UPDATES: Day 3 of the 40th GCF Board Meeting
You can watch the GCF B39 proceedings live and on demand here: https://www.greenclimate.fund/boardroom/meeting/b40#videos
Full transcript of the interventions by the GCF Observer Network are available here: https://www.gcfwatch.org/resources/board-meeting-resources/40th-board-meeting-of-the-gcf
DAY 3 – October 23, 2024
Continuing the discussion on the Consideration of Funding Proposals from the previous day, the Board deliberated on the remaining FPs tabled for B40. Summary of FP information and discussions are below.
Funding Proposals |
Comments |
Status |
SAP044 Empowering Women Groups to Build Resilience to Climate Impacts to the Province of Cunene in South West Angola (CREW Angola) *FP Supported by PPF Total financing: $9.9 million Total GCF financing: $9.6 million Co-financing: $0.3 million |
No comments from the Board. |
APPROVED |
SAP046 Strengthening Climate Information and Multi Hazard Early Warning Systems for Increased Resilience in Azerbaijan Accredited Entity: UNEP Total financing: $35.1 million Total GCF financing: $25 million Co-financing: $10 million from government and UNEP |
The BM from Georgia noted the importance of prioritizing Early Warning Systems (EWS) for the people of Azerbaijan and expressed support to approve the FP. The BM from France requested to put on record his abstention, without blocking the consensus for approving the project. The BM from Gambia urged the Board to look into the inequitable allocation of GCF Financing for certain countries. She noted the discrepancy between the $9 million funding for SAP044 in Angola, with a population of 37 million, versus the $25 million for SAP046 in Azerbaijan, a country with a population 10 million. |
APPROVED |
SAP047 Climaventures: Harnessing the Domestic Private Sector Ecosystem for Climate Action in Pakistan Accredited Entity: National Rural Support Programme (NRSP) Total financing: $50 million Total GCF financing: $25 million ($15m equity, $5 grant) Co-financing: $25 million equity |
Tara Daniel, the Active Observer from developed country CSOs was the first to comment on the FP, delivering the Observer Network intervention that highlights the categorization of the FP. As the project included potential waste-to-energy activities, the CSOs recommended reclassifying the project from Category C, which is exempted from Environmental and Social Impact Assessment, to Category B. The CSOs also believe an Environmental and Social Management System to monitor and mitigate possible impacts of the ventures, must be established. The BM from Antigua and Barbuda sought clarity on grievance mechanisms and asked where the project recipients can submit complaints, especially in events that involve legal disputes. The Secretariat together with the accredited entity, NRSP, assured the Board that the FP was able to comply with the ESS and that grievance mechanisms are already embedded in the project. |
APPROVED |
SAP045 Scaling up Climate Resilience Solutions for Burundian Smallholders in Burundi *FP Supported by PSAA Accredited Entity: One Acre Fund (OAF) Total financing: $35 million Total GCF financing: $25 million grant Co-financing: $10 million from DIF, KFF, PSP |
The BM from Mali commended the Secretariat for considering this FP as he believes Burundi is on the frontier of climate change. He also agreed with the recommendations of the ITAP, particularly on the governance framework to ensure long-term partnership with institutions involved and added that the provision of full grants directly to beneficiary farmers must be ensured. He recommended adding these as part of the covenant of the Funded Activity Agreement (FAA). The BM from the Gambia raised concerns on the significant budget allocation of the project to the administrative costs of the AE, reiterating the overall issue raised against IAEs for charging a significant amount of operating cost. This point was echoed by the Observer Network, when Kairos dela Cruz delivered the intervention of the CSOs, who believe the $25 million grant provision by the GCF is overwhelmingly used for the working capital and operating costs of the PSAA entity, but not to make the participation in the program and the payment for the inputs provided more affordable for the most vulnerable and marginalized smallholder farmers. Participating farmers are instead charged at standard recovery for inputs provided, and a delay or delinquency in full repayment will lose them their spot in the program for a year. The CSOs also noted that while the FP is supported by the PSAA, which is aimed to make it easier for entities from developing countries to bring proposals forward, the first PSAA entity is NOT one from a developing country. |
APPROVED |
FP243 Climate-resilient community access to safe water powered by renewable energy in drought-vulnerable regions of Ethiopia Accredited Entity: Ministry of Finance Ethiopia Total financing: $50 million Total GCF Financing: $45 million grant Co-financing: $5 million from government |
