CSO Updates on the 31st Green Climate Fund Board Meeting – Day 4

Prepared by The Asian Peoples’ Movement on Debt and Development

DAY 4 – 31 March 2022

Read the full text of CSO interventions for B31 here 

On Day 4 of B31, the Board first discussed the agenda item Consideration of Accreditation Proposals, specifically on the re-accreditation application of DBSA, which was opposed by several BMs from Day 3. The co-chair from France proposed to add in the decision text a statement that would reflect DBSA’s efforts towards advancing the goals of the Paris Agreement, particularly the Just Transition Investment Framework. There were no objections received from the Board, however the BM from Sweden proposed to also add in the decision text a formulation about banks that have adopted net-zero pathways in their portfolio.

BMs from Egypt and Pakistan opposed the said proposal and asserted that the Board should not send a message that AEs will be required to meet these new conditions for accreditation and re-accreditation. Citing the policy guidance from the GCF Updated Strategic Plan (USP), the BM from Sweden argued against this and added that in order for the GCF to be Paris-aligned, commitments to net-zero emissions must be encouraged. He furthered that there should be an expectation from the entities up for accreditation or re-accreditation to move away from investments in fossil fuels in the first 5 years of accreditation.

BMs from developing countries, asserted that clarity and predictability in accreditation is crucial and that alignment with the Paris Agreement must be taken in a holistic manner while taking into account the principle of Common But Differentiated Responsibilities (CBDR). The BM from Egypt further argued that the Board must find a balance between their mandate to add conditions, and the needs of entities seeking re-/accreditation. He averred that such balance must acknowledge and resolve the fact that BMs have unfair leverage over entities who will acquiesce to “new conditions” just to get approval, after investing so many resources in the accreditation process.

Other BMs from developed countries supported the proposal and assertions of the BM from Sweden. The alternate BM from France insinuated that a “double standard” narrative is being raised by some BMs and added that it should not be tolerated. The BM from Gambia reminded the Board tofocus their attention to improvements in DAE access, especially for LDCs.

The Secretariat clarified that the GCF has not adopted a net-zero policy yet and reiterated that the Digital Accreditation Platform (DAP) that the Secretariat is working on aims to establish a baseline of the overall portfolio of AE’s.

After hearing the clarification from the secretariat regarding net-zero, the co-chair invited the Board to adopt the decision with the additional text about DBSA’s Just Transition Framework. It was then adopted without the additional text proposed by the BM from Sweden.

The Board also discussed Dates and Venues of upcoming Board Meetings. This agenda item was suspended twice, as a proposal to replace B32 with an informal meeting was raised. Many BMs expressed strong preference towards having 3 more in-person formal Board Meetings, provided that Board documents are circulated 21-days prior and travel requirements are properly taken care of in consideration of the latest Covid-19 situation. After a number of deliberations, the Board adopted to hold in-person Board Meetings based on the following schedule:

  • B32: May 16-19, 2022 in Antigua and Barbuda, with first two days dedicated for GCF policy matters

  • B33: June 27-30, 2022 in Songdo, South Korea

  • B34: October 24-27, 2022 venue TBA

The Board then proceeded to adopt the decision text for the Strategic Planning and Programming Matters, which is still under the agenda item Updated Board Workplan for 2020-2023. It can be recalled that developed and developing country BMs debated on Day 2 on whether or not an update of the GCF Strategic Plan (USP) should be a condition towards the GCF’s 2nd Replenishment (GCF-2). After several consultations to resolve the opposing views among BMs, the co-chair from France presented the draft decision text.

Developed country BMs were not satisfied and proposed additional texts aimed to strengthen the point of having an updated USP as a condition for commencing the 2nd replenishment process or GCF-2. The BMs from Sweden, UK, Switzerland, and US argued that it would be difficult for contributor countries to justify their contributions under GCF-2 if they have no idea where or how the resources will be used by the GCF.

