TWN Info Service on Climate Change (Nov19/03)
20 November 2019
Third World Network

GCF Board adopts policy on co-financing and updated gender policy

Songdo, 20 Nov (Prerna Bomzan): The Green Climate Fund (GCF) adopted two key decisions relating to the policy on co-financing and an updated gender policy at its 24th Board meeting in held Songdo, Korea from 12-14 November.

Policy on co-financing

The draft policy on co-financing was introduced to the Board, by Co-Chair Josceline Wheatley (United Kingdom). A draft decision was also prepared by the Secretariat for the consideration of the Board for adopting the policy.

The draft policy developed by the Secretariat sets out the objectives, definitions, principles, scope and methodology to determine, account for, track and report on co-financing as well as additional resources invested alongside GCF resources. The proposed policy takes into consideration, the experience and lessons learned of similar policies from other climate finance delivery channels.

In the policy drafted by the Secretariat (which was adopted by the Board later after deliberations), ‘co-financing’ was defined as “the financial resources required, whether public finance or private finance, in addition to the GCF proceeds, to implement the funded activity for which a funding proposal has been submitted.”

In explaining the policy to the Board members, the Secretariat said that the objective of the policy is to provide greater clarity and transparency to both developing countries and the accredited entities (AEs) to prepare funding proposals.

The Secretariat underlined that the “policy does not impose any conditions or restrictions on GCF funding based on co-financing, but rather intends to improve its consistency and alignment with the mandate of the GCF”.

One of the key principles as set out in the policy document is that “there is no minimum amount of co-financing required for a funded activity, and no specific sources of co-financing that must be complied with”.

The policy also states that “whenever possible, funded activities should seek to incorporate appropriate levels of co-financing to maximize the impact of GCF proceeds, as determined on a case-by-case basis, cognizant that while desirable to demonstrate alignment of interests between the GCF and AEs, and country ownership by developing countries, co-financing may not always be achievable or realistic”.

In the draft decision prepared by the Secretariat for the consideration of the Board, the decision requested the Secretariat “to report mobilized private finance, as defined in the Policy on co-financing, to the Organisation for Economic Co-operation and Development (OECD) beginning with calendar year 2021”. This drew concerns from Ayman Shasly (Saudi Arabia), who questioned the need to report to the OECD.

Shasly also welcomed the proposed co-financing policy stating that it was “flexible enough” for developing countries to enable themselves to contribute to climate action. He commented that “no specific targets” on co-financing with “no upfront limits” was encouraging.  

Revisions were made to the draft decision following from Shasly’s comments by the deletion of references to the OECD.

In the final decision adopted, the Board “requests the Secretariat to report relevant financial data defined in the Policy on co-financing no later than 2021 on the basis of 2020 data to inform relevant processes and relevant institutions collecting international development finance data, including those informing assessments by the Standing Committee on Finance and the reporting for the Biennial Reports under the UNFCC, as appropriate”.

The Board also requested “the Secretariat to continue to work on the collaboration with relevant bilateral and multilateral institutions as well as on capacity-building with a view to introduce an instrument-based methodology to report mobilized public finance”.

The Board decided that the policy will apply to funding proposals approved at the 26th meeting of the Board and thereafter.

Updated Gender Policy and Gender Action Plan 2020-2023

At its preceding 23rd meeting, the Board had requested the Secretariat to present a revised updated Gender Policy and an updated Gender Action Plan, building on the progress made in the consultations so far and the assessment of the Secretariat on implementation considerations.

Co-Chair Nagmeldin Elhassan Mahmoud (Sudan) informed members that a number of comments were received on the circulated draft document prepared by the Secretariat, coming from the African Group members, France, Germany, the UK, Canada and Sweden.

Following consultations on the matter, he said that the Co-Chairs’ were presenting a draft decision for consideration, stating that “significant efforts have been made to reach convergence” on the draft proposal with a view to “find consensus on the policy and action plan”.

Elhassan Mahmoud said that a new paragraph was introduced in the draft decision which confirms both readiness and preparatory support as well as support from the project preparation facility to implement the updated gender policy.

On the guiding principles in the Gender Policy, the Co-chair said that principle 1 reflects “agreed language” from the existing Fund policy and is consistent with its environmental and social safeguards (ESS) policy.

