Financial Flows for Environment:
World Bank, UNDP, UNEP
Uwe Steckhan
August 2009
CONCESSIONAL FINANCE AND GLOBAL PARTNERSHIPS VICE PRESIDENCY
THE WORLD BANK GROUP
Abstract
While there is a common understanding of the urgent need to support the environment, there
is little analysis of the financial flows directed to do so. This note attempts to provide an
overview of the development financial flows for the environment through the three main
implementing agencies of the Global Environment Facility (GEF), the World Bank, the United
Nations Development Programme (UNDP), and the United Nations Environment Programme
(UNEP). The GEF is a major source of grant funding for the environment, with annual flows
averaging about US$658 million for its implementing agencies. The World Bank adds
additionally about US$2 billion annually for the environment through its lending operations.
Flows for the environment through trust funds analyzed in this note average US$244 million
annually, and are in a similar order of magnitude than the flows through the UNDP and the
UNEP. Finally, this note presents details on the thematic and regional focus areas of these
channels and draws out trends in the development of the financial flows through these.
Acknowledgements
This note was prepared by Uwe Steckhan (CFPTP) with guidance from Rocio Castro (CFPVP).
Input was provided from Buenaflor Cabanela (CFPTP), Zhimei Xu (CFPTP), Fernando Machado
(CFPMI), Eri Tsutsui (ENV), Louise Shaw-Berry (ENVGC). Comments and feedback were received
from James Warren Evans (ENV), Kulsum Ahmed (ENV), Yewande Awe (ENV), Steve Gorman
(ENVGC), Siv Tokle (ENVGC), Priya Basu (CFPMI), Pamela Crivelli (CFPMI), Jonathan Caldicott
(CFPMI), Lesley Wilson (CFPMI), Abebe Adugna (CFPIR), Kjell Nordlander (CFPTP), Brian
Hammond (Consultant).
Abbreviations and Acronyms
AFR
Sub-Saharan Africa
CFPIR
IDA Resource Mobilization
CFPMI
Multilateral Trustee and Innovative Financing
CFPTO
Global Partnership & Trust Fund Operations
CFPTP
Global Partnership & Trust Fund Policy
CFPVP
Concessional Finance and Global Partnerships Vice Presidency
DAC
Development Assistance Committee
EAP
East Asia and Pacific
ECA
Europe and Central Asia
ENRM
Environment and Natural Resources Management
ENV
Environment Department
ENVGC
GEF Coordination Team
FY
Fiscal Year
GEF
Global Environment Facility
GEFIA
GEF IBRD as Implementing Agency
IBRD
International Bank for Reconstruction and Development
IDA
International Development Association
LAC
Latin America and Caribbean
MNA
Middle East and North Africa
ODA
Official Development Assistance
OECD
Organisation for Economic Co-operation and Development
OPCS
Operations Policy & Country Services
OSG
Office of the Secretary General
RETF
Recipient Executed Trust Funds
SAR
South Asia Region
STAP
Scientific and Technical Advisory Panel
UNDP
United Nations Development Programme
UNEP
United Nations Environment Programme
Financial Flows for Environment:
World Bank, UNDP, UNEP
Table of Contents
Executive Summary ....................................................................................................................................... i
A.
Global Environment Facility ................................................................................................................. 1
B.
World Bank ........................................................................................................................................... 3
B.1.
World Bank Lending Commitments for Environment................................................................... 3
B.1.1.
World Bank Lending Commitments for Environment by Region ........................................................4
B.1.2.
World Bank Lending Commitments for Environment by Sub-Theme .................................................4
B.2.
World Bank Recipient Executed Trust Fund Grant Disbursements for Environment ................... 5
B.2.1.
World Bank RETF Grant Disbursements for Environment by Country’s Borrowing Eligibility.............7
B.2.2.
World Bank RETF Grant Disbursements for Environment by Region ..................................................7
B.2.3.
World Bank RETF Grant Disbursements for Environment by Sub-Theme ...........................................8
C.
UNDP................................................................................................................................................... 10
D.
UNEP ................................................................................................................................................... 12
E.
Concluding Remarks ........................................................................................................................... 13
Annex .......................................................................................................................................................... 15
I.
Approach and Methodology ....................................................................................................... 15
II.
Data Tables.................................................................................................................................. 18
Figures
Figure 1: GEF Council and CEO Net Funding Decisions – By Implementing Agencies .................................. 1
Figure 2: GEF Trustee Commitments – By Implementing Agencies ............................................................. 2
Figure 3: World Bank ENRM Lending by Country’s Borrowing Eligibility ..................................................... 3
Figure 4: World Bank IBRD / IDA ENRM Lending – Regional Breakdown ..................................................... 4
Figure 5: World Bank IBRD / IDA ENRM Lending – Share of Sub-Themes .................................................... 5
Figure 6: Recipient Executed Trust Fund Disbursements – Environment and Natural Resources
Management Theme..................................................................................................................................... 6
Figure 7: RETF ENRM Disbursements – Breakdown by Country’s Borrowing Eligibility ............................... 7
Figure 8: RETF ENRM Disbursements – Regional Breakdown ...................................................................... 8
Figure 9: RETF ENRM Disbursements – Share of Sub-Themes ..................................................................... 8
Figure 10: UNDP – Expenditures & Share of Environment ......................................................................... 10
Figure 11: UNEP – Sources of Income......................................................................................................... 12
Tables
Table 1: Commitment of GEF grants through the World Bank as implementing agency .......................... 18
Table 2: GEF Council and CEO Net Funding Decisions – By Implementing Agencies ................................. 18
Table 3: GEF Trustee Commitments – By Implementing Agencies ............................................................ 18
Table 4: World Bank ENRM Lending by Country’s Borrowing Eligibility / # of Lending Projects ............... 19
Table 5: World Bank ENRM Lending – Regional Breakdown for IBRD: ...................................................... 19
Table 6: World Bank ENRM Lending – Regional Breakdown for IDA: ........................................................ 19
Table 7: World Bank ENRM Lending – Share of Sub-Themes for IBRD: ..................................................... 20
Table 8: World Bank ENRM Lending – Share of Sub-Themes for IDA: ....................................................... 20
Table 9: Recipient Executed Trust Fund Disbursements ............................................................................ 20
Table 10: Number of RETF / RETF Grants ................................................................................................... 20
Table 11: RETF ENRM Disbursements – Breakdown by Country’s Borrowing Eligibility ............................ 21
Table 12: RETF ENRM Disbursements – Regional Breakdown ................................................................... 21
Table 13: RETF ENRM Disbursements – Share of Sub-Themes .................................................................. 21
Table 14: UNDP – Total Income Received from Governments and Other Contributors ............................ 22
Table 15: UNDP – Expenditures & Share of Environment .......................................................................... 22
Table 16: UNEP – Sources of Income .......................................................................................................... 22
Executive Summary
1.