Many BMs expressed support for this FP, with the BM from Germany adding that the FP must also look into the alignment of initiatives and programs of other humanitarian and development agencies working in the country. The BM from Saudi Arabia expressed his disagreement, and requested to put it on record, with the Secretariat assessment on the impact of foreign exchange rates. |
APPROVED |
FP245 Green City Kigali: a new model for urban development in Rwanda Accredited Entity: Ministry of Environment Rwanda Total financing: $35 million Total GCF financing: $27.9 million grant Co-financing: $7.2 million from government |
The BMs were happy to support the FP, with the BM from Germany highlighting the FP’s strong focus on gender equality and social inclusion. The BM from France likewise expressed support but also sought clarity regarding the mitigation co-benefits of the project. |
APPROVED |
FP246 Climate Resilient Agriculture in Somalia (Ugbaad) Accredited Entity: Food and Agriculture Organization (FAO) Total financing: $94.9 million Total GCF financing: $79.7 million grant Co-financing: $15.2 from USAID/FAO |
As the FP is the first GCF project in Somalia, the Board was pleased to consider the project. The BMs from Egypt, Norway, Italy expressed support, while the BM from Mali extended his appreciation to the ITAP and the Secretariat as the duration of FP processing time was relatively short. However, the issue around the current political unrest in the country was raised by the BM from Finland, urging the accredited entity to add as part of the conditions, a policy outlining the FP’s solid approach in implementing its activities amidst political conflict. The BMs from UK and Sweden concurred and requested the AE to share more information about it. This was opposed by the BM from Saudi Arabia, who believed that the AE is a reliable GCF partner and has proven its ability to implement projects in various countries, and disagreed with the need to add more conditionalities not only for this FP, but for other projects designed to support the underserved communities. The Secretariat added that in the course of FP preparation, they had conflict sensitivity assessments that allowed the FP to adjust its disbursements to be done in 7 installments and implement adaptive management if needed. Upon the approval of FP246, Ambassador Khadija Mohamed Al Makhzoumi, the Minister of Environment and Climate Change, Somalia was given the space to thank the GCF Board and the Secretariat. |
APPROVED |
FP247 Local Climate Adaptive Living Facility Plus (LoCAL+) – West Africa (Burkina Faso, Ivory Coast, Mali and Niger) Accredited Entity: Banque Ouest Africaine de Développement (BOAD) Total financing: $52.8 million Total GCF Finance: $44.4 million grant Co-financing: $8.5 million from governments and UMEO-CCT |
Several BMs echoed the concerts around the political instability in some of the recipient countries of the project. The BM from Sweden underscored how it poses great risk to project implementation, urging the AE to clearly outline in the FP the safeguards and fiduciary standards, and to describe how short-term monitoring initiatives will take place in the event of unforeseen circumstances. The AE assured the Board that despite the security situation in the region, their institution receives a stable investment rating and has the capacity and enough experience to operate. A dedicated monitoring and evaluation for climate change projects was also recently established to look into their climate projects. In defense of the FP, the BM from Mali questioned the ITAP recommendation that is related to the disbursement of funds. He argued that the AE is a trusted regional institution capable of operating as a bank, and he does not see the value in adding more conditions related to its institutional functions. The Observer Network also had concerns regarding the proposed financing mechanism – dedicated blended finance facility – that allows local private sector actors to access repayable grants for income-generating adaptation investments that are aligned with local priorities. The CSOs raised how the project introduces up to four levels of intermediation and complex financial structuring, which may hinder the flow of crucial resources to local communities. The BM from Saudi Arabia also raised a question to the ITAP on its recommendation that requires the AE to look into the financial capacity of microfinance institutions and align these with adaptation goals. As each country will have their own NDC targets and NAPs, he clarified which goal should be the basis of the criteria. This prompted the co-chairs to suspend the item for a few hours, allowing the Secretariat to make amendments to the decision text. Upon resumption of the consideration of FP247, the Board failed to arrive at a consensus, allowing the co-chairs to proceed into a voting process. Each Board Member casted their votes using the automated voting device, and resulted in 19 votes in favor, 4 votes of abstention and 1 vote of not in favor of approving the project. |
APPROVED |
