How to accessthe Green Climate Fundfor the private sector

Ministry of theEnvironment, Japan

Overseas Environmental
Cooperation Center,
JapanHow to accessthe Green Climate Fundfor the private sector
The Ministry of the Environment, Japan
March 2018

Contents
ABBREVIATION .............................................................................................1
INTRODUCTION ...........................................................................................3
1.

BASIC INFORMATION ON GREEN CLIMATE FUND ............................5
1.1 About the Fund .................................................................................5
1.2 Target area ........................................................................................6
1.3 Financial Instruments ........................................................................9
1.4 Investment criteria ..........................................................................12
1.5 Modalities of Access ......................................................................14

2.

HOW TO ACCESS FUNDING .............................................................29
2.1 Project approval process ..............................................................30
2.2 Various entry points by the private sector ..................................36
2.3 Ways of engagement in GCF project .........................................46
2.4 Private Sector Facility .....................................................................56
2.5 Contents of GCF Funding Proposal..............................................57

3.

GCF INVESTMENT CRITERIA...............................................................67

4.

TIPS & TRICKS FOR WRITING A WINNING PROPOSAL .....................81
4.1 Setting the Stage for a project/programme ..............................81
4.2 Crafting Effective Interventions ....................................................83
4.3 Selecting the Right Sources of Funding .......................................84
4.4 Conducting Preparatory Feasibility Assessments .......................86
4.5 Writing Winning Proposal ...............................................................87

APPENDIX...................................................................................................91
Accreditation Entities in Asia Pacific (DAEs) .....................................92

ABBREVIATION
Abbreviation

EnglishAE

Accredited Entity

COP

Conference of the Parties

CSO

Civil Society Organization

DAE

Direct Access Entity

EE

Executing Entity

ESCO

Energy Service Company

ESIA

Environmental and Social Impact Assessment

ESMP

Environmental, Social and Management Plan

ESS

Environmental and Social Safeguard

FAA

Funded Activity Agreement

FP

Funding Proposal

GCF

Green Climate Fund

GHG

Greenhouse Gas

IAEInternational Access Entity

ICB

International Competitive Bidding

IDB

Inter-American Development Bank

iTAP

independent Technical Advisory Panel

LAC

Latin American Countries

LDC

Least Developed Countries

NDA

National Designated Authority

NDC

Nationally Determined Contributions

PMF-A

Performance Measurement FrameworkAdaptation

PMF-M

Performance Measurement Framework-Mitigation

PPF

Project Preparation Facility

PSF

Private Sector Facility1Abbreviation

EnglishPV

Photo Voltaic

RFP

Request for Proposals

SAP

Simplified Approval Process

SIDS

Small Island Developing States

TNA

Technology Needs Assessment

UNDP

United Nations Development Programme

UNFCCC

United Nations Framework Convention on Climate
Change2

INTRODUCTION
The Green Climate Fund (GCF) is an operating entity of the financial
Mechanism of the United Nations Framework Convention on Climate
Change (UNFCCC). It was established at the 16th session of theConference of the Parties (COP16) to the UNFCCC. Its governancediffers from existing climate finance mechanism in area of financeinstilment, investment of criteria as well as the enormous amount ofcontributions from the Parties which has caught a great deal ofworldwide attention.
GCF project/programme is evaluated by 6 investment criteria which
is one of the unique concept of the GCF. Funding proposal is
expected to clarify its effectiveness of the Fund based on the criteriasuch as paradigm shift potential, sustainable development potential
and impact potential. In addition, it emphasizes importance ofcountry ownership and needs of the recipient are also included in theinvestment criteria. Accredited Entity (AE) which plays a central roleboth of project development and management is selected bynational designate authorities (NDA), and project need to beendorsed by the NDA before submitting to the GCF secretariat.
Another important aspect in the GCF is private sector engagement.
Private sector involvement is inevitable for implementation of theParis Agreement with a view to climate action as well as to introduce3100 billion USD for climate finance. Hence the GCF promotes theparticipation of the private sector in various ways.
This guidebook is designed for GCF project development by theprivate sector. Chapter 1 describes principle elements for the GCF
project development, chapter 2 indicates possible ways ofparticipation to GCF project. Given some readers are not familiar to
the GCF, the guidebook gives idea of entry point to the GCF project,various ways of participation, and linkage with key player in GCF
project development process. A template of the funding proposal
and its description of contents are also provided. Chapter 3 highlights
details of 6 investment criteria including information on coveragearea, activity-specific sub-criteria, and indicative assessment factors
based on the GCF official document. The final chapter provides tips
and ingenuity for generating funding proposal based on experiences.

41. BASIC INFORMATION ON GREEN CLIMATE FUND
1.1 About the FundThe GCF is an operating entity of the Financial Mechanism of the
UNFCCC1 . It was established at the COP16 in Cancun, Mexico, in
2011, and became fully operational in 2015. The purpose of the GCF
is to make a significant and ambitious contribution to the global
efforts towards attaining the goals set by the international community
to combat climate change. In the context of sustainable
development, the Fund will promote the paradigm shift towards lowemission and climate-resilient development pathways by providing
support to developing countries to limit or reduce their greenhousegas (GHG) emissions and to adapt to the impacts of climate change,
taking into account the needs of those developing countries
particularly vulnerable to the adverse effects of climate change.
The Fund promotes a country-driven approach and strengthens
engagement at the country level through effective involvement ofrelevant

institutions

andstakeholders.

National

DesignatedAuthorities (NDAs) for each developing country act as the country’s
interface with the Fund, and are involved closely in all of the GCF’s
funding processes. A multi-layered approach also helps to mobilize

1

Detail of the governing instrument of the Green climate fund is in UNFCCC document,

FCCC/CP/2011/9/Add.1.

5

climate finance, working directly with the public and private sectors.
The GCF is guided by the principle and provisions of the Convention,and the Board of the fund consists of 24 members who oversee theoperations of all relevant functions of the fund. The Board meeting isheld in approximately three times a year 2 and decides relevant
modalities, guidelines and standards as well as evaluating Funding
Proposals for possible approval.

1.2 Target area
The GCF makes allocation under adaptation, mitigation and thePrivate Sector Facility (PSF)3. There are equal amounts of funding for
projects on mitigation of climate change effects, and on adaptation
to its adverse effects. In relation to adaptation, resources areallocated based on the urgent and immediate needs of vulnerable
countries, in particular Least Developed Countries (LDCs), Small Island
Developing States (SIDS) and African States, as well as geographicalbalanced approach.
It will also support, among others, actions that enable preparation ofnational reports4, and operates a readiness and preparatory support
programme and project preparatory facility (PPF) that are discussed
later.
At least two board meetings a year are required.
Ref. GCF document, DECISION B.05/05.
4 National reports include National Adaptation Plan (NAP).
2
3

6

The GCF will support developing countries through both projectbased and programmatic approaches that are in line with national
strategies and plans, including reducing GHG emission.

Figure 1 Funding allocation for mitigation, adaptation andprioritized countries5.

5

Ref. GCF Element 01 (2015)

7

The Fund also defines eight strategic impacts to be achieved at thefund level, four mitigation and four adaptation as described below6.

Figure 2 Eight strategic impact areas from mitigation and adaptation

6

Ref. GCF Elements 01 (2015), and GCF document, DECISION B. 07/04.

8

1.3 Financial Instruments
The

GCF

offersnon-repayablegrants,concessionalloans,

guarantees and equity (the latter two instruments represent
repayable grants). The Board may further approve other modalities,
instruments, or financing facilities to disburse GCF funds as it deems
appropriate. According to the governing instrument of the GCF
approved at the COP17, the GCF may use results-based financing toenable mitigation and adaptation actions7.

Table 1 Financial instrument and its conditions8
Instrument

Conditions

Grant

No return condition

Loan

Two types of concessional loans with specificconditions set at project level

Guarantees

Specific conditions set at project level

EquitySpecific conditions set at project level

Ref. GCF document, DECISION B.18/07 (REDD Plus results based payment pilot
programme)
8 Ref. GCF document, DECISION B.09/04, Annex II
7

9

Table 2 Terms and conditions of outgoing grants

Condition

GrantsCurrency

Major convertible currency

Interest rate

Grants without repayment contingency: no
reimbursement required*
Grants with repayment contingency: terms
adapted to the required concessionality of the
project or programme

Maturity
Graceperiod*All grants will be subject to an obligation for repayment if the recipient is found to be inmaterial breach of its contractual obligations towards the Fund or involved in a material
violation of the Fund’s integrity or fiduciary standards, including those on corruption andfraud.

Table 3 Terms and conditions of outgoing concessional loans to the
public sector9

Concessionality
Currency
Maturity (year)

Low

Major
convertible
currency
40

Major
convertible
currency
20

10

5

2%

6.7%

Grace period (year)
Annual principal repayment
year 11-20/6-20 (% of initialprincipal)
Annual principle repayment
year 21-40 (% of initial principal)
Interest

4%

N/A

0.00%

0.75%

Service fee (per annum)

0.25%

0.5%

Up to 0.5%

Up to 0.75%

Commitment fee (per annum)

9

High

Ref. GCF document, DECISION B.09/04, Annex II

10

Figure 3 Funding amount by financial instrument (as of 15 Mar. 2018)10

10

Ref. GCF Portfolio dashboard[https://www.greenclimate.fund/what-we-do/portfolio-dashboard]111.4 Investment criteria
In addition to the 8 strategic impact area for mitigation andadaptation mentioned above, GCF and the independent TechnicalAdvisory Panel (iTAP) will independently assess the performance ofthe project or programme against the criteria included in the Fund’sinvestment framework 11 . The criteria consists of 6 elements, andfurther details including coverage area, the activity-specific subcriteria as well as indicative assessment factors (including indicators)
are described in Chapter 3.

11

Ref. GCF document, DECISION B.09/04

12

Figure 4 The Fund’s six investment criteria.

131.5 Modalities of Access
NDAs and Focal points, and AEs play important roles in accessing theFund. These roles are compiled in this section. Information on theaccreditation process, application forms and nomination letter
templates can be found at the GCF website12.
NDAs and Focal Points

To be able to access funding from the GCF, a developing country
has to nominate a NDA or a Focal Point and inform the GCF
Secretariat accordingly. The NDA/Focal Point will serve as aninterface between its country and the GCF, and play an importantrole in coordinating GCF activities in the country. Currently, 146 initial
NDA or Focal Points have been appointed and all of their contact
information is uploaded and updated on the GCF website within the
country directory. Among others, every Funding Proposal submitted
to the GCF has to be no-objected by the NDA/Focal Point of arespective country, or countries in case of a regional project, toensure compatibility of a project with relevant national policy andcompliance with national environmental and social safeguard
policies. In this regard, when developing a GCF projects, it is essential
to communicate with one’s NDA or Focal Point at an early stage of

12 Fine print [https://www.greenclimate.fund/how-we-work/empowering-countries/fineprint#p_p_id_56_INSTANCE_4CvAHaIYKHcJ_]

14

development to make sure that the project design is compatible withnational policies and GCF country programme.
In addition to the aforementioned, the NDA/Focal Point has crucial
roles in project development such as:Coordinates the development of country programme;Appoints DAEs;



Issues No-objection letters for project/programmes; and

Requests and coordinates readiness support.

