UPDATES: Day 1 of the 37th 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 37th Board Meeting of GCF.

For full transcript of B37 CSO Interventions, check https://www.gcfwatch.org/resources/board-meeting-resources/37th-board-meeting-of-the-gcf.


The 37th Board Meeting of the Green Climate Fund is happening from October 23-25, in Tbilisi, Georgia. This is the last Board Meeting for the year that also immediately follows the recently concluded GCF-2 pledging conference held last October 5, in Germany.

The meeting opened with Welcome Remarks from the host country’s Minister for Environmental Protection and Agriculture, Otar Shamugia and the Chair of the Parliamentary Committee for Environmental Protection and Agriculture, Maia Bitadze. Their speeches were followed by the GCF Executive Director, Mafalda Duarte, who expressed gratitude to the Georgian government for hosting B37 and highlighted that the GCF under her administration will simplify direct access and prioritize country-owned investments. The co-chairs from the US and Pakistan also shared a few words to manifest the work ahead of the Board towards the successful implementation of the second replenishment of the Fund (GCF-2).

As soon as the meeting opened, the co-chairs welcomed the new members of the Board and proceeded to the Adoption of the B37 Agenda. While the agenda presented was easily adopted, some Board Members registered a number of items that must be addressed by the Board sooner than later. The BM from Switzerland reminded that the Fund’s Accreditation Strategy must be prioritized and hoped the item be dealt with in the first Board Meeting next year. BMs from Antigua & Barbuda and Austria requested space in the “Other Business” agenda item to quickly discuss the amendments made to the No Objection Letters (NOLs), and processes to follow for budget-related requests vis-a-vis the Fund’s commitment authority.

The Board then proceeded to adopt and note some of the reports presented such as the Report of the 36th Meeting of the Board and the Report on the Activities of the Co-chairs. The co-chair from US then registered the plan to set-up an ad-hoc committee tasked to address Human Resource issues in the Secretariat (i.e. policies on salaries and other HR needs of staff). She further explained that personnel issues have been raised repeatedly and it is about time that the Board do something concrete about it. Both co-chairs promised to work on a decision text regarding the proposal and present for Board adoption before the end of B37.

The GCF Executive Director Mafalda Duarte also presented the Report on the Activities of the Secretariat where she highlighted how the GCF can become the premier financial entity for country-led climate action. She added that enhanced country ownership is key in achieving the “50 by 30” goal (USD 50 billion by 2030) and also touched on how the Fund’s resource mobilization should not be limited only during the replenishment cycle. She admitted that the result of the pledging conference with only USD 9.3 billion is far from what was expected, but she remained hopeful that before COP28 more pledges will come in for the GCF-2 to reach at least USD 12.5 billion.

The report also recognized the need to urgently address the erratic retention rates of the Secretariat staff members and welcomed the proposal to address the Human Resource issues via the Board ad-hoc committee mentioned. She also shared that as part of the Secretariat’s strategy to enhance complementarity and coherence of the GCF with other climate finance institutions, the GCF in COP28 will be hosting the joint pavilion of the 4 climate finance entities (i.e. GEF, CIF, AF and GCF). BMs from US and UK saw this move as a positive step and added that the GCF eventually may need to go further beyond the funds mentioned to take the driver seat in leading other institutions towards climate finance.

BMs from Sweden and Norway agreed but also wanted the Secretariat to communicate more strongly the progress of the Fund in terms of its target results (i.e. mitigation and adaptation numbers) together with the status of the GCF portfolio. They believe such information is key to remind the world that the GCF is delivering its mandate, which is also crucial to attract more contributions from other institutions. 

Developing country BMs on the other hand, were more concerned about how the country ownership priority that the Executive Director mentioned will be addressed given that problems with direct access such as the delays in processing and tedious back and forths experienced by NDAs and DAEs remain in the Fund. The BM from Ghana also emphasized that resource mobilization is crucial in order to deliver all these plans and strategies, and agreed with the Executive Director’s plan to continuously mobilize resources even outside the replenishment period. 

