Seventeenth meeting of the GCF Board (B.17)

The Board, having considered document GCF/B.17/Inf.09 titled “Report on the activities of the Co-Chairs” and GCF/B.17/Inf.09/Add.01 titled “Addendum to the report on the activities of the Co-Chairs: Updated work plan of the Board for 2017”:

1. Takes note of the updated Board work plan for 2017, as set out in annex I;
2. Decides to defer consideration of the following matters and requests the Secretariat, in consultation with the Co-Chairs and the relevant committees, panels, and groups of the Board, to progress its work on these matters and present these for consideration by the Board at the earliest possible opportunity:
   
   1. Work programmes of the committees, panels and groups of the Board, including the actions outlined in the strategic plan in their respective deliberations and work programmes, as appropriate, throughout the Initial Resource Mobilization period, requested pursuant to decision B.12/20, paragraph (f);
   2. The GCF communications strategy, requested pursuant to decisions B.04/14 and B.13/25;
   3. The report on the outcomes of the annual review of the financial terms and conditions of the GCF financial instruments, requested pursuant to decision B.15/05, paragraph (b);
   4. Proposals on indicative minimum benchmarks as noted in decision B.14/07, paragraph (e);
   5. Recommendations on further steps to enhance cooperation and coherence with the Technology Executive Committee and the Climate Technology Centre and Network, requested pursuant to decision B.14/02, paragraph (d);
   6. Options on how the GCF can support collaborative research and development in developing countries, requested pursuant to decision B.14/02, paragraph (f);
   7. Alternative policy approaches for the integral and sustainable management of forests, requested pursuant to decisions B.12/07, paragraph (e) and B.14/01, paragraph (b);
   8. Policies and procedures for contributions from philanthropic foundations and other non-public and alternative sources to the Initial Resource Mobilization process, requested pursuant to decisions B.11/05, paragraph (d) and B.14/01, paragraph (i);
   9. A fund-wide Indigenous peoples’ policy, requested pursuant to decision B.15/01, paragraph (a);
   10. The further development of some indicators in the performance measurement frameworks as contained in document GCF/B.13/26, titled “Further development of some indicators in the performance measurement frameworks”, requested pursuant to decisions B.08/07, paragraph (b) and B.13/34;
   11. The method and criteria for prioritization of entities applying for accreditation, requested pursuant to decision B.14/08, paragraph (d)(ii);
   12. Modalities for the use of third‐party evidence in the accreditation process, requested pursuant to decision B.14/08, paragraph (e)(i);
   13. An assessment, including a gap analysis, of the Adaptation Fund’s Environmental and Social Policy (approved in November 2013 and amended in March 2016) and Gender policy (approved in March 2016) in line with the GCF interim environmental and social safeguards and gender policy with recommendations on their potential accreditation or fast-tracking, requested pursuant to decision B.14/08, paragraph (e)(iii);
   14. The review of funding for the Project Preparation Facility, requested pursuant to decision B.13/21, paragraph (f);
   15. The outcome of the performance review of the members of the Accreditation Panel, requested pursuant to decision B.BM-2017/03, paragraph (e);
   16. The final report from the review of the independent Technical Advisory Panel’s structure and effectiveness, requested pursuant to decision B.15/06, paragraph (c);
   17. Modalities for the qualitative and quantitative review of the webcasting service requested pursuant to decision B.12/35, paragraph (f);
   18. The approval of the revised terms of reference for the independent Redress Mechanism, requested pursuant to decisions B.13/24, paragraph (e), and B.15/12, paragraph (c);
   19. The complete work plan and budget of the Independent Evaluation Unit for 2017, requested pursuant to decision B.16/07, paragraph (b);
   20. The presentation of the outcome of the Co-Chairs’ consultations and recommendations based on lessons learned from the current application of financial terms and conditions, requested pursuant to decision B.12/17, paragraph (c);
   21. The document on the mobilizing of private sector finance to progress the GCF forestry-related results areas, requested pursuant to decision B.14/01, paragraph (a); and
3. Decides, recalling decision B.12/39, paragraph (a), to approve the continued application of the corporate procurement guidelines on the use of consultants and the corporate procurement guidelines for goods and services, until the Board shall have approved the revised guidelines.

