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Green Climate Fund Readiness Project - Kenya

GCF Capacity Building of Executing EntitiesAssessment Report and Strategy

2 Green Climate Fund Readiness Project - Kenya

Submitted to UNDP Kenya and The National Treasuryby Peterson Olum Olumson Consulting Ltd.

Green Climate Fund Readiness Project - Kenya

GCF Capacity Building of Executing EntitiesAssessment Report and Strategy


GCF Capacity Building of Executing Entities – Assessment Report and StrategyDecember 2017This document has not been edited.

GCF Capacity Building of Executing Entities

Green Climate Fund Readiness Project - Kenya 5

Acronyms ...................................................................................................................................... 7

Executive Summary ...................................................................................................................... 9

1.0 Chapter 1: Introduction ....................................................................................................... 13

1.1. About the Assignment and Report ..................................................................................... 13

1.2. About the Green Climate Fund ........................................................................................... 13

1.3. Roles and Functions of Executing Entities .......................................................................... 14

1.4. Rationale for and Objectives of the Capacity Building Assignment ................................... 16

1.5. Approach to the Capacity Building Assignment ................................................................. 17

1.6. Objectives, Scope of Activities and Methodology .............................................................. 18

1.6.1. Objectives ............................................................................................................... 18

1.6.2. Scope of Activities ................................................................................................... 18

1.6.3. Methodology ........................................................................................................... 18

2.0 Chapter 2: Situation Analysis and Findings ......................................................................... 21

2.1. National Drought Management Authority .......................................................................... 22

2.1.1. Existing Capacities and Competencies ................................................................... 22

2.1.2. Capacity Gaps and Recommendations ................................................................... 23

2.2. Water Resources Authority .................................................................................................. 24



2.3. The Council of Governors ................................................................................................... 26



2.4. Overall Observations and Recommendations for Training ................................................. 28

3.0 Chapter 3: Elements of the Capacity Building Exercise ...................................................... 31

3.1. Green Climate Fund Standards ........................................................................................... 32

3.1.1. Environmental and Social Safeguards ..................................................................... 33

3.1.2. Fiduciary Standards ................................................................................................. 35

3.1.3. Gender Principles .................................................................................................... 39

3.2. Project Development and Execution................................................................................... 42

3.2.1. Paradigm Shift Potential .......................................................................................... 43

Table of Contents


3.2.2. Impact Potential ...................................................................................................... 46

3.2.3. Needs of the Recipient (Country) ............................................................................ 48

3.2.4. Country Ownership ................................................................................................. 50

3.2.5. Efficiency and Effectiveness .................................................................................... 52

3.3 Project Cycle Management ................................................................................................. 52

3.3.1. Funded Activity Agreement .................................................................................... 52

3.3.2. First Disbursement .................................................................................................. 56

3.3.3. Further Disbursements ............................................................................................ 56

3.3.4. Monitoring & Evaluation and Reporting.................................................................. 56

3.3.5. Annual Performance Reports - linkages with national reporting obligations .......... 57

4.0 Chapter 4: Recommendations for Follow up Capacity Building Activities .......................... 59

5.0 Chapter 5: Annexes ............................................................................................................. 63

5.1. Institutional Capacity Assessment Toolkit ........................................................................... 63

5.2. Personnel Capacity Assessment Toolkit .............................................................................. 66

5.3. Example of a Theory of Change diagram ........................................................................... 69

Endnotes ....................................................................................................................................70

Table of Figures

Figure 1: Linkages of the various entities under the GCF Direct Access Modality .................... 15

Figure 2: Approach to Capacity Building ................................................................................... 17

Figure 3: Fit-for-purpose accreditation approach ....................................................................... 32

Figure 4: General Capacities for Executing Entities ................................................................... 33

Figure 5: Key Assessment Areas of a GCF Project Proposal ...................................................... 43

Figure 6: Impact Potential – addressing the Initial Result/Impact Areas .................................... 46

Figure 7: Projected baseline (BAU) and low-carbon pathway emissions up to 2030 ................. 47

List of Tables

Table 3.1: Basic Fiduciary Standards .......................................................................................... 36

Table 3.2: Specific Fiduciary Standards ...................................................................................... 37

Table 3.3: GCF’s Approach to Gender Mainstreaming into GCF Projects and

Programmes ................................................................................................................ 40

Table 3.4: Emission reduction potential by sector:

Technical potential and NDC 30% GHG emission reduction targets ......................... 48



Acronyms and Initialisms

AE Accredited Entities (used interchangeably with Implementing Entity (IE) APR Annual Performance ReviewBUR Biennial Update ReportCC Climate ChangeCEO Chief Executive OfficerCoG Council of County Governors DFID Department for International DevelopmentEE Executing EntitiesESS Environmental and Social SafeguardsEU European Union FAA Funded Activity AgreementFP Focal PointFYs Fiscal YearsGAAP Generally Accepted Accounting PrinciplesGCF Green Climate FundGIZ German Development AgencyHSNP Hunger Safety Net ProgrammeIFC International Finance Corporation IFRS International Financial Reporting StandardsIGRA Intergovernmental Relations Act, 2012IIED International Institute for Environment and DevelopmentIPSAS International Public Sector Accounting Standards IUCN International Union for Conservation of NatureIWRM Integrated Water Resources ManagementKCB Kenya Commercial BankKRDP Kenya Rural Development ProgrammeMAF Monitoring and Accountability FrameworkMIE Multilateral Implementing Entity MRV Monitoring, Reporting and VerificationNAPN ational Adaptation PlanNCCAP National Climate Change Action PlanNCCRS National Climate Change Response StrategyNDAN ational Designated AuthorityNDC Nationally Determined Contribution


NDMA Nations Drought Management Authority NEMA National Environment Management AuthorityNGO Non-Governmental OrganisationNIE National Implementing EntityPMF Performance Measurement FrameworkRIER egional Implementing Entity SDGs Sustainable Development GoalsUNDP United Nations Development ProgrammeUNEP United Nations Environment ProgrammeUNFCCC United Nations Framework Convention on Climate Change WB World BankWDC WRUA Development CycleWRA Water Resources AuthorityWRI World Resources InstituteWRUA Water Resource Users Association



This is a report of an assignment on capacity building of Green Climate Fund (GCF) execut-ing entities (EEs).

The assignment was one of a number of capac-ity related initiatives undertaken under the Ke-nya Green Climate Fund (GCF) Readiness Proj-ect, which is a component of the GCF Readi-ness and Preparatory Support Programme (the Readiness Programme). The Readiness Pro-gramme is a funding programme by the GCF to enhance country ownership and access to the Fund. The Programme provides resources for strengthening the institutional capacities of National Designated Authorities (NDAs) or fo-cal points and Direct Access Entities (Accred-ited Entities and Executing Entities) to engage efficiently with the Fund. The Government of Kenya (GoK), in partnership with the United Nations Development Programme (UNDP), UN Environment (UNEP) and the World Resources Institute (WRI), is implementing the Kenya GCF Readiness Project.

It engaged the Water Resources Authority (WRA), the Council of Governors (CoG) Secre-

tariat, the National Drought Management Au-thority (NDMA) and the Geothermal Develop-ment Authority (GDC) as the GCF executing entities. The National Environment Manage-ment Authority (NEMA) was the participating accredited entity.

The assignment’s aim was to assess and build the capacity of the executing entities in GCF projects development and execution. A fur-ther aim was to enhance Kenya’s capacity in developing a pipeline of bankable GCF proj-ects. To achieve this twin objective, the assign-ment was divided into interlinked components (diagrammatically represented below):

a) “General capacities and competencies” – ordinarily required of prospective accred-ited entities for accreditation and demon-stration during the lifespan of a project, but equally relevant to executing entities as their (the general capacities’) demon-stration happens at the project level. They are the GCF’s fiduciary standards, environ-mental and social safeguards and gender principles/standards.

Executive Summary

Capacity Building

GCF Standards Project Development and Execution Fiduciary Standards Project/Proposal General Specific Development Environmental & Capacities Capacities Social Safeguards Project Cycle Management Gender including M&E


b) “Specific capacities and competencies”, relating to project development and ex-ecution. This pertains to the core functions of executing entities.

The results of a capacity assessment undertak-en using the approach above were that:

a) All the three organisations (GDC was not assessed) had general capacities and com-petencies for the categories and sizes of projects (Chapter 3 of this report) they were interested in pursuing. Of the three ele-ments (fiduciary, environmental and social and safeguards and gender), capacity in fiduciary standards was arguably, the most developed in terms of the existence of systems and practices that conform to the recommendations of the GCF. While all the three institutions demonstrated experience in gender mainstreaming, it could be ob-served during the training that capacity and experience in gender mainstreaming were somewhat short of the GCF requirements. The same was observed for environmental and social safeguards (ESS), where GDC, al-though not assessed, highlighted during the training the challenges it had faced in dem-onstrating its ESS compliance in its quest for accreditation.

b) The three institutions had varying capaci-ties in GCF project development and ex-ecution, with WRA being arguably, the best capacitated, perhaps due to its longer en-gagement with the GCF and having a dedi-cated GCF project team.

Based on the above observations, in addition to specific recommendations for each institu-tion, which also informed the training, the fol-lowing recommendations were made:

a} Proposal development is a key and criti-cal area in Kenya’s quest to enhance its

capacity for accessing GCF funds. In gen-eral, the quality of proposals from develop-ing countries’ executing entities has been raised as an issue of concern, yet proposals are the only means by which funding can be accessed from the GCF. The training therefore prioritised this aspect of capacity building in the GCF.

b) Given the complexity of a GCF proposal and the fact that project developers are often resource constrained, external ex-pertise is inevitable in developing quality proposals that can attract the GCF funding. The current WRA proposal that requires five studies in order to bring it to the ex-pected quality standards is an example in this regard. Project developers must there-fore invest time and money in developing bankable projects.

c) The complexity of a GCF proposal further demands a paradigm shift in the way project development is conventionally approached. A GCF project is not a conventional de-velopment partners-funded project that is developed majorly with the input from technical/science related departments and by merely informing other departments. In addition to scientific technical input, input would be required from finance, economics, monitoring and evaluation, and gender de-partments.

On the way forward, the report makes the fol-lowing recommendations:

a) Measurement,reportingandverificationMeasurement, reporting and verification (MRV) is an important element of the international cli-mate change framework. The Paris Agreement established universal and harmonised MRV provisions, and a common system of transpar-ency now applies to all countries. MRV is still an evolving area in the GCF, making it necessary



for it to be a follow up activity once the neces-sary MRV guidelines and tools have been de-veloped by the Fund.

The focus should be linking the GCF proj-ect’s MRV system with the National Climate Change Registry (a requirement under the Cli-mate Change Act 2016) as well as the report-ing obligations under the UNFCCC. b) Evolving domestic and international cli-

mate change architectureClimate change projects and programmes in-cluding those funded by the GCF are a means of responding to particular climate change provisions and priorities, as identified either at the international (UNFCCC) level or do-mestically. The continually evolving nature of the international climate change architecture and periodically shifting national priorities cre-ate a need for periodic capacity building of project proponents on the latest topical issues to which their projects/programmes ought to respond. For instance, projects to be devel-oped between 2018 and 2022 will have to be aligned with the National Climate Change Ac-tion Plan 2018-22, which is yet to be devel-oped, hence the need for capacity building of project proponents on the Action Plan once it is developed.

Further, an observation during the training was that a majority of participants had mini-mum understanding of the national climate change processes and outcomes (strategies, laws and policies) such as the Climate Change Act 2016, the NCCAP and the National Cli-mate Change Policy, among others. This fur-ther underscores the need for periodic capac-ity building of potential executing entities in the same as part of enhancing the country’s capacity in the GCF.

It is recommended that this activity be aligned with the already established climate change

capacity building initiative of the Climate Change Secretariat implemented in conjunc-tion with the Kenya School of Government. c) New and emerging GCF guidelines and requirementsThe GCF itself is a new entity, with a number of its guidelines tagged ‘initial’, indicating that future updates of the same are anticipated. Some, such as the ESS as well as the Fund’s fi-duciary standards, have actually been adopted from IFC and other sources. The consequence is that new guidelines will be continually re-leased in the next few years. August 2017 saw, for instance, the release of a gender main-streaming tool/manual (widely referenced in this report). WRA has had to follow these new gender guidelines in the revision of its proposal that it first submitted to the GCF in 2016.

Similarly, the guidelines for Simplified Appli-cation Process (SAP) for Category C projects/programmes, together with the associated ESS guidelines, were released in Nov. 2017. It is also anticipated that the GCF’s own ESS and fiduciary standards (initially projected to be released by 2017) will be out in early 2018.

The implication is that project proponents will have to be capacity built on these new and emerging GCF guidelines and provisions.

d) EconomicandfinancialanalysisEconomic and financial analysis (EFA) is an integral component of the GCF proposal. A recommendation for an in-depth training in-volving relevant personnel from finance, ac-counts and technical departments was made. The recommendation is to have a project pro-ponent’s project development team working with a consultant (the trainer) to undertake the analysis. This will be the case for WRA with the planned studies that include an EFA. It was unclear how NDMA intended to address this need.



Most importantly, EFA seems to be an area that will present difficulties even for future project development, hence the need to consider some long term capacity building initiative with either the NDA or NEMA. e) Linkages with the Climate Change

Directorate There is need to create mechanisms for aligning the GCF projects with the initiatives of the Climate Change Directorate (CCD) particularly on and around MRV, which is a core mandate of the Directorate.

1.1 About the Assignment and ReportThe assignment was one of a number of capac-ity related initiatives undertaken under the Ke-nya Green Climate Fund (GCF) Readiness Proj-ect, which is a component of the GCF Readi-ness and Preparatory Support Programme (the Readiness Programme). The Readiness Pro-gramme is a funding programme by the GCF to enhance country ownership and access to the Fund. The Programme provides resources for strengthening the institutional capacities of National Designated Authorities (NDAs) or fo-cal points and Direct Access Entities (Accred-ited Entities and Executing Entities) to engage efficiently with the Fund.1 The Government of Kenya (GoK), in partnership with the United Nations Development Programme (UNDP), UN Environment (UNEP) and the World Resources Institute (WRI), is implementing the Kenya GCF Readiness Project.

This particular assignment was on capac-ity building of Executing Entities (EEs) to en-able them to develop bankable projects or programmes for funding by the GCF. It en-gaged the Water Resources Authority (WRA), the National Drought Management Author-ity (NDMA), the Council of Governors (CoG) and the Geothermal Development Company (GDC) – as potential Executing Entities – in or-der to assess and build their capacities with respect to developing and executing GCF funded projects and programmes. The Na-tional Environment Management Authority (NEMA) was the participating Accredited En-tity (AE). Two of the participating EEs – WRA and NDMA – are already in the process of developing and submitting project proposals through NEMA for funding by the GCF.

