Green Climate Fund Glossary of Terms and Acronyms (June 2017) PDF

Green Climate Fund Glossary of Terms and Acronyms Accreditation (version June 2017) The Board, in decision B.14/08 part 3.7 paragraph 3, (e) proposed a...

Green Climate Fund Glossary of Terms and Acronyms Accreditation (version June 2017) The Board, in decision B.14/08 part 3.7 paragraph 3, (e) proposed an internal manual consisting of terms related to the accreditation framework, and (f) requested for a development of a set of operational guidelines that clearly outline the roles of respective actors in the accreditation process, the steps required for accreditation, and the expectations of each to identify, and take advantage of, opportunities for reducing duplication and streamlining at all levels. Acronyms: Stands for: AC Accreditation Committee a.i Ad interim AE Accredited Entity AF Adaptation Fund AMA Accreditation Master Agreement AML anti‐money laundering AP Accreditation Panel APR Annual Performance Report BD Business Day CA Confidentiality agreement CDS Country Dialogue Specialist CFM Climate Financial Mechanism CFT countering the financing of terrorism CIF Climate Investment Funds CN Concept Note COB Close of Business COP Conference of the Parties CPB Country Programme Briefs CPD Country Programming Division CSO Civil society organization DG DEVCO Directorate‐General Development and Cooperation – EuropeAid of the European Commission DCP Division of Country Programming DMA Division of Mitigation and Adaptation DA Direct Access DO Disbursement Officer DPSF Division of Private Sector Facility DSS Division of Supporting Service ED Executive Director 1  EDAEnhanced Direct Access EE Executing Entity EOI Expression of Interest ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plan ESMS Environmental and Social Management System ESRCEnvironmental and Social Risk Categories ESS Environmental and Social Safeguards EWP Entity Work Programme FAAFunded Activity Agreement FAQFriendly asked questions FI Financial Instruments FMCA Financial Management Capacity Assessment FP Focal Point FPSSFinancial professional & strategy services GA Grant Award GE Grant equivalent GEFGlobal Environmental Facility GHGGreenhouse gases GI Governing Instrument ICT information, communication, technology IDE International Access Entity IDP Information disclose policy IE Implementing Entity IEU Independent Evaluation Unit IIU Independent Integrity Unit INDCIntended Nationally Determined Contribution IOC Instruments of Commitment IP Intellectual property IPC Institutional Procurement Committee iPMSInternal Portfolio Management System IRMIndependent Redress Mechanism ITAPIndependent Technical Advisory Panel KPI Key Performance Indicator KYCKnow your customer LAC Latin America and the Caribbean LDCleast developed countries LEDLow‐emission development MAFMonitoring and Accountability Framework MDB Multilateral Development Bank MIF Multilateral Investment Fund MIEMultilateral Implementing Entity ‐ Term Not to Be Used, use International Access (IA) MRV Measurable, Reportable, and Verifiable MSME Micro, Small, and Medium Entities M&A Mitigation and Adaptation 2  M&E Monitoring and Evaluation NAMA Nationally Appropriate Mitigation Actions NAPA National Adaptation Plans of Action NAP National Adaptation Plan NIE National Implementing Entities ‐ Term Not to Be Used, use National Direct Access (NDA) NDA National Designated Authority NDE National Direct Entity NDC National Determinant Contribution NOL No‐Objection Letter OAS Online Accreditation System OC Operational Committee OGC Office of General Council OIC Office in Charge OL/BL On Lending/Blending ORM Office of Risk Management OSB Office of Secretary to the Board PCA Permanent Court of Arbitration PL Project Lawyer PM Project Management PMF Performance Management Framework PMS Portfolio Management System PMU Portfolio Management Unit PPF Project Preparation Facility PPP Public‐Private Partnership PS Performance Standard PSAG Private Sector Advisory Group PSF Private Sector Facility P&I Privilege and Immunity RA Regional Advisors RAP Resettlement Action Plan RD Restructuring Document RDA Regional Direct Access RDE Regional Direct Access RFP Request for Proposal RIE Regional Implementing Entities ‐ Term Not to Be Used, use Regional Direct Access (RDA) RM Risk Management RMC Risk Management Committee RMF Results Management Framework RMU Resource Mobilization Unit RPS Readiness and Preparatory Support RPSP Readiness Preparatory Support Programme RWG Readiness Working Group SIA Strategic Impact Areas SIDS small island developing states 3  SMT Senior Management Team SRS Safeguards Review Summary SSC South‐South Cooperation SSKE South‐South Knowledge Exchange TBD To be determined ToC Theory of Change ToR Terms of Reference UNFCCC UN Framework Convention on Climate Change VCR Video conference room 4  Term Definition Source(s) Accreditation An accreditation process for all implementing entities based on Governing specific accreditation criteria that reflect the Fund’s fiduciary Instrument paragraph 49 principles and standards and environmental and social safeguards. Accredited Institutions or organizations accredited to the Green Climate AMA Entities (AEs) Fund (GCF) to carry out a range of activities including developing and submitting funding proposals and