Arrangements for the Management of the Adaptation Fund: Global Environment Facility (GEF)

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Arrangements for the Management of the

Adaptation Fund: Global Environment Facility (GEF)

UNFCCC Workshop on the Adaptation Fund3 May 2006

Edmonton, AlbertaCanada


Outline

• History

• Structure

• Principles

• Trustee Operations

• Evaluation

• GEF Support to Adaptation

• Stage 1 & Stage 2 Adaptation

• Beyond Stage 2• SPA

• SCCF

• LDCF

• GEF’s Strengths for Managing Adaptation Fund


History

•Pilot Phase: 1991-1994 ($750m)•Negotiations for Restructured GEF

•GEF Instrument

•GEF 1: 1994-1998 ($ 2.0 billion)

•GEF 2: 1998-2002 ($2.75 billion)

•GEF 3: 2002-2006 ($3.0 billion)


CBD

UNFCCC

POPS

CCD

Montreal Protocol

International Waters

ADB

AfDB

EBRD

UNDP

UNEP

W.B.

FAO

IDB

IFAD

UNIDO

ASSEMBLY

COUNCIL

CEO/CHAIRMANGEF SECRETRIAT

STAP

Evaluation Office

NGO’s

IAs/EAsGEF: A Network Organization


Operational Principles

1. In context of UNFCCC, CBD, ODS, & POPS, priority is implementing Guidance of COP’s

2. Funding to meet agreed incremental costs of global environmental benefits

3. Cost-effectiveness4. Country-drivenness

5. Maintain Flexibility6. Full disclosure of

information7. Stakeholder

Consultation8. Eligibility (9a & 9b)9. Catalytic role—

leveraging resources10. Regular and open

Monitoring and Evaluation


GEF Trustee Operations

• World Bank serves as Trustee of GEF Trust Fund, and the Trust Funds for the LDCF and the SCCF• WB manages more than 800 Trust Funds• Each fund managed separately

• Responsibilities• Maintenance of distinct, appropriate records, including

accounting and financial transaction records• Management of donor contributions• Execution of Commitments and Disbursements of trust fund

resources • Monitoring and management of ‘commitment authority’, i.e.,

funding availability• Investment of liquid assets in funds and other cash

management functions• Preparation of financial reports and coordination of

independent annual audits• Regular reporting to the Council and donors


GEF Trustee Operations (cont)

• WB Trustee Office has developed accounting, control systems & reporting infrastructure resulting in considerable economies of scale and cost savings

• Services provided are compensated at actual costs which are minimal

• In addition, draw upon experience of WB Treasury operations in trading on financial markets


GEF’s Office of Evaluation

• Office of Evaluation (originally office of Monitoring & Evaluation, renamed and made independent, 2005)• Undertakes Climate Change Program Study (2000 &

2004) as input to independent evaluations• Sets standards and policy for project and portfolio

monitoring

• Monitoring & Evaluation Requirements• All projects must supply log-frame, allocate

responsibilities for annual monitoring, independent mid-term and final evaluation, and set aside budget for M&E

• Monitoring report (APR; PPR) must be made available on an annual basis


Independent Evaluations of the GEF

• Prior to replenishment, GEF undergoes Independent Evaluation• Undertakes Climate Change Program Study (2000 & 2004) as

input to independent evaluations• OPS1 (1997)

• Effectively created new institutional arrangements• Relatively successful in leveraging resources• Had implemented guidance of conventions with respect to GEF’s

own mandate and funding limitations

• OPS2 (2001)• GEF achieved significant results• GEF had responded to guidance from conventions, but required

more frank dialogue & exchange of ideas

• OPS3 (2005)• GEF is a network organization, which is appropriate• GEF has effectively performed its role as financial mechanism

responding to COP guidance--coordination has improved• GEF is a more stable and effective institution in 2005 than it was

in 2001


GEF Response to UNFCCC Guidance on Adaptation

•COP I Guidance: Stage I Adaptation through Enabling Activities (11/CP.1)

• V&A Assessments part of enabling activities

• From 1995 to 2005, over $160m allocated to EA’s in nearly 140 countries

• V&A one of components of EA’s--optional

• Over half of countries included some element of V&A

• Up to $40m from EA’s devoted to V&A assessments


Stage II Adaptation: Planning Studies

• COP 4 in 1998, Guidance provided to support Stage II activities (2/CP.4)• Further round of adaptation projects

• CPACC-Caribbean Planning for Adaptation (WB, GEF $6.8m)*

• PICCAP—Pacific Islands CC Assistance Program (UNDP, GEF $3.44m)*

• MACC—Mainstreaming Adaptation to CC in Caribbean (WB, GEF $5.98m; Total $9.64m)

• Cap Bldg for Stage II Adaptation to CC in C America, Mexico, Cuba (UNDP, GEF $3.64m, Total $4.90m)

• Assessment of Impacts & Adaptation to CC (global, UNEP—GEF $8.23, Total $12.46m)

• Took Steps to further understanding of country’s adaptation needs and logical next steps


Beyond Stage II: Toward Implementation—the SPA

• GEF should support inter alia establishment of pilot or demo projects to show how adaptation planning and assessment can be practically translated into projects providing real benefits (6/CP.7)

