CSO Update: GCF Board Meeting 27 Day 5

On the last day of B27, the Board tried closing unresolved items that needed board decision, starting with the Consideration of Funding Proposals.

After consultations done on the sidelines with opposing BMs and BMs that added new conditions, the 5 FPs were presented again to the Board for their approval. Because the Board did not reach consensus on the adoption of SAP 017 for Burundi, SAP019 for Sudan, and FP146 for Nicaragua, the adoption was made under a voting process. FP151 and FP152 on the other hand, had to be deliberated together based on the conditions set by BM from Germany. The following are the summary of the votes casted by the Board.

SAP 017 – Climate proofing food production and investments in Imbo and Moso basins in the Republic of Burundi (Cross-cutting)

 

Accredited Entity: International Fund for Agricultural Development (IFAD)

Country: Burundi

Amount Requested: $9.9 Million USD (Grant)

In Favor: Pakistan, Mexico, Albania, Sudan, Iran, Belize, South Africa, Ecuador, Saudi Arabia, Liberia, Senegal, The Bahamas, France, Germany, Norway, Spain, Italy, Sweden, Japan, Denmark, Finland, United Kingdom A

D

O

P

T

E

D

Object: United States
Abstain: Canada
SAP 019 – Gums for adaptation and mitigation in Sudan (GAMS): Enhancing adaptive capacities of local communities and restoring carbon sink potential of the Gum Arabic belt, expanding Africa’s Great Green Wall (Cross-Cutting)

 

Accredited Entity: Food and Agriculture Organization (FAO)

Country: Sudan
Amount Requested: $9.9 Million USD (Grant)

In Favor: Pakistan, Mexico, Albania, Sudan, Iran, Belize, South Africa, Ecuador, Saudi Arabia, Liberia, Senegal, The Bahamas, France, Germany, Norway, Spain, Italy, Sweden, Japan, Denmark, Finland, United Kingdom, Canada ADOPTED
Object: United States
Abstain:
FP 146 – Bio-CLIMA: Integrated climate action to reduce deforestation and strengthen resilience in BOSAWAS and Rio San Juan Biospheres (Mitigation)

 

Accredited Entity: Central American Bank for Economic Integration (CABEI)

Country: Nicaragua

Amount Requested: $64.1 Million USD ($26.13 Million USD in Grant; $37.95 Million USD in Loan)

In Favor: Pakistan, Mexico, Albania, Sudan, Iran, Belize, South Africa, Ecuador, Saudi Arabia, Liberia, Senegal, The Bahamas, France, Germany, Norway, Spain, Italy, Sweden, Japan, Denmark, Finland, United Kingdom ADOPTED
Object: United States
Abstain: Canada

During the deliberations, the BM from Liberia manifested that the Simplified Approval Process (SAP) such as SAP 017 and SAP 019 have already undergone a rigorous process before it has been submitted to the Board for approval. The opposition made at this Board meeting somehow added another layer of difficulty as it has been subjected to very stringent and subjective opposition that is not based on the merits of the proposal. As BM from an LDC country, he expressed his disappointment and called for the revision of the SAP.

As for FP146, some Board Members suggested adding conditions related to concerns raised regarding indigenous peoples. BM from the Bahamas delivered a statement on behalf of the government of Nicaragua expressing support for the project, while BMs from Denmark and France emphasized that the conditions must be implemented under close monitoring of the Board and of the Fund. FP 151 and FP 152, also greatly debated due to the vagueness of their distribution and access mechanisms, was approved after the Board heard the explanations and confirmation of compliance of conditions by the accredited entities IUCN and Pegasus Capital Advisors.

In total, all the funding proposals, worth more or less, USD 1 Billion were approved.

The Board then proceeded to the discussion on the Updated Strategic Plan. The said item was targeted to run for 45 minutes, but due to further debates and opposing views from the Board, the UPS discussion lasted for more than 5 hours.

It can be recalled that the Board suspended the decision of this item due to several contentions on the language. Some BMs argued that some of the language used – including options presented in the decision text of the USP imply changes in the programming and direction of the Fund.

The highly contentious language of the USP concerns the balance of fund allocation between mitigation and adaptation projects. The proposed version of the USP does not guarantee corrections to the previous Strategic Plan of the Fund under the Initial Resource Mobilization, that allowed more than 50% funding allocation to mitigation projects, which is contrary to the GI provision of the Fund, that there should be 50:50 balance for mitigation and adaptation. Hence, the opposition of many developing country BMs. They reiterated the provisions in the Governing Instrument, mandating the Fund to maintain an equal balance between adaptation and mitigation projects.

In this particular session, the Board considered to remove the options presented and move forward with the proposed text by the Co-Chair from Pakistan, which includes the phrase “by meeting or exceeding IRM outcomes.” BM from Iran and Egypt argued adding such phrase will make it more confusing and could follow the same direction as the IRM outcome, which favored mitigation projects over adaptation. As a compromise, BM from Egypt proposed adding “minimum allocation floor” to indicate that the minimum allocation for adaptation funding should be at least fifty percent (50%) of the resources raised in GCF-1.

