The Readiness and Preparatory Support Programme (the Readiness Programme) is a funding modality designed to assist developing countries to enhance their weaknesses, challenges, and gaps in the areas of institutional capacities, governance mechanisms, and planning and programming frameworks so that they may effectively engage the GCF and for them to make a meaningful contribution towards the climate resilience building agenda.
The Readiness Programme is accessed through the National Designated Authorities (NDAs) and Focal Points (FPs) of each country. The NDAs are able to use this funding modality to build their institutional capacity and governance mechanisms to fully engage with the GCF. The Readiness has the option of being implemented individually by the NDAs, by GCF accredited entities or any other capable entities.
Implementing entities that are not accredited to the GCF must undergo a Financial Management Capacity Assessment prior to implementation. The Readiness may also serve to assist countries with their GCF programming by carry out interventions on the areas of adaptation planning and strategic framework development such as National Adaptation Plans (NAPs) and Nationally Determined Contributions (NDCs). Direct Access Entities and nominated entities by the NDA for accreditation to the GCF can be supported through this funding modality.
Grant funds for this modality has a benchmark of US$1 million or less per country and per year for activities designed to enhance intuitional capacity, governance mechanisms and investment programming. Actions for the development of NAPs and other adaptation processes can access up to US$3 million per country. The implementation time of a Readiness can range between 18 months to 3 years.
The Project Preparation Facility (PPF) is a financing modality designed to assist Accredited Entities, especially those in developing countries, with technical and financial resources required for the development of a project or Programme funding proposal. The PPF is geared towards providing support for Accredited Entities for direct access to funds within the micro to small size category. Accredited Entities are able to access up to a maximum of $USD1.5 million upon the approval of their PPF application. Financing through PPF is made via grants and repayable grants. The PPF has the flexibility of financing initiatives in the private sector where considerations for equity by the GCF may be imposed.
The PPF is an available funding window for the development of funding proposals including the Simplified Approval Process (SAP). The development and submission of a PPF application by the Accredited Entity must be done in close collaboration with the NDA or Focal Point and the GCF Secretariat. Accredited Entities are able to access funds with the submission of the PPF application along with an approved concept note expressing the PPF support and a No-objection PPF letter by the NDA or Focal Point. It is important to note that PPF applications will only be accepted after the approval of a concept note by the GCF.
The approval process of the PPF is led by an inter-divisional group of the GCF Secretariat which reviews, engages the Accredited Entity to make adjustments and approves the PPF application once all corrections have been addressed. The key areas of support by the PPF are pre-feasibility and feasibility studies; project design; environmental, social and gender studies; and risk assessments. Other project preparation activities can be funded through the PPF upon the submission of a well-defined justification. PPF activities should lead towards the development of a funding proposal within a period of 24 months followed by the submission of the funding proposal to the GCF Board for approval.
The funding proposal is a financial modality available for national, regional and international Accredited Entities to directly access financing from the GCF for climate change projects and programmes. Accredited Entities have the opportunity of submitting their proposal to the GCF at any given time or when the GCF has a call for Request for Proposals (RFP). Under this modality, Accredited Entities are able to partner with the public or private sector.
Funding proposals are partially financed by the GCF, therefore; proposals are required to strongly demonstrate a co-financing facility from a partner organization. The number of funds requested to the GCF is within the Accredited Entity’s accreditation standards, which stipules the threshold for the total project size in millions (USD) such as micro (≤10m), small (10m<x≤50m), medium (50m<x≤250m), and large (>250m).
Prior to the submission of a funding proposal to the GCF, Accredited Entities must ensure that the NDA or the Focal Point and the GCF are informed and engaged. The engagement of the NDA or the Focal Point during the development process serves to facilitate the alignment of the project or progamme with the country’s strategic framework and priorities, and to engage relevant stakeholders. Also, the project or programme should make a direct contribution towards the Accredited Entities Work Programme.
The focus of the proposal can solely be on adaptation or mitigation interventions, however; there is flexibility to blend both types of interventions as cross-cutting. Prior to the development and submission of a funding proposal, an Accredited Entity can submit a concept note to the GCF to seek the GCF guidance and to ensure that the concept is aligned with the GCF objectives, policies and investment criteria. Funding Proposals submitted to the GCF go through a process of review and approval by the GCF Board.
For funding proposals to be approved, they should encapsulate critical areas such as technical, financial, environmental, social, gender, and legal. In addition, proposals are required to meet the six GCF investment criteria which are impact potential, paradigm shift potential, sustainable development potential, needs off the recipient, country ownership and, efficiency and effectiveness.
The Simplified Approval (SAP) financing modality consists of a less rigid process which is designed to address climate impacts. SAP is a simplified process since the required documents are straightforward, and the documents have been shortened to have fewer pages. The proposal should not exceed 20 pages or 10,000 words, and questions on documents have been simplified for concise answers.
Financing for SAP modality is for small scale projects or programmes which are developed to scale-up existing projects which has identified technologies and solutions for adapting and/or mitigating climate change, financial contribution by the GCF not exceeding $USD10 million, and projects with little to no environmental and social risk and impacts.
Accredited Entities, NDA’s or Focal Points and Direct Access Entities are eligible to submit their application through a concept note. Accredited Entities are encouraged to engage with their respective NDA or Focal Point before submitting a concept note. Also, financing from the Project Preparation Facility (PPF) can be expressed via the concept note and a subsequent PPF application to develop the SAP proposal. The GCF is available for any guidance required to access this modality.
The Enhanced Direct Access (EDA) financing modality is a pilot programme designed by the GCF to assist the Direct Access Entities (DAEs) with the necessary resources required to strengthen the country ownership of projects and programmes. The EDA is a unique pilot programme since its decision for funding and project oversight occurs at the national or regional level using the most effective mechanism such as the establishment of a facility that specifically deals with the financing of small-scale projects.
The EDA is available only for DAEs that are accredited since they can provide grant-awards or other financial functionalities such as on-lending or the blending of funds. To access funding under the EDA pilot programme, the DAE’s must submit an EDA funding proposal to the GCF Board for consideration and approval. Once approved, the DAE has oversight and delivery of the funding facility while ensuring that broad needs and circumstances of the country are addressed.
The EDA differs from the conventional GCF funding proposal in the manner whereby once the EDA funding proposal is approved by the GCF board then pilot proposals, having sub-projects, do not require the approval of the GCF board. The approval of pilot proposals is decided at a country level through a decision body and a pre-approved selection criteria as highlighted in the approved EDA funding proposal.
Adaptation and mitigation interventions are accepted in the pilot proposals as either