Programming
Chapter Three ProgrammingFunding Priorities and Guidelines
1. OVERVIEW OF THE GEF "PORTFOLIO"
Combined, the projects funded through the GEF are referred to as the overall GEF "portfolio". Box 3.1 contains some key statistics summarising the portfolio.
Specific summary data has not been compiled on (i) the number of NGOs serving as executing agencies for GEF projects or implementing discreet project components; and (ii) the total amount of GEF funds received by NGOs to date. However, it is estimated that NGOs have received roughly 20% of total funds disbursed through the GEF to date approximately US $100 million. Of notable concern, is the proportion of funds disbursed to the total amount approved; as such, less than one-third of approved funding has reached the project level.
Box 3.1 The "Big Picture"The Overall GEF Portfolio at a Glance
Total # of full projects approved for funding 332
Total amount of approved funding US $1.57 billion
Total amount of funding disbursed US $475 million
Total disbursed by UNDP (US $216 million)
Total disbursed by UNEP (US $241 million)
Total disbursed by the World Bank (US $17 million)
Total # of Small Grants Program (SGP) projects 973
Total amount of approved GEF funding for SGP US $39 million
Total amount of SGP funds disbursed US $17 million
Note: Figures include GEF activities from the beginning of the Pilot Phase (1991) to June 1997.
2. OVERVIEW OF THE OPERATIONAL STRATEGY
The Operational Strategy (OS; GEFDOC #12) has three basic parts:
a policy framework that lays out principles and general considerations that apply to all GEF projects;
a general description of programming of GEF operations; and
separate Operational Strategies for each of the four focal areas (covered in Chapters 47).
The OS serves four general purposes, providing:
a view of the GEF's long-term direction;
a framework for allocating GEF resources;
a way of integrating the guidance from the related Conventions; and
a statement of GEF operational objectives related to funding and monitoring and evaluation activities.
In short, the OS helps to focus the GEF portfolio so that it has maximum effect. The OS, as a strategy rather than a rule book, does not include very specific details on such matters as criteria for project selection.
Box 3.2 Ten Operational Principles for Developing and Implementing the GEF Work Programme
1. For purposes of the financial mechanisms for the Biodiversity and Climate Conventions, the GEF will function under the guidance of, and be accountable to, the Conferences of the Parties (COPs; i.e., the governing bodies) of the two conventions. For financing in the ozone focal area, GEF policies will be consistent with those of the Montreal Protocol and its amendments.
2. The GEF will provide new and additional grant and concessional funding to meet the agreed incremental costs of measures to achieve agreed global environmental benefits.
3. The GEF will ensure the cost-effectiveness of its activities to maximise global environmental benefits.
4. The GEF will fund projects that are country-driven and based on national priorities designed to support sustainable development, as identified within the context of national programmes.
5. The GEF will maintain sufficient flexibility to respond to changing circumstances, including evolving guidance of the COPs and experience gained from monitoring and evaluation activities.
6. GEF projects will provide for full disclosure of all nonconfidential information.
7. GEF projects will provide for consultation with, and participation as appropriate of, the beneficiaries and affected groups of people.
8. GEF projects will conform to the eligibility requirements set forth in paragraph 9 of the GEF Instrument.
9. In seeking to maximise global environmental benefits, the GEF will emphasise its catalytic role and leverage additional financing from other sources.
10. The GEF will ensure that its programmes and projects are monitored and evaluated on a regular basis.
(GEFDOC #12)
Box 3.3 Strategic Considerations for Designing All GEF Activities
GEF activities will be designed to:
Be consistent with national priorities and, where appropriate, regional initiatives.
Strive to ensure the sustainability of global environmental benefits.
Reduce the risk caused by uncertainty.
Complement traditional development financing.
Facilitate effective responses by other entities to address global environmental issues.
Be environmentally, socially and financially sustainable.
Avoid the transfer of negative environmental impacts between focal areas.
