UPDATES: Day 3 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 last day of GCF B37 commenced with the Board’s consideration of the Work Plan and Budget of the Independent Units. Each of the unit heads presented their respective work plans and budgets for 2024 .

The Independent Evaluation Unit (IEU) outlined its upcoming evaluation reports which include evaluations on the GCF Investments in Latin America and the Caribbean, the GCF’s Indigenous Peoples’ Policy, and the GCF’s Approach to Whistleblowers and Witnesses. Additionally, the IEU is poised to evaluate GCF projects in Health, Food, and Water Security. To support these upcoming evaluations, the IEU requested a budget increase of 7.79%, totaling USD 7.6 million for 2024.

Subsequently, the Independent Integrity Unit (IIU) requested an 8% budget increase, allowing for a total 2024 budget of USD 3.6 million. The requested funds are meant to cover the review of the GCF’s existing Integrity Policy Framework, which guides integrity risk assessments, supports the proper implementation of accreditation master agreements (AMAs), and oversees investigations on suspected integrity violations. The IIU reported that it is currently handling 25 ongoing integrity cases and added that the budget increase is due to the unit’s increasing need for capacity-building. 

The Independent Redress Mechanism (IRM) also proposed a budget increase of 8%, positioning its projected 2024 budget at USD 1.9 million. Its proposed focus for next year include managing project complaints and grievances, conducting capacity-building, and handling communications and outreach. The said budget hike is meant to cover the expected rise in grievance cases due to the increasing number of GCF projects being implemented and corresponding operational costs.

All the proposed work plans and budgets for the independent units were easily approved by the Board, allowing for more time to deliberate the Revised Readiness and Preparatory Support Programme (RPSP). 

The GCF Executive Director presented the revisions for the RPSP including the intended outcomes, and funding opportunities for developing countries. The proposed revisions aim to shift the RPSP’s focus towards climate programming and direct access, and further align with the GCF’s Updated Strategic Plan (USP-2). The alterations are depicted in a diagram, outlining the RPSP’s prioritization and expected outcomes. 

The proposed Readiness and Preparatory Support Programme (RPSP) will still allow countries to access the USD 3 million grant that was previously designated for the development of National Adaptation Plans (NAPs) of developing countries, and offer an additional USD 4 million, if necessary, for updating and implementing NAPs, along with Nationally Determined Contributions (NDCs) and Long-Term Strategies (LTS). The revised RPSP also seeks to provide allocations of an extra USD 320 thousand for Least Developed Countries (LDCs) and Small Island Developing States (SIDS), as well as USD 1 million DAEs, to further align their plans with the 11 targeted results under USP-2.

The Board had mixed reactions to the presentation, with the BM from Antigua and Barbuda asking about the proposed RPSP’s alignment within the broader climate finance architecture, particularly with the upcoming Loss and Damage Fund. Concerns were also expressed by BMs from Switzerland and Denmark about the apparent absence of gender-focused measures, emphasizing the need to monitor outcomes related to gender. BMs from the Latin America and the Caribbean (LAC) region highlighted as well the necessity of involving NDAs when DAEs seek to access the USD 1 million grant window.

Erika Lennon, Civil Society Organization (CSO) Active Observer (AO) from developed countries, delivered the position of the GCF Observer Network. While acknowledging the alignment of the proposed revisions with the USP, the Observer Network echoed concerns raised about the lack of gender focus. They stressed the need for local communities and indigenous peoples to be significant beneficiaries and key stakeholders in the development of NAPs, NDCs, and LTS. The CSOs strongly emphasized that successful climate action relies on locally-led solutions and indigenous knowledge.

Although the Secretariat addressed issues around coordinating NDAs with DAEs for accessing the USD 1 million grant, several concerns remained unresolved, prompting the co-chair to suspend the item for further consultations. Several offline consultations were then made among concerned BMs, which led to further revisions of the budget support for NAP implementation from USD 4 million to USD 3 million, and textual revisions to the decision text that included provisions around market-oriented approaches in the NAP formulation approach. The said further revisions were then approved by the Board.

