CSO Updates on the 31st Green Climate Fund Board Meeting – Day 2

DAY 2 – 29 March 2022

Read the full text of CSO interventions for B31 here 

The second day of B31 started with another debate about the daily programme as some important policy items mentioned in Day 1 were not included. Of these, the Updated Accreditation Framework and the Board committee guidelines were repeatedly raised as the most crucial items. As some BMs raised their concerns, the Co-Chair from France requested the legal opinion from the Office of the General Counsel (OGC) and asked how the Board should move forward in discussing such policy items, especially the item on the Board Committee Guidelines.

The BM from Bhutan asked why the daily programme was not shared ahead of time. He stressed the need for Board members to prepare in advance, which according to him was more difficult for developing country BMs who mostly have limited capacity to look at all Board documents. This prompted the co-chair to apologize and acknowledge the shortcomings regarding this matter. He reiterated the importance of following the Rules of Procedure (ROP), and assured the Board that the co-chairs will sort out the issues raised once the OGC provides them guidance.

The Board then proceeded to discuss Agenda 9, the Updated Workplan of the Board for 2020-2023. There was no Board document circulated for this agenda item and even the CSO Active Observers received copies of the documents only  a few hours after the session opened. The Co-Chairs explained that this is not a usual item that the Board considers, but they believe this could be a good practice to start in order to idenitfy  the key concerns and agenda items that the Board should prioritize for 2022 to 2023. The co-chairs said that after the discussions from B31 they  plan to come up with a decision text and plan out next steps for the Board.

The Co-Chair from South Africa then explained the sub-topic “the Co-chairs’ Mandates and Consultations (Agenda 9.a)”  under  Agenda item 9. He clarified that this item includes matters about governance including  use of secret ballot, review of committees, and cases for decision-making without Board meetings. This item is also geared towards ensuring consultations and enhancing the process of achieving consensus among BMs.

Because there was no Board document circulated ahead of this discussion, several BMs raised their concerns and confusion. . BM from Sweden urged the Co-Chairs to clarify when items for consultations will be presented to the Board since those items must be brought to closure. BM from Egypt said that it is vital for the co-chairs to provide them with their comprehensive plan for these matters to be addressed or resolved. He added that guidelines and approaches used in consultation should be in line with the Board existing consultation guide.

BM from the US stressed that consultations  must be open, transparent, inclusive and ideally done ahead of time. As there have been confusions in the past, he urged the co-chairs to clarify the role of the  Secretariat in these consultations in support of the Board. BM from Norway agreed with the point and further said that consultations would help the Board function by creating a culture of consensus-building even outside of Board meetings. He believed that the facilitation of the consultations should be largely led by the Secretariat.

As former co-chair of the Board, BM from Pakistan cited that the Rules of Procedure (ROP) are clear on the flow of consultations and the important role that the Co-Chairs play in ensuring closure of policy items. He stressed that the Secretariat’s role providing technical support is very much useful, but the Co-Chairs must always take the lead and give political direction.

Alluding to this point, BM from Sweden added that the Secretariat have led consultations in the past (e.g. Integrated Results Management Framework (IRMF)). He believed that the ROP does not state that only the co-chairs could prepare documents for consultation, and argued the Board has already failed in complying with the ROP when documents for the meeting were not released 21 days ahead. He suggested that a Working Group be convened by the Co-Chairs to enact “surgical changes” on policies related to document releases and on consultation processes outside Board meetings. He closed his intervention by reminding the Board that this discussion is crucial in addressing governance issues in the GCF.

BM from Pakistan responded to this and reiterated that while the role of the Secretariat is very important,  the co-chairs have to step in and take leadership when it comes to political matters. BM from Egypt agreed and stressed that discussions in the Board are very political, which is why the Board is structured to have 2 co-chairs from both constituencies to provide guidance and leadership, and with  the Secretariat providing support. He referred to a past decision (B23.03) on guidelines regarding consultations and asked Co-Chairs to continue enhancing these consultations and work to conduct them in an open, consultative, and transparent manner.