overseeing the management and implementation of projects and programmes. Accreditation A committee comprised of four Board members (two from a Decision Committee (AC) developing country and two from developed member) or B.07/02, Annex IV alternates established by the Board to provide to provide policy guidance to the Board on the GCF’s evolving guiding framework for the accreditation process, enabling the GCF to enhance the efficiency and efficacy of the accreditation process. In fulfilling this role, the AC will: (a) Provide guidance on the development of policies and procedures for the GCF’s guiding framework for the accreditation process; and (b) Provide policy guidance to the Accreditation Panel to facilitate the accreditation process without interfering with the technical assessments of the Panel. The Accreditation Committee will consider the recommendations and advice provided to it by the Accreditation Panel. Accreditation Upon accreditation, the Fund enters an accreditation master Decision Master agreement with the Accredited Entity, which sets out the general B.09/08 (25) Agreement terms and conditions of the services to be rendered by the entity for the Fund under its accreditation. Accreditation The independent technical panel established by the Board to Decision Panel (AP) advise it on matters related to the accreditation of implementing B.07/02, Annex V; entities (IEs) and other matters relating to: (a) Independent technical advice to the Board on the results of AMA. the in‐depth assessment and review of individual applications for accreditation; (b) Expertise in good‐practice fiduciary principles and standards, financial intermediation functions, intermediation regulations and oversight; (c) Expertise in environmental and social safeguards, as well as in evaluating environmental and social management systems in order to ensure that applicant entities have the capacity to implement and oversee the GCF’s interim and subsequent ESS; 5  (d) Expertise in international and recognized good practices in accreditation procedures and systems; (e) Expert policy advice on developing countries’ special circumstances, including sustainability and climate‐related issues. The Panel is comprised of six expert members with balanced representation between developing and developed countries and the appropriate range of expertise, to be nominated by the Accreditation Committee for endorsement by the Board soon thereafter. Adaptation The identification of adaptation priorities and development of GCF Planning strategies and programmes to address these priorities in a Guidebook continuous, dynamic and iterative process. GCF support for adaptation planning processes may have a national, sub‐national and/or sectoral focus, and could contribute to an integrated national vision for climate resilience. Agreement Means the GCF Accreditation Master Agreement between the GCF AMA and the Accredited Entity. Affiliate Any Party or entity that directly or indirectly: (i) is controlled by AMA the Party; (ii) controls the Party; or (iii) is under common control with the Party. For this purpose, “control” of an entity or Party means ownership of a majority of the voting power of the entity or Party, or as otherwise agreed by the Parties and set out in the relevant Funding Activity Agreement (FAA). Arbitration The arbitration rules of the arbitral body or organization, which AMA section Rules rules that in case of controversy or disagreement regarding the 29.03 AMA an arbitration authority shall be the Secretary‐General of the PCA, have one or three arbitrator, take place in Seoul (South Korea), The Hague (the Netherlands), São Paulo (Brazil), Singapore, or Hong Kong, the preceding language will be English, and the decision binding to all parties. Basic fiduciary GCF’s basic fiduciary standards for administrative and financial Decision criteria capacities are: B.07/02, Annex II, (a) Financial inputs and outputs are properly accounted for, section 1.1 reported, and administered transparently in accordance with pertinent regulations and laws, and with due accountability; (b) Information relating to the overall administration and management of the entity is available, consistent, reliable, complete and relevant to the required fiduciary standards; and (c) Operations of the entity show a track record in effectiveness and efficiency. 6  Board The board is the governing body of the GCF and has full AMA; responsibility for funding decisions. It is composed by 24 Governing members (12 from developing and 12 from developed countries) Instrument, established pursuant to the provisions of the Governing paragraphs 5‐ Instrument. 