The Board:

1. Authorizes the Secretariat to provide a loan from the administrative budget of the Secretariat to the administrative budget of the Independent Evaluation Unit in an amount and for a period determined by the Co-Chairs, in consultation with members and alternate members of the Board; and
2. Also authorizes the Secretariat to reimburse an equivalent amount from the administrative budget of the Independent Evaluation Unit to the administrative budget of the Secretariat upon the approval of the Board of the workplan and budget of the Independent Evaluation Unit for 2017.

The Board, having considered document GCF/B.17/02 titled “Sixth report of the Green Climate Fund to the Conference of the Parties to the United Nations Framework Convention on Climate Change”:

Requests the Co‐Chairs, assisted by the Secretariat, to finalize the “Sixth report of the Green Climate Fund to the Conference of the Parties to the United Nations Framework Convention on Climate Change” as presented in document GCF/B.17/02 and to be annexed to the report of the seventeenth meeting of the Board, taking into consideration the comments made and decisions taken at the seventeenth meeting of the Board, and submit the revised report to the United Nations Framework Convention on Climate Change secretariat no later than 12 weeks prior to the twenty-third session of the Conference of the Parties to the United Nations Framework Convention on Climate Change, in accordance with UNFCCC decision 7/CP.20, paragraph 23.

The Board, having considered document GCF/B.17/08 titled “Operational Framework on complementarity and coherence”:

1. Adopts the operational framework on complementarity and coherence contained in annex II to this document;
2. Requests the Secretariat to present a report on the progress made and outputs from the operational framework on complementarity and coherence in line with decision B.13/21, paragraph (c), for consideration by the Board in 2018, and to provide an annual update thereafter;
3. Encourages the Executive Director to host the annual dialogue with climate finance delivery channels in the margins of the eighteenth meeting of the Board and to utilize it as a forum for exchange between the GCF and relevant climate finance delivery channels; and
4. Requests the Secretariat to include outcomes and updates related to complementarity and coherence in the report to the Conference of the Parties to the United Nations Framework Convention on Climate Change for consideration by the Board, and to continue cooperation with the Standing Committee on Finance in line with decision B.13/11.

The Board, having considered document GCF/B.17/11 titled “Implementation of the Initial Strategic Plan of the GCF: Update on country programmes and entity work programmes”:

1. Takes note of the information provided in the document;
2. Welcomes the progress made with the preparation of country and entity workprogrammes;
3. Requests the Secretariat to consolidate the country and entity work programmes and provide the Board with the document, as appropriate; and
4. Amends decision B.12/20, paragraph (d), to replace “at each Board meeting” with the words “annually through a comprehensive status report”.

The Board, having considered document GCF/B.17/03 titled “Analysis of barriers to crowding-in and maximizing the engagement of the private sector, including Private Sector Advisory Group recommendations”:

1. Welcomes the analysis provided by the Secretariat and the recommendations from the Private Sector Advisory Group;
2. Requests the Secretariat to integrate the analysis and recommendations into the future work of the Private Sector Facility, as appropriate, whilst taking into account country needs and priorities;
3. Requests the Secretariat to develop an annual work plan for the Private Sector Facility;
4. Requests the Private Sector Advisory Group to provide recommendations, in accordancewith decision B.15/03, paragraph (i), to the Board at its eighteenth meeting on:
   
   1. The development of modalities to support activities enabling private sector involvement in the least developed countries and small island developing States; and
   2. Opportunities to engage the private sector, including local actors, in adaptation action at the national, regional and international levels; and
5. Requests the Secretariat, in accordance with decision B.09/07, paragraph (h), and recognizing decision B.08/03, to provide recommendations for modalities to fast-track the accreditation of private sector entities by the nineteenth meeting of the Board.

The Board:

1. Invites the independent Evaluation Unit to undertake the independent evaluation of the Readiness and Preparatory Support Programme; and
2. Requests the head of the independent Evaluation Unit, in consultation with the Co-Chairs, to prepare the terms of reference for the independent evaluation of the Readiness and Preparatory Support Programme to be considered by the Board as a decision between meetings.