As for the release of documents, BM from Switzerland recommended that the Board stick to the ROP and to follow the 21-day lead time for release of materials, to also give enough time for stakeholder consultations. He also suggested holding Joint Technical Briefings not just for FPs but also for Policy discussions in order to speed up joint consultations.

Noting the various points raised by the Board, the Co-Chair from South Africa proposed to provide the Board with a roadmap aimed to address the issues mentioned and develop a new process for consultations.

Another sub-topic under this agenda item is the Appointment of Board-appointed officials and performance-related matters (Agenda 9.b), which addresses  matters related to the appointment of the heads of the independent units, the Fund’s Executive Director and the Independent Technical Advisory Panel (ITAP), among others. The co-chair clarified that they are still working on several issues around the appointments and promised to get back to the Board with updates on the selection of the appointees and the performance assessment of the appointed officials.

The OGC intervened and advised the Co-Chair from France that these matters could not be discussed in an open session and suggested dealing with the matter in an executive session, which prompted the Board to suspend the webcast.

Upon resumption of the virtual Board Meeting, the Board discussed the sub-item under the Updated Workplan of the Board for 2020-2023, Strategic Planning and Programming Matters (Agenda 9.c), which proposed the following list of items that should be accomplished by the Board before the end of 2023:

  1. Consideration of the Processes regarding the Updated Strategic Plan (USP)

  2. Launch of the GCF-2 Replenishment Process

  3. Launching of the GCF strategic programming process, as mandated

  4. Setting the annual funding goal for 2023, per the Updated Strategic Plan and in accordance with the financial management plan to manage the Commitment Authority

  5. Support to adaptation

  6. Climate rationale

  7. Programmatic approach

  8. Matters related to the program and programme activity cycle of the Simplified Approval Process (SAP)

  9. Matters related to the accreditation framework

  10. Private Sector Facility (PSF)

  11. Second Performance Review

  12. Policy for contributions from other sources

Many BMs from developed countries raised their long-standing issue on policy gaps, urging the Board to address them before discussing the GCF-2 Replenishment Process. Some of the policies they mentioned include the update of the USP, Programmatic Approach, and PSF. BMs from the Netherlands and Switzerland mentioned that as “donor” countries, it would be difficult to ask for another round of “donations” from their respective governments to the GCF if policy gaps remain unaddressed.

Developing country BMs, while also supportive of addressing some policy gaps, focused on the need to prioritize the GCF-2 replenishment. BM from Pakistan reminded developed country BMs that delivery of climate finance is an unconditional obligation of Annex 1 countries under the Paris Agreement, while BM from Ghana, on behalf of the African Group of Nations (AGN), demanded that there be an agreed modality, authority, and timeframe on the Board’s Work Plan not later than B32 towards the launch of GCF-2. He added that these conditions are to be met, before any discussion or review of the USP is to be conducted.

The Board then proceeded to discuss the sub-topic Institutional Matters (Agenda 9.d), which is still under the Workplan of the Board for 2020-2023 and is aimed at seeking Board guidance in addressing the following:

  1. Trustee arrangement (as contract with the Trustee, the World Bank, will soon expire)

  2. Report to the COP (2nd Quarter)

  3. Assessment of the GCF’s regional presence

  4. Terms of Reference (ToR) on the Indigenous Peoples’ Advisory Group

  5. Salary Scale, update of the GCF Secretariat

  6. Administrative guidelines including a Human Resources framework

  7. Detailed guidelines for the effective functioning of the Independent Evaluation Unit (IEU)

The BMs from both constituencies were  supportive of addressing these, especially on the update of the Salary Scale of the GCF Secretariat, as well as the Administrative guidelines update towards a Human Resource framework. The BM from Canada stressed that it is important for Indigenous Peoples to check the draft ToR on the Indigenous Peoples’ Advisory Group (IPAG) to avoid “offending” IPs. BM from the US, with support from BMs from Italy and Spain, suggested to include in the list the re-establishment of the Private Sector Advisory Group (PSAG).

Some of the BMs also aired their confusion on what the “Detailed guidelines for the effective functioning of the IEU” mean, as they believe this is already captured in the ToR of the Head of the IEU. An explanation from the Co-Chairs on what these guidelines will entail and its necessity was then requested, to which the co-chairs agreed to provide when discussions about this matter resume in the coming days.

