1

Quarter 7 Report

FONERWA Fund Management Team (FMT)

ANNEXES 4.1-4.4

18th July 2014

2

ANNEXES:

ANNEX 4. Enclosed Annexes related to the future 15 month period

4.1 REVIEW WORKSHOP REPORT4.2 CIDT DRAFT EXIT STRATEGY 4.3 FMT EXTENSION PROPOSAL 4.4 TABLE OF ANNUAL REVIEW RECOMMENDATIONS

3

ANNEX 4.1

DRAFT Report on

FONEWRA Retreat.

18-19 June 2014

Introduction

A two-day retreat was held for key staff involved with FONERWA on 18-19 June 2014. The retreat was held at the Plast Rock Hotel in Nyamata- town and facilitated by Liberal Seburikoko of Wasafiri Consulting. A full list of participants and their roles is presented in Annex 1.

This short report aims to synthesise the key points discussed and attempts to capture the key outcomes of the workshop.

Workshop Objectives

By the end of the workshop building on the previous workshops and work undertaken, we will:

Appreciate where we are now by having a quick update on previous mini-workshops Appreciate the important role of FONERWA in Rwanda Examine possible sustainable options for how FONERWA be institutionally positioned to

serve as the national channel/platform for environment and climate financing. Examine the pros and cons of each of the possible options Develop a longer term shared sense of direction for FONERWA1 in line with the above2

Examine internal lessons learnt and develop some ideas/plans for improving FONERWA design systems and processes

Participate in developing an immediate Action Plan for 2014-15

Session 1 - Welcome and looking back

In the first session introductions were made, the objectives of the retreat agreed and some useful ground rules established. Following this participants were given a “snapshot” of how FONERWA had been developed. The seven-step design process was outlined alongside the results hierarchy that was key in the design. The funding windows were outlined and the resource mobilisation process presented and explained. With the help of a face mask (worn by the presenter in her home country), a very helpful analogy on the cost of clean Rwandan air was presented.

Having been refreshed on the genesis of FONERWA, participants then viewed the draft of a short video that has been produced on FONERWA. In order to inform the required revisions to the video participants were invited to write their feedback comments on the video on post- its. The general perception was that the images were not reflecting the

1 Some Definitions:Longer Term - Green Growth Climate Resilient Strategy (GGCRS) – 2050Medium Term - Vision 2020 Shorter Term - 2014-15

2 Recognise that we may not have all the long term answers here and now but that we need to develop a work plan for the next year that further examines the best options with the key stakeholders

4

vision of FONERWA and consequently not consistent with the storyline. It was suggested that a new version of video be produced, based on comments provided so far, and shared with participants for validation prior to its being released in the public domain. A summary of the feedback is presented in Annex 2.

Session 2 - What has worked and what has not worked and needs to improve?

In the second session participants were invited to openly share their differing perceptions on what has worked in FONERWA and what needs to be improved. This helpful brainstorming session lead to some open and honest sharing of the very real successes of the FONERWA ‘experiment’ and the challenges ahead. Seven key messages came out this session:

1. Operationalizing FONERWA, with its strong governance structure, a competent and committed team as well as transparent processes was a massive achievement. As a result, setting up the fund and approving high quality projects was much faster than other similar funds around the world.

2. There were concerns that approved projects were not being implemented quickly enough. This could be due to limited support from FMT after projects are approved and a possible ‘relaxation’ attitude from some project developers as there was no deadline for effectiveness. It was suggested that the FMT institutes deadlines for effectiveness and reaches out strategically to FONERWA priority sectors such as agriculture, which felt somehow underserved.

3. The capacity for implementing projects was relatively limited. Yet unless projects were effectively implemented and delivered the expected results, it would be hard to mobilise additional funds. Participants suggested that the FMT devises an aggressive strategy for reaching to project developers after they were approved.

4. The delay in operationalizing FONERWA seem to have created some reluctance to own the FMT ‘baby’, as this was perceived to be too risky.

5. The 6-member FMT (with 2 additional CDKN-funded staff) currently has an insurmountable workload. As projects move into implementation and new calls for proposals are issued over the next couple of months, there is a pressing need to expand the team and evolve the FMT into a Secretariat.

6. Communication within FMT and between the FMC and FTC could be improved. For example, some FTC members were not aware of FONERWA’s M&E framework and there seem to be a lack of deliberate process for seeking feedback from FMT and FTC members on how FONERWA was perceived.

