20201118_GCF_Operations Manual.pdf

GCF GUIDEBOOK SERIES Operations Manual This Manual is a living document and will be updated to reflect feedback, lessons learned, as well as policy and operational changes. We encourage readers to use the online/electronic version of this document. Please note that at the time of the development and initial publication of this manual, the Standard Operating Procedures (SOPs) for operationalizing the AML/CFT Policy and Standards were still in development. The manual indicates the various points wherein AML/CFT, sanctions and related integrity checks are to occur based on current and planned practice as of the time of publication. However, these points are subject to change. Once the AML/CFT SOPs are approved by the Ethics and Audit Committee (EAC), this manual will be updated accordingly. The insertion of preliminary AML/CFT process points described in this manual should not be construed as an expansion of the AML/CFT Policy and Standards. To the extent that there is a conflict between this manual, the AML/CFT Policy and Standards, or the final approved AML/CFT SOPs, the conflict shall be resolved in that priority. All rights reserved © Green Climate Fund Published in August 2020 Rev. October 2020 Green Climate Fund Songdo Business District 175 Art Center-daero Yeonsu-gu, Incheon 22004 Republic of Korea +82 (0)32-458-6039 [email protected] greenclimate.fund TAB LE O F CO NT E NT S COMMONLY USED ABBREVIATIONS AND ACRONYMS................................................................................................................................................. 6 ACCREDITED ENTITIES (AS AT JUNE 30, 2020).......................................................................................................................................................... 13 GLOSSARY: ESSENTIAL TERMS.................................................................................................................................................................................... 18 INTRODUCTION TO THE OPERATIONS MANUAL.......................................................................................................................................................... 34 GOALS AND OBJECTIVES........................................................................................................................................................................................... 34 GCF BACKGROUND AND GENESIS................................................................................................................................................................................ 38 OVERVIEW.................................................................................................................................................................................................................... 38 GENESIS....................................................................................................................................................................................................................... 38 OBJECTIVES AND GUIDING PRINCIPLES AS PER THE GOVERNING INSTRUMENT FOR THE GCF....................................................................... 39 COP DECISIONS GUIDING GCF DEVELOPMENT AND OPERATIONS....................................................................................................................... 40 STRATEGIC PLAN........................................................................................................................................................................................................ 40 BUSINESS MODEL....................................................................................................................................................................................................... 42 PROGRAMMING FRAMEWORKS................................................................................................................................................................................. 44 GCF SERVICES AND ORGANIZATIONAL STRUCTURE................................................................................................................................................. 52 GCF ORGANIZATION CHART....................................................................................................................................................................................... 53 PROGRAMMING UNITS.................................................................................................................................................................................................... 54 DIVISION OF COUNTRY PROGRAMMING................................................................................................................................................................... 54 DIVISION OF PRIVATE SECTOR FACILITY.................................................................................................................................................................. 56 DIVISION OF MITIGATION AND ADAPTATION............................................................................................................................................................. 58 OFFICE OF PORTFOLIO MANAGEMENT..................................................................................................................................................................... 60 OFFICE OF RISK MANAGEMENT AND COMPLIANCE................................................................................................................................................. 62 Version 2.0 OFFICES AND DIVISIONS................................................................................................................................................................................................ 66 FINANCE TEAM............................................................................................................................................................................................................ 66 31 July 2020 OFFICE OF GOVERNANCE AFFAIRS........................................................................................................................................................................... 68 OFFICE OF THE GENERAL COUNSEL......................................................................................................................................................................... 70 DIVISION OF EXTERNAL AFFAIRS.............................................................................................................................................................................. 72 GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | TABLE OF CONTENTS 1 OFFICE OF THE EXECUTIVE DIRECTOR.................................................................................................................................................................... 74 PROPOSAL APROVAL PROCESS (PAP)........................................................................................................................................................................ 78 OVERVIEW.................................................................................................................................................................................................................... 78 OVERVIEW OF SECRETARIAT’S OPERATIONALIZATION OF THE PROPOSAL APPROVAL PROCESS................................................................... 80 FURTHER DEFINITIONS OF CATEGORIES OF WORK AS PART OF THE OPERATIONALIZATION OF PAP.............................................................. 84 STAGE I. COUNTRY PROGRAMMES, REGIONAL AND/OR ENTITY WORK PROGRAMMES AND STRUCTURED DIALOGUES............................... 94 COUNTRY PROGRAMME............................................................................................................................................................................................. 95 ENTITY WORK PROGRAMME...................................................................................................................................................................................... 99 CIC1 ENDORSEMENT................................................................................................................................................................................................ 100 DIRECT ACCESS WORKSHOPS................................................................................................................................................................................ 103 STRUCTURED DIALOGUES....................................................................................................................................................................................... 104 OPERATIONAL PROCEDURES/STEPS FOR STRUCTURED DIALOGUES............................................................................................................... 105 STAGE II. TARGETED GENERATION OF PROGRAMME OR PROJECT FUNDING PROPOSALS.............................................................................. 110 TARGETED REQUESTS FOR PROPOSAL................................................................................................................................................................. 110 GENERATION OF PROJECT IDEAS THROUGH DEDICATED PROJECT PREPARATION PARTNERSHIPS AND PLATFORMS.............................. 112 HIGH-LEVEL DISCUSSIONS ON PROJECT IDEAS WITH ACCREDITED ENTITIES AT AN EARLY STAGE.............................................................. 113 STAGE III. CONCEPT NOTE........................................................................................................................................................................................... 116 IPT TERMS OF REFERENCE...................................................................................................................................................................................... 116 CONCEPT NOTE REVIEW AND APPROVAL PROCESS............................................................................................................................................ 120 TECHNICAL REVIEW.................................................................................................................................................................................................. 122 CIC2 ENDORSEMENT................................................................................................................................................................................................ 