The discussion was followed by the agenda item, Consideration of Funding Proposals (FPs). For this Board Meeting, only 2 FPs were submitted for deliberation by the Board, amounting to a total of USD 187.6 million. According to the secretariat, they endorsed 6 FPs for B31, but only 4 were recommended by the Independent Technical Advisory Panel (ITAP) for Board approval. Of the 4, one FP was withdrawn by the accredited entity several days before B31, while another FP had complications with the expiry date of its AE’s Accreditation Master Agreement (AMA) and the revised date of B31, which was initially scheduled from February 4-7, but was later moved to March 28-31. The AE’s AMA lapsed last February 20, 2022, therefore the proposal submitted by the AE cannot be considered as planned.

The Secretariat also gave a brief overview about the FPs and a snapshot of the GCF portfolio once the B31 batch of FPs are approved. It showed that if this batch of projects were approved, the GCF would have    supported 192 projects, worth USD 10.2 billion. Of these, 66% are from the public sector, while 34% from the private sector. In terms of access modality, the projects were  primarily submitted by International Access Entities (IAEs) at 79%, while the share of Direct Access Entities (DAEs) remains low at 21%. Majority of the projects also cover the thematic area of Mitigation at 62%, while projects for Adaptation are at 38%. All these figures are in nominal terms.

Almost all of the BMs expressed disappointment with the low number of FPs considered at this Board Meeting. BMs from Mali and Bhutan said the low turnout only shows the systemic flaws in the GCF that the Board should urgently address, and doing nothing about it could lead to major reputational risks for the Fund.

Several BMs from developed countries expressed their belief that one of the reasons for having less FPs to consider at this Board Meeting is the failure to resolve policy gaps in the GCF. BM from Sweden added that the matter is also a reflection of several governance issues in the Board and emphasized that deferring the approval of a FP just because the Board decided at the last minute to change the dates of B31, should not be a reason to prevent vulnerable countries from receiving the support they need the most.

Some BMs were also concerned about the approval process and sought clarity about the bottlenecks that AEs experience during FP submission that were  more likely experienced specifically by DAEs. BM from Bhutan said he believes the iTAP and the Secretariat should be closely working together and urged the Board to do something about the iTAP’s ways of working. He proposed that the iTAP and the Secretariat disclose all information about the FP assessment, so the Board knows where the problems lie and can address them.

With regards to a specific FP, BM from Ghana sought clarity about the Secretariat’s compliance with Board Procedures, particularly on securing No Objection Letters (NOLs) from NDAs before projects are endorsed to the Board. The project that was recently withdrawn a few days before B31 failed to comply with the NOL requirement, and BM from Ghana believed the secretariat should have noted this before it was endorsed to the Board.

Other BMs gave positive feedback on some of the items presented. BM from Spain was happy about the increased involvement of the Private Sector and is looking forward to strengthening Private Sector engagement in the GCF. BM from Norway noted how the FPs for B31 have strong adaptation components, and that he is pleased to see Climate Smart Agriculture considered by accredited entities.

For our CSO Intervention, Erika Lennon, the Active Observer from developed country CSOs, echoed the concerns raised by the Board about having very few FPs for approval at this Board Meeting. She added that while CSOs fully support ensuring the quality of GCF projects, we are worried that despite spending significant time on FP review and assessment, several gaps and non-compliance with GCF policies and standards remain. Erika also mentioned our objection to the use of Climate Smart Agriculture, which is a term that Board members have rejected in the past as it lacks a clear and commonly agreed international definition. The intervention also emphasized how the 2 FPs have inadequate Gender Action Plans and little regard to the rights of Indigenous Peoples and local communities as they remain excluded from the formulation of the projects.

In response to the questions and concerns raised, the Secretariat assured the Board that more FPs are in the pipeline, with a total funding allocation of USD 1.77 billion, and they are expected to come up in B32 and B33. A new FP template will also roll out from B32 onwards to expedite the process and address the delay caused by non-compliance of requirements and others. They also assured the Board that more Private Sector projects will come up in the next Board Meetings.