This note presents an analysis of development financial flows directed to support the
environment through the World Bank1, the United Nations Development Programme (UNDP), and the
United Nations Environment Programme (UNEP) - the main implementing agencies of the Global
Environment Facility (GEF). As such, this note complements the analysis of environment aid based on
data from the OECD-DAC.2
2.
The objective of the note is to shed light as to the volume of financial flows channeled by each
of the three agencies as well as their allocation to sub-themes and regions. Because of the data
availability constraints and different ways of reporting, data are not strictly comparable across agencies
(some are based on commitments, disbursements, or expenditures). Notwithstanding these limitations,
it is still possible to ascertain orders of magnitude of the size of financial flows channeled by the various
agencies.
3.
The World Bank is the largest source of funding for the environment among the three agencies.
During FY04-08, World Bank lending commitments for the environment have grown more rapidly than
overall lending and averaged US$1.97 billion a year; or 9% of overall lending commitments. In FY08,
environment related commitments peaked at US$2.66 billion. On average, 75 projects (with an
environmental component) were approved annually during FY04-08.
 IBRD commitments averaged US$1.39 billion annually, or about 70% of the Bank’s
environmental lending over FY04-08. The majority was directed to the East Asia Pacific and Latin
America and Caribbean regions. Thematically the bulk of IBRD environment commitments were
directed to Water Resources Management and Pollution Management and Environmental
Health, although the share of Climate Change surged to 40% in FY08 up from an average of 8%
in the preceding four fiscal years.
 IDA commitments (including those to blend countries) averaged US$516 million annually or 27%
of total environment related financial flows. Most commitments were directed to the SubSaharan Africa region. In terms of themes, Water Resources Management plays an even larger
role, averaging 30% during FY04-08, growing to a share of 45% in FY08.
4.
In addition, the World Bank channels several recipient executed trust funds (RETFs) which target
the environment. Notably, GEF grant commitments through the World Bank as implementing agency
(GEFIA) added an average of US$261 million a year over the period. Given that GEFIA grants account for
71% of disbursements from World Bank administered RETFs for the environment, overall RETF
commitments are estimated at US$368 million a year3.
1
According to the World Bank classification the Environment and Natural Resources Management theme includes
Biodiversity, Climate Change, Environmental Policies and Institutions, Land Administration and Management,
Pollution Management and Environmental Health, Water Resources Management, and Other Environment and
Natural Resources Management.
2
See the paper on “The Architecture of Aid for the Environment – A ten-year statistical perspective”.
3
RETF figures are based on disbursement data, as a detailed breakdown of trust fund data is not available on a
commitment basis due to the fact that trust fund commitments are not allocated upfront to specific themes.
i
5.
The majority of disbursements from environment related RETFs go to IBRD countries (close to
60%), mainly for the East Asia Pacific region, with a decreasing share for the South Asia region and
increasing shares to the Sub-Saharan Africa and Middle East and North Africa region. Thematically,
Pollution Management and Environmental Health accounts for the largest share, similar to lending
commitments, together with grant commitments to Environmental Policies and Institutions.
6.
For UNDP, environment related activities make up an average of 11% of UNDP’s expenditures,
averaging US$312 million a year over CY04-07; with GEF providing the majority of funding. With GEF
funding averaging US$241 million a year (or 5% of UNDP’s income during the period), it is estimated that
GEF finances over 75% of UNDP’s expenditures for the environment. UNDP environmental activities
have a stronger focus on Biodiversity than the World Bank, with an average share of 28% of UNDP’s
expenditures.
7.
For UNEP it is assumed that all of its activities are environment related. UNEP’s income has
stayed largely flat at an average of US$268 million during CY04-07. On the other hand, GEF
commitments to UNEP have declined significantly over the last years, going down from US$140 million
in fiscal year 2004 to US$36 million in FY 2007, suggesting that the importance of GEF in UNEP funding is
declining.
8.
In sum, the GEF is an important source of funding for UNDP and UNEP, but plays a relatively
smaller role in funding environmental activities for the World Bank. With commitments averaging about
US$2 billion a year, the World Bank provides three times as much as the GEF annually (US$658 million a
year). In terms of concessional financing, GEF commitments are somewhat higher than IDA financing for
the environment (US$516 million a year).
ii
A.
Global Environment Facility
1.
The GEF is a major source of grant funding for the global environment.4 The GEF provides grants
for projects related to six focal areas (Biodiversity, Climate Change, International Waters, Land
Degradation, the Ozone Layer, and Persistent Organic Pollutants). Since its inception in 1991 the World
Bank, UNDP, and UNEP have been the three implementing agencies of the GEF, complemented by seven
more agencies since 1999, but remain the major recipients of funds from the GEF. Donor countries have
provided funding to the GEF in four year replenishment cycles, with the third GEF replenishment
covering the period from July 1, 2002 to June 30, 2006 (FY03 through FY06), and the fourth from FY07
through FY10.
2.
The GEF Council approves and the GEF CEO subsequently endorses funding decisions for project
proposals brought forward by the implementing agencies, which negotiate these with the recipient
countries.5 The World Bank as Trustee of the GEF trust fund commits these funds, after CEO
endorsement, to the implementing agencies. Partly because of time lags, there can be differences
between the value of funding decisions, commitments, and disbursements.
Figure 1: GEF Council and CEO Net Funding Decisions – By Implementing Agencies
1,000
900
80.0
UNIDO
800
USD millions
700
67.3
99.2
UNDP
328.9
78.9
IFAD
600
55.5
500
275.8
320.1
258.2
400
IBRD
IADB
256.6
FAO
300
200
UNEP
456.1
327.8
236.2
297.9
AfDB
264.2
100
EBRD
ADB
0
FY04
FY05
FY06
FY07
FY08
Source: CFPMI; includes projects, fees and project preparation activities but does not include cancellations
3.
