What to do with the Adaptation Fund?
Its role in relationship with the GCF
Sunday, 7 December, Swissôtel Lima
Benito Müller
Director ecbi,
MD oxford climate policy
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european capacity building initiative
initiative européenne de renforcement des capacités
ecbi
for sustained capacity building in support of international climate change negotiations
pour un renforcement durable des capacités en appui aux négociations internationales
sur les changements climatiques
STRATEGIC PROSPECTS FOR
THE ADAPTATION FUND
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Grant award
and/or funding
allocation
mechanisms
On-lending and/or blending
“Intermediary”
Specialized fiduciary criteria
“Implementing Entity”
• Project preparation and appraisal (from concept to full funding proposal)
• Project oversight and control
• Monitoring and evaluation
• Project-at-risk systems and related project risk management capabilities
• Grant award procedures
• Transparent allocation of financial resources
• Public access to information on beneficiaries and results
• Good standing with regard to multilateral funding (e.g. through
recognized public expenditure reviews)
• Appropriate registration and/or licensing by a financial oversight body or
regulator in the country and/or internationally, as applicable;
• Track record, institutional experience and existing arrangements and
capacities for on-lending and blending with resources from other
international or multilateral sources;
• Creditworthiness;
• Due diligence policies, processes and procedures;
• Financial resource management, including analysis of the lending portfolio
of the intermediary;
• Public access to information on beneficiaries and results;
• Investment management, policies and systems, including in relation to
portfolio management;
• Capacity to channel funds transparently and effectively, and to transfer
the Fund’s funding advantages to final beneficiaries;
• Financial risk management, including asset liability management;
• Governance and organizational arrangements, including relationships
between the treasury function and the operational side (front desk).
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Project
management
GCF Modes of Engagement: Implementing Entities and Intermediaries
GCF Scales of Engagement: Executing Entities
Micro/Small/Medium Executing Entity (MSME)
Micro/Small Project/Programme
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Large Executing Entity
Medium/Large Project/Programme
GCF Fast-track Accreditation
Bilateral (EU DEVCO)
Local
Provincial
National
AF NIE
Implementing Entity
Intermediary
Large Executing Entity
Medium/Large Project/Programme
Micro/Small/Medium Executing Entity (MSME)
Micro/Small Project/Programme
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International
AF & GEF MIE/RIEs
National
Provincial
Local
Implementing Entity
Intermediary
Large Executing Entity
Medium/Large Project/Programme
Micro/Small/Medium Executing Entity (MSME)
Micro/Small Project/Programme
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International
GCF Maximum Entropy Accreditation
Adaptation Fund
National
Local
Provincial
NIE
Implementing Entity
Intermediary
Large Executing Entity
Medium/Large Project/Programme
Micro/Small/Medium Executing Entity (MSME)
Micro/Small Project/Programme
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International
MIE/RIEs
GCF Enhanced Direct Access (Pilot Phase?)
National
Adaptation
Mitigation
Local
Provincial
NFE
Implementing Entity
Intermediary
Large Executing Entity
Medium/Large Project/Programme
Micro/Small/Medium Executing Entity (MSME)
Micro/Small Project/Programme
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International
• Foreign public sector funding stream consolidation through national gateway (National Funding Entity)
• In-country devolved access to the provincial and local level for engaging local stakeholders (communities, MSMEs)
The Status Quo Scenario
The Fund continues its current interim arrangements with the Global Environment Facility (GEF) and the World Bank,
and its lines of accountability and reporting under the authority and guidance by the CMP. The Fund and the GCF are
functionally independent from one another.
Local
Provincial
National
International
Coherence could be enhanced
through common guidance
NIE
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•
The Institutional Integration Scenario
Different degrees of integration between the Fund and the GCF could be envisaged. Possible options may include the
Fund serving as: the “Adaptation Window” of the GCF; a specialized instrument or window of the GCF; or a dedicated
mechanism based on innovative sources (building on the experience of the CER-monetization process), etc.
Local
Provincial
National
International
•
NIE
The AF would not be a “window” or
“instrument” under this form of
“integration”, it would simply cease
to exist.
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• The AF Board would have no role to play in such an “institutional integration” or rather
replication
• All Micro and Small project proposals for international GCF funding would instead be
administratively approved
Why should the AF continue to exist?
•
“It is fully operational and has a proven record, particularly in providing direct
access. Indeed it is the first climate fund to engage in enhanced direct access,
providing not only country ownership but country driven-ness. It is currently
the only Fund with direct access projects/programmes under implementation;
It is also operationally independent and able to perform its functions without
extensive external support;”
•
“Given its unique mandate to address concrete adaptation projects, the Fund
can provide targeted and specialised support to project proponents, even for
smaller projects in highly localized contexts;”
•
“Its governance structure allows for greater (recipient) country ownership.”
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The AF is a multilateral funding instrument tailor-made for and dedicated
exclusively to (‘small-scale’) concrete adaptation projects with specialised
services that cannot (cost) effectively be provided by wholesale funders.
The Operational Linkage Scenario
Local
Provincial
National
International
AF as GCF Multilateral Adaptation Funding Entity
(“Multilateral Funding Window”)
NIE
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Given the legal capacity of the Board, the GCF could conclude agreements with it, limited to certain
operational aspects. This modality would allow the GCF to channel some of its operations (and
resources) through the Fund (e.g. direct access, concrete adaptation projects). These agreements
do not imply any change in the institutional arrangements for the Fund, and could be concluded by
the Board regardless of them.
GCF Enhanced Multilateral Access
International
National
Provincial
Local
NIE
Multilateral Mitigation Funding Entities
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Multilateral Adaptation Funding Entity
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Thank You!