Post-Bali: It’s Crunch Time! – Report of the 6th GCF Board Meeting

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Report

The sixth meeting of the Board of the Green Climate Fund (GCF) in Bali from February 19 – February 21, 2014 was meant to propel the new Fund toward full operationalization by year’s end. After Bali, however, this tightly timed goal – which included the expected start of the GCF’s resource mobilization efforts in connection with the UN Secretary General’s extraordinary climate summit in New York on September 23rd – is in peril. The 24 Board members left Bali with only a handful of actual decisions taken and many more postponed for the next Board meeting in late May, after old tensions between developed and developing countries flared up. At issue are competing approaches on how the GCF should support the paradigm shift towards low-carbon and climate-resilient development in recipient countries. Will the GCF operate as a fund closely tied to the UN Framework Convention on Climate Change (UNFCCC) passing on primarily concessional public finance to all eligible Non-Annex I-Countries under the Convention? Or is the GCF to develop eventually into a more full-fledged climate bank with complex financial instruments which could prioritize public funding to leverage private sector engagement in fewer competitively selected countries and investment opportunities?

Presiding over their first GCF Board meeting as new co-chairs, German Board member Manfred Konukiewitz and the Philippine’s Jose Ma. Clemente Sarte Salceda faced difficulties in steering their colleagues through a heavy-set agenda and keeping them task-oriented and focused on decision-making. Instead lengthy discourses about the Fund’s travel and administrative policies, including in closed executive sessions, took away precious Board time. This short-changed in-depth Board member feedback on a number of operational policies for which only progress reports were under review in Bali with a decision based on revised texts to come in May. In total six of the eight policies deemed essential for the Fund to be able to receive and disburse funding this fall will have to be decided at the next Board meeting. Added to this are a number of operational modalities, where decisions expected in Bali were postponed to the May meeting, including on a work program to get developing countries ready for GCF funding. This increases the pressure on the GCF Board and its Co-Chairs for the May meeting tremendously.

In Bali, the Board was only able to decide on two of the total eight policies required for GCF capitalization, namely a set the terms of reference for several accountability mechanisms for the Fund, and probably the most important decision in Bali, Fund-wide benchmarks for how GCF resources will be allocated. The Board confirmed that the mandated balance between spending for adaptation and mitigation in effect means a 50:50 split “over time.” It also reserved a minimum half of all of its adaptation spending for particularly vulnerable countries, such as LDCs and SIDS. Interestingly enough, there was only one issue in which the Board went beyond what was considered to be a likely outcome for the Bali meeting, with the Board deciding to raise ambition for the implementation of the GCF mandate for a gender-sensitive approach to its funding with a far-reaching gender decision.

In preparation for the all important 7th GCF meeting, which is to take place from May 18-21 in Songdo, South Korea, good cooperation between the Board Co-Chairs, Executive Director Hela Cheikhrouhou and a still understaffed GCF Secretariat, which is to revise and re-issue more than a dozen complex policy papers, will be crucial. The Co-Chairs will have to step up their efforts in smoothing out Board disagreements over key operational policies already in the lead-up to the May meeting and work with the Secretariat strategically to draft balanced decision texts which the Board members – in the interest of seeing the Fund succeed and start funding quickly – can compromise on.

For the Board preparation documents for the 6th GCF Board meeting, click here.