Figure 1 displays funding decisions from the GEF Council to the ten GEF implementing agencies
over the last five fiscal years. A decline in funding decisions is apparent over the term of the third
replenishment cycle, with a similar trend visible also for the fourth replenishment cycle from its start in
FY07. Notably, GEF funding decisions to the World Bank dropped by almost 50% from US$456.1 million
in FY07 to US$236.2 million in FY08, for the first time falling behind UNDP, having been endorsed for
US$320.1 million in FY08.
4
5
Source: GEF: About the GEF (http://www.thegef.org/interior_right.aspx?id=50)
Source: GEF: GEF Project Cycle; GEF/C.31/7; May 14, 2007
1
4.
Figure 2 displays GEF Trustee commitments to implementing agencies over the same period6.
The level of commitments picked up significantly in FY08, reaching US$913 million in FY08, reflecting
increased funding decisions in FY07. The World Bank, UNDP and UNEP account on average for 95% of all
commitments, with the World Bank alone covering an average of 45% of all commitments; 49%
(US$450.6 million) in FY08. The UNDP accounts on average for 39% of all commitments, and the UNEP
on average for 11%, with declining shares through FY08.
Figure 2: GEF Trustee Commitments – By Implementing Agencies
1,000
900
28.2
800
USD millions
700
UNEP
345.5
139.5
600
500
60.8
259.7
400
218.4
96.1
IBRD
35.5
270.1
100
IADB
202.8
236.9
320.0
UNDP
IFAD
300
200
UNIDO
FAO
450.6
EBRD
AfDB
267.0
180.5
ADB
0
FY04
FY05
FY06
FY07
FY08
Source: CFPMI; reflects initial Trustee commitments less cancellations and unused amounts from financially closed projects;
includes stand alone projects, projects attached to Programmatic Initiatives, fees and project preparation activities; does not
include project and fee amounts pending Agency approval
5.
The subsequent sections will provide additional details on the development financial flows
allocated to support the environment from different sources through the three main implementing
agencies of the GEF.
6
GEF figures are commitments, as GEF disbursement data is not available from all implementing agencies and is
used only in the RETF analysis part.
2
B.
World Bank
6.
The World Bank supports the environment by drawing on its own resources and by integrating
GEF grants with its lending operations.7
B.1.
World Bank Lending Commitments for Environment
7.
World Bank lending is categorized according to themes, with up to five themes being assigned to
lending under individual projects.8 Project amounts are classified along these themes for the purpose of
tracking the intended share of themes.9 World Bank environmental funding represents lending for
projects with an Environment and Natural Resources Management (ENRM) theme. These themes are
assigned when projects are committed, but are not tracked at the disbursement level. Figure 3 depicts
World Bank lending commitments that are marked as ENRM related over the last five fiscal years10.
Figure 3: World Bank ENRM Lending by Country’s Borrowing Eligibility
3,000
2,500
151.8
1.9
417.9
734.6
USD millions
2,000
221.0
444.3
1,500
53.5
1,000
492.4
Blend Lending
0.0
361.6
IDA Lending
2,057.4
1,775.4
1,351.7
500
IBRD Lending
1,025.8
758.7
0
FY04
FY05
FY06
FY07
FY08
Source: World Bank Project Portfolio Database; includes all Environment Projects with at least one ENRM sub-theme; data
does not include GEF and Montreal Protocol Projects
7
Source: World Bank: GEF Operations (http://go.worldbank.org/O926LPMVO0)
Themes are assigned to projects based on objectives and are therefore not necessarily representing the physical
transfer of funds, but provide a general overview of the targets of Bank environmental lending.
9
World Bank Themes are: Economic Management, Public Sector Governance, Rule of Law, Financial and Private
Sector Development, Trade and Integration, Social Protection and Risk Management, Social Development, Gender,
and Inclusion, Human Development, Urban Development, Rural Development, Environment and Natural Resources
Management.
10
World Bank lending figures are commitments, as a detailed breakdown onto sub-theme level is not available on
a disbursement basis and is used only in the RETF analysis part.
8
3
8.
Overall Bank lending commitments grew by an average of 4% per year since FY04, reaching
US$24.64 billion in FY08. Over the period, ENRM marked lending fluctuated but showed a general
upward trend; peaking at US$2.66 billion in FY08.



Overall ENRM lending accounted for an average of 9% of all Bank lending, having grown with a
compound annual growth rate of 15%, significantly higher than the growth rate of 4% for overall
Bank lending commitments; with 25% of all Bank projects containing an ERNM share.
On average, 75 projects annually had an ENRM component, with an average ENRM component
of US$28 million per project.
Regarding the borrowing eligibility of recipient countries, an average of 70% of these ENRM
commitments go to IBRD countries (with about a third of this being committed to China), 26% to
IDA countries and the remainder to blend countries.
B.1.1. World Bank Lending Commitments for Environment by Region
9.
Among IBRD countries, a third of ENRM commitments are directed to the Latin America and
Caribbean (LAC) and East Asia Pacific (EAP) region, with about a fifth going to the Europe and Central
Asia (ECA) region. For IDA countries on average about half of the commitments go to Sub-Saharan Africa
(AFR) and a fifth to South Asia (SAR) and EAP. Middle East and North Africa (MNA) has a small share.
Figure 4: World Bank IBRD / IDA ENRM Lending – Regional Breakdown
World Bank IBRD Lending Commitments
100%
90%
80%
1%
12%
17%
19%
8%
70%
33%
37%
10%
25%
FY05
80%
4%
3%
12%
1%
15%
50%
20%
12%
1%
20%
16%
3%
5%
5%
23%
14%
34%
26%
1%
2%
3%
24%
23%
48%
46%
FY07
FY08
40%
20%
32%
65%
40%
48%
10%
19%
FY04
22%
30%
37%
0%
18%
70%
16%
35%
90%
60%
9%
30%
25%
100%
7%
3%
41%
40%
20%
13%
44%
60%
50%
2%
5%
4%
World Bank IDA Lending Commitments
1%
FY06
0%
FY07
AFR
FY08
EAP
FY04
ECA
LCR
MNA
FY05
FY06
SAR
Source: World Bank Project Portfolio Database
B.1.2. World Bank Lending Commitments for Environment by Sub-Theme
10.