18 Capacity In the context of climate change, the process of developing the UNFCCC Building technical skills and institutional capability in developing countries and economies in transition to enable them to address effectively the causes and results of climate change. Country A GCF Country Programme is a living document that presents a GCF Programming country’s climate change priorities with the GCF, including a Guidebook pipeline of projects that the country would like to develop with the Fund. It provides an action plan that details how projects and programmes are to be developed, the type of entity to partner with, and the readiness and project preparation support needs required. Category A Activities with potential significant adverse environmental Decision and/or social risks and/or impacts that are diverse, irreversible, B.07/02, Annex I, or unprecedented (NOTE: Usually related with Intermediation 1). section IV Category B Activities with potential mild adverse environmental and/or Decision social risks and/or impacts that are few in number, generally B.07/02, Annex I, site‐specific, largely reversible, and readily addressed through section IV mitigation measures (NOTE: Usually related with Intermediation 2). Category C Activities with minimal or no adverse environmental and/or Decision social risks and/or impacts (NOTE: Usually related with B.07/02, Annex I, Intermediation 3). section IV Concept Note A concept note prepared and submitted to the GCF by the AMA Accredited Entity (AE) for a project, programme or investment. Country Country Programme Brief identifies strategic priorities for Decision Programme engagement with the Fund, disseminates information and B.08/11, Annex XVI Briefs engages stakeholders in the country programme; and Identifies strategic investment priorities and takes stock of existing strategies, policies, and needs assessments, including low‐ emission development strategies, Nationally Appropriate Mitigation Actions, National Adaptation Plans, and National Adaptation Programs of Action. Decision A unanimous official decision of the Board. All decisions are AMA numbered with a B followed by the number of the decision (e.g. B.14). 7  Delivery Institutions selected by the National Designated Authority (NDA) GCF Partners or focal point to implement activities approved under the Guidebook Readiness and Preparatory Support Programme. Delivery partners provide services such as: development of readiness request proposals; implementation and supervision; fiduciary management; progress reporting; and project completion and evaluation. Delivery partners may be AEs or other institutions assessed to meet the financial management capacities requirements of the Fund. Direct Access Mode of access to only regional, national, and sub‐national Governing entities who accompany their application for accreditation with Instrument paragraphs evidence of their nomination from the NDA or focal point 45‐47 designated from their country with their application for accreditation (Note: These are entities that are eligible to readiness and preparatory support). Direct Access Entities that apply for accreditation through the direct access GCF Entities modality. They are regional, national and sub‐national Guidebook institutions that are required to provide evidence of a nomination from a NDA or focal point with their application documents. Entities that are accredited under the direct access modality, or wish to be accredited, may be eligible to receive support under the Readiness Programme at the request of its NDA or focal point Disbursement The disbursement schedule as set out in a Funding Activity AMA Schedule Agreement (FAA). Enhanced Created to enhance country ownership of projects and Request for Direct Access programmes by devolving decision making at country level, it Proposals: Enhanced (EDA) allows for greater involvement and input from impacted Direct Access; stakeholders. It was designed to provide an opportunity for accredited entities and countries to move beyond the financing Decision of individual, bankable projects towards a more comprehensive, B.10/04 and Annex I. stakeholder driven programmatic approach, which is based on transparent criteria that are aligned with the GCF’s investment criteria and results management framework. Entity Work It provides an overview of the entity’s areas of work, priority GCF/B.15/ Programmes sectors and experience in implementing projects and Inf.09, section 1.4 & 1.5 (EWP) programmes across the eight strategic impacts of the GCF. It summarizes potential projects that the entity is likely to submit to the GCF and outlines an action plan for engagement with the GCF. For direct access entities, it further addresses short‐ and long‐ term initiatives to build their institutional and project implementation capacity. 8 Environmental A set of criteria that aims to address key environmental and GCF and Social social risks in the implementation of activities to be funded by Guidebook Safeguards GCF. The Fund has adopted interim ESS while it develops a (ESS) comprehensive environmental and social management system (ESMS). Environmental The interim environmental and social safeguards of the GCF Decision and Social highlights eight Performance Standards (PS) and objectives: B.07/02, Annex III; Standards (PS1) Assessment and management of environmental and social (ESS) risks and impacts; AMA. (PS2) labor and working conditions; (PS3) resource efficiency and pollution prevention; (PS4) community health, safety, and security; (PS5) land acquisition and involuntary resettlement; (PS6) biodiversity conservation and sustainable management of living natural resources; (PS7) indigenous peoples; (PS8) cultural heritage. Environmental The categories and levels of intermediation specified in the AMA and Social Risk Framework for Accreditation Process that ranks risks in three Categories categories:  Category A/Intermediation 1;  Category B/Intermediation 2; and  