GEF-6 Policies

IFAD and FAO Learning Event

on GEF

Rome, Italy

December 10-12, 2014

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OverviewBackground: GEF Policies are usually submitted to Council for approval via Council

papers but do not capture discussions/views of Council during the meeting.

GEF Policy Framework:

In GEF-6: Types and Hierarchy of Policy and Procedure Framework was established

Policy: A statement of principles or values approved by the GEF Council that mandates or

constrains activities undertaken to achieve the institutional goals of the GEF Secretariat. A

Policy’s legal power is higher than that of procedures and guidelines.

Procedures: A set of instructions or process that must be followed to adhere to a particular

Policy or to accomplish an operational function or a specific task. Procedures are approved by

the GEF CEO with the responsibility for the relevant Policy or relevant operational area or

subject matter.

Guideline: Additional information to help explain or implement a particular policy. Guidelines

are approved by the CEO or by Team Leaders with responsibility of the relevant Policy or

relevant operational area or subject matter. Guidelines have the lowest power in the strata of

Policies, Procedures and Guidelines.

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Overview…………(2)

1. GEF Programmatic Approach, 47th Council Meeting

2. Update on Project Cancellation Policy,

47th Council Meeting

3. Co-financing Policy, 46th Council Meeting

4. Non-Grant Instrument, 47th Council Meeting

5. Policy on Gender Mainstreaming, 47th Council

Meeting

6. Public Involvement Policy, 7th Council Meeting

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Programmatic Approach

Key document = a Program Framework Document (PFD) submitted in a

work program for Council approval;

Program can be single-Agency or multi-Agency; single focal area or

mutli-focal area, single trust fund or multi-trust fund;

For multi-Agency program, a Lead Agency will be identified to manage

the program in all related administrative matters;

Extensive upstream consultation among relevant stakeholders;

Key Features in a PFD:

• Discuss program objectives;

• Describe all child project contributions to the program objective;

• Establish a program commitment deadline.

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Project Cancellation Policy

Objectives: to improve the GEF’s operational efficiency, particularly in the amount of

time it takes to prepare and deliver projects;

to ensure that GEF-financed projects remain relevant to the objectives and

priorities of the GEF and recipient countries.

Using Phased approach to implement the policy:

• After 12 months of Council approval of PIF, a notification will be sent to the

Agency and OFP of the recipient country to alert them of the remaining 6 months

for submission of project for CEO endorsement;

• After 18 months, the Secretariat informs all relevant stakeholders on the

cancellation of the project.

• The Secretariat will consider exception to the above cancellation only on

extraordinary events, and if agreed, will notify Council.

• Cancelled projects maybe resubmitted within a year for consideration of CEO

endorsement if resources are available.

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Project Cancellation Policy……..(2)

Cancellation of child projects under a program and unused program

amount:

• All child projects should be submitted for CEO endorsement by

the program commitment deadline.

• Six months before the program commitment deadline, if there

are still program funds of child projects not yet CEO endorsed,

the Secretariat sends a notification to the Lead Agency notifying

it of the upcoming cancellation of such program funds.

• After the passing of the program commitment deadline, the CEO

notifies the relevant Lead Agency and the Trustee of the

cancellation for the remaining program funds.

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GEF Co-financing Policy

• Approved by Council in May 2014, which has been posted as Policy FI/PL/01.

This Policy:

establishes the objectives for co-financing in GEF-financed projects;

Defines co-financing for GEF-financed projects and programs; and

Provides rules/requirements on co-financing for GEF-financed projects and

programs.

• Applies to GEF Trust Fund and the Nagoya Protocol Implementation Fund

(GEF-financed projects) financed projects and programs but not to LDCF or

SCCF financed projects.

• Council Document that proposed the Policy to the Council (Document

GEF/C.20/6/Rev.1, Co-financing) contains helpful background and guidance

on how it will be implemented.

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GEF Co-financing Policy……..(2)

• Objective: “to attain adequate levels of co-financing as a means to:

enhance the effectiveness and sustainability of the GEF in

achieving global environmental benefits;

strengthen partnerships with recipient country governments,

multilateral and bilateral financing entities, the private sector, and

civil society.”

