Thank you for your interest in our recent GCF unpacked webinar, ‘GCF B.38 unpacked: analysing operational risk’. Welcome to your replay kit.
On Thursday 1 April, we held the latest session of ‘GCF unpacked‘. Hosted by Dr Grant Ballard-Tremeer, we were joined by Senior consultant William Lynam, Project Development Specialist at CCCCC, Ryan Zuniga, Active Private Sector Observer to the Board at the GCF, Miles Austin, and Head of Policy and Markets at Ecosecurities and Active Private Sector Observer at the GCF, Pedro Carvalho.
In this session, the panel discussed the operational risks present within the Green Climate Fund (GCF) project development process and how GCF stakeholders can overcome them. They spoke on what they perceived to be the most risk-prone activities within the GCF proposal development process, the aspects of risk mitigation that are critical to success, and potential improvements to this process that could be made.
Grant also took registrants through the proceedings of the 38th Meeting of the GCF Board, held in Kigali in March. Eleven projects were put forward for Board approval, with a total requested finance of USD 489.9 million. All eleven projects were endorsed. When including co-finance, the total amount of finance secured was USD 1.26 billion.
Explore this replay kit:
- Watch this webinar here
- Answering registrant questions
- Additional resources
- Training & updates from E Co. institute
Watch this webinar here
Participant Q&A
During this event, our webinar team was asked a large array of useful questions. We’ve included their answers here.
The merged economy is highly affected by weather anomalies. How can the GCF support this through projects?
E Co.: The GCF doesn’t directly fund projects responding to single weather anomalies. This is because weather anomalies are short-term events, while the GCF focuses on long-term climate resilience and adaptation strategies. However, the GCF does indirectly address the economic impacts of weather anomalies by supporting projects that build resilience to climate change. These projects aim to prepare developing countries for the increased frequency and intensity of extreme weather events caused by climate change, whether through adaptation planning, establishing early warning systems, or building climate-smart infrastructure.
How does the GCF ensure that local communities benefit from interventions for climate mitigation and/or adaptation?
E Co.: The GCF is prioritising country ownership in its projects, and funding projects led by Direct Access Entities (accredited national institutions in developing countries), including funding for capacity development. It also prioritises allocating adaptation funding to the most climate vulnerable (Least Developed Countries, Small Island Developing States, and African States). There are still challenges in terms of the complexity of GCF funding procedures for entities at a national or sub-national level, as well as challenges with Monitoring and Evaluation and tracking that the benefits are really reaching the most vulnerable local communities.
APSOs: It has rigorous E&S procedures which are integrated into projects and programmes and reported on by AEs to the GCF.”
Can you share the % age of grant and loan components in GCF Funding issued during 2022-2023 and amount in USD Million? What’s your estimate for 2023-24 ?
E Co: We don’t have easy access to this breakdown. See the charts here for a breakdown of loans, grants and other instruments from the entire GCF portfolio.
I have heard of the IEU – what is the relationship of IEU and GCF exactly? And why GCF fund is of importance to IEU?
E Co.: The IEU is essentially a watchdog or independent reviewer for the GCF. It is a separate, independent entity from the GCF Secretariat to ensure its evaluations are objective and unbiased. The head of the IEU reports directly to the GCF Board, not the Secretariat. The GCF is of importance to the IEU in that the IEU wants to ensure that the funding is well spent and wants to hold the GCF accountable, ensuring their efforts are truly making a difference in the fight against climate change.
E Co. also reviews the work of the GCF (hence our research and reporting that goes into the GCF insights, which are communicated and distributed publically) and is often in communication with the GCF to provide recommendations to improve processes, but in a more informal manner than the IEU. E Co. is a private company specialised in market studies, evaluations, fund support and proposal development. We are not affiliated with the GCF, the Secretariat or donors, and our views do not represent those of the GCF.
To green our economy, what is the mechanism to support PPP by financing to free carbon, like energy pipelines to align GCF project to mitigate carbon?
E Co.: The GCF has the Private Sector Facility and has various funding instruments including blended finance to encourage private sector participation. The GCF can also support capacity building and policy advocacy to create the enabling environment for more PPPs. The GCF can support project preparation through feasibility studies and market analysis to develop projects attractive to private investors.
What do you think is the main problem for sub-Saharan Africa to get access to the GCF funds?
E Co.: In our view, the complexity of GCF processes and requirements is a significant barrier when coupled with low internal capacity.
How do you see resource competition between public and private entities affecting access to resources (Particularly in Africa where the private sector participation is weak)?
E Co.: Public and private entities might have different priorities for climate action (for example, public entities might focus on national adaptation plans and social welfare, while the private sector might be more interested in commercially viable renewable energy projects). And public funds are often stretched thin in developing countries, so governments will often prioritise immediate needs. This could mean affect overall access to resources, though the GCF has targets for investment from the public and private sector, so in a sense the GCF has reduced this competition.