The CSO Observer Network via Erika Lennon, the CSO Active Observer from developed countries, raised some positive points from the report. Recognizing the value of reducing complexity, the CSOs look forward to how the proposed climate information gateway and expert advisory forum, as well as the “fast-track” templates under the Simplified Approval Process (SAP) can be maximized to ease the burden from proposal development. The CSOs also noted how the report seems contradictory with one bullet point under the implementation of the Sexual Exploitation, Abuse and Harassment (SEAH) Policy, noting that awareness-raising and training for Board Members, alternate Board members, advisors, and external members is pending and another suggesting alternates, advisors and external members don’t receive any training. The Secretariat clarified that SEAH training for staff is still ongoing and committed that it will also be extended to the Board, their alternates, advisors and external members.

The CSO Intervention also reminded the Secretariat about the Observer Network’s commitment to fully participate in all GCF events and activities, including the Global Programming Conference, regional dialogues as well as the Private Sector Conference.

After hearing all the comments from the board room, the Report was adopted.

The Board then proceeded to the Appointment of the external auditor for 2023. The Ethics and Audit committee recommended Nexia Samduk, the firm responsible for the Fund’s audited 2020-2022 financial statements, to extend its contract and be the external auditor for 2023. The GCF used to contract auditing firms for three-year periods, but as terms are being revised, the GCF decided to just hire a new auditor for 2024-2026.

The appointment was then followed by the Board’s consideration of Sustainable and Responsible Investment Options for the GCF funds held in the GCF Trust Fund. The GCF Trust Fund currently stands at $8.4 billion managed by the World Bank as the Fund’s Trustee, to which is investing the GCF Trust Fund into two portfolios with returns distributed every three months and one year.

The Board urged the Secretariat and the Trustee to explore additional sustainable investment options and proposed to invest 30% of the GCF Trust Fund into “Model Portfolio 8.” The said portfolio was considered as the most sustainable option following the World Bank’s Environment, Social, and Governance (ESG) standards. This move wouldn’t impact the GCF’s ability to finance existing or future projects, as assured by the Secretariat and the World Bank.

Some Board Members raised concerns about transparency, not only regarding Model Portfolio 8 and other investment options, but also about the World Bank’s fossil fuel portfolio. The BM from Sweden asked the World Bank to disclose its fossil fuel investments, while the BM from Saudi Arabia suggested shifting its fossil investments to developing countries instead, as he emphasized that most ESG investments go to developed countries.

Eileen Cunningham, CSO Active Observer from developing countries, expressed the Observer Network’s cautious support of the move, echoing the call of many BMs regarding the need for more transparency and information disclosure regarding Model Portfolio 8, the GCF’s current investments, and the fossil fuel activities associated with World Bank portfolios. The CSO intervention also reitearetd the longstanding call against the World Bank to end its fossil fuel investments and financing.

The World Bank was then given the chance to respond, to which it clarified that there are ongoing efforts to make their portfolio more sustainable. They acknowledged that while the GCF could place its entire trust fund into a sustainable portfolio like Model Portfolio 8, fixed returns cannot be guaranteed due to the limited number of sustainable investments. A number of BMs wanted to further discuss the Model Portfolio 8 as well as other investments of the World Bank, to which the co-chair proposed to proceed with offline consultations and suspend the decision for further deliberations.

The Board then moved on to discuss the financing of Results-Based Payments (RBP) for Reducing Emissions from Deforestation and Forest Degradation (REDD+). In 2017, the GCF allocated USD 500 million for its REDD+ RBP pilot programme. At this Board Meeting, the Board is asked to deliberate whether such funding allocation should be increased considering the inflation adjustments, and be made permanent taking into consideration the lessons learned from the pilot programme. Summary of the proposed new REDD+ Program are as follows:

REDD+ Pilot Program

Proposed New REDD+ Program

Funding Window USD 500 million USD 620 million to USD 1.2 billion
Pricing of Reduced CO2 emissions USD 5 per tons of CO2 Equivalents (tCO2eq) USD 6 to 8/tCO2eq
Duration Open for 5 years or until the funding window is fully consumed, whichever comes first Open for 4 years or until the funding window is fully consumed, whichever comes first
Phasing No particular phasing 2 tranches
Eligibility No restrictions on which countries are eligible to access With proposed options on which may be eligible to access given the mix of countries that availed REDD+ financing under the pilot.