124 PROJECT PREPARATION FACILITY.......................................................................................................................................................................... 129 STAGE IV. DEVELOPMENT OF FUNDING PROPOSAL................................................................................................................................................ 136 FUNDING PROPOSAL SUBMISSION TO THE SECRETARIAT AND COMPLETENESS CHECK................................................................................ 138 COMPLETENESS CHECK.......................................................................................................................................................................................... 139 ADDITIONAL SUBMISSION REQUIREMENTS FOR PROPOSALS FOR COUNTRIES WITH UN SANCTIONS REGIMES......................................... 140 STAGE V. FUNDING PROPOSAL REVIEW PROCESS.................................................................................................................................................. 142 INTERDIVISIONAL PROJECT TEAMS: OPERATIONAL PROCEDURES FOR REVIEW AND ANALYSIS OF FUNDING PROPOSALS...................... 156 INTERDIVISIONAL PROJECT TEAM SIGN-OFF PROCESS TO INDEPENDENT APPRAISAL/SECOND LEVEL DUE DILIGENCE........................... 175 GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | TABLE OF CONTENTS 2 INDEPENDENT APPRAISAL/SECOND-LEVEL DUE DILIGENCE BY ORMC.............................................................................................................. 176 SECRETARIAT ASSESSMENT................................................................................................................................................................................... 180 CIC3 REVIEW OF FUNDING PROPOSAL CLEARED BY APPRAISAL TEAM TO MOVE TO THE INDEPENDENT TAP.............................................. 181 OPERATIONAL PROCEDURES FOR THE INDEPENDENT TAP REVIEW.................................................................................................................. 186 STAGE VI. BOARD DECISION........................................................................................................................................................................................ 190 BOARD SUBMISSION REQUIREMENTS.................................................................................................................................................................... 190 STAGE VII. LEGAL ARRANGEMENT: FUNDED ACTIVITY AGREEMENT.................................................................................................................... 194 PROCEDURES FOR FAA EXECUTION & EFFECTIVENESS...................................................................................................................................... 200 FAA EFFECTIVENESS.......................................................................................................................................................................................... 202 EXTENSION OF FAA EFFECTIVENESS DEADLINE................................................................................................................................................... 203 POST APPROVAL PORTFOLIO STATUS UPDATES.................................................................................................................................................. 204 CONDITIONS ASSESSMENT AND CLEARANCE....................................................................................................................................................... 204 PORTFOLIO IMPLEMENTATION, MONITORING AND MANAGEMENT........................................................................................................................ 208 ROLES OF DIFFERENT STAKEHOLDERS................................................................................................................................................................. 210 STAGE VIII. MONITORING FOR PERFORMANCE, RESULTS AND COMPLIANCE..................................................................................................... 214 SECRETARIAT MONITORING FRAMEWORK AND APPROACH................................................................................................................................ 214 MONITORING TOOLS FOR PERFORMANCE AND COMPLIANCE............................................................................................................................ 215 MONITORING OF INDIVIDUAL FUNDED ACTIVITIES (PROJECTS AND PROGRAMMES)........................................................................................ 216 ASSESSING INFORMATION FROM MONITORING TOOLS....................................................................................................................................... 219 PROCESS OF MONITORING PROJECTS UNDER IMPLEMENTATION..................................................................................................................... 220 FIRST DISBURSEMENT.............................................................................................................................................................................................. 221 PROJECT HANDOVER............................................................................................................................................................................................... 222 PROCESSES FOR MONITORING............................................................................................................................................................................... 225 MONITORING OF FINANCIAL PERFORMANCE......................................................................................................................................................... 231 SECOND AND SUBSEQUENT DISBURSEMENTS..................................................................................................................................................... 234 FINANCIAL OPERATIONS: REFLOW OF FUNDS....................................................................................................................................................... 234 STAGE IX. ADAPTIVE MANAGEMENT.......................................................................................................................................................................... 238 ADAPTIVE MANAGEMENT TRIGGERS...................................................................................................................................................................... 239 ADAPTIVE MANAGEMENT MEASURES..................................................................................................................................................................... 241 GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | TABLE OF CONTENTS 3 STAGE X. EVALUATION, LEARNING AND PROJECT CLOSURE................................................................................................................................ 248 EVALUATION.............................................................................................................................................................................................................. 248 LEARNING.................................................................................................................................................................................................................. 250 KNOWLEDGE GENERATION:..................................................................................................................................................................................... 250 PROJECT CLOSURE.................................................................................................................................................................................................. 252 FINANCIAL AND LEGAL CLOSING............................................................................................................................................................................. 254 SIMPLIFIED APPROVAL PROCESS............................................................................................................................................................................... 256 SAP PILOT SCHEME ELIGIBILITY CRITERIA............................................................................................................................................................. 256 OVERVIEW OF SAP SPECIFIC FEATURES................................................................................................................................................................ 256 STANDARD OPERATING PROCEDURES FOR THE SIMPLIFIED APPROVAL PROCESS........................................................................................ 259 READINESS AND PREPARATORY SUPPORT PROGRAMME..................................................................................................................................... 282 OBJECTIVES OF THE READINESS AND PREPARATORY SUPPORT PROGRAMME............................................................................................... 282 IMPLEMENTATION OF READINESS AND PREPARATORY SUPPORT PROGRAMME............................................................................................. 283 PROCESS FOR REVIEW OF REPORTS..................................................................................................................................................................... 298 PROCESS FOR SECRETARIAT REVIEWS OF READINESS PROGRAMME.............................................................................................................. 303 ANNEX I - FOUNDATIONAL DOCUMENTS................................................................................................................................................................. 307 ANNEX II - OPERATIONAL DOCUMENTS.................................................................................................................................................................. 307 ANNEX III – ASSESSMENT FRAMEWORKS............................................................................................................................................................... 307 ANNEX IV – KEY BOARD DECISIONS CITED IN OPERATIONS MANUAL................................................................................................................. 307 ANNEX V – OPERATIONAL GUIDELINES AND ADMINISTRATIVE INSTRUCTIONS................................................................................................. 