Developing country BMs raised that an informed basis for the update of the USP should be established before the Board undergoes another round of deliberations for it. As the proposed decision text by the Co-Chairs considers the Second Performance Review (SPR) and the GCF policy framework review to be conducted, the BM from Pakistan argued that these documents are sufficient enough to guide whether or not the Board decides to update the USP. He added that based on previous practice under GCF-1, GCF replenishment period should commence 30 months from the previous resource mobilization. The BM from Bhutan supported the point and added that the USP has only been effective for less than 2 years thus updating it before GCF-2, which is expected to commence around the latter half of 2022 and first half of 2023, will be premature. Both BMs said that it would not be ideal to use a prematurely updated USP as a basis for GCF-2.

Since the Board did not have a consensus on the proposed decision text, the co-chair from France suspended the decision and committed to return with an agreeable proposed decision text. However, B31 closed without adopting any decision related to this.

For the agenda item Institutional Matters, still under the Updated Board Workplan for 2020-2023, the co-chair from South Africa presented the draft decision text, which initiates a review of the Trustee Agreement of the GCF with the World Bank. It can be noted that the World Bank is also an accredited entity under the GCF and as interim trustee, it also receives climate finance contributions, manages the GCF finances, and disburses GCF funds for GCF initiatives. CSOs have campaigned against the trusteeship of the World Bank in the past, due to clear conflict of interest and its portfolio on fossil fuel financing.

Under the proposed decision text, the Board will have to review the GCF trusteeship agreement with the World Bank that is soon to expire. It also requests the Secretariat to present new terms of the trusteeship agreement “renewal,” indicating that the World Bank may continue to be the GCF’s trustee after its current term.

No comments were raised by BMs on this matter and as earlier mentioned, this agenda item was not made available to observers hence the CSOs were not able to make any intervention. The Board then adopted the decision text on this agenda item.

The Board also continued discussing other evaluations made by the IEU. The Independent Evaluation of the relevance and effectiveness of GCF’s investments in the small island developing states was presented to the Board with the following key findings:

  1. GCF modalities and processes are not sufficiently effective to address urgency

  2. Accreditation disadvantages SIDS with low capacity and experience

  3. Capacity to develop Concept Notes and Funding Proposals is a barrier and the GCF Readiness and Preparatory Support Programme (RPSP) and Project Preparation Facility (PPF) are not sufficiently tailored for SIDS

  4. GCF is focused on grant-funded adaptation, but premature to assess results

  5. GCF’s approach to the private sector is not sufficiently articulated or coordinated

  6. The GCF’s policy landscape has flexibility to accommodate the SIDS, but certain policies require Board decisions.

Given these observations, the IEU recommended the following:

  1. Make improvements to the RPSP for access and capacity. More accompaniment, Human Resource DAEs and government, and support for Concept Note development.

  2. The Fund must accelerate and simplify the project cycle, especially for the SAP, by considering delegation of authority to the Secretariat. The Project Specific Assessment Approach (PSAA) should also make access more efficient and streamlined

  3. The Board should approve a policy on a programmatic approach by including single-and multi-country programmes and streamlined processes for sub-project approval and changes

  4. The Private Sector strategy should reflect the complexion of the local private sector in SIDS and a coordinated approach across the Secretariat

Representing SIDS, the BM from Antigua and Barbuda commended the IEU and made several comments on the report. She urged the Secretariat to work on the IEU recommendations to improve the GCF’s policy and operations around the Simplified Approval Process (SAP) as it relates to SIDS. She added that the GCF must further simplify project development to allow SIDS to cross reference national reports, indigenous and local knowledge, and the IPCC reports. She also encouraged the Secretariat to accommodate more private sector projects for SIDS.

Other BMs raised several clarificatory questions. The BM from Norway asked the IEU about the effectiveness of the Readiness and Support Program for the SIDS since based on the evaluation, lack of capacity was identified as one of the major challenges. The IEU responded and said that many AEs from SIDS are really understaffed with only less than 5 people. This makes it more difficult for them to access relevant data needed to develop Concept Notes or work on their 2nd Funding Proposal.