Category C/Intermediation 3. Evaluation Unit an operationally independent evaluation unit as part of the core Governing structure of the GCF. The head of the unit will be selected by, and Instrument, paragraph 60 will report to, the Board. Executing any entity, which includes, as the case may be, a developing AMA Entity country which is a party to the Convention, through which GCF Proceeds are channeled or used for the purposes of a Funded Activity or part thereof, and/or any entity that executes, carries out or implements a Funded Activity, or any part thereof. For the avoidance of doubt, the Accredited Entity may also carry out the functions of an Executing Entity. Executive The secretariat will be headed by an Executive Director with the Governing Director necessary experiences and skills, who will be appointed by and Instrument, paragraphs be accountable to the Board. The Board will approve the job 20 & 21; description and qualifications for the Executive Director. The Executive Director will be selected through a merit‐based, open AMA. and transparent process. The staff selection will be managed by the Executive Director and will be open, transparent and based on merit, taking into account geographical and gender balance. 9 External audit The external financial audit function ensures an independent Decision review of financial statements and internal controls. B.07/02, Annex II, section 1.1.3.C Fast‐Track Fast‐track accreditation is to expedite the accreditation of Decision entities, including subnational, national, regional, and B.08/03, (c‐g) international entities, that have already been accredited by a relevant fund or institution that has an accreditation process, and whose fiduciary and environmental and social standards are found to be comparable to the Fund’s fiduciary standards and environmental and social safeguards (ESS). Entities’ accreditation process will be fast‐tracked if they have been accredited either GEF, Adaptation Fund, and EU DEVCO. Fiduciary Refers to two distinguished fiduciary principles, basic and Decision Principles and specialized requirements of the GCF. Accredited entities and B.07/02, Annex II, Standards readiness partners need to comply with depending on the nature section III; of the activities funded by the GCF. AMA. Fit‐for‐purpose The fit‐for‐purpose approach recognizes the role of a wide range Decision Accreditation of entities, which differ in the scope and nature of their activities, B.08.02, Annex I Approach as well as their capacities. By enabling entities, including subnational, national and regional entities, to increase their scope of activities as their capacity increases over time, should they want to do so, the accreditation process will contribute to empower developing countries. The guidelines for the operationalization of the fit‐for‐purpose accreditation approach set out how the Fund’s fiduciary standards and ESS will be assessed though a fit‐for‐purpose accreditation process, and the criteria that entities need to meet to demonstrate compliance to be accredited to access the Fund’s resources. The objectives of the fit‐for‐purpose accreditation approach, which matches the nature, scale and risks of proposed activities to the application of the fiduciary standards and ESS, are as follows: (a) To help the Fund achieve an impact by enabling it to work through a wide range of entities at the subnational, national, regional and international levels; including through private sector entities; (b) To recognize the different institutional contexts of different types of entities (e.g. public and private), and different compliance parameters in accordance with the intended scale, nature and risks of activities of the applicant entity with the Fund’s resources; and (c) To avoid creating an unnecessarily long and burdensome accreditation process 10 Framework for The GCF’s initial guiding framework and procedures for Decision Accreditation accrediting national, regional and international implementing B.07/02, Annex I Process entities and intermediaries, including the fund’s fiduciary principles for its accreditation process, and Standards and AMA Environmental and Social Safeguard All entities undergo the process until they become AEs at the GCF. The pipeline is divided in 4 steps:  Stage I;  Stage II (Step I);  Stage II (Step II); and  Stage III. Focal Point the individual or authority designated by a developing country AMA party to the Convention to fulfil all functions of an NDA on a temporary basis, until it has designated an NDA. Force Majeure Any act of God, war (whether declared or not), invasion, AMA revolution, insurrection or other acts or events of a similar nature or force, to the extent that they constitute (i) an unforeseeable exceptional situation or event, (ii) beyond the Parties’ control (iii) which prevents either of the Parties from fulfilling any of their obligations under this Agreement or under an FAA for a Funded Activity. Fund Agent Fund Agent means a third party retained by the GCF to perform AMA certain functions or activities on behalf of the GCF. Funded Activity Any legal agreement relating to a Funded Activity entered into by AMA Agreement the Parties setting out, in summary form, the key terms and (FAA) conditions relating to the proposed Funded Activity. Funding Proposals submitted to the Fund by accredited entities to fund AMA Proposal (FP) projects, programme activities or investments. GCF Fiscal Year 1 January through 31 December of each calendar year. AMA GCF Holding US Dollars (USD), Japanese yen (JPY), Euro (EUR) or British AMA Currency Pound (GBP), or such other currency as designated by the GCF from time to time. Gender Policy The GCF’s Gender policy aims to ensure the GCF will efficiently AMA contribute to gender equality and will, in turn, achieve greater and more sustainable climate change results. The gender policy is applied to all of the GCF’s activities, whether implemented by international, regional, national or subnational, public or private entities or institutions that access GCF’s resources. 