308 ANNEX VI – TEMPLATES............................................................................................................................................................................................ 309 ANNEX VII – HANDBOOK OF DECISIONS.................................................................................................................................................................. 310 ANNEX VIII – DELEGATION OF AUTHORITY (DOA)................................................................................................................................................... 311 ANNEX IX – IPT REVIEWER TERMS OF REFERENCE AND CHECKLISTS............................................................................................................... 311 ANNEX X – SOP ADDENDUM: PROJECT CYCLE IN COUNTRIES SUBJECT TO OR AFFECTED BY UNSC SANCTION REGIMES......................... 390 ANNEX XI: READINESS SOP ADDENDUM: PROJECT CYCLE IN COUNTRIES SUBJECT TO OR AFFECTED BY UNSC REGIMES........................ 395 ANNEX XII: TERMS OF REFERENCE: INTERIM/FINAL EVALUATION (CONSULTANT)............................................................................................ 402 GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | TABLE OF CONTENTS 4 GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | TABLE OF CONTENTS 5 CO M MO NL Y U S ED A BB RE V IA TIO N S AN D AC RO N Y M S ABBREVIATION/ACRONYM TERM AC adaptation coordinator AE accredited entity AF adaptation fund a.i ad interim AMA accreditation master agreement AML anti-money-laundering AP Accreditation Panel APR annual performance report BD Business Days CFT countering the financing of terrorism CIC Climate Investment Committee CIF Climate Investment Funds CN concept note C-NET Climate Impact Assessment Network CO2eq carbon dioxide equivalent COP Conference of the Parties COSO Committee of Sponsoring Organizations of the Treadway Commission CP country programme GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | COMMONLY USED ABBREVIATIONS AND ACRONYMS 6 CPP country programme pipeline CSA Climate Smart Agriculture CSD country structured dialogues CTO compensatory time-off DAE direct access entity DCP Division of Country Programming DEA Division of External Affairs Dep ED Deputy Executive Director DMA Division of Mitigation and Adaptation DO Disbursement Officer DP Delivery partner [for readiness and preparatory support] DPSF Division of Private Sector Facility DSS Division of Support Services ED Executive Director EDA Enhancing Direct Access EE executing entity EOI expression of interest ESIA environmental and social impacts assessment ESMP environmental and social management plan ESMS environmental and social management system ESS environmental and social safeguards GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | COMMONLY USED ABBREVIATIONS AND ACRONYMS 7 EWP entity work programme FAA funded activity agreement FMCA financial management capacity assessment FP funding proposal or focal point FT finance team GA grant agreement GC General Counsel GCF Green Climate Fund GE grant equivalent GEF Global Environment Facility GHG greenhouse gas ICS investment criteria scorecard ICT Information, Communication, Technology IDP Information Disclosure Policy IE Implementing Entity IEU Independent Evaluation Unit IIU Independent Integrity Unit INDCs Intended Nationally Determined Contributions IOC Instruments of Commitment IPCC Intergovernmental Panel on Climate Change iPMS Integrated Portfolio Management System GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | COMMONLY USED ABBREVIATIONS AND ACRONYMS 8 IPT interdivisional project team IRM Independent Redress Mechanism iTAP Independent Technical Advisory Panel LDC least developed country MAF monitoring and accountability framework MC mitigation coordinator M&E monitoring and evaluation MSME micro, small and medium-sized enterprises NAMAs Nationally Appropriate Mitigation Actions NAP national adaptation plan NDA national designated authority NDC nationally determined contribution NOE notice of effectiveness NOL no-objection letter NOP notice of payment OA operations analyst or operations assistant OAS Online Accreditation System OC Operations committee OED Office of the Executive Director OFAC Office of Foreign Assets Control OGA Office of Governance Affairs GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | COMMONLY USED ABBREVIATIONS AND ACRONYMS 9 OGC Office of the General Counsel OIC Officer in Charge OPM Office of Portfolio Management ORMC Office of Risk Management and Compliance PA Project analyst PAP proposal approval process PCA Permanent Court of Arbitration PEP politically exposed person P&I Privileges and immunities PL project lawyer PM portfolio management PMFs performance measurement frameworks PN promissory note PO project officer PP prohibited practices PPF Project Preparation Facility PPMS portfolio performance management system PPP policy on prohibited practices or public-private partnership PSAG Private Sector Advisor Group RA regional advisor RBA risk-based approach GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | COMMONLY USED ABBREVIATIONS AND ACRONYMS 10 RBP risk based payment RCA risk and compliance assessment RCI risk and compliance initial questions to Accredited Entity RCP Risk and Compliance Profile RCS Risk and Compliance Summary RCSA Risk Control Self-Assessment RD restructuring document RFP request for proposal RFQ request for quotation RMC risk management committee RMF results management framework RWG Readiness Working Group SAP simplified approval process SAR suspicious activity report SEEP Super Energy-efficient equipment program SIDS small island developing state SIS safeguard information system SMT Senior Management Team Ts & Cs Terms and Conditions TOR terms of reference TR Technical reviewer GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | COMMONLY USED ABBREVIATIONS AND ACRONYMS 11 TS task support TT task team UBO Ultimate Beneficial Owner UNFCCC United Nations Framework Convention on Climate Change VCR video conference room GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | COMMONLY USED ABBREVIATIONS AND ACRONYMS 12 AC CR E DI T ED E NT ITI E S ( A S AT J UN E 30 , 2 02 0) ABBREVIATION/ACRONYM FORMAL NAME Acumen Acumen Fund, Inc. ADA Austria Austrian Development Agency ADA Morocco Agency for Agricultural Development of Morocco ADB Asian Development Bank AEPC Alternative Energy Promotion Centre AFC Africa Finance Corporation AFD Agence Française de Développement AfDB African Development Bank AWB Attijariwafa Bank BNDES Banco Nacional de Desenvolvimento Econômico e Social BNP Paribas BNP Paribas BOAD Banque Ouest Africaine de Développement CABEI Central American Bank for Economic Integration CACIB Crédit Agricole Corporate and Investment Bank CAF Corporación Andina de Fomento CCCCC Caribbean Community Climate Change Centre CDB Caribbean Development Bank CDG Capital CDG Capital S.A. CDP Cassa depositi e Prestiti S.p.A. CEF (Caixa) Caixa Economica Federal CGIAR Consortium of International Agricultural Research Centers China CDM Fund China Clean Development Mechanism Fund GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | COMMONLY USED ABBREVIATIONS AND ACRONYMS 13 CI Conservation International COFIDES Compañia Española de Financiación del Desarrollo CRDB CRDB Bank Plc CSE Centre de Suivi Ecologique DBSA Development Bank of Southern Africa Deutsche Bank AG Deutsche Bank Aktiengesellschaft DOE Antigua and Barbuda Department of Environment of Antigua and Barbuda EBRD European Bank for Reconstruction and Development EGH Ecobank Ghana EIB European Investment Bank EIF Environmental Investment Fund Enabel Enabel (formerly Coopération Technique Belge - Belgian Technical Cooperation) EPIU Environmental Project Implementation Unit, State Agency of the Ministry of Nature Protection, Armenia FAO Food and Agriculture Organization of the United Nations FDB Fiji Development Bank FECO Foreign Economic Cooperation Office Findeter Findeter FMCN Fondo Mexicano para la Conservación de la Naturaleza A.C. FMO Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. FNEC Fonds National pour L’Environnement Fondo Acción Fondo para la Acción Ambiental y la Niñez Funbio Fundo Brasileiro para a Biodiversidade Fundación Avina Fundación Avina FYNSA Finanzas Y Negocios Servicios Financieros Limitada GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | COMMONLY USED ABBREVIATIONS AND ACRONYMS 14 HSBC HSBC Holdings plc and its subsidiaries IBRD/IDA (World Bank) International Bank for Reconstruction and Development/International Development Association IDB Inter-American Development Bank IDB Invest Inter-American Investment Corporation IDCOL Infrastructure Development Company Limited IDFC Infrastructure Development Finance Company Limited IEISL IL&FS Environmental Infrastructure and Services Limited IFAD International Fund for Agricultural Development IFC International Finance Corporation IUCN International Union for Conservation of Nature JICA Japan International Cooperation Agency JS Bank JS Bank Limited KDB Korea Development Bank KfW Kreditanstalt für Wiederaufbau Landbank Landbank of the Philippines LuxDev Luxembourg Agency for Development Cooperation MAAML Macquarie Alternative Assets Management Limited MCT Micronesia Conservation Trust MFEM Cook Islands Ministry of Finance and Economic Management of Cook Islands MOE Rwanda (formerly MINIRENA) Ministry of Environment (formerly Ministry of Natural Resources) of Rwanda MoFEC Ministry of Finance and Economic Cooperation of the Federal Democratic Republic of Ethiopia MUFG Bank (formerly BTMU) MUFG Bank, Ltd (formerly Bank of Tokyo-Mitsubishi UFJ, Ltd.) MWE Uganda Ministry of Water and Environment of Uganda NABARD National Bank for Agriculture and Rural Development NCDD Secretariat National Committee for Sub-National Democratic Development GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | COMMONLY USED ABBREVIATIONS AND ACRONYMS 15 NEFCO Nordic Environment Finance Corporation NEMA National Environment Management Authority of Kenya NRSP National Rural Support Programme OSS Sahara and Sahel Observatory PACT Protected Areas Conservation Trust PCA Pegasus Capital Advisors, L.P. PKSF Palli Karma-Sahayak Foundation PROFONANPE Peruvian Trust Fund for National Parks and Protected Areas PROPARCO Société de Promotion et de Participation pour la Coopération Economique, SA PT SMI PT Sarana Multi Infrastruktur SANBI South African National Biodiversity Institute SCA Save the Children Australia SIDBI Small Industries Development Bank