TWN Info Service on Climate Change (Feb25/05)
28 February 2025
Third World Network

GCF BOARD AGREES TO ESTABLISH FUND’S REGIONAL PRESENCE

New Delhi, 28 Feb. (Radhika Chatterjee): The Green Climate Fund [GCF] Board adopted a historic decision to establish regional presence at its 41^st meeting held in Songdo, Republic of Korea from February 17 to 20, 2025. The decision was adopted after several hours of discussions spread over two days, parts of which were held in an informal setting.

The Board meeting was presided over by newly elected Co-chairs Seyni Nafo [Mali] and Lief Holmberg [Sweden].

On the first day of discussions on this matter, Board members shared their views after the initial presentation was made by the Secretariat of the plan for implementation of regional presence.  On the second day, members requested the Co-chairs to take up further consultations informally and produce a simplified draft decision text for the Board’s consideration, that would lay out the principles relating to the establishment of regional presence.

The principles laid out in the final decision adopted by the Board reads as follows:

“Also decides that a GCF regional presence shall:

(i)                   Be equitably and geographically balanced among developing countries, taking into account the needs of those developing countries that are particularly vulnerable to the adverse effects of climate change;

(ii)                 Be cost-effective, cost-efficient, and within the approved multiannual budgeting process;

(iii)                Increase the efficiency and effectiveness of Secretariat operations, including with respect to programming and delivery support and Secretariat staffing; and

(iv)                Be operationally feasible, taking into account relevant risks and mitigants; and

                that the process to establish a GCF regional presence shall be conducted in an open, inclusive, consultative, transparent and non-discriminatory manner;”

The decision also requests the Secretariat to consult with the Board’s Budget Committee and the Risk Management Committee to present further matters relating to the operationalization of regional presence as follows:

“(d) Requests the Secretariat, following consultation with the Budget Committee and Risk Management Committee on matters relevant to their mandates, to present for the Board’s consideration no later than its forty-third meeting a proposal for operationalizing …, including proposed configuration(s), a selection process and an implementation plan, for a GCF regional presence, taking into account the views expressed by Board members at its forty-first meeting; and

(e) Takes note that further Board deliberation may be required prior to its forty-second meeting in order to inform the proposal referred to in paragraph (d) above, and welcomes the offer from Germany to host a workshop.”

During the discussions on this matter, most Board members expressed support for the implementation of regional presence, although there were several members who expressed their concerns. Developing country Board members in particular, highlighted the need for keeping in mind equity and inclusiveness in the process. They also asked for more discussions and detailed cost and risk analysis before the operationalization of regional presence could be taken up. Developed country members stressed particularly on the need for keeping in mind cost effectiveness in the implementation of this process.

The Board member from the Republic of Korea expressed that he could not join the consensus in respect of the decision adopted. (See details below).  

Some highlights of the discussion

Mafalda Duarte, the Executive Director of GCF presented the vision for establishing regional presence of the Fund. Calling it “a very strategic and important discussion”, she said it relates to the vision for the Fund as imagined by the Secretariat and expressed hope that the Board and the Secretariat could converge on that vision. Highlighting the critical role that the GCF has to play in delivering and supporting ambition in developing countries in the face of the climate crisis, she said “we are carrying out reforms in the organisation to be able to deliver at scale and speed” and to be fit for purpose for the populations the Fund is serving. She said the world is at a “particular point in history… it is not just about the climate mission; multilateralism is also at stake.... [The] GCF represents such multilateralism. We see the Fund becoming a prominent mechanism” or instrument in helping developing countries to respond to a global challenge. Elaborating further, she said, a critical part of GCF’s mandate is the role it plays in empowerment of a broad network of organisations, that haven’t necessarily delivered climate finance in the past and reiterated the importance of direct access entities (DAEs) and pointed out that a majority of accredited entities are still not constituted by DAEs [but international accredited entities. The accredited entities to the GCF are the only ones through whom funds are channeled].   