11  Grant Award GCF’s Grant award and/or funding allocation mechanisms Decision (GA) fiduciary standards are: B.07/02, Annex I, mechanism  Grant award procedures; section III  Transparent allocation of financial resources;  Public access to information on beneficiaries and results; and  Good standing with regard to multilateral funding (e.g. through recognized public expenditure reviews). Independent An appointed and fully functional body that oversees the work of Decision audit the internal audit function as well as the external audit firm as it B.07/02, Annex II, committee relates to the audit of financial statements, control systems and section reporting. The committee (or comparable body) is guided and 1.1.3.A. mandated by written terms of reference that address its membership requirements, duties, authority, accountability and regularity of meetings. Integrity Unit It works with the secretariat and reports to the Board, to Governing investigate allegations of fraud and corruption in coordination Instrument, paragraph 68; with relevant counterpart authorities. AMA. Internal Audit Internal auditing is an independent, objective assurance and Decision consulting activity designed to add value and improve an B.07/02, Annex II, organization's operations. It helps an organization accomplish its section B objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. Intermediation (or high level of intermediation) When an intermediary’s existing Decision 1 or proposed portfolio includes, or is expected to include, B.07/02, Annex I, substantial financial exposure to activities with potential section IV significant adverse environmental and/or social risks and/or impacts that are diverse, irreversible, or unprecedented (NOTE: Usually related with Category A). Intermediation (or medium level of intermediation) When an intermediary’s Decision 2 existing or proposed portfolio includes, or is expected to include, B.07/02, Annex I, substantial financial exposure to activities with potential limited section IV adverse environmental or social risks and/or impacts that are few in number, generally‐site specific, largely reversible, and readily addressed through mitigation measures; or includes a very limited number of activities with potential significant adverse environmental and/or social risks and/or impacts that are diverse, irreversible, or unprecedented (NOTE: Usually related with Category B). 12 Intermediation (or low level of intermediation) When an intermediary’s existing Decision 3 or proposed portfolio includes financial exposure to activities B.07/02, Annex I, that predominantly have minimal or negligible adverse section IV environmental and/or social impacts (NOTE: Usually related with Category C). Internationals Recipient countries able to access the Fund through accredited Governing Access international entities, including United Nations agencies, Instrument, paragraph 48 multilateral development banks, international financial institutions and regional institutions. International Mode of access for international entities, including United Access Modality Nations agencies, multilateral development banks, international financial institutions and regional institutions. Institutional The main purpose of the institutional assessment and Decision Assessment and completeness check step is to ensure that applications are B.07/02, Annex I, Completeness properly submitted with all the necessary information and that section V Check they comply with criteria such as legal status and mandate, institutional track record, alignment with the Fund’s objectives and guiding principles. This step will look at:  Legal status;  Registration, permits, and licenses;  Track record;  Institutional presence and relevant networks;  Readiness. Large‐sized a project, activity within a programme or investment where the Decision Activity total projected costs as agreed by the Parties at the time of B.07/02, Annex I, submission of the Funding Proposal to the Board are above USD Section II; 250 million (or the equivalent amount thereto measured in any other GCF Holding Currency) or such other amount as may be AMA subsequently specified in a Decision for such sized activity. Medium‐sized a project, activity within a programme or investment where the Decision Activity total projected costs as agreed by the Parties at the time of B.07/02, Annex I, submission of the Funding Proposal to the Board are above USD Section II; 50 million and up to and including USD 250 million (or the equivalent amount thereto measured in any other GCF