This report is an output of the assignment. Chapter 1 – the Introduction – provides the assignment’s overview including its overall aim/goal, objectives, activities and methodology used. It also briefly discusses the GCF. Chapter 2 details existing capacities and capacity gaps in three of the four EEs. Chapter 3 is on the capacity building areas that formed the basis of the training conducted as part of the assignment, while the last chapter, Chapter 4 proposes a capacity building strategy for follow up activities. 1.2 About the Green Climate Fund The Green Climate Fund (GCF) was established in 2010 by the 16th Conference of the Parties to

Introduction


the United Nations Framework Convention on Climate Change (UNFCCC) (COP 16) as a financial mechanism of the Convention under its Article 11. It seeks to support developing countries’ efforts in limiting and/or reducing their greenhouse gas (GHG) emissions (mitigation) and building resilience to climate change (adaptation).2 It does this by mobilising financial resources from different sources, but mainly from developed country Parties to the UNFCCC, and channelling the resources to developing countries using various financial instruments such as grants, loans and equity. The Fund further strives to strike a balance between mitigation and adaptation in terms of its resource allocation.

Access to the GCF funds is through entities called Accredited Entities (AEs) (also referred to as Implementing Entities in some texts). An institution that wishes to become an accredited entity must undergo an accreditation process (http://www.greenclimate.fund/how-we-work/getting-accredited), and be accredited by the GCF Board. The accredited entities are the implementing entities that act as a country’s programme managers of the fund (grants). They are responsible for presenting funding applications (which they prepare in collaboration with executing entities) to GCF, and then overseeing, supervising, managing and monitoring the overall GCF-approved projects and programmes.3

Accreditation enables the GCF to have trust and faith in the ability of the accredited entity to effectively and efficiently utilise the Fund’s resources for their intended purpose, while also adhering to certain standards and principles. Accreditation thus ensures that the accredited entity meets a set of GCF’s fiduciaryprinciplesand standards, environmental and social safeguards (ESS), and gender policy.

In this respect, there are three types of Ac-credited Entities4: National Accredited Entities

(or National Implementing Entities – NIEs), Re-gional Accredited Entities (or Regional Imple-menting Entities – RIEs), and International/Multilateral Accredited Entities (or Multilat-eral Implementing Entities – MIEs).5 Further, accredited or implementing entities may be public bodies, private entities or non-govern-mental institutions.

Accessing the GCF resources through the first two categories of accredited entities (NIEs and RIEs) is termed direct access modality. This simply implies that the accredited entity is either legally registered in the particular developing country (for national accredited entities) or legally registered elsewhere, but has a physical presence and operations in the country in which it intends to implement GCF funded activities (e.g., regional development banks). Direct access modality, especially through national accredited entities, is a focus area of the GCF in its efforts to enhance beneficiary countries’ ownership of the programmes and projects it funds.

Accredited entities with ongoing and proposed GCF activities in Kenya are NEMA, which is also an NIE of the Adaptation Fund, UNDP (a multilateral institution), Acumen Fund and IUCN, the latter two being International Non-Governmental Organisations (INGOs). These entities are working with a number of potential executing entities and the National Treasury as the GCF’s National Designated Authority (NDA) to develop project proposals for funding by the GCF (see section 1.2 below). Other national entities that have applied for or shown interest in GCF accreditation include the Kenya Commercial Bank (KCB), GDC, and the Cooperative Bank, among others.

1.3 Roles and Functions of Executing Entities Accredited entities (AEs) work with executing



vironmental and social safeguards as well as gender principles, as elaborated in the ac-creditation process. Furthermore, project pro-posals must comply with these standards and principles, hence the need for project pro-ponents (executing entities) to demonstrate compliance with them in both project design and execution/implementation.

Figure 1 below illustrates the linkages be-tween the four entities (the Fund, NDA, AE and EE) involved in the GCF direct access modality as well as their respective functions and expected capacities or requirements. Fo-cusing on AE and EEs, one notices that roles such as risk identification and management/mitigation, compliance with environmental and social safeguards, compliance with fidu-ciary standards and adherence to expected to gender principles interface between the two entities, although disproportionate burden of meeting them is placed on accredited enti-ties as conditions to be met for accreditation. On this basis, in this assignment, these four requirements were termed “general capaci-ties of executing entities” as they are primarily required of accredited entities as conditions to be met or demonstrated for their accredita-tion.

Specifically, executing entities are required to have capacities in project development and execution, hence the reason these were termed, in this assignment, “specific capaci-ties of executing entities”. From figure 1, the two capacities are ability to access funding and to make investment decisions on project level and project cycle management (includ-ing monitoring and evaluation of activities). An ability to access GCF funding essentially en-tails developing bankable projects that meet the GCF’s six assessment criteria of paradigm

entities (EEs) to undertake GCF funded proj-ects. The technical definition of an EE is, an entity through which GCF proceeds are chan-nelled or used for the purposes of a funded activity or part thereof, and/or any entity that executes, carries out or implements a funded activity, or any part thereof.6 The GCF Con-cept Note User’s Guide provides for an institu-tion to act as both an accredited entity and an executing entity, if it so desires and provided that it has sufficient capacity and experience in relation to execution of projects.

Practically speaking, under the GCF and other multilateral funds, an executing entity carries out specific tasks related to the preparation and execution of project activities such as the preparation of project proposals, project documents, procurement of services, contract administration, and management and/or over-sight of specific project activities. In the case of the GCF, an executing entity is further ac-countable to the Accredited Entity for the use of funds approved by the Accredited Entity, and is subject to any oversight that may be established by the Accredited Entity. i

Unlike in the case of AEs, the GCF has not de-veloped explicit guidelines on roles, respon-sibilities and requisite capacities of executing entities. However, considering the critical role that executing entities play in the actual ex-ecution of projects and that nearly every in-formation on projects reported back to the GCF by accredited entities is generated at the project level, it may be expected that some of what could be considered “general capacities and competencies” required of accredited en-tities may apply to executing entities.

These general capacities and competencies relate to the GCF’s fiduciary standards, en-

i Where it is not clear in this report, in relation to the GCF, “implementation” refers to overall oversight and includes roles such as advisory, monitoring & evaluation and high-level political engagement while “execution” refers to all activities pertaining to the actual undertaking of project activities on the ground.


shift potential; sustainable development poten-tial, impact potential, needs of the recipient, country ownership as well as efficiency and ef-fectiveness, as defined in the GCF’s Investment

Framework (https://www.greenclimate.fund/documents/20182/239759/Investment_Criteria.pdf/771ca88e-6cf2-469d-98e8-78be2b980940).

Framework for direct access to climate finance

Function Institution Competencies and skills

Implementing national strategy

Identify, prioritize and

coordinate activities

Design, manage,

Implement and execute

International Climate Funds (Adaptation Fund, Global

Environment Facility, Green Climate Fund)

Reporting of activities (including Measure- ment Reporting and Verification)

Allocation of funds

Activities Activities

National governing bodies (National Designated

Authority)

Accredited Entity (AE)

Executing Entity

(EE)

•Fund management (e.g. risk management/ mitigation)

•Application management

* The knowledge for approving grant-financed projects is different to loan-financed projects (e.g. loan provision requires stringent risk management and risk mitigation capacities).

• Ability to access funding and to make investment decisions on country level

• Knowledge for approving activities e.g. grants and/or loans on national level*

• Responsible for the entrusted funds (including monitoring and evaluation of all programmes/projects)

!

• Ability to access funding and to make investment decisions on project level

• Project cycle management (including monitoring and evaluation of activities)

!

• Risk management/mitigation • Environmental and social safeguards • Fiduciary standards • Gender principles

Figure 1: Linkages of the various entities under the GCF Direct Access Modality

Source: Adapted from Frankfurt School – United Nations Environment Programme Collaborating Centre for Climate & Sustainable Energy Finance (2013) Direct access to international climate finance and associated fiduciary standards, Working Paper in CDKN 2013. Enhancing Direct Access to Green Climate Fund.



1.4 Rationale for and Objectives of the Capacity Building Assignment WRA and NDMA, as potential executing entities, are in the process of seeking funding from the GCF to undertake climate change projects. The WRA proposal, with NEMA as the AE, has an outcome of increasing water security through Integrated Water Resource Management (IWRM) within the Athi River Catchment Area of Kenya as well as enhancing health and general wellbeing of the targeted community beneficiaries. On the other hand, one of the NDMA’s proposals, also with NEMA as the AE, aims to enable county and community level climate change planning and investment. The project proposes to upscale and replicate the outcomes of the UK Department for International Development (DFID)’s funded Adaptation Consortium.

On the basis of GCF’s initial feedback on these two proposals, it was decided that capacity building of the two executing entities would be required to enable them to deliver bankable project proposals in line with GCF’s requirements. Through the Kenya GCF Readiness Programme, delivered by GoK in partnerships with UNDP, UNEP and WRI, a capacity building assignment project was thus designed to address this need.

An additional objective of the assignment was to enhance the capacity of Kenya to build a pipeline of bankable projects through building the capacity of a number of potential executing entities besides these two (NDMA and WRI). This was the reason for incorporating, at a later stage into the project, GDC and CoG. The latter was incorporated into the assignment in its capacity as the coordinator of capacity-building related initiatives for county governments.

The assignment was supported by the UNDP-supported component of the Kenya GCF Readiness project. The overall project (the Kenya GCF Readiness project) is focussed

on institutional capacity building for national AEs, national EEs and the NDA. The National Treasury is the NDA for Kenya.

The specific goal of the assignment was to carry out capacity assessment and development of necessary institutional capacities for the priority EEs (WRA, NDMA) relative to their projects submitted to the GCF by NEMA and IUCN as the AEs of the GCF. The capacity development would enable the EEs to comply with the EE’s rules, policies and procedures in accordance with the GCF’s standards, policies and procedures as well as enhance their capacity in developing and executing GCF programmes and projects.

Overall, through this assignment and other related capacity building initiatives supported under the UNDP-supported component of the Kenya GCF Readiness Programme, Kenya aims to develop the capacity of climate finance stakeholders in Kenya to plan for, access, manage, and monitor climate change finance, particularly the GCF, at the national and subnational levels. The activities are part of the climate change mainstreaming activities stipulated by the Climate Change Act 2016.

The working definition of capacity building in this assignment encompasses skills, competencies, knowledge, experience and systems/structures.

1.5 Approach to the Capacity Building Assignment The initial aim of the assignment, as captured in the Terms of Reference (TORs), was to build the capacity of the two executing entities (NDMA and WRA) with respect to the GCF’s fiduciary standards, environmental and social safeguards as well as gender principles. However, at the inception meeting, stakeholders observed that focusing solely on these three elements would be equivalent to building the capacity of the institutions as accredited entities given


that a pre-condition to being accredited by the GCF Board was compliance with the three standards. A second observation, which was also a dominant theme in the consultations undertaken, was that there was generally an issue with the quality of proposals submitted by developing countries’ accredited entities to the GCF for funding, necessitating the importance of building the capacity of project developers in this regard.

The approach to the capacity building assignment, adopted in consultation with the project stakeholders, thus focused on building the capacity of the executing entities in developing and executing projects, complemented with enabling (or enhancing) their understanding of the GCF standards. This is illustrated in figure 2 below.

There were three important reasons given against completely deprioritising the GCF standards in the capacity building exercise:

1) Executing entities are primarily responsible for executing or implementing project activities. This execution is expected to be in line with the GCF standards. It is therefore incumbent upon them (executing entities)

to understand and internalise the standards.

2) GCF project proposals must integrate the GCF standards and requirements. This is particularly the case with gender mainstreaming as well as environmental and social safeguards, with gender being a recurring theme in all the sections of a GCF proposal. To develop bankable proposals that meet the GCF’s project specifications, project proponents must therefore have capacity in and knowledge of the standards.

3) Some executing entities such as WRA and GDC expressed an interest in seeking accreditation with the GCF Board, with GDC in particular already pursuing this goal. It was therefore in their interest for them to be trained on the GCF accreditation standards.

1.6 Objectives, Scope of Activities and Methodology

1.6.1 ObjectivesThe assignment sought to build the capacity of three GoK institutions, i.e. NDMA and WRA and CoG, as executing entities. GDC was also incorporated into the project at a very later

Capacity Building

GCF Standards Project Development and Execution Fiduciary Standards Project/Proposal General Specific Development Environmental & Capacities Capacities Social Safeguards Project Cycle Management Gender including M&E

Figure 2: Approach to Capacity Building



stage. In order to deliver this overall objective, the assignment aimed to:

1) Carry out an assessment of existing capacities and gaps in the initial three entities focusing on structures, mandates, personnel and financial systems relevant to effective development and implementation of GCF projects, with a view to developing their capacity in respective of the identified gaps;

2) Based on the identified gaps, train all the four executing entities in developing and undertaking GCF projects in line with internationally accepted benchmarks and safeguards; and

3) Make recommendations for follow up capacity building, if necessary.

1.6.2 Scope of ActivitiesActivities undertaken for the assignment were:

1) Consultations with stakeholders in various forms and formats (workshops, physical as well as telephone interviews, emails);

2) Development of an inception report to guide the assignment;

3) A capacity assessment of the executing entities to identify existing capacities as well as training and capacity needs in respect to GCF projects development and execution;

4) An assessment of fiduciary systems and procedures, environmental and social rules and procedures as well as gender practices for conformity with GCF standards;

5) Identification of capacity building gaps and needs based on assessment of existing capacities and gaps ( Chapter 2 of this report);

6) Developing capacity building/training materials (PowerPoint presentations);

7) Training the four executing entities in the identified capacity gaps (Chapter 3 of this report); and

8) Developing a capacity building strategy and action plan for follow up capacity building initiatives.

1.6.3 MethodologyIn undertaking the assignment, the following tools and methods were used:

1) Literature Review and Analysis covered the GCF’s fiduciary standards, environmental and social safeguards, gender policies and strategies as well as respective institutions’ record of implementation of similar past projects. These were analysed against the GCF standards and requirements. Other documents analysed included the National Climate Change Response Strategy (NCCRS), National Climate Change Action Plan (NCCAP) 2013-17, Kenya’s first Nationally Determined Contribution (NDC), Kenya’s Second National Communication (SNC) to the UNFCCC, the Climate Change Act 2016, the Paris Agreement and relevant sectoral plans and strategies. These address several areas pertaining to projects development and execution such as paradigm shift, needs of the recipient country, country ownership and impact potential. Additional reference materials were manuals and handbooks on the GCF, e.g. a gender mainstreaming manual by the GCF and UN Women, 2017 and a 2015 WRI handbook on mainstreaming GCF’s environmental and social safeguards.