What share of GCF is allocated to creating a level playing field for civil society and the private sector?
E Co.: he GCF provides a fairly open and transparent system for civil society and the private sector. It is complex and demanding, but it is complex and demanding for the public sector too! Specifically for the private sector, the GCF created a department to support these projects: the Private Sector Facility. GCF readiness funds can be used by countries to support institutional development, capacity building and training, but this is accessible to the government’s NDA, Delivery Partners and Accredited Entities.
What is your take on the Board’s discussions on REDD+ and regional presence?
E Co.: Since the REDD+ agenda item was tabled, we look forward to future discussions on REDD+. In general we are fairly optimistic that a regional presence model would be beneficial for effectiveness of REDD+ initiatives.
APSOs: The REDD+ agenda topic was deferred for future consideration to allow a streamlined consultation about the design of the proposal.
What are the challenges of the accredited entities?
E Co.: We touched on this in the panel discussion, but the complexity of GCF processes and requirements is a major challenge, especially when coupled with uncertain timeframes. There are often capacity constraints (both in project design and during implementation, such as capacity for M&E). Co-financing requirements can be a challenge for AEs in countries with weak private sector participation.
One needs to be in certain financial position to take on risks. What type of risks and what are the measures to determine risks? I hear about risk capacity and risk tolerance.. Are they the same? How do you measure those?
E Co.: In our presentation we identified a number of risks shared by stakeholders that responded to our survey. We looked up definitions of risk capacity and risk tolerance and round this:
- Risk Capacity: The maximum amount of risk an entity can realistically take on while still achieving its goals. It’s more objective, often linked to financial resources and reserves.
- Risk Tolerance: The level of risk an entity is psychologically willing to accept. This is more subjective, influenced by attitudes and emotional responses to risk.
Financial position is definitely a major factor in risk capacity. An organisation with more resources can take on bigger potential risks. However, risk tolerance plays a huge role too. We find that, generally, governments and public organisations, and many civil society organisations have lower risk tolerance, thank private sector organisations who are often willing to take on more risky activities.
Can you please give examples of some low carbon technologies?
E Co.: Beyond the ones mentioned in the webinar, there are also energy storage technologies (like thermal energy storage), transportation technologies (like electric vehicles and mass transit systems), sustainable agriculture (like agroforestry), nature-based solutions (like wetland restoration, and waste management/recycling/circular economy technologies (like waste-to-energy).
APSOs: Renewable Energy, Carbon Capture and Storage, Energy Efficiency, Biochar, etc. It’s also important to differentiate low from lower. Natural gas is a lower carbon tech in comparison to coal, but it’s still very much part of the problem not the solution.
Additional resources
We’ve developed a presentation that can be used to complement the webinar above. Access it here.
You can also access the 25th edition of our GCF insight series here. A large part of GCF B.38 unpacked was based on the analysis carried out in this report – so view this report as a complementary and important part of this conversation.
Your APSOs need you!The Active Private Sector Observers represent the private sector at the GCF board, sitting in on board meetings, mandated to intervene in proceedings on the private sectors behalf. To date this has largely been around individual projects and accreditations, which is extremely important work that we fully intend to continue. However. The GCF is currently at a very important moment in its development as the secretariat and board are essentially reconsidering all aspects of their work and the way the GCF functions. So we are looking to expand the scope of our work to include inputting and guiding the ongoing policy dialogues around, for example, the current restructuring of the GCF secretariat in preparation for greater regionalisation. As the next two years are a crucial moment in the GCFs development this is an opportunity to foster greater understanding of the private sector and its needs within the GCF culture and structures. We are both volunteers. We are looking for more volunteers to help with the work load. So. If you would like to volunteer, if you would like to volunteer a colleague, if you would like to help fund some of this work, please get in touch with us on this, or any other GCF private sector related matter. We are both reachable on the email addresses below. We look forward to hearing from you. Kind regards, Miles Austin: Miles.Austin@advisroy-42.com |
Training & updates from E Co. institute
E Co. institute is the training division of E Co. and is run by our project formulation experts. E Co. institute builds on our experience developing low-carbon, climate-resilient projects & programmes and the specialist training workshops we’ve conducted across the globe. Our trainings, coaching, and courses are intended for mid-level professionals working in UN agencies, NGOs, bilateral organisations, development banks, and local or country government officials. For more information, see here for how we can help you and your team.
- If you’re interested in learning more about E Co. institute‘s bespoke training services for you and your team, you can email Dr Grant Ballard-Tremeer at: grant@ecoltdgroup.com and we’ll be happy to arrange a 30-minute call with our consultants to discuss this further.
- To receive an invitation to future training sessions with E Co. institute, please sign up to our newsletter here. If you had registered for this workshop, you won’t need to sign up – we have your details and you can opt at any time.
About these resources
These resources are an initiative of E Co., emerging from work we are doing to develop low-carbon, climate-resilient projects. E Co. has produced the resources independently.