of India SPC The Pacific Community SPREP Secretariat of the Pacific Regional Environment Programme TDBM Trade and Development Bank of Mongolia UCAR Unidad Para el Cambio Rural (Unit for Rural Change) of Argentina UNDP United Nations Development Programme UNEP United Nations Environment Programme WFP World Food Programme WMO World Meteorological Organization WWF World Wildlife Fund, Inc. XacBank XacBank LLC YesBank Yes Bank Limited GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | COMMONLY USED ABBREVIATIONS AND ACRONYMS 16 GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | COMMONLY USED ABBREVIATIONS AND ACRONYMS 17 G LO S S AR Y: E S S ENT I AL T E R M S AC CR E DIT ATI O N Pursuant to paragraph 45 of the Governing Instrument for the GCF, access to GCF resources is through entities accredited by the Board. Accreditation means a process by which entities are assessed and approved by the Board to access GCF funding. Accreditation defines the way in which an entity can access GCF resources (e.g. the accreditation scope), identifying the maximum limits of GCF financial support for which the entity can apply in a single funding proposal, the financing modality (e.g. for managing projects, awarding grants, on-lending, blending, undertaking equity investments and providing guarantees) and the environmental and social risk levels. AC CR E DIT ATI O N M A ST E R AG R E E M EN T The accreditation master agreement (AMA) is a legally binding framework between the GCF and the accredited entity (AE) that marks the final stage of the accreditation of the AE. The AMA establishes the general terms and conditions that govern the relationship between GCF and the AE during the entire term of the accreditation of the AE. The AMA also sets out the main roles and responsibilities of an AE throughout the GCF project cycle and reflects the GCF’s policies and requirements that apply to implementation of funded activities. GCF has a template AMA, as adopted by the Board in decision B.12/31, as updated to reflect all new GCF policies, or revisions thereto, applicable to funded activities. AMAs with individual AEs are negotiated based on the template AMA and may accommodate fit-for-purpose and entity specific deviations, as approved by GCF. The template AMA can be found on the GCF website. AC CR E DIT ATI O N PA NE L The Accreditation Panel (AP) was established by the Board in accordance with decision B.07/02, paragraph (g), as an independent technical panel to advise the Board on matters related to the accreditation of implementing entities and intermediaries to GCF. The AP comprises six expert members nominated by the Accreditation Committee for endorsement by the Board. The AP is responsible for conducting the Stage II (Step 1) review of applications in the accreditation process in accordance with its terms of reference (TOR), contained in annex V to decision B.07/02, resulting in an assessment of how the entity meets the standards for accreditation and a recommendation on accreditation scope for the Board’s consideration. GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GLOSSARY: ESSENTIAL TERMS 18 AC CR E DIT ATI O N STA ND AR D S During the accreditation process, an applicant entity's systems, policies and procedures, track record and demonstrated capacity to undertake projects or programmes of different financing size categories, financing modalities and environmental and social risk categories are assessed against the following GCF standards: Fiduciary standards: o Initial fiduciary principles and standards (refer to annex II to decision B.07/02); Policy on the Protection of Whistleblowers and Witnesses (refer to annex I to decision B.BM-2018/21); o Anti-Money Laundering and Countering the Financing of Terrorism Policy (AML/CFT Policy) (refer to annex XIV to decision B.18/10); o Standards for the Implementation of the Anti-Money Laundering and Countering the Financing of Terrorism Policy (refer to annex IX to decision B.23/15);1 o Policy on Prohibited Practices (refer to annex XIV to decision B.22/19); and Environmental and social safeguards (ESS) standards (refer to annex III to decision B.07/02); and o Environmental and Social Policy (see annex X to decision B.19/10); o Interim environmental and social safeguards standards (see annex III to decision B.07/02); and o Information Disclosure Policy requirements for environmental and social information disclosure (decision B.12/24); and Updated Gender Policy of the GCF (refer to annex XXIII to decision B.24/12). AC CR E DIT E D E NTI T Y AEs are institutions or organizations that are accredited by GCF through the accreditation process. Only AEs can submit a funding proposal to GCF. AEs develop and submit funding proposals for appraisal and approval by GCF and oversee and monitor the management and implementation of projects and programmes approved and financed by GCF. There are two types of accreditation modalities: direct access and international access. For further information, please refer to the definition of direct access entities and international accredited entities. A more detailed view of what AEs are expected to do on an operational level can be found here. AD AP TAT IO N Adjustment in natural or human systems in response to actual or expected climatic stimuli or their effects, which moderates harm or exploits beneficial opportunities. 1 Decision B.23/15, paragraph (b), requests the Accreditation Committee, in consultation with the Head of the Independent Integrity Unit, to consider the best way to integrate the Anti-Money Laundering and Countering the Financing of Terrorism Policy in the interim fiduciary standards and present to the Board a proposal for its consideration in 2019 as a matter of urgency. A proposal on integration has yet to be presented to the Board for its consideration. After adoption by the Board of the revised initial fiduciary standards, the accreditation process may be amended to reflect them. GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GLOSSARY: ESSENTIAL TERMS 19 AD AP TAT IO N PL AN NI NG The identification of adaptation priorities and development of strategies and programmes to address these priorities in a continuous, dynamic and iterative process. GCF support for adaptation planning processes may have a national, subnational and/or sectoral focus, and could contribute to an integrated national vision for climate resilience. ANT HRO P O G EN IC CL IM AT E CH AN G E A change of climate which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is in addition to natural climate variability observed over comparable time periods. BO A RD The Board of GCF was established pursuant to the provisions of the Governing Instrument and is the highest decision-making body of GCF. CLI M AT E IM P AC T A S S E S SM E NT N ET WO R K The Climate Impact Assessment Network (C-NET) is an interdivisional network of Secretariat staff, led by OED, formed to ensure the GCF Secretariat is equipped to deploy world-leading specialist expertise in climate impact assessment, including GHG/additionality assessment and application of climate science/modelling, as a distinctive strength embedded within its investment processes. They advance more systematic integration of climate impact assessment across GCF operations, including the project review cycle, strategic planning and policy development. C-NET members strengthen the quality of GCF investments by working as an embedded part of project teams and through existing operational processes to assure the climate impact of GCF investments and collaborate to mainstream climate science and impact assessment knowledge and build a wider staff skill base across the Secretariat, both through supporting formal training, provision of advice and technical support and continuous knowledge sharing and learning. CLI M AT E IN V E ST M EN T CO M MI TT E E The Climate Investment Committee (CIC) , established by the AI on the SMT, the Establishment of the CIC, the OC and the RPSP and PPF Working Group, oversees the development, management and financial planning of the pipeline of concept notes and funding proposals submitted by AEs and national designated authorities (NDAs), as applicable, in alignment with GCF portfolio-level goals and Board decisions on financial planning, including matters related to readiness and preparatory support and the Project Preparation Facility (PPF). It comprises nine Senior Management Team members. GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GLOSSARY: ESSENTIAL TERMS 20 CLI M AT E F UN D S Refers to the main multilateral climate funds including the Green Climate Fund (GCF); Adaptation Fund; Climate Investment Funds (CIF); and Global Environment Facility (GEF). This reference is commonly used in the context of the GCF Operational Framework on complementarity and coherence adopted by the Board at B.17 that sets the parameters for enhancing coordination with other climate finance delivery channels. CO - FI N AN CI NG The financial resources, whether public finance or private finance, required in addition to GCF proceeds to implement the funded activity for which a funding proposal has been submitted. CO N C E PT NO T E A document submitted using the template provided by GCF, which provides basic information about a project or programme that an entity can use to seek feedback from the Secretariat on whether the concept is broadly aligned with GCF objectives and policies. CO U NTR Y PRO G R AM M E A country programme (CP) is a document developed by the NDA/focal point that presents a country’s climate change priorities to GCF, including a pipeline of projects that the country would like to develop with GCF for each replenishment period. It provides an action plan for projects and programmes to be developed, the accredited or prospective entity with which to partner, and the readiness and project preparation support that requires funding from GCF. The country programme represents step 1.1 of the proposal approval process. DE LI V E RY PA RT N ER Institutions selected by an NDA or focal point to implement activities approved under the Readiness Programme. DPs provide services such as: development of Readiness request proposals; implementation and supervision; fiduciary management; progress reporting; and project completion and evaluation. DPs may be AEs or other institutions assessed to meet the financial management capacities requirements of the Fund. DPs are only relevant to Readiness activities. GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GLOSSARY: ESSENTIAL TERMS 21 DI RE CT A CC E S S E NT IT Y Pursuant to paragraph 47 of the Governing Instrument for the GCF, DAEs