Green Climate Fund (GCF)

Crucial year for the GCF starts with Board meeting in Bali

Germany as new GCF Board co-chair carries the responsibility for steering the GCF through a make-or break year so that the Fund can finalize its operational modalities and start receiving significant initial contributions – hopefully also from Germany — later this year.

When the Board of the Green Climate Fund (GCF) convenes for its sixth meeting from February 19 – February 21, 2014 in Bali, Indonesia, it will be guided by a new leadership team. As new Co-Chairs, Board members Manfred Konukiewitz (Germany) and Jose Ma. Clemente Sarte Salceda (Philippines) will have to prove their mettle in navigating the 24-member body through the make-or-break year for the Fund. The first of the three 2014 Board meetings in Bali is also the first that the Fund’s Executive Director Hela Cheikhrouhou and her growing Secretariat team will have prepared from the Fund’s new headquarters in Songdo, Korea. The meeting in Bali will give some indications about the rebalancing of the working relationship between the Co-Chairs and the ED and how much of its decision-making and agenda-setting prerogative the Board and its Co-Chairs is willing to delegate to the independent Secretariat now that it is in full operation.

The choke-full agenda of the Bali meeting includes important decisions in eight operational policy areas ranging from additional indicators for adaptation efforts, to initial allocation procedures, initial modalities for the Fund’s two windows and the Private Sector Facility (PSF), to elements of a country-ownership structure for the Fund’s operation, and a detailed work program for early activities to get developing countries ready and prepared for GCF funding.

The Board will also give guidance in five crucial areas of the Fund’s Business Model Framework (BMF) to prepare decisions at its next meeting in late May on the Fund’s initial results management framework, its funding approval process, guiding framework for accrediting implementing and financial partners and GCF fiduciary standards and social and environmental safeguards, the Fund’s investment and risk management frameworks, and the detailed structure of the Fund, including its PSF. Lastly, and hopefully not as an afterthought but with an understanding of its cross-cutting importance, the Board will discuss options on how to ensure a gender-sensitive approach to GCF funding operations, as the governing instrument mandates. With this broad agenda, the Board in Bali will thus address – either with final decisions or concrete recommendations for policy direction – all eight of the operational policies whose completion the Board at its last meeting in Paris decided were essential requirements to start the GCF resource mobilization process later this year. Germany will be hopefully one of the initial contributors with a significant pledge in the range of the € 1 billion demanded by German civil society.

The Board will have to figure out its prudent steps in a delicate dance required in Bali and at its next meeting in May. How can it avoid endangering the initial resource mobilization efforts for the Fund by delaying important decisions unnecessarily without succumbing to the other extreme and just resort to rubber-stamping proposed draft decisions? Obviously, time is of the essence in getting the GCF funded so that it can start disbursing funding to developing countries. This is crucial for the political signal this sends to the ongoing negotiation process for a new global climate treaty which has to be negotiated by 2015 and where countries are hoping to make progress at the climate summit convened by UN Secretary General Ban-Ki Moon in September, as well as at COP 20 in Lima, Peru in December.

However, cutting short necessary discussions now or avoiding scrutiny of the implications of proposed GCF policies, could be a disservice to the Fund’s long-term future. Above all, the Board meeting in Bali must take the time to provide clarifications, reach common understandings and provide clear definitions of key terms and key actors indispensable for the fulfillment of the Fund’s mission such as how to define the paradigm shift the GCF wants to support or the respective capabilities and roles required for GCF implementing entities and intermediaries.

by Liane Schalatek, Heinrich Böll Foundation, North America