2) Organisational capacity assessment, which took place at two levels – institutional and personnel (individual) levels. The


institutional capacity assessment involved understanding systems, procedures and processes related to the GCF fiduciary standards, environmental and social safeguards and gender principles. For the personnel capacity assessment, a select group of personnel from the three institutions that were involved in the project from the outset (NDMA, WRA and CoG) were assessed for their knowledge and experience in relation to the same subject issues (gender, fiduciary standards and environmental social safeguards), in addition to project development and execution.

3) Questionnaires (see Annex 1) were developed and used for the organisational capacity assessment – one for the institutional capacity assessment and the other for the personnel capacity assessment.

4) Interviews were the means by which the questionnaires were administered. Interviews also took place with the management staff of some of the participating institutions as well as with secondary stakeholders in the project.

5) Case Studies: As part of the literature review and training, case studies on selected projects that have received GCF funding through Direct Access modality as well as related projects and programmes were referenced and used in the training.

6) Workshops: Three workshops took place as part of the exercise. They were the inception meeting, an initial workshop to discuss preliminary findings of the capacity assessment (11th to 12th, October 2017) and a third that served as both the project validation meeting and the training of the EEs (Nov 29th to Dec 1st, 2017).



Situational Analysis and Findings2


2.1 National Drought Management Authority The National Drought Management Authority (NDMA) is “an agency of the Government of Kenya mandated to establish mechanisms which ensure that drought does not result in emergencies and that the impacts of climate change are sufficiently mitigated”. NDMA is a public body established by the National Drought Management Authority Act, 2016.

NDMA is divided into five broad departments.7 These departments are Technical Services, which deals with drought information, drought resilience, and drought contingency planning and response; Support Services that deliver among other functions, finance and accounts, supply chain (procurement), and information and communication technology; and Resource Mobilisation and Advocacy that mobilises resources and fosters partnerships and community advocacy programmes. Others are Policy, Planning and Research, which is in charge of the national strategy on drought management as well as planning and prioritisation of programmes and activities; and Internal Audit.

In total, there are about 44 staff members in Administration, 58 in Finance, Accounting and Procurement and 112 in Technical/Field operations.

2.1.1 Existing Capacities and Competencies In interviews with the personnel working in these departments, one may conclude that the general capacities and competencies required for developing and executing GCF projects exist at NDMA. The Finance Department, for instance, adheres to the International Public Sector Accounting Standards (IPSAS), which is one of the GCF’s fiduciary requirements for public bodies. Similarly, the Internal Audit Department, currently undergoing additional staffing, follows the guidelines of the Institute

of Internal Auditors (IIA). For independence, the audit department reports functionally to the Audit Committee of the NDMA Board and administratively to the Chief Executive Officer (CEO). This is actually the expected norm with public institutions in Kenya, and is in line with the international best practice. One has to be a member of the Institute of Certified Public Accountants of Kenya (ICPAK) – a local affiliate of both the IPSAS Board and IIA – for he or she to hold a senior position in the finance and audit departments.

The Procurement Department has a customised internal procurement manual based on the Public Procurement and Asset Disposal Act 2015. However, the lack of regulations to operationalise the Act has hindered NDMA from making the manual publicly available. NDMA has made a similar attempt with the Anti-corruption law (although this is still in preliminary stages). Nevertheless, the organisation adheres to national laws on anti-corruption, and has in addition, developed a (Financial) Risk Assessment Framework for risk preventive measures.

NDMA also has experience with implementing development partners’ funded climate change projects and programmes. Some of the ongoing projects, programmes and initiatives are the Kenya Rural Development Programme (KRDP) funded by the European Union (EU), Hunger Safety Net Programme (HSNP), and the Climate Adaptation (ADA Consortium) funded by the United Kingdom’s Department for International Development (DFID). The success of the ADA Programme is for instance, the reason behind NDMA’s decision to seek GCF funding to upscale and replicate similar project activities in other counties. It should however, be taken into consideration that most of these projects have been developed by the respective donors (through consultancies), and some have fully fledged programme/project



management units (PMUs). This may have a bearing on the institution’s capacity to develop [and execute] a GCF project while relying solely on its own human resource.

The institution and its personnel have also been involved in national climate change processes such as the National Climate Change Response Strategy (NCCRS), National Climate Change Action Plan (NCCAP) 2013-17, the National Adaptation Plan and the Nationally Determined Contribution (NDC). The experience and knowledge from these are applicable in a GCF proposal, particularly in the “Country Ownership” and “Needs of the Recipient (Country)” sections of the GCF proposal template.

Environmental safeguards are incorporated in programmes and projects that require environmental impact assessments (EIAs) as per the existing national regulations on EIAs. Increasingly, social dimensions are also being considered through a new tool, the Environmental and Social Impact Assessment (ESIA). A number of NDMA technical staff have knowledge and experience in this area.

Lastly, gender mainstreaming into projects is through the Community Managed Disaster Risk Reduction, a tool developed by Cordaid and International Institute of Rural Reconstruction (IIRR) for use in disaster risk reduction projects.8

2.1.2 Capacity Gaps and Recommendations As indicated above, NDMA has experience in implementing donor-funded projects. However, most of these projects have been developed by the respective funding entities through consultancies, but with technical input from the institution. In spite of what is evidently an existing capacity in areas required for a GCF proposal development, this scenario raises some doubts over the institution’s own experience in developing projects - from project conception to full proposal development and

finally to funding, as would be the case with a GCF project. In particular, it must be pointed out that the assignment did not work with a consistent team. None of the personnel who were consulted was trained. Some, who were consulted, just like all those who participated in the training, were not even aware of the institution’s initiative to develop a GCF project. Thus, if NDMA intends to be in a situation where it is developing a pipeline of projects for GCF funding, it may need to re-think its approach and strategy: it should designate a dedicated GCF project team.

Secondly, NDMA generally implements what would be considered as Category C projects (based on the GCF’s ESS accreditation categories – see Chapter 3) for which the newly released (Nov. 2017) Guidelines for the Environmental and Social Screening of Activities proposed under the Simplified Approval Process suffice. EIAs and ESIAs as currently conducted are also adequate for the few Category B projects it implements. This picture creates a need for additional capacity building in the GCF’s environmental and social safeguards, if the institution desires to implement more of Category B projects or programmes for which it has the other necessary capacities. In any event, a training on GCF’s ESS was also a key recommendation from the consultations.

Another recommendation was the need to involve all key departments in GCF project development. This was exemplified by what was identified as a capacity gap in economic and financial analysis (EFA) by the technical department; yet this capacity exists in the Finance and Accounts departments of the institution. This finding was not unique to NDMA though; WRA also expressed difficulty with the EFA section of their proposal. A further justification for involving all key departments in project development is the fact departments such as finance, accounting and procurement often


play critical roles in project cycle management (PCM). They should thus be aware of what PCM entails for GCF projects. For instance, periodic GCF project reporting involves significant financial information reporting, necessitating the involvement of finance and accounting departments in GCF project development and execution.

Lastly, there is limited knowledge of the GCF itself as well as its access processes and procedures; the little capacity being with the three or so technical staff members who have been involved in the development of the aforementioned proposal. This area was therefore an element of the capacity building/training exercise. Further, a recommendation was made for its inclusion as an agenda item in future capacity-building initiatives, given that the international climate change architecture including climate finance is ever evolving.

2.2 Water Resources Authority The Water Resources Authority (WRA) is a state corporation under the Ministry of Water and Irrigation. WRA is established as a body corporate under the new Water Act (2016) that was operationalized on the 21st of April 2017 vide Special Issue Kenya Gazette Notice No. 59. The organization has been in existence for the past 12 years following its establishment under the Water Act (2002) that has now been replaced by the new Water Act 2016.

WRA is the State Authority mandated with regulation of the management and use of water resources in Kenya. The Authority is responsible for formulation and enforcement of standards, procedures and regulations for water quality and quantity, water allocation and apportionment, monitoring and assessment of water resources, gathering and publishing information on water resources, receiving and determining applications for water use permits. WRA

protects water quality and oversees protection and management of fragile ecosystems and water catchments in the country.

WRA operates through a catchment basin model in respect of the country’s five drainage basins. Accordingly, WRA has six regional offices established according to the drainage basins namely: Athi, Tana, Rift Valley, Ewaso Ngiro North and Lake Victoria Basin which is divided into Lake Victoria North and Lake Victoria South Catchment areas.

Information from the Human Resource Department indicates that WRA has a staff capacity of over 750 staff members who based at the head office, regions and sub-regional offices and with skills and knowledge sets across different fields. There are approximately 325 staff members in Management and Administration, 330 Technical/Field officers, 75 in Finance, Accounting and Procurement and the rest in the other departments.

2.2.1 Existing Capacities and Competencies The first and perhaps the most discernible capacity in WRA is arguably a good number of personnel with different skill and knowledge sets across different departments and functions. For example, the resource mobilisation unit that is leading the GCF proposal development is comprised of about eleven staff members with degree and post-graduate level training in various aspects of project development and management.

From the interviews conducted with a number of technical staff, existing capacities at WRA relevant to GCF project development and implementation include an understanding of both national (domestic) and international climate change processes (NCCRS, NCCAP, UNFCCC), ranging from familiarisation from literature review, to deeper understanding from involvement/participation in these processes;



an understanding/awareness of Sustainable Development Goals (SDGs) broadly and of SDG 6 as the organisation’s focus area; and capacity in environmental and social safeguards. On the latter, the institution has about 80 Lead and Associate Environmental Experts who are registered by NEMA. Other knowledge and skill sets are monitoring, reporting and verification (MRV) (or what is referred to as traditionally as monitoring and evaluation (M&E)) as well as in gender mainstreaming (in which there are some staff members with previous training).

At the project level, gender mainstreaming happens through a tool called a WRUAii Development Cycle (WDC), which defines how different gender groups including men, women, youths and persons with disabilities are to be involved in both project management and execution.

Recently completed and ongoing natural resource and climate change related projects that demonstrate the institution’s capacity in project implementation include the Kenya Water and Sanitation Programme (KWSP); the Mau Mara Serengeti (MaMaSe) Project/Integrated Water Resources Action plan (IWRAP); UNEP-WRMA Collaboration for Conservation of Upper Tana Catchment Area; the Medium Term ASAL Programme I and II; and Capacity Building and SCMP implementation for WRUAs. Others are the Water Reforms and Stewardship Programme, the Study of Economic Evaluation of Ecosystems in the Tana Basin and Establishment of an Upper Tana Water Fund with The Nature Conservancy (TNC). Under the GCF project size and type classification, these projects range from micro to medium in terms of level of funding, and between Category B and C for environmental and social safeguards. The Category B projects speak to what has been alluded to before as the existence of necessary capacity in the GCF’s

ESS standards for that category of projects (e.g., the 80 NEMA registered Lead and Associate Experts).

The institution’s finance system also complies with IPSAS and the Public Finance Management Act 2012 (which also complies with international best practice). WRA is actually one of the first government institutions to comply with IPSAS, according to information provided by its Finance Department. An independent audit department (with a Senior Internal Auditor who is IIA certified and reports directly to the Audit Committee of the Board), a procurement department whose operations are guided by the Public Procurement and Asset Disposal Act 2015, and risk assessment framework to prevent financial risks complete the other elements of the fiduciary standards at the organisation. An anti-corruption policy and anti-corruption committees at sub-regional levels complement the risk assessment framework.

2.2.2 Capacity Gaps and Recommendations The first capacity building area that the team pointed out was enhancing the understanding of the GCF and its access processes, even for those who are involved in the development of the current GCF proposal. This will address the fact that the personnel have different levels of understanding of the Fund, ranging from those in the Finance, Accounts and Audit Departments who are, in most cases, not aware of its existence, to those in the technical department that are involved in climate change related work. The former group, as has been indicated before, is critical to project cycle management that conforms to GCF guidelines.

Project development (proposal writing) was identified as the second capacity building area. Despite adequate experience in proposal writing by Technical staff in WRA, there is need

ii WRUA stands for Water Resource Users Association


for capacity building since the GCF proposal development processes and procedures are relatively complex, and the nature of the GCF proposal currently under development further justifies the need to prioritise the activity.

Thirdly, WRA will be aiming for more of the Category B projects than Category C projects. Category B projects will necessitate more robust environmental and social safeguards than the current practice of undertaking EIAs and ESIAs for selected projects, hence the decision to include the GCF ESS in the training. Further, WRA’s intention to seek GCF accreditation further justified the need to incorporate ESS in the training/capacity building. However, in regard to accreditation, the institution may need to consider the lengthy time the process takes as well as learn from other organisations like the Geothermal Development Company (GDC), which has pointed out a challenge with fulfilling the GCF’s environmental and social safeguards. NEMA may not be an ideal case study as it was accredited under the Fast Track Accreditation process because of its prior accreditation for the Adaptation Fund.9

The fourth area for capacity building/training is economic and financial analysis (EFA), which as noted was also a concern for NDMA. A specific recommendation was made by the WRA project team for both technical and finance/accounts staff to undergo this training given the linkages between the financial and technical sections of the GCF proposal. However, the finance/accounts team did not participate in the training, which actually limited the scope of EFA coverage in the training. There will be need to follow up on this particular aspect, with specific focus on the current proposal. Lastly, WRA re-emphasised the need for fast-tracking the four studies that had been identified by the GCF Secretariat in its feedback to the WRA proposal as critical to improving the

proposal’s quality. This recommendation was however, out of the scope of the assignment.

2.3 The Council of Governors

The Council of Governors (CoG) is established under Section 19 of the Intergovernmental Relations Act (IGRA) (2012). Its mandate is to provide a mechanism for consultation amongst county governments, share information on performance of the counties in execution of their functions, facilitate capacity building for governors and consider reports from other intergovernmental forums on national and county interests amongst other functions (IGRA Section 20). The Council is composed of the forty-seven County Governors.

The CoG has powers, under sections 20(2) and 20(3) of the Intergovernmental Relations Act, to form other structures that can enable it to perform its mandate. Thus, the CoG has established eighteen (18) committees to facilitate the planning & performance of its activities. The CoG Committees include:

1. Agriculture Committee

2. Arid and Semi-Arid Land (ASAL) Committee

3. Cooperatives and Enterprise Development

4. Education, youth, sports, culture and social services Committee

5. Finance and Economic Affairs Committee

6. Health Committee

7. Human Resources, Labor and Social

Welfare Committee

8. Infrastructure and Energy Committee

9. Intergovernmental Relations Committee

10. Information, Technology and Communication (ICT)

11. Legal Affairs and Human Rights Committee



12. Urban Development, Planning and Lands Committee

13. Resource Mobilization Committee

14. Rules and Business committee

15. Security and Foreign Affairs committee

16. Trade, Industry and Investment Committee

17. Tourism and Wildlife

18. Water, Forestry and Mining Committee.

The function of the Council of Governors’ secretariat is to help fulfil the CoG’s mandate and functions as provided for under the Fourth Schedule of the Constitution of Kenya 2010 and in Section 20 of the Intergovernmental Relations Act 2012. The secretariat is staffed with about 35 personnel (8 in Management and Administration, 10 in Finance, Accounting and Procurement Departments, and 15 providing technical services).