For World Bank ENRM lending commitments a more detailed breakdown by sub-themes is
available, providing additional information on specific topic areas to which the loan amounts are
4
assigned. The ENRM theme consists of seven sub-themes: Biodiversity, Climate Change, Environmental
Policies and Institutions, Land Administration and Management, Pollution Management and
Environmental Health, Water Resources Management, and Other Environment and Natural Resources
Management (see Annex for details), to which ENRM lending is classified.
Figure 5: World Bank IBRD / IDA ENRM Lending – Share of Sub-Themes
World Bank IBRD ENRM Lending Commitments
100%
4%
1%
90%
80%
27%
34%
70%
5%
15%
2%
30%
24%
3%
7%
100%
19%
80%
9%
60%
50%
20%
10%
3%
90%
8%
32%
16%
39%
20%
20%
31%
40%
8%
5%
13%
19%
10%
4%
6%
0%
FY04
FY05
23%
4%
9%
21%
8%
1%
1%
FY07
FY06
30%
40%
20%
10%
1%
FY08
0%
4%
3%
39%
45%
10%
70%
50%
14%
32%
60%
37%
40%
30%
World Bank IDA ENRM Lending Commitments
25%
12%
37%
7%
27%
10%
15%
27%
14%
11%
11%
15%
19%
7%
3%
7%
3%
9%
6%
FY04
FY05
FY06
16%
FY07
3%
Other Environment and Natural Resources Management
Water Resources Management
Pollution Management and Environmental Health
Land Administration and Management
Environmental Policies and Institutions
Climate Change
7%
1%
FY08
Biodiversity
Source: World Bank Project Portfolio Database
11.
Comparing a breakdown by sub-theme of ENRM lending to IBRD and IDA countries side by side
(Figure 5) shows largely similar distributions between IBRD and IDA. Although the patterns vary, Water
Resources Management, together with Pollution Management and Environmental Health account for
the largest share of ENRM financial flows. On average about half of all commitments are assigned to
these sub-themes for IBRD and IDA countries. Biodiversity accounts for the smallest share for both IBRD
and IDA with an average of 3% of all loans. Notable is an increase in Climate Change related
commitments for IBRD countries, which surged from an average of 8% to 40% in FY08. For IDA countries
a growth of Water Resources Management in FY07 and FY08 to an average of 30% is apparent.
B.2.
World Bank Recipient Executed Trust Fund Grant Disbursements for Environment
12.
Besides World Bank lending operations, the World Bank as implementing agency of the GEF
(GEFIA), channels GEF grants to recipient countries. Financial flows under these projects are additional
to the World Bank ENRM lending commitments. Table 1 displays the amount of World Bank
commitments of GEF grants during the last five fiscal years. GEFIA commitments account for an average
5
of 14% on top of World Bank ENRM lending commitments, an average of US$261 million, with an
average of 37 new GEFIA projects per fiscal year.
Table 1: Commitment of GEF grants through the World Bank as implementing agency
GEFIA Grant Amount (USD millions)
FY04
FY05
FY06
FY07
FY08
217.6
245.6
324.6
238.9
280.0
# of GEFIA Projects
37
43
41
31
35
Source: World Bank Project Portfolio Database; includes all Global Environment Project & Medium Sized Projects
13.
The GEFIA grants are accounted for under the World Bank administered recipient executed trust
funds (RETFs). As opposed to World Bank lending projects, trust funds are assigned to themes only at
the time of disbursement of the grants. Commitment data for the GEFIA is available due to the GEF
approval and endorsement process. The following section on World Bank RETF financial flows for the
environment therefore provides data on disbursements from these trust funds and cannot directly be
compared with the previous section on World Bank lending commitments, but provides an idea of the
focus of RETF grants for the environment along ENRM themes.
Figure 6: Recipient Executed Trust Fund Disbursements – Environment and Natural Resources Management Theme
350
18%
300
15%
96.7
250
USD millions
16%
16%
15%
13%
91.9
200
150
59.4
10%
GEFIA ENRM Theme
235.0
126.3
ENRM Theme (w/o
GEFIA)
8%
51.8
100
50
59.2
14%
13%
12%
157.1
171.8
172.5
6%
ENRM Share of RETF
Disbursements
4%
2%
0
0%
FY04
FY05
FY06
FY07
FY08
Source: CFPTO Trust Fund Data Analysis Group
14.
RETF disbursements for environment have been increasing since FY04, but growing slower than
overall RETF disbursements, averaging US$244 million and reaching US$332 million in FY08 (Figure 6).
However, as a share of total RETF disbursements, RETF ENRM disbursements declined from 15% to 13%
between FY04 and FY08. Disbursements from the GEFIA trust fund make up for the majority (71% on
average) of all RETF ENRM disbursements.
15.
On average, a quarter of all RETF’s have disbursed grants supporting the ENRM theme; 87 out of
310 RETF in FY08. The number of individual grants for ENRM purposes from RETFs remained at an
average of 132 grants per year until FY07, with an overall average size of US$2 million. In FY08, the
number of grants declined to 92 with a significantly higher average grant size of US$3.9 million.
6
B.2.1. World Bank RETF Grant Disbursements for Environment by Country’s Borrowing Eligibility
16.
The breakdown by country’s borrowing eligibility (Figure 7) shows a majority of disbursements
going to IBRD countries (58% on average). Again China accounts for a large share of IBRD ENRM
disbursements with an average of 46%. The share of IDA countries (excluding blend countries) in trust
fund disbursements averages 19%.
17.
About 12% of trust fund grants are going to global or regional projects; a category that is not
applicable to World Bank lending. Out of these global / regional grants about half are attributable to two
large regional projects (the West Bank & Gaza IBRD funded program and the Nile Basin Initiative trust
fund program), with the remainder belonging largely to a number of GEFIA projects. These programs
focus to a large extent on the AFR and MNA region, supporting mainly Water Resource Management
and partly Environmental Policies and Institutions and Biodiversity projects.