Table 4 provides information on NDA/Focal point in Asia Pacificregion13.

13 Country Directory [https://www.greenclimate.fund/how-we-work/tools/countrydirectory]

15

Table 4 List of NDA and Focal point in Asia Pacific country14
Country
NDA or Focal point
Bangladesh
ECONOMIC RELATIONS DIVISION, MINISTRY OF FINANCE

BhutanCambodia

Cook Island

Fiji
India

Indonesia

Kiribati

Lao PDR

Malaysia
14

Mr. Kazi Shofiqul Azam
Secretary (in charge)
GROSS NATIONAL HAPPINESS COMMISSION
Mr. Thinley Namgyel
Secretary
CAMBODIA KH Cambodia
MINISTRY OF ENVIRONMENT
His Excellency Say Samal
Minister
CLIMATE CHANGE COOK ISLANDS DIVISION OF THE
OFFICE OF THE PRIME MINISTER
Ms. Ana Tiraa
Director
MINISTRY OF ECONOMY
Ms. Makereta Konrote
Permanent Secretary for Finance
MINISTRY OF ENVIRONMENT, FORESTS AND CLIMATECHANGE
Mr. Ravi S. Prasad
Joint Secretary
FISCAL POLICY AGENCY, MINISTRY OF FINANCE
Mr. Parjiono
Director of Center for Climate Finance and Multilateral
Policy / Head of NDA Secretariat
MINISTRY OF FINANCE AND ECONOMIC DEVELOPMENT
Honourable Dr. Teuea Toatu
MinisterMr. Jonathan Mitchell
Program Finance Officer
MINISTRY OF NATURAL RESOURCES AND ENVIRONMENT
Mr. Syamphone Sengchandala
Director of Management and Coordination Division
Department of Disaster Management and Climate
ChangeMINISTRY OF NATURAL RESOURCES AND ENVIRONMENTAs of March 201816

Country

NDA or Focal point

Maldives
Marshall Island

Micronesia
Mongolia

Myanmar

Nauru
Nepal

Niue
Palau
Papua
GuineaNew

Mr. Dato' Azimuddin Bin Bahari
Deputy Secretary General
MINISTRY OF ENVIRONMENT AND ENERGY
Mr. Amjad Abdulla
Director General, Climate Change Department
OFFICE OF ENVIRONMENTAL PLANNING AND POLICY
COORDINATION
Mr. Warwick Harris
Acting Director
DEPARTMENT OF FINANCE AND ADMINISTRATION
Ms. Sihna N. Lawrence
Secretary
MINISTRY OF ENVIRONMENT, GREEN DEVELOPMENT AND
TOURISMMr. Batjargal Zamba (Focal Point)
Nature Conservation Fund
MINISTRY OF ENVIRONMENTAL CONSERVATION AND
FORESTRY
Mr. Hla Maung Thein
Director
General,Environmental
Conservation
Department
DEPARTMENT OF FOREIGN AFFAIRS AND TRADE
Mr. Michael Aroi
Secretary
INTERNATIONALECONOMIC
COOPERATION
COORDINATION DIVISION, MINISTRY OF FINANCE
Mr. Kewal Prasad Bhandari
Joint Secretary
MINISTRY OF FINANCE
His Excellency The Honourable Toke Tufukia Talagi
Minister of Central Agency
PALAU NATIONAL GRANTS OFFICE
Ms. Judy L. Dean
Grants Coordinator
OFFICE OF CLIMATE CHANGE AND DEVELOPMENT
Mr. Ruel Yamuna
Acting Managing Director
Climate Change and Development Authority

17

Country
Philippines

Samoa
Solomon Island

Sri Lanka

Thailand

Timor-Leste
TuvaluVanuatu

Viet Nam

NDA or Focal point
DEPARTMENT OF ENVIRONMENT AND NATURALRESOURCES
Mr. Roy A. Climatu
Secretary
MINISTRY OF FINANCE
Mr. Lavea Tupaimatuna Iulai Lavea
Chief Executive Officer
MINISTRY OF ENVIRONMENT, CLIMATE CHANGE, DISASTER
MANAGEMENT AND METEOROLOGY
Dr. Melchior Mataki
Permanent Secretary
MINISTRYOF
MAHAWELIDEVELOPMENTAND
ENVIRONMENT
Mr. Anura Dissanayake
Secretary
OFFICE OF NATURAL RESOURCES AND ENVIRONMENTAL
POLICY AND PLANNING
Dr. Phirun Saiyasitpanich (Focal Point)
Director of Climate Change Management andCoordination Division
NATIONAL DIRECTORATE FOR CLIMATE CHANGE
Mr. Augusto Manuel Pinto (Focal Point)
Director
GOVERNMENT OF TUVALU
His Excellency The Honourable Enele Sosene Sopoaga
Prime Minister
MINISTRY OF CLIMATE CHANGE, CHANGE ADAPTATION,
METEOROLOGY, GEO-HAZARDS, ENVIRONMENT, ENERGYAND DISASTER MANAGEMENT
Mr. Jesse Benjamin
Director General
Ministry of Climate Change
MINISTRY OF PLANNING AND INVESTMENT
Dr. Pham Hoang Mai
Director General, Department of Science, Education,
Natural Resources and Environment18

Accredited Entity (AE)15

Access to fund resources will be through AEs, i.e., national, regional
and international entities accredited by the Board. AEs can submit
funding proposals to the GCF and once these funding proposals areapproved by the Board, AEs will be entitled to receive GCF financeand coordinate the implementation of an approved project orprogramme. There are two modalities (Direct access entity andInternational access entities) to access the fund, and currently 59
entities are accredited by the GCF.
Direct Access Entity (DAE)
Recipient countries can nominate competent subnational, nationaland regional implementing entities for accreditation to request,
receive and implement GCF funding. Once accredited, such entities
are referred to as Direct Access Entities (DAEs). Enhancement of
direct access is promoted by the Board in order to strengthen country
ownership.
International Access Entity
Recipient countries will also be able to access the Fund throughaccredited international entities, including United Nations agencies,
multilateral development banks, international financial institutions,regional institutions and entities registered and operating in countries

15 Accredited entity, [https://www.greenclimate.fund/how-we-work/tools/entitydirectory]

19

that are not recipient/beneficiary countries.
AEs are responsible for developing and submitting Funding Proposals,
which meet GCF policies, standards and safeguards. Onceapproved, AEs will manage and coordinate the implementation ofprojects and programmes. During accreditation period and project
development/implementation,

AEs

must

demonstrate

theircommitment to climate change and sustainable development byimplementing high fiduciary standards, including social

andenvironmental safeguards, open procurement processes and untied
aid.
According to the GCFs “fit for purpose” accreditation model, AEs
can get accredited for varying functions. These functions include
maximum size of GCF finance they can receive for one single
project/programme, maximum environmental and social risks
funded projects may include, and ways of delivering GCF finance(project

implemented

directly

byAE;

on-granting;on-lending/blending). Therefore, when designing a GCF project and if aproject is not developed by an AE, project developers shouldcarefully choose AEs in line with their accreditation features (i.e. Entity
programme16).
Scopes of each AE accredited by January 2018 are referred in next
16 During the course of the accreditation process, each entity needs to submit their entity
programme to the GCF that indicates their policy and way of engagement to the GCF.
Up to now, no entity programme is published.

20

pages in accordance with GCF document. A scope and course ofaction provided by the PT Sarana Multi Insrastructure (PT SMI) fromIndonesia17 is also summarized.

17

Information on other DAEs in Asia Pacific region are summarized in Appendix.

21

22

23

Mapping of GCF Accredited entities and their accreditation scopes(GCF/B.19/14/Rev.01)

24

25

PT Sarana Multi Infrastruktur (PT SMI)
Scope as DAE
Access modality:

Direct access, national

Location / Headquarter

Indonesia

Maximum size of an individual Small
project or activity within aprogramme
Fiduciary functions

Projectmanagement;

grantaward,

on-lending

and/orblending (for loans)
Maximum environmental and Middle (category B)
social risk category
Course of Action-

PT Sarana Multi Infrastruktur (PT SMI), is a national entity with thegoal of serving as a catalyst for accelerating national
infrastructure development in Indonesia. The PT SMI supports thefulfilment

of

its

government’s

infrastructuredevelopment

objectives by implementing projects through public–private
partnerships. It mobilizes resources from multilateral and bilateralfinancial institutions in order to finance infrastructure projects.
-

Since its establishment in 2009, the PT SMI has partnered with anumber of entities to support infrastructure projects, including
renewable energy projects such as hydropower, wind andbiogas energy projects in Indonesia. Other sectors that the PT SMI
focuses on are transport, water, waste management, energy
efficiency, health, agriculture, education and tourism.
26

-

PT SMI has experienced in financing 10 renewable energy
projects amounting to around USD 436 million to date and has
experience in developing and implementing projects using
different financial instrument.

27



Executing Entity (EE)

AEs can use one or several Executing Entities (EEs) to implement all orparts of an approved Funding Proposal. EEs are subcontracted by
AEs and will be in charge of executing eligible activities supported by
the GCF under oversight of the AE. Note that no accreditation isnecessary for EEs and that an AE can also execute a project orprogramme by itself, i.e. without EEs18.

18

Green Climate Fund Proposal Toolkit 2017(ACCLIMATISE and CDKN)

28

2. HOW TO ACCESS FUNDING
Chapter 2 seeks ways for private sector to engage in GCF project
development. It highlights the following aspects:
Project approval process

Various entry points by the private sector

Way of private sector engagement in GCF project

Private Sector FacilityContents of GCF Funding Proposal292.1 Project approval process
There are two options for submitting Funding Proposal. The first option
is that the GCF may invite the submission of Concept Notes or
Funding Proposals as part of a Request for Proposals (RFP) 19 . The
micro-, small-, and medium-sized enterprises pilot programme;enhancing direct access; and mobilizing funding at scale pilot
Programme has been requested through the RFP. The second option
is for AEs to submit spontaneous Concept Notes or Funding Proposals
at any time.
To date, most Concept Notes and Funding Proposals have been
submitted to the GCF following the second option, thus this chapter
highlights the way of spontaneous submission in light of possible wayof private sector engagement.
Figure 5 indicates project approval process and there are several key
players and elements required to be involved in each step (1-6).