(GEFDOC #12)
3. THE GENERAL PART OF THE OPERATIONAL STRATEGY
The general part of the OS, which applies to all projects, has two major elements:
a set of 10 operational principles for developing and implementing the GEF's work programme (see Box 3.2); and
a set of seven strategic considerations for designing all GEF projects (see Box 3.3).
4. PROGRAMMING OF GEF OPERATIONS
This section of the OS states that GEF operations (or funds) will be programmed in three broad, interrelated categories:
Operational Programmes;
Enabling activities; and
Short-term response measures.
Operational Programmes (OPs) are frameworks for designing, implementing and coordinating a set of similar projects within a GEF focal area, which together contribute to achieve a global environmental objective. Ten initial OPs are listed in the Operational Strategy (see Box 3.4). A significant percentage of GEF funding will be allocated to Operational Programmes.
Box 3.4 List of 10 Initial Operational Programmes by Focal Area
Biodiversity: Arid and semi-arid ecosystems
Coastal, marine and freshwater ecosystems (including wetlands)
Forest ecosystems
Mountain ecosystems
Climate change: Removing barriers to energy conservation and energy efficiency
Promoting the adoption of renewable energy by removing barriers and reducing implementation costs
Reducing the long-term costs of low greenhouse gas emitting energy
technologies
International waters: Waterbody-based program
Integrated land and water (multiple focal area)
Contaminant-based programme
Enabling activities help to provide countries with a foundation for responding effectively to global environmental problems. The activities include: inventories, compilation of information, policy analysis, and developing strategies and action plans. Enabling activities may fulfill reporting requirements under the Biodiversity and Climate Conventions, provide information so that policy and strategic decisions can be made, or assist planning that identifies priority activities within a country. Depending on the activity, either the agreed full cost or agreed incremental cost could be funded by the GEF. A significant percentage of GEF funding will be allocated to enabling activities.
Short-term response measures do not correspond to enabling activities, nor any of the existing operational programmes. Such measures yield short-term benefits at a low cost, and are of sufficiently high priority to merit funding consideration. One example would be urgent measures to conserve highly endangered species. Only a small percentage of GEF funding will be allocated to short-term response measures.
5. FOUR TYPES OF GRANTS
To complicate matters a bit further, there are four types of grants allocated through the GEF: PDF (planning) Grants, Full Project Grants, Medium-Size Grants and Small Grants.
PDF Grants. Various types of planning grants are available through the Project Preparation and Development Facility (PDF). These PDF grants are used to support the short-term preparation of full project proposals for inclusion in GEF work programmes. Three categories of PDF grants include: Block A (up to US $25,000), Block B (up to US $350,000), and Block C (up to US $1 million).
Full Project Grants. These grants are for longer-term projects costing more than US $1 million.
They are mainly provided to governments under the incremental cost approach. However, NGOs and other nongovernmental entities are eligible for consideration as executing agencies, provided that the host government endorses the project. (See Chapter 8)
Medium-Size Grants (MSG). These grants are for longer-term projects costing between US $50,000 and US $1 million. Medium-sized projects must be based on the national priorities of the countries in which they are to be conducted. Accordingly, they must be endorsed by the government or governments concerned and must reflect the GEF's operational policies and principles. NGOs played an instrumental role in creating this new GEF window, which was formally established by the Council in 1997. It is expected that NGOs will be the executing agencies for a significant percentage of these grants. (See Chapter 10)
Small Grants. A Small Grants Programme (SGP) was launched in 1992 by UNDP and provides grants up to US $50,000 to community-based organizations and NGOs for activities that address local problems related to the GEF focal areas. The programme is active in 33 countries and will be expanded to 46 countries. (See Chapter 10)
The GEF Secretariat is considering options for other financing modalities, which are the ways that the GEF can disburse its funds for projects. Currently, the GEF can only provide grant funding, but the GEF Secretariat is exploring other types of funding, such as concessional or contingent loans. These types of funding would help start projects with negative incremental costs, but which need financing. Concessional financing is a repayable loan with below market interest rates, while contingent financing is a normally repayable loan, but under specified contingencies, all or part of which may be forgiven. For example, the former could be used for energy efficiency projects, while the latter would be useful when there are certain types of risks.