Regional presence she said, “is about being closer to the clients and to those we partner with, and to those we are trying to serve.” She added that proximity to partners and relevant agencies would enable GCF to “support country ownership, enhance partnership and access, and drive effectiveness and greater impact”. She stressed that the delegation of authority through the establishment of regional presence would drive “a more efficient way of doing business” and that following the establishment of regional presence, she said bulk of the Fund’s staffing would be in regional departments while the role of the headquarters will be to provide “oversight and quality assurance” over the functions.

She also informed the Board that the Secretariat had narrowed down on a few cities for establishing regional presence according to criteria related to cost-of-living index and travel connectivity, but the actual list of cities where regional departments would be established could vary according to other factors as well. Among the proposed criteria for selection of host countries, Duarte mentioned commitment from countries to provide necessary privileges and immunities, and ensuring safety and security of GCF staff as important factors. She also added that the decision to establish regional presence is adopted, it would be implemented in a phase-wise manner which would be preceded by the preparation of a detailed risk assessment and cost analysis.

Mohammad Ayoub (Saudi Arabia) said that the Asia-Pacific region is the largest landmass in the world and has the largest population and recalled that the COP guidance on regional presence had asked for the need for striving towards ensuring geographic balance. Sharing his disagreement with grouping the region together with Eastern Europe, Middle East and Central Asia, he said it would be better to think about Asia in terms of its sub-regions. Ayoub said that given that discussions on regional presence were still in the preliminary stages, the Board should decide the structure of the decision at this meeting. He added that planning has not been “sufficiently clear”, and asked the Secretariat to provide the Board with “some kind of implementation plan”. He said further that there is need for having new, clear and objective cost-benefit assessment. Regarding the selection criteria of choosing cities for establishing regional presence, he said it is important to ensure that the metrics and indicators used in this process are not “discriminatory in nature”, and stressed the need for equity. 

Nauman Bashir Bhatti (Pakistan) said form should follow function and highlighted the importance of understanding the function that regional offices will perform. He said that fundamental to the issue of regional presence is the effort to enhance the GCF’s reach within a country and pointed out that it was already performing within its mandate. He cautioned that cost effectiveness should not be looked at “for the sake of cost effectiveness”. He asserted that the principle of equity will be critical to the process, especially when population-based criteria is considered and that this could be done by sub-regions. In terms of location of regional presence, he stressed that no region “must be disadvantaged”.

Mariamalia Jimenez Coto (Costa Rica) said regional presence is of critical importance to the Latin American and Caribbean States, adding that the decision should be guided by several elements like principles, technical work, way forward and so on. She said her region’s view is for a phased-approach, elaborating that the process must respond to the needs of all developing countries equitably. She highlighted the importance of ensuring representation from all developing countries and regions and that the process be done in 2025. Coto also proposed a workshop between the Board meetings for discussing technical issues further and in providing inputs.

Antwi-Boasiako Amoah (Ghana) said the African region is in favour of establishing regional presence, and that such a move would support National Designated Authorities (NDAs) further. He stressed the importance of multilingualism in the context of regional presence. Highlighting the importance of having an enhanced understanding of cost implications, he said the methodology of costing is very important and that he would like to see the issue of selection criteria reflected in the decision. He also expressed the need for seeing a “comprehensive timeline” of how the process of implementation of regional presence would play out and added, “we want to clearly indicate that the Board must be in charge, in the driving seat” with the Secretariat supporting the Board.

Isatou F. Camara (Gambia) said there is a need for a “phased-approach” in sequencing the work of implementing regional presence. She agreed on the need for more technical work, stressing the importance of equity, equity and inclusiveness as important factors to keep in mind. On the assessment process, she said a clear and transparent disclosure of the selection process would be important. As regards regional groupings, she said it would be important to see the assessment of different regions, based on lessons learnt from different international organisations. She also highlighted the importance of multilingualism while implementing the process.

Teuea Toatu (Kiribati) acknowledged the overwhelming support for the need to establish regional presence but added that it is “still very much work in progress”. He said regardless of the form in which the regional presence decision is adopted, the bottom line should be that it does not compromise the overall position of the GCF. He said the regional presence initiative is “a huge and costly project” and that it is important that it be done “properly”. Adding a caution, he said, “if it fails, it is important to remember that not only the Secretariat, but also the Board will be held responsible”. 