The Board, having considered document GCF/B.17/09 titled “Status of the GCF portfolio: pipeline and approved projects”:

1. Takes note of the status of the GCF pipeline and the analysis of the portfolio;
2. Requests the Secretariat to undertake additional analysis, taking into consideration the potential investment priority areas presented in document GCF/B.09/06, to identify specific results areas where targeted GCF investment would have the most impact; and
3. Also requests the Secretariat to undertake the following actions in relation to the relevant results areas referred to in paragraph (b) above in order to align the portfolio composition with the initial results management framework contained in decision B.07/04:
   
   1. Undertake targeted outreach to promote partnerships between accredited entities and those potential non-accredited entities that have the technical expertise to support such results areas;
   2. Prepare targeted draft requests for proposals for the Board’s consideration, as appropriate; and
   3. Work with accredited entities to ensure that the financial terms and conditions proposed in concept notes and funding proposals for concessional loan products meet the principles agreed in annex XIII to decision B.07/05 (annex XIII to document GCF/B.07/11), including on the minimum amount of concessionality, and in this context, and pending the conclusion of the review of financial terms and conditions, apply the financial terms and conditions set out in annex II to decision B.09/04 (annex II to document GCF/B.09/23) in a fit-for-purpose manner, provided that such terms and conditions do not exceed the upper limits set out therein.

The Board, having considered document GCF/B.17/18 titled “Review of the initial proposal approval process”:

1. Takes note of the update from the Investment Committee on progress related to Board- mandated work on indicative minimum benchmarks, financial terms and conditions, and the performance review of the independent Technical Advisory Panel;
2. Also takes note of the review of the initial proposal approval process undertaken pursuant to decision B.11/11, paragraph (j);
3. Endorses the immediate actions that the Secretariat will implement in order to improve the effectiveness, transparency and country ownership of the initial proposal approval process, as contained in annex III;
4. Requests the Secretariat to only submit to the Board those funding proposals:
   
   1. Submitted to the Secretariat by entities accredited by the Board that have signed
   2. accreditation master agreements;
   3. Submitted to the Secretariat by entities accredited by the Board that have not signed accreditation master agreements, provided that such submission to the Secretariat occurs no later than 120 days from the date of the decision by the Board to accredit the relevant entity;
   4. Submitted to the Secretariat in response to requests for proposals issued by the GCF; or
   5. From those entities who have not yet signed the accreditation master agreement that have proposals currently at stage 4 of the updated project and programme activity cycle;
5. Underscores the importance of early engagement by accredited entities with national designated authorities and focal points in the preparation and submission of concept notes;
6. Agrees, in the context of decision B.11/11, paragraph (p), to insert the following new stage into the project and proposal activity cycle: “On receipt of a concept note submission from an accredited entity, the Secretariat will seek confirmation from the national designated authority or focal point that the concept note fits under national priorities and country ownership”;
7. Requests the Secretariat to prepare a document, for the Board’s consideration at its nineteenth meeting, which outlines options for the development of a two-stage proposal approval process, with stage 1 focusing on concept note approval and stage 2 focusing on the assessments by the Secretariat and the independent Technical Advisory Panel and Board consideration;
8. Also requests the Secretariat to present to the Board implementation challenges identified in the application of the initial proposal approval process, including policy matters identified during the Secretariat’s assessment of funding proposals, for the Board’s consideration at the earliest opportunity, including information on budgetary considerations;
9. Decides that the Secretariat shall only submit to the Board for its consideration those funding proposals (stage 5 of the updated project and programme activity cycle) whose approval has been recommended by the independent Technical Advisory Panel and the Secretariat;
10. Confirms that proposals not recommended by the independent Technical Advisory Panel and the Secretariat, as outlined in paragraph (i) above, will continue to be revised by the Secretariat and accredited entities at stage 5 of the updated project and programme activity cycle;
11. Requests the Secretariat to inform the Board at each Board meeting on the status of funding proposals that either the Secretariat or the independent Technical Advisory Panel do not recommend for approval and do not submit to the Board;
12. Also requests the Secretariat to develop and publish clear timelines for its assessment of funding proposals to ensure timely consideration of funding proposals by the Secretariat, the independent Technical Advisory Panel and the Board;
13. Further requests the Co-Chairs, in consultation with the Board, to explore options for the timely consideration of funding proposals between Board meetings;
14. Decides to update the project and programme activity cycle as contained in annex IV;
15. Requests the Secretariat to define the nature, scope and extent of second-level due diligence and submit the same to the Board for its consideration no later than April 2018; and
16. Also requests the Secretariat to develop an interim restructuring and cancellation policy, including further options for decision-making, for consideration by the Board no later than its eighteenth session, and a comprehensive restructuring and cancellation policy no later than April 2018.

