Difficult Decisions - Deferred? The 4th Green Climate Fund Board Meeting wrestles with the Fund's Business Model and selects its new Executive Director

When the Board of the Green Climate Fund (GCF) met for its fourth meeting from June 25 – June 28, 2013 in Songdo, South Korea, the Co-Chairs requested that the 24-member body take some ambitious decisions on how the GCF will conduct its business in order to push for the paradigm shift toward low-emission, climate-resilient, sustainable and gender-sensitive development in developing countries mandated by its Governing Instrument. The discourse on the Business Model Framework (BMF) for the Fund – the constituent building blocks of policies, guidelines, and organizational structure of facilities, windows and units to operationalize the Fund – dominated the Songdo meeting, including a whole-day of informal discussions on June 25th.  A key question to address and a point of contention was the question of what role the private sector will play in contributing to that shift and what the mandated Private Sector Facility should look like. The Board struggled with the unavoidable tension between urgency to “get on with it” and show results (as a prerequisite that developed countries have reiterated repeatedly to even start talking about the initial resource mobilization for the Fund) and “getting it right” (to rationalize the existing climate finance architecture, fill delivery gaps and secure the GCF as the global community’s main multilateral climate funding mechanism for decades to come). The latter involves dealing with existing fundamental differences on the vision for and the purpose of the Fund, consensus and trust building efforts as well as acknowledging and addressing definitional uncertainties and knowledge gaps among Board members in order to advance toward consensus decisions. In Songdo, this tension could at times only be resolved by requesting additional background materials and by deferring controversial decisions for resolution at future Board meetings.

One crucial decision – and the key accomplishment by the Board in Songdo – was the selection of Heda Cheikhrouhou of the African Development Bank as the new Executive Director for the Fund’s Independent Secretariat. The new GCF Executive Director will have to oversee as one of her first tasks the move of the current GCF Interim Secretariat from Bonn to Songdo and its scaled-up reconstitution as permanent Independent Secretariat before the end of this year.

Several agenda items up for decision in Songdo addressed the transparency and accountability of the GCF and its Board, including the Fund’s information disclosure, further work on a communication strategy, a competition to design a logo for the Fund, as well as voting rules for the Board. Unfortunately, in Songdo the GCF Board failed to meet, let alone surpass, existing international best practice in terms of transparency by deciding to not allow for web-casting of its proceedings. Lastly, the Board postponed to its next meeting (the last of this year) its decision on the relationship of the Fund, which is an operating entity of the financial mechanism of the UN Framework Convention on Climate change (UNFCCC), with the Convention’s Conference of Parties (COP), to whom the GCF is accountable. The GCF Board will wait for the draft arrangements on the relationship from the Convention’s Standing Committee on Finance (SCF), which was tasked jointly with the GCF Board by COP 18 to finalize the arrangements before COP 19 in November in Warsaw. The SCF hopes to conclude the arrangements at its upcoming August meeting and forward its recommendations to the GCF Board.  The Fund’s Board will consider them at its next meeting, from October 7-10 in Paris, France.