Further debate on language followed with the BMs raising opposing views on the texts “by meeting or exceeding IRM outcomes” found in the main paragraph of the decision text, and the text “while aiming to build on IRM outcomes” found in the sub-section. Developed country BMs said do not see anything wrong with both texts, while developing country BMs opposed, emphasizing the point that the current status quo under the IRM is unacceptable because of the adaptation versus mitigation funding allocation discrepancy. They argued that the GCF programming should not rely on the IRM outcomes, but rather be determined by the adaptation and mitigation needs of developing countries, and emphasized this has always been the case as it is what is written in the GI. In the end, the points of the developing country BMs prevailed and the final text adopted reads:

“(i) Further agrees that the GCF-1 programming period will strive to achieve greater impact for developing countries compared with the initial resource mobilisation (IRM) period, while strengthening country ownership and capacity to identify, design and implement projects and programmes, by meeting or exceeding IRM outcomes and in this regard agrees to the following parameters and guidelines for the allocation of resources during the GCF-1 period:

(i) (…)

(ii) Maintaining a minimum allocation floor of fifty percent of adaptation funding, to be provided to developing countries that are particularly vulnerable to the adverse effects of climate change, including small island developing states (SIDS), least developed countries (LDCs) and African States, taking into account their urgent and immediate needs, while aiming to build on IRM outcomes. The Board will aim for appropriate geographical balance.”

While the issue on language on the IRM outcomes seem to be the major issue towards the adoption of the USP, it is also worth mentioning that some developing country BMs, most notably from South Africa, Iran, and Egypt, were cautious on the explicit mention of “African States,” “Least Developing Countries (LDCs),” and “Small Island Developing States (SIDS)” as categories under the term “developing countries.” They argued these could disenfranchise other developing countries that are not part of the country grouping (i.e. Eastern European countries and other uncategorized developing countries). In the end, the Board agreed to stick to what is in the GI, which states the Fund will aim for “appropriate geographic balance” in the overall fund programming.

After more than 5 hours of deliberation, the USP was adopted. However, some BMs were not happy with the final version, especially BM from Sweden, as seconded by the BM from France. BM from Sweden expressed his disappointment on the text and would want to put on record that his country abstains from the decision to adopt the USP in its adopted form. He manifested this despite the fact that the USP was already adopted under a board consensus decision and not through a Board voting process.

Since the Board took a very long time coming up with a decision on the UPS, they decided to quickly adopt some of the pending agenda items during the previous days. These include the Work Program and Budget of the Independent Evaluation Unit (IEU) and the Work Program and Budget of the Independent Redress Mechanism (IRM). 

As reported in our Day 4 updated, these 2 items were suspended because there were pending textual edits proposed by BM from Egypt. Under the Work Programme of the IEU, the original decision text include the approval of the USD 5.9 million budget, the request to IEU to present the Evaluation Policy and guidelines at B28, and the request to the Budget and Audit Committee to review budget execution and future additional budgetary requests of the IEU at the next Board Meeting. BM from Egypt proposed to add another paragraph that urges the Board “to further consider matters including written comments from Africa” to be considered at the next Board Meeting.

The entire proposal from Egypt was opposed by BM from Sweden who said he believed the language is vague, while BM from France said that adding the text that distinguishes Africa as a group may set precedence and that other constituency groups may follow suit in the future. She added that since the issue is to ensure written comments will be considered regardless of who is providing them, she suggested to amend the text that reflects consistency with the Rules of Procedure, to which all Board Members agreed.

The discussion on these two items ended with the Board agreeing to the proposal of BM from France, and both items were adopted by the Board.

Another agenda item that usually takes a significant amount of time from Board deliberations is the Dates and Venue of the next Board Meetings. The document presented to the Board states that if circumstances allow, the next BM will be held physically at the GCF headquarters in Songdo, South Korea. BM from Saudi Arabia suggested not to prejudge the circumstance and urged the Board to just agree on the venue for B28. Should special circumstances arise again in the future, the co-chairs can decide whether or not a physical meeting will be done. This was echoed by BM from Iran, who raised the difficulty of conducting Board Meetings at a virtual setting and cited several UN meetings that have already been done physically.

The proposed schedule for the 2021 BMs are as follows:

  • B28: March 16-19, 2021
  • B29: June 29 – July 2, 2021
  • B30: October 5 – 8, 2021

Other BMs raised issues with regards to the timing as some of the proposed dates coincide with other national holidays and important meetings. This prompted the co-chair to request the secretariat to provide more schedule options and suspend the item to be decided by the Board in between BMs (BBM).

The Election of Co-chairs was also deferred and to be decided by the Board in between BMs. While the agenda item was opened, the nominations for the next co-chair were incomplete. Only the developing country BMs have confirmed the nomination of the co-chair from their constituency – Brenda Ciuk Cano from Mexico. Developed country BMs on the other hand, have not finalized their nomination, although the BM from France expressed interest in the nomination. The item was suspended until the nomination from developed country BMs have been finalized.

The Board also had executive sessions to discuss the following items. Since these sessions are exclusive to Board Members, alternates and their advisers only, and there were no webcasts available, we have yet to see the decisions made for these items at the B27 report.

  • Matters Related to the Head of the IEU: Appointment of the Interim Head of the IEU
  • Matters Related to the Head of the IEU: Selection Process and Committee
  • Appointment of the Members of ITAP

In the closing session, the BMs expressed their appreciation to the outgoing co-chairs Nauman Bhatti of Pakistan and Sue Szabo of Canada. Many have lauded their leadership and patience in moderating the discussions, especially on highly contentious items like the USP done in a virtual format. After several exchanges of message of thanks, the Board Meeting ended almost 4 hours past the scheduled time.

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