• Includes “an ambition for the overall GEF portfolio to reach a co-

financing ratio of at least 6:1, with expectations for greater co-financing

in upper-middle income countries that are not SIDs.”

This is a portfolio ambition, not project-by-project.

GEF Secretariat “will not impose minimum thresholds and/or

specific co-financing sources in the review of individual projects or

work programs.”

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GEF Co-financing Policy……..(3)

• Definition: “resources that are additional to the GEF grant1 and that are

provided by the GEF Partner Agency itself and/or by other non-GEF sources

that support the implementation of the GEF-financed project and the

achievement of its objectives.”

• Co-financing is required for all GEF full-sized and medium-sized projects

and programmatic approaches (PAs). Optional for enabling activities.

PIFs & PAs must list indicative co-financing for work program

inclusion.

For CEO endorsement, Agencies must confirm co-financing and

provide evidence.

Agencies must list co-financing by source and type.

Secretariat reviews proposals for consistency with Policy.

____________1 GEF financing (e.g. the GEF grants) is determined on the basis of the agreed incremental cost

principle.

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GEF Co-financing Policy……..(4)

Council Document GEF/C.20/6/Rev.1 also notes that the Secretariat

will “continue to review project co-financing as part of its assessment

of whether the project is supported by an adequate financing package

in light of the needs of the project.” (Paragraph 16)

• GEF Secretariat will also monitor portfolio co-financing and report

to Council through Annual Monitoring Review (AMR).

• Agencies to report on materialized co-financing during

implementation and project closure (per GEF PIR and TER-Terminal

Evaluation Report)

• Evaluation Office may evaluate co-financing through Overall

Performance Studies.

Link to the paper: http://www.thegef.org/gef/policy/co-financing

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Non-Grant Instrument

GEF’s experience to date suggests that non-grant instruments

can make an important contribution to the achievement of the

GEF’s objectives. They have helped deliver innovative projects

and catalytic partnerships.

GEF-6 Policy Recommendations: expand the use of non-grant

instruments, in view of the contributions these can make to

leverage capital from private sector, to long-term financial

sustainability through their potential for generating reflows, as

well as the usefulness of assessing the demand for non-grant

instruments for the public sector in GEF recipient countries.

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Non-Grant Instrument…………(2)

• Since the GEF’s inception, a total of 86 projects have been recorded

as having utilized a “non-grant” instrument, totaling $715 million of

GEF financing (about 6% of the GEF’s total programmed amount);

• Co-financing ratio of these projects has trended high over time,

and is well above co-financing levels of GEF grant programming;

• The largest share of projects has been in the CCM focal area (80%

of the funds). 7 projects have been in the BD;

• Debt instruments and risk mitigation products are the most

frequently used non-grant instruments (71 % of the funds)

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GEF-6 Non-Grant Pilot

• will play a key role in supporting the GEF’s efforts to leverage significant

capital from the private sector through the use of innovative and flexible

financial instruments.

• will expand the range of tools available to the GEF and allow the GEF to

assess the demand and applicability of GEF non-grant instruments for

public sector recipients.

• By demonstrating and validating successful models for the use of non-grant

instruments, the GEF can help catalyze large-scale changes through

broader adoption and generate experiences which may also be useful for

other international environmental funding mechanisms such as the Green

Climate Fund.

• by focusing the Pilot on non-grant instruments that have the potential to

generate reflows, the Pilot can make a contribution to the GEF Trust

Fund’s financial sustainability.

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NGI Pilot: Implementation

• A set-aside of $110 million for the Non-Grant Pilot.

• The maximum amount of funding for each project is approximately $15

million.

• Proposals must be submitted by one of the GEF Partner Agencies on

behalf of the potential project proponent. Interested parties are

encouraged to contact the relevant GEF Partner Agency focal point.

• Only proposals using non-grant instruments with a potential for

reflows to the GEF Trust Fund will be funded under the Pilot.