19 Details can find at GCF procurement [https://www.greenclimate.fund/who-weare/procurement]

30

Figure 5 Project approval process20

20

See GCF Elements 01（2015）31

Step 1: Generation of Project idea
NDA and AEs (possibly supported by project proponents) formulate
a project idea in accordance with the requirements of the GCF
investment framework 21 . Ideally, a project idea will also becompatible with the Country Programme of the country(ies)22 where
project interventions are foreseen (one of the NDA tasks is tocoordinate the elaboration of Country Porgrammes). There is also
probability that the private sector provide their inputs of project idea
at this stage.

Step 2: Concept Note
Although not an obligation, the GCF recommends submission of aConcept Note by the AE, which is ideally reviewed and endorsed by
the NDA/Focal Point. There is a template and guideline for Concept
Notes available at the GCF website23 which needs to be used andcompleted. Submitting a Concept Note can be helpful for AEs andproject

proponents,

as

they

receiveearly

feedbackandrecommendations, which may help reduce extra works and timeneeded to prepare full Funding Proposals. A Concept Note endorsedby the GCF Secretariat along with a No-Objection letter from the
NDA/Focal Point is also needed to receive financial support from the

21 Ref. GCF document Decision B.09/05. The 6 investment criteria are included investment
framework.
22 NDA produce a country program which three countries are published.
23 GCF fine print [https://www.greenclimate.fund/how-we-work/funding-projects/fineprint]

32

GCF PPF24.

Step 2a: Elaboration and implementation of PPF RequestAEs (especially DAEs) in consultation with the NDAs/Focal Points,
can request PPF support to finance the elaboration of
background/supporting studies which need to be submitted
together with a Funding Proposal, such as feasibility study,
Environmental and Social Impact Assessment (ESIA), genderassessment and action plan, risk assessment or procurement plan,
etc25. (Details are described in Chapter 2.2 section.)

Step 3: Funding Proposal
The elaboration and submission of a Funding Proposal is mandatory
in order to receive GCF finance for a project or programme. There isa template for Funding Proposals available at the GCF website 26
which needs to be used and completed. Once completed, the AE
will submit the Funding Proposal to the GCF Secretariat along with a
No-Objection letter signed by the NDA(s)/Focal Point(s) of thecountry(ies) where the proposed project or programme will be
implemented.

24 Project Preparation Facility (PPF) is designed for DAE. International access entity also
can use but it may request additional description for its necessity. Details on PPF aredescribed in GCF101 [https://www.greenclimate.fund/gcf101/empoweringcountries/readiness-support] and Fine point [https://www.greenclimate.fund/how-wework/empowering-countries/fine-print#p_p_id_56_INSTANCE_4CvAHaIYKHcJ_].
25 Also see the GCF funding proposal in Chapter 2.5 in this document.
26 See Chapter 3 in this document

33

Step 4: Analysis and recommendation
The GCF Secretariat and the iTAP will assess submitted Funding
Proposals for their compliance with environmental and social
safeguards, gender, risk and other relevant performance policies.
Importantly, they will also assess the proposals on the degree to which
the criteria set out in the GCF Investment Framework are compliedwith. Based on these assessments (due diligence), the GCF
Secretariat and iTAP will formulate recommendations for the GCF
Board.

Step 5: Board decision and legal arrangements
To date, GCF Board meetings have been held approximately 3 times
a year. During these meetings, Funding Proposals submitted forapproval are discussed. The Board may reject or approve Funding
Proposals. In case of approval, the Board may also formulate
additional conditions that will need to be met before or during
project/programme implementation.

Step 6: Legal arrangements
The GCF Secretariat will inform the respective AE and NDA(s)/Focal
Point(s) on the decision taken by the Board. In case the Funding
Proposal is approved, the GCF Executive Director and the AE will sign
the necessary legal agreements, i.e. a Funded Activity Agreement(FAA).
34

The final step: Implementation
Once the FAA is signed and relevant conditions are fulfilled, theproject / programme implementation phase may start with thetransfer of funds from the GCF to the AE. The AE will coordinate,
manage and oversee the implementation of activities included in theapproved project / programme. The AE will also be responsible forcarrying out mandatory monitoring and evaluation processes
throughout project implementation and after project closure.

35

2.2 Various entry points by the private sector
There are several options for private companies to get involved in a
GCF projects. Broadly, two areas for such engagement may be
defined as:
1. Readiness work for NDA and AE; and2. Project development and implementation.
These options are depicted in the figures on “Various entry points forthe private sector in GCF readiness work” and “Various entry points
for the private sector in development/implementation of GCF CNs &FPs” in p.42 and p.44 respectively.

Entry point 1. Readiness work for NDA and AE
In Readiness and Preparatory Support Programme27, the GCF Board
has allocated dedicated resources, capped at US $1 million perdeveloping country per year, to assist developing countries in
preparing to effectively access and deploy the GCF funding. Priority
for readiness support is given to most vulnerable developing countries,
including LDCs, SIDS and African States, with a minimum of 50 percentof the readiness funding being earmarked for these countries. The
participation in the Readiness and Preparatory Support Programme
is coordinated by a NDA or Focal Point of a respective country.
Depending on a country’s needs, specific readiness support activities
may include institutional strengthening of the NDA/Focal Point,
27

Details are in GCF101 [https://www.greenclimate.fund/gcf101]

36

development of strategic frameworks and country programmes forengagement with the GCF, assistance in accreditation and capacity
building of accredited direct access entities, and support for theformulation of national adaptation plans and/or other adaptation
planning processes. A template for submission of a Readiness andPreparatory Support Proposal can be found in the later section. In thisreadiness programme, the private sector can engage in the process
also.
Readiness assistance requested by NDAs
This readiness programme aims to strengthen NDAs and includes
various NDA support such as establishment of no-objection
procedure

andstakeholder

engagement

processes,

elaborating/updating of GCF Country Programmes and projectpipelines, elaboration of National Adaptation Strategies and Action
Plans. The two current modalities are:Option 1.
NDA requests assistance from GCF and the NDA itself will be thecontractor and responsible for delivery to GCF.
Option 2.
NDA requests assistance from GCF and proposes a delivery
partner28; the contractor and responsible party for delivery will be
28

Several international institutes (i.e. GIZ、UNDP、UNEP、GGGI）concluded frameworkagreement

with

GCF.[

https://www.greenclimate.fund/-/gcf-concludes-framework-

agreements-with-undp-unep-and-giz-to-support-country-readiness]
Detail descriptions regarding to the delivery partner can be found in GCF101[https://www.greenclimate.fund/gcf101/empowering-countries/readiness-support#step-37

a delivery partner. Delivery partners need to undergo a Financial
Management Capacity Assessment, unless they are AEs.
Under option 2, private companies chosen by the NDA can provide
consulting services and other services needed for implementing
readiness assistance. Part of the services may be procured throughinternational competitive tenders.
(Also see “Various entry points for the private sector in GCF readinesswork” R1.)

Readiness assistance requested by AEs
An AE can request support for elaborating gap assessments against
GCF accreditation standards, work leading to closing/addressing
such accreditation gaps, or work allowing AEs (especially DAEs) toaddress accreditation conditions stipulated by the GCF Board. Under
this readiness assistance request by AEs, private companies canprovide consulting services and other services as a Service
contractor 29 . Part of the services may also be procured through1-submit-a-readiness-proposal]
29

According to the Administrative Guideline on Procurement (GCF/B.08/31) paragraph2.19-２.22, there is two descriptions: Service contractor is Specialist engaged to provide
specific technical services or processes related to or arising from institutional procurementof goods and/or services, and renders specific technical services that include, but are notlimited to, formulating technical specifications for institutional goods and/or services
being procured; and Service Provider is a business firm or entity that provides a defined
range of services to the Fund and under such conditions as may be agreed in a service
contract.

38

international competitive tenders.
(Also see “Various entry points for the private sector in GCF readinesswork” R2.)

Entry point 2. Project development and implementation
To date, most of the Concept Notes and Funding Proposals submitted
to the GCF represent projects and programmes that the GCF did not
specifically invite 30 . Project development in the figure on “Various
entry

pointsfortheprivatesectorinproject

development/implementation” can be distinguished into 4 phases
as:-Generation of project ideas (P1);-

Development, submission and endorsement of Concept Notes
(P2);

-

Development, submission and approval of full Funding Proposals(P3); and-

Implementation of Funding Proposals (P4).

There are many possibilities for private sector entities to participate bysupporting AEs in the development of project ideas (P1), Concept
Notes (P2) and/or Funding Proposals (P3). Such support may consistof, for example, advising/training AEs, accessing PPF, completing the30

Funding Proposal can be submitted to GCF either by spontaneously or by responding toRequest for Funding Proposal (RFP) which is posted under GCF procurement.
[https://www.greenclimate.fund/who-we-are/procurement]

39

Funding Proposal templates for AEs, carrying out studies which arecompulsory at Funding Proposal stage (i.e. Feasibility study, ESIA,
gender assessment/action plan, etc.). If the PPF application isapproved, private companies can contract with AE throughinternational competitive bidding in order to support the creation offunding

proposals

includingthese

investigations

andreportpreparations.
Depending on the project/programme considered in a Concept
Note and Funding Proposal, information on technology/services canbe provided by the private sector. Another possibility for private
sector entities to be involved is as an eventual executing entity, i.e.
entity that will implement part or all of the Funding Proposal(technology provider, intermediary, construction, services, O&M,
etc.). Moreover, the private sector may engage by monitoring
project implementation and evaluating projects (near/full term) such assignments will likely be contracted following competitive
international tendering (P4).
Co-finance for the proposal is another option to engage in a GCF
project/programme and if this is the case, co-financing agreements
would typically need to be signed ahead of GCF Board approval of
the Funding Proposal.
Elaboration and implementation of Project Preparation Facility (PPF)
40

requests
PPF will support project and programme preparation requests from
AEs, especially DAE, and for projects in the micro-to-small size
category with a view to enhancing the balance and diversity of the
project pipeline. The following activities are to be considered under
the PPF.
Pre-feasibility and feasibility studies, and project designEnvironmental, social and gender studies



Risk assessments



Identification of programme- and project-level indicatorsPre-contract services, including the revision of tender
documents

Advisory services and/or other services to financiallystructure a proposed activity

AE will develop a PPF request in consultation with NDA or Focal Pointand submit the request with a No-Objection letter to a corresponding
Concept Note. PPF request and the Funding Proposal being
developed are limited to a maximum amount of USD 1.5 million.
Support for PPF requests will be in the form of grants and repayablegrants, and equity may also be considered for private sector projects.
The Board has authorized the Executive Director to approve PPF
request. Proposal developed with PPF resources should be submitted
to the Board within two years after the PPF request was approved.
41

42

43

44

45

2.3 Ways of engagement in GCF project
More than 70 Funding Proposals have been approved as of March2018. The analysis of these projects reveals that a wide variety of
implementation structures exist. As shown in the figure “Ways ofprivate sector engagement in different types of project structures”,
these examples include:
Case 1. Project is implemented directly by the AE;
Case 2. The AE operates a (revolving) Fund, which on-lends tobeneficiaries (intermediation structure operated by the AE); andCase 3. The AE co-finances a third-party investment programme(intermediation structure operated by a third party).
Case 1. Project directly implemented by the AE
Entry points for the private sector in such types of projects are:1) Co-financing party;
2) Pre-subcontract to implement parts of the project; and3) International competitive bidding (ICB).
Case 2. Intermediation structures operated by the AE
Entry points for the private sector will be typically the same as case 1
and in addition include opportunities at the stage when the AE
established intermediation Fund selects and contracts sub-projects.
Various type of investment strategies such as combination ESCO
business with Green bond, investment of local fund (fund of funds)46

have been approved by the Board. Note that this type of project
structure can be proposed and implemented by those AEs only,
which are accredited by the GCF for on-lending and on-granting
GCF finance.
Case 3. Intermediation structure operated by a third party
Entry points for private sector are the same as with the previous
structure, except that the intermediation structure is operated by athird party, i.e. private sector would engage with this third party. Suchproject structures can be used by AEs which lack the specialized
fiduciary standard for grant awards and/or specialized fiduciarystandard for on-lending and blending, but still would like toimplement intermediation structures in their project/programme.