The proposed capacity building of the CoG Secretariat in developing and executing GCF projects aligns with the CoG Strategic Plan 2017-22’s capacity building objective of “an expanded and adequately capacitated workforce to pick up the workload and crucial tasks”. It will further complement the recently conducted capacity building in gender mainstreaming, as gender is a critical consideration of the GCF funding.

Strictly speaking, the CoG (including the CoG Secretariat) does not execute projects and cannot, therefore function as a GCF executing entity. Its inclusion in the capacity-building project was on the basis of its function as a provider of technical advice to counties on a range of devolution-related issues. Building the capacity of the CoG Secretariat on the GCF is thus viewed as enhancing its own capacity to build that of counties that may be interested in seeking GCF funding.

2.3.1 Existing Capacities and Competencies Given that the CoG Secretariat does not execute projects, its capacity assessment was given a slightly different approach from that used for assessing the capacity of NDMA and WRA. For instance, while financial, accounting, auditing, procurement and risk mitigation systems were assessed, the emphasis was on how the compliance of these systems with the GCF requirements was important for accessing GCF funds, rather than on capacity gaps in the systems that the institution needed to address to be able to access GCF funds. This also means that capacity of the CoG Secretariat should not be and was not on the basis of the identified capacity gaps (see below), but wholesomely on the requirements for accessing GCF funds.

That said, a number of capacities and competencies relevant to GCF were identified. One of these is the existence of financial and audit systems that comply with the GCF guidelines, i.e., IPSAS and International Standards on Auditing, respectively. This is indeed the expectation for all government institutions. In addition, the CoG has developed an internal manual on procurement – the CoG Procurement Manual – aligned with the Public Procurement and Asset Disposal Act 2015. The Public Procurement and Asset Disposal Act 2015 is modelled on international best practice. With the support of UN Women, the World Bank, and the Public Procurement Oversight Authority, CoG has also built the capacity of counties on the provisions of the Act. Similarly, CoG is developing an anticorruption policy as well as a risk assessment framework (which provides for an anticorruption committee) as measures of enhancing financial prudence.

The Secretariat also has capacity in gender mainstreaming including having a gender department. It has also developed a policy on gender (the Gender Policy 2015) as well as a gender mainstreaming guideline. With the


support from development partners and the National Government, the secretariat has further built the capacity of counties in a number of gender related themes including gender rapid assessment and gender responsive budgeting. In addition to these, a number of staff have also been mainstreamed in gender mainstreaming.

The strongest capacity in relation to a GCF project development is in Sustainable Development Goals (SDGs) in which the Secretariat has even developed a booklet/factsheet on how to mainstream SDGs into the County Integrated Development Plans (CIDPs) as well as supported the mainstreaming of SDGs into the CIDP Guidelines. SDGs will be mainstreamed into the 2018-22 CIDPs, courtesy of these initiatives.

At the individual/personnel level, there is capacity in implementation of climate change projects particularly community development projects, but limited capacity in national climate change programming (NCCRS, NCCAP, NDC, Climate Change Act) as well as in international climate change processes and outcomes. This situation is replicated in the area of monitoring, reporting and verification as well as in environmental and social safeguards in which the existing capacity would best address “Category C” risks. 2.3.2 Capacity Gaps and Recommendations Given the perceived role of the CoG Secretariat in this project and the fact that it does not execute projects, its capacity ought to be built in all aspects of the GCF. For this reason, the staff members that the assignment engaged recommended training that covered both “general” and “specific” capacities and competencies, as defined previously. In addition, CoG identified priority/focus areas of the training, all of which related to project development and execution.

The first priority area is environmental and social safeguards, in which the available limited

capacity (only one individual) is applicable to mainly “Category C” projects. This is against a huge expectation placed on the secretariat where it is occasionally called upon to review “Category A” projects (e.g. the Lamu Port project) against these standards. The team recommended training of the entire technical staff on environmental and social safeguards including in undertaking strategic environmental assessments (SEAs). The latter is however, beyond the scope of this assignment.

Another recommendation was on how to access GCF funding, and specifically, to develop a customised (localised) manual that illustrates the processes involved. A manual on developing and executing GCF projects has been developed in this regard. It, together with this report/strategy, are the main outputs of the assignment.

Lastly, the low level of staffing in the various departments of the secretariat and its implication on new tasks and functions was also raised as a concern. A specific recommendation was made for the establishment of a climate change desk/unit that could support new and emerging matters such as the GCF as well. This was, however, beyond the scope of this assignment.

2.4 Overall Observations and Recommendations for Training Based on the consultations with the three potential executing entities (WRA, NDMA and CoG) and other stakeholders, the following general observations and recommendations were made:

1) Proposal development is a key and critical area in Kenya’s quest to enhance its capacity for accessing GCF funds. In general, the quality of proposals from developing countries’ executing entities has been raised as an issue of concern, yet proposals are the only means by which funding can



be accessed from the GCF. The training therefore prioritised this aspect of capacity building in the GCF.

2) Given the complexity of a GCF proposal and the fact that project developers are often resource constrained, external expertise is inevitable in developing quality proposals that can attract the GCF funding. The current WRA proposal that requires five studies in order to bring it to the expected quality standards is an example in this regard. Project developers must therefore invest time and money in developing bankable projects.

3) The complexity of a GCF proposal further demands a paradigm shift in the way project development is conventionally approached.

A GCF project is not a conventional development partners-funded project that is developed majorly with the input from technical/science related departments and by merely informing other departments. In addition to scientific technical input, input would be required from finance, economics, monitoring and evaluation, and gender departments.

These recommendations mirror lessons learned, reproduced here below, from a Climate and Development Knowledge Network (CDKN) supported project in Ethiopia. The project, responding to the increasing risk of drought: building gender responsive resilience of the most vulnerable communities, has since been funded by the GCF.

Table 1: Summary of lessons learned from a GCF project development in Ethiopia

Communicate about GCF procedures but don’t reinvent the wheel

The Green Climate Fund is a great entry point – people know about it and get excited about the potential for resource mobilisation. However, Green Climate Fund has its own project proposal form and a continuously updated online operational manual now aptly titled. While it is helpful to communicate about this, it can seem intimidating to those who have limited experience of applying for international grants. It does not need to be. Much of what the GCF wants is good programme design practice that already features in Ethiopia’s own planning and project appraisal handbooks.

The CDKN-supported investment-planning project aimed to create lasting project development capacity within the water sector. Part of the project involved providing training and mentoring on interpreting GCF requirements and on good project design practice. However, linking technical specialists within the water ministry to support from project appraisal specialists in the Ministry of Finance and Economic Cooperation was equally essential.

Respect the balance between technocratic ‘best fit’ and pragmatic national priorities

Programme prioritisation and appraisal can sometimes feel like a very technocratic process – a set of ideas can be assessed and the ‘right’ solution can be picked that represents the best fit between applicants’ and funders’ priorities. The reality is so much messier than this. There are national political priorities, urgent needs to progress pre-tested areas of work as well as less well-tested ideas that creative technicians would like to get going all jostling for a place in a funding proposal. At the same time, subtle differences in the process of project prioritisation and formulation that can make all the difference to an outcome!


GCF calls for ‘bold ideas’ but sometimes such ideas may not be prioritised when faced with the technocratic idea of ‘best fit’. On the other hand, ignoring technocratic considerations may not result in the best outcome if the process ignores the criteria that funding agencies are most interested in or doesn’t consider how different ideas fit together as an integrated project.

Finding a pragmatic way through this challenge requires a high level of flexibility and a willingness to listen and support national priorities and processes. It also means that building ‘adaptive management’ systems for learning and evaluation becomes even more important. These systems will ensure that bold ideas can be tested against evidence and scaled up where they work.

Involve technical staff from across the sector, not just ‘environment’ specialists

Perhaps this doesn’t need to be said anymore. Maybe somewhere there are still people who feel that responding to climate change is the responsibility of an environment ministry or a single unit within a ministry. Our experience showed very clearly that this is not enough.

In our work, we interacted with experts from across six of the water ministry’s directorates, who had core skills in: watershed management; water treatment; water, sanitation and hygiene; hydrological monitoring and others. It was impressive to see how their expertise was harnessed and brought together with knowledge on climate finance from the National Climate Finance Facility. Facilitating that process for the purpose of the pipeline proposal was our role but the political leadership to create that commitment came first.

Hand over the pen but don’t stop the dialogue

The best way to leave lasting capacity in a sector for future project development is to hand over the pen and make sure that Government experts are the ones who write as much of the document as possible. However that doesn’t mean stepping away.

We used a proposal gap analysis process as a key technique for summarising missing or weaker areas and ensured that queries kept being directed to our Sectoral counterparts. This encouraged water sector staff to develop their proposal ideas over time. We also integrated a component of the proposal that focused on building internal adaptive management systems that would enable that dialogue to continue throughout the implementation of the programme.

These four lessons summarise some learning from LTS’s project supporting Ethiopia to develop one element of a cross-sectoral Green Climate Fund investment proposal pipeline. When the project started, the GCF fund allocation processes had not yet been tested and the accreditation of Ethiopia’s national climate finance vehicle was not yet secured. Nevertheless, the flexible approach we took to managing this uncertainty and to improving Government staff’s understanding of proposal development should stand the country in good stead for its ongoing efforts to mobilise funds from the GCF and other climate finance providers.

Source: https://cdkn.org/2015/12/lessons-from-ethiopias-gcf-planning/?loclang=en_gb. Accessed on 4th December, 2017.



Elements of the Capacity Building Exercise3


• Alignment with the fund objectives

• At least 3 years of operations

• Basic • Specialized

• A (High) • B (Medium) • C (Low)

• Micro • Small • Medium • Large

FIDUCIARY FUNCTIONS

MANDATE & TRACK RECORD

PROJECT SIZE

ENVIRONMENT AND SOCIAL RISK CATEGORY

3.1 Green Climate Fund Standards For projects to be funded by the GCF, the recipient accredited entity (and by extension the associated executing entity/ties where the accredited entity is not the executing entity) must demonstrate their capacity to address the fund’s key requirements pertaining to fiduciary standards, environmental and social safeguards and gender principles (see Figures 3 and 4). For this assignment, these three have been termed “general capacities of executing entities” for the fact that they are not the primary focus area of the capacity building/training, but are equally essential in designing a project. The scope of capacities that an institution ought to demonstrate in these three areas depends on the type and size of activities for which it intends to seek GCF funding. The GCF thus accredits entities under different categories through an approached referred to as “fit-for-purpose approach” (Figure 3 below)10 .

The type and size of projects that an accredited entity intends to implement determine its accreditation category. For accredited entities that are not acting as executing entities, this also has a bearing on the types of executing entities that they may work with to execute/implement projects. For instance, an executing entity that has only been implementing micro and small-scale projects may lack the capacity and experience to implement medium and large-scale projects. “Capacity for implementation” is one of the key areas that project proponents (EEs) must demonstrate in their project proposals.

The “fit-for-purpose” is a tiered accreditation system, which classifies applicant entities based on the nature of their organizations and the intended scale, nature and risks of their proposed climate finance activities.

The approach allows a broader set of institutions to become accredited, while simultaneously

Source: Lucy Ssendi and Neha Rai. 2016.

Figure 3: Fit-for-purpose accreditation approach



ensuring that only capable institutions receive funding for higher risk projects, where risk is considered from a perspective of both financial and environment and social safeguards (ESS).

The “fit-for-purpose” accreditation approach considers three elements:

1) Proposed project’s or programme’s activity size, 2) Fiduciary standards, and3) Environmental and social risk categories.

These three elements as well as their implications for different project types and sizes (scales) are discussed in the next section.

3.1.1 Environmental and Social SafeguardsThe GCF adopted the International Finance Corporation (IFC) Performance Standards (PS) as its safeguard standards on an interim basis. In the meantime, it undertook to develop its own safeguards, which were initially projected to be

ready for adoption by the GCF Board by 2017. It is expected that the new standards, with a new 2018 delivery timeline, will mirror the interim (IFC’s) standards.11

The IFC’s Performance Standards consist of one overarching standard (PS 1) and seven standards covering specific issue areas (PSs 2-8) (see Figure 4 above). PS 1 covers the elements that need to be in place to help ensure that the remaining seven standards are implemented, e.g. the systems (rules, regulations, personnel, etc) that an organisation has to implement standards on labour and working conditions (PS 2). Together, the PS 1 elements are called the environmental and social management system (ESMS).12 PS 1 is not programme or project specific and must be demonstrated by prospective accredited entities before they are accredited. On the other hand, PS 2 to PS 7 are project specific in the sense that they are integrated into projects/programmes, depending on their respective applicability.

Gender Principles

§ Alignment of proposals with national gender policies and priorities and the Fund’s Gender Policy

Fiduciary Standards (Initial basic fiduciary standards):

§ General Management and Administrative Capacities

§ Financial Management and Accounting (GAAP – IFRS and/or IPSAS)

§ Internal and external audit

§ Control framework § Procurement standards § Transparency and

accountability

Environmental and Social Safeguards (8 Performance Standards –PS):

§ PS1: Assessment & management of environmental and social risks and impacts

§ PS2: Labour and working conditions

§ PS3: Resource efficiency and pollution prevention

§ PS4 Community health, safety and security

§ PS5: Land acquisition and involuntary resettlement

§ PS6: Biodiversity conservation and sustainable management of living natural resources

§ PS7: Indigenous peoples § PS8: Cultural heritage

Figure 4: General Capacities for Executing Entities


For instance, large scale projects that are likely involve acquisition of land (voluntary or otherwise) as well as resettlement (voluntary or otherwise) must demonstrate invoke PS 5. The World Resources Institute (WRI) defines environmental and social safeguards as “rules (such as policies, laws, regulations) that reduce the environmental and social risk and negative impact of activities and institutions that implement those rules”.13

Environmental and social safeguards aim to avoid, reduce or compensate for negative effects of activities. They ensure that planned activities are successful. They can reduce conflict, optimize benefits, and help ensure that activities do not result in unintentional harm to people or ecosystems. For adaptation projects, environmental and social safeguards could also prevent maladaptation.