The Board then proceeded to look at the Project Preparation Facility (PPF) Operating Modalities, which supports the transformation of NAPs, NDCs, and LTS into viable projects aligned with GCF policies and priorities. Following the changes in the RPSP, the PPF consequently applied changes such as an increased grant cap, digitalization of project processes, and the inclusion of new consultancy firms in the eligible roster. Along with partnership enhancements, the PPF Operating Modalities required a budget approval of USD 90.3 million for implementation next year, and was easily approved by the Board. 

The Board then went back into discussing the Options for Sustainable and Responsible Investments of the GCF Funds held in the GCF Trust Fund, which was initially presented in Day 1, but was suspended due to the concerns of some BMs on the lack of information on the Trustee’s investment strategies and portfolios. Following offline consultations with the World Bank, the Board approved the initial proposal to allocate 30% of the GCF’s Trust Fund to the World Bank’s Model Portfolio 8 (M8). Additionally, the Board mandated the provision of quarterly reports on portfolio performances to be published on the World Bank’s website.

In matters related to the restructuring of select FPs the Board decided to hold it under an executive session as some items were deemed confidential. The FPs being considered for restructuring are:

FP Name Proposed by To be implemented in GCF Funding Risk Category
FP093: Yeleen Rural Electrification Project in Burkina Faso African Development Bank (AfDB) Burkina Faso $25.8m in grants, loans, and equity B (Medium Risk)
FP166: Light Rail Transit for the Greater Metropolitan Area (GAM) Central American Bank for Economic Integration (CABEI) Costa Rica $271.3 million in grants, loans A (High Risk)
FP185: Climate Change: The New Evolutionary Challenge for the Galapagos Corporacion Andina de Fomento (CAP) Ecuador $65.2 million in grants, loans A (High Risk)
FP086: Green Cities Facility European Bank for Reconstruction and Development (EBRD) Albania, Georgia, North Macedonia, Mongolia, Tunisia, Armenia, Jordan, Moldova, Serbia $92.4 million in grants, loans A (High Risk)
SAP016: Fiji Agrophotovoltaic Project in Ovalau Fiji Development Bank (FDB) Fiji $5 million in grants, loans C (Low Risk)

As soon as the executive session finished, the Board then discussed the Consideration and Endorsement of the Outcomes of the Second Formal Replenishment of the GCF (GCF-2). The agenda item started with reports from the Secretariat and the Replenishment Facilitator, Mahmoud Mohieldin, who both highlighted the total amount of pledges under GCF-2, which is USD 9.3 billion. Notably, countries like the United States, Sweden, and Australia have expressed their intent to pledge, yet have not announced the exact amount and date when they plan to deliver the said pledges. 

Both the Secretariat and the Pledging Facilitator believe the GCF-2 was a success and recommended that the GCF align itself with multilateral development banks (MDBs) and the Private Sector to maintain its role as a “capital investor for climate-related ventures.” They stressed the need for the GCF to focus on “investable and not just bankable projects” and shared the ongoing efforts done by the Secretariat to consistently engage with contributors that have expressed intents to pledge. 

Many BMs were happy to hear the report, but the GCF Observer Network had a different take as Erika Lennon, the CSO AO from developed countries, expressed the disappointment of the CSOs on the GCF-2 outcome. The CSOs strongly emphasized that the USD 9.3 billion mobilized falls way below than what is actually needed, especially in the face of the escalating costs of the climate crisis. The CSOs urged developed countries to fulfill their obligations, stressing that adequate funding should be public and should support projects that uphold human rights, country ownership, and gender equality.

After noting the report, the Board proceeded to look into Matters Related to the USP, specifically, Allocation Parameters and Portfolio Targets under the GCF Initial Investment Framework, and the Criteria and Planned Allocations for Targeted Results. Based on the presentation of the Secretariat, the strategy expects GCF-2 resources to predominantly support food security, biodiversity, and climate information and early warning systems (CIEWS), with comparatively fewer resources allocated for energy access.  

The Secretariat also emphasized that the proposal is very much aligned with GCF’s established priorities, including the goal of keeping the 50-50 balance between mitigation and adaptation projects and channeling more than 35% of GCF funding through the Private Sector Facility (PSF). 

