1-4 July 2018, Songdo (Republic of Korea)

Summary from the 20th Green Climate Fund Board Meeting

From 1-4 July 2018, the Board of the Green Climate Fund (GCF) convened for its 20th meeting in Songdo, Republic of Korea. With a heavy agenda, the Board looked to address important issues, such as a process to organize the Fund's first formal replenishment; the closure of remaining policy gaps, e.g. on full cost and incremental cost financing, concessionality and co-financing; the adoption of a Gender Equality and Social Inclusion policy; the review of the accreditation framework; as well as the consideration of 11 funding proposals (requesting USD 988.5 million of GCF funding) and 9 applications for accreditation.

The official start of the meeting was delayed for almost one day, as the developing country Co-Chair, Mr. Paul Oquist, was not able to attend the meeting due to political turmoil in his home country Nicaragua. According to the Rules of Procedure (paragraph 8), this required the developing country constituency to elect a replacement for Mr. Oquist to assume the functions of Co-Chair for the duration of the meeting. However, due to internal disagreement within the constituency, no replacement was elected. After additional consultations within the developed and developing country constituencies, the Board decided that the developed country Co-Chair, Mr. Lennart Bage, would chair the meeting alone, as a neutral Chair.

The Board then turned towards the adoption of the meeting's agenda. Some developing country Board members voiced their discontent that the developing country Co-Chair had not consulted with his constituency for feedback on the draft provisional agenda and requested that amendments be made to accommodate their views. The suggested changes included a reorganization of the agenda, as well as further additions, such as "matters related to the selection of the permanent trustee". Some developing country Board members stressed that a certain sequencing of agenda items was very important, justifying the reorganization of the agenda.

A procedural fight among Board members ensued whether additional items could deliberately be added to the meeting's agenda, also in light of a very restrictive and rigorous handling of similar situations in the past by previous Co-Chairs. Disagreement also arose regarding the addition of agenda items concerning governance issues. For instance, dissatisfied with the way the preparation within their constituency for the 20th meeting had turned out, some developing country Board members wanted a new standing agenda item to prepare for each subsequent Board meeting. Developed country Board members disagreed with this, as they felt this would interfere with the governance of the Fund and would not be appropriate to be discussed. After further adjournments of the meetings and prolonged constituency meetings, an agenda was finally adopted.

Given that almost two days had already been spent on tedious procedural issues, the spirit in the Board was already negatively affected when the meeting finally kicked-off in the late afternoon of the second day. However, discussions on day three of the meeting continued to focus on rather procedural issues, e.g. as some developing countries questioned specific actions the Co-Chairs had undertaken in the intersessional period. For instance, one developing Board member questioned that the Co-Chairs had confirmed the appointment of the Heads of the Independent Units beyond the probationary period. In his view, this was subject to the approval of the entire Board. The Co-Chair highlighted that prior to making this decision, legal counsel was sought from the GCF Secretariat, which confirmed that the Co-Chairs, elected to represent the Board, were indeed authorized to make such a decision.

After long debates about procedural matters the Board addressed financial issues in the afternoon of the third day. At the outset, the Secretariat presented the status of the Initial Resource Mobilization (IRM) process, while the Trustee delivered the GCF Trust Fund financial report. Accordingly, available resources of the GCF as of 30 June 2018 (referred to as commitment authority) amount to about USD 2 billion, with an expected USD 790 million to be made available by end of the year 2018. Out of this USD 2.8 billion, around USD 500 million has to be allocated for the administrative budget of the Board, Secretariat, Independent Units and Trustee; the Readiness and Preparatory Support Programme; the Project Preparation Facility; and other expenses related to the operations of the Fund. At the current pace of project approvals, including the funding proposals at this meeting, the reported numbers imply that the resources of the GCF would likely run out by the end of the 21st Board meeting.

Taking note of the information received, the Board also requested the Secretariat to prepare an analysis of options for the management of the Fund's remaining commitment authority by the next meeting.

The Board then engaged in a heated debate about matters related to the replenishment process. Some developing countries strongly opposed a notion presented in the document prepared by the Secretariat that could make the start of the replenishment process conditional on certain policies and procedures being in place. Furthermore, they questioned whether and what type of review of the GCF IRM period should be conducted and by whom for the replenishment to happen. Last but not least, disagreement arose as some developed country Board members suggested that the replenishment process should be driven those who contribute to the GCF, rather than by the GCF Board.

The earlier insistence by some developing countries that items be addressed in the order they are listed on the agenda became a problem.  According to the agenda, matters related to replenishment issues were to be addressed before other items and, as the meeting was running out of time towards the end, some developed country Board members made it clear that they were not willing to open any other agenda item until a decision on this issue was taken. The proposal to address other issues, in particular accreditation and the approval of funding proposals, while a compromise on replenishment was being developed, was therefore not accepted. Nonetheless, a compromise text with two separate decisions on the review of the GCF IRM period and the start of the replenishment process was presented, but blocked at the very end by one developing country Board member.

Although several attempts were undertaken by the Co-Chair and some developed and developing country Board members to continue discussions, an agreement on neither the issue nor the process forward could be reached, forcing the Co-Chair to conclude the meeting. Before officially closing, Co-Chair Lennart Bage presented a letter from GCF Executive Director (ED) Mr. Howard Bamsey, in which he announced his resignation as head of the GCF Secretariat for personal reasons. Deputy Executive Director, Mr. Javier Manzanares, will assume the position of ED on an interim basis.

The next meeting of the GCF Board will be held in Manama, Kingdom of Bahrain from 17-20 October 2018.

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