FP249 Strengthening climate Resilience of Vulnerable Agriculture Livelihoods in Iraq (SRVALI) Accredited Entity: Banque Ouest Africaine de Développement (BOAD) Total financing: $39 million Total GCF Funding: $29.3 million grant Co-financing: $9.7 million from FAO, MoWR, MoE |
No comments |
APPROVED |
FP251 Barbados Climate Resilient South Coast Water Reclamation Project (SCWRP) Accredited Entity: Inter-American Development Bank (IDB) Total financing: $110 million Total GCF finance: $70 million ($40m grant, $30m loan) Co-financing: $40 million from IDB |
There was overall support from the Board however a number of concerns were raised during the discussion. The BM from Bahamas underscored how the project compared to other FPs, has a very high loan component. The Observer Network also raised the same concern and added that the introduction of the Debt-for-Climate conversion in the FP might validate the use of financial instruments which are not only complex, limited and ineffective, but also fail in providing true climate justice for countries that have contributed the least to the climate crisis but are grappling with a growing debt burden due to its impacts. The debt-swap in the FP does not reduce the overall debt, but rather lowers the interest payments on existing debt, clearly not providing a real solution considering that Barbados’ debt-to-GDP ratio reached 144% in 2020. The points raised by the CSOs were only recorded, and did not prevent the Board from approving the project as it stands. Upon the approval of FP251, a video of Ambassador Mia Motley was played on the screen, sending a message of appreciation to the Board and the GCF for granting the project to her country. |
APPROVED |
F252 Acumen Resilient Agriculture Fund II (Multi Country Project) Accredited Entity: Acumen Fund Inc. Total financing: $132 million Total GCF financing: $30 million equity, $4 million grants Co-financing: $98 million from Acumen Fund |
The BM from Antigua and Barbuda sought clarity on the legal jurisdiction of the project in the event that the project recipients will need to settle legal disputes. She argued that this question is also for other private sector FPs, as these projects are not required to disclose their project ESS. The BM from the USA raised concerns on one of the country recipients of the project, Uganda and its policy against homosexuality that negates the Fund’s objective to promote the rights of LGBTQA+. The Observer Network noted the lack of stakeholder participation, as majority of the consultations mentioned were online and have not included a diverse base of smallholder farmers’ representatives. For the CSOs, this makes the FP’s country ownership component weak. |
APPROVED |
FP253 Greening Financial Systems: Delivering Climate Finance for All (Multi Country Project) Accredited Entity: European Bank for Reconstruction and Development (EBRD) Total financing: $669 million Total GCF financing: $186 million loans, $14 million grants Co-financing: $469 million from EBRD and other donors |
Some developing country BMs raised an overall concern regarding GCF multi-country projects and their tendency to not benefit all country recipients. The BM from Antigua and Barbuda shared that of the several multi-country projects in the Caribbean region, not a single country has ever received funding from GCF projects. The BM from Pakistan was also interested to know the allocation parameters used to ensure that all countries identified will receive GCF funding, and avoid overconcentration to some countries only. The CSO Observer Network raised concerns on the accountability and transparency of the FP. It was noted that while this FP is a successor of a previous GCF Project (FP253), no public assessment of the programme and its climate impacts have been published. Annual Performance Reports have not been shared and very little information can be found on either GCF or EBRD websites. The CSOs also questioned the potential effectiveness of the proposed blended finance approach in reaching the MSMEs, and reminded the Board, the Secretariat, and accredited entities that the target of efforts on gender should ultimately be advancement toward gender equality, and not the performative check-box of single-year targets that are not contextualized in terms of baseline data. The BM from Pakistan also raised a perennial issue addressed to the Secretariat on the overconcentration of GCF finance being accessed by a few international entities, including the EBRD, which is now the top entity receiving Fund resources. The Secretariat assured the BM that they are monitoring and working with the risk committee to implement the necessary adjustments in the succeeding FP processes. |
APPROVED |
FP253 GCF-IFC Scaling Resilient Water Accredited entity: International Finance Corporation (IFC) Total financing: $1.2 billion Total GCF financing: $250million loans, $8million grants Co-financing: $1 billion from IFC |
