Updates from Day 4 of the 36th GCF Board Meeting

From The Asian Peoples’ Movement on Debt and Development (APMDD)
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DAY 4 – 13 July 2023

The last day of B36 started with an announcement from the BM from Canada about his government’s pledge to the GCF-2. A total of 450 million Canadian Dollars will be provided by Canada, which is said to be a 50% increase from its previous commitments in GCF-1. He added that his government sees the potential of the GCF in helping achieve ambitious climate action, as reflected in the recently adopted Updated Strategic Plan (USP) and its concrete plans to deepen its relationship with the Private Sector.

The announcement was well-received by the Board and the Secretariat took note of the pledged amount. This was then followed by the Consideration of Funding Proposals (FPs) particularly for FPs that needed further discussion from Day 3.

Majority of the Board were ready to approve FP210 KawiSafi II and FP211 Hardest-To-Reach both submitted by Acumen, except for the BM from China. While he is ready to support the FPs based on its merits, he argued that the allegations made against his country about forced labor and human rights violations are unacceptable. The BM from China believes such text provision in the FPs is political to smear the reputation of his country, and then urged Acumen and the Secretariat to make the necessary steps to change the wording that will ensure neutrality and remove his country’s presumption of guilt in the FPs.

Many of the developed country Board members argued not only for the approval of the FPs, but also to remind the BM from China that the Board is not mandated to make amendments to the texts of the FPs especially when the projects have already undergone rigorous review and revisions, not only from the iTAP and the Secretariat, but also from the Board when it was first presented in Day 2 of B36. Recognizing the arguments made by the BM from China and the Board’s inability to arrive at consensus, the BM from Saudi Arabia then urged the co-chairs to proceed with voting. He also expressed concern on how such careless judgment against a particular country slipped the assessment of the Secretariat and the iTAP.

The co-chair from Pakistan then commenced the voting process for the approval of FP210 and FP211. Board Members were called upon by the Secretariat one by one, and they declared whether they were in favor of the approval of both FPs. As expected, all BMs were in favor except for the BM from China, who at the end of voting gave a statement clarifying that he is opposing the approval of the FPs not based on its objectives and projected outcomes but based on the FP language that he believed politicized China. He then urged the Secretariat to do better with its assessments and handle these kinds of approaches differently in the future.

The Board then took note of the statement and proceeded to adopt the decision of approving FP210 and FP211 without any textual changes.

Other agenda items that were left opened in the previous days were also easily adopted without any comments by the Board. These include the GCF 2022 Audited Financial Statements, the Reports of the Activities of the Independent Units, and the Report of the Green Climate Fund to the Conference of Parties.

These were then followed by the discussion about the Dates and Venues of upcoming Board Meetings, to which the Board was requested to confirm B37 to happen from 23 to 27 October 2023 in Georgia, and then decide the dates for B38, B39 and B40. While these decision texts were easily adopted, the Board spent time discussing other issues around having Board Meetings.

The BM from France opened the idea of holding the Board Meetings in the GCF Headquarters in Songdo, not only for budgetary concerns, but also for the Board to meet and work closely with the Secretariat. This was agreed by some BMs, but other developing country BMs also raised the benefit of holding the meetings in developing countries so there could be opportunities for field visits.

Responding to the budgetary concerns raised, the BM from Switzerland added that having 3 in-person meetings in a year poses a tremendous amount of work for the Secretariat and the Board, hence suggested to consider having 1-2 complementary virtual board meetings. Such virtual BMs will be aimed to discuss agenda items that are relatively simpler, and do not need extensive in-person deliberation. An example would be the approval of FPs under the Simplified Approval Process (SAP). This suggestion was later opposed strongly by many developing country BMs, reiterating their past experiences of having difficulties with faulty internet connections, as well as challenges with time differences.

Since the points raised were mainly to explore options for future meetings, the co-chair then decided to take note of the suggestions for further discussions in the upcoming meetings, and closed the item.

The Board proceeded to discuss the budget required to address the Resourcing Implications of Implementing the Accreditations Strategy. It should be noted that the new accreditations strategy approved at B34, was meant to expedite the GCF’s accreditation process and enable greater access for Direct Access Entities (DAEs), particularly from Small Island Developing States (SIDS), African states, and Least Developed Countries (LDCs). According to the GCF Secretariat, the changes to the accreditations strategy needed significant modifications and additions to the existing process, which would require studies and outsourced work for successful implementation, hence a budget of USD 612,000 was requested.

Although there were no objections to the requested budget for implementing the strategy, some BMs from developed countries expressed concerns about the Secretariat’s proposed actions alignment with the overall framework of the updated accreditations strategy. They suggested holding an informal board session prior to B37 to deep dive into the topic of accreditations, while some proposed postponing the consideration of the item since there are several other policies and strategies related to accreditation that have not yet been discussed.