7. It was broadly recognised that FONERWA is still largely a DFID funded project at this stage and requires an institutional home for effective GoR ownership, management sustainability and further resource mobilisation

A summary of the successes and challenges are presented in Annex 3. This session served to inform the Action Plan discussed on Day 2 (Annex 5). Session 3 - Official Opening

In this session the Permanent Secretary of MINIRENA, Caroline Kayonga, welcomed everyone and thanked participants for coming to the retreat. She stressed the need for FONERWA staff to have time away from their busy schedules to think and learn lessons from their important work. She especially thanked the FMT for all their hard work over the past 18 months and congratulated them on their huge achievements. She also thanked the FMC for their helpful guidance. DFID were thanked for getting the FONERWA project fund ‘ball rolling’. It was noted that other development partners are following DFID and she was thankful to them all. It was noted that only the day before the retreat FONERWA had been successfully presented to the ongoing GoR Joint Sector Review. She noted that moving to implementation would most likely bring new

5

challenges as these were unchartered waters and there were not many places to learn from.

Session 4 – Dreaming the Future

In this session the FONERWA Programme Manager, Alex Mulisa, outlined a longer-term vision for FONERWA. With the help of a powerful image of a possible trajectory of change towards a longer-term dream the options and steps for change were outlined and illustrated.

The need for short and long-term elements of the Green Growth Climate Resilient Strategy (GGCRS) was outlined, and it was carefully noted that ‘Green Growth’ is very much a national, strategic and high-level economic activity. It was also noted that unfortunately some people only consider the environmental aspects of this as they focus on the ‘Climate Resilience’ angle of the GGCRS. The importance of all aspects of the GGCRS is noted for the aim of poverty reduction.It was also noted that while ‘Sustainable Development’ may be a buzz word in the development lexicon for some, it is of critical importance for Rwanda. It was noted that Rwanda has no choice but sustainable development and consequently Development Partners have no choice other than support it.

A number of participants were invited to share their longer term dreams – these included:

o “Not waking up in the middle of the night and thinking of natural disasters and their effects”

o “Green, Safe, Clean and wealthy”o “Being the first zero poverty country in Africa” o “That others look and learn from Rwanda’s success in developing a Green Growth

Climate Resilient Strategy”

Session 6 - Roles and Responsibilities

6

Current FONERWA support to projects

FONERWA support to EDPRS II/V2020: transformational projects/programmes: Green investments, Green City Pilot, Climate Innovation Center, Green villages, etc.

Rwanda’s Development “Strategic orientation and Vision 2020”

FONERWA support to sustainable development agenda through successful implementation of GGCRS

Rwanda’s Development “DREAM”

In this session the current and possible roles and responsibilities of FONERWA and its stakeholders were examined and discussed.

In the wide ranging and open discussions a number of key questions and points emerged:

We need to be clear that FONERWA is intended for strategic and innovative ‘pilot’ interventions – it is not meant to be achieving GGCR objectives itself.

FONERWA in the operationalisation phase was intended to be a lean structure. It was an experiment.

o But we found that there were greater demands for technical proposal support and implementation support.

o And the FMT is currently under very real pressure to spend and spend fast.o The FMT is still on a steep learning curveo We could just go back to the original vision of an application processing facility.

We need to decide how big FONERWA wants to be. This is not clear at the present time.

FONERWA is demand driven. We need to let the demand determine supply. The FMT has to grow by default to manage the compounding projects – over 20 likely by

September. It is unclear as to whether this can be sustained under current conditions If the FMT increases in size the issue of Human Resources capacity will need to be

addressed. The FMT could be perceived as being a ‘department’ with different units with dedicated

roles and responsibilities e.g. it could be perceived as having three distinct roles: o Resource mobilisationo Providing Technical Assistance for project preparationo Influencing implementation

The earlier we define what kinds of projects FONERWA supports, the better – but this is challenging to plan for given FONERWA is a demand-based facility.

o We have an option of focusing on bigger projects but ideally we need to manage a portfolio – having a balance between large and small projects. How do we come up with this portfolio?

o We need a strategic tool to help make decisions. How can FONERWA meet the expectations of beneficiaries? How can we grow the

fund? Need a team that is commensurate with the level of responsibilities. Does FONERWA need to bring in interns that can support operations?

Under the discussion on possible options a number of possible scenarios and ideas were put forward:

1. FONERWA just collapses due to ‘staff burnout’ – we need to avoid this! 2. FONERWA withers and dies due to lack of funding – we need to avoid this!3. We think out of the box and outsource functions on a temporary basis, as long as they

achieve results. This is needed as long as it’s demand driven. 4. We transfer technical capacity building functions and knowledge management and

information provision to a possible Climate Change Innovation Centre this could leave the FMT only processing proposals.

5. We transfer technical capacity building functions to the National Capacity Building Secretariat (NCBS)– we could also work with them to develop capacity of sector specialists.

