https://www.greenclimate.fund/boardroom.

The Board then proceeded to the Adoption of the B36 Agenda. While there was consensus to adopt the agenda as presented, the BM from Saudi Arabia moved to remove Agenda 9, which is about the Summary of the 2nd Consultation Meeting for GCF-2. He argued that since a summary report will eventually be presented for all the GCF-2 consultation meetings, the Board need not discuss the update at this Board Meeting. The co-chair from Pakistan then clarified that Agenda 9 is only an information document and many BMs see the value of getting regular updates and progress from the GCF-2 processes, so having the matter as a B36 agenda is a must.

BM from Denmark also raised the need to add the discussions around the Annual Portfolio Performance Reports of the Fund, especially those from years 2019-2021. The co-chair from Pakistan argued that adding the item at B36 would entail huge paperwork preparation from the Secretariat, which will be very difficult given the amount of time available. He then suggested that the matter be tabled at the next meeting, to which the BM from Denmark agreed.

After resolving the issues raised, the Board then moved to adopt the agenda, and the Report of the previous Board Meeting (B35) and the Board decisions made in between BMs, were then noted.

Another agenda item discussed extensively on the first day was Agenda 16, the Update of the Strategic Plan (USP) for the GCF 2024-2027. It can be recalled that from the previous Board Meetings, many BMs expressed the need to resolve several issues that are crucial for the USP. These include issues around Fund accessibility, adequate budget allocation for adaptation projects, leveraging private sector finance and other issues raised by the Independent Evaluation Unit (IEU) assessment reports. As a response, the co-chairs initiated several informal meetings to further discuss the said issues and finalize the USP in time for GCF-2.

At this Board Meeting, the latest version of the USP circulated on the evening of July 9th was considered. The co-chair from the US shared that the Board and the Secretariat worked extensively to revise the document and incorporate as much as possible the points raised by each constituency, to which many BMs were happy about. While the feedback from the room was generally positive, some BMs have also noted a number of priority areas they believe the GCF should advance in the coming months.

Developed country BMs focused on the GCF’s potential to become a major player in the climate finance architecture and its potential role in “greening” the financial system. The BMs from Sweden and Denmark believe the GCF should evolve to compete with other institutions in the financial ecosystem and that the Fund should be the “fund of choice” for innovative climate projects. This was echoed by the BM from Japan, who raised how the Fund should further incorporate innovation in its programs and projects, and how this can be achieved by leveraging private sector finance. The BM from France added that given the urgent need to mobilize enough climate finance, the Fund should also be open to expand its donor base and ensure that there is coherence and complementarity with the financial mechanisms of the major financial players, like the World Bank and other multilateral development banks.

BMs from developing countries on the other hand raised issues around the need for the GCF to step up its programming capacity and targets. BMs from Egypt, South Africa and Gabon believe the urgency and scale of actions needed to address mitigation and adaptation has evolved tremendously, yet the targets set under the USP remain the same. As a way forward, they urged the Board to come up with concrete action plans based on the increasing needs of developing countries and make sure the goals set in the USP are met. The BM from China also reminded the Board how the GCF serves the COP and the Paris Agreement, and therefore its programmes and operations must safeguard the provisions in the UNFCCC, including the principle of CBDR. He added that ambitious climate actions set in the USP must be met by ambitious climate financing from developed countries and furthered that all developing countries are eligible to access GCF resources, hence no differentiation or prejudice must be given against any other developing country.

Erika Lennon, the Active Observer from the developed country CSOs also expressed the civil society organizations’ take on the USP. The CSOs believe the USP could have been stronger and more ambitious if it was explicitly centered in human rights, including the rights of Indigenous Peoples, gender equality, and rights-based climate action. While the improvement on accessibility as a priority is welcomed, the CSOs argued that it must not only lead to more direct access entities and approved projects for direct access entities, but also to a greater percentage of the funding going to direct access projects. The CSOs also reiterated that all the Strategic Plans mentioned must be accompanied by an ambitious second Replenishment.

The Board also discussed the 2022 Audited Financial Statements, to which the co-chair admitted that relevant documents for this item were circulated late. It can be recalled that under the GCF Rules of Procedure, Board documents should be shared to the members of the Board, their alternates and to observers at least 21-days prior to a Board Meeting. But since not all financial statements of some Accredited Entities (AEs) have been made available, the circulation of the documents had been delayed. The co-chair then proposed to move the decision on this matter in between Board Meetings (BBM) and that any questions can be noted and discussed at this meeting.

Having been able to look at the said documents, the BM from Saudi Arabia raised several questions to the Secretariat, which included a clarification on the earmarking of contributions and the possibility of granting refund to contributors should there be no Funding Proposals accepted under the identified earmarked areas. He also added that under the Fund description, information about the GCF being an operating entity and financial mechanism of the UNFCCC should be explicitly mentioned. The Secretariat responded by saying that refunds to contributors in cases when no FPs have been approved are possible, but none has been made so far. They also took note of the suggestion to mention the Fund’s role and mandate as per the UNFCCC.

Responding to the proposal of the co-chair to move the decision of this agenda item to in-between Board meetings (BBM), the BM from South Africa believes a more extensive in-person Board discussion should be done given the seriousness of the matter, and suggested this item be tabled at B37. Other BMs think otherwise and forwarded to conduct a separate technical session that can be done immediately after B36, to clarify issues before proceeding to a BBM decision. The BM from Honduras echoed the urgency and reminded the Board that further delay on the matter entails reputational risks for the GCF especially since auditing for international financial entities are usually done at the first half of the year. He then urged the Board to resolve the matter no later than B37.

The BM from Austria also pointed out how audited financial statements are used as conditions to contribution agreements, implying that the matter should be resolved sooner rather than later especially as the GCF-2 process is ongoing.

Since a few details are yet to be confirmed, the co-chair from the US moved to suspend the discussion and resolve the matter in the coming days.

This was then followed by several reports that the Board was asked to take note of, namely the Report on the Activities of the Co-Chairs and the Report from the Board Committees, Panels and Groups. Under the latter agenda item, the BM from Austria, representing the Board Budget Committee, provided a brief update as to the tasks requested from them since B34. He shared that the Committee agreed to propose amendments to the Fund budgetary approach that will not only ensure transparency in both inflow and outflow of funds but will also secure the alignment of the budget with the USP. The BM from Austria then asked the co-chairs to arrange a space for an information session about the matter before B37.

The Board also noted without further comments the Performance Review of the members of the Accreditation Panel and adopted the Appointment of the members of the Independent Technical Advisory Panel (ITAP).

Representing the Board Investment Committee, the BM from Gambia shared how the committee led the ITAP selection process since April 2023 and have shortlisted two candidates among the 110 applicants. The Board had no objections to the committee recommendations and quickly endorsed the appointments of the two candidates. The said new ITAP members, who are both female, will both serve a 3-year term, starting on August 1, 2023.

The Board then proceeded to an Executive Session, where there was no webcast and participation was exclusive only to the members of the Board, their alternates and advisers. The said closed-door session was aimed to discuss Matters related to the Independent Units, and was the last agenda item of the day.

You can catch GCF B35 via webcast and on demand here: https://www.greenclimate.fund/boardroom/meeting/b35#videos.