Other BMs voiced their concerns about further delays in implementing the revised strategy. The BM from Bhutan also emphasized the urgent need for accreditation and increased access to the GCF for LDCs, SIDS, and African states, to which the BMs from Saudi Arabia and South Africa added that the updated strategy must be implemented first before the Board can see the “bigger picture” and its alignment with the overall accreditations framework. All three argued that placing trust in the co-chairs and allowing the new accreditation strategy to start implementation, along with the Updated Strategic Plan (USP), would allow them to fully see the comprehensive strategy.

The Co-Chair from the United States acknowledged that although the Board did not disagree with the Secretariat’s proposed budget and way forward, some developed country BMs wanted the decision text to explicitly reference the “bigger picture” of accreditation. Other BMs also requested to include holding an informal meeting prior to B37, but such request was opposed by some developing country BMs.

After several back and forths and lengthy offline consultations, the Board then decided to agree to the proposed actions and budget put forth by the Secretariat. However, they also acknowledged the need to discuss the unresolved policies on accreditation at the earliest opportunity, in accordance with the B34 mandate.

At B35, the Independent Evaluation Unit (IEU) presented an evaluation on the Relevance and Effectiveness of the GCF’s investments in African states. The Board instructed the IEU to present a draft decision text at this Board Meeting to inform the Board of potential policies in response to the evaluation’s findings, as well as provide guidance to the Secretariat on enhancing its operations in African countries. In the proposed decision text, the Secretariat is requested to come up with a multilingual approach, as language remains a major challenge in conducting GCF transactions, and to propose changes to the Accreditation Entity (AE) fee structure. The IEU on the other hand, was asked to prepare a management action plan, from which the Secretariat can base their responses to the findings identified in the IEU evaluation.

Although the proposed decision text excluded changes in the AE fee policy, the BM from Switzerland expressed opposition to the item. He argued that revising the AE fee policy may imply that transactions with the African states in general are costly, corrupt, or too bureaucratic that could be challenging in project implementation. He also requested additional language in the decision text to request the Secretariat to “vigorously promote transformative gender action using African-led and independently verifiable assessments” as the new benchmark for gender components in future funding proposals that will be implemented in Africa. He believed this would strengthen the translation of gender equality into actionable measures on the ground. However, the BM from Egypt disagreed with this proposed addition, stating that there is no need to include another action in the decision text beyond the management plan based on the report’s findings.

The Board also discussed the application of the findings on other developing country regions. While some developing countries recognize that the findings of the report can serve as the starting point for future evaluations in other regions including the Latin America and Caribbean (LAC), others argued the findings can not be the same for other regions. They believe the need to amend the AE fee policy is not necessary since the recommendation came out of the evaluation made from the African states.

As the Board became so caught up in editing the decision text, Eileen Cunningham, the civil society active observer (CSO AO) from developing countries, reminded the Board of the substantive items found in the report. The CSOs strongly advocated for facilitating GCF access for Micro, Small, and Medium Enterprises (MSMEs) and for prioritizing Direct Access as delivery partners for Civil Society Organizations (CSOs) and communities. The CSOs also stressed the importance of simplified GCF processes that are highly responsive to the needs of African states and developing countries as a whole.

Due to the lack of consensus on the decision text, the Co-Chair suggested conducting offline consultations. Upon reconvening, the Board adopted the original decision text proposed by the IEU, without incorporating the suggested additions from the BM from Switzerland.

The last item on the B36 agenda was the finalization of the Local Currency Financing Pilot (LCFP). It should be noted that on Day 3 of the meeting, the Board did not reach a consensus on specific actions to be taken. After conducting offline consultations, the Board developed a decision text that no longer specified concrete actions for implementing an LCFP. Instead, they instructed the Secretariat to present a framework at the next Board Meeting, which would be followed by a finalized local currency approach presented at B39. The initial proposal to finance certain projects in the pipeline using local currencies was excluded from the final decision text.

As B36 drew to a close, the Board opened discussions on Other Matters. BMs from Austria and the United States, requested the Board for an informal discussion on budgetary matters. They argued that considering the context of the replenishment and the numerous budgetary items for consideration throughout B36, such a discussion was necessary. The BM from South Africa, citing the rules of procedure of the GCF Board, opposed this move and raised a point of order. He asserted that deciding to have an informal discussion under “Other Matters” is not allowed. The Co-Chair from the US concurred, and the said request was no longer entertained.

As no further matters were raised, the co-chairs closed the session.

The 36th Board Meeting of the Green Climate Fund concluded at 5:55 PM Korean Standard Time on July 13, 2023. You can watch the recordings of GCF B36 via webcast and on-demand at this link: https://www.greenclimate.fund/boardroom/meeting/b36#videos.