The BM from the UK asked about the Secretariat’s management response since this evaluation of the IEU was released, to which the Secretariat replied and presented the steps undertaken since March 2021 as enumerated below:

  1. To increase capacity, the Secretariat has expanded the scope of Project Preparation Facility and provided technical assistance to support SIDS. It has also developed a roster of international firms that can support DAE projects in SIDS

  2. The Secretariat continues to improve the modalities and processes for SIDS in terms of the SAP policy

  3. A guidance on steps to enhance climate rationale was developed

  4. The approval of PSAA now allows public and private sector transactions to aid the handling of multi-country projects

Given the varying comments and points raised by the Board, the co-chair from France suspended the item so both co-chairs can discuss and revert back with a decision text for Board approval. However, as with other agenda items, B31 ended with no decision made for this item.

Another report done by the IEU that was presented to the Board is the Independent Evaluation of the relevance and effectiveness of GCF’s investments in the least developed countries. The IEU reported that out of almost USD 3 billion of approved funding for LDCs, USD 1.81 billion was allocated to 52 single-country projects, and around USD 1.8 billion for 25 multi-country projects. There are also 30 LDCs that have single-country projects, while 4 are without any project. The report also revealed that 75% of the approved funding proposals for LDCs was through IAEs, and that the disbursement rate for LDCs is much slower than for other country groups. They also averred that the PPF works whenever it is used, but more than half of LDCs have not accessed it. Given these, the IEU recommended that the GCF should support building structures and incentives aimed to provide opportunities and motivation for countries, accredited entities, and the Secretariat to engage DAEs.

In terms of responsiveness and relevance, the IEU further found that:

  1. COP decisions related to LDCs are not consistently followed

  2. There is no specific mechanism to ensure the adaptation allocation target will continue to be met

  3. Access to GCF support remains cumbersome for LDCs that face significant structural barriers, especially for DAEs

To address these, the IEU recommended that The GCF should consider operationalizing, through Board decisions, COP guidance specifically about the most vulnerable countries, and particularly LDCs.

In terms of coherence and complementarity, the IEU found that:

  1. Compared to other climate funds, the GCF places additional emphasis on country ownership and capacity building in the LDCs

  2. Complementarities at the LDCs portfolio level are increasing but these are not being systematically coordinated or tracked

  3. There is a need to especially consider coherence and complementarity of the GCF’s support programs (RPSP, PPF) with other funds in LDC contexts.

The IEU recommended that the Secretariat should urgently operationalize frameworks and plans on coherence and complementarity into a systemic approach, including for support programs.

In terms of results and impact, the IEU found that:

  1. Measures to independently verify data on project implementation and results have not been fully operationalized

  2. Projects in LDCs, particularly in adaptation, may target vulnerable communities

  3. GCF’s support of sustained low-carbon and resilient development pathways is hampered by non-climate systemic barriers to paradigm shift in the LDCs.

The IEU then recommended that the GCF should consider incentivizing, particularly in data-poor contexts, the development and use of country monitoring systems. The Secretariat was also advised to consider revisiting indicators and reporting on gender to allow for the monitoring of gendered outcomes.

Representing LDCs, the BM from Bhutan commended the IEU and gave a few more observations on the experience of LDCs. He expressed his concern over the stringent rules for climate rationale, particularly the unrealistic demands of providing data as requested by the ITAP and the Secretariat. He further noted that mobilizing private sector funds in LDCs for adaptation is nearly impossible, and emphasized that so far, the GCF has accredited only 14 DAEs for LDCs, and the FPs approved are mostly micro projects. He also criticized the “success through percentage” attitude that he argued is pervading the Board, citing that in absolute terms very few projects are going to LDCs. He further pointed out that this disparity is reflected in the Co-Chairs’ treatment of LDC voices in the Board, which is rarely ruling in their favor.

The BM from the UK agreed with the BM from Bhutan’s remarks and added that the issue around climate rationale has been overlooked for quite some time, but remains very crucial. He also noted the Secretariat’s shortcomings in accounting for LDC’s special circumstances, as the issues raised by the IEU have not been flagged by the Secretariat in past BMs. He then proposed to deal with matters related to climate rationale and how its implementation can be improved via BBM.