He elaborated that principle 1 also recalls the preambular language of the Paris Agreement (PA) which states that “acknowledging that climate change is a common concern of humankind, Parties should, when taking action to address climate change, respect, promote and consider their respective obligations on human rights, the right to health, the rights of indigenous peoples, local communities, migrants, children, persons with disabilities and people in vulnerable situations and the right to development, as well as gender equality, empowerment of women and intergenerational equity”.

Further, principle 1 in the updated policy also states that the policy is also guided by Article 7(5) of the PA where “Parties acknowledge that adaptation action should follow a country-driven, gender-responsive, participatory and fully transparent approach, taking into consideration vulnerable groups, communities and ecosystems, and should be based on and guided by the best available science and, as appropriate, traditional knowledge, knowledge of indigenous peoples and local knowledge systems, with a view to integrating adaptation into relevant socioeconomic and environmental policies and actions, where appropriate”.                                                                                                                              

Elhassan Mahmoud also gave an “assurance” of respect for the “national circumstances” of countries in the covering decision, with a proposal in this regard for consideration. (See further details on the decision below).

When the floor was open for comments, Sue Szabo (Canada) highlighted that 90 per cent of survey respondents on costs versus benefits, consider the GCF gender-related requirements as “beneficial”. However, she expressed concern that almost half of the AEs had limited capacity for implementation while 40 per cent of national designated authorities (NDAs) and focal points communicated technical capacity constraints. She concluded that she was ready to approve the policy although it was “not a perfect update”.

Tlou Emmanuel Ramaru (South Africa) fully supported the updated policy and action plan stating that it represents a “balanced approach” that provides support to both NDAs and direct access entities (DAEs).

Karina Ramirez Arras (Mexico) looked forward to “reaching a consensus” on the important matter and for its approval.

Ali Gholampour (Iran) said there should not be any further delay to take action on the policy and stressed the need to work on a “consensus basis”. He cautioned about the policy being used on “exclusionary grounds to deny (countries from) accessing resources”.

Jeremiah Garwo Sokan (Liberia) recognised the importance of the policy and the need for it to be concluded as an integral policy of the Fund.

Richard Muyungi (Tanzania), Janine Felson (Belize), Irina Ghaplanyan (Armenia) also supported the approval of the updated gender policy.

Frank Fass-Metz (Germany) hoped of reaching a decision finally on the policy and looked forward to “achieving a consensus”.

Ayman Shasly (Saudi Arabia) reiterated that the focus of the policy should be solely on “women and girls” and sought further clarity on the definition of “vulnerable groups”. He said its reference in Art 7(5) of the PA is different and “(is) definitely not in a gender policy context”. Further, he added that the reference to “national circumstances” in the covering decision should also be reflected in the policy itself, urging that the “decision must be attached to the policy” to avoid it being prescriptive or intrusive.

Executive Director Yannick Glemarac responded that there has not been a single case of the existing gender policy acting as a barrier to accessing GCF resources. He also confirmed that the decisions and policies will be definitely treated as part of the package.

Ali Gholampour (Iran) requested to put “on record” that the gender policy shall not be implemented for “denial of access to resources” and that “it should not be taken as a conditionality”.

After consultations on the comments made by Board members, Co-Chair Elhassan Mahmoud presented the revised policy document and covering decision for approval, highlighting the changes made in the texts.

In the decision adopted, the Board confirmed that “in order to support capacity-building to access GCF resources:

(i) National designated authorities and focal points may request readiness and preparatory support from GCF to develop and/or strengthen their capacities, policies, procedures and competencies to meet the requirements of the updated Gender Policy of the GCF and the Gender Action Plan of the GCF 2020–2023; and 

(ii) Direct access entities may request support from the Project Preparation Facility to support the project-level requirements of the updated Gender Policy of the GCF and Gender Action Plan 2020–2023.”

The decision also adopted the updated Gender Policy “acknowledging the progress made in advancing gender balance and gender equality within the context of climate change policies and in line with individual country circumstances when applying (the) said policy.”

The Board also adopted the Gender Action Plan.

(Edited by Meena Raman)