are entities accredited under the direct access modality, including subnational, national or regional entities, that have obtained a nomination from NDAs/focal points. They may include ministries or government agencies, development banks, climate funds, commercial banks or other financial institutions, private foundations and non-governmental organizations. EFF IC I EN C Y A measurable concept, quantitatively determined by the ratio of useful output to total input, which can be expressed by the mathematical formula r = P/C, where P is the amount of useful output (product) produced per the amount C (cost) of resources consumed. Efficiency focuses on achieving the maximum output with minimum resources and may also be expressed as a percentage of the result that can ideally be achieved. EN TIT Y WO R K P RO G RA M ME The entity work programme (EWP) is a document developed by AEs that provides an overview of the envisaged partnership of the AE with GCF, including strategies and plans to address climate change, the comparative advantages, areas of work and priority sectors of the AE, alignment with Country Programmes and country programming processes as well as GCF sectoral guidance on the eight GCF results areas, and its experience in implementing projects and programmes across the eight GCF results areas. It also summarizes the indicative projects and programmes of the AE and outlines an action plan for engagement with GCF for each replenishment period. The entity work programme represents step 1.2 of the proposal approval process. EN V IR O N M ENT AL A N D SO CI AL PO LI C Y The Environmental and Social Policy (ESP), adopted by the Board in decision B.19/10, sets out applicable ESS requirements applicable in the preparation and implementation of all GCF funded activities. ESP articulates the commitments of GCF to sustainable development, elaborates how GCF integrates environmental and social issues into its processes and activities, and sets the roles and responsibilities of AEs, executing entities (EEs) and other parties involved in project implementation in respect of ESS. EN V IR O N M ENT AL A N D SO CI AL S AF EG UA RD S A set of criteria that aims to address key environmental and social risks in the implementation of activities to be funded by GCF. GCF has adopted interim environmental and social safeguards (ESS) while it develops a comprehensive environmental and social management system. GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GLOSSARY: ESSENTIAL TERMS 22 EN V IR O N M ENT AL A N D SO CI AL S AF EG UA RD S S TA ND AR D S Environmental and Social Safeguards (ESS) standards are a set of standards that specifies the desired outcomes and the specific requirements to achieve those outcomes through means that are appropriate to the nature and scale of the activity and commensurate with the level of environmental and social risks and/or impacts. Each AE is required to have a set of ESS standards that are equivalent to the GCF ESS standards within the scope of its accreditation and to apply those standards in GCF funded projects. The standards are detailed in the ESS section of this OM. E X EC UT ING ENT IT Y An EE refers to any entity which channels or uses GCF proceeds for the purposes of a GCF funded activity, and/or which executes, carries out or implements a GCF funded activity or any part thereof. The reference to executing or implementing a GCF funded activity relates to the exercise of discretion and decision making with respect to such funded activity, or part thereof. An EE can be a developing country that is a Party to the United Nations Framework Convention on Climate Change and/or any entity that possesses a legal personality. An AE may also carry out the functions of an EE. The GCF requires the AEs to evaluate the capacity of and engage the relevant EE based on their ability to channel or use GCF proceeds and/or implement the GCF funded activity in accordance with GCF policies and requirements. A flowchart highlighting the key questions to be considered when determining whether an entity is to be an EE is set out here. E X P ECT E D CO - F IN AN CI NG As per the GCF’s Policy on Co-financing, approved by the Board in decision B.24/14, the amount of co-financing, based on ex ante estimations, that is identified in the funding proposal submitted to the Board for adoption and included in the FAA that is expected to be necessary for the implementation of the funded activity. FID UC IA R Y ST AN DA RD S Fiduciary Standards are an element of the AE’s scope of accreditation that is determined based on the assessment by the GCF of the fiduciary, transparency, accountability, financial management, principles and policies, and track record of the AE, against the GCF fiduciary principles and standards. All AEs must satisfy the basic fiduciary requirements of GCF. Additionally, each AE is accredited to a specialized fiduciary standard based on the policies and procedures and track record of the AE. There are three specialized fiduciary standards that AEs may be accredited for, including a combination thereof: Specialized fiduciary standard for project management: where an AE manages, supervises and oversees the overall project or programme, either directly or indirectly through executing entities. The AE has identified EEs and beneficiaries at the time of the funding proposal. Specialized fiduciary criteria for grant award and/or funding allocation mechanisms: where AEs provide grants to beneficiaries through an award system or competitive-based mechanism. The mechanisms (including criteria for selection of beneficiaries, modalities for providing financing, decision-making processes for allocating grants, etc.) are identified in the funding proposal, however, the identification of EEs to undertake the actual selection of beneficiaries, and identification of beneficiaries, would take place after the funding proposal is approved by GCF. GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GLOSSARY: ESSENTIAL TERMS 23 Specialized fiduciary criteria for on-lending and/or blending (for loans, blending, equity and/or guarantees): where AEs provide loans, equity and/or guarantees onto beneficiaries using GCF resources, or blending resources (particularly of different instruments). This also includes AEs that provide resources to an EE, such as a fund manager, that further on-lends, undertakes equity investments and/or provides guarantees to beneficiaries. FIN AN CI AL I NS TR U M EN T S Pursuant to paragraph 54 of the Governing Instrument for the GCF, GCF may provide financing in the form of grants, concessional lending and other modalities. The Board, by decision B.08/12, concluded that GCF would work through AEs, who may deploy the resources in approved projects and programmes by using a diverse range of financial instruments, focusing on but not limited to grants, concessional loans, equity and guarantees. FIN AN CI AL M AN AG E M ENT C A PA CI T Y A SS E S S ME NT An assessment of an entity’s capacity to effectively manage the finances of a funded project. As part of the assessment, a review of the capacity of implementing entities and their financial management systems, procedures and policies is conducted. An analysis is carried out of legal framework and status; organizational structure; financial management; procurement; and project management modalities. A financial management capacity assessment is undertaken for readiness DPs and also as a first-level assessment in the accreditation process. For Funding Proposals, where the AE is not the EE, the AE needs to conduct an FMCA of the executing entity in order to evaluate its capacity to effectively manage the finances of GCF projects. FIR ST - L E V EL DU E D I LIG E N C E As per decision B.12/31, annex XXVI, clause 4.05(b), it is the duty and obligation of the AE to carry out all due diligence as necessary or desirable in accordance with its own policies and procedures and the requirements of the AMA when investing funds (its own funds or funds for which it has management or investment responsibility) in relation to a funding proposal submitted to GCF. The AE’s due diligence includes, but is not limited to: (i) technical, engineering, economic, financial, risk, legal and commercial viability; (ii) compliance, in accordance with AMA clause 13.01, with the standards (to the extent and scope of its accreditation); (iii) developmental, climate change mitigation and/or adaptation impacts; (iv) administrative and regulatory requirements; and/or (depending on the circumstances) (v) any business or company searches to ascertain the solvency or financial health of the EE as well as other recipients or beneficiaries of the funding and parties to the transaction set out in relevant funding proposal. GCF, in conducting appraisals and making investment decisions, relies on the AE’s due diligence and risk assessments performed by the AE and presented in the relevant funding proposal, without prejudice to the right of GCF to request additional information, clarification and documents from the AE. GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GLOSSARY: ESSENTIAL TERMS 24 FUN D ED A CTI V IT Y Funded activity means, unless otherwise specified in the FAA applicable to that funded activity, a project and/or programme to be financed by GCF based on an approved funding proposal, and which the AE is responsible for implementing in accordance with the AMA and funded activity agreement. In this Operations Manual, the terms “funded activity”, “project” and “programme” will be used interchangeably. FUN D ED A CTI V IT Y A G R E EM E NT The funded activity agreement (FAA) : a legally binding agreement entered into between GCF and an AE for an individual funded activity. Each approved project or programme must have an FAA. An FAA contains the specific terms and conditions for the financing and implementation of the funded activity, including an implementation plan, reporting requirements, disbursement plan and budget for the project. The FAA also incorporates by reference the provisions from the AMA. The FAA must be consistent in all material respects with the approved funding proposal and term sheet. FUN DI NG P RO PO S AL The set of documents prepared by the AEs using GCF standard templates (i.e. funding proposal and its annexes) that is submitted to GCF to formally request funding for a project. In some cases, however, GCF may issue a request for proposal (RFP) allowing submission by entities that are not yet accredited to GCF. In these cases, the accreditation application of the entity may be considered alongside the funding proposal. FUN DI NG W IN