The Board, having considered the document GCF/B.17/19 titled “Strengthening and scaling up the GCF pipeline: establishing strategic programming priorities”:

1. Reaffirms the elements of funding proposal eligibility criteria embedded in previous decisions, including those related to the results management framework, the investment framework, country ownership, and engagement with nationally designated authorities, focal points and accredited entities;
2. Requests the Secretariat, under the guidance of Co-Chairs, to develop a mapping document that identifies all elements related to project and programme eligibility and selection criteria included in previous decisions, conditions imposed by the Board on funding proposals, and the Governing Instrument for the GCF that can contribute to strengthening the eligibility criteria of the GCF, and present this for the Board’s consideration at its eighteenth meeting as part of the ongoing process to simplify and clarify project and programme eligibility and selection criteria and update the policies and procedures of the GCF;
3. Also requests the Secretariat, under the guidance of the Co-Chairs, to develop a proposal for the Board’s consideration at its nineteenth meeting, taking into account best practices from other multilateral funds and other approaches, to address the following:
   
   1. The development and application of an incremental cost calculation methodology and/or alternative methodologies, as appropriate;
   2. Guidance on the approach and scope for providing support to adaptation activities;
   3. A policy on co-financing; and
   4. Options for further guidance on concessionality, building on related work; and
4. Reaffirms the importance of the following ongoing work of the Board that will contribute to providing policy guidance in the development of funding proposals:
   
   1. Reviews of the financial terms and conditions of GCF financial instruments;
   2. Indicative minimum benchmarks; and
   3. Risk management framework.

The Board, having reviewed document GCF/B.17/12 titled “GCF risk management framework: Risk Management Committee proposal”:

1. Adopts the first set of components of the risk management framework as contained in annexes V to VIII to this document as follows:
   
   1. Risk management framework component I – revised risk register, as set out in annex V;
   2. Risk management framework component II – risk appetite statement, as set out in annex VI;
   3. Risk management framework component III – risk dashboard, as set out in annex VII;
   4. Risk management framework component IV – “Risk guidelines for funding proposals”, as set out in annex VIII;
2. Agrees that the:
   
   1. Risk management framework component I – revised risk register referred to in paragraph (a) (i) above replaces the risk register adopted through decision B.12/34;
   2. Risk management framework component II – risk appetite statement referred to in paragraph (a) (ii) above replaces the risk appetite methodology adopted pursuant to decision B.10/08 and contained in annex XXIV to decision B.10/08 (annex XXIV to document GCF/B.10/17);
   3. Risk management framework component III – risk dashboard referred to in paragraph (a) (iii) above replaces the risk dashboard adopted pursuant to decision B.10/08 and contained in annex XXIII to decision B.10/08 (annex XXIII to document GCF/B.10/17);
   4. Risk management framework component IV – “Risk guidelines for funding proposals” referred to in paragraph (a) (iv) above replaces the “Interim risk and investment guidelines for the public sector” and “Interim risk and investment guidelines for the private sector” adopted pursuant to decision B.13/36 and contained in annexes VIII and IX, respectively, to decision B.13/36 (annexes VIII and IX to document GCF/B.13/32/Rev.01);
3. Notes that the first set of components of the risk management framework as contained in annexes V to VIII complements the financial risk management framework adopted pursuant to decision B.07/05;
4. Takes note of the proposed preliminary risk dashboard in annex VII; and requests the Secretariat to further develop the risk dashboard and the underlying methodologies for consideration by the Board at its eighteenth meeting; the risk dashboard will be published every quarter thereafter;
5. Takes note of the risk rating approach as set out in annex IX;
6. Requests the Secretariat to continue with the development of appropriate risk rating models with the support from an external professional service provider and in consultation with the Risk Management Committee and present the risk rating models for consideration by the Board at its nineteenth meeting; and
7. Also requests the Secretariat to continue with the development of the risk management framework and its remaining components in consultation with the Risk Management Committee and present these for consideration of the Board at its eighteenth meeting.