Figure 7: RETF ENRM Disbursements – Breakdown by Country’s Borrowing Eligibility
100%
11%
90%
80%
70%
13%
13%
6%
15%
11%
12%
7%
6%
18%
15%
22%
17%
60%
20%
Global/Regional
20%
BLEND
50%
IDA
40%
IBRD
30%
62%
62%
61%
59%
FY07
FY08
48%
20%
10%
0%
FY04
FY05
FY06
Source: CFPTO Trust Fund Data Analysis Group
B.2.2. World Bank RETF Grant Disbursements for Environment by Region
18.
On a regional level on average 38% of all RETF ENRM grants are going to the EAP region (Figure
8), with an average of 69% of this being disbursed to China. About 18% each go to the AFR and LCR
region. AFR’s share shows a strong growth trend, whereas LCR’s share has staid rather flat over the last
five fiscal years. ECA has received an average of 14%, also staying rather flat. Trust fund disbursements
to the MNA and SAR regions are accounting for the smallest shares with about 6% on average. MNA
shows a similar trend as AFR, growing over 30% during this time, in contrast to the SAR region, which
had a decline in disbursements.
7
Figure 8: RETF ENRM Disbursements – Regional Breakdown
100%
90%
80%
5%
4%
9%
4%
4%
15%
20%
19%
21%
70%
60%
8%
6%
10%
21%
11%
13%
5%
11%
14%
10%
MNA
13%
LCR
50%
40%
30%
SAR
41%
43%
35%
40%
ECA
EAP
35%
AFR
20%
10%
10%
14%
15%
FY04
FY05
FY06
24%
21%
FY07
FY08
0%
Source: CFPTO Trust Fund Data Analysis Group
B.2.3. World Bank RETF Grant Disbursements for Environment by Sub-Theme
19.
Breaking down the RETF ENRM disbursements by sub-theme (Figure 9) depicts a steady
distribution over the five fiscal years. Pollution Management and Environmental Health with 28% on
average and Environmental Policies and Institutions with 27% on average account together for the
majority of disbursements. Biodiversity accords for 14% on average and Climate Change for 10% on
average of the overall disbursements, with the remainder going to Water Resources Management (9%
on average), Land Administration and Management (6% on average) and Others (6% on average as well).
Figure 9: RETF ENRM Disbursements – Share of Sub-Themes
100%
90%
80%
15%
16%
15%
12%
9%
10%
11%
8%
13%
Climate Change
31%
29%
22%
25%
27%
Environmental Policies and
Institutions
3%
4%
10%
6%
5%
Land Administration and
Management
26%
Pollution Management and
Environmental Health
70%
60%
50%
40%
30%
31%
31%
24%
27%
20%
10%
0%
Biodiversity
14%
9%
11%
9%
3%
7%
4%
11%
8%
8%
6%
FY04
FY05
FY06
FY07
FY08
Water Resources
Management
Other Environment and
Natural Resources
Management
Source: CFPTO Trust Fund Data Analysis Group
8
20.
The Biodiversity sub-theme plays a larger role in trust fund disbursements, with on average a
four times larger share, than it does in lending commitments. Also disbursements for Environmental
Policies and Institutions have a larger share in trust fund disbursement financial flows. In contrast, the
role of Water Resources Management is larger in Bank lending than in trust fund grants. Still Pollution
Management and Environmental Health are attributable for the largest share in trust fund grants and
Bank lending.
21.
The following section aims to give an indication of the role of the UNDP and UNEP, as the other
major implementing agencies of the GEF besides the World Bank, in allocating development financial
flows for the environment. Due to limitations in the data that is available for these agencies, relying on
financial data from different sources instead of commitment or disbursement data, the figures for the
different agencies are not directly comparable, but should provide an overall idea of the size of financial
flows for environment from these institutions and the role of the GEF in their environmental activities.
9
C.
UNDP
22.
After the World Bank, the UNDP is the second largest GEF implementing agency, becoming the
largest recipient of GEF grants in regards to GEF Council funding decisions in FY08. The UNDP's primary
role is the development and management of capacity building programs and technical assistance
projects.7 above UNDP’s work focuses on five themes: Democratic Governance, Poverty Reduction and
Achievement of the MDGs, Responding to HIV and AIDS, Crisis Prevention and Recovery and
Environment and Energy for Sustainable Development. UNDP’s expenditures in these themes have
totaled US$3.2 billion in calendar year 2007 (Figure 10)11.
Figure 10: UNDP – Expenditures & Share of Environment
3,500
14%
3,000
12%
11%
11%
11%
USD millions
2,500
9%
10%
2,000
8%
1,500
6%
1,000
4%
500
2%
0
260.0
327.0
363.0
CY04
CY05
CY06
Democratic governance
298.0
0%
CY07
Poverty reduction and
achievement of the MDGs
Responding to HIV and
AIDS
Crisis prevention and
recovery
Environment and Energy
for sustainable
development
% Environment and Energy
for sustainable
development over TOTAL
Source: OSG/UNDP; UNDP Annual Report
23.
For the purpose of this analysis, UNDP’s expenditures on Environment and Energy for
Sustainable Development are considered environmental financial flows. This theme accounts on average
for 11% of UNDP’s overall expenditures, US$312 million per year during CY04-07.
24.
Regarding its role as a GEF implementing agency, UNDP draws upon its expertise in institution
strengthening, human resource development, and non-governmental and community participation to
assist countries in designing and implementing activities consistent with the purpose of the GEF. In
addition, UNDP manages the Small Grants Programme on behalf of the GEF.7 above
11
UNDP figures are actual expenditures as provided in the UNDP Annual Reports, due to unavailability of other
UNDP financial data, as opposed to commitment data for World Bank lending; limiting the possibility of direct
comparisons between the implementing agencies.
10
25.
The UNDP GEF Trust Fund accounts on average for 5% of UNDP’s income, US$241 million a year
over CY04-07.12 Assuming that funding out of this trust fund is solely used for environmental purposes
and is fully spent, the GEF is estimated to contribute 77% of UNDP’s environmental expenditures.
26.
UNDP’s environmental work can be sub-divided into six priority areas, out of which
Conservation and Sustainable use of Biodiversity has the largest share (28% on average) on the same
level as Frameworks and Strategies for Sustainable Development, followed by Access to Sustainable
Energy Sources (20% on average), Water Governance (11% on average), Ozone and Persistent Organic
Pollutants (7% on average), and Sustainable Land Management and Desertification (5% on average).