Holding AMA Currency) or such other amounts as may be subsequently specified in a Decision for such sized activity. Micro‐sized a project, activity within a programme or investment where the Decision Activity total projected costs as agreed by the Parties at the time of B.07/02, Annex I, submission of the Funding Proposal to the Board are up to and Section II; including USD 10 million (or the equivalent amount thereto 13  measured in any other GCF Holding Currency) or such other AMA amounts as may be subsequently specified in a Decision for such sized activity. Monitoring and The monitoring and accountability framework of the GCF is Decision Accountability designed to ensure the compliance of accredited entities (AEs) B.11/10, Annex I (1‐2) Framework with their accreditation standards over time and effective implementation of each of the GCF‐funded projects and AMA programmes of the AE. Monitoring and accountability involve a series of actors with specific roles and responsibilities. These include AEs; the Secretariat and the GCF accountability units; NDAs/focal points; the direct beneficiaries of the projects and programmes; project‐ affected people and communities; and other local actors such as local governments, civil society organizations, non‐governmental organizations and the private sector. Monitoring and The monitoring function detects, assesses, and provides Decision evaluation management information about risks relating to projects, B.07/02, Annex II, particularly those deemed to be at risk. section 2.1.3 The evaluation function assesses the extent to which projects, programmes, strategies, policies, sectors or other activities achieve their objectives and contribute to the initial results areas of the GCF. The goal of evaluation is to provide an objective basis for assessing results, to provide accountability in the achievement of objectives, and to learn from experience (and to detect any deviation from project planning in the early stages). National The United Nations Framework Convention on Climate Change GCF Adaptation (UNFCCC) established the national adaptation plan (NAP) Guidebook Plan (NAP) process to facilitate adaptation planning in least developed countries (LDCs) and other developing countries. National The authority designated by a developing country to recommend Governing Designated to the Board funding proposals in the context of national climate Instrument; Authority strategies and plans, including through consultation processes. AMA (NDA) The national designated authorities will be consulted on other funding proposals for consideration prior to submission to the Fund, to ensure consistency with national climate strategies and plans. On‐Lending GCF’s On‐Lending and/or Blending fiduciary standards are: Decision and/or  Appropriate registration and/or licensing by a financial B.07/02, Annex I, Blending oversight body or regulator in the country and/or section III internationally, as applicable;  Track record, institutional experience and existing arrangements and capacities for on‐lending and blending 14  with resources from other international or multilateral sources;  Creditworthiness;  Due diligence policies, processes and procedures;  Financial resource management, including analysis of the lending portfolio of the intermediary;  Public access to information on beneficiaries and results;  Investment management, policies and systems, including in relation to portfolio management;  Capacity to channel funds transparently and effectively, and to transfer the Fund’s funding advantages to final beneficiaries;  Financial risk management, including asset liability management;  Governance and organizational arrangements, including relationships between the treasury function and the operational side (front desk). No‐Objection A letter from an NDA or, if applicable, a Focal Point, signed by its AMA Letter Official Representative, confirming that it has no objection to a Funding Proposal proposed by an Accredited Entity in its country. No‐Objection A letter from an NDA or, if applicable, a Focal Point, signed by its AMA Procedure Official Representative, confirming that it has no objection to a Funding Proposal proposed by an Accredited Entity in its country. Other GCF Investment Income and Reflowed GCF. AMA Funds Pipeline The ‘nickname’ of the rigorous accreditation process that entities undergo until they become AEs at the GCF. The pipeline is divided in 5 stages:  Pre‐accreditation (application is being received);  Stage I;  Stage II (Step I);  Stage II (Step II);  Stage III. See Pre‐ Process where entities send an OAS account request to enter Accreditation Stage I and start the application process. The pre‐accreditation Stage stage is done through the entities team. This step will look at:  Formal request for an OAS account to start the application process from the head of the entity;  Legal status of the entity; 15   The nomination letter from NDA(s)/FP(s) – in case of direct access;  Registration, permits, and licenses;  Track record;  Contacts and people who will manage the account. Prioritization Accreditation Panel and the Secretariat ought to prioritize Decision entities applying for accreditation (in 2016 and 2017) and B.14/08 (d) prioritizes in 2016 and 2017the following, not listed in any particular order of