7

6. We somehow tap into the resources of the line agencies and others e.g. we consider:o Can a strategic linkage be made with the MINECOFIN unit in charge of project

monitoring and implementation?o Can FONERWA push the GoR to support the implementation and M&Eo Can FONERWA build strategic partnerships with research organisations, universities,

etc?

It was concluded that FONERWA needed to have an aggressive strategy that focuses on results and can establish clear priorities

Session 7 - Institutional Positioning

In the discussions on institutional positioning it was agreed that FONERWA needs:

An institution that can deliver on its mandate and have a holistic approach. To consider the short, medium and long-term optionso In the short term, these could include: Keeping a lean team Expanding the team into four departments: Project appraisal, project development,

resource mobilisation, implementation and Monitoring and Evaluation. Building synergies with MINECOFIN’s PMMU or PITT to support FONERWA Empowering the FMT, give them resources and institutional support Capacity development: Work with other government departments (e.g. NCBS,

ministries), universities, research institutions Outsourcing: e.g. Auditing, call down etc.o In the longer term, these could include: Offloading technical capacity functions, information sharing and support to the Climate

Innovation Centre Outsourcing: as above

Building on all the above comments and the wide-ranging discussions, a number of possible institutional options were drawn up and considered.

The perceived advantages and disadvantages of each of the institutional options were discussed. In total eight options were considered. These were ranked in terms of preference (for short and longer terms) and the following short-term options were retained through a process of elimination:

Preferred option: Independent agency under MINECOFIN Second best option: Independent agency under MINIRENA

The table below provides a summary of the perceived advantages and disadvantages of each of the 8 institutional options:

8

Option 1 - Independent agency under the Office of the President

Notes on Participants Ranking - Low

Perceived Advantages Perceived Disadvantages

o Done in other countrieso Greater gravitas given by the GoRo More interest coming from donorso Good idea for resource mobilisation

o Poor idea for implementationo Can’t run away from ministries because

they are perceived to be weak.o Doesn’t achieve practical implementation

purposes (e.g. capacity building)

Option 2 - Independent agency under the Office of the Prime Minister

Notes on Participants Ranking - Low

Perceived Advantages Perceived Disadvantageso Done in other countrieso Greater gravitas given by the GoRo More interest coming from donorso Good idea for resource mobilisation

o Poor idea for implementationo Can’t run away from ministries because

they are perceived to be weak.o Doesn’t achieve practical implementation

purposes (e.g. capacity building)

Option 3 - Independent agency under MINIRENA Notes on Participants Ranking - #2 Short term

Perceived Advantages Perceived Disadvantages

o MINIRENA is mandated to deal with the cross-sectoral CC activities

o Mandated by Law to house FONERWA.o Technical understanding of the sector.o Political alignment with mission.o International connections.o Can strengthen the ministry.o Connections/synergies with other

MINIRENA agencies.o Builds on existing structures

o MINIRENA is weak, and will likely be weak for some time to come, as is generally the case for ministries of environment elsewhere. It will be hard to bridge this gap.

o Will likely result in a duplication of mandate between FONERWA and REMA.

o Lack of adequate ownership to date.o Not as strategic as MINECOFIN.o Low resource mobilisation.o Project appraisal and implementation

championed by MINECOFIN.o Blurs the division of labour of

mainstreaming.o Conflict of interest perceived that

REMA/RNRA/MINIRENA will unfairly get resources.

o MINIRENA has multiple mandates, and this could potentially confuse the ministry on a longer term basis that would preclude ownership.

o Potentially more difficult to recruit new staff in a short time.

o Limited leverage.o Managing a fund doesn’t fit its mandate or

9

capacity.

Option 4 - Independent agency under MINICOFIN Notes on Participants Ranking #1 Short term option

Perceived Advantages Perceived Disadvantages

o It’s a fund, so belongs with a financial institution.

o Aligns with MINICOFIN mandate.o Strong internal/external message of the

value of FONERWA.o Strong experience in fund management.o It has domestic and external capitalisation.o They also deal with international funds and

they have a lot of influence.o National capacity building secretariat is

under MINECOFIN.o This would also support the implementation

synergies between PMMU and PITT.o International preference for CC: GCF also

wants to see the importance of Ministries of Finance. This is also much more effective than having it under MINIRENA.

o This aligns with the principles of GCF, supports accreditation, and the possibility of enhanced direct access.

o This is also closely aligned with energy needs.

o Minimises conflict of interest across line ministries.

o Give FONERWA a neutral home which it needs.

o Birds eye view: Strategic orientation in terms of other projects being financed across the country (e.g. across all sectors).

o Already providing strongest technical expertise to the FTC.