In the annexes of the document presented, a change in the temperature rise limit was noted. It was indicated that a 2 degrees Celsius limit instead of the 1.5 degrees is a viable option. The CSO Intervention, delivered by Eileen Cunningham, urged to edit such a provision to explicitly reflect the 1.5 degrees Celsius limit based on what was indicated in the Paris Agreement. This point was echoed by the BM from Germany.

The BM from South Africa also sought clarification regarding the co-financing approach and the possibility of setting it as a new requirement of the GCF. The Secretariat responded and explained that while co-financing is not a requirement, the proposed language aims to create an environment conducive for co-financing and investments. The CSOs once again argued that while co-financing is not explicitly expressed as a requirement, the use of the term may potentially influence the kind of proposals being submitted to the GCF as many perceive co-financing to be efficient and effective in terms of using the limited resources of the Fund. 

Other BMs also pointed out the weak language when it comes to the rights of women and indigenous peoples. The CSOs echoed this and emphasized the need for explicit inclusion of women, indigenous peoples, and local communities as primary recipients and allocation categories of GCF-2 resources. 

After noting the comments and proposed changes to the document, the Board adopted the agenda item. 

They then proceeded to address the Financial Management Plan for the GCF’s Commitment Authority under GCF-2, which was easily noted by the Board. In line with the previous Board’s directive in B36, the Secretariat presented a financial plan detailing the allocation and management of resources raised from GCF-2, including setting annual commitment authority allocations. This authority represents the total amount that the GCF Board may commit to fund proposals, projects, and programs.

The document showed projection of the resources available and the proposed commitment authority for the next four years. The plan starts with a total of USD 10.3 billion in resources to be used through the GCF-2 period of 2024 to 2027. The said amount is derived from resources raised from GCF-2, loan repayments to the GCF, and a USD 1 billion carry-over from GCF-1. The proposed commitment authority figures were estimated to be at USD 2.1 billion for 2024, USD 2.2 billion for 2025, USD 2.5 billion for 2026, and USD 3.4 billion for 2027. The Secretariat highlighted that the management of the commitment authority will be influenced by the schedule of contributors’ deposits and payments to the GCF, and then added that they are already drafting contribution agreements accordingly.

The Board also revisited the Consideration of Accreditation Proposals, which had been previously suspended. The Secretariat presented the roster of applicants for accreditation and re-accreditation. The table below shows the details of the applicants:

RAPL043, Foreign Environmental Cooperation Center of the Ministry of Ecology and Environment of China (FECO) Reaccreditation
RAPL053, Micronesia Conservation Trust (MCT) Reaccreditation
RAPL040, Food and Agriculture Organization of the United Nations (FAO) Reaccreditation
RAPL038, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Reaccreditation
RAPL041, International Fund for Agricultural Development (IFAD) Reaccreditation
RAPL054 MUFG Bank, Ltd (MUFG) Reaccreditation
APL122, Federated States of Micronesia Development Bank (FSMDB) New application
APL123, CARICOM Development Fund (CDF) New application
APL124, SK Securities, Co., Ltd (SK Securities) New application

During the session, Eileen Cunningham, representing the GCF Observer Network, aired the CSOs’ strong opposition to the re-accreditation of MUFG Bank due to its substantial involvement in fossil fuel financing since 2015. MUFG stands as the largest fossil fuel financier in Asia and ranks 6th globally. The CSOs exposed MUFG’s portfolio of projects that offer false solutions and financing and its track record for lack of transparency and weak compliance with the GCF’s Gender Policy. Despite the concerns raised, the Board only referenced MUFG’s Net Zero roadmap in the decision text. As with other institutions with fossil fuel finance track records that were easily approved by the Board in the past, a provision that says it will commit to align its portfolio with the Paris Agreement was stipulated. Consequently, MUFG and the other entity applicants were approved by the Board.

The Board also approved the decision to extend the accreditation term of all accredited AEs by 3 years. This decision seeks to to prevent the expiration of accreditation terms and manage the reaccreditation pipeline, ensuring that AEs wouldn’t face obstacles in submitting and implementing FPs due to pending reaccreditation processes. The Executive Director, in consultation with the Co-Chairs, proposed this measure to manage the anticipated high volume of AEs due for reaccreditation in the upcoming Board Meetings.