DO W As per the Governing Instrument, para. 37, the Fund has two thematic funding windows, one each for adaptation and mitigation. An integrated approach to funding mitigation and adaptation will be used to allow for cross-cutting projects and programmes. G CF P RO CE E D S The funds disbursed by GCF via the Trustee to implement a funded activity, in accordance with the relevant FAA, which do not include any fees payable to the AEs. GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GLOSSARY: ESSENTIAL TERMS 25 G E ND E R PO L IC Y The GCF’s updated Gender Policy adopted by the Board in decision B.24/12, aims to ensure that GCF will contribute to gender equality through a gender-sensitive approach and will, in turn, achieve greater and more sustainable climate change results. Each AE is required to have a gender policy that is equivalent to the GCF Gender Policy and to apply its own gender policy in GCF funded activities. G O V E RN ING I N ST RU M E NT The Governing Instrument (GI) for the GCF was approved by the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP) at its seventeenth session on 11 December 2011 and annexed to its decision 3/CP.17. The Governing Instrument outlines the objectives and guiding principles for GCF, governance and institutional arrangements and operational guidelines. The GI also refers to the integrated approach for cross-cutting projects/programmes and for results- based payments. G RA NT AG R EE M E NT A legally binding agreement between the recipient and GCF outlining the terms and conditions for provision of the Readiness grant and PPFs. IN DIG E NO U S P EO PL E S PO LI C Y A GCF policy adopted by the Board in decision B.19/11, which aims to ensure that GCF activities are developed and implemented in a way that fosters full respect, promotion and safeguarding of indigenous peoples so that they benefit from GCF activities and projects in a culturally appropriate manner; and do not suffer harm or adverse effects from the design and implementation of GCF financed activities. All GCF projects must comply with the applicable requirements of the Indigenous Peoples Policy. INFO R MAT IO N DI S CL O S UR E P O LI C Y The Information Disclosure Policy (IDP) as per decision B.12/32, that sets out GCF policy regarding the information that it makes available to the public either as a routine matter or upon request, and outlines requirements for the information that is made available to the public. The IDP applies to all information produced by or in possession of GCF. It sets out the requirements to be observed by AEs for the public disclosure of the relevant environmental and social reports in advance of the decision by the board of the AE or the GCF Board, whichever occurs first. GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GLOSSARY: ESSENTIAL TERMS 26 INT EG RA T ED P O RT F O LIO M AN AG E M ENT S Y ST E M The Integrated Portfolio Management System (iPMS) is an online tracking system of funding proposals and concept notes submitted to the Secretariat, which includes the submission date, review status/stages and other relevant project information. INT E RD I VI S IO N AL P R O J EC T T E AM A team consisting of members of divisions and offices (DCP, DMA/PSF, OPM, etc…) from across the Secretariat assigned to a project to review specific technical elements of the project or programme proposal such as the GHG emissions calculations. INT E RN ATI O N AL AC CE S S ENT IT I E S IAEs are AEs that are accredited under the international access modality track and operate across multiple regions and countries. IAEs include United Nations agencies, multilateral development banks, international financial institutions and regional institutions, which can be public, private or non-governmental organizations. GCF considers these organizations to have the wide reach and expertise to handle a variety of climate change issues, including ones that cross borders and thematic areas. IAEs do not need to be nominated for accreditation by developing country NDAs/focal points. IN V E ST M ENT C RI T ER IA Six criteria adopted by the Board in decision B.07/06 that all GCF funding proposals have to meet in order to receive GCF funding. The criteria include coverage areas, activity-specific sub-criteria and indicative assessment factors further detailed by the Board. IN V E ST M ENT C RI T ER IA S CO R EC AR D The investment criteria scorecard (ICS) is a tool developed and used by the Secretariat for rating GCF investment criteria, used at the Secretariat review stage, which provides for rating of each investment criterion. LO G I CAL F RA M E WO RK One of the sections of the FP and a tool that brings together all the elements of the project or programme that are related to the effective planning, implementation, measurement, monitoring and evaluation of the programme or project. The logical framework is critical to defining and understanding the cause and effect (causal logic) or relationship between each level of the logical framework (inputs, activities, project results/outputs, outcomes, etc…) and key project and/or programme milestones. The GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GLOSSARY: ESSENTIAL TERMS 27 logical framework can also be considered as a results map that allows for the clear articulation of the expected changes or results to be achieved from the project or programme. MIT IG ATI O N In the context of climate change, a human intervention to reduce the sources or enhance the sinks of GHGs. Examples include using fossil fuels more efficiently for industrial processes or electricity generation, switching to solar energy or wind power, improving the insulation of buildings, and expanding forests and other sinks to remove greater amounts of carbon dioxide from the atmosphere. MO B IL IZ ED PR I VAT E FIN AN C E As per the GCF’s Policy on Co-financing, approved by the Board in decision B.24/14, this means, in the context of a funded activity, the private finance mobilized as a result of the GCF proceeds, calculated in accordance with relevant methodologies. NAT IO N AL A DA PT AT I O N PL AN A national adaptation plan (NAP) is a means of identifying medium- and long-term adaptation needs and developing and implementing strategies and programmes to address those needs. The NAP process, which was established under the UNFCCC Cancun Adaptation Framework, enables Parties to formulate and implement these plans. It is a continuous, progressive and iterative process which follows a country-driven, gender-sensitive, participatory and fully transparent approach. In decision B.13/09, the Board decided that, given the urgent need to support and expedite the formulation and implementation of national adaptation plans and other adaptation planning processes, the Executive Director can approve up to USD 3 million per country through the GCF Readiness and Preparatory Support Programme modalities, in order to support the formulation of national adaptation plans and/or other national adaptation planning processes based on his/her assessment of country circumstances and needs, and taking into consideration the United Nations Framework Convention on Climate Change national adaptation plan technical guidelines and the importance of coordination and complementarity with other national adaptation plan related initiatives and support;” NAT IO N AL D E S IG N A TE D AUT HO RIT Y An authority designated by a developing country Party to the United Nations Framework Convention on Climate Change pursuant to paragraph 46 of the Governing Instrument for the GCF that serves as the interface between each country and GCF. The NDA/focal point plays a key role throughout the project cycle in ensuring country ownership and a country-driven approach, which are core principles of the GCF business model. NDAs and focal points are listed on the GCF website. Further information on guidelines for NDAs or focal points is contained in annex III to document GCF/B.08/45. GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GLOSSARY: ESSENTIAL TERMS 28 NO - O B J E CTIO N L ETT ER A letter signed and issued by the GCF NDA or a focal point official representative pursuant to the GCF no-objection procedure, adopted in Decision B.08/45, Annex XII. The communication of a “no-objection” implies that the government of the country has no objection to the funding proposal. A no-objection is a condition for inclusion of the relevant country in the approval of all funding proposals submitted to GCF. The template form for the NOL is available on the GCF’s website. PA RA LL EL FI NA NC E The financial resources that flow alongside GCF proceeds to a project, but which are not required for the implementation of the funded activity, and which are earmarked for other outcomes and may be consistent with general mitigation and adaptation measures. PO L IC Y O N R E S TR U CTU RI NG AN D C AN C ELL AT IO N A policy adopted by the Board in decision B.22/14, which sets out the procedures to be followed by the AE, among others, to request changes to approved funded activities and the mechanism for decision-making by GCF in respect of such proposed changes PR I VA T E F IN AN C E All financial resources that are provided for the implementation of a funded activity from entities that are more than 50 per cent owned and/or controlled by private shareholders. PR O J E CT P R E PA RA T IO N FA CI LIT Y ( P PF): The PPF supports AEs in project and programme preparation and development of funding proposals to be submitted to GCF. It is especially targeted to support DAEs and micro- to small-size category projects. PU BL IC FI NA N CE All financial resources, other than the GCF proceeds, that are provided for the implementation of a funded activity from the public sector or entities that are more than 50 per cent owned and/or controlled by the public sector. GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GLOSSARY: ESSENTIAL TERMS 29 RE AD IN E S S A ND PR E PA RA TO R Y SU P PO RT P RO G RA M ME The Readiness and Preparatory Support Programme (Readiness Programme) focuses on preparing country stakeholders to be successful and impactful in their engagement with GCF. This planning arm of GCF funding support goes beyond helping countries and organizations to take their first steps in working with GCF. It continues capacity-building throughout the lifecycle of their engagement with GCF. The Readiness Programme provides resources for strengthening the institutional capacities of NDAs or focal points and DAEs to efficiently engage with GCF. All developing countries can access the Readiness Programme, and GCF aims for a floor of 50 per