priority: 1. National direct access entities; 2. Entities in the Asia‐Pacific and Eastern European regions; 3. Private sector entities, in particular those in developing countries; 4. Entities responding to requests for proposals issued by the GCF, for example including a pilot phase for enhancing direct access; a pilot programme to support micro‐, small‐, and medium‐sized enterprises; and a pilot programme to mobilize resources at scale in order to address adaptation and mitigation; 5. Entities seeking fulfilment of conditions for accreditation; and 6. Entities requesting upgrades. Private Sector GCF facility that enables it to directly and indirectly finance Governing Facility private sector mitigation and adaptation activities at the national, Instrument paragraph 41 regional and international levels Procurement Procurement processes in the applicant entity cover regular Decision procurement relating to the general operations of the entity as B.07/02, Annex II, well as procurement in the context of the implementation and section 1.1.5 execution of funding proposals approved by the GCF. These should include formal standards, guidelines and systems based on widely recognized processes and an internal control framework to ensure fair and transparent procurement processes. Project GCF’s project management fiduciary standards are: Decision Management  Project preparation and appraisal (from concept to full B.07/02, Annex I, funding proposal); section III  Project oversight and control;  Monitoring and evaluation; and  Project‐at‐risk systems and related project risk management capabilities. Project Facility that aims to fund specific preparatory activities related AMA Preparation to an underlying project which must be submitted to the GCF Facility (PPF) either the form of a concept note or a funding proposal in parallel with the PPF request. PPF requests can be sent directly by 16  accredited entities but require a no‐objection letter from the NDA. Project and Funding of the GCF.Proposal Approval Process, Including the Decision Programme Criteria for Programme and Project B.07/03 and Annex VII Activity Cycle Full table on the cycle available in Annex VII of Decision B.07/03. AMA Readiness and GCF resources for readiness and preparatory activities and Governing Preparatory technical assistance, such as the preparation or strengthening of Instrument paragraphs Support low‐emission development strategies or plans, NAMAs, NAPs, 40‐41 Programme NAPAs and for in‐country institutional strengthening, including the strengthening of capacities for country coordination and to meet fiduciary principles and standards and environmental and social safeguards, in order to enable countries to directly access the Fund. The operation of the facility is consistent with a country‐driven approach. Readiness The RWG reviews and approves the readiness preparatory Administrati‐ Working Group support (RPS) grant requests/applications with full spectrum of ve Instruction on the (RWG) technical background and utmost transparency. Establish‐ The purpose and objective of the Working Group are to: ment of the  Review and endorse all RPS grants made by the GCF for Readiness approval; and and Preparatory  Ensure that RPS grant allocations are processed with Support efficiency and transparency. Working The major roles and responsibilities of the Working Group are to: Group  Adopt its rules and procedures;  Conduct through review and analysis of RPS grant requests/applications to meet GCF objectives and to be consistent with Board decisions on RPS; and  Report the results of the Working Group’s activities to the Senior Management Team periodically. Reflowed Funds any funds reflowed to the Accredited Entity or directly to the GCF AMA via the Trustee (or such other entity or account as the GCF may designate), as the case may be, which were originally distributed by or through the Accredited Entity from GCF Proceeds including, but not limited to, reimbursement or repayment, payments of principal, interest, dividends and fees, as appropriate, but excluding any unused or undisbursed funds with respect to a Funded Activity. Request for A written request submitted by the Accredited Entity to the GCF AMA Disbursement for the transfer of funds to the Accredited Entity for Funded Activities. Secretariat The secretariat is a fully independent body that will service and Governing be accountable to the Board. It will have effective management Instrument, 17  capabilities to execute the day‐to‐day operations of the Fund. It paragraphs will be headed by an Executive Director with the necessary 19‐22; experiences and skills, who will be appointed by and be AMA. accountable to the Board. Small‐sized a project, activity within a programme or investment where the Decision Activity total projected costs as agreed by the Parties at the time of B.07/02, Annex I, submission of the Funding Proposal to the Board are above USD Section II; 10 million and up to and including USD 50 million (or the equivalent amount thereto measured in any other GCF Holding AMA Currency), or such other amounts as may be subsequently specified in a Decision for such sized activity. Specialized The underlying criteria are: Decision fiduciary (a) Ability to identify, formulate and appraise projects or B.07/02, Annex II criteria