In terms of country eligibility, three options were presented:

  1. Limited to small island developing states (SIDS), African States, and Least Developed Countries (LDCs), including those with concept notes from the first pilot but were not funded due to the window being exhausted
  2. All countries are eligible except those that benefited from the pilot program
  3. All countries are eligible except those that received more than 30% of funding from the pilot program. These options were offered to address the concentration of pilot program projects in Latin America and the Caribbean (LAC) countries.

The Secretariat added that the new REDD+ program explicitly adheres to GCF Policies (i.e. Environmental and Social Protection, Gender and Indigenous Peoples) and is aligned with the Cancun REDD+ Safeguards. 

Most of the Board’s comments focused on ensuring fair access to REDD+ financing for developing countries. The BM from Saudi Arabia, along with some BMs from developing countries, emphasized the need for geographical balance and the absence of funding concentration to a specific region or country grouping. On the other hand, the BM from the Netherlands advocated for dedicating 30% of the entire REDD+ funding window to SIDS, African States, and LDCs.

For the CSO Observer Network, while compliance to GCF policies and Cancun REDD+ Safeguards is important, their intervention delivered by Eileen Cunningham, the CSO Active Observer from developing countries, raised concerns about the unproven effectiveness of forest offset projects in achieving claimed emissions reductions. The CSOs furthered that projects that involve unproven and harmful technologies should be rejected, and urged the Board to ensure the meaningful and active engagement of civil society and indigenous peoples in drafting programs like REDD+. The CSOs in the GCF’s Indigenous Peoples’ Advisory Group noted a recent experience where they were only allowed to participate in REDD+ drafting workshop when they insisted on participating.

Since a number of issues remain unresolved, the Co-Chair decided to suspend the discussion of the agenda item to allow for offline consultations with various stakeholders, including the Secretariat. The consultations aim to determine which options is best and and to address other crucial details such as the size of the funding window and the tranches.

The discussion was then followed by the presentation of the updates on the GCF Regional Presence Study Outcomes, which is an information document that presents the result of the feasibility study conducted by the Dalberg Advisors, aimed to examine options for establishing GCF Regional Presence (RP). The Secretariat noted that the item is flagged as a priority, but further review is needed for them to present recommendations to the Board.

The study identified 9 options for establishing Regional Presence, ranging from Regional Hubs providing project programming and delivering support, to GCF offices with a multifunctional team providing full project programming and delivering support. The study also noted that RPs will help address operational bottlenecks, but may entail additional costs that can be outweighed in the long-run depending on the efficiency and effectiveness of the roles and mandate of the regional presence.

Many Board Members from GRULAC see the value of establishing RPs as soon as possible and urged the Board to not let B37 end without any decision on the matter. This was eventually countered by the co-chair from Pakistan and explained the study presented is just an initial information shared to the Board and that the Secretariat needs to further assess and come up with recommendations that the Board must consider. Given that the item was flagged as a priority, the co-chair explained that it should come up again at B38.

Many BMs expressed support for the establishment of RPs, saying such a move will empower DAEs and NDAs and will help respond to the needs of the national entities more efficiently, especially for countries and regions that remain underrepresented to the GCF. They also argued that language, timezone differences and other logistical challenges will be addressed especially if the RPs will be tailored according to the varying needs and priorities of the countries in the region.

While there is a general consensus among the Board Members in moving forward with the establishment of RPs, BMs from Norway, Switzerland, Mali, Antigua & Barbuda and Ghana believe having RPs will not necessarily improve the bottlenecks and problems around access, as it is a recurring problem that can be addressed by more efficient processes. The BM from Norway believe that improving the GCF Readiness Program should be done to solve issues around complex processes, and that establishing RPs may have more negative implications that the GCF will eventually deal with. These include budget implications, issues with staffing, as well as the legal implications for countries without Privileges and Immunities. BM from Mali echoed his points and emphasized that a one-size-fits-all approach of the RPs will not address the challenges just like how regional MDBs operate. BM from Ghana argued that RPs in Africa will not solve the issues around direct access as the fact still remains that the DAEs are faced with the pile of requirements that they have to comply with. 

Noting all the points made by the Board including how the matter was deemed as a priority that should be addressed at the next Board Meeting, the document was noted.