27.
These priority areas can be compared with the World Bank’s ENRM sub-themes. Notably,
Biodiversity (Conservation and Sustainable use of Biodiversity) plays a much larger role for UNDP’s
environmental activities than in World Bank lending, with a share of 28% (against 3% for the World
Bank). UNDP’s expenditures related to biodiversity are on average US$88 million annually, even
nominally higher compared to an average of US$62 million for World Bank lending commitments;
although the World Bank biodiversity lending commitments fluctuated significantly over time.
12
For UNDP income figures see data tables in Annex
11
D.
UNEP
28.
UNEP is the third largest GEF implementing agency, which focuses on catalyzing the
development of scientific and technical analysis and advancing environmental management in GEFfinanced activities. UNEP helps to relate GEF-financed activities to global, regional and national
environmental assessments, policy frameworks and plans, and to international environmental
agreements. UNEP is also responsible for supporting the Scientific and Technical Advisory Panel (STAP)
of the GEF.7 above
Figure 11: UNEP – Sources of Income
300
250
USD millions
200
UN Regular Budget
175.1
150
156.4
175.1
156.4
Counterpart Contributions
Trust Funds
Environment Fund
100
50
0
CY04
CY05
CY06
CY07
Source: Global Policy Forum
29.
For this analysis it is assumed that all of UNEP’s activities are environment related. As shown in
Figure 11, UNEP’s income has remained largely flat over the last four calendar years, with a total income
of US$280 million in CY0713. Trust Fund contributions to UNEP’s income accord on average for 62% of its
income. If the GEF trustee commitments are used to estimate the contribution to UNEP’s income data,
GEF would contribute on average a third to UNEP’s total income and half of its trust fund resources. A
declining trend of GEF trustee commitments to UNEP is apparent over the last years, reducing its impact
on UNEP’s income, down to 13% of its total income in calendar year 2007.
13
UNEP figures are income data, as collected by the Global Policy Forum, due to unavailability of other UNEP
financial data, as opposed to commitment data for World Bank lending and expenditure data for UNDP; limiting
the possibility of direct comparisons between the implementing agencies.
12
E.
Concluding Remarks
30.
A number of trends can be identified based on the findings from this note. Notably, World Bank
lending commitments for the environment have grown with a compound annual growth rate of 15%,
which is significantly higher than the growth rate of 4% for overall Bank lending commitments.
Disbursements from recipient executed trust funds for the environment have grown at a comparable
rate of 13%, although five percentage points slower than overall RETF disbursements. For both lending
and trust funds, the majority of funds flow to IBRD countries, with flows to China making up the majority
of these funds.
31.
Most of the funds for environmental themes are flowing towards projects dealing with Pollution
Management and Environmental Health, Water Resources Management and Environmental Policies and
Institutions. However, the share of Climate Change increased significantly in FY08 for IBRD countries. In
IDA countries the focus remains on Water Resources Management.
32.
World Bank lending commitments for the environment, averaging about US$2 billion, were
about six times the size of trust fund commitments. Both for UNDP and UNEP, the size of funds
attributable to the environment is in a similar range of about US$300 million annually, which is
comparable to the Bank’s environmental flows from trust funds, but represents a fraction compared to
Bank lending commitments to the environment.
33.
The GEF is an important source of funding for the UNDP and the UNEP, but it plays a relatively
smaller role in funding environmental activities for the World Bank. With GEF commitments averaging
US$658 million a year, the World Bank provides three times as much as the GEF annually. In terms of
concessional financing, GEF commitments are somewhat higher than IDA financing for the environment
(US$516 million a year).
34.
It is important to note that besides GEF and the implementing agencies reviewed in this note,
there are a multitude of other sources of funding for the environment, which are out of the scope of this
analysis14 or have not yet disbursed funds15.
14
E.g. see the paper on “The Architecture of Aid for Environment – A Ten-Year Perspective” analyzing ODA flows
for the environment reported to the OECD-DAC.
15
E.g. the Climate Investment Funds, the Adaptation Fund and other Climate and Carbon Funds, for which the
World Bank acts as Trustee or Financial Intermediary, but which are partly not recipient executed or have not yet
disbursed funds, as well as other partnerships not involving funding from the World Bank’s trust fund portfolio.
13
14
Annex
I.
Approach and Methodology
This analysis uses different data sources due to limitations of data availability for the different agencies.
The analysis is based on commitment data for World Bank lending and the GEFIA, disbursement data for
trust funds, and financial statement expenditure / income data for UNDP and UNEP. For this reason,
data is not always comparable between the implementing agencies.
Where available, data for the last five fiscal years (for Bank channels) or calendar years has been taken
into account. The specific data sources are listed and limitations of the data and findings are pointed out
accordingly. A regional breakdown has been provided where available and if possible also a distinction
between aid to IBRD and IDA countries has been made.