o Greater influence.o Have convening powers. Would help

awareness of FONERWA across GoR and DPs.

o Positive image and respect from applicants.

o PFM expertise.o Sends a clear message that economic

development is about green growth, not just environment.

o More attractive place to work as it can attract and retain staff.

o Transparency and VfM.o Streamlining climate financing at the

national level.o Great chance for influencing

implementation of EDPRS II and GGCRS.o Would support a long-term dream of

o MINECOFIN speaks a totally different language than environment.

o They don’t have capacity in this area and they don’t want to set a precedent of taking in every fund.

o It’s unknown if UNDP funds follow if went to MINECOFIN.

o Lack of legal mandate and the key decision makers need convincing.

o Potentially slow buy-in by policy makers.o Long approval process of the change.o Potential conflict of interest of resource

mobilisation and allocation.o Could be perceived as disempowering

MINIRENA.o Uncertain time period for transitioning to

MINECOFIN.

10

CC/env finance flowing across ministries, in line with aid effectiveness principles.

o MINECOFIN would force other ministries and agencies to actually learn about how to operationalise CC/Env and would build greater capacity more quickly (similar to gender).

Notes: Need to examine and pursue GCF institutional arrangements – this will be explored in the forthcoming CDKN institutional study, which will consider MINIRENA, MINECOFIN and other innovative arrangements outlined here.

Option 5 - Public Enterprise with financial autonomy(Like BNR, RSSB, BRD, with lean structure)

Notes on Participants Ranking - #1 Medium term option

Perceived Advantages Perceived Disadvantages

o Issues decided by a Board, not by the GoR.

o Has much more financial and operational autonomy

o Would avoid the issue of MINECOFIN objectives.

o Less bureaucracy.o Strong autonomy with a Board.

o Unclear as to what services will FONERWA sell? (FONERWA doesn’t have services as such).

o Seems that you might need revenue generation capability.

Notes: We need to know the status of a public enterprise and whether the enterprise would need to report to MINECOFIN.

We also need to explore if we could have a hybrid option where we have a not-for-profit social enterprise organisation (this could possibly be a viable long-term option)

Option 6 – Out of government Not-for-Profit Social Enterprise

Notes on Participants Ranking - Low

Perceived Advantages Perceived Disadvantages

o Can work like RALGA.o Special Purpose Entity/Vehicle (Grow

Africa was considering piloting one such model in Agriculture sector along the potato value chain in Musanze district, in collaboration with MINAGRI)

o Needs someone that is passionate about driving it forward

Option 7 – Autonomous fund (like Agaciro) with percentage contribution from GoR annual

Notes on Participants Ranking - Low

Perceived Advantages Perceived Disadvantages

o Independent fund with Board. o Very different from Agaciro.

11

o Doesn’t get hung up in GoR bureaucracy. o FONERWA much more complicated operationally.

Option 8 – Independent Bank – Long Term Option Notes on Participants Ranking - Low

Perceived Advantages Perceived Disadvantages

o Would make it part of strategic private sector targeting.

o Might move away from FONERWA mandate of giving grants

Session 7 - Capacity Development

In this session a quick update on FONERWA capacity developments to date was presented.In total some 21 formal workshop training sessions have been delivered to date. In addition these have been followed up by numerous coaching and mentoring sessions to applicants and grantees by FMT and CDKN staff.

The capacity development priorities ahead now are less to do with encouraging applications to the fund and more to do with ensuring existing grantees enhance standards of implementation and sustainability. Core project implementation skills, Monitoring and Evaluation skills and finance management skills are now of paramount importance.

In addition, with the need for CIDT, the International Consultant, to undertake a phased withdrawal, a further priority ahead is the training of staff to take over from FMT staff by October 2015. The following are future priority subject areas:

- FMT internal management skills - Monitoring and Evaluation skills - Budgeting, VfM and finance reporting at project level- Knowledge of climate change and technologies to address its effects- Project Cycle Management principles and skills- Training and Learning principles.

Session 7 - FONERWA Launch

In this session the forthcoming launch of FONERWA was quickly discussed and debated. It was agreed this important event should preferably be hosted before the 69 th

UN General Assembly summit, which is expected to start on 16th September and will be on climate change. The key outcomes from the session were added to the Action Plan in Annex 5.

Session 8 – Action Plan Development

In this session a series of actions points were discussed, debated and then formulated into an agreed Action Plan. This Action Plan is presented in Annex 5.

Session 9 – Closing of the Retreat

In her closing remarks Sarah Love, the DFID-R Adviser, thanked the participants and Liberal the facilitator, for all their hard work in making the two days such a success.