• Consistent with the Policy on Non-Grant Instruments, a broad and

flexible range of debt, equity and guarantee instruments will be

supported under the Pilot. For projects/programs with public sector

recipients, instruments include concessional loans and guarantee

instruments; an emphasis on concessional loans is expected.

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NGI Pilot Implementation – Selection Criteria

• Project proposals are eligible as long as they contribute GEBs as per

GEF’s strategic programming under GEF-6.

• The Pilot will seek to fund a diversity of recipient countries,

regions, and Focal Areas. Proposals for both full-sized projects and

medium-sized projects will be considered.

• The Pilot will support capacity building, technical assistance, and

advisory services only if they are included as part of the overall

investment using the non-grant instrument and if the overall

investment has potential for reflow to the GEF Trust Fund.

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Implementation – Selection Criteria

Following elements are especially encouraged:

• demonstrate innovative application of financial

mechanisms and partnerships that may be broadly adopted

and can be scaled-up;

• demonstrate use of non-grant instruments in areas other

than CC;

• deliver innovative engagement with the private sector and

innovative business models;

• deliver high levels of co-financing.

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Implementation – Financing Terms……(1)

• For projects with private sector, the GEF Partner Agency

will negotiate an appropriate lending rate or return on

investment that is consistent with the Agency’s standard

practices;

• Ensures a minimum level of concessionality;

• Avoids displacing other finance;

• Catalyzes other investments;

• The maximum maturity for private sector loans is twenty

years; the exit date for equity investments will be negotiated

case by case.

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Implementation – Financing Terms……(2)

For projects/programs with loans to public sector recipients, the Pilot will

use differentiated terms: softer concessional terms will be offered to LDCs

and SIDS, while harder concessional terms will be offered to other countries

as follows:

GEF

concessional

loans under

the Pilot

Maturity

(Years)

Grace

Period

(Years)

Annual Principal

Repayment Years

11-20

(% of initial

principal)

Annual

Principal

Repayment

Years 21-40

(% of initial

principal)

Interest

To LDCs

and SIDS

40 10 2% 4% 0.25%

To Other

Recipient

Countries

20 10 10% NA 0.75%

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Implementation – Financing Terms ………..(3)

• Consistent with MDB standard lending practice, the GEF Agencies

will not seek any guarantee or security for lending to sovereign

governments under the Pilot. If a GEF loan under the Pilot is made

to a sub-national entity, the beneficiary country will be required to

guarantee the loan if the GEF Partner Agency requires such

guarantees for sub-sovereign lending.

• In case of the use of guarantee instruments for public sector entities,

the reflow schedule and fees will be negotiated on a case-by-case

basis by the GEF Partner Agency. There will be no requirement for

sovereign government indemnity for any guarantee product

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Implementation - Application

Schedule:

• It is anticipated that funds under the Pilot could be allocated rapidly --

the Pilot aspires to be fully programed by the end of the calendar year

2015. This will facilitate early compilation of lessons learned that

might be useful for GEF-7 and for other interested parties.

• The first opportunity for FSPs will open in Nov 2014 . Agencies are

encouraged to submit projects/programs in time for consideration by

Council in the June 2015 WP. The second opportunity for FSPs will

open in July 2015.

• Medium-sized projects can be submitted for CEO consideration under

the Pilot on a rolling basis, consistent with regular processing of

medium-sized projects.

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Gender Mainstreaming

Policy on Gender Mainstreaming (PL/SD/02) was adopted in 2011

• GEF’s commitment to enhancing gender equality through GEF operations.

• The Policy calls on the GEF Agencies to have policies, strategies, or action

plans that meet the seven minimum standards:

1) Institutional capacity for gender mainstreaming

2) Consideration of gender elements in project design,

implementation and review

3) Undertake project gender analysis

4) Measures to minimize/mitigate adverse gender impacts

5) Integration of gender sensitive activities

6) Monitoring and evaluation of gender mainstreaming progress

7) Inclusion of gender experts in projects

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Gender Equality Action Plan

To operationalize the Policy on Gender Mainstreaming, a Gender

Equality Action Plan was approved by Council in the October 2014

meeting where the following was established:

• Concrete road map to implement the GEF Policy on Gender

Mainstreaming that builds on the existing and planned gender

strategies and plans of the GEF Agencies

• Goal: to operationalize the mainstreaming of gender in GEF policy

and programming to advance both the GEF’s goals for attaining

GEBs and the goal of gender equality and women’s empowerment.

