24TH GREEN CLIMATE FUND BOARD MEETING: PROJECTS, POLICIES, ENTITIES APPROVALS
This article is a summary of projects and other relevant items approved by the Green Climate Fund (GCF) Board members during its 24th board meeting held in Songdo on November 12-14, 2019.
THE CHINA AND PALESTINE PROJECTS
China project
The China proposal for the project ‘Catalyzing climate finance (Shandong Green Development Fund)’ for a loan of USD 100 million from GCF was submitted by the Asian Development Bank (ADB). The project is expected to blend government finance, concessional donor finance, and private finance to catalyze and leverage investment.
In China, among all other provinces, the Shandong province has the highest energy consumption that is managed by traditional sources such as coal resulting in the province that has the most carbon-intensive economy.
Nearby 75 percent of the sub-projects aims to support mitigation actions: renewable energy, energy efficiency, sustainable transport, and solid waste management, and 25 percent – people’s resilience-building, especially infrastructure.
This project received disapproval from Japan and the US since both countries emphasized a lack of qualification and indicated that the GCF should focus on most vulnerable countries with more critical needs. Particularly both countries brought attention to the matter of project being financed by the Asian Development Bank (ADB) and by the local government, indicating that China project isn’t a project that can’t be achievable without GCF financing.
Developing countries responded to these comments by highlighting that according to the Convention and its rule China is a developing country and therefore eligible for the support of GCF projects. In conclusion, the board members voted in favour of the project, and they approved the project.
Palestine project
Palestine project’s proposal “Water Banking and Adaptation of Agriculture to Climate Change in Northern Gaza” that was submitted by Agence Française de Development (AFD) received disapproval from the US. Mainly objection was based on the US disbelieve that the State of Palestine is qualified; therefore, the US didn’t support the project. However, the US didn’t stand its way because of the proposal’s potential significant impact. In response to the comments, Board members affirmed that under the Convention, the Paris Agreement and the GI of GCF Palestine are eligible for funding. In conclusion, the Board of GCF approved the project.
APPROVED PROJECTS
THE BOARD APPROVED USD 407.8 MILLION TO 13 NEW PROJECTS. BESIDES CHINA AND PALESTINE PROJECTS, THE BOARD APPROVED 11FOLLOWING PROJECTS:
❏ ‘Carbon Sequestration through Climate Investment in Forests and Rangelands’ with Food and Agriculture Organization (FAO) in the Kyrgyz Republic (USD 30 million).
❏ ‘Implementation of the Lao PDR Emission Reductions Programme through improved governance and sustainable forest landscape management’ with GIZ (USD 16.8 million).
❏ ‘Building a Resilient Churia Region’ in Nepal with FAO (USD 39.3 million).
❏ ‘Chile REDD-plus result-based payment for results period 2014-2016’ with FAO (USD 63.6 million).
❏ ‘REDD+Results-based payment in Paraguay for the period 2015-2017’ with UNEP (USD 50 million).
❏ ‘GCF Ecosystem-Based Adaptation Programme in the Western Indian Ocean (Madagascar, Mozambique, South Africa and the United Republic of Tanzania) with KfW (USD 33.3 million).
Under the simplified approval process (SAP):
❏ ‘Extended Community Climate Change Project-Flood’ with PKSF (USD 9.7 million).
❏ ‘Building resilience of urban populations with ecosystem-based solutions in Lao PDR’ with UNEP (USD 10 million).
❏ ‘Multi-Hazard Impact-Based Forecasting and Early Warning System’ in the Philippines with Landbank (USD 10 million).
❏ ‘Climate-resilient food security for women and men smallholders’ in Mozambique through integrated risk management with WFP (USD 9.3 million).
❏ ‘Inclusive Green Financing for Climate Resilient and Low Emission Smallholder Agriculture’ in Niger with IFAD (USD 9.4 million).
REPLENISHMENT
The first formal replenishment process of the GCF resulted in a successful conclusion with the outcome of the pledging session to USD 9.78 billion (Special Drawing Rights (SDR) 7.05 billion) tantamount. The outcome was reached by the pledge that was made by 28 contributors in result reaching USD 9.66 billion (SDR 6.87) and the credit earned because of early payment encashment. (SDRs are additional foreign exchange reserve assets that are managed by the International Monetary Fund. Throughout the initial resources mobilization, GCF lost almost USD 1 billion in foreign exchange losses).
Contributing countries were encouraged by the Board to further the pledges and/or contributions during the replenishment period, as well as, without long hesitation to verify their pledges to the GCF in the form of fully completed contribution agreements/arrangements.