The Secretariat added that they are working closely with the iTAP and are doing everything they can to expedite the assessment and review process, which they do on a rolling basis and have automated to avoid unnecessary delays. In line with the GCF goal of prioritizing DAEs and SAPs, the Secretariat meant to endorse FPs based on its merits, but also noted the value of strictly requiring the NOLs from NDAs.

The co-chair then proceeded to discuss the FPs one by one. Summary of discussions for each are as follows:

Information about FP

Discussion

Status

FP182 Climate-smart initiatives for climate change adaptation and sustainability in prioritized agricultural production systems in Colombia (CSICAP) Annexes

Country: Colombia

AE: CAF

Total Financing: USD 99.92 million

GCF Financing: USD 73.2 million (USD 42.28 million grant, USD 25 million loans)

Co-financing: USD 26.3 million

There were no comments from the Board except our CSO Intervention, delivered by Erika Lennon the AO for developed country CSOs. She raised the concerns of Civil Society particularly on the promotion of livestock production, the ways the FP discusses smallholder farmers without centering human rights and food sovereignty and its failure to consult Indigenous Peoples and lack of ambition in advancing gender equality.

Since there was no objection from the Board, FP182 was approved.

APPROVED

FPP183 Inclusive Green Financing Initiative (IGREENFIN I): Greening Agricultural Banks & the Financial Sector to Foster Climate Resilient Low Emission Smallholder Agriculture in the Green Great Wall (GGW) countries – Phase 1 Annexes

Country: Burkina Faso, Chad, Côte d’Ivoire, Djibouti, Eritrea, Ethiopia, Ghana, Mali, Mauritania, Niger, Nigeria, Senegal, Sudan

AE: IFAD

Total Financing: EUR 177.4 million

GCF Financing: EUR 104.4 million (EUR 30.4 million grants, EUR 73.9 million loans)

Co-financing: EUR 73.9 million (grant and loans)

The Board was also quiet about this FP and the co-chair asked the Board for its approval before he called upon Kairos dela Cruz, the alternate Active Observer of developing country CSOs for the CSO Intervention. The Board approved the FP and then listened to Kairos who mentioned the lack of information about the FP’s target percentage of the overall loan amounts that would be granted to the marginalized entrepreneur groups and the exclusion of clear measures to address certain risks common to both the agricultural sector and the countries involved, especially that of natural disasters.

APPROVED

The following approved FPs were granted extension of deadlines as requested:

  • SAP015: Promoting zero-deforestation cocoa production for reducing emissions in Côte d’Ivoire (PROMIRE)

  • FP150: Promoting private sector investment through large scale adoption of energy saving technologies and equipment for Textile and Readymade Garment (RMG) sectors of Bangladesh

  • FP153: Mongolia Green Finance Corporation

  • FP154: Mongolia: Aimags and Soums Green Regional Development Investment Program (ASDIP)

After all Board decisions were  made under this agenda item, the co-chair from South Africa called upon Daniel Nolasco of the iTAP to respond to the questions raised by the Board regarding FP assessment and review done by the iTAP. He clarified that of the 6 FPs that were endorsed by the Secretariat, 4 were recommended by the iTAP for Board approval. However, due to reasons beyond their control, only 2 FPs were tabled at this Board Meeting. He added that to date, there have been 261 FP endorsements that were reviewed by the ITAP. Only 16% were not forwarded to the Board, but many of these have been resubmitted, endorsed by the iTAP, and eventually received Board approval. Only 5% of the iTAP non-endorsements were not resubmitted.

On the  issue of transparency, the iTAP stressed that they have been working closely with the Secretariat ever since they were established, not only in developing the climate rationale, but also in improving policies on SAP and others that the Secretariat requests their assistance. He added that they have conducted activities like “meet iTAP” specifically for AEs so they understand common FP submissions issues, and expressed his agreement with some of the Board Members regarding closing policy gaps.

The co-chair from South Africa then gave the floor to his fellow co-chair from France to open the next agenda item, but with just 4 minutes left before the scheduled time of adjournment, the co-chairs decided to end Day 2.

You can catch the recordings and live stream of the proceedings of the Board at: https://www.greenclimate.fund/boardroom/meeting/b30#videos

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