12

In her closing speech Dr Rose thanked DFID and other development partners for their commitment and support to FONERWA. She noted that she hoped that there would soon be more Development Partners supporting the fund. She also thanked CIDT and the FONERWA staff for doing a good job but she also urged them not to celebrate. She noted that she was impressed that lessons had been and were being learned in such an open manner. Finally she also thanked everyone for their hard work during the two very intensive days.

Annex 1 – Retreat Participants

To be added from Alexia

Annex 2 – Participants Post-it Note Feedback on the FONERWA Video

Good ! but can reduce kids fun

We started with dirty kids and we ended up with dirty kids running behind a good

vehicle. However with commitment of all of us we can build a strong green growth and

resilient Rwanda

Inspiring possibilities

A climate change free country

The message is clear and the video great, but could we have got a bit of testimony from

the citizens?

The message is great but the video has nothing to do with FONERWA’s vision

Going green a big impact to economic development through poverty reduction

Looks good, but doesn’t show vision

Video would be more fit for purpose if it was covering more activities related to

FONERWA outputs/activities, i.e. solar panel installations, biogas, terraces, agroforestry

Down to earth, ‘real’

Poverty?

The video does not clearly show the objectives of FONERWA and its achievements

Good quality video, though would be nice if there was more on what FONERWA has

done or is doing and more on beneficiaries

Muddled message, content is confusing

The video does not reflect FONERWA’s objectives

Inspirational and positive (but too full of muzungus)

Impressed about courage of people to improve their lives through cooking with clean

energy/biogas

No clear message. Some nice images but there is no thread that ties them together.

Needs a clear story.

13

14

Annex 3 – Feedback from Workshop Participants on “What has worked!” A working fund financing projects addressing environmental and climate change issues

is a massive achievement Successfully followed the “Nike Principle of Development” i.e. – the “Just do it”

approach. Half Time Score - Rwanda (FONERWA) 3 Ethiopia (SCIP) 2 Very rapid progress in getting the fund set up and project approved – much faster than

other similar funds Rigour and backend of website Innovative idea to formulate the programme to encourage Rwandans to work on

bankable projects and to support their initiatives It has a mind-set change and impact for private sector growth Developing the vision of FONERWA Funding of integrated green projects has worked well Stakeholder consultation processes have been very positive Attracting the need for sustainable development Team commitment in supporting the entire application process by beneficiaries A lot of positive training and capacity development work undertaken Robust first call Many applicants Support to Districts Support from CDKN is great Applicants are enthusiastic Followed GoR system Proposals screening on time Proposals screening on time and to good quality Fund established Funds mobilised Government projects funded Training done X 4 Three districts supported Local FMT in place and doing a great job Strong fund coordination Good work done Strong Governance structures Excellent inputs from FTC Quality of project approved is high Rigorous processes Proposal processes in place Projects screened and funded Resources mobilised Proposals submitted Private sector on board for development Good quality proposals being received Good project now underway Quality control Operational Open to all The FMT is well organised with good support from CDKN – this is great Accessible X 3 Transparency X 3 Results based

Annex 4 - What worked less well and that needs to be improved? Understanding of climate change/environmental issues

15

The call for proposals on a quarterly basis should be done on a semester basis and aligned to the budget calendar. This will make people more accountable when it comes to implementation

We need to mobiles more funds We need to support all districts technically and financially The quality of projects needs to improve We need to improve budget fund utilisation We need a lot more political commitment and involvement We need more citizen involvement Housing FONERWA under REMA while financially its under MINIRENA makes it

cumbersome for disbursing counterpart funds. The process of expediting FONERWA as budget agency should start

We need to engage the mining sector to be part of a shared vision Lesson learning between the successful submissions and the failed Web initially limited but being improved Early capitalisation was slower than expected Need to transfer to GoR Use of climate information and science in proposals Clearer understanding of the need for partnerships between NGOs We need to improve the quality of projects submitted Low disbursement rate – needs to improve 698 people trained in PD and PPD preparations, 891 project submissions, 13 projects

funded – we need more commitment from trained people to provide good support What MINIRENA thinks of us. We need to revisit some of the design and operational manual elements that could ease

streamline or improve processes We need to adjust the PPD/PD process to make it more relevant for the private sector We need to adjust deadlines and timelines to make them more realistic A lot is being done but not communicated Reduce the number of calls for proposals Websites needs to be user friendly Projects so afar have not been very innovative Lack of trust by FMC in FTC recommendations Lack of interest from ministries for mainstreaming projects Government ownership Private sector involvement Few projects from Government meeting standards of approval Government have not taken on find management role - we need a clear path for doing

this Low quality of proposals overall (although we have had some good ones) The windows are limiting Challenge of application process needs support Need more technical support Lesson learning – this retreat! Projects take too long to start after approval Approval process is judged as being too long Slower disbursement than planned – it will now pick up but we need to keep an eye on it Longer term funding is required There was serious “optimism bias” at the design stage as is the case with many other

DFID funded Climate Change projects.