The Board then discussed the Reports from Board committees and Updates on the Accreditation Panel’s modalities. The BM from the Gambia, who heads the Investment Committee, reported that the committee have yet to reach a consensus on the specifics of the Local Currency Financing Pilot (LCFP), as several items remain unresolved. These include the establishment of an eligibility criteria for Direct Access Entities (DAEs) and the assessment of how the LCFP might impact the GCF’s commitment authority. He furthered that the Investment Committee plans to work on these matters before COP28, assuring that an LCFP proposal will be up for Board consideration at B38.

After noting the reports and updates of the committees, the Board looked into the Final Report of the Independent Evaluation Unit (IEU) on the Readiness and Preparatory Support Program (RPSP). The RPSP is the GCF’s initiative aimed at preparing countries to develop climate finance projects that align with the GCF’s goals. In the past, BMs expressed disappointment with the recurring issue of inefficiency and ineffectiveness, particularly in ensuring access of DAEs and project approvals, especially to Small Island Developing States (SIDS) and Least Developed Countries (LDCs).

The discussion began with the IEU presenting its major findings and recommendations, and the Secretariat responding to some of the key findings. Summary of the discussion is below:

IEU’s Findings

IEU’s Recommendations

Secretariat Response

The RPSP’s value is under-developed and not universally shared. Sharpen the intentions of the RPSP and provide proper leadership in the strategy and the programs under the RPSP. The Secretariat will adopt the IEU’s recommendations.
The RPSP is challenged by GCF’s operational constraints such as language barriers, long processing times, and difficulty in being accessed. The RPSP should adopt a country-centered approach and move away from a grant-by-grant and delivery-partner approach. The Secretariat will integrate the context, and shift from the grant-by-grant modality towards a coordinated climate investment planning and execution method.
The GCF’s fragmented internal structure affects the levels of integrated engagement The GCF should be intentional and targeted in communicating programmatic offerings and enabling learning. The Secretariat will develop an awareness-raising and translate such materials, along with developing a knowledge bank, that will inform stakeholders on how to successfully engage under the RPSP.
Success at the country level depends on contextual factors that are not fully acknowledged and addressed by the current program. The GCF should invest in standardizing the newly created Readiness Results Management Framework (RRMF), as a learning and accountability tool in measuring outcomes and impacts of the RPSP. The RRMF will be applied to all grants, even those in the past, and the Secretariat will hold its own evaluation of readiness outcomes.
There is a lack of clarity around key concepts in the RPSP’s theory of change The GCF should operationalize the new RPSP strategy in a timely manner. The GCF should also help countries understand what paradigm shift is and not equate country ownership with government ownership. The Secretariat will update the operational tools of the RPSP.
The RRMF has no means of assessing the quality of implementation and final results. The GCF must enhance the sustainability of RPSP results and reach out to diverse actors towards cultivating national climate finance environments. The Secretariat will enhance complementarity and synergy within the climate finance architecture to help inform it on finding out the quality of implementation and final results.
Little harmonization and coherence between the RPSP strategy and the tools proposed towards the strategy’s implementation. Increase accessibility and cost effectiveness by adjusting strategy, processes, and mechanisms. 50% of the resources for RPSP will be allocated for SIDS, LDCs, and African states. The RPSP resources will also prioritize countries with no GCF funding yet. There will also be a dedicated process for the most vulnerable countries.

After hearing the exchanges, the Board then noted the report including the proposed revisions to the RPSP, which are scheduled to be deliberated at this Board Meeting. 

The Board also appointed members of the Independent Technical Assistance Panel (iTAP), the panel tasked to review funding proposals based on GCF policies and standards. The contracts of three iTAP members were up for renewal, and the Board decided to renew the contracts of Rey Guarin, Ricardo Nogueira, and Caroline Petersen.

After appointing members of the iTAP, the Board proceeded to discuss the Accreditation Master Agreements (AMAs) of Accredited Entities (AEs) with substantial deviations in an executive session. Because this matter was deemed confidential, the livestream was suspended, prompting the end of the first day of B37 at 19:00, Tbilisi, Georgia time (GMT+4).

Catch the GCF B37 via webcast and on-demand here: https://www.greenclimate.fund/boardroom/meeting/b37#videos