OPINION: Green Climate Fund Board sets itself on even keel for 2016 decisions
The Green Climate Fund’s (GCF) latest Board meeting took place in Songdo, South Korea, from 8-10 March 2016, following an informal pre-meeting on 7 March. CDKN’s Christina Elvers observed the proceedings.
The Green Climate Fund has pledged to make funding decisions worth $2.5bn by the end of 2016, an ambitious target given the fact that thus far, only around $160m worth of projects have been approved. So the Board has its work cut out for the coming year to make this happen.
Good news came out of the meeting on a variety of fronts: The United States signed the first tranche ($500m) of their $3bn commitment to the GCF; the Board approved its Strategic Plan (which had been hotly debated at a previous meeting); and 13 new entities were accredited to the GCF. Among these were the Ministry of Finance and Economic Cooperation of Ethiopia and the National Environment Management Authority of Kenya, both of which CDKN is working closely with.
Notably the first Board meeting of 2016 was a welcome departure from previous meetings in terms of tone and collaboration. The Board meeting in Zambia in November 2015 was marred by a number of disagreements among the Board members and a slow and cumbersome decision-making process – not dissimilar to previous Board meetings that year. The newly elected Co-Chairs, Zaheer Fakir of South Africa and Ewen McDonald of Australia made sure that the first Board meeting of 2016 meeting stayed on schedule and that decisions were made. Board members worked together collaboratively in finding solutions to challenges. And the previously oft-noted divide between developing and developed countries was far less noticeable – if at all.
All in all, the GCF Board acted as a real board, creating cause for optimism about its being able to make the important decisions needed to disburse $2.5bn by the year’s end.
However, it was remarked by some observers that the agenda for this board meeting wasn’t particularly controversial, making it easy for Board members to find common ground and for the Co-Chairs to push the Board for decisions. For example, the agenda didn’t contain decisions on funding proposals, which had caused most controversy in Zambia. It remains to be seen whether the collaborative spirit will last if and when more controversial agenda items (such as which proposals to actually fund) are being discussed, but this meeting certainly was an important step for building trust.
In terms of its proposal pipeline, the GCF Secretariat reported that the projects proposed to the Secretariat but not yet put to the Board are promising. The pipeline includes 34 proposals and 90 concept notes for a total of $6.2bn. The Secretariat estimates that 22 of these with a total value of $1.5bn have a greater than 50% chance of being ready for Board approval in 2016. However, one cloud that darkened the skies of the board meeting was the fact that out of these 22 proposals, only two are from direct access entities, both of which came from the private sector. Direct access institutions are developing country institutions which are accredited to receive funds directly from the GCF and disburse them nationally – as opposed to the GCF’s using intermediary organisations like the regional development banks and UN agencies to play this role.
Several Board members raised concerns about this and it was stressed that stronger readiness support – supporting developing countries to get ready to effectively access and deploy GCF resources – was needed in order for the proposals to reach the quality necessary for Board approval.
The issue also raises questions as to how the GCF will strike the balance between disbursing large amounts of funds in a short period of time while choosing projects that are country-driven. (See CDKN’s briefing note How can the Green Climate Fund initiate a paradigm shift?) There was cause for optimism on this question however, with approval to provide readiness support to Rwanda’s direct access entity, MINIRENA, with $1.5m. The Secretariat has thus far approved proposals for readiness support in 45 countries for a total of $11m – however, the demand for this currently outpaces disbursement, as a total of 101 countries have requested this support.
Overall, this meeting laid good foundations for the Board to tackle what is sure to be a challenging year ahead if it is to disburse $2.5bn of funding, deliver a strong pipeline of future projects and ensure the machinery of the fund is in working order. It is to be hoped that the Board will retain its collaborative spirit and that the Secretariat, which is due to grow from about 60 to 100 staff, will be able to support the Board in its needs. The test for this will be at the next Board meeting, scheduled for the end of June, where the next round of funding proposals will be discussed and likely decided on.
Image: Songdo, Korea, World Urban Planning