The Board:

1. Decides to adopt the Performance criteria and measurement procedures for the Executive Director as presented in annex X; and
2. Agrees to use the table as presented in annex X as a template for all Board-appointed officials for their performance framework.

The Board, having considered document GCF/B.17/05 titled “Consideration of accreditation proposals”:

1. Takes note with appreciation the assessments conducted by the Secretariat and the Accreditation Panel contained in the relevant annexes for the following applicants:
   
   1. Applicant 050 (APL050) is CDG Capital S.A. (CDG Capital), based in Morocco, as contained in annex XI;
   2. Applicant 051 (APL051) is Infrastructure Development Company Limited (IDCOL), based in Bangladesh, as contained in annex XII;
   3. Applicant 052 (APL052) is the Small Industries Development Bank of India (SIDBI), based in India, as contained in annex XIII;
   4. Applicant 053 (APL053) is the Micronesia Conservation Trust (MCT), based in Micronesia (Federated States of), as contained in annex XIV;
   5. Applicant 054 (APL054) is the Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), headquartered in Japan, as contained in annex XV; and
   6. Applicant 055 (APL055) is the Japan International Cooperation Agency (JICA) headquartered in Japan, as contained in annex XVI;
2. Accredits applicants APL050, APL051, APL052, APL053, APL054 and APL055 pursuant to paragraph 45 of the Governing Instrument for the GCF, subject to and in accordance with the assessments by the Accreditation Panel contained in the relevant annexes for each of the applicants. A summary of the recommended accreditation types and conditions and/or remarks, if any, for each applicant is contained in annex XVII;
3. Takes note, pursuant to decision B.08/03, paragraph (k), that the Secretariat, in consultation with the Accreditation Panel, is proposing that eligibility to apply under the fast-track accreditation process be extended to those entities listed in annex XVIII; and
4. Decides that those entities referred to in annex XVIII are also eligible to apply under the fast-track accreditation process for the standards of the GCF, in accordance with decision B.08/03, paragraph (f) for entities accredited by the Adaptation Fund and decision B.08/03, paragraph (g) for entities accredited by the Directorate-General for International Development and Cooperation.

The Board:

Requests the Co-Chairs to undertake consultations with members and alternate members of the Board in relation to decision B.13/28, paragraph (b), and decision B.14/08, paragraph (c), and present a proposal on matters related to the accreditation framework and policy gaps for consideration by the Board at its eighteenth meeting.

The Board, having considered document GCF/B.17/Inf.05 titled “Status of accreditation master agreements and funded activity agreements”:

Requests the Secretariat to report at the eighteenth meeting of the Board the details of the substance and nature of outstanding issues preventing the signature of accreditation master agreements.

The Board, having reviewed document GCF/B.17/15 titled “Approval of the accreditation master agreement agreed with Conservation International Foundation”:

1. Takes note of the text of the accreditation master agreement agreed with Conservation International Foundation, as contained in annex XIX, which marks the changes against the template accreditation master agreement;
2. Approves the substantive change in the accreditation master agreement agreed with Conservation International Foundation from the template accreditation master agreement as set out in annex XIX;
3. Authorizes the Executive Director to negotiate changes, which are in substance similar to those contained in the accreditation master agreement agreed with Conservation International Foundation, to the accreditation master agreement to be entered into with other institutions whose structure, object and purpose is similar to that of Conservation International Foundation without requiring further Board approval in respect of such changes; and
4. Authorizes the Secretariat to finalize the negotiation of the third party liability cap with respect to the part of the funded activity to be implemented by Conservation International Foundation under FP026.

The Board, having considered document GCF/B.17/20 titled “Extension of the deadline for fulfilment of conditions for FP038 and FP044, related to the execution of accreditation master agreements”:

1. Recalls that funding proposals FP038 and FP044 were approved by decision B.16/02, subject to a condition that the relevant accredited entity execute an accreditation master agreement with the GCF, in a form and substance satisfactory to the GCF, within 120 days of Board approval;
2. Recognizes that absent an extension of time, decision B.16/02, in relation to FP038 and FP044, will lapse if an accreditation master agreement is not entered into with the relevant accredited entity by 4 August 2017;
3. Decides to extend the deadline by an additional 120 days starting on 4 August 2017 for the fulfilment of the condition relating to the execution of an accreditation master agreement with the GCF, with respect to the following funding proposals:
   
   1. FP038 (European Investment Bank (EIB) and Global Energy Efficiency and Renewable Energy Fund NeXt (GEEREF NeXt)); and
   2. FP044 (World Bank and Solomon Islands); and
4. Requests the Secretariat to inform all national designated authorities of the risks involved in supporting a project or programme being proposed to the GCF by an accredited entity that has not signed an accreditation master agreement with the GCF.

