eu

rop

ean

cap

acity

bu

ildin

g

initia

tive e

cbiWhat to do with the Adaptation

Fund?Its role in relationship with the GCFSunday, 7 December, Swissôtel Lima

Benito MüllerDirector ecbi, MD oxford climate policy

eu

ropean

cap

acity

bu

ildin

g

initia

tive

initia

tive e

uro

péen

ne d

e re

nfo

rcem

en

t des

cap

acité

s ecbi

for sustained capacity building in support of international climate change negotiations

pour un renforcement durable des capacités en appui aux négociations internationales sur les changements climatiques

eu

rop

ean

cap

acity

bu

ildin

g

initia

tive e

cbi

STRATEGIC PROSPECTS FOR THE ADAPTATION FUND

eu

rop

ean

cap

acity

bu

ildin

g

initia

tive e

cbiSpe

cialized

fiduciar

y criteria

Project management

• Project preparation and appraisal (from concept to full funding proposal)

• Project oversight and control

• Monitoring and evaluation

• Project-at-risk systems and related project risk management capabilities

Grant award and/or funding

allocation mechanisms

• Grant award procedures

• Transparent allocation of financial resources

• Public access to information on beneficiaries and results• Good standing with regard to multilateral funding (e.g. through

recognized public expenditure reviews)

On-lending and/or blending

• 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;

• 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 Modes of Engagement: Implementing Entities and Intermediaries

“Implementing Entity”

“Intermediary”

eu

rop

ean

cap

acity

bu

ildin

g

initia

tive e

cbi

GCF Scales of Engagement: Executing Entities

Large Executing EntityMedium/Large Project/Programme

Micro/Small/Medium Executing Entity (MSME)Micro/Small Project/Programme

eu

rop

ean

cap

acity

bu

ildin

g

initia

tive e

cbi

GCF Fast-track Accreditation

Loc

al

Pr

ovin

cial

Nat

iona

l

I

nter

natio

nal

Implementing Entity

Intermediary

Large Executing EntityMedium/Large Project/Programme

Micro/Small/Medium Executing Entity (MSME)Micro/Small Project/Programme

Bilateral (EU DEVCO)AF & GEF MIE/RIEs

AF NIE

eu

rop

ean

cap

acity

bu

ildin

g

initia

tive e

cbi

GCF Maximum Entropy Accreditation

Loc

al

Pr

ovin

cial

Nat

iona

l

I

nter

natio

nal

Implementing Entity

Intermediary

Large Executing EntityMedium/Large Project/Programme

Micro/Small/Medium Executing Entity (MSME)Micro/Small Project/Programme

eu

rop

ean

cap

acity

bu

ildin

g

initia

tive e

cbi

Adaptation Fund

Loc

al

Pro

vinc

ial

N

atio

nal

Inte

rnat

iona

l

Implementing Entity

Intermediary

Large Executing EntityMedium/Large Project/Programme

Micro/Small/Medium Executing Entity (MSME)Micro/Small Project/Programme

NIE

MIE/RIEs

eu

rop

ean

cap

acity

bu

ildin

g

initia

tive e

cbi

GCF Enhanced Direct Access (Pilot Phase?)L

ocal

Pr

ovin

cial

N

atio

nal

I

nter

natio

nal

Implementing Entity

Intermediary

Large Executing EntityMedium/Large Project/Programme

Micro/Small/Medium Executing Entity (MSME)Micro/Small Project/Programme

NFE

MitigationAdaptation

• 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)

eu

rop

ean

cap

acity

bu

ildin

g

initia

tive e

cbi

The Status Quo ScenarioL

ocal

Prov

inci

al

Nat

iona

l

Int

erna

tiona

l

NIE

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.

• Coherence could be enhanced through common guidance

eu

rop

ean

cap

acity

bu

ildin

g

initia

tive e

cbi

The Institutional Integration ScenarioL

ocal

Prov

inci

al

Nat

iona

l

Int

erna

tiona

l

NIE

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.

• 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.

eu

rop

ean

cap

acity

bu

ildin

g

initia

tive e

cbi

Why should the AF continue to exist?

• “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 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.

eu

rop

ean

cap

acity

bu

ildin

g

initia

tive e

cbi

The Operational Linkage Scenario

Loc

al

Pr

ovin

cial

N

atio

nal

I

nter

natio

nal

NIE

AF as GCF Multilateral Adaptation Funding Entity(“Multilateral Funding Window”)

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.

eu

rop

ean

cap

acity

bu

ildin

g

initia

tive e

cbi

GCF Enhanced Multilateral Access

Loc

al

Pr

ovin

cial

N

atio

nal

I

nter

natio

nal

NIE

Multilateral Adaptation Funding Entity

  

 

 

  

 

 

  

Multilateral Mitigation Funding Entities

eu

rop

ean

cap

acity

bu

ildin

g

initia

tive e

cbiThank You!