Annex 5 - RETREAT ACTION PLAN

# What Who When

How

16

1 Institutional analysis GoR, CDKN July CDKN study – access to GCF (institutional analysis study). Richard Sherman will come to Kigali and meet stakeholders. Feed in discussion from this w/shop into the study

2 Institutional Options analysis decision – need to develop a road map for this action

FMC to discuss the outputs and recommendations coming out of this retreat

25 July and call an extraordinary meeting as soon as it is ready

Meeting

3 Agreement developed with relevant PS

Chair and co-chair of FMC

August A meeting with a policy brief developed

4 There may be a change of the law needed but we have to look at the MINIRENA option if it transpires that it will not be ready within the short time possible (by Oct 2015)

5 Possible roadmaps developed with contingency planning. The process should start now (and include liaising with MIFOTRA)

FMT August Decision tree - Some part to be done immediately (Sarah) while others bits will need external call down support (Jill/FMT)

6 Recruitment of government-led staff (1st and 2nd phases)

FMT July 2014 and March 2015

Ongoing

7 Structure agreed and approved

FMT, engaging MIFOTRA once ready

August Ongoing. Need to expand the team and retain existing call down consultants.To what extent is that set up going to be accommodated in GoR?Need to test the GoR procurement approachNeed to encourage relevant decision makers to retain the current FMT as they have acquired some experience. In March 2015, FMT will do a 2nd phase. By then, FMT will have replicated itself and have a clear understanding of what the GOR-led modality can attract.

8 Capacity development plan Largely internal FMT exercise. No need to involve FMC and FTC

Arrange CB session at the start of FTC meetings – the primary focus should be on proposal developments.

9 Communication Plan FMT Need for targeted outreach – FMT to develop that approach. Provide both FTC and FMT strategic communication materials – to be added to

17

quarterly meetings.Setting deadlines for ‘effectiveness’ into project implementationArticulating the 4-5 key messages FTC and FMC should be taking around. These should be updated regularly - current status- (aspirational), latest situation (what projects have been funded), etc

10 Knowledge Management and Website

Internal FMT exercise. No need to involve FMC and FTC

Need to produce materials (case studies, briefs, lessons learn etc) – content development

11 Resource Mobilisation FMT12 Setting deadlines for

‘effectiveness’ for project implementation and hold applicants to that.

FMT From third round

Set a timeline from the outset – as part of project development cycle.Need a document with conditions for effectiveness.After project is approved, met applicant and agree a roadmap.

13 Developing confidential agreement and conflict of interest agreement for FTC and FMC to sign up to

Richard End of June

Richard to chase the lawyer working on the documents.

14 One-pager briefing paper on shared vision

FMT FMC meeting

Articulating the 4-5 key messages on shared vision FTC and FMC should be taking around. These should be updated regularly - current status (aspirational), latest situation (what projects have been funded, funds mobilised etc)

15 Launch FMT September Want to make it big due to strategic timing for FONERWA evolution. Sept will be the end of the pilot period.Opportunity for sharing the vision with preeminent friends and partners of RwandaInward looking – for awareness raisingOutward looking for resource mobilisationKey note speakers – approved projects promoters on to share lessonsPromotional video – tell the FONERWA storyCocktail reception – big wigs mix with doers, policy makers etcPrepare a concept note to share with FTC and FMC within 1 week.Comments expected by the following week

18

Social media campaign – twitter, facebook69th UN General Assembly summit starts on 16 Sept and will be on climate change. Best to do it before.

19

ANNEX 4.2

CIDT DRAFT EXIT STRATEGY

CIDT EXIT STRATEGY – 3 RD DRAFT (18 TH JULY 2014)

RWANDA FUND FOR ENVIRONMENT AND CLIMATE CHANGE (FONERWA)

Background

1. The Government of Rwanda (GoR) established the Environment and Climate Change Fund – FONERWA in March 2012. The fund design identified key features that would inform successful operationalization of FONERWA.

2. FONERWA is embedded in the Green Growth and Climate Resilience Strategy (GGCRS) as a cross sectoral financing mechanism to achieve development objectives of environmentally sustainable, climate resilient and green economic growth. It clearly demonstrates Rwanda’s commitment to sustainable national development and a green economy.

3. The UK Department for International Development (DFID) has provided 100% funding to support operationalization for the first two years of the fund by contacting CIDT to support the capitalization and operationalization of the FONERWA fund (October 2012- September 2014).