Under the “fit for purpose” accreditation approach, there are three accreditation categories from an environmental and social safeguards’ perspective:

1) Category C - Lowest level risks only These are “activities with minimal or no adverse environmental or social risks and/or impacts”. They may include research and advisory services such as climate scenario modelling, a programme on health and family planning, a micro-scale renewable energy programme or project (e.g. distribution of solar lanterns) as well as a climate change education and awareness project. Institutions that have been accredited under this category include the Acumen Fund (which has also received funding for a regional micro-scale energy project that covers Kenya), the World Metrological Organisation (WMO) and the World Food Programme (WFP). The Kenya Meteorological Department (KMD) may for instance, seek funding from the GCF for a climate change related research project through

WMO. Similarly, a Kenyan organisation seeking funding to implement a food security (or food safety) programme may also do so through WFP as an accredited entity.

2) Category B - A combination of lowest level risks and medium-level risks onlyMedium-level risks are “activities with potential limited adverse environmental or social risks and/or impacts that are few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures”. Examples of these include adaptation of crop farming systems to climate change; forest management activities; activities to improve energy efficiency of industry; small and medium-scale low emission power generation; and small-scale agriculture initiatives. Accredited entities under this category include the National Environment Management Authority (NEMA), UNEP, UNDP, WWF, IUCN, GIZ, FAO. The proposed WRA’s project, “Enhancing the Resilience of Communities and Ecosystems in the Athi River Catchment Area, Kenya, is an example of a Category B project. NEMA is also the accredited entity for the proposed NDMA project, “Devolved Access to Climate Finance for Sustainable Development”, which is a Category C project.

3) Category A - All of the risk categories, including high risk projectsHigh-risk projects are “activities with potential significant adverse environmental or social risks and/or impacts that are diverse, irreversible, or unprecedented”. Project activities under Category A may include large-scale forestry projects, large-scale agricultural projects, projects affecting highly sensitive ecosystems, projects with large resettlement components, projects with serious occupational or health risks, and projects, which pose serious socioeconomic concerns. Nearly all Development Finance Institutions (DFIs), which include multilateral development banks (MDBs)



(e.g. the World Bank, AFC, AfDB, AFD, EIB, JICA, IFC, KfW) have been accredited for these types of projects given these are generally the types of projects they deal with. An organisation such as GDC that is engaged in environmentally and socially high-risk projects may seek funding through one of these AEs, or may itself seek accreditation for Category A projects; an effort that it is already pursuing.

3.1.2 Fiduciary StandardsSimilar to ESS, the GCF’s interim initial fiduciary principles or standards borrow from international best practice; especially the standards applied by MDBs as well as other multilateral funds. MDB’s fiduciary standards and practices are generally similar to one another.14 In particular, the Global Environment Facility (GEF)’s, Adaptation Fund (AF)’s and the European Commission’s Directorate-General for International Cooperation and Development (DG DEVCO)’s standards have been adopted in the interim by the GCF.15

The GCF’s fiduciary standards aim at ensuring that an accredited entity, together with its associated executing entity(ties), have the capacity to prudently undertake a project’s activities with

minimal oversight from the Fund.16 They stipulate an accredited entity’s capacities to identify, prepare, submit and implement funding proposals for projects and programmes in line with national climate change mitigation and adaptation needs.17

Under the “fit-for-purpose” accreditation approach, there are two broad accreditation categories from a fiduciary standards’ perspective. These are basic and specific, with the latter further divided into three sub-categories (project management; grant award and/or funding allocation mechanisms; and on-lending and/or blending).

1) BasicfiduciarystandardsAs the name suggests, the GCF’s basic fiduciary standards stipulate an entity’s minimum fiduciary measures comprising of systems, procedures and practices/experience that demonstrate its capacity to effectively and efficiently implement (and execute) a funded project or programme with no or minimal oversight from the Fund. The basic fiduciary standards consist of key administrative and financial capacities and transparency and accountability measures. The underlying principles as well as the scope of the requirements of each are illustrated in Table 1 below.

Table 3.1: Basic Fiduciary Standards

Specific Requirement Scope

• Generalmanagementandadministrativecapacities-Clear and formal definition of the main “corporate governance” actors of the entity and of their respective roles and responsibilities

• Financialmanagementandaccounting(GAAP-IFRS or IPSAS or equivalent standards)

• Internalandexternalaudit• Controlframeworks–aprocesstoprovide

reasonable assurance regarding the achievement of objectives in the following stated categories: effectiveness and efficiency of operations; reliability of financial reporting; compliance with applicable laws and regulations; risk assessment

Required Competency

Key administrative and financial capacities

Underlying Principles

Financial inputs and outputs are properly accounted for, reported and administered transparently in accordance with pertinent regulations and laws, and with due accountability

Information relating to the entity’s overall administration and management is available, consistent, reliable, complete and conforms to the required fiduciary standards

The entity’s operations show a track


Specific Requirement ScopeRequired Competency


Transparency and accountability

record in effectiveness and efficiency

Protection and commitment against mismanagement and fraudulent, corrupt and wasteful practices.

Disclosure of any form of conflict of interest (actual, potential or perceived).

Code of ethics, policies and culture that drive and promote full transparency and accountability.

processes; defines roles and responsibilities pertaining to the accountability of fiscal agents and fiduciary trustees; and defines internal control activities, amongst others

• Procurement–coveringbothgeneraloperationsof the entity and the implementation/execution of the activities funded by the Fund

• Disclosureofconflictsofinterest-adisclosurepolicy, or equivalent administrative provisions to this effect, that establishes the necessary mandatory financial disclosures

• Codeofethics-adocumentedcodeofethicsthat defines ethical standards to be upheld

• Capacitytopreventordealwithfinancialmismanagement and other forms of malpractice

• Investigation-independentandobjectiveinvestigation of allegations of fraudulent and corrupt practices

• Anti-moneylaunderingandantiterroristfinancing

Source: Adapted from the GCF Fiduciary Standards, and Neha Rai and Marek Soanes. 2015. A practical handbook for Green Climate Fund accreditation in Bangladesh. IIED, London

For a prospective executing entity, the important thing for consideration is that the systems and structures that constitute basic fiduciary standards are the same systems and structures that are required of them (executing entities) since they are the actual recipients of the GCF funding. They must therefore have in place systems and structures to enable them to effectively and efficiently utilise as well as account for the funding.

At minimum, an entity must meet both the Fund’s basic fiduciary standards and have an internationally recognised ESMS in order to be eligible for accreditation, whether under the normal accreditation process or fast-track accreditation process (the latter for those

entities already accredited by the GEF, AF and DG DEVCO). An entity may additionally apply for accreditation under any or all of the three specialised fiduciary standards.18

2) SpecialisedfiduciarystandardsThe fund’s specialised fiduciary criteria refer to institutional capacities that will qualify applicant entities to undertake specialised activities depending on the nature and scope of their mandate within the fund’s operations. These are project management, grant award mechanisms and on-lending and/or blending. The underlying principles as well as the scope of the requirements of each are illustrated in Table 2 below.


Specific Requirement ScopeRequired Competency


Projectmanagement

Ability to identify, formulate and appraise projects or programmes

Competency to manage or oversee the execution of approved funding proposals, including the ability to manage EEs or project sponsors and to support project delivery and implementation

Capacity to consistently and transparently report on the progress, delivery and implementation of the approved funding proposa

• Projectpreparationandappraisal(fromconcept to full funding proposal)

• Projectimplementation,oversightandcontrol• Monitoringandevaluation• Project-at-risksystemsandrelatedprojectrisk

management capabilities

Table 3.2: Specific Fiduciary Standards

Specific RequirementsRequired Competency

Grant award mechanismsand/or funding allocationmechanisms

On-lending andblending

• Transparenteligibilitycriteriaandevaluation• Grantawarddecisionandprocedures• Publicaccesstoinformationonbeneficiariesandresults• Transparentallocationandimplementationoffinancialresources• Goodstandingwithregardtomultilateralfunding(e.g.throughrecognisedpublic

expenditure reviews)• Appropriateregistrationand/orlicensefromafinancialoversightbodyorregulatorinthe

country and/or internationally, as applicable• Trackrecord,institutionalexperienceandexistingarrangementsandcapacitiesforon-

lending and blending with resources from other multilateral sources• Creditworthinessoftheinstitutionmakingon-lendingorblendingarrangements• Duediligencepolicies,processesandproceduresinplace• Financialresourcemanagement,includinganalysisoftheintermediary’slendingportfolio• Publicaccesstoinformationonbeneficiariesandresults• Investmentmanagement,policiesandsystems,includingportfoliomanagement• Capacitytochannelfundstransparentlyandeffectively,andtotransferGCF’sfunding

advantages to final beneficiaries• Financialriskmanagement,includingassetliabilitymanagement• Governanceandorganisationalarrangements,includingrelationshipsbetweentheentity’s

treasury function and the operational side• ForintermediariesorAEsthatblendgrantawards:

o clear procedures about the grant award rules that the implementing partner is required to apply, or

o if the intermediary or AE uses its own rules, satisfactory minimum requirements.

Source: Adapted from the GCF Fiduciary Standards, and Neha Rai and Marek Soanes. 2015. A practical handbook for Green Climate Fund accreditation in Bangladesh. IIED, London



Project Management: As the name suggests, project management deals with project formulation (development), execution and reporting that includes monitoring and evaluation. The purview of activities under project management ideally entails the roles and functions of executing entities, and for this reason, it (project management) was a priority coverage area in this capacity building assignment and the training that was conducted as part of the assignment. For many institutions, the primary objective of seeking accreditation by the GCF is to be able to receive funding for implementation and/or execution of projects. Therefore, nearly all accredited entities (57 out of 59 at present) have been accredited for project management. This means that a potential Kenyan executing entity seeking GCF funding for project management has a wide range of accredited entities to choose from, including NEMA, Acumen Fund, Africa Finance Corporation (AFC), Africa Development Bank (AfDB), Agence Française de Development (AFD), Conservation International Foundation (CI), European Investment Bank (EIB), the World Bank, IFC, IUCN and JICA.

Grant award: is for entities that are seeking funding from the GCF for disbursing to different project executors in the form of grants. Critical elements that are considered are transparency of a grant system, decision-making procedures, and public access to information on grants and grant beneficiaries. A majority of entities under this category is financial institutions that include multilateral development banks (e.g. AfDB, EIB, the World Bank, IFC), funds (e.g. Acumen Fund) and bilateral development agencies (AFD, GIZ, JICA). Some international NGOs such as WWF, CI and IUCN, because of the nature of their operations that in some instances involve disbursing of grants to community-based organisations for project activities, have also been accredited for grant award.

On-lending: is for entities that receive funding

from the GCF purposefully to lend to other entities for their project activities using a variety of financial instruments (e.g., loans, equity or a combination of both). Accredited entities under this category include Acumen Fund, AFC, AfDB, AFD, EIB, the World Bank, IFC, Kreditanstalt für Wiederaufbau (KfW) and JICA.

Blending: is when the accredited entity undertaking on-lending combines the GCF resources it is on-lending to other entities with its own resources or with resources from other sources/funds. JICA is the only entity accredited so far under the blending category.

In addition to the above categorization of projects based fiduciary standards and ESS, projects are also categorized based on their size (scale). The four project categories based on this classification are:

1) Micro scale projects – project total costs (inclusive of co-financing) of up to 10 million USD. Entities of relevance to Kenya that are accredited under this category are NEMA, Acumen Fund and WFP.

2) Small scale projects – Project totals costs of above 10 million USD and up to 50 million USD. AEs of relevance to Kenya under this category are UNEP and WMO.

3) Medium scale projects – Project total costs of

above 50 million USD and up to 250 million USD. There are several AEs of relevance to Kenya under this category including CI, FAO, GIZ, IFAD, IUCN, UNDP and WWF.

4) Large scale projects – project total costs above 250 million USD. Nearly all multilateral development banks and development partners’ agencies are accredited under this category. Of relevance to Kenya would be AFC, AfDB, AFD, EIB, World Bank, IFC, JICA and KfW.


As a rule of thumb, an AE’s minimum threshold for fiduciary standards and ESS requirements increases with the size/scale of projects it intends to implement. The bigger the project, the more complex its environmental and social impacts are likely to be. Medium and large-scale projects therefore, generally have more demanding/stringent fiduciary and ESS requirements than micro and small-scale projects. However, there are exceptions to every rule.

This rule of thumb may useful to executing entities such as GDC and WRA that are interested in obtaining accreditation.

3.1.3 Gender PrinciplesThe centrality of gender in GCF projects and programmes is captured in several GCF decisions and guidelines, not least the GCF Governing Instrument, which states that “the Fund will strive to maximise 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.”19

According to a GCF/UN Women manual for mainstreaming gender into GCF projects (for implementing the GCF Gender Policy and Action Plan (GCF/B.09/23)), the GCF is in fact the first climate funding mechanism to mainstream gender perspectives from the outset of its operations as an essential decision-making element for the allocation of its resources.20

The manual has adopted the universally applied definition of gender, which is “how societies and specific cultures assign roles and ascribe characteristics to men and women based on their sex”. Gender is thus seen largely from the perspective of men and women. However, when undertaking GCF programming, project proponents ought to take into consideration Kenyan/local context, which considers a broader

perspective when dealing with gender related issues. Gender is given special consideration in climate change programming for the same reason as for other marginalised/special groups: the differentiated impacts of climate change on different groups and segments of society. These other groups would be youth & children, persons with disabilities, the elderly and marginalised communities. This is the same approach taken by the National Gender and Equality Commission (NGEC), which has programmes in three distinct but interlinked areas – Gender & Women, Youth & Children, and Disability & the Elderly.

There are three important reasons for gender mainstreaming in GCF projects and programmes:21

1) Both women and men significantly contribute to climate change. Shifting the paradigm towards low-emission and climate-resilient development pathways therefore requires a large number of individual and collective decisions by both women and men. In Kenya for instance, agriculture is the largest contributor to greenhouse gas (GHG) emissions as well as one of the most vulnerable to climate change. In addition, women play a significant role in smallholder agriculture, which is also the most dominant form of agriculture in Kenya. Addressing climate change in the sector must therefore involve both men and women.

2) Climate change impacts women and men differently, often to the detriment of women, [girls, children, and marginalised groups/communities], and existing gender inequalities are likely to be worsened by climate change. For instance, in Kenya, biomass meets over 60% of household energy needs. Depleting biomass resource as a result of both climate change and over-exploitation has placed a disproportionate burden on women and girls, who are primarily responsible for fetching fuelwood.


Required actionsStages of gender mainstreaming in GCF projects

− This is the most appropriate stage to ensure gender mainstreaming from the onset of a project.

− Reference should be existing national climate change plans and strategies to support the conceptualization and formulation of initiatives to respond to problems related to mitigation and adaptation, and to build climate resilience (NCCAP 2013-17, under review; National Adaptation Plan 2015-30; Kenya’s Second National Communication to the UNFCCC, 2015; Nationally Appropriate Mitigation Actions; and the National Climate Change Act, 2016.

