Role of Adaptation Fund in Relation to GCF

initiative europenne de renforcement des capacits european capacity building initiative ecbi ecbi european capacity building initiative What to do with the Adaptation Fund? Its role in relationship with the GCF Sunday, 7 December, Swiss tel Lima Benito M ller Director ecbi, MD oxford climate policy for sustained capacity building in support of international climate change negotiations pour un renforcement durable des capacit s en appui aux n gociations internationales sur les changements climatiques

STRATEGIC PROSPECTS FOR THE ADAPTATION FUND ecbi european capacity building initiative

GCF Modes of Engagement: Implementing Entities and Intermediaries Project preparation and appraisal (from concept to full funding proposal) management Project Project oversight and control ecbi european capacity building initiative Implementing Entity Monitoring and evaluation Project-at-risk systems and related project risk management capabilities and/or funding Grant award procedures Grant award mechanisms allocation Transparent allocation of financial resources Public access to information on beneficiaries and results Specialized fiduciary criteria Good standing with regard to multilateral funding (e.g. through recognized public expenditure reviews) Appropriate registration and/or licensing by a financial oversight body or regulator in the country and/or internationally, as applicable; Track record, institutional experience and existing arrangements and capacities for on-lending and blending with resources from other international or multilateral sources; On-lending and/or blending Intermediary Creditworthiness; Due diligence policies, processes and procedures; Financial resource management, including analysis of the lending portfolio of the intermediary; Public access to information on beneficiaries and results; Investment management, policies and systems, including in relation to portfolio management; Capacity to channel funds transparently and effectively, and to transfer the Fund s funding advantages to final beneficiaries; Financial risk management, including asset liability management; Governance and organizational arrangements, including relationships between the treasury function and the operational side (front desk).

GCF Scales of Engagement: Executing Entities ecbi european capacity building initiative Large Executing Entity Medium/Large Project/Programme Micro/Small/Medium Executing Entity (MSME) Micro/Small Project/Programme

GCF Fast-track Accreditation AF & GEF MIE/RIEs Bilateral (EU DEVCO) Local Provincial National International ecbi european capacity building initiative AF NIE Large Executing Entity Medium/Large Project/Programme Implementing Entity Intermediary Micro/Small/Medium Executing Entity (MSME) Micro/Small Project/Programme

GCF Maximum Entropy Accreditation Local Provincial National International ecbi european capacity building initiative Large Executing Entity Medium/Large Project/Programme Implementing Entity Intermediary Micro/Small/Medium Executing Entity (MSME) Micro/Small Project/Programme

Adaptation Fund MIE/RIEs Local Provincial National International ecbi european capacity building initiative NIE Large Executing Entity Medium/Large Project/Programme Implementing Entity Intermediary Micro/Small/Medium Executing Entity (MSME) Micro/Small Project/Programme

GCF Enhanced Direct Access (Pilot Phase?) Foreign public sector funding stream consolidation through national gateway (National Funding Entity) In-country devolved access to the provincial and local level for engaging local stakeholders (communities, MSMEs) ecbi european capacity building initiative Local Provincial National International Adaptation Mitigation NFE Large Executing Entity Medium/Large Project/Programme Implementing Entity Intermediary Micro/Small/Medium Executing Entity (MSME) Micro/Small Project/Programme

The Status Quo Scenario The Fund continues its current interim arrangements with the Global Environment Facility (GEF) and the World Bank, and its lines of accountability and reporting under the authority and guidance by the CMP. The Fund and the GCF are functionally independent from one another. ecbi european capacity building initiative Coherence could be enhanced through common guidance Local Provincial National International NIE

The Institutional Integration Scenario Different degrees of integration between the Fund and the GCF could be envisaged. Possible options may include the Fund serving as: the Adaptation Window of the GCF; a specialized instrument or window of the GCF; or a dedicated mechanism based on innovative sources (building on the experience of the CER-monetization process), etc. ecbi european capacity building initiative The AF Board would have no role to play in such an institutional integration or rather replication All Micro and Small project proposals for international GCF funding would instead be administratively approved The AF would not be a window or instrument under this form of integration , it would simply cease to exist. Local Provincial National International NIE

Why should the AF continue to exist? The AF is a multilateral funding instrument tailor-made for and dedicated exclusively to ( small-scale ) concrete adaptation projects with specialised services that cannot (cost) effectively be provided by wholesale funders. ecbi european capacity building initiative It is fully operational and has a proven record, particularly in providing direct access. Indeed it is the first climate fund to engage in enhanced direct access, providing not only country ownership but country driven-ness. It is currently the only Fund with direct access projects/programmes under implementation; It is also operationally independent and able to perform its functions without extensive external support; Given its unique mandate to address concrete adaptation projects, the Fund can provide targeted and specialised support to project proponents, even for smaller projects in highly localized contexts; Its governance structure allows for greater (recipient) country ownership.

The Operational Linkage Scenario Given the legal capacity of the Board, the GCF could conclude agreements with it, limited to certain operational aspects. This modality would allow the GCF to channel some of its operations (and resources) through the Fund (e.g. direct access, concrete adaptation projects). These agreements do not imply any change in the institutional arrangements for the Fund, and could be concluded by the Board regardless of them. ecbi european capacity building initiative AF as GCF Multilateral Adaptation Funding Entity ( Multilateral Funding Window ) Local Provincial National International NIE

GCF Enhanced Multilateral Access ecbi european capacity building initiative Multilateral Adaptation Funding Entity Multilateral Mitigation Funding Entities Local Provincial National International NIE

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