While some countries that previously promised GCF during the Initial Resource Mobilization (IRM) period did not pledge for the first official replenishment, the total pledge of $9.79 billion was still about $500 million more than promised at the IRM Conference in 2014 November.
This result was achieved with three-fourths of the contributors raising in national currency terms, and nearly half of them doubling or more than doubling their pledge. Besides, further, pledges could be expected in the coming months and years.
Accreditation of entities
The Board also accredited 7 entities to the Fund, and these entities will have access to GCF resources:
● National Committee for Sub-National Democratic Development Secretariat (NCDDS) – Cambodia
● CRFB Bank – Tanzania
● Finanzas y Negocios Service Financieros Limitada (FYNSA) – Chile
● IL&FS Environmental Infrastructure and Services Limited (IEISL) – India
● Yes Bank Limited (Yes Bank) – India
● Save the Children Australia (SCA) – Australia
GCF BOARD TO UPDATE STRATEGIC PLAN
One of the issues that were discussed at the GCF 24th Board meeting (Songdo, South Korea), was the Strategic Plan for the period of 2020-2023. The inputs for the Strategic Plan that was developed and updated by the Secretariat under the guidance of the Co-Chair were provided by inviting members, national designed authorities, accredited entities, and observers.
The draft for 2020-2023 was open for the remarks to finalize the strategic plan during the meeting that would take place on March 20, 2020. Members of the Board addressed various details within the draft that requires some adjustments to make it as efficient as possible.
The Board members, with regards to the plan, emphasized that the final strategic plan needs to be aligned with the latest scientific findings that would rapidly bring changes in the direction of emissions reduction. Also, some of the attention was directed to the need for implementing projects that focus on technology development and transfer.
The current draft document sets out “eight different key areas”: energy access and power generation; transport; buildings, cities and industries; forestry and land use; the most vulnerable people, communities and regions; health and wellbeing, food and water security; infrastructure and build environment results area; ecosystems and ecosystem services. However, the Board emphasized that it should not be as detailed since, in this way, it limits the activity sphere by the Fund and might overlook domestic priorities and sensitivities.
Additionally, some of the Board members made further remarks about the private sector emphasized that the private sector is not a charity organization and engagement with the private sector, although essential should be minimal to ensure that the Fund remains a public Fund.
Furthermore, it’s necessary to be management efficient and focus on the countries that are at the highest risk and most vulnerable to climate change. Therefore, Fund needs to be flexible and do an annual review as well as make the process of money channeling simple and faster to minimize the burden for the developing countries who need money as soon as possible.
In conclusion, to make the Strategic Plan of the Fund more effective, the Board has invited to submit written comments by Board members, alternates, and active observers by December 20, 2019. As well as, the Board will hold an informal meeting that will be open to Active Observers before the 25th meeting of the Board.
POLICY ON CO-FINANCING
Policy on co-financing acts as “the financial resources required, whether public or private, besides the ones managed by the GCF to implement the funded action for which the funding proposal is being submitted.” In other words, the principal purpose of the policy on co-financing is so that the developing countries and accredited entities (AEs) might be able to prepare more efficient funding proposals.
The Secretariat of GCF reflects on similar policies that have been adopted by other climate finance delivery channels to make policy on co-financing more effective.
The decision of the Board about the policy on co-financing highlighted a need for improvements, and that this policy will be actively implemented for the approved funding proposals starting from the 26th meeting of the Board.
UPDATED GENDER POLICY AND GENDER ACTION PLAN 2020-2023
Updated Gender Policy and Gender Action Plan 2020-2023 (that is consistent with environmental and social safeguards (ESS) policy) refer to principle 1 of the Paris Agreement (PA), which emphasizes the fact that climate change is a concern of all humankind.
Therefore, when dealing with issues of climate change, it’s necessary to respect human rights, the right to health, the rights of indigenous peoples, local communities, migrants, children, persons with disabilities, and people in vulnerable situations. Also included are the right to development, gender equality, empowerment of women, and intergenerational equality.
Moreover, principle 1 in the updated policy refers to Article 7(5) of the (PA) that highlights the importance of recognizing that adaptation action should support a country-driven, gender-responsive, participatory, and fully transparent approach keeping in mind vulnerable groups, communities, and ecosystems.
The Board decided to approve the updated Gender Policy as well as the Gender Action Plan.
Within the adopted decision, the Board as well recognized the need for support in capacity building to access GCF resources. A request by national designated authorities and focal points can be made to receive support from GCF to be able to effectively meet the requirements of the updated Gender Policy of the GCF and the Gender Action Plan of the GCF 2020-2023.
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Prepared by: Andra Vitola
Edited by: Abe Sumalinog
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