47

48

49

Approved project
FP46 Renewable Energy Program #1 - Solar31

AE

XacBank (Mongolia)

Project

10MW solar power generation
Mongolia is committed to supply 30% of
the country’s energy through renewableenergy by 2030, as part of its NDC
targets. However renewable energy
investments in the country are limited
by barriers to finance including highinterest rates, and prohibitively shorttenors, which make renewable projects
more expensive than coal‐fired power
plants. This project utilizes GCF'sconcessional loans to introduce
investment from the private sector
which realize procurement of long‐term
low interest loans by XacBank, and make
10 MW solar power generation

summary

Total costinvestment(USD)

17.6 M
GCF finance, Loan 8.7 M
Project developer, Equity 8.9 M

31 https://www.greenclimate.fund/-/renewable-energy-program-1solar?inheritRedirect=true&redirect=%2Fwhat-we-do%2Fprojectsprogrammes%3Fp_p_id%3D101_INSTANCE_Hreg2cAkDEHL%26p_p_lifecycle%3D0%26p_p_
state%3Dnormal%26p_p_mode%3Dview%26p_p_col_id%3D_118_INSTANCE_4ZRnUzRWpEq
O__column2%26p_p_col_pos%3D1%26p_p_col_count%3D2%26_101_INSTANCE_Hreg2cAkDEHL_delta%3D30%26_101_INSTANCE_Hreg2cAkDEHL_keywords%3D%26_101_INSTANCE_Hreg2cAkDE
HL_advancedSearch%3Dfalse%26_101_INSTANCE_Hreg2cAkDEHL_andOperator%3Dtrue%
26p_r_p_564233524_resetCur%3Dfalse%26_101_INSTANCE_Hreg2cAkDEHL_cur%3D2

50

51

Approved projectFP6 Energy Efficiency Green Bonds in Latin America and the
Caribbean32AE

IDB (Latin America and the Caribbean,
Mexico)Project

Use of ESCO receivables and green bond
The Programme uses a two‐phased
approach to bridge that gap. It will, at first,
fund energy efficiency projects using loans.
Once a sufficient amount of projects areaggregated, the Programme will “bundle”
them such that they will be used tounderpin the issuance of partly guaranteedgreen bonds. In its initial phase, theProgramme targets four Latin America andCaribbean countries – Colombia, theDominican Republic, Jamaica and Mexico(as pilot country) – of which two are Small
Island Developing States.

summary

Total costinvestment(USD)

184.5 M
GCF finance, Guarantee 20.0 M, Grant 2.0
M,
IDB, Loan 50 M, Guarantee 56.0 M
CTF Guarantee, 19.0 M
Private sector Equity 37.5 M, Green bond
150 M

32 https://www.greenclimate.fund/-/energy-efficiency-green-bonds-in-latin-america-andthe-caribbean?inheritRedirect=true&redirect=%2Fwhat-we-do%2Fprojectsprogrammes%3Fp_p_id%3D101_INSTANCE_Hreg2cAkDEHL%26p_p_lifecycle%3D0%26p_p_
state%3Dnormal%26p_p_mode%3Dview%26p_p_col_id%3D_118_INSTANCE_4ZRnUzRWpEq
O__column2%26p_p_col_pos%3D1%26p_p_col_count%3D2%26_101_INSTANCE_Hreg2cAkDEHL_delta%3D30%26_101_INSTANCE_Hreg2cAkDEHL_keywords%3D%26_101_INSTANCE_Hreg2cAkDE
HL_advancedSearch%3Dfalse%26_101_INSTANCE_Hreg2cAkDEHL_andOperator%3Dtrue%
26p_r_p_564233524_resetCur%3Dfalse%26_101_INSTANCE_Hreg2cAkDEHL_cur%3D3

52

53

Approved project
FP13 Improving the resilience of vulnerable coastal communities toclimate change related impacts in Viet Nam33
AE

UNDP (Viet Nam)

Project

Construction of disaster resilience
housing, rehabilitation of mangrove andrisk assessment
More resilient housing will be createdthrough incorporating storm and flood
resilient design features in new houses tobenefit up to 20,000 people who areexposed to high risk from adverse weather
events. In order to create storm surge
buffers, 4,000 hectares of mangroves will
be planted and rehabilitated, which will
also create sustainable ecosystem
resources to support coastal livelihoods.
The project will also develop systematizedclimate and economic risk assessments forprivate and public sector application in all
28 coastal provinces of Viet Nam

summary

Total

cost

investment(USD)

40.5 M
GCF finance, Grant 29.5 M
Ministry of Construction, Grant 8.0 M
Ministry of Agriculture and Rural
Development (MARD)
Grant 1.4 M
UNDP, Grant 1.6 M

33 https://www.greenclimate.fund/-/improving-the-resilience-of-vulnerable-coastalcommunities-to-climate-change-related-impacts-in-vietnam?inheritRedirect=true&redirect=%2Fwhat-we-do%2Fprojectsprogrammes%3Fp_p_id%3D101_INSTANCE_Hreg2cAkDEHL%26p_p_lifecycle%3D0%26p_p_
state%3Dnormal%26p_p_mode%3Dview%26p_p_col_id%3D_118_INSTANCE_4ZRnUzRWpEq
O__column2%26p_p_col_pos%3D1%26p_p_col_count%3D2%26_101_INSTANCE_Hreg2cAkDEHL_delta%3D30%26_101_INSTANCE_Hreg2cAkDEHL_keywords%3D%26_101_INSTANCE_Hreg2cAkDE
HL_advancedSearch%3Dfalse%26_101_INSTANCE_Hreg2cAkDEHL_andOperator%3Dtrue%
26p_r_p_564233524_resetCur%3Dfalse%26_101_INSTANCE_Hreg2cAkDEHL_cur%3D3

54

55

2.4 Private Sector Facility
Project Preparation Facility (PPF) 34 is available for preparation offunding proposal (see Chapter 2.2). In addition, Private Sector Facility(PSF) also promotes engagement of the private.
Private Sector Facility (PSF)35
The PSF has been set up to catalyse the engagement of private
sector investors, developers, entrepreneurs, corporations, and small
and medium-sized enterprises in mitigation and adaptation projects
in developing countries. An innovative feature of the PSF is thatprivate sector intermediaries can be accredited to deploy the GCF
resources. The PSF can support mitigation action by finding
innovative ways to scale up the supply of clean energy by, forexample,increasing

accesstoaffordable

financeformicroenterprises, using funds to “de-risk” investment, mobilizing
private sector activity on the demand side, and by rallying long-term
institutional investors.

34

Ref. GCF document Decision B.13/21 [Operational guidelines for the Project Preparation

Facility]
35 Detail information on PSF can be found in “The Green Climate Fund’he Green
Climate Fund PSF ”(2017).
[https://www.greenclimate.fund/documents/20182/194568/The_Green_Climate_Fund_s_
Private_Sector_Facility.pdf/c47eacd1-5b93-4fe0-97de-b4b9ebe669d3] Advisory group forPSF (Private Sector Advisory Group: PSAG) provides recommendation to the Board inorder to mobilize the Private sector.

56

2.5 Contents of GCF Funding Proposal
The GCF Funding Proposal template includes 9 sections and requires,among others, financing and cost information, rationale for GCF
involvement, and expected performance against the GCF’s
investment criteria. Project proponents or developers (i.e. privatecompany) can support AEs in developing or writing a proposal.
NDAs/Focal Points can guide project development and will need toissue a No-Objection letter prior to proposal submission. Engaging
with NDA/Focal Point during proposal development is therefore
important.
To finance background studies required for Funding Proposals, PPF
support can be requested by AEs. Moreover, a so-called Simplified
Approval Process (SAP) 36 was recently developed and can beapplied by AEs (especially DAEs) who are considering less than 10
million USD GCF contributions to an ESS risk category C project (oneSAP project from Namibia is already approved37). Contents of thefunding proposal is indicated as below.

36 The simplifications in SAP are two-fold: 1. The documentation to be provided with theFunding Proposal is reduced; and 2. The review and approval processes are streamlined.
Details can be found in the GCF website. [https://www.greenclimate.fund/how-wework/funding-projects/simplified-approval-process]37 [https://www.greenclimate.fund/-/improving-rangeland-and-ecosystemmanagementpractices-of-smallholder-farmers-under-conditions-of-climate-change-insesfonteinfransfontein-and-warmqu?inheritRedirect=true&redirect=%2Fwhat-wedo%2Fprojectsprogrammes]

57

Funding proposal38
Section A

Project/Programme summary

Section B

Financing / Cost information

Section C

Detailed project / Programme description

Section D

Rationale for GCF involvement

Section E

Expected performance against investment
criteria

Section F

Appraisal summary

Section G

Risk Assessment and management

Section H

Result monitoring and reporting

Section I

Annex

A. Project/Programme summary
A.1. Brief Project/ ProgrammeInformation
A.1.1. Project /Provide the full title of the proposed

programme title

project/programme.

A.1.2. Project or

Indicate If the proposal is associated with aprogramme

project or a programme.