As the FP is another multi-country project, the BM from Antigua and Barbuda once again asked how the FP will ensure country recipients receive adequate GCF funding and whether the subprojects have already been developed. The BM has consistently raised this issue in the past, citing the tendency of AEs with multi-country programming projects to get GCF approval without finalizing the subprojects and the guarantee that these will be aligned with country priorities. The representative from the IFC explained that the selection of countries for the project was based on needs, adding that countries most vulnerable and needing water resources the most were prioritized. While subprojects have yet to be developed, the AE confirmed that they continue extensive engagement with stakeholders, NDAs and government ministries and share that the IFC Environment and Social Monitoring framework is available in every IFC location. The Secretariat also responded to the BM’s point about subprojects, and added that the Secretariat is working on preparing the templates to ensure future subprojects are aligned with the country needs and priorities, thereby ensuring country ownership. The BM from Saudi Arabia sought clarity on another ITAP recommendation, urging the AE to maintain its alignment with the Paris goals, to which the representative from IFC assured that they follow the standards of the World Bank and most MDBs, making their operations and programme 100% Paris aligned. While the CSO Observer Network welcomed initiatives aiming to improve water management, they raised concerns about the Public Private Partnership (PPP) Structuring Facility and on-the-ground funding elements of the project. The IFC’s PPP has created problems in many countries and, in the case of cost overruns or PPP failure, it is the public that ultimately bears the risk. Comments from the ITAP were also noted by the CSOs, who agree that more sustainable climate-resilient options, such as Non-Revenue Water Reduction (NRWR), are sidelined. This deprioritization risks compromising energy efficiency and climate resilience, as well as diverting attention from maintaining and modernizing existing infrastructure, which may offer more sustainable solutions. Although the FP suggests modifying the design, it is unclear how this would address the structural issue that NRWR is unattractive to profit-seeking infrastructure investors and would require public investment. |
APPROVED |
FP244 Climate Resilient Health and Well-Being for Rural Communities in southern Malawi (CHWBRC) Accredited entity: Save the Children Australia Total financing: $37 million Total GCF financing: $33 million grant Co-financing: $4 million from MoH, GSK, Foundation S, Moondance Foundation, etc. |
While the BM from China expressed support on how the FP will greatly benefit the people of Malawi, he expressed disappointment on how the FP in its climate rationale, used an outdated article that puts China in bad light. He argued that there are a number of reliable resources, even from UN agencies, that the FP could have used, and for this reason he is rejecting the project. The matter was not addressed by the AE or the Secretariat, prompting the co-chair to call for a vote. The results were 22 votes in favor, 1 against, and 1 abstention. The BM from China reminded the Board of their mandate, emphasizing that these meetings should not be a place for political propaganda. He also urged the Secretariat to ensure that the AEs are equipped with the right, unbiased information in preparing their concept notes and FPs. |
APPROVED |
The Board then proceeded to approve the Changes and Restructuring of Funding Proposal requests for several approved FPs. These include the reduction of scope and restructuring in the operations of FP077 Ulaanbaatar Green Affordable Housing and Resilient Urban Renewal Project (AHURP) in Mongolia. According to the accredited entity, Asian Development Bank (ADB), rampant inflation and currency devaluation made it extra challenging for the project construction requirements. Request for changes to FP173 Amazon Bioeconomy Fund: Unlocking Private Capital by Valuing Bioeconomy Products and Services with Climate Mitigation and Adaptation was also presented. The accredited entity, Inter-American Development Bank (IADB) explained that the multi-country programming project initially did not include Bolivia due to its political context at the time when the FP was submitted. But over the past months, the government expressed interest in developing their concept note for a project in Bolivia.
The Board had no objections to these requests, and approved the changes for both FPs. Other restructuring requests for several FPs were also noted, but due to matters deemed confidential, the Board went on a brief Executive Session.
Upon resuming, the Board reviewed the Report on the Activities of the Secretariat, which provided an overview of the Secretariat’s progress against its 2024 work plan. The Executive Director highlighted efforts to streamline accreditation reforms and the commitment to an ‘efficient GCF,’ including plans to shorten the Project Review cycle to 9 months next year. The Secretariat also shared updates on the development of the new Readiness Program and plans to launch a Regional Presence at the next Board Meeting.