4. In the first 18 months of the contract a number of circumstantial challenges and opportunities altered the trajectory of FONERWA implementation relative to the original proposal. These have all been documented in the sustainability plan3.

5. In January 2014 a CIDT-FMT Contract Addendum was approved to maintain the achievements of FONERWA operationalization. CIDT concluded a budget amendment with DFID-Rwanda in January 2014 which reduced the international TA proportion of the original FMT contract budget and correspondingly increased the FMT local staff budget to support their engagement on a full time basis until the end September 20144. This change was achieved within the current CIDT-FMT-DFID contract, with no change to total contract budget ceilings; securing FMT staff at full, 100% functionality until end of September 2014.

6. A key deliverable for the CIDT contract is to propose a credible option for sustainability of the FONERWA fund. In recent months options have been under discussion. The aim has been “to ensure the on-going sustainability of the Fund beyond the initial two-year period of its operation, both in terms of securing resources for future Fund activities and ensuring that a functioning system, capacity and expertise is transferred to the GoR .”

Where are we now?

7. The current FMT has successfully managed to initiate and maintain momentum of FONERWA operationalization despite facing critical challenges to implementation of the original FMT proposal.5

3 For example the selection of the Rwanda Development Bank (BRD) as an implementation partner as opposed to BDF, and the delay of the first public call for proposals of 10 months.

4 Note the addendum was originally introduced to manage a change in CIDT project management due to the departure of the original Project Manager. This proved an opportunity for further contractual changes due to the delays in capitalisation, availability of GoR counterparts and project implementation.5 These included:

i. Limited availability of GoR staff to shadow the FMT, due to their already heavy workloads and existing, full-time GoR responsibilities;

ii. 6-month delay in FONERWA capitalisation, with corresponding knock on effects on the originally proposed transition of fund management to the GoR during the last 6-months of the FMT contract;

20

8. By September 2014, many elements within the original proposal will have been completed. In line with this, the current FMT consists of 100% locally recruited staff. However, the key element, which will not have been achieved, is GoR taking over the management of the FONERWA fund. 6

9. The GoR has secured funding from UNDP to support a GoR led management team and recruitment is currently underway as a measure to reinforce FMT and to ensure skills transfer to incoming team in a way that prepares the GoR for eventual management of FONERWA. This is crucial for sustainably managing the fund and is an important aspect of the exit strategy.

10. It should be carefully noted that the GoR. clearly now has the option of retaining these staff beyond the CIDT-FMT DFID funded contract period. The practical challenge is finding the best way to do this. The present plan is a two-phased recruitment of the GoR led management teams to ensure capacity and skills transfer from FMT to the GoR teams by the end of the 3rd year of DFID support in September 2015

The CIDT Exit Strategy

11. DFID are willing to support a 1-year costed extension period to enable GoR more time to take over the management of FONERWA, but require a very clear exit strategy for CIDT by the end of the 3rd year.

12. A one year extension will facilitate the local FMT team and GoR 12 months to explore choices of institutional scenarios and options for FONERWA for the immediate, short and medium-long periods. This work has already started but it is recognised that this work will take time as both technical and political choices may have to be made. Milestone: A choice and decision must have been taken by March 2015.

13. CIDT will assist the FMT local team and GoR to consider their options. During the year CIDT HQ will incrementally transition from the current internationally managed FMT contract operations to a local Rwanda managed operation.

14. Over the extension year, the funds for international technical and financial management days will be substantively less than in the previous 2-year period. This forcing a greater degree of Rwandan management oversight to be taken on by the local FONERWA FMT.

15. The CIDT capacity development initiatives will, above all else, focus on building this local management ownership and capacity by both FMT and GoR. There will also be considerable capacity development in Monitoring and Evaluation. Specific capacity development activities are scheduled to empower newly recruited and existing staff to become part of FMT decision making, as they transition towards a fully locally managed team leading FONERWA operations7. In addition there will be training of a pool of local consultants to support FONERWA8.

16. DFID funds for the international support to website and media work have been cut. Rwandan service providers will be sought and used.

iii. 6-month delay in FONERWA funded project implementation, as a knock on effect of the capitalisation delay.

6 From a perceived GoR perspective, funded FONERWA projects are ‘on the ground’ and have been under implementation for a few months, demonstrating that the FONERWA programme has ‘started’ and systems have been put in place and are operational. This means a more serious discussion is now possible between CIDT, FMT, DFID and GoR about a phased handover of responsibilities from the FMT to GoR in 2015. These discussions have been ongoing during Quarter 7.7 This includes the CDKN FONERWA support project which will assist in the capacity development of a cohort of local Rwandan consultants 8 Training workshops are planned in the Q8by Climate Development Knowledge Network (CDKN)/FONERWA project, with a 15 member national pool of consultants expected to be trained in different areas covering the Green Growth and Climate Change Resilience Strategy’s Programmes of Actions, as well as project design and development.