cent of the readiness support allocation to particularly vulnerable countries, including least developed countries (LDCs), small island developing States (SIDS) and African States. Grants of up to USD 1 million per country, per year may be provided under the Readiness Programme. Of this amount, NDAs or focal points may request up to USD 300,000 per year to help to establish or strengthen an NDA or focal point to deliver on GCF requirements. Resources may be provided in the form of grants or technical assistance. RE AL IZ E D C O - FI NA N CI NG The amount of co-financing, based on ex post assessments, actually provided to the funded activity during its implementation. RE Q U E ST FO R P RO P O S AL A specific call for proposals published on the GCF website for certain subsectors/results areas as approved by the Board. Requests for proposal (RFPs) have specific eligibility standards, project requirements and an allocated budget envelope. RE S ULT S A R EA S GCF funds projects that fall under eight of its results areas divided into two categories: mitigation and adaptation (four results areas for mitigation and four for adaptation), as approved by the Board in decision B.07/04. RUL E S O F P RO C ED U RE Pursuant to paragraph 17 of the Governing Instrument, the Board adopted, in decision B.01-13/01, additional rules of procedure of the Board to supplement the procedural rules contained in the Governing Instrument. This key document presents the rules of procedure as set out in the Governing Instrument and the additional rules of procedure in a consolidated manner. GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GLOSSARY: ESSENTIAL TERMS 30 S EC O N D - L E V EL DU E DIL IG EN C E A comprehensive assessment undertaken by the Secretariat, as per decision B.07/03, in respect of funding proposals, which seeks to identify any relevant risks, such as financial, environmental and social, compliance and legal risks, and to ensure consistency with the relevant GCF policies and procedures. As a result of this assessment, GCF may request specific clarification, information and/or additional documents from the AE. For these purposes, the Secretariat relies and bases its assessment on the first-level due diligence conducted by the AE. TA SK T EA M The team assigned to each funding proposal submitted to the Secretariat in the Division of Mitigation and Adaptation (DMA) or the Private Sector Facility (PSF). This team is responsible for review of the funding proposal package and managing the relationship and communication between the AE, the Secretariat, iTAP and the Board. The Task Team leads the funding proposal review and negotiation process. TE RM SH E ET A document setting out, in summary form, the key terms and conditions relating to a proposed funded activity to be presented to the Board. All funding proposals submitted to GCF for consideration must be accompanied by a term sheet agreed by GCF and the AE. An indicative example of a term sheet is attached as annex 1 to the template AMA. TRU ST E E A Board-appointed organization which is responsible for holding GCF funds in a trust account, pursuant to the Governing Instrument for the GCF. In decision B.21/07, the Board appointed the International Bank for Reconstruction and Development as the Permanent Trustee of GCF. UN IT ED N ATI O N S FR AM E WO RK C O N V EN T IO N O N C LI MA T E CH ANG E (U NFC C C) The UNFCCC ‘s ultimate objective is to achieve, in accordance with the relevant provisions of the Convention, stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. Such a level should be achieved within a time-frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner. GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GLOSSARY: ESSENTIAL TERMS 31 GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GLOSSARY: ESSENTIAL TERMS 32 GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GLOSSARY: ESSENTIAL TERMS 33 INT RO D UC TIO N TO T HE O P ER AT IO N S MA NU AL The Green Climate Fund (GCF) Operations Manual for the Project and Programme Lifecycle (OM) will, we hope, be of great value to every member of Secretariat staff — for those who have been here for a number of years, as well as those who started yesterday! G O A L S A ND O BJ EC TI V E S GCF has three programming modalities: 1. Proposal approval process (PAP) for projects and programmes; 2. Simplified approval process (SAP) for projects under a certain funding threshold and for projects that are categorized as having minimal to no environmental risk and 3. The Readiness and Preparatory Support Programme (Readiness Programme) for readiness grants and National Adaptation Plan process (NAP) The OM, therefore, has been organized to reflect these three programming modalities. Operational procedures are described in detail for each of the modalities in separate sections as follows: 1. The 10 PAP stages are defined based on decision B.07/03, paragraph (a). Specifically, the details of the process are presented in annex VII to that decision, “Project and programme activity cycle”, which includes the phases of funded project approval: a. In decision B.17/18, the Board approved an updated project and programme cycle which amended PAP; b. The most recent guidance is found in annex IV to document GCF/B.17/22, “Updated project and programme cycle”.; and 2. SAP is anchored in paragraph 53 of the Governing Instrument for the GCF, decision B.11/11, paragraph 1, and decision 7/CP.21, paragraph 4, of the Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC). The Readiness Programme is grounded in paragraph 40 of the Governing Instrument as well as subsequent decisions, in particular decision B.13/32, and the most recent guidance provided by the Board in decision B.22/11, in which a revised strategy was adopted for the Readiness Programme. 3. The RPSP is grounded in paragraph 40 of the GCF’s Governing Instrument as well as subsequent decisions including B.13/32 and the most recent guidance provided by the Board in B.22/11 in which a revised strategy was adopted for the RPSP. The OM has been developed as an internal document for Secretariat staff with the following objectives: Provide guidance and support to Secretariat staff as they manage the stages in the lifecycle of the three GCF programming modalities; Disseminate information about changes in the operational procedures for those modalities as they evolve over time; Foster transparency by supporting frictionless access to information about PAP, SAP and Readiness Programme processes; Serve as a training resource for new and existing staff; Empower employees with regard to the specific tasks that their roles entail and the extent of their responsibilities; GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | INTRODUCTION TO THE OPERATIONS MANUAL 34 Establish a consistent and coherent mechanism for documenting institutional knowledge and the efficient management and sharing thereof; and Serve as a basis for operational risk assessments for funding processes. In addition, the OM seeks to provide a framework through which staff can understand key operational procedures across: Internal divisions, offices and units; Key functional and interdivisional partners; and External partners and stakeholders. Lastly, the OM is expected to be a usable tool that can be leveraged to ensure the consistent and efficient delivery of the practices that support the stages of the three programming modalities. The Secretariat is continually seeking ways to improve the efficiency and effectiveness of its internal processes. As such, the OM is a living document that will be updated periodically to keep pace with the continually evolving practices of the GCF. This version is based on organizational practices as of 31 July 2020. GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | INTRODUCTION TO THE OPERATIONS MANUAL 35 GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | INTRODUCTION TO THE OPERATIONS MANUAL 36 GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | INTRODUCTION TO THE OPERATIONS MANUA L 37 G CF BA CK G RO UN D AN D G E N ES I S The GCF mandate is to promote the paradigm shift towards low-emission and climate-resilient development pathways in developing countries. It aims to scale up climate action through helping countries to design and pilot innovative climate projects/programmes in such a way that they can and will be replicated and scaled up after the project is completed for ultimately larger impact and transformational change. O V E RV I E W This section presents a summary of the institutional background of GCF that forms the foundation for its operations, including: The “genesis” of GCF and its relationship to the UNFCCC; The grounding of GCF in COP decisions; The mission of GCF as an operating entity of the UNFCCC Financial Mechanism2; The objectives and guiding principles of GCF as per its Governing Instrument; and The GCF Strategic Plan, business model and programming frameworks as well as the Secretariat’s services and structure. G E N ES I S The Green Climate Fund (“GCF” or “The Fund”) was established in 2010 by the 197 countries party to the UNFCCC. The Fund is an operating entity of the Financial Mechanism of the UNFCCC under Article 11 and serves the Paris Agreement. The Fund’s mandate is to promote the paradigm shift towards low‐emission and climate‐ resilient development pathways by providing support to developing countries to limit or reduce their greenhouse gas emissions (mitigation) and to adapt to the impacts of climate change (adaptation). The Paris Agreement, adopted in 2015, builds on the Convention and defines under Article 2 its three key objectives: 1. To hold the increase in the global average temperature to well below 2 degrees Celsius above the pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 degrees Celsius above the pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change. 2. To increase the ability to adapt to the adverse impacts of climate change and foster climate resilience and low greenhouse gas emissions development, in a manner that does not threaten food production. 