A.1.3. Country(ies) / region
A.1.4. National
designatedauthority (ies)38Enter the country (or countries) or region in which
the proposed project/programme will be
implemented.
Insert the name of the NDA

Ref. Green Climate Fund Proposal Toolkit 2017(ACCLIMATISE and CDKN)

58

A.1.5. Accredited
EntityA.1.5.a. Accessmodality
A.1.6. Executing
entity /beneficiary
A.1.7. Project size
category (Total
investment,
million USD)
A.1.8. Mitigation /adaptation focus
A.1.9. Date ofsubmission
A.1.10. Projectcontact details

Insert the name of AE.
Indicate which mode of access the entity is usingtoaccesstheFund’sresources:

directorinternational
Insert the name of the EE(s) who will channel
funds, execute, carry out or implement the funded
activity under the overall management andsupervision of the AE.
Indicate the scale of intended activities for the
proposed project/ programme: Micro (≤10),
Medium (50<x≤250), Small (10<x≤50), Large (>250)
Indicate if the proposed project/programme
targets mitigation, adaptation, or cross-cutting(both mitigation and adaptation)-

A.1.11. Results

Mark all the relevant results area of the Fund’sareas (mark all that

initial RMF that are applicable to the proposed

apply)

project/programme.

A.2. Project /Programme
Executive-

Summary59

B. Financing / Cost information
Provide a breakdown of cost estimates analyzed
according to major cost categories. Present afinancial model that includes projection covering

B.1. Description

the period from financial closing through finalof Financial

maturity of the proposed GCF financing with

Elements of thedetailed assumptions and rationale. Summaries

Project /the financial instrument(s) to be used in support ofProgramme

the project/programme, and how the choice offinancial instrument(s) will overcome barriers andleverage

additional

publicand/orprivatefinance to achieve project objectives.
State the amount of financial contributions
needed for the proposed project/programme.
The ‘total project financing’ should be the sum of‘requested GCF’ amount and ‘Co-financing’

B.2. Project
Financing
Information

amount. Provide a breakdown by financial
instrument.

Providestrongeconomic

andfinancial justification for the concessionality that
GCF provides, particularly in the case of grants.
Please note that the level of concessionality
should correspond to the level of the proposal’s
expected performance against the investment
criteria.

B.3.Financial

Provide an overview of the size of total banking

Markets Overview assets, debt capital markets and equity capital(if applicable)markets which could be tapped to finance the60proposed project/programme. Provide also an
overview of market rate (i.e. one-year Treasury
bill,

five-year

government

bond,

five year

cooperate bond (Specify credit rating) and fiveyear syndicate loan.

C. Detailed project / Programme description
Describe relevant national, subnational, global,

C.1. Strategic

political and/or economic factors that help toContext

contextualize the proposal, including existing
national and sector policies and strategies.
Describe the baseline scenario (i.e. emission

C.2. Project /baseline, climate vulnerability baseline, key

Programmebarriers,

challenges

Objective

outcomes

andagainst Baseline

project/programme will aim to achieve in

and/orthepolicies),

impact

that

the
the

improving the baseline scenario.
Describe the main activities and the planned

C.3. Project /Programme
Description

measures of the project/programme according
to each of its components. Provide information
on how the activities are linked to objectives,
outputsandoutcomes

that

the

project/programme intends to achieve.

C.4. Background
Information on
Project /ProgrammeSponsorDescribe the quality of the management team,overall strategy and financial profile of thesponsor(EE) and how it will support the

project/programme

61

in

terms

of

equity(Executing Entity)

investment,

management,

operations,production and marketing.
Describe the market for the product(s) or services
including the historical data and forecasts.

C.5. Market
Overview (ifapplicable)

Describe the competitive environment including
the list or competitors with market shares andcustomer base and key differentiating factors (ifapplicable). Provide pricing structures, pricecontrols, subsidies available and government
involvement (if any).
Provide detail of government licenses or permits

C.6. Regulation,
Taxation andInsurance (ifapplicable)

required for implementing and operating the
project/programme, the issuing authority and thedate of issue or expected date of issue. Describe
applicable

taxes

and

foreignexchange

regulations and details on insurance policies
related to the project/programme.
Describe in detail the governance structure of the

C.7. Institutional

project/programme, including but not limited to/ Implemen-thetation Arrange-

responsibilities

ments

management unit, steering committee, EEs andorganization’sofstructure,
the

role

and

project/programme

so on, as well as the flow of funds structure.

C.8. Timetable ofProject/

Provide a project/programme implementation

Programme

timetable.

Implementation
62

D. Rationale for GCF involvement
Describe the value added by the Fund’s support
and

the

sustainability

project/programme’s
after

the

Fund’slong-termintervention.

Provide a justification for the amount of funding

D.1. Value

requested

Added for GCF

proposed, in order to close the funding gap andInvolvement

bring the project/programme to function. In the
case

and

the

financialof grant funding

instrument(s)without repayment

contingency present a convincing financial
and/or economic argument to ensure that thefund maximizes its use of resources.
Explain how the project/programme sustainability

D.2. Exit Strategy

will be ensured in the long run, after the project/programme is implemented with support from the
GCF and other sources.

E. Expected performance against investment criteria
E.1. Impact
Potential

Specify the climate mitigation and/or adaptation
impact, using the four core indicators providing in
the Fund’s investment framework.
(1) Potential for scaling-up and replication (e.g.
multiples of initial impact size) for both mitigation

E.2. Paradigm

and adaptation; (2) potential for knowledge andShift Potential

learning; (3) contribution to the creation of an
enabling environment; (4) contribution to theregulatory framework and policies.

63Provide the expected environmental, social andhealth, and economic co-benefit. Also provide
the gender-sensitive development impact, which

E.3. Sustainable

will aim to reduce gender inequalities in climate

Developmentchange impacts. These co-benefits and wider

Potential

positive impacts

may

be

drawn

from

an

economic analysis of the proposed activities andcan be strengthened with more qualitative
factors.
Describe the scale and intensity of vulnerability of

E.4. Needs of thethe

Recipientelaborate

countryandhowbeneficiarythegroupsandproject/programme

addresses the identified needs.
Demonstrate the following factors, amongst
others: (1) existence of a national climate strategy

E.5. Country

and coherence with existing plans and policies;

Ownership(2) capacity of AEs or EEs to deliver; and (3)engagement

with

NDAs,

civil

societyorganizations and other relevant stakeholders.

E.6. Efficiency
andEffectiveness

Make the case for strong cost-effectiveness andfinancial soundness.

F. Appraisal summary
F.1. Economic

Provide the result of the detailed economic andand Financial

financial analysis (including the financial model).

Analysis

Also demonstrate the economic and financial

64justification (both qualitative and quantitative) forthe concessionality that GCF provides.

F.2. Technical
Evaluation

Provide an assessment from the technicalperspective, if a particular technological solution
has been chosen.
Describe the main outcome of the Environmental

F.3.

and Social Impact Assessment (ESIA) and specify

Environmental,

the Environmental and Social management Plan

Social(ESMP), and how the project/programme will

Assessment,

avoid

includingaccordance with the Fund’s (ESS) standard. Also

Genderdescribe how the gender aspect is considered in

Considerations

accordance with the Fund’s Gender Policy andormitigate

negative

impactsinAction Plan.

F.4. Financial
Management
and Procurement

Describethemanagement

project/programme’s

financialandincluding

procurement,

financial accounting, disbursement methods andauditing.

G. Risk Assessment and management
G. Risk
Assessment andmanagement

Identify any substantial technical, operational
financial, social and environmental risks that the
project/programme may face and propose
respective risk mitigation measures.

65

H. Result monitoring and reporting
H. Result monitoring

Provideand reporting

proposed project/programme.

the

logic

frameworkofthe

I. A NNEX
No-objection letter from DNA

Feasibility studyIntegrated financial model that provides sensitivity analysis of
critical elementConfirmation letter or letter of commitment for co-financing
commitment

Project/programme confirmation (term sheet)Environmental

andSocialImpactAssessment(ESIA)orEnvironmental and Social Management Plan (ESMP)Appraisal report or due diligence report with recommendations



Evaluation report of the baseline project

Map indicating the location of the project/programmeTimetable of project/programme implementationProcurement plan

Detailed budgetGender action plan,

Economic analysis

66

3. GCF INVESTMENT CRITERIAWhen implementing project formulation with GCF, it is necessary todescribe in section E of the Funding Proposal to show that it meets six
investment standards namely impact potential, paradigm shiftpotential, sustainable development potential, needs of the recipient,country ownership, efficiency and effectiveness. Investment criteria
further include target areas, sub-criteria and indicators. It is desirable
to formulate projects based on these items. In this section, based on
Decision B.09/05 Annex III which details are shown concerning six
investment criteria. With regard to indicators, review process iscurrently under way in the Board meeting and it is recommended
that latest information should be confirmed on the relevant website.

67

Table 5. Initial investment framework: activity-specific-criteria andindicative assessment factors (DECISION B.09/05)
An AE will develop its Funding Proposal with due consideration of theinvestment criteria and the applicable and relevant activity-specificsub-criteria and indicative assessment factors. In the formulation of
the proposal, the AE is expected to respond to all six of the investment
criteria but only the applicable and relevant sub-criteria andindicative assessment factors. Not all activity-specific sub-criteria andindicative assessment factors will be applicable or relevant for every
proposal.
1. Impact potential
Definition
Potential oftheprogramme/
project tocontribute totheachievementof the Fund’s
objectives
and result
areas

39

Coveragearea
Mitigation
impactActivityspecific subcriteria
 Contribution to theshift to low
emissionsustainable
development
pathways

Indicative assessment factors (including
indicators)39
 Expected tonnes of carbon dioxide
equivalent (t CO2 eq) to be reduced or
avoided (PMF-M Core 1)40
 Degree to which activity avoids lock-inof long-lived, high emission infrastructure Expected increase in the number ofhouseholds with access to low- emission
energy Degree to which theprogramme/project supports the scaling
up of low-emission energy in theaffected region by addressing key
barriers
 Expected number of MW of lowemission energy capacity installed,

Indicative assessment factors include both quantitative indicators and qualitative

factors.
40

PMF-M Core 1 refers to a linkage with the first core indicator in the mitigation

performance measurement framework, as contained in document GCF/B.08/07. PMF-A
5.0 refers to a linkage with the indicator 5.0 in the adaptation performance measurement
framework and so on.