For the purpose of this analysis, environmental flows have been classified according to each agency’s
definition. For the World Bank lending and trust fund data all financial flows marked with the
Environment and Natural Resources Management (ENRM) theme are considered environment related
for this analysis. This theme comprises seven sub-themes, which have been broken out where possible
to identify focus areas of the different channels:







Biodiversity
Climate Change
Environmental Policies and Institutions
Land Administration and Management
Pollution Management and Environmental Health
Water Resources Management
Other Environment and Natural Resources Management
These sub-themes include following activities16:


16
Biodiversity includes activities aimed at:
- in situ conservation (establishment of protected areas, management of
existing protected areas)
- ex situ conservation (ex situ collections, germplasm and genebanks, arboretums, zoos)
- targeted biodiversity training, research and assessments
- Ecosystem management approaches, including payment for ecological services
- Freshwater and marine biodiversity protection
- Wetlands, mangroves, and coral reef protection
Climate Change includes activities aimed at:
- carbon sequestration
- alternative and renewable energy technologies
- gas-flaring abatement
Source: World Bank OPCS
15




- energy conservation and efficiency improvements
- nonmotorized transport
- cleaner transportation technologies
Environmental Policies and Institutions includes activities aimed at:
- establishment and strengthening of environmental regulatory institutions (national,
subnational, local) environmental policies, regulations, monitoring, and enforcement
- environmental assessment and management-capacity improvement
- financing mechanisms and economic instruments for environmental management
- environmental awareness building, education, and training
Land Administration and Management includes activities aimed at:
- control and mitigation of land
degradation, desertification and drought
- land policies and administration,
including titling, registration, tenure, and mapping
- land rehabilitation, protection and conservation
- sustainable land management practices
- access to land resources, markets, information and technologies, and capacity building
- impact monitoring of land use and land use changes and interventions
- rural cadastres
Pollution Management and Environmental Health includes activities aimed at:
- mitigation of pollution and health effects from pesticide use
- reduction and elimination of the use of persistent organic pollutants and ozone
depleting substances
- mitigation of non-point source pollution from agricultural runoffs
- cleaner fuels
- oil spill contingency planning and remediation
- rehabilitation of contaminated production sites and surrounding areas
- improved environmental management in mining and energy operations
- cleaner production and eco-efficiency
- industrial pollution control and prevention
- hazardous waste treatment, management, storage, and disposal
- reduction and elimination of the production of persistent organic pollutants and ozone
depleting substances
- pollution abatement from shipping activities
- vehicle emissions monitoring and maintenance
- water pollution abatement
- sanitation and sewerage
- wastewater management and treatment
- solid waste management
- surface and ground water quality management and monitoring
Water Resources Management includes activities aimed at:
16
freshwater/coastal/marine water resource management
groundwater management
watershed and river basin protection, management, and rehabilitation
water resources management infrastructure (transbasin transfers, reservoirs and bulk
water canals)
- water quality management
- flood protection and management
- bulk water allocation and pricing (water rights)
- drainage
- reservoir management improvement
- dam safety measures
- coastal zone and marine water management
- flood protection and management (e.g., inland navigation)
Other Environment and Natural Resources Management includes all other environmental
-

activities that do not fall under other themes
17
II.
Data Tables
Table 1: Commitment of GEF grants through the World Bank as implementing agency
FY04
GEFIA Grant Amount (USD millions)
# of GEFIA Projects
FY05
217.6
37.0
FY06
245.6
43.0
FY07
324.6
41.0
FY08
238.9
31.0
Source: World Bank Project Portfolio Database; includes all Global Environment Project & Medium Sized Projects
Table 2: GEF Council and CEO Net Funding Decisions – By Implementing Agencies
USD millions
ADB
AfDB
EBRD
FAO
IADB
IBRD
IFAD
UNDP
UNEP
UNIDO
TOTAL
FY04
FY05
1.1
0.0
0.0
0.0
8.4
327.8
7.2
275.8
99.2
4.6
724.3
FY06
28.0
0.0
0.0
13.1
7.1
297.9
11.9
258.2
78.9
1.2
696.4
FY07
0.4
0.0
0.0
0.0
5.0
264.2
2.2
256.6
55.5
0.9
584.6
FY08
13.7
0.9
0.0
10.9
24.4
456.1
11.7
328.9
80.0
27.0
953.5
36.2
8.9
30.7
12.7
11.2
236.2
49.1
320.1
67.3
30.4
803.0
Source: World Bank CFPMI; includes projects, fees and project preparation activities but does not include cancellations
Table 3: GEF Trustee Commitments – By Implementing Agencies
USD millions
ADB
AfDB
EBRD
FAO
IADB
IBRD
IFAD
UNDP
UNEP
UNIDO
TOTAL
FY04
FY05
8.4
0.0
0.0
0.0
2.5
320.0
0.4
259.7
139.5
0.9
731.4
FY06
23.8
0.0
0.0
0.0
12.9
270.1
6.7
218.4
60.8
4.7
597.4
FY07
0.4
0.0
0.0
3.6
1.5
267.0
9.3
202.8
96.1
2.0
582.6
FY08
4.6
0.0
0.0
0.0
0.6
180.5
5.5
236.9
35.5
1.7
465.3
20.4
1.0
0.6
16.7
5.6
450.6
12.7
345.5
28.2
31.7
913.0
Source: World Bank CFPMI; reflects initial Trustee commitments less cancellations and unused amounts from financially
closed projects; includes stand alone projects, projects attached to Programmatic Initiatives, fees and project
preparation activities; does not include project and fee amounts pending Agency approval
18
280.0
35.0