2 The contribution of countries to climate change, and their capacity to prevent and cope with its consequences, varies enormously. The Convention and the Protocol therefore foresee financial assistance from Parties with more resources to those less endowed and more vulnerable. Developed country Parties (Annex II Parties) shall provide financial resources to assist developing country Parties in implementing the Convention. To facilitate this, the Convention established a Financial Mechanism to provide funds to developing country Parties. GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GCF BACKGROUND AND GENESIS 38 3. To make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development. The GCF mandate is to promote the paradigm shift towards low‐emission and climate‐resilient development pathways by providing support to developing countries to limit or reduce their GHG emissions (mitigation) and to adapt to the impacts of climate change (adaptation). GCF is governed by a 24-member Board composed of an equal number of members from developing and developed country Parties. The Board reports to and receives guidance from the COP to support projects, programmes, policies and other activities in developing country Parties using thematic funding windows (one each for mitigation and adaptation). O BJ E CTI V E S A ND G U IDI NG PR IN CI P L E S A S P E R TH E G O V ER NI NG IN ST RU M E NT FO R T H E G CF PURPOSE Given the urgency and seriousness of climate change, the purpose of 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. OBJECTIVES GCF will contribute to the achievement of the ultimate objective of the UNFCCC. In the context of sustainable development, GCF will promote the paradigm shift towards low-emission and climate-resilient development pathways by providing support to developing countries to limit or reduce their 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. GUIDING PRINCIPLES GCF is guided by the principles and provisions of the UNFCCC. As such, GCF: Operates in a transparent and accountable manner guided by efficiency and effectiveness; Plays a key role in channelling new, additional, adequate and predictable financial resources to developing countries; Catalyses climate finance, both public and private, and at the international and national level; and Pursues a country-driven approach to promote and strengthen engagement at the country level through effective involvement of relevant institutions and stakeholders. GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GCF BACKGROUND AND GENESIS 39 Furthermore, GCF will: Be scalable and flexible and be a continuously learning institution guided by processes for M&E; and Strive to maximize the impact of its funding for adaptation and mitigation, and seek a balance between the two, while promoting environmental, social, economic and development co-benefits and taking a gender-sensitive approach. CO P D EC IS IO N S G UI DI NG G CF D E V E LO P M ENT AN D O P E R AT I O N S GCF policies, programmes and projects are driven by the guidance set at various sessions of the COP, as follows: At its seventeenth session, the COP adopted and approved the Governing Instrument for the GCF; At its eighteenth session, the COP endorsed the consensus decision of the GCF Board to select Songdo, Incheon, Republic of Korea, as the host of GCF; At its nineteenth session, the COP welcomed the establishment of the independent GCF Secretariat and provided initial guidance to GCF; and At its twenty-first session, the COP decided that GCF would serve the Paris Agreement. ST R AT EG I C P L AN The Board drafted an initial Strategic Plan (decision B.12/32) to guide GCF as a continuously learning institution with a view to achieving its overarching objectives outlined in the Governing Instrument. The plan was endorsed by the Board at its twelfth meeting, in March 2016. The Strategic Plan seeks to articulate to the world the vision and operational priorities of GCF, thereby making it more accessible to countries and strengthening its partnerships with NDAs/focal points and AEs. This guide for action translates the GCF vision of how to drive a paradigm shift towards low-emission and climate-resilient development pathways into practice. The Strategic Plan is a living document, which guides the Board in addressing policy gaps, and investing GCF resources in transformational climate actions in a country- driven manner. The operational priorities to achieve this vision are to: Scale up investments in developing countries; Maximize impact by supporting scalable and replicable projects and programmes; Invest the full amount pledged for the 2015–2018 programming period, while balancing adaptation and mitigation investments. As at January 2018, the total amount pledged, announced and signed was USD eq. in reference rate of 10.332 billion; Ensure that GCF is responsive to developing countries’ needs and priorities, including by enhancing country programming and direct access; and Proactively communicate the GCF ambition in terms of scale and impact, as well as its operational modalities. GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GCF BACKGROUND AND GENESIS 40 The strategy sets out an Action Plan based on five strategic measures that the Board intends to promote. Most of the measures, listed below, contribute to more than one of the operational priorities listed above. 1. Prioritizing pipeline development GCF develops a pipeline of country-driven, high-impact projects and programmes which can be scaled up and support the achievement of the GCF strategic objectives, through: Its Readiness Programme, which supports the development of the capacities of developing countries to access and implement GCF projects; Its PPF, which supports the development of proposals by AEs; Consulting with developing countries and AEs to identify national and regional priorities for investment, and by identifying opportunities to work in partnership with the Global Environment Facility, the Adaptation Fund, multilateral development banks and other climate delivery channels: o As per the mandate from the seventeenth meeting of the Board, GCF is beginning work on “complementarity and coherence” with the Global Environment Facility, the Adaptation Fund and the multilateral development banks driven Climate Investment Funds; The use of RFPs aimed at both the public and the private sector, developing replicable approaches to allow rapid roll-out in new locations; and Introducing results-based payments for REDD-plus and evaluating how such payments could apply to other sectors of GCF activities. 2. Strengthening the GCF proactive and strategic approach to programming This is key to ensuring that GCF investments meet the objectives and needs of developing countries. This is achieved as follows: All AEs submit annual or multi-annual work programmes, prepared in consultation with developing countries (via their NDA or focal point); A consolidated version of all these work programmes is then submitted to the Board, which uses it for planning purposes; and GCF carries out a market survey to establish what is needed to support climate action, and to track successes or innovative ideas that could be built upon. 3. Enhancing accessibility and predictability GCF continues to engage with a wide range of stakeholders to promote accessibility, and to enhance understanding of GCF operations and processes by: Surveying stakeholders to gain a better understanding of where the barriers to engagement are, and more clearly signal the kinds of projects and programmes it is looking to finance by providing guidance on the GCF investment criteria, risk appetite, standards and processes; Revising and simplifying PAP; and Streamlining and simplifying its processes and templates, particularly for micro-scale activities in LDCs and SIDS. GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GCF BACKGROUND AND GENESIS 41 4. Maximizing the engagement of the private sector The Division of Private Sector Facility (DPSF) is a unique feature of GCF, enabling engagement with the private sector to support its aim of driving a paradigm shift to low- emission and climate-resilient development pathways through co-financing with GCF. Building on existing work, GCF, through DPSF, aims to: Foster the mobilization and leveraging of private capital as a means of maximizing the engagement of the private sector at the national, regional and international level; Analyse barriers to the mobilization and leveraging of private capital and private sector engagement; and Carefully consider the recommendations of the Private Sector Advisory Group on, inter alia, enhancing GCF capacity, targeted accreditation modalities for private sector entities, enhancing private sector involvement with the Readiness Programme and reducing currency risks. 5. Building adequate institutional capabilities GCF needs to have adequate institutional capabilities in order to achieve its operational priorities to: Build and maintain a well-staffed Secretariat that can deliver all of its functions; Staff and resource the three independent accountability units so that they can be operationalized; Improve the efficiency of its processes, including decision-making related to funding proposals, and review the role and structure of the Board’s panels and groups; Strengthen the role of NDAs by providing support through the Readiness Programme and facilitate dialogue between NDAs and AEs by offering a platform for knowledge-sharing and a marketplace for ideas; and Assess whether to enhance the role of the Interim Trustee in order to facilitate the administrative execution of funding decisions. The Strategic Plan will be reviewed as part of each replenishment process, taking into account evolving priorities, including COP guidance, and be reflected in GCF workplans. The GCF’s Strategic Plan, updated for the period 2020-2023, but still yet to be approved by the Board 3, sets the Fund’s direction for a given programming period to achieve the greatest climate impact. In accordance with its mandate to foster a paradigmatic shift towards low emission climate resilient development in developing countries, GCF’s capacity to take risk is supported by a robust set of investment, risk and result management frameworks. BU S IN E S S M O D E L GCF is a partnership institution. It operates through a network of AEs, who work directly with developing countries represented through NDAs or focal points appointed by the government of the country, to propose projects and programmes to GCF for funding, and to implement them once approved. These entities span multilateral and 3 As of June 30, 2020. GCF OPERATIONS MANUAL (OM) FOR THE PROJECT AND PROGRAMME LIFECYCLE | GCF BACKGROUND AND GENESIS 42 national banks, international financial institutions, development finance institutions, United Nations agencies, conservation organizations, equity funds, government agencies, regional institutions and more.4 GCF adds value to its partners by enabling them to raise the ambition of their climate action, for both climate mitigation and adaptation. By leveraging the risk management capacity o

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