Following the swift approval of accreditation and reaccreditation matters, the Board resolved pending issues raised in Day 1 of B37 around the Proposal for the financing of Results-Based Payments (RBP) for Reducing Emissions from Deforestation and Degradation (REDD+). The BM from Norway led two offline consultations and initiated the REDD+ discussion by presenting a compromise text proposal, which noted changes to the eligibility of countries for accessing the funding window and changes to carbon pricing:

  • The revised proposal included two tranches: Tranche 1A (30% of the total funding), Tranche 1B (20%), and Tranche 2 (50%).
  • Tranche 1A prioritized access for African States, LDCs, and SIDS. Countries that had already accessed the initial REDD+ RBP pilot would not qualify for Tranche 1A, while all other nations could access Tranches 1B and 2.
  • Carbon pricing was set at USD 6 per metric ton of CO2 equivalent (mtCO2eq) for Tranche 1 and USD 7.5/mtCO2eq for Tranche 2. Initially, the proposal suggested a range of USD 6 to 7/mtCO2eq for Tranche 1 and USD 7 to 8/mtCO2eq for Tranche 2.

Some BMs from developing countries raised concerns about not being present during the offline consultations and that they have seen the compromise text proposal only for the first time at Day 3 of B37. As a result, the developing country constituency requested to defer the discussion to B38, urging that the matter needs further consultations not only to selected BMs. 

The Board then looked into the Report of the Activities of the Co-Chairs. It can be recalled that on Day 1 of B37, the Board agreed to establish an ad hoc committee mandated to address the salary structure and human resource management policies of the GCF. The decision text for such a proposal was presented, prompting the BMs from Ghana, France, Sweden and US to express their intent to join the committee. The decision also requested the Secretariat to present the budgetary implications of future GCF policies, and was then adopted by the Board. 

The BM from Antigua and Barbuda also raised concerns around securing No-Objection Letters (NOLs) and requested for a space in Day 1 to discuss how the matter is of a serious concern especially for GCF projects that involve multi-countries including small island states. A proposed decision text was presented by the co-chair, but the BM from Antigua and Barbuda noted that further consultations are needed, urging the Board to reconsider discussing the matter in the next Board Meeting. 

The Dates and Venues of GCF Board Meetings for 2024 were also decided accordingly:

  • B38: March 4-7, 2024 in Kigali, Rwanda
  • B39: July 15-18 in Songdo, South Korea
  • B40: October 21-24 in Songdo, South Korea

Under the same item, the BM from Honduras raised matters related to visa assistance for participants of Board Meetings, citing the bad experience of his advisers at this Board Meeting. He then suggested that host governments must include in their responsibility the assistance needed for visa processing.

Subsequently, the Board deliberated on the Secretariat’s proposal regarding Potential Measures to Manage Non-Confirmation of Pledges. The proposal included three options that outlined steps to take in order to urge the timely confirmation and delivery of pledges. These are:

  • Raise the matter to the Conference of Parties (COP) for further guidance
  • Encourage developed country constituencies to consider measures to support the Secretariat’s efforts in managing non-confirmation of pledges
  • Continue current efforts that includes holding regular engagement, reporting of non-confirmed and non-delivered pledges under the Status of GCF Resources and the Report to the Conference of Parties (COP) at every Board Meeting

As expected, many developed countries preferred the 3rd option, but the BM from South Africa emphasized the importance of urgently fulfilling pledges as the Fund grows its portfolio and the climate crisis worsens. Since the item was only meant to inform the Board coming from GCF-2 discussions from previous Board Meetings, the Board took note of the measures and moved on to the Election of Co-Chairs.

The Board elected the BMs from the UK (Sarah Metcalf) and the Dominican Republic (Milagros De Camps German) as Co-Chairs from developed and developing countries, respectively. There were no further deliberations done under this agenda item.

During Other Matters, the Board acknowledged that the BMs from Switzerland (Stefan Denzler), Canada (Tom Bui), and Argentina (Corinna Lehmann) were attending their last Board Meeting. It was noted that their seats would be filled by different representatives from their respective countries. Moreover, during the Report of the Meeting, the Board expressed gratitude to CSO AOs Eileen Cunningham and Erika Lennon, recognizing their two years of significant service representing civil society. The Close of the Meeting concluded at 19:39 in the evening, Tbilisi time.

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