− Stakeholder engagements of women and men of all ages to understand roles, responsibilities and benefits as stakeholders, participants, and managers. The relevant Kenyan constitutional and legal provisions could inform stakeholder engagement. They provide for a broader definition of gender beyond men and women, as used in the GCF guidelines.

− A project’s log frame should take account of gendered needs and interests related to climate change risks and impacts, as well as resilience, in fulfilment of a requirement of the GCF Concept Note User’s Guide, which states that a project must illustrate its “gender-sensitive development impact”.

− More detailed information and data on gender: o Gender aspects/issues must be reflected in the terms of reference for all feasibility

3) Gender inequality, exacerbated by climate change, is linked, as are other development areas, to vulnerability and risks. The greater vulnerability of women to climate change stems from gender norms and discrimination that result in the imbalanced division of labour, lower income, and lesser livelihood opportunities; less access and control over land and other productive assets; fewer legal rights; and lesser mobility and lesser political and professional representation.

The approach to gender mainstreaming as proposed by the GCF/UN Women manual is engaging women and men of all ages as stakeholders in the design, development and implementation of ALL strategies and activities to be financed by the GCF, as illustrated in Table 3 below. Gender mainstreaming “applies to all projects, not only those intended from

the outset to centre on women/girls or to have a gender focus”.

Three gender documents must be submitted together with a GCF project/programme proposal. They are:

1) A Gender Analysis report (details in Table 3 below);

2) A Gender Action Plan; and 3) A gendered Monitoring and Evaluation

(M&E) Framework.

Lastly and perhaps most importantly, gender is a requirement both for accreditation and in project design and execution. The GCF proposal template has several sections pertaining to gender, underscoring the weight that the Fund attaches to the subject matter.

Table 3.3: GCF’s Approach to Gender Mainstreaming into GCF Projects and Programmes

Project identification–concept note preparation

Project proposal formulation




Project Implementation and M&E

studies and the environmental and social impact assessments undertaken as part of the proposal

o The study team must comprise a gender experto Collection of a sex-disaggregated before the implementation of a project

− Gender related documents to (that must) be submitted together with, or be part of, a proposal are: o A gender analysis report - a gender analysis must be conducted, and should

incorporate an overview of the gender equality situation in a country and in targeted sector(s), description of gender issues that may be relevant to the project, and gender-sensitive development impact opportunities. Gender-sensitive development impact opportunities may be drawn along the GCF’s Eight Result Areas. Gender analysis is at the core of mainstreaming gender considerations in the project cycle. It should inform a project design, and therefore should either precede or be conducted in parallel with preparing the GCF Funding Proposal. Potential reference materials include Status of Equality and Inclusion in Kenya (National Gender and Equality Commission, 2016) and Exploring Kenya’s Inequality- Pulling Apart of Pooling Together? (KNBS and SID, 2013). A gender analysis report informs a Gender Assessment, which is a component of a GCF proposal.

o A gender action plan covering gender-responsive activities, gender performance indicators (see table 4 below for examples of gender indicators) and sex-disaggregated targets. The purpose of a gender action plan is to operationalize the constraints and opportunities for women and men identified during the gender analysis towards fully integrating them into the project design.

o A gender-sensitive monitoring an evaluation (M&E) framework incorporating [mandatory] gender indicators in the project’s results framework. The results-based framework should incorporate both qualitative and quantitative indicators at the goal, outcome and output levels to capture differentiated impacts on men and women of climate change mitigation and adaptation.

− Mainstreaming of gender into project implementation and M&E ensures that gender mainstreaming does not remain as a mere theoretical undertaking in project documents such as the project concept note and project proposal, but that gender-responsive approaches and actions are actually applied in the implementation of a project as well as reporting on gender outcomes undertaken.

− Project Implementation:o Use the gender analysis and assessment to establish a project baseline against which

progress can be measured. This should be reflected in the results framework.o Ensure sufficient resources – people and funds – are available for gender equality

and women’s empowerment activities. o Based on the gender assessment and action plan, assess the potential impact of

proposed activities on women and men.o Develop gender-responsive approaches to address these impacts to ensure men

and women are not negatively affected, and can equally access project resources,



services, technologies and training, and equally benefit (e.g., ensure equitable representation of women and men on project committees and management, and in planning and conducting project activities and meetings; involvement of women’s groups and networks in projects, etc).

o Ensure project partners have been trained in gender and gender-sensitive approaches.

o Include gender expertise in project and partner implementation teams.o Engage with women’s civil society organizations and gender advocates as project

counterparts and gender advisors. Build capacity within the project team and among stakeholders to ensure gender-responsive implementation and the continued integration of gender perspectives

− Project M&Eo Foundation: a results framework with gender-responsive indicators and targets (sex-

disaggregated)o Determine if there is a set of nationally relevant gender-specific indicators, and

use gender indicators in existing national M&E systems wherever possible (SDG 5: - Achieve gender equality and empower all women and girls)

o Qualitative and quantitative data collectiono Qualitative lessons learned and best practices through narrative reportingo Use gender-sensitive data collection techniques, such as separate focus groups for

women and men, so that their voices are heardo Interview project participants, men and women separately or together, depending on

the contexto Ensure the evaluation team is gender-sensitive and gender-balanced, with adequate

gender expertiseo Ensure gender is a cross-cutting theme in each of the evaluation topicso Make available key gender-related evaluation reports, scorecard exercises and other

documentation that proves useful for the M&E team

Source: The GCF and UN Women, 2017. Mainstreaming Gender in Green Climate Fund Projects. Songdo: GCF

3.2 Project Development and Execution

The main function of an executing entity under the GCF is to develop and execute projects as well as to report on the implementation progress and results achieved as part of the M&E framework. The latter is undertaken in close collaboration with the accredited entity, which also has the overall responsibility of accountability to the GCF for the funding received for a project or programme.

In addition to meeting the conditions set out in Section 3.1 of this report (ESS, fiduciary and gender requirements), entities are only funded if their projects satisfactorily fit certain six interlinked assessment criteria in the GCF’s [Initial] Investment Framework. Figure 5 below is an illustration of the six assessment criteria. These six criteria also underline bankability of a GCF project, which, in the context of climate finance, encompasses both the traditional definition of the term in terms of financial returns



and socioeconomic/social indicators (e.g., improvements in the resilience of communities, and/or alignment with national priorities).23

An additional critical element considered in gauging the bankability of a GCF project stakeholder engagement including validation/endorsement by a country’s National Designated Authority (NDA)/Focal Point.

Figure 5: Key Assessment Areas of a GCF Project Proposal

transformation envisaged to transform the global economy towards a sustainable development pathway is of the scale comparable only with “the Neolithic Revolution (the wide scale transition of many human cultures and societies from a lifestyle of hunting and gathering to that of settlement, accompanied by diffusion of arable farming and animal husbandry) and the Industrial Revolution (the transition from an agrarian to an industrial society)”.26

Downscaled to a country level, paradigm shift implies a remodelling of a national economy and society towards sustainability. For Kenya, this would be a pursuit of a green growth agenda as envisaged in a number of strategies, policies and plans such as the Green Economy Strategy and Implementation Plan (GESIP) 2016-30, the Vision 2030, the Climate Change Act and the supreme law of the land, the Constitution. All of these have a vision that speaks to a sustainable development pathway. GESIP 2016-30’s vision for instance, is a low carbon, resource efficient, equitable and inclusive socio-economic transformation, and closely mirrors that of the Climate Change Act 2016 and its implementation instrument, the National Climate Change Action Plan, the second of which is currently under preparation.

The overall impact of a shift of individual national economies towards sustainability is a shift of the global economy towards sustainability – the so-called paradigm shift – hence the reason the Paris Agreement demands actions from all its Party members, “in accordance with their common but differentiated responsibilities and respective capabilities and their social and economic conditions”.

For GCF projects, paradigm shift is considered as “the degree to which the Fund can achieve sustainable development impact beyond a one-off project or programme investment through replicability and scalability”. Over time and in their numbers, programmatic activities lead

Each criterion has sub-criteria that provide detailed information as to what project proponents should be incorporating into their proposals in order to satisfactorily meet the criterion. In the formulation of a proposal, an Accredited Entity/Executing Entity is expected to respond to all six of the investment criteria but only the applicable and relevant sub-criteria and indicative assessment factors.24

3.2.1 Paradigm Shift PotentialThe concept of “paradigm shift” is the core of the GCF. At the global level, paradigm shift envisages “a remodelling of the global economy and society towards sustainability”.25 The kind of


to a “systemic change towards low-carbon and climate-resilient development pathways”.

The [Initial] Investment Framework, which is the tool for assessing projects’ suitability for funding, has provided four sub-criteria assessment factors and associated indicators for the paradigm shift. These four sub-criteria assessment factors are the means of demonstrating that a project fits the GCF’s paradigm shift definition. They are:

1) Potential for scaling up and replication, and its overall contribution to global low-carbon development pathways being consistent with a temperature increase of less than 2 degrees Celsius (mitigation only). The Paris Agreement has set a global goal of “limiting global average warming to “well below” 2º Celsius, above pre-industrial levels, and pursuing efforts to limit the temperature increase even further to 1.5º Celsius”. NDCs, which are developed and implemented over 5-year periods, are the means of achieving this global target. A GCF project or programme should thus illustrate how it contributes to the implementing country’s NDC target including sectoral targets (see “Impact Potential” below for more details on Kenya’s first NDC). This can be by way of:

a) Innovation - incorporating opportunities for targeting innovative solutions, new market segments, developing or adopting new technologies, business models, modal shifts and/or processes;

b) Expanding the scale and impact of the proposed programme or project without equally increasing the total costs of implementation (scalability); and

c) Exporting key structural elements of the proposed programme or project elsewhere within the same sector as well as to other sectors, regions or countries (replicability).

2) Potential for knowledge and learning, which assesses the contribution of a project to the creation or strengthening of knowledge, collective learning processes, or institutions. Knowledge and learning are an integral component of any project, and projects are required to document methods of knowledge and lessons dissemination, usually as a component of the M&E framework. Knowledge transfer and awareness creation of results can encourage continuity beyond the life of a programme, thus ensuring more significant and longer-term impacts, especially where lessons learned are incorporated within other projects. Opportunities for enhancing knowledge and learning from projects could include partnering with academic and research institutions, documenting lessons learned and sharing through various platforms and means such as the Internet, radio and publications.

3) Contribution to the creation of an enabling

environment that supports “systemic change towards sustainable development”. Projects may demonstrate this through:

a) Sustainability (“continuity”) of outcomes and results beyond completion of the project or intervention, normally by having in place, arrangements that provide for long-term and financial sustainability of relevant outcomes and key relevant activities derived from the project/programme beyond the completion of the intervention. This could be through the project’s ability to attract additional funding from other sources and/or for integration into the national development agenda (for public institutions); and

b) Market development and transformation.

Factors that support market development



and transformation towards sustainability may include (i) the extent to which the project/programme creates new markets and business activities at the local, national or international levels; (ii) the degree to which the activity will change incentives for market participants by reducing costs and risks, eliminating barriers to the deployment of low-carbon and climate-resilient solutions; and (iii) the degree to which the proposed activities help to overcome systematic barriers to low-carbon development to catalyse impact beyond the scope of the project or programme. Examples of such programmes abound in the Kenya solar home systems (SHS) market where support given in the early stages of the market development to overcome various barriers led to the development of a robust and sustainable solar PV market.

4) Contribution to regulatory framework and policy transformation towards greening. This considers the potential for strengthened regulatory frameworks and policies to drive investment in low-emission technologies and activities, promote development of additional low-emission policies, and/or improve climate-responsive planning and development. Assessment factors or indicators could be:

a) The degree to which the project or programme advances the national/local regulatory or legal frameworks to systemically promote investment in low-emission or climate-resilient development. The Energy (Solar Water Heating) Regulations 2012 is an example of an enabling regulatory framework for green growth that has resulted from lessons learned over several years of programmatic work in the solar energy industry. Another example is emergence

of climate change regulations (laws and policies) in devolved units, e.g. in Wajir and Makueni from climate change programmes in those counties; and

b) The degree to which the activity shifts incentives in favour of low-carbon and/or climate-resilient development or promotes mainstreaming of climate change considerations into policies and regulatory frameworks and decision-making processes at national, regional and local levels, including private-sector decision-making.

5) Overall contribution to climate-resilient development pathways consistent with a country’s climate change adaptation strategies and plans (adaptation only). Unlike mitigation, adaptation targets are not generally quantifiable; hence, the reason the Paris Agreement’s adaptation goal is a qualitative target relating to “enhancing adaptive capacity, strengthening resilience and reducing vulnerability to climate change, with a view to contributing to sustainable development and ensuring an adequate adaptation response in the context of the temperature goal”. Similarly, the adaptation goal of Kenya’s National Adaptation Plan 2015-30 is a qualitative statement, “enhanced climate resilience towards the attainment of Vision 2030 and beyond”.28 Just like in the case of mitigation, a programme’s contribution to adaptation and climate-resilient development pathway is considered from:

a) Scalability – Scaling up the scope and impact of the intended project/programme without equally increasing the total costs of implementation;

b) Replicability – the potential for exporting key structural elements of the proposal to other sectors, regions or countries; and


c) The degree to which the programme or project reduces proposed risks of investment in technologies and strategies that promote climate resilience in developing countries.

The paradigm shift of a GCF project or programme is best demonstrated by means of a Theory of Change (ToC) diagram (see Annex 3). A ToC is a comprehensive description and illustration of how and why a desired change is expected to happen in a particular context. ToC focuses on mapping out or “filling in” what has been described as the “missing middle” between what a programme or change initiative does (its activities or interventions) and how these lead to desired goals being achieved.29

All ToC approaches articulate an ultimate ‘big picture’ outcome, and then ‘backwards map’ the steps needed to achieve it. Stakeholders (in this case project proponents) begin with defining the long-term goal, and work backwards in time up to the present, systematically laying out each step along a ‘causal pathway.’ For each step in the sequence, stakeholders outline clear indicators,

thresholds, and assumptions. The end result is usually a diagram (‘change map’), accompanied by a narrative.30

Additional information on ToC may be accessed from http://www.ukcip.org.uk/wp-content/PDFs/MandE-Guidance-Note3.pdf and the links to other articles and resources provided therein.

3.2.2 Impact PotentialImpact potential considers the contribution of a programme/project to the achievement of the Fund’s objectives and any of the eight result/impact areas under the two broad thematic areas of mitigation (contribution to the shift to low emission and sustainable development pathways) and adaptation (contribution to increased climate resilient sustainable development).

The GCF has prioritised the below eight result/impact areas (figure 6) on the basis of their potential to deliver significant mitigation and adaption benefits, consistent with the global ambition of creating a paradigm shift towards sustainable development.

