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I distributed a survey to 24 DFIs, contacted by email. In total eight organizations responded to the survey, namely: FMO, AFC, DBSA, CDB, CAF, XacBank LLC, SANBI and GEF Small Grant Programme . Due to the response rate being incomplete, the survey was distributed to three more entites that are not DFIs, two of which responded (SANBI and the GEF Small Grants Programme).

Figure 1 shows a summary of question 9 to 11, where the respondents were asked to rate their experience of the reorganization from 1 (Most negative impact) to 5 (Most positive impact). Specifically, they were asked to rate the following:

  • Q8-The impact of capacity building/reorganization on development of initial pipeline of project and programmes, concept notes and funding proposals.
  • Q9-The impact of reorganization on project implementation.
  • Q10-How reorganization had impacted on the DFI’s access to GEF/GCF/AF information.
  • Q11- How reorganization/capacity building had helped to meet the GEF/GCF/AF fiduciary standards.

According to figure 1, ‘up-skilling of staff’ was seen as having had the most positive impact by 5 out of 5 respondents who answered this question. 4 out of 5 respondents stated that ‘creation of a unit’ dedicated to climate change had the most positive impact. AFC was the only respondent who indicated that developing a unit dedicated to climate change did not have an impact on development of initial project pipeline and programmes, concept notes or funding proposals. Overall, the results indicate that all the classes of reorganizations were considered to have had a positive impact on the development pipeline of concept notes, funding proposals, projects and programmes.

4 out of 8 respondents rated creation of a dedicated unit and the hiring of additional staff as having had the most positive impact on project implementation. Overall all the types of reorganization had a positive impact on project implementation. Two respondents also indicated that other types of reorganization also had a positive impact on project implementation.

In terms of the impact of reorganization on the DFI’s access to GEF/GCF/AF information. A dedicated unit was rated as having the most positive impact (by 4 out of 8 respondents), followed by hiring additional workers. One respondent, the XacBank LLC, indicated that trainings from GEF/GCF/AF and up-skilling existing workers did not have a significant impact on accessing funder’s information. Overall according to the results all the types of reorganization had a positive impact on accessing funder’s information.

From the results of question 11, none of the classes of reorganization seemed to have had any impact on meeting the funder’s fiduciary standards. 4 out of 6 respondents indicated that hiring additional staff had no impact on meeting these standards. 3 out of 5 respondents also felt that training from GCF/GEF/AF did not significantly impact on meeting the funder’s fiduciary standards.

Figure 1: Impact of reorganization on development of initial pipeline of projects and programmes, concept notes and funding proposals, project implementation, DFI’s access to GEF/GCF/AF information and on assisting to meet GEF/GCF/AF fiduciary standards.

Table 1 shows how specific capacity building has helped to overcome specific barriers. The types of barriers which were identified varied. Creation of a dedicated unit, trainings and attending workshops appeared to help overcome most barriers.

Table 1: Specific capacity building that has helped to overcome barriers to climate finance

Most respondents expressed that trainings from the GEF/GCF/AF are not effective in assisting them to overcome problems in accessing climate finance. However, one respondent indicated that, gender mainstreaming training assisted their organization with mainstreaming gender in projects. On the contrary trainings offered by funders aim to strengthen the competencies of organizations and to improve their performance in project implementation by ensuring that projects are in consistent with funders’ requirements (GCF, 2018c).

Furthermore, other external issues such as political interference were seen as key barriers to accessing climate finance, but unfortunately no solutions was identified to address these types of barriers. Moreover, climate finance represents a complicated national decision making process because it involves government, implementing agencies, executing agencies, consultants and other various stakeholders, however there is some limited research that addresses the influence of political interference in the allocation and use of climate funds amongst these several stakeholders (Pickering et al., 2015). The authors of this study explained that when it came to climate finance policy; monetary value and political landscape all play an important role in how the funds are actually used (Pickering et al., 2015).

In conclusion most of the barriers to accessing climate finance can be addressed through reorganization, however barriers political interference cannot be addressed through reorganization. A dedicated unit and upskilling of existing employees are the best strategies and cost-effective methods to improve access to climate change through reorganization. When a unit is dedicated to specific functions of an entity, it is important to ensure that there are enough human and financial resources within the unit and the resources must be efficiently utilized. In addition, monitoring and evaluation on the progress of the projects is important, because it helps in identifying where progress was made and how improvements can be made, it also becomes easier to identify when resources such as financial resources where mismanaged. (Wilson, 2015) outlined that restructuring is a byproduct of significant changes in strategic and financial management structures, consequently restructuring creates a need for corresponding changes in the entities decision making process, hence this results in changes such as creation of dedicated units, hiring additional staff, upskilling existing staff and trainings.

Based on the overall perception of participants, the respondents found creation of a dedicated unit to be most cost effective. Burke (1998) has argued that it is common for organizations to undergo restructuring, especially when they are faced with a challenge, and that they may use restructuring as a method of addressing the problem through attempting to improve efficiency (Burke, 1998). Lastly, organizational transitions are drivers of new, innovative and more flexible organization forms that will be necessary to meet the demands of the competitive global markets such as climate finance.

 

Bula!

A financial expert, Michael Metcalfe, gave a TED talk about the possibility of using SDRs issued by IMF to combat climate change. Climate change is a global challenge and requires international cooperation just like the global financial crisis which happened in 2008. The SDRs can be sold to buy green bonds or donated to the GCF to meet the promise of mobilizing $100 USD per by 2020. Watch the TED talk, on the link below, and learn more about a strategic way to finance the fight against climate change.

https://m.youtube.com/watch?v=UoMpbL_Fsig&t=132s

Molweni!

High level GCF project pipeline flowchart.

On Tuesday, I attended a GCF and GEF projects pipeline workshop, at DBSA. The workshop was absolutely informative. I learnt about the whole project pipeline from the request of project proposals, transitioning projects from pre-feasibility state to bankability, sending them to the GCF/GEF secretariat for inputs and then the GEF/GCF board/council makes the final decision on funding. Amongst other things, the following components of the projects pipeline were scrutinized:

  • The status of each of the projects in the pipeline – including project implementation stages and implementation plans.
  • Any project implementation issues
  • Contractual / financing arrangements.
  • Environmental and social safeguards assessments
  • Gender action plans
  • Monitoring and evaluation considerations
  • Monitoring and evaluation and reporting.
  • Roles and responsibilities.

Moreover, what was interesting was that GCF and GEF has an advisory panel who gives inputs on projects, after reviewing them. And also after submitting the concept notes to the GEF, which is a summary of a proposal, the GEF gives funding which is called the Project Preparation Grant. This type of funding assist project developers financially, to cover costs that are incurred when transitioning projects to a technically, financial and sustainable sound state.