The Board, having considered document GCF/B.17/13 titled “Pilot programme for REDD- plus results-based payments”:

1. Takes note of the progress made in preparing the draft request for proposals for the pilot programme for REDD-plus results-based payments, as mandated in decision B.14/03, and the related draft scorecard in the form set out in annex II and annex III to document GCF/B.17/13;
2. Requests the Secretariat to undertake a further analysis of existing GCF policies and procedures adopted by the Board and reflect in the draft request for proposals referred to in paragraph (c) below the manner in which such policies and procedures would need to be applied or otherwise considered in order to operationalize GCF REDD-plus results-based payments proposals; and
3. Also requests the Secretariat to finalize the draft request for proposals for the pilot programme for REDD-plus results-based payments and the related draft scorecard in the light of the final analysis referred in paragraph (b) above and the discussions of the Board at its seventeenth meeting on this matter and present it to the Board for its consideration at its eighteenth meeting.

The Board, having considered document GCF/B.17/16 titled “Green Climate Fund support for early phases of REDD-plus”:

1. Takes note of the document provided to support efforts by national designated authorities and focal points to engage with the GCF in the early phases of REDD-plus using existing modalities, tools and programmes, and seeking complementarity and coherence for REDD- plus finance with other funds and initiatives;
2. Encourages national designated authorities and focal points to access readiness support directly, or to collaborate with readiness delivery partners and accredited entities to submit readiness requests, for the early phases of REDD-plus, using the existing modalities for accessing readiness and preparatory support;
3. Also encourages national designated authorities and focal points to collaborate with accredited entities to submit concept notes, Project Preparation Facility requests and funding proposals that will facilitate support for the early phases of REDD-plus; and
4. Requests the Secretariat to prepare appropriate communication material in order to facilitate access to the information presented in document GCF/B.17/16 and update the information provided in the light of future decisions when needed.

The Board:

Expresses support for the proposal by the Executive Director for the position of a Deputy Executive Director

The Board, having considered document GCF/B.17/14 titled “Guidelines for enhanced country ownership and country drivenness”:

1. Adopts the guidelines for enhanced country ownership and country drivenness contained in annex XX to this document;
2. Requests the Secretariat, accredited entities, delivery partners and national designated authorities/focal points to follow these guidelines;
3. Also requests the Secretariat to assess annually the experiences gathered from the application of these guidelines and to continue to improve the guidelines based on lessons learned and observations from current best practices; and
4. Decides to undertake a review of the implementation of these guidelines as needed, or at least every two years.

The Board, having considered document GCF/B.17/06 titled “Report on the execution of the 2017 administrative budget of the GCF as at 31 May 2017”:

Takes note of document GCF/B.17/06.

The Board, having considered document GCF/B.17/07 titled “Audited financial statements of the Green Climate Fund for the year ended 31 December 2016”:

Approves the audited financial statements of the GCF for the year ended 31 December 2016 as contained in annex XXI.

The Board, having reviewed document GCF/B.17/04 titled “Date and venue of the following meeting of the Board”:

1. Decides that the eighteenth meeting of the Board will take place in Cairo, Arab Republic of Egypt, from Saturday, 30 September to Monday, 2 October 2017;
2. Also decides that the nineteenth meeting of the Board will take place from Tuesday, 27 February to Thursday, 1 March 2018 in Songdo, Republic of Korea;
3. Recommends that the Secretariat propose, at the second Board meeting of each calendar year, the schedule of Board meetings for the following calendar year, with this process to begin at the twentieth Board meeting;
4. Requests the Secretariat, in presenting the indicative schedule of Board meetings, to take into account all official United Nations holidays, including both fixed and floating holidays.