Regarding impact and results, the Secretariat reported that both B39 and B40 surpassed the $1 billion threshold in FPs. They have also implemented measures to expedite disbursements, reducing processing time from 51 to 20 days. Additionally, the private sector team has hosted investor forums in recent months to foster collaboration and explore new partnerships. The Secretariat also emphasized the importance of communicating GCF project impacts and sharing success stories to attract further partnerships. In terms of institutional strengthening, the Executive Director shared that as part of the recently launched fit-for-purpose organizational design, consultations on modernizing policies are underway and several key policies are being updated to ensure alignment with the Fund’s strategic priorities.
While no decision was expected from the Board on this agenda item, some BMs expressed support and appreciation for the Secretariat’s efforts over the past year. They also identified areas for improvement, such as enhancing the Secretariat’s capacity to implement Monitoring, Evaluation, and Learning (MEL). The BM from Korea highlighted the need for an updated Human Resource Policy and requested clarification on the GCF’s role in complementing the Fund for Responding to Loss and Damage (FRLD) and other climate funds. COP29 was mentioned as a valuable opportunity for the GCF to showcase its achievements and project impacts.
Regarding the organizational structure, BMs were pleased to see improvements in the Secretariat’s capacity. However, the BM from Finland requested more details about the functions and expertise of newly added staff. The BM from the US reiterated concerns about the number of executive positions within the organization, reminding the Executive Director of the Board’s oversight role, especially on decisions with cost implications. Some members also emphasized the importance of maintaining geographical and gender balance within the Secretariat.
The BM from Egypt appreciated the report’s use of the term ‘underserved countries,’ pointing out that several nations, including Egypt, still receive zero GCF funding. The Executive Director acknowledged this concern and assured the Board that it would be considered in the upcoming revisions to the accreditation process.
The Observer Network raised concerns about the report’s framing, suggesting it shifts the GCF toward functioning like another multilateral development bank. Bertha Argueta, the Alternate Active Observer for developed country CSOs, expressed alarm over the introduction of a ‘client satisfaction survey,’ viewing it as problematic for using banking jargon and misrepresenting the GCF’s true clients, which are communities rather than NDAs or AEs. CSOs also criticized the recent ‘investor forums,’ which connected IFIs, banks, and philanthropic organizations, while CSOs remain uninformed about the development of country programmes, project site visits, or key updates involving local partners. The Executive Director noted these concerns, and assured the observers that the Secretariat is mindful of the mandate of the Fund and that it is very much aligned with the observers.
After noting the report, the Board went to quickly adopt the decision on the Implementation of the Proposed Structure of the Secretariat. As the item was related to the presentation of the Secretariat’s activities, the BM from US proposed textual edits, reflecting Board oversight on the recruitment of executive staff and on situations where the percentage of senior management exceeds 7% of the total Secretariat staff headcount.
The Observer Network concluded the discussions, with Bertha Argueta, the Alternate Active Observer from developed country CSOs, reminding the Board of the GCF’s founding purpose: a climate fund created under the UNFCCC to assist all developing countries, with no restrictions on financial instruments, regardless of income levels. It was not intended to operate like an MDB, but rather established to respond to the specific climate finance needs of developing countries as they implement mitigation and adaptation actions.
CSOs also highlighted the challenges regional entities and NDAs face when engaging with the GCF, particularly due to language barriers, limited understanding of local contexts, and inconsistencies during the GCF review process. These issues stem from staff turnover, a multiplicity of task managers, and poor internal communication. As the report findings indicate, many bottlenecks occur within the Secretariat, where potential projects and accredited entities encounter delays. The CSOs stressed that these problems must be addressed as part of any revision to the accreditation and project approval processes.
After hearing all comments, the Board adopted the decision to consider the report’s findings and Board recommendations in the ongoing GCF policy deliberations and in the Secretariat’s efforts to revise the Fund’s readiness and accreditation programs.
The IEU Evaluation Report was the final agenda item for Day 3. The meeting adjourned at 19:04 KST.
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