Noting all the comments, the co-chair from France suspended the item and averred that the co-chairs will present back a draft a decision for Board approval. But as with the previous evaluation, no decision was made under this item.

The Board then proceeded to adopt the decision text on the Independent evaluation on the adaptation portfolio and approach, which is one of the evaluations made by the IEU that was deliberated by the Board on Day 3. The co-chair from France presented the draft decision text and opened the floor for comments and interventions from BMs. The Board proposed several textual edits to make sure that the adoption of the decision will result in actions and efforts reflecting the findings of the evaluation.

The decision was then adopted and it includes requesting the IEU to present a management action report after a year. It also requires the Board to urgently clarify the GCF’s role in and vision for climate adaptation by requesting the Secretariat to update the draft “Guidance on the approach and scope for providing support to adaptation activities” and present it no later than B32.

The last item discussed by the Board was about the Appointment of Members of the Committees of the Board. This is in light of the change in the composition of the Board starting January 2022. While names of BMs from the Latin American and Caribbean States (GRULAC) have not been submitted yet, the Board proceeded to appoint current BMs to various Board committees, and then noted to add the names of GRULAC BMs once they have been confirmed.

Before the co-chair was able to ask for the adoption of the appointments, the BM from Albania once again raised her concern about maintaining gender balance in the Board Committee Membership given that the majority of the committee members are men. She strongly urged the Board to comply with the GCF’s mandate of mainstreaming gender and ensure that women BMs and alternates are given equal opportunities to be part of the committees. In a statement, she emphasized the crucial role that the GCF plays towards the advancement of gender mainstreaming and the Board has a greater responsibility in showcasing respect, equality and inclusivity. She then urged the Board to form an informal group of women among Board members that is aimed to promote inclusive and respectful behaviors during Board meetings, advance meaningful and equal participation of women BMs and alternates, and promote gender mainstreaming principles.

The intervention of the BM from Albania received strong support from other BMs, including BMs from Sweden, Egypt and Austria, who all said advocating for gender balance should not necessarily come from women BMs only, and that the support of male BMs is also crucial in realizing gender equality.

This point was duly noted by the co-chair, and since the intervention did not result to any objection, the Board adopted the Appointment of Committee Members as enumerated below:

Accreditation Committee

  1. Mr. Antwi-Boasiako Amoah (Ghana)

  2. Ms. Gisella Berardi (Italy)

  3. Ms. Ornela Cuci (Albania)

  4. Ms. Jennifer De Nijs (Luxembourg)

  5. Mr. Jan Wahlberg (Finland)

Budget Committee

  1. Ms Katrijn Coppens (Belgium)

  2. Mr. Jose Delgado (Austria)

  3. Ms. Kyunghee Kim (South Korea)

  4. Ms. Marta Mulas (Spain)

  5. Mr. Karma Tshering (Bhutan)

Ethics and Audit Committee

  1. Mr. Wael Aboulmagd (Egypt)

  2. Mr. Nauman Bhatti (Pakistan)

  3. Mr. Stéphane Ciniewski (Switzerland)

  4. Mr. Mathew Haarsager (US)

  5. Ms. Fiona Ralph (Ireland)

  6. Mr. Albara Tawfiq (Saudi Arabia)

Investment Committee

  1. Ms. Isatou F. Camara (the Gambia)

  2. Mr. Toshihiro Kitamura (Japan)

  3. Ms. Annette Windemeisser (Germany)

  4. Ms. Eliette Reira (UK)

  5. Mr. Tlou Ramaru (South Africa)

  6. Ms. Yan Ren (China)

Performance Oversight Committee

  1. Mr. Nauman Bhatti (Pakistan)

  2. Mr. Jean-Christophe Donnellier (France)

  3. Mr. Mathew Haarsager (US)

  4. Mr. Tlou Ramarou (South Africa)

The co-chairs then proceeded with their closing remarks to end B31. Both thanked the members of the Board for their cooperation and hard work. It should be noted however, that a number of agenda items remain unresolved and that there are items in the Adopted Agenda of the Meeting that were not opened at all. Despite these, the co-chairs announced the adjournment of B31 40 minutes past the scheduled time.

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