68Definition

Coverage
area

Adaptation
impactActivityspecific subcriteria

 Contribution toincreasedclimateresilientsustainable
development

Indicative assessment factors (including
indicators)39
generated and/or rehabilitated Expected increase in the number ofsmall, medium and large low emission
power suppliers (PMF-M 6.0 and related
indicator(s)), and installed effective
capacity Expected decrease in energy intensityof buildings, cities, industries andappliances (PMF-M 7.0 and related
indicator(s))
 Expected increase in the use of lowcarbon transport (PMF-M 8.0 and
related indicator(s))
 Expected improvement in the
management of land or forest areas
contributing to emission reductions(PMF-M 9.0 and related indicator(s))
 Expected improvement in waste
management contributing to emission
reductions (e.g. the change in the shareof waste managed using low-carbon
strategies and/or the change in theshare of waste that is recovered throughrecycling and composting); and/or Other relevant indicative assessment
factors, taking into account the Fund’s
objectives, priorities and result areas, as
appropriate on a case-by-case basis
 Expected total number of direct andindirect beneficiaries, (reduced
vulnerability or increased resilience);
number of beneficiaries relative to total
population (PMF-A Core 1), particularly
the most vulnerable groups Degree to which the activity avoids
lock-in of long-lived, climate vulnerable
infrastructure Expected reduction in vulnerability byenhancing adaptive capacity andresilience for populations affected by
the propose, activity, focusing
particularly on the most vulnerable
population groups and applying agender-sensitive approach Expected strengthening of institutionaland regulatory systems for climateresponsive planning and development(PMF-A 5.0 and related indicator(s))

69Definition

Coveragearea

Activityspecific subcriteria

Indicative assessment factors (including
indicators)39
 Expected increase in generation anduse of climate information in decisionmaking (PMF-A 6.0 and related
indicator(s))
 Expected strengthening of adaptive
capacity and reduced exposure toclimate risks (PMF-A 7.0 and related
indicator(s))
 Expected strengthening of awareness ofclimate threats and risk reduction
processes (PMF-A 8.0 and related
indicator(s)); and/or Other relevant indicative assessment
factors, taking into account The Fund’s
objectives, priorities and result areas, as
appropriate on a case-by-case basis

70

2 Paradigm shift potential
Definition
Degree towhich theproposedactivity cancatalyse
impactbeyonda one-offproject orprogramme
investment

Coveragearea
Potential
for scaling
up andreplication,and itsoverall
contribution to
global low
carbondevelopment
pathwaysbeing
consistent
with atemperature
increase ofless than 2
degrees
Celsius(mitigation
only)

Potentialforknowledge
andlearning

41

Activity-specificsub-criteria
 Innovation
 Level ofcontributions to
global lowcarbon
development
pathways,consistent with atemperature
increase of lessthan 2 degrees
Celsius Level ofcontributions to
global lowcarbon
development
 Potential for
expanding thescale and
impact of the
proposedprogramme or
project(scalability) Potential forexporting key
structuralelements of the
proposedprogramme or
project
elsewhere within
the same sector
as well as toother sectors,
regions orcountries(replicability) Contribution to
the creation orstrengthening of
knowledge,
collective
learning

Indicative assessment factors(including indicators)41
 Opportunities for targeting
innovative solutions, new market
segments, developing or adopting
new technologies, businessmodels, modal shifts and/or
processes
 Expected contributions to global
low-carbon development
pathways consistent with atemperature increase of less than 2
degrees Celsius as demonstrated
through: A theory of change for scaling up
the scope and impact of theintended project/programme
without equally increasing the total
costs of implementation
 A theory of change for replicationof the proposed activities in the
project/programme in othersectors, institutions, geographicalareas or regions, communities orcountries Existence of a monitoring andevaluation plan and a plan forsharing lessons learned so thatthey can be incorporated within
other projects

Indicative assessment factors include both quantitative indicators and qualitative

factors.

71

Contribution to thecreationof anenabling
environment

processes, or
institutions
 Sustainability ofoutcomes andresults beyond
completion of
the intervention
 Marketdevelopment
andtransformation

Contribution to theregulatory
frameworkandpolicies Potential forstrengthened
regulatory
frameworks andpolicies to drive
investment in
low-emission
technologies
and activities,
promotedevelopment ofadditional lowemission
policies, and/or
improveclimateresponsiveplanning anddevelopment

Overall
contribution toclimateresilient Potential for
expanding the
proposal’s
impact without
equally72

 Arrangements that provide for longterm and financially sustainable
continuation of relevant outcomesand key relevant activities derived
from the project/programme
beyond the completion of theintervention
 Extent to which the
project/programme creates newmarkets and business activities atthe local, national or international
levels Degree to which the activity willchange incentives for market
participants by reducing costs andrisks, eliminating barriers to thedeployment of low-carbon andclimate-resilient solutions
 Degree to which the proposed
activities help to overcome
systematic barriers to low-carbon
development to catalyse impact
beyond the scope of the project orprogramme Degree to which the project orprogramme advances thenational/local regulatory or legal
frameworks to systemically promote
investment in low-emission or
climate-resilient development
 Degree to which the activity shifts
incentives in favour of low-carbon
and/or climate-resilient
development or promotes
mainstreaming of climate change
considerations into policies andregulatory frameworks anddecision-making processes atnational, regional and local levels,
including private-sector decisionmaking

 Scaling up the scope and impact of
the intended project/programme
without equally increasing the total
costs of implementation
 A theory of change for replication

Development
pathwaysconsistent
with acountry’s
climatechangeadaptation
strategies
and plans(adaptation only)

increasing its
cost base(scalability) Potential forexporting key
structuralelements of the
proposal toother sectors,
regions orcountries(replicability)73of the proposed activities in the
project/programme in othersectors, institutions, geographicalareas or regions, communities orcountries Degree to which the programme or
project reduces proposed risks ofinvestment in technologies andstrategies that promote climate
resilience in developing countries

3. Sustainable development potential
Definition
Wider
benefits
andpriorities

Coveragearea

Activity-specific subcriteria

Indicative assessment factors(including indicators)42

Environmen
tal cobenefits

 Expected positiveenvironmental
impacts, including inother result areas of
the Fund, and/or inline with the priorities
set at the national,
local or sectoral level,
as appropriate
 Expected positivesocial and healthimpacts, including inother result areas of
the Fund, and/or inline with the priorities
set at the national,
local or sectorallevels, as appropriate
 Expected positive
economic impacts,
including in otherresult areas of theFund, and/or in linewith the priorities set
at the national, local
or sectoral level, as
appropriate

 Degree to which the projector programme promotes
positive environmental
externalities such as air
quality, soil quality,
conservation, biodiversity,
etc.

Social cobenefits

Economiccobenefits42

 Potential for externalities in
the form of expected
improvements, for woman
and men as relevant, inareas such as health andsafety, access to
education, improved
regulation and/or culturalpreservation.
 Potential for externalities in
the form of expected
improvements in areas suchas expanded and enhanced
job markets, job creation andpoverty alleviation for
women and men, increased
and/or expanded
involvement of local
industries; increased
collaboration between
industry and academia;
growth of private funds
attracted; contribution to anincrease in productivity andcompetitive capacity;
improved sector incomegenerating capacity;
contribution to an increase inenergy security; change inwater supply and agricultural
productivity in targetedareas, etc.

Indicative assessment factors include both quantitative indicators and qualitative

factors.

74

Gendersensitive
developme
nt impact Potential for reduced
gender inequalities inclimate change
impacts and/or equal
participation bygender groups incontributing to
expectedoutcomesoutcomes75

 Explanation of how the
project activities will address
the needs of women andmen in order to correct
prevailing inequalities inclimate change vulnerability
and risks

4. Needs of the recipient

43

Activity-specific subcriteria

Definition

Coverage area

Vulnerability
andfinancingneeds of thebeneficiary
country andpopulation

Vulnerability of
the country(adaptationonly) Scale and intensityof exposure ofpeople, and/or
social or economic
assets or capital, torisks derived fromclimate change

Vulnerable
groups andgender aspects(adaptation
only) Comparably highvulnerability of thebeneficiary groups

Economic andsocialdevelopmentlevel ofthe country andtheaffected
population

 Level of social andeconomicdevelopment of thecountry and target
population

Absence ofalternative
sources offinancing Opportunities for
the Fund to
overcome specificbarriers t financing

Need forstrengthening
institutions andimplementation
capacity Opportunities tostrengthen
institutional andimplementation
capacity inrelevant institutionsin the context ofthe proposal

I ndicative

assessment
factors(including
indicators)43
 Intensity of exposure toclimate risks and thedegree of vulnerability,
including exposure to slow
onset events
 Size of population and/or
social or economic assets
or capital of the country
exposed to climatechange risks and impacts
 Proposed
project/programme
supports groups that are
identified as particularly
vulnerable in national
climate or development
strategies, with relevant
sex disaggregation
 Level of social andeconomic development(including income level)of the country and target
population (e.g.
minorities, disabled,elderly, children, female
heads of households,
indigenous peoples, etc.)
 Explanation of theexisting barriers thatcreate absence of
Alternative sources offinancing and how they
will be addressed Potential of the proposed
programme or project tostrengthen institutional
and implementation
capacity

Indicative assessment factors include both quantitative indicators and qualitative

factors.

76

5. Country ownership
Definition
Beneficiary
country
ownershipof, andcapacity to
implement,a fundedproject orprogramme(policies,
climatestrategies
andinstitutions)

Coveragearea
Existence ofanational
climatestrategy

Coherencewithexisting
policies
Capacity of
Accredited
Entities or
executingentities todeliverEngagement
withcivil society
organizations
and otherrelevant
stakeholders

44

Activity-specificIndicative
assessment
factors
sub-criteria(including indicators)44
 Programme or project contributes
 Objectives
to country’s priorities for loware in line
emission and climate-resilientwith priorities
development as identified inin thenational climate strategies orcountry’splans, such as nationally
national
appropriate mitigation actions
climate(NAMAs), national adaptation
strategyplans (NAPs) or equivalent, and Proposeddemonstrates alignment withactivityistechnology needs assessments
designed in(TNAs), as appropriate
cognizanceofother  Degree to which the activity is
supported by a country’s enabling
country
policy and institutional framework,
policies
or includes policy or institutionalchanges Experienceand track
record of theAccredited
Entity or
executingentities in key
elements oftheproposedactivity Stakeholder
consultations
andengagement

 Proponent demonstrates aconsistent track record andrelevant experience andexpertise in similar or relevant
circumstances as described in the
proposed project/programme(e.g. sector, type of intervention,technology, etc.)

 Proposal has been developed inconsultation with civil society
groups and other relevant
stakeholders, with particularattention being paid to genderequality, and provides a specificmechanism for their future
engagement in accordance with
the Fund’s environmental andsocial safeguards and stakeholder
consultation guidelines. The
proposal places decision-making
responsibility with in-country
institutions and uses domestic
systems to ensure accountability

Indicative assessment factors include both quantitative indicators and qualitative

factors.