Figure 6: Impact Potential – addressing the Initial Result/Impact Areas

Source: GCF Infographics. Available at http://www.greenclimate.fund/how-we-work/tools/infographics



Impact potential is both a quantitative and qualitative assessment of a project’s or a programme’s contribution to mitigation and adaptation, with indicators such as:

• Expected tonnes of carbon dioxide equivalent to be reduced or avoided, expected increase in the number of households with access to low emission energy and expected number of megawatt (MW) of low-emission energy capacity installed, generated and/or rehabilitated (mitigation); and

• Expected total number of direct and indirect beneficiaries (reduced vulnerability or increased resilience), number of beneficiaries relative to total population, particularly the most vulnerable groups, expected

strengthening of institutional and regulatory systems for climate-responsive planning and development and expected increase in generation and use of climate information in decision-making (adaptation).

A country’s mitigation and adaptation goals are expressed in its NDC and National Adaptation Plan (NAP), respectively. Kenya’s first NDC, however, has an adaptation goal too. The NDC has a mitigation target of reducing the country’s emissions by 30 percent relative to the baseline or business-as-usual scenario (figure 7). The country’s adaptation goal is “ensuring enhanced resilience to climate change towards the attainment of Vision 2030 by mainstreaming climate change adaptation into the Medium Term Plans (MTPs) and implementing adaptation actions” (NAP 2015-30, GoK, 2016 and first NDC, GoK, 2015).

0

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100

120

140

160

1995 2000 2005 2010 2015 2020 2025 2030

GHGEmission

sMTCO2e

Waste

IndustrialProcesses

Agriculture

Transportation

EnergyDemand

ElectricityGeneration

Forestry

LowCarbonPathway

Figure 7: Projected baseline (BAU) and low-carbon pathway emissions up to 2030

Source: Government of Kenya (2015), Second National Communication, page 172.


A project’s impact potential is thus its contribution to the beneficiary country’s mitigation or adaptation goal or target. For mitigation projects, this is always a quantitative assessment of the project’s potential emission reduction, which is analysed in the context of the relevant sector’s target. A project in the electricity generation sector would thus be expected to indicate its contribution to the sector’s GHG reduction target of 9.32 million tonnes of carbon-dioxide equivalent per year by 2030 (Table 3.1). Similarly, an adaptation project in the water sector would be expected to link its contribution to the sector’s goal of “mainstreaming of climate change adaptation in the water sector” as is envisaged in the NAP 2015-30.

3.2.3 Needs of the Recipient (Country)This factor considers a prospective recipient country’s financial needs in relation to its level of development, which has a bearing on its capacity or lack thereof to fund on its own, the project or

programme for which it is seeking funding from the GCF. Project proponents must therefore demonstrate clearly the unique circumstances that make the beneficiary country particularly needful of the financial support it is seeking and how the proposed project or programme would address this need.

The elements considered in assessing the Needs of the Recipient (Country) are:

1) Vulnerability of the country (for adaptation projects only) in which project proponents demonstrate that the recipient country is already reeling from the impacts of climate change, and therefore, that the financial support being sought would contribute to addressing the existing climate change problem. Vulnerability is a function of the level of exposure to climate risk and adaptive capacity. Under this factor, the focus is on the former (level of exposure

Table 3.4: Emission reduction potential by sector: Technical potecntial and NDC 30% GHG emission reduction targets

Sector GHG Emission Reductions Potential NDC (MTCO2eq) Target

2015 2020 2025 2030 2030

Forestry 2.71 16.24 29.76 40.2 20.10

Electricity Demand 0.28 2.24 8.61 18.63 9.32

Energy Demand 2.74 5.16 7.92 12.17 6.09

Transportation 1.54 3.52 5.13 6.92 3.46

Agriculture 0.63 2.57 4.41 5.53 2.77

Industrial Processes 0.26 0.69 1.03 1.56 0.78

Waste 0.05 0.33 0.5 0.78 0.39

Total Emission Reduction Potential 85.79 42.90

Total Emissions in 2030 143.00 143.00

% of Total Emissions in 2030 60% 30%

Source: Government of Kenya (2015), Second National Communication, page 172.



to climatic risks). Project proponents should therefore document, as indicators,:

• The scale and intensity of exposure of people, and/or social or economic assets or capital, to risks derived from climate change, and the degree of vulnerability, including exposure to slow onset events; and

• The size of population and/or social or economic assets or capital of the country exposed to climate change risks and impacts.

For a national and sub-regional (county) perspective on climatic risks including impacts on different sectors and groups/communities, reference materials may include Kenya’s Communication to the UNFCCC, which has a whole chapter on “National Circumstances”, the National Climate Change Action Plan and the NAP 2015-30. Project/programme-level vulnerability should be obtained from baseline surveys, gender analysis and other studies that are undertaken as part of the project proposal’s development.

2) Vulnerable groups and gender aspects (adaptation projects only) takes into consideration the widely accepted fact that climate change has differentiated impacts on different groups and segments of society. It underscores the fact that women and children, persons with disabilities, and marginalised groups may be particularly more vulnerable to climate change, and therefore, the need to integrate their special needs in an adaptation project. The gender studies (Gender Analysis, Gender Assessment and Gender Action Plan) to be submitted together with a proposal should provide relevant information for this section, hence the recommendation for taking a more encompassing definition of gender beyond women and men when undertaking these studies.

3) Economic and social development level of the country and the affected population: As already indicated above, vulnerability is a function of the level of exposure to climatic risks and adaptive capacity, where it is broadly understood that a country’s level of economic and social development has a bearing on its adaptive capacity. This section therefore highlights socio-economic indicators such as income level of the country and target population (e.g. minorities, disabled, elderly, children, female heads of households, indigenous peoples, etc.), literacy levels, and unemployment rate that underpin the ability of the target population to cushion itself from climate vagaries and to recover from such vagaries. Reference materials may include the Economic Surveys, the Medium Term Plans to the Vision 2030 and [the World Bank and other development partners’ publications/documents/reports on Kenya].

4) Absenceofalternativesourcesoffinancing

is considered from two perspectives:

• Resource constraint. This relates to vulnerability as discussed above, in which it is understood that poor countries are more resource constrained than developed countries and therefore, do face investment hurdles where unlimited development needs compete for limited resources; and

• Projects facing financial barriers as a result of being considered risky by conventional financiers (banks). This is usually the case with several micro and small-scale green start-ups, but it may also be faced by large-scale projects. An example of the latter is geothermal energy development that is considered financially risky because of the potential for risk of drilling failure. This was one


of the barriers that the geothermal Nationally Appropriate Mitigation Action (NAMA) that Kenya developed in 2014 sought to address.

5) Need for strengthening institutions and implementation capacity. This sub-criterion contributes to the implementation of Article 11 of the Paris Agreement and other capacity building provisions within the framework convention (the UNFCCC). The Article “highlights the importance of enhancing the capacity and ability of developing country Parties to take effective climate change action, including inter alia, to implement adaptation and mitigation actions, and should facilitate technology development, dissemination and deployment, access to climate finance, relevant aspects of education, training and public awareness and the transparent, timely and accurate communication of information”. In this regard, institutional capacity is seen as an essential component of the fight against climate change.

Project proponents should thus aim to indicate how their projects would contribute to institutional capacity building. At the same time, caution should be taken to avoid creating an implication of weak institutional capacities that would impede implementation of the project. The best approach – adopted in both the WRA and NDMA proposals – is demonstrating how a project would build the capacity of grassroots institutions and networks since it is at the grassroots/local level where climate change impacts are mostly felt and where therefore, significant capacity is required to respond.

3.2.4 Country OwnershipThe GCF places a high value on the country ownership of projects and programmes it funds.

Paragraph 3 of the GCF Governing Instrument states that “the Fund will pursue a country-driven approach and promote and strengthen engagement at the country level through effective involvement of relevant institutions and stakeholders”.

NDAs/focal points (FPs) exist in the GCF direct access structure for this very reason (country ownership). NDAs/FPs are required to ensure alignment of proposed projects or programmes with national policies and priorities including on gender by way of issuing letters of no objection in respect to proposed projects and programmes as well as to entities seeking accreditation.

The Kenya GCF Access Strategy 2017 (also an output of the GCF Readiness Project) provides a more comprehensive picture of the proposed working arrangements and modalities between the country’s NDA (the National Treasury), accredited entities and executing entities – aimed at enhancing the country’s ownership of GCF projects/programmes. Here, we only delve into what national ownership implies for project development using the four sub-criteria assessment factors in the GCF’s [Initial] Investment Framework:

1) Existence of a national climate change strategy/coherence with national policies that seeks to understand the extent to which a project or programme is aligned with national goals and aspirations, which further links with the overarching ambition of shifting growth towards a green trajectory/pathway (for mitigation projects). The two indicators used with this sub-criterion factor are:

a) Programme’s or project’s contribution to the country’s priorities for low emission and climate-resilient development as identified in national climate strategies or plans; and



b) The Degree to which the activity is supported by a country’s enabling policy and institutional framework, or includes policy or institutional changes

Reference materials may include the Climate Change Act 2016, National Climate Change Policy 2016, National Climate Change Action Plan (second of which is under development), and relevant sectoral plans and strategies (e.g., the National Water Master Plan, the Agricultural Sector Development Strategy, the Climate Smart Agricultural Strategy 2017-26 and the Development of a Power Generation and Transmission Master Plan, Kenya 2015-35).

2) Capacity of accredited entities or executing entities to deliver. This aims to serve two purposes:

a) Proof of existence of basic and project management fiduciary standards and (the premise of accreditation of an entity for project management) and therefore an assurance of the capacity of the entity to deliver results or provide value for money; and

b) For national accredited entities, limiting the involvement of external/international expertise (project management units (PMU) types), which in turn builds the domestic/internal capacity to address climate change.

The capacity to execute is demonstrated by means of:

a) a consistent track record and relevant experience and expertise in similar or relevant circumstances as described in the proposed project/programme (e.g. sector, type of intervention, technology, etc.) in which relevant past projects

including their outcomes/achievements are highlighted; and

b) Staffing level and different relevant capacities, skills and competencies.

3) Engagement with civil society organizations and other relevant stakeholders whose aim is to ensure that the project disadvantages no one or that no one suffers maladaptation (for adaptation related projects), demonstrate compliance with the GCF ESS and gender standards (which require wide stakeholder consultations), and enhance benefit sharing. Its demonstration is by means of:

a) Ensuring that the proposal has been developed in consultation with civil society groups and other relevant stakeholders, with particular attention being paid to gender equality [youth groups, the elderly, persons with disabilities (PWDs), other special needs];

b) providing specific mechanisms for future engagement of these different stakeholders in the execution of the project, in accordance with the Fund’s environmental and social safeguards and stakeholder consultation guidelines; and

c) The proposal places decision-making responsibility with in-country institutions and uses domestic systems to ensure accountability.

Other important elements to consider under this sub-criterion are:

a) The recurring theme on gender, which further underscores the importance the GCF places on gender; and

b) The critical role of the civil society,


particularly community based organ-isations, in stakeholder engagement. There are at least three important rea-sons for engaging civil society groups in stakeholder consultations:

i) Their presence at the grassroots and networks with different groups (including indigenous people who must also be engaged when de-veloping a project);

ii) They are often, a rich source of lo-cal level knowledge and informa-tion; and

iii) They can enhance the delivery of stated project objectives.

3.2.5EfficiencyandEffectivenessUnder Efficiency and Effectiveness, the GCF assesses the economic and, if appropriate, financial soundness of a programme/project. From business management, effectiveness has the meaning of “adequate to accomplish a task; producing the intended or expected result”, while efficiency implies “perform-ing or functioning in the best possible man-ner with the least waste of time and effort”. A 2x2 grid (figure 8 below) best illustrates this. Fundable projects match the description in the green quadrant.

In assessing efficiency and effectiveness, the GCF considers the sub-criteria factors illustrat-ed in the table below, together with examples of how they have been incorporated in proj-ects that have been funded.

3.3 Project Cycle Management

A GCF project management cycle entails processes and activities post the approval of a GCF funded activity. In addition, it may include, for some projects, post project-completion results’ monitoring and report-ing activities, depending on the agreement between the Fund and the concerned ac-credited entity. The key steps or stages in the project cycle management are detailed in the following sub-sections, information of which has been largely drawn from GCF resources, and in particular, http://www.greenclimate.fund/gcf101/implementing-projects/project-implementation#faq-who-is-responsible-for-monitoring-approved-projects.

3.3.1 Funded Activity AgreementThe first step in a GCF project cycle follow-ing the approval of a project activity by the GCF Board is the signing of a Funded Activ-ity Agreement (FAA) between GCF and the respective Accredited Entity carrying out the project. The FAA lays the legal groundwork to implement the project, and varies according to the type of project being implemented.

Drawing up and signing an FAA is the respon-sibility of an accredited entity and the Fund. However, an executing entity ought to be con-versant with the contents of an FAA to enable its putting in place necessary arrangements and structures to effect the implementation of a project as stipulated in the FAA. The con-tents or provisions of an FAA relevant to an executing entity in this regard may include:

a) A project description section, which is

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Source: Google images [see Endnote 31]

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55


drawn mainly from the approved project document. It includes an M&E framework, which forms the basis of monitoring and reporting activities to be jointly undertaken by the AE and EE;

b) A project’s budget, broken down into out-puts and outputs’ activities and disburse-ment schedules as well as disbursement plan;

c) A project’s implementation arrangement (which could include a project steering committee at the top to perform an adviso-ry role, a number of technical committees to technically inform the steering commit-tee on technical issues (number and types depending on the sectoral scope of the project) and local level committees whose number would depend on the geographic scope of the project);

d) Reporting schedules and milestones and estimated/projected timings (typically an inception report, interim independent evaluation, annual project reports (APRs), project completion report (final APR), and final independent evaluation report); and

e) Project’s start and end dates.

3.3.2 First DisbursementThe first disbursement of funds to an accred-ited entity follows the signing of the FAA, and is one of the indicators of the Fund’s commit-ment to or compliance with the FAA. In some instances, the recipient accredited entity may have to fulfil certain pre-conditions before the grant or loan is judged to be effective. GCF will determine if the recipient has fulfilled those conditions. Once it is satisfied these conditions have been met, it will notify the re-cipient that the grant or loan agreement has become effective.

Payment instructions are sent to the World Bank, which is the Fund’s interim trustee. The GCF also informs the Accredited Entity of the expected date of the first disbursement. This dates marks the effective start date of a project activity. The trustee then transfers the funds to the Accredited Entity.

A template for Requests for Disbursements is usually provided in an FAA.