• GEF created new strategic priority in CC Focal Area entitled “Piloting an Operational Approach to Adaptation (SPA)”• Set aside $50m to be used for concrete adaptation

projects in focal areas in which GEF works

• Close to $30m of projects have already been approved


SPA Projects• Approved SPA Projects

• Kiribati Adaptation Program (WB, GEF $2.07m; Total $6.69m)

• Colombia National Adaptation Pilot (WB, GEF $6.07m; Total 17.5m)

• Pilot Adaptation Measures in Dominica, St Lucia and St. Vincent & Grenadines (WB, GEF $2.61m, Total $6.4m)

• Lake Balaton Vulnerability, Early Warning & Adaptation Strategy, Hungary (UNDP, GEF $1.13, Total $4.07)

• Integrating V&A to CC into Sustainable Dev’t in Southern & Eastern Africa (UNEP, $1m; Total $2.25 m)

• Recently Recommended SPA Projects• Community-Based Adaptation (UNDP, GEF $5m; Total $10m)

• Responding to Shoreline Change in West Africa (UNDP, GEF $4.0m; Total $7.5m)

• Coastal Zone restoration and Sust. mgt in Post-tsunami Sri Lanka (IFAD, GEF $4mLD + 1.9mSPA, total $15m)

• Pipeline• Coping w/ Drought in Eastern Africa (4 MSPs)

• Sustainable Land Mgt in Zambezi Valley (MSP)


Beyond Stage II: the Special Climate Change Fund

• In Marrakech, COP7 established the special climate change fund to finance, inter alia, activities in adaptation and transfer of technologies (Decision 7.CP7) and requested GEF to manage it

• GEF Prepared a programming paper and hosted a donor’s meeting• Defines “additional costs” imposed on country not

incremental cost for global environmental benefits• Proposed sliding scale as a simplified procedure to

estimate eligible additional costs

• Donor’s contributed $31m to initial endowment in September 2004


SCCF: Open for Operations in September 2005

• Separate Pipeline Operation for SCCF• Approved:

• Tanzania: Pangani River Basin (UNDP, GEF $1m, Total $2.57m)

• Pipeline (GEF total estimated at $31m) :• Adaptation to CC thru Effective Water Governance in

Ecuador (UNDP)• Piloting CC Adaptation to Protect Human Health

Barbados, Fiji, Uzbekistan & Jordan (UNDP)• Pilot CC Adaptation measures in Andean Region (WB)• Pacific Islands Adaptation to Climate Change Project

(PACC) (UNDP)• India: Climate-resilience Development and Adaptation

(UNDP, SCCF)


Least Developed Countries Fund (LDCF) (1)

• In Marrakech, COP7 created LDC fund to support NAPA’s (Decision 7/CP.7) and requested GEF to manage it

• GEF established LDCF• Consulted with LEG, Feb/Mar 2002• Developed Guidelines for funding NAPA’s• Two donor meetings were held

• Stockholm, 2002• Paris, 2004

• Raised $40.5m for LDCF

• Support NAPA Preparation in 44 countries• LDCF still contains $29.2m for NAPA Implementation


LDCF Implementation

• Process• COP11 Decision on NAPA

Implementation (Decision 3/CP.11)

• Consultative workshop held in Dhaka, Bangladesh April 4-6, 2006

• Reached agreement on Programming paper

• Donor’s meeting held in Copenhagen, April 28, 2006

• New Pledges: $44.6m• Total Available: $74m

• Programming Innovations• Streamlined project

cycle• Review/approvals on

rolling basis• 4 Council member

objections to halt project• Projects up to $2m will be

circulated on “no objection” basis

• Additional cost approach for funding costs imposed on LDC’s

• Full-cost funding for instances where case is proven

• No need to demonstrate global environmental benefits


Adaptation Fund

• In Marrakech, COP 7 created Adaptation Fund (Decision 10/CP.7) and requested GEF to make arrangements to manage fund

• GEF Council and World Bank Board accepted the request to establish the Adaptation Fund, including conversion of CER’s

• GEF Secretariat, Trustee’s Office and UNFCCC Secretariat had begun discussions on Adaptation Fund arrangements

• Summarized in GEF Report to COP 11


GEF’s Strengths for Managing Adaptation Fund

• GEF’s governance is transparent, universal and responds directly to Guidance from Convention bodies

• GEF has demonstrated flexibility in responding to guidance and new programming challenges

• GEF already manages three different sources of adaptation funding

• Structured Learning—”learning by doing”

• Administrative Simplification & Savings


GEF’s Strengths for Managing Adaptation Fund

• GEF’s Administrative Structure provides a sound foundation for AF

• Trustee’s office to manage• Pre-existing structures results in savings• Experience with Treasury operations bring established

experience in financial markets

• GEF is a network organization with capacity to support the global environment and sustainable development

• Council Constituencies represent all countries• Three IA’s: UNDP, UNEP, & World Bank• Seven EA’s: IFAD, FAO, UNIDO, ADB, AfDB, EBRD, & IDB• Other executing agencies can be utilized as appropriate


Thank you

Documents

Arrangements for the Management of the Adaptation Fund: Global Environment Facility (GEF)