programmes; (b) Competency to manage or oversee the execution of approved funding proposals, including the ability to manage executing entities or project sponsors and to support project delivery and implementation; (c) Capacity to consistently and transparently report on the progress, delivery and implementation of the approved funding proposal. Stage I Stage I: No‐objection and readiness Decision The overall purpose of this stage is to determine whether B.07/02, Annex I, applicant entities show sufficient preparedness and institutional Section V capabilities to progress to stage II in the accreditation process of the Fund. Two tracks are envisioned: one applicable to direct access (for subnational, national and regional entities) and the other applicable to the international access (for international entities, including United Nations agencies, multilateral development banks, international financial institutions and regional institutions). Stage II (Step I) Stage II – Step 1: Review of the application for accreditation Decision This step ascertain whether applicant entities: B.07/02, Annex I, (a) Meet the Fund’s applicable initial basic fiduciary standards Section V and applicable initial specialized fiduciary standards; and (b) Have the capacity to manage relevant environmental and social risks in line with the Fund’s interim ESS and scaled risk‐based approach. It also evaluates the robustness of the applicant’s ESMS. The Fund’s Accreditation Panel will conduct the accreditation review process1 and recommend to the Board whether the applicant entity should be accredited or not; or alternatively 18  whether the applicant entity may reapply once it has addressed the specific areas of concern. Stage II (Step Stage II – Step 2: Decision on the application for accreditation Decision II) At the end of this stage the Board will consider the B.07/02, Annex I, recommendations of the Accreditation Panel and make a decision Section V on whether the applicant entity can be granted accreditation and move on to stage III for final validation and legal arrangements. Based on the recommendations of the Accreditation Panel, the Board may alternatively decide to assign the entity to stage I for additional focused readiness support and reconsider the application at a later date after the application undergoes a further focused accreditation review by the Accreditation Panel. Stage III Stage III: Final validation and arrangements Decision This final stage will conclude the process through the validation B.07/02, Annex I, and finalization of formal arrangements between the applicant Section V entity and the Fund upon the successful completion of stage II. This will include validation and registration of the accredited entity’s payment instructions and the conclusion of legal arrangements between the accredited entity and the Fund. Standards All of the Fiduciary Principles and Standards, the Environmental AMA and Social Standards, and the Gender Policy. Stakeholder National climate change strategies, plans and priorities will be Decision Engagement the strategic framework provided in a country’s country B.08/10, Annex XIV (3‐ Best Practices programme, and would therefore be a basis for the preparation 7); and implementation of funding proposals. Recipient countries may therefore define their strategic framework on the basis of AMA existing national climate change plans and strategies, including nationally appropriate mitigation actions (NAMAs), national adaptation plans (NAPs) and national adaptation programmes of action (NAPAs), or choose to develop a Fund‐specific strategic framework drawing on existing relevant national plans and strategies. The Fund may provide assistance for the identification of these national strategic frameworks in the context of the Fund’s work programme on readiness and preparatory support. To ensure systematization of country coordination and multi stakeholder engagement, countries could be encouraged to design a consultative process through which national climate change priorities and strategies can be defined. Subsidiary Any agreement entered into by the Accredited Entity on the basis AMA Agreement of or in connection with this Agreement, unless expressly agreed otherwise in an FAA, in its own name and on its own behalf, with an Executing Entity (that is not the Accredited Entity). 19 Transparency To be demonstrated through an effective combination of fully GCF/B.07/11, and functional policies, procedures, systems and approaches, Annex II, Section 1.2 accountability transparency and accountability outline the key standards to demonstrate fiduciary alignment with the above principles. The principles are: (a) Protection and commitment against mismanagement and fraudulent, corrupt and wasteful practices; (b) Disclosure of any form of conflict of interest (actual, potential or perceived); and (c) Code of ethics, policies and culture that drive and promote full transparency and accountability. Trustee The Fund has a trustee with administrative competence to Governing manage the financial assets of the Fund. The trustee will maintain Instrument paragraph 24. appropriate financial records and will prepare financial statements and other reports required by the Board, in accordance with internationally accepted fiduciary standards. 20