77

6. Efficiency and effectivenessDefinition

Coverage area

Economicand, ifappropriate,
financialsoundnessof theprograme/
project

Costeffectivenessand efficiency
regardingfinancialand nonfinancial
aspects

Amount of cofinancing

Programme/pro
ject financial
viability andother financial

45

ActivityIndicative
assessment
factors
specific sub(including indicators)45
criteria
 Financial
 Proposed financial structure (funding
adequacyamount, financial instrument, tenor
andand term) is adequate andappropriat
reasonable in order to achieve theeness ofproposal’s objectives, including
concessio
addressing existing bottlenecks
nalityand/or barriers
 Cost Demonstration that the proposed
effectiven
financial structure provides the leastess(mitigati
concessionality needed to make theon only)
proposal viable
 Demonstration that the Fund’s
support for the programme / projectwill not crowd out private and otherpublic investment
 Estimated cost per t CO2 eq (PMF-M
Core 2) as defined as total
investment cost / expected lifetime
emission reductions, and relative tocomparable opportunities
 Expected volume of finance to be Potential
leveraged by the proposedtoproject/programme and as a result
catalyseof the Fund’s financing,
and/ordisaggregated by public andleverage
private sources (PMF-M Core 3)
investment(mitigation  Co-financing ratio (total amount of
co-financing divided by the Fund’s
only)
investment in the
project/programme) Potential to catalyse private- andpublic-sector investment, assessed in
the context of performance on
industry best practices
 Expected indirect/long-term lowemission investment mobilized as aresult of the implementation ofactivity Economic and financial rate of Expected
return with and without the Fund’s
economic
support (i.e. hurdle rate of return orandother appropriate/relevant
financial

Indicative assessment factors include both quantitative indicators and qualitative

factors.

78

indicators

Industry bestpracticesinternal
rate ofreturn Financial
viability inthe longrun Application of bestpracticesanddegree ofinnovation79

thresholds)
 Description of financial soundness in
the long term (beyond the Fund’sintervention)

 Explanations of how best available
technologies and/or best practices,
including those of indigenous
peoples and local communities, areconsidered and applied If applicable, the proposal specifies
the innovations ormodifications/adjustments madebased on industry best practices

80

4. TIPS & TRICKS FOR WRITING A WINNINGPROPOSAL
A successful Funding Proposal will compare to or exceed the quality
and/or content of similar, already approved Funding Proposals.
Increasing access to climate finance while shifting from international
towards direct access however poses unique challenges to thefinancial systems in countries. More importantly, this shift necessitates
greater in-country capacity to prepare Funding Proposals. It istherefore the wish of this booklet to help stakeholders, specificallythose in national institutions involved in climate change projects, byproviding key tips and tricks in preparing proposals drawn frompractitioners, project developers, and financial institutions. While it is
the aim of this section to provide as much useful and helpful
information to stakeholders, readers are encouraged to further
consult the plethora of other guides, toolkits, and resource materials
from other relevant organizations such as GCF.

4.1 Setting the Stage for a project/programme
Having a clear idea of the challenge to be addressed and thecontext in which it develops is a first key step to develop a winning
project proposal.
Take advantage of existing secondary information

Desk research of publicly available documents (e.g. Nationally81Determined Contributions, vulnerability and climate risk studies,
economic and environmental studies, project reports) is useful inunderstanding the problem at hand, as these offer valuable data
which would be otherwise difficult to collect in a short period of time.
Conduct a comprehensive analysis of the local context

Climate impacts as well as institutional, socioeconomic, and politicaland regulatory contexts can vary greatly even over small
geographical areas. Hence, it is important to gather localized andcontext-specific information. To achieve this, there is no substitute fordoing field visits and consultation with local stakeholders.



Embrace complex thinking

Assembling a cross-sectoral working team to participate both in the
problem identification and project design phases can incentivise
complex thinking, as diversity tends to open the space for morevaried and novel ideas.



Mind the politics

The issues that are harder to observe (e.g. power and political
dynamics, embedded inequalities) are often the greater challenges
during project implementation.

82

Before moving on…
●

Check national and subnational climate change anddevelopment plans to identify priorities: Financial institutions
and other key stakeholders will expect for any project
proposal to be aligned with national and subnational climatechange priorities, plans and development strategies. Theseshould be available to the public. If they are not available
online, respective offices in each country can offer them.

●

Verify that climate change is causing the main problem to beaddressed: If the main threats and barriers affecting the
problem are out of the scope of climate change action, theproposal is not likely to be funded through climate financeand should rather be considered as a development priority.

4.2 Crafting Effective Interventions
Once a climate action priority has been mapped out and the
problem better understood, identifying the best combination ofinterventions to solve the problem follows.


Engage local stakeholders

Civil society organizations and other local groups, including the mostvulnerable, offer indispensable insights to craft the most valuable andlocally relevant solutions. Engaging with these stakeholders at the83earliest stages can also help secure local support, ensure added
value, avoid duplication of efforts, and reduce the risk of social
rejection of a project in further stages of its development.


Mind social, gender and environmental considerations

Being cautious of issues of equity and inequalities in resource
distribution at early stages is very important, as it has often been thecase that a project increases the resilience of one sector of society
or a particular ecosystem, at the cost of harming others.

4.3 Selecting the Right Sources of Funding

Determine the type of financial instrument that is most suitable
for the proposal

Depending on the project’s level of risk, its financial strength and its
duration, a project may be more suitable to receive a grant, aconcessional loan, or other financial instruments. Grants tend to be
more appropriate for projects with no returns generated by projectinterventions, while projects that are financially viable tend to be
more eligible for concessional loans.

84

Consider multiple co-financing



It can be useful to approach by mapping the requirements of eachpotential

co-financier (eligibility requirements, costs, ease ofavailment, repayment terms) and analysing which one aligns bestwith each intervention of the project. Once the most promising
options have been identified, it is advisable to initiate conversations
with these at the earliest possible.

Before moving on…
●

Consider submitting a Concept Note: As indicated in
Chapter 2.1, submitting a concept note whenever possible ishighly encouraged. Doing so initiates a dialogue with thefinancial institution and presents the possibility to receive
valuable early feedback on the substantive issues on theconcept note. Feedback may include questions on mattersthat the concept note failed to address or provide guidanceon the interventions.

85

4.4 Conducting Preparatory Feasibility AssessmentsTechnological viability

In case a project requires a specific technology, it is important todemonstrate that the technology is fit to be used for the project. Thisentails testing important equipment and their alternatives in similar
conditions where it will be used. In addition, testing should consider
different climate change scenarios. This is particularly important forequipment that will be used for multiple years keeping in mind thatthe longer the lifespan of an asset, the wider the range of scenariosthat should be used. For new technologies, proprietary methods oftestingandprojectionsareacceptableprovided

that

full

transparency is exercised.


Economic and financial feasibility

Different

financial

institutions

would

have

varying

project

performance benchmarks. Consequently, economic and financial
analyses requirement differ from one project to another. These
analyses commonly include sensitivity analysis to measure if project
objectives can still be achieved. If project conditions change
adversely, cost-benefit analysis to systematically determine the bestintervention among alternatives, and net present value and internalrate of return analysis to evaluate in the project’s profitability andfinancial viability.

86

Environmental soundness

Environmental assessments often include taking a baseline andassessing potential consequences of the proposed intervention onthephysicalenvironment

and local

biologicalenvironment(ecology). It is also important to consider the meteorologicalconditions in this study. Typical considerations include geology, land
use categorisations, and the terrestrial flora and fauna.
Social equity and gender mainstreaming

Community members are not uniformly vulnerable and without aclear understanding of these differences, projects can further
exacerbate social and gender inequalities. Hence, it is essential thatproject proponents conduct social and gender assessments to havea comprehensive understanding of the potential risks of the proposedinterventions and determine how to address these. Proposals that fail
to consider and address climate vulnerability and genderdifferentiated impact will most likely get rejected outright.

4.5 Writing Winning Proposal
The task at hand is to elaborate a winning full Funding Proposal thatclearly explains the problem at hand and makes a compelling casefor the proposed solutions. To achieve this, following elements areneeded to be considered.

87

Clearly describe the climate threat at hand and the context inwhich it develops, presenting both the big picture and finer
details

Detail the root cause of the problem and how climate change iscontributing to the problem at present and in the future under
different climate change scenarios. In setting the broader context, acommon good practice is to describe the policy and regulatoryenvironment at the international, national and local levels, including
environmental and climate conditions as well as socioeconomic,
political and institutional details.


Develop a clear, coherent and convincing roadmap (spellingboth short and long-term lines of action) to describe the impactof the project

The project’s logic framework should be framed simply and clearly. Itshould include all the key interventions of the proposal anddemonstrate a coherent logic starting from the activities to outputs
to the desired outcomes of the project including likely long-term
impacts.


Make every piece of information evidence-based

Supporting every claim or assertion in the proposal with soundscientific understanding is a must. Hence, it is important to exploit thefindings

ofpreparatory

assessments,

research,

and

other

documentation to the fullest extent and to ensure there is high quality88

of analysis. This will demonstrate that the decisions made have been
robust and well-founded and that the project interventions will leadto effective and sustainable results.


Demonstrate support for the projectDue diligence of financial institutions involves looking at project
activities whether they align with plans, policies and/or strategies set
at local, national and international levels. They will also verify social
support for the project, especially from vulnerable groups such as
ethnic minorities and women. Additionally, if there is a relevant
project on stream in the same location, it is important to clarify thatlinkages and synergies between the two. This might be particularly
important in cases where there are projects financed by the private
sector

that

are

big

enoughtochallengetheeconomic

considerations made in a project.
Specify how gender and vulnerable population considerations
have (and will continue to) been taken into account

The proposal should clearly describe the distribution of impact tovulnerable groups and the different access to resources. It should alsodetail how vulnerable populations will continue to be involved toensure their needs are taken into account, assess how benefits canbe enhanced and impacts minimised or mitigated.

89

Include comprehensive project governance and knowledge
management structures

Financial institutions will expect detailed information on project
management, coordination

mechanisms

andimplementation

measures, and the agencies that are going to execute them. Project
proponents should also specify the methods that will be used formonitoring and evaluation, knowledge management, and lesson
sharing.
Be transparent about risks and limitations associated with the
project and provide detailed information of risk-mitigating
counter-measures

Being transparent about risks and limitations that can hinder success,and detailing strategies to address these threats, will show diligenceand increase the attractiveness of the proposal. It can be convenient
to include operational implications, security constraints and financial
risks (whenever applicable). In developing contingency plans or risk
mitigating measures, it is advisable to refer to the lessons learned andproposed solutions from projects that were subject to similar risks andlimitations in the past. Additionally, setting explicit project boundaries,
in terms of implementation timelines as well as infrastructure, systems,
beneficiaries,

institutions

andecosystems

strengthen the proposal.