Nino Tandilashvili (Georgia) said regional presence addresses several challenges and that regional offices of GCF should simplify the decision-making process rather than adding a new bureaucratic hurdle. Highlighting the importance of a “full information package”, she said it was needed for assessing the governing structure that would be laid out for establishing regional presence. She pointed out the importance of ensuring transparency in the process, especially in terms of eligibility and evaluation criteria. She stressed the need for agreeing on concrete timelines and the importance of effectiveness and efficiency in the decision-making process and supported the idea of organizing inter-sessional workshops for having further discussions on the technical aspects related to this issue.

Annette Windmeisser (Germany) said establishing regional presence is important in the context of improving access to resources, which in turn is related to the impact GCF makes eventually. However, she also cautioned about the need for managing expectations as establishing regional presence “might not do everything” that the Board imagines. She highlighted the need to be cost effective, realistic and pragmatic and expressed wariness about the possibility of seeing a slippery slope if these were not kept in mind. She also expressed support for holding a workshop.

Jose Delgado (Austria) said the decision of establishing regional presence of the fund is an important one and needs to address the “how perspective”. He said the decentralized approach can help engage accredited entities and direct access entities further and that it is very important to “see how we approach the implementation plan”. He stressed the need for “thinking outside of the box” to find a “landing zone”. Regarding the budget, he mentioned the principle of “cost neutrality” as something that had been introduced by the Secretariat and said, “that speaks directly to cost efficiency aspects”. Adding further, he said it would be important to understand how efficiency and effectiveness gains can be made in the process of establishing regional presence. He also emphasized the need for scrutinizing several potential risks and highlighted the importance of following a sequenced approach.

Hans Olav Ibrekk (Norway) raised caution against rushing towards establishing regional presence and mentioned that while at COP28, the GCF was encouraged to expedite regional presence, at COP29, the GCF was asked to ensure regional presence is established in a “balanced manner”. Elaborating further, he said, “I am skeptical to move ahead” and called on the need to “make an informed decision” and added, “I am not convinced that we have all the material before us” [for making the decision]. He also stressed the need for a better analysis of the options and a “careful review of the budget”. Finally, he also asked for taking equity into account and reflecting diversity in all elements.

Lucretia Landmann (Switzerland) expressed reservations about having regional and that GCF had been placed as a “second level fund”. She said that many questions still remained unanswered and asked what the different models [of implementation of regional presence] would look like; what would happen with cross regional thematic roles; what would be the impact of establishing regional presence on the headquarters; how would the readiness support programme be affected and so on. She said any decision on regional presence. She also expected a phased-approach in the implementation of regional presence, which would involve taking stock of things and learning from lessons before moving forward.

Hideaki Chotoku (Japan) said there is need to ensure that costs do not increase significantly, and risks are minimized in the implementation of regional presence. Elaborating further, he said he is not fully convinced that implementing regional presence would be the cheaper option as there would be other costs related to the establishment process. He asked for a more comprehensive cost and risk analysis from the Secretariat before the Board decides on establishing regional presence.

Jisung Moon (Republic of Korea) raised concerns stressed that there is a fundamental difference between GCF and multilateral development banks (MDBs) and that GCF is not an MDB. He said that a particular point of difference between the two is that MDBs implement their entire projects themselves while GCF does that through its NDAs and Accredited Entities (AEs), with each playing an important role in the process. He asked what was the need for creating another layer of administration between NDAs and AEs and the GCF. He said the current document provided by the Secretariat on regional presence had limited information and that there is a need to look at alternatives. He also pointed out about there being a difference between efficiency and cost neutrality. He said there is a lack of sufficient risk assessment of the impact on the GCF headquarters and asked for further discussions on this matter in the Risk Management Committee. He asserted that he was not ready to decide on establishing regional office as this is a fundamental change.

After the decision to establish regional presence was adopted by the Board, Moon said although he did not want to object to regional presence, he had different views on how it could be achieved. Expressing disagreement with the decision adopted, he said he could not be a part of the consensus due to “procedural reasons”.