3.3.3 Further DisbursementsFurther disbursements are contingent on the project’s meeting of set performance indica-tors in the FAA and the project document. This is normally based on information pro-vided in its Annual Performance Review (APR) based on requirements as outlined in the FAA (more details under “Reporting”). For exam-ple, grant projects normally require that 70 percent of the previous disbursement it has received has been accrued or committed. The review also assesses other financial reports provided by the Accredited Entity, for ex-ample if they involve project implementation delays. This further underscores the critical involvement of the executing entity’s Finance and Accounts department in the implementa-tion of the project.

The GCF’s Portfolio Management Unit is re-sponsible for ensuring that the disbursement goal, along with implementation delays, are addressed in assessing whether to continue disbursements after the first one is released.

3.3.4 Monitoring & Evaluation and Reporting While Accredited Entities are primarily respon-sible for the monitoring and evaluation of the funded activities they carry out, they are also required to report regularly to GCF.

This is done in the form of the various reports such as Annual Performance Reports (APRs)



and Mid-term/Final Evaluation Reports. All reporting should align with GCF’s Monitoring and Accountability Framework (MAF)31 and Performance Measurement Framework (PMF)32 for adaptation and mitigation.

As indicated previously, GCF’s assessment doc-uments include:

Inception Report: helps to review and se-quence activities and, if necessary, to reorga-nise the project work plan and implementation schedule.

Annual Performance Report (yearly and final): records the status of implementation of each project activity, updates achievement indicators against targets and identifies implementation-related problems and mitigation measures.

Mid-term Evaluation Report: presents prelimi-nary or initial evaluation findings, measures and reports on performance to date and recom-mends adjustments (activities and outputs) that may need to be made to ensure the successful implementation of the project.

Final Evaluation Report: measures the overall impact, effectiveness, efficiency, sustainability, replicability and lessons learned of a project.

Yearly audits and financial information: regular financial reports and yearly/final financial state-ments.

3.3.5 Annual Performance Reports – linkages with national reporting obligations The Annual Performance Report includes a narrative report, accompanied by supporting qualitative and quantitative data as needed, describing progress by the Accredited Entity in implementing the project. The report is based on the logical framework submitted in the fund-ing proposal that specifies project component outputs, outcomes and activities.

APRs take into account the investment, perfor-mance measurement/results management, and monitoring and accountability frameworks. The Annual Performance Report also indicates chal-lenges or problems (if any) encountered during implementation, as well as identifying lessons learned.

To avoid duplication of efforts, a recommenda-tion is made for the harmonisation of individual APRs systems with the reporting obligations under the UNFCCC and relevant national laws such as the Climate Change Act, 2016. The UNFCCC places two reporting obligations on developing (non-Annex 1) countries: National Communications and Biennial Update Reports (BURs). The Climate Change Act, on the other hand, has recommended a measurement, re-porting and verification (MRV) for low carbon and climate resilient actions. There is also the ongoing process of developing a projects’ tracking toolkit, which is spearheaded by the Climate Change Directorate.



Recommendations for Follow up Capacity Building Activities4


tion Plan 2018-22, which is yet to be devel-oped, hence the need for capacity building of project proponents on the Action Plan once it is developed.

Further, an observation during the training was that a majority of participants had mini-mum understanding of the national climate change processes and outcomes (strategies, laws and policies) such as the Climate Change Act 2016, the NCCAP and the National Cli-mate Change Policy, among others. This fur-ther underscores the need for periodic capac-ity building of potential executing entities in the same as part of enhancing the country’s capacity in the GCF.

It is recommended that this activity be aligned with the already established climate change capacity building initiative of the Climate Change Secretariat implemented in conjunc-tion with the Kenya School of Government. c) New and emerging GCF guidelines and requirementsThe GCF itself is a new entity, with a number of its guidelines tagged ‘initial’, indicating that future updates of the same are anticipated. Some, such as the ESS as well as the Fund’s fiduciary standards, have actually been ad-opted from IFC and other sources. The con-sequence is that new guidelines will be con-tinually released in the next few years. August 2017 saw, for instance, the release of a gen-der mainstreaming tool/manual (widely refer-enced in this report). WRA has had to follow these new gender guidelines in the revision of its proposal that it first submitted to the GCF in 2016.

Similarly, the guidelines for Simplified Appli-cation Process (SAP) for Category C projects/programmes, together with the associated ESS guidelines, were released in Nov. 2017.

The training that was conducted as part of the capacity building assignment covered the ar-eas in Chapter 3 of this report. From the train-ing and additional stakeholder engagements, a number of recommendations were made on follow up capacity building activities/initia-tives. They are:

a) Measurement, reporting and verificationMeasurement, reporting and verification (MRV) is an important element of the inter-national climate change framework. The Paris Agreement established universal and harmon-ised MRV provisions, and a common system of transparency now applies to all countries. MRV is still an evolving area in the GCF, mak-ing it necessary for it to be a follow up activity once the necessary MRV guidelines and tools have been developed by the Fund.

The focus should be linking the GCF proj-ect’s MRV system with the National Climate Change Registry (a requirement under the Cli-mate Change Act 2016) as well as the report-ing obligations under the UNFCCC. b) Evolving domestic and international climate change architectureClimate change projects and programmes in-cluding those funded by the GCF are a means of responding to particular climate change provisions and priorities, as identified either at the international (UNFCCC) level or do-mestically. The continually evolving nature of the international climate change architecture and periodically shifting national priorities cre-ate a need for periodic capacity building of project proponents on the latest topical issues to which their projects/programmes ought to respond. For instance, projects to be devel-oped between 2018 and 2022 will have to be aligned with the National Climate Change Ac-



It is also anticipated that the GCF’s own ESS and fiduciary standards (initially projected to be released by 2017) will be out in early 2018.

The implication is that project proponents will have to be capacity built on these new and emerging GCF guidelines and provisions.

d) Economicandfinancialanalysis

Economic and financial analysis (EFA) is an integral component of the GCF proposal. A recommendation for an in-depth training in-volving relevant personnel from finance, ac-counts and technical departments was made. The recommendation is to have a project pro-ponent’s project development team working with a consultant (the trainer) to undertake the analysis. This will be the case for WRA with the

planned studies that include an EFA. It was unclear how NDMA intended to address this need.

Most importantly, EFA seems to be an area that will present difficulties even for future project development, hence the need to con-sider some long term capacity building initia-tive with either the NDA or NEMA. e) Linkages with the Climate Change Directorate

There is need to create mechanisms for align-ing the GCF projects with the initiatives of the Climate Change Directorate (CCD) particularly on and around MRV, which is a core mandate of the Directorate.



5.1 Institutional Capacity Assessment Toolkit

Date and time of Interview ............................ Name(s) of Interviewee(s) ........................................

Name of the institution ...................................................

1. Institutional mandate (briefly explain the mandate of the organisation including its year of establishment and any law if applicable)

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................................................................................................................................................. 2. What is the approximate number of key personnel in the following departments/sections?

Management and administration .....................Finance and Accounting ..............................

Technical/Field ..................................................Legal .............................................................

3. What is the organisation’s experience in developing and implementing donor funded project? How many such projects have been developed and funded in the last five years and who were the donors? Any critical project development and management issues from your experience or capacity gaps that you may point out?

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Annexes5


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4. What national and international standards do your finance and accounting as well as auditing conforms to? Name them.

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5. Do you have an internal audit? What can you say of the internal department and function in terms of its capacity? If possible, kindly share your internal audit reports of the past two FYs.

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6. Have you had any of your externally (OFAG/KENAO) audited reports qualified in the last five FYs? What were the reasons and how were these dealt with?

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7. Does the organisation have procurement manuals and procedures that are distinctly different from the national statutes and international standards?

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8. Does your organisation have an anti-corruption policy or strategy and how does this align with national and international standards and statutes on anti-corruption? Can these be shared? Has there been a corruption allegation issue that the organisation has had to deal with? What measures were taken in respect to the case? Most importantly, what additional measures (safeguards) were put in place to limit or prevent such occurrences in the future?

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9. Does the organisation have environmental and social safeguards? To the best of your knowledge, to what extent do these safeguards conform to international standards (are they adopted from any particular international standard(s)? Are these applied in the development and execution of projects? Kindly share project reports that could help ascertain your response.

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10. Does the organisation have a gender policy and/or strategy? To the best of your knowledge, to what extent does it conform to national policy/strategy on gender? Is gender mainstreamed in your projects? Kindly share project reports that could help ascertain your response.

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11. Any additional comments or thoughts in relation to necessary capacity in respect to the project?

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5.2 Personnel Capacity Assessment Toolkit

1. Date and Time of Interview .....................Name of Interviewee ..............................................

Name of organisation ..............................

2. Briefly highlight your knowledge of international and national climate change processes/architecture and outcomes particularly with respect to climate finance.

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3. Briefly highlight/discuss your knowledge of the Sustainable Development Goals (SDGs) particularly the goals on gender, economy, social and environmental dimensions as well as their indicators.

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4. To what extent have you been involved in climate change programming in the past? Kindly highlight your experience in developing a climate change/environmental proposal (project) and the lessons learned in terms of what worked and what did not work in enabling access to the funds.

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5. In relation to 4 above, briefly explain your experience in project impact assessment (environment, socioeconomic, political, etc.) with risk mitigation plans as well as any capacity gaps that you would like the project to address.

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6. In relation to 4 above, briefly discuss your experience in project cycle management including Monitoring, Reporting and Verification (MRV) as well as gaps that you would like the capacity building exercise to address.

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7. In relation to 4 above, briefly discuss your (including the organisation’s) experience in incorporating environmental and social safeguards in the projects you have been involved in. Are there reports that can ascertain the statements? Any gaps that you would like the project to address?

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8. In relation to 4 above, briefly discuss your (including the organisation’s) experience in incorporating gender dimensions in the projects you have been involved in. Are there reports to the statements? Any gaps that you would like the project to address?

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9. Kindly highlight your level of knowledge of the Green Climate Fund (GCF) and its access processes/procedures as well as requirements.

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10. Kindly highlight your knowledge of the requirements of a GCF project proposal and experience you have in relation to the same or to a closely related project (Hint: focusing on paradigm shift argument, impact potential, country ownership, rationale/needs of the recipient country).

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11. Any additional comments or thoughts in relation to necessary capacity in respect to the project?

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5.3 Example of a Theory of Change diagram

Source: Danida- Kenya Country Programme 2016-2020 (MESPT Component Document)


1 The GCF website: http://www.greenclimate.fund/gcf101/empowering-countries/readiness-support. Accessed on 3/12/2017

2 The GCF website: http://www.greenclimate.fund/who-we-are/about-the-fund. Accessed on 14/08/2017

3 The GCF website: http://www.greenclimate.fund/gcf101/funding-projects/project-funding. Accessed on 24/08/2017

4 UNFCCC 2011. The Governing Instrument for the Green Climate Fund

5 Rai N. and Soanes M. 2015. A Practical Handbook for Green Climate Fund Accreditation in Bangladesh. IIED

6 The Green Climate Fund. Undated. Concept Note User’s Guide

7 http://www.ndma.go.ke/features/key-departments

8 https://www.cordaid.org/en/wp-content/uploads/sites/3/2013/05/Booklet_1_CMDRR_Training_Design_and_Implementation.pdf

9 http://www.greenclimate.fund/documents/20182/46513/1.9_-_Fast-track_Accreditation_Guidance.pdf/daa75a16-e657-4409-9453-215dc9de209c

10 Lucy Ssendi and Neha Rai. 2016. Eight things to know about Green Climate Fund. IIED, London.

11 WRI 2015. Environmental and Social Safeguards at the Green Climate Fund

12 Ibid

13 Ibid

14 GCF 2014. A report of the GCF Board Meeting (GCF/B.08/05). Relevant International Private Sector Best-Practice Fiduciary Principles and Standards and Environmental and Social Safeguards

15 Neha Rai and Marek Soanes. 2015. A practical handbook for Green Climate Fund accreditation in Bangladesh. IIED, London.

16 GCF 2014. A report of the GCF Board Meeting (GCF/B.08/05). Relevant International Private Sector Best-Practice Fiduciary Principles and Standards and Environmental and Social Safeguards

17 Neha Rai and Marek Soanes. 2015. A practical handbook for Green Climate Fund accreditation in Bangladesh. IIED, London.

18 GCF 2014. A report of the GCF Board Meeting (GCF/B.08/05). Relevant International Private Sector

Endnotes



Best-Practice Fiduciary Principles and Standards and Environmental and Social Safeguards

19 UNFCCC 2011. The Governing Instrument for the Green Climate Fund

20 GCF and UN Women 2017. Mainstreaming Gender in Green Climate Fund Projects

21 Ibid.

22 The Green Climate Fund, 2014. The GCF Initial Investment Framework. Songdo: the GCF. https://www.greenclimate.fund/documents/20182/239759/Investment_Criteria.pdf/771ca88e-6cf2-469d-98e8-78be2b980940

23 Charlotte Ellis and Kamleshan Pillay, 2017. Understanding ‘bankability’ and unlocking climate finance for climate compatible development. Climate and Development Knowledge Network (CDKN).

24 The Green Climate Fund, 2014. The GCF Initial Investment Framework. Songdo: the GCF. https://www.greenclimate.fund/documents/20182/239759/Investment_Criteria.pdf/771ca88e-6cf2-469d-98e8-78be2b980940

25 Sven Harmeling et al., 2013. How can the Green Climate Fund initiate a paradigm shift? Climate and Development Knowledge Network (CDKN).

26 WBGU, 2011. The Transformation towards Sustainability. Factsheet No. 4/2011. Berlin: German Advisory Council on Global Change (WBGU). http://www.wbgu.de/fileadmin/user_upload/wbgu.de/templates/dateien/veroeffentlichungen/factsheets/fs2011-fs4/wbgu_fs4_2011_en.pdf

27 The Green Climate Fund, 2014. The GCF Initial Investment Framework. Songdo: the GCF. https://www.greenclimate.fund/documents/20182/24943/GCF_B.07_06_-_Investment_Framework.pdf/

28 Government of Kenya, 2016. Kenya National Adaptation Plan: 2015-2030. Nairobi: Ministry of Environment and Natural Resources

29 Theory of Change Community, undated. http://www.theoryofchange.org/what-is-theory-of-change/

30 Bours, D., McGinn, C., and Pringle, P. (2014). The Theory of Change approach to climate change adaptation programming. SEA Change CoP, Phnom Penh and UKCIP, Oxford.

31 http://www.greenclimate.fund/documents/20182/76153/DECISION_B.11_10_-_Initial_monitoring_and_accountability_framework_for_accredited_entities.pdf/b06dddfc-2d18-4675-9d2f-d3e81de6ba99

32 http://www.greenclimate.fund/documents/20182/239759/5.3_-_Performance_Measurement_Frameworks__PMF_.pdf/60941cef-7c87-475f-809e-4ebf1acbb3f4

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