• Initially serves during the GEF-6 period (FY15-18).

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Key Elements

1. Project Cycle

• Develop a Guideline on Mainstreaming Gender in GEF Project Cycle

• Incorporate in Project Templates and Guidelines

2. Programming and Policies

• Support gender responsive projects, based on country demand and GEF-6

Strategy

• Mainstream gender in key GEF Strategy and Policy documents.

3. Knowledge Management

• Enhance KM on gender equality, in line with new KM strategy (Knowledge

products, webpage, etc)

4. Results Based Management

• Strengthen GEF-wide accountability for gender mainstreaming by having

Corporate and Focal Area level indicators and targets.

5. Capacity Development

• Strengthen capacity at GEFSEC institution and staff levels, OFPs and partners

at the country level

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GEF-6 Core Gender Indicators

1. Percentage of projects that have conducted gender analysis during

project preparation.

2. Percentage of projects that have incorporated gender responsive

project results framework (e.g. gender responsive output, outcome,

indicator, budget, etc).

3. Share of women and men as direct beneficiaries of project.

4. Share of convention related national reports incorporated gender

dimensions (e.g. NBSAP, NAPA, TDA/SAP, etc.).

5. Percentage of monitoring and evaluation reports that incorporates

gender equality/women’s empowerment issues and assess

results/progress.

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Public Involvement Policy

Policy: Public Involvement in GEF Projects, GEF/PL/SD/01http://www.thegef.org/gef/content/public-involvement-policy

• Approved by GEF Council in April 1996, based on paragraph 5 of the

GEF Instrument.

• Effective public involvement is critical to the success of GEF-financed

projects, with emphasis on local participation.

• Includes five principles and related requirements that all GEF Partner

Agencies are required to follow to ensure public involvement in the

design, implementation, and evaluation of GEF-financed projects.

• GEF Partner Agencies must describe (in PIF and CEO endorsement) how

they have ensured public involvement in project design and will continue

during implementation.

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The Rationale for Public Involvement in

GEF-financed Projects

Public involvement improves the performance and impact of projects by:

• Enhancing recipient country ownership of, and accountability for,

project outcomes

• Addressing the social and economic needs of affected people

• Building partnerships among project executing agencies and

stakeholders

• Making use of skills, experiences, and knowledge, specifically of

non-governmental organizations (NGOs), community and local

groups, and the private sector in the design, implementation and

evaluation of project activities.

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Public Involvement Guidelines: Overview

Information Dissemination

Consultation for Setting Priorities

Consultation for Project/Program Design and

Implementation

Reporting, Monitoring and Evaluation

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Action Plan for Implementing Public Involvement

Policy and Guidelines

Information Dissemination

Design of programs and projects

Knowledge Management

Monitoring

Capacity Development

Policy and Guidelines

Conflict Resolution

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Related Council Paper Links

GEF website: www.thegef.org for all relevant project cycle papers

for more detailed policies and procedures.

GEF/C.38/05/Rev.1

Streamlining the Project Cycle and Refining the Programmatic Approach

GEF/C.39/Inf.03 GEF Project and Programmatic Approach Cycles

GEF/C.43/06 Streamlining of Project Cycle

GEF/C.47/07 Improving the GEF Project Cycle

GEF/C.46/09 Co-financing Policy, http://www.thegef.org/gef/policy/co-financing

For GEF Policies and Strategies, http://www.thegef.org/gef/policies

For key GEF Policy and Procedure Documents:

http://www.thegef.org/gef/policies_procedures

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.

Thank you for your attention!

Questions?

Lily Uy Hale (Lhale@thegef.org)

Sr. Operations Officer

Operations and Business Strategy, GEF

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