Table 4: World Bank ENRM Lending by Country’s Borrowing Eligibility / # of Lending Projects
USD millions
IBRD
FY04
of which China
IDA
Blend
IDA share in Blend
TOTAL ENRM Lending
# of ENRM Lending Projects
TOTAL BANK Lending
# of BANK Lending Projects
758.7
259.4
492.4
53.5
23.8
1,304.6
67
20,080.1
256
FY05
FY06
FY07
FY08
2,057.4
1,025.8
1,351.7
1,775.4
358.2
357.5
414.2
505.0
417.9
361.6
444.3
734.6
2.0
0.0
220.9
151.8
1.0
0.0
74.5
31.4
2,477.3
1,387.3
2,017.0
2,661.8
79
74
81
76
21,893.1 23,581.2 24,535.8 24,644.5
292
297
318
319
Source: World Bank Project Portfolio Database; includes all Environment Projects with at least one ENRM sub-theme;
data does not include GEF and Montreal Protocol Projects
Table 5: World Bank ENRM Lending – Regional Breakdown for IBRD:
USD millions
FY04
FY05
FY06
FY07
FY08
AFR
0.0
0.0
15.0
0.0
0.0
EAP
265.5
388.6
377.5
457.2
573.7
of which China
259.4
358.2
357.5
414.2
505.0
ECA
251.4
332.6
91.4
342.5
356.1
LCR
142.4
836.8
451.0
340.0
653.6
MNA
93.8
158.3
42.7
179.0
60.0
SAR
5.5
341.1
48.1
33.0
132.0
TOTAL
758.7
2,057.4
1,025.8
1,351.7
1,775.4
Source: World Bank Project Portfolio Database
Table 6: World Bank ENRM Lending – Regional Breakdown for IDA:
USD millions
AFR
EAP
ECA
LCR
MNA
SAR
TOTAL
FY04
FY05
195.2
115.1
58.0
14.9
20.0
89.2
492.4
FY06
200.7
58.4
61.8
2.4
1.9
92.8
417.9
FY07
235.6
18.9
57.4
3.0
1.8
44.9
361.6
FY08
212.0
107.8
20.7
13.0
0.7
90.2
444.3
338.0
172.4
19.5
11.2
5.0
188.6
734.6
Source: World Bank Project Portfolio Database
19
Table 7: World Bank ENRM Lending – Share of Sub-Themes for IBRD:
USD millions
Biodiversity
Climate Change
Environmental Policies and Institutions
Land Administration and Management
Pollution Management and Environmental Health
Water Resources Management
Other Environment and Natural Resources Management
TOTAL
FY04
FY05
0.0
144.6
38.7
59.0
282.8
201.5
32.2
758.7
FY06
122.1
90.4
212.8
257.6
664.8
690.5
19.4
2,057.4
FY07
77.6
95.3
239.7
159.6
249.5
156.0
48.0
1,025.8
FY08
16.9
20.1
289.9
55.3
527.8
408.8
33.0
1,351.7
15.0
718.1
360.1
158.3
331.9
130.9
61.0
1,775.4
Source: World Bank Project Portfolio Database
Table 8: World Bank ENRM Lending – Share of Sub-Themes for IDA:
USD millions
Biodiversity
Climate Change
Environmental Policies and Institutions
Land Administration and Management
Pollution Management and Environmental Health
Water Resources Management
Other Environment and Natural Resources Management
TOTAL
FY04
FY05
15.4
33.4
53.3
66.6
153.6
155.8
14.4
492.4
FY06
14.3
31.2
64.3
152.6
83.1
40.3
32.2
417.9
FY07
23.4
31.5
96.0
25.9
44.1
91.9
48.9
361.6
FY08
1.4
12.2
72.0
47.3
119.0
175.1
17.3
444.3
9.6
53.7
136.2
109.1
70.1
333.8
22.0
734.6
Source: World Bank Project Portfolio Database
Table 9: Recipient Executed Trust Fund Disbursements
USD millions
GEFIA ENRM Theme
ENRM Theme (w/o GEFIA)
Non ENRM Theme
TOTAL
FY04
FY05
126.3
51.8
971.9
1,150.0
FY06
157.1
59.4
1,260.5
1,477.0
FY07
171.8
59.2
1,214.0
1,445.0
FY08
172.5
91.9
1,828.6
2,093.0
235.0
96.7
2,248.3
2,580.0
Source: World Bank CFPTO Trust Fund Data Analysis Group
Table 10: Number of RETF / RETF Grants
FY04
# of RETF supporting ENRM Grants
TOTAL # of RETF
# of ENRM Grants from RETF
FY05
49
241
118
FY06
52
259
167
FY07
60
222
146
FY08
82
274
139
Source: World Bank CFPTO Trust Fund Data Analysis Group
20
87
310
92
Table 11: RETF ENRM Disbursements – Breakdown by Country’s Borrowing Eligibility
USD millions
IBRD
FY04
FY05
110
60
27
22
19
178
of which China
IDA
BLEND
Global/Regional
TOTAL
FY06
135
65
37
16
29
217
FY07
112
38
47
42
31
231
FY08
160
63
58
29
17
264
197
100
65
19
51
332
Source: World Bank CFPTO Trust Fund Data Analysis Group
Table 12: RETF ENRM Disbursements – Regional Breakdown
USD millions
AFR
EAP
FY04
FY05
18
76
60
24
34
7
16
3
178
of which China
ECA
LCR
MNA
SAR
Others
TOTAL
FY06
30
89
65
24
44
9
11
10
217
FY07
35
80
38
30
49
9
24
4
231
FY08
63
92
63
55
40
15
21
-21
264
69
133
100
32
46
35
15
1
332
Source: World Bank CFPTO Trust Fund Data Analysis Group
Table 13: RETF ENRM Disbursements – Share of Sub-Themes
USD millions
Biodiversity
Climate Change
Environmental Policies and Institutions
Land Administration and Management
Pollution Management and Environmental Health
Water Resources Management
Other Environment and Natural Resources Management
TOTAL
FY04
FY05
25
16
55
6
55
16
5
178
FY06
32
21
62
9
68
16
9
217
FY07
36
25
50
23
55
21
20
231
FY08
40
22
66
15
72
29
21
264
Source: World Bank CFPTO Trust Fund Data Analysis Group
21
39
44
90
16
85
37
21
332
Table 14: UNDP – Total Income Received from Governments and Other Contributors
USD millions
CY04
CY05
CY06
CY07
Regular contributions received
842.0
914.5
916.3
1,108.2
Cost-sharing contributions
1,921.7
2,261.5
2,320.9
2,435.2
Other Contributions
76.1
56.0
60.8
93.0
Trust Funds established by the Administrator, excluding GEF
894.7
1,027.8
918.2
850.5
GEF Trust Fund
108.8
309.2
274.2
272.3
TOTAL
3,843.3
4,568.9
4,490.4
4,759.2
Source: UNDP; Contributions Unit, Treasury Division, Office of Finance and Administration, Bureau of Management,
UNDP; Statistical Annex; UNDP Executive Board Documents; includes accounting linkage and tax reimbursement
adjustments
Table 15: UNDP – Expenditures & Share of Environment
USD millions
Environment and Energy for sustainable development
Crisis prevention and recovery
Responding to HIV and AIDS
Poverty reduction and achievement of the MDGs
Democratic governance
TOTAL
CY04
CY05
260.0
379.5
148.8
521.9
1,050.4
2,360.6
CY06
327.0
386.0
160.0
762.0
1,403.0
3,038.0
CY07
363.0
362.0
141.0
928.0
1,368.0
3,162.0
298.0
440.0
86.0
1,055.0
1,290.0
3,169.0
Source: OSG/UNDP; UNDP Annual Report
Table 16: UNEP – Sources of Income
USD millions
Environment Fund
Trust Funds
Counterpart Contributions
UN Regular Budget
TOTAL
CY04
CY05
59.3
156.4
37.1
5.3
258.0
CY06
59.3
156.4
37.1
5.3
258.0
CY07
63.9
175.1
33.8
6.6
279.5
63.9
175.1
33.8
6.6
279.5
Source: Global Policy Forum
22