90

involved,

will

also

APPENDIX

91

Accreditation Entities in Asia Pacific (DAEs)
According to the GCF documents, DAEs from Asia Pacific region aresummarized.
National Bank for Agriculture and Rural Development (NABARD)
Scope
Access modality:

Direct access, national.

Head office location

India

Maximum size of an

Large

individual project or
activity within aprogramme
Fiduciary functions

Project management; grant award,
on-lending

and/orblending(forloans and equity)
Maximum environmental

Medium risk (category B)

and social risk category
Course of action-

It is national financial institution with a total balance sheet ofover US$ 40 billion located in a developing country in the Asia–
Pacific region.

-

It has the mandate of promoting sustainable agriculture andrural development through innovative, sustainable andequitable agriculture and rural prosperity by providing
financial and technical support.

-

It has built partnerships with other national entities, financial
92

institutions and non-governmental organizations in order toimplement innovative ideas through loans, guarantees,
blended finance and other structures in the areas ofagriculture, natural resources management, fisheries, rural
livelihood improvement, renewable energy and microfinance among others.
-

One-third of its cumulative disbursements are related toclimatechangeadaptation

andmitigation

activities,

particularly food and water security, forestry and landscapemanagement, enhancing livelihoods and ecosystem services.
Leveraging its long-standing partnerships and experience,
NABARD intends to undertake low-emissions and climateresilient sustainable development that reduces the impacts ofclimate change.

93

XacBank LLC (XacBank)
Scope
Access modality:

Direct access, national.

Head office location

Mongolia

Maximum size of an

Smallindividual project or
activity within aprogramme
Fiduciary functions

Projectmanagement;

and/or blending

on-lending(for loans andequity and gurantee)
Maximum environmental

Medium (category B)

and social risk category
Course of action-

XacBank is a private sector entity in Mongolia. It serves clientsfrom individuals and micro-, small- and medium-sized enterprises
to Mongolia’s largest corporations with a full spectrum of
inclusive banking, fair investment and other financial products
and services.

-

XacBank has provided products and services to over 650,000
clients through 93 branches operating across the country. The
retail banking transformation, piloted from July 2013, toimplement international best practices was expanded to coverbranches and sub-branches in Ulaanbaatar and 6 rural
provinces.

-

The Xacbank has successfully introduced specialized financial
94

products that support energy efficient and renewable energy
technologies for business sustainability and Green living.
-

Mongolian industries to move towards sustainable production,
investing in energy efficiency and renewable energy, increasingenergy security, and bettering the environment. The Xacbank
intends to scale up its focus on climate change in its operationsin the future.

95

The Secretariat of the Pacific Regional Environment Programme(SPREP)
Scope
Access modality:

Direct access, regional

Head office location

Samoa

Maximum size of an

Smallindividual project or
activity within aprogramme
Fiduciary functions

Basic fiduciary standards; project
management;

Maximum environmental

Minimal (category C)

and social risk category
Course of action-

SPREP is a regional entity located in the Asia–Pacific region
focused on climate change and environmental issues affecting
the SIDS in which it operates.

-

It supports action on climate change in the key areas ofadaptation, mitigation, policy and science. Key activities
include:assistingconsiderations

into

SIDS

to

integratenationalplanning

climateandchangedevelopment

processes; supporting and building capacity at the national andsubnational levels through technical training on meteorologicalservices, cost benefit analyses, vulnerability assessments andmonitoring and evaluation; providing support to coordinate
integrated adaptation measures; and implementing mitigation
activities such as renewable energy projects (solar and biomass).
96

-

It intends to build upon its current experience and to focus on
integrated approaches to addressing climate change, disasterrisks as well as ecosystem based adaptation projects andprogrammes in SIDS.

-

It will apply any funds towards SIDS-focused adaptation andmitigation projects and programmes, as well as building national
capacity in order to address climate change.

-

It applied the first-track accreditation process under the
Adaptation fund.

97

Fiji Development Bank (FDB)
Scope
Access modality:

Direct access, national

Head office location

Fiji

Maximum size of anMicroindividual project or
activity within aprogramme
Fiduciary functions

Projectmanagement;

on-lending

and/or blending (for loans, equity
and guarantees)
Maximum environmental

Medium (category B)

and social risk category

Course of action-

FDB is a national public sector entity and Government-owned
development bank based in Fiji. The main objectives are tofacilitate and stimulate the promotion and development of
natural resources, transportation and other industries andenterprises in Fiji and to give special consideration and priority to
the economic development of the rural and agricultural sectorsof the economy.

-

All capital stock of the FDB is for the sole account of theGovernment of Fiji, and it has a strong presence at the national
level with an emphasis on the social impacts of development
assistance. This presence and focus have allowed the applicant
to reach vulnerable groups and various beneficiaries including98the private sector and to contribute to national policies throughthe projects it finances.
-

In order to advance the objectives of the GCF, the FDB intends
to implement initiatives that have direct and positive impacts on
climate change mitigation and adaptation. Particularly, it plans
to promote: (a) Renewable energy; (b) Energy efficiency in the
housing sector; and (c) Reduction of carbon emissions throughnew technologies in the marine transport sector.

-

As a development bank, FDB places a high value on
environmental and social impacts. FDB has undertaken relevant
projects such as financing sustainable energy, providing
guarantees for solar PV systems for rural areas, and providing
micro loans to beneficiaries in the rural and agricultural sector.

99

Infrastructure Development Company Limited (IDCOL)
Scope
Access modality:

Direct access, national

Head office location

Bangladesh

Maximum size of an

Mediumindividual project or
activity within aprogramme
Fiduciary functions

Projectmanagement;

on-lending

and/or blending (for loans)
Maximum environmental

Medium risk (Category B)

and social risk category
Course of action-

IDCOL is a national entity in Bangladesh with a vision to help toensure the economic development of the country and to
improve the standard of living of the people of Bangladesh
through sustainable and environmentally‐friendly investments.

-

IDCOL has been promoting and financing in the private sector
since its inception in 1997, focusing on infrastructure, renewableenergy and energy efficiency projects.

-

The IDCOL has 12 regional offices in Bangladesh from which the
IDCOL manages

theprojects

implements.

haswell‐established

It

and

programmes

thatpartnerships

it

with

government institutions; the private sector, which includes but is
not limited to micro‐finance institutions, non‐governmentalorganizations; as well as bilateral and multilateral development100

agencies.
-

Through piloting new renewable energy technologies incollaboration with the private sector, the IDCOL has been able
to design a sustainable business model that ensures the deliveryof clean, affordable and reliable energy services to the end users
living mostly in remote areas.

-

Furthermore, the IDCOL seeks to strengthen country ownership byproviding technical assistance in the form of training andcapacity‐building services to its local partners.

101

Small Industries Development Bank of India (SIDBI)
Scope
Access modality:

Direct access, national

Head office location

India

Maximum size of an

Mediumindividual project or
activity within aprogramme
Fiduciary functions

Project management; grant, on-lending
and/or blending (for loans, equity andgurantees)

Maximum

Medium risk (Category B)

environmental andsocial risk category
Course of action-

SIDBI is a national entity focusing on promoting and financing thedevelopment of micro‐, small‐ and medium‐sized enterprises(MSMEs), primarily those in the manufacturing and services
sectors.

-

The SIDBI supports national action plans on climate change andhas taken initiatives to promote responsible business practices,
including sustainable financing, energy efficiency and cleaner
production in the MSMEs sector through both financial and non‐financial support.

-

It has partnered with multilateral agencies to raise resources at
attractive rates and thus incentivizes and motivates MSMEs
through the extension of concessional loans, equity, guarantees
102and technical and capacity‐building assistance.
-

The SIDBI encourage innovative mitigation and adaptation
programmes for adopting low‐emission and climate‐resilient
practices.

-

The intended climate change programmes to be implemented
with GCF support include, but are not limited to: (a) Assistancefor green, smart and eco‐cities projects through public–private
partnerships; (b) Increasing energy efficiency and cleaner
production investments in green infrastructure, sustainabletransport, waste to energy projects, waste recycling andmanagement,

etc.;

(c)

Providingend‐to‐end

energyefficiency solutions to Indian MSMEs; (d) Providing direct
assistance to solar energy and solar power projects; and (e)Providing training and education to stakeholders in order toincrease awareness of climate change and capacity to manage
resulting risks and realize opportunities.

103

Micronesia Conservation Trust (MCT)
Scope
Access modality:

Direct access, national

Head office location

Micronesia

Maximum size of anMicroindividual project or
activity within aprogramme
Fiduciary functions

Project management, grantMaximum

Minimal to no risk (category C)

environmental andsocial risk category
Course of action-

MCT is an entity based in Micronesia (Federated States of)operating in that country with a mission to promote biodiversity
conservation and related sustainable development.

-

It focuses on providing long‐term sustained funding throughgrant programmes, building the capacity of organizations of theFederated States of Micronesia to design and manage
conservation and climate adaptation programmes, providing
regional forums for collaborations among government, theprivate sector, the community and non‐profit organizations tocollectively

address

management

and

the

challenges

climateofadaptation,

naturalresourceandmanaging

endowment funds and other piloting revolving funds forecosystem services.
-

The applicant is eligible for, and applied under, the fast‐track104

accreditation process as an Adaptation Fund Accredited Entity.
-

The MCT supports biodiversity conservation, climate change
adaptation and related sustainable development for the peopleof the Marshall Islands, Micronesia (Federated States of), theNorthern Mariana Islands, Palau and the Territory of Guam.

-In order to advance the objectives of the GCF, the MCT aims tobuild the resilience of communities of the Federated States ofMicronesia through ecosystem‐based adaptation strategies,
capacity‐building, and sustainable and innovative funding
mechanisms.

-

The MCT anticipates addressing emission reductions from energy
generation and access as well as increasing the resilience of
health,

food

and

water

security,

andlivelihoods

andcommunities. It will also continue managing the Micronesia
Challenge Endowment to serve as a resource providing bridging
funding for new initiatives.

105

Acknowledgement
This book was developed under the Programme on facilitation ofproject development utilizing the Green Climate Fund in JFY2017,
funded by the Ministry of the Environment, Japan. We thank for ateam from the Asia Institute of Technology, Regional Resource Center
for Asia and the Pacific and Mr. Juerg Klarer (Æquilibrium ConsultingGmbH) for useful discussion and inputs on this document.

106

Ministry of the Environment

Overseas Environmental Cooperation

Government of Japan

Center, Japan

Godochosha No. 5, Kasumigaseki

NP Onarimon building 3rd floor,

1‐2‐2, Chiyoda‐ku, Tokyo 100‐

3‐25‐33, Nishi‐Shinbashi, Minato‐ku,

8975, Japan.

Tokyo, 105‐0003, Japan

URL: http://www.env.go.jp/en/

URL: https://www.oecc.or.jp/en/