21

17. CIDT will support local FMT management to incrementally draw down and utilise to the full five years of UNDP funds that the GoR has secured to underpin local office, stationary, transport and workshop costs. These funds will also be used to pay for staff to support for the scoping of expertise needed to support project screening and reviews through recruitment of local experts.

18. With the above arrangements in place, there is time and resources to plan for the other funding modalities including, but not limited to, applying management fees to funds mobilized by and for FONERWA. Milestone: Decisions required by March 2015

19. These arrangements will facilitate lesson learning that will appropriately inform how FONERWA will continue in a sustainable manner over the medium to long-term.

20. By the fourth quarter of the extension year, the local FMT management will be fully functional with minimum backstopping support from CIDT HQ and international suppliers.

21. The above plan is very much in line with CIDT’s philosophy and stated practice of ‘Helping people to find their own path to development’.

22

FMT 1-YEAR EXTENSION PROPOSAL ANNEX 4.3

23

4.4TABLE OF ANNUAL REVIEW RECOMMENDATIONS ANNEX 4.4

No. Recommendation Action Timeline:

1 Clarify the methodology for calculating progress against output indicator 1.1

The methodology and definition will be reviewed and revised basing on the experience so far and lessons learned.

October 2014

2

Consider revisiting the agreed review deadlines e.g. considering extending the timeframe for review of PPDs and shortening the timeframe for review of PDs. However, any changes would need to consider the impact this would have on other outputs and deliverables under this project and the overall Fund.

3Review output indicator 1.2 as part of the FONERWA log-frame review planned for October 2014.

4

Take steps to ensure prompt agreement on a contract extension to DFID’s support to the Fund Management Team in order to minimise current uncertainty and focus attention on delivering project objectives.

Extension proposal and sustainability plan have been developed and annexed in Q.7 . The extension has been agreed in principle contingent upon submission of the final exit strategy. Additionally GoR will propose an action plan for the management transfer from DFID supported FMT to GoR led Secretariat.

August 2014

5 The GoR should take the necessary steps now to ensure they are in a position to take over full fund management responsibility when DFID support ends. This includes: recruitment and training of staff, including retaining FMT staff where

Recruitment of additional staff is progress. The recruitment process has also made provision to call down consultants in the first phase of the recruitment

End of August 2014 for the first Phase and End of

24

possible; and ensuring that other critical fund management arrangements (e.g. access to call-down consultants) are incorporated into government arrangements.

which ends in August 2014.

The current FMT will be confirming their intention to continue supporting FONERWA under the GoR modality in March 2015 by submitting applications in the second phase application round.

March 2015 for the second Phase.

6

Add a fourth indicator under output 2: “Number of government of Rwanda staff recruited and undergoing training for the fund management secretariat” with appropriate milestones and targets.

The proposals will be discussed in the next logframe review workshop

October 2014

7Increase the impact weighting of output 2 to 35%, and reduce the impact weighting of output 1 to 25% to reflect the change in relative emphasis for the final phase of the project.

October 2014

8

Milestones and targets for indicator 3.1 should be revised upwards in order to reflect the progress made so far and the need for a continued strong emphasis on capacity building for proposal development.

October 2014

9

The FMT should develop a simple system for logging requests for information and requests for technical assistance, including the nature of the request and the degree of technical assistance provided.

Recruitment to target website and knowledge management support to develop and maintain a database to capture request for support information. Currently resources are limited and the plan is to use UNDP funds to support this activity.

December 2014

10 Conduct more detailed analysis of the quality and depth of community participation and the extent to which gender issues are taken into account by

The indicator information will be tracked through the PD reviews and the PD review matrix has

October 2014

25

projects, both at PD stage and implementation stage.

been raised to capture the information.

The definition and methodology will be discussed at the next logframe review workshop

11

Review indicator 4.3 as part of the FONERWA log-frame review planned for October 2014. Consideration should be given to incorporating lessons around fund design, creation and management as well as the targeting and reach of dissemination activities.

Indicator will be reviewed October 2014

12Any changes to the FONERWA log-frame should also be reflected in the log-frame for this project since the two are closely related.

This change will be reflected in the documents following the review

October 2014

13

DFID to review VfM indicators for this project and agree with the FMT by September 2014. This could potentially contribute to discussions around revisions to the VfM requirements at PPD and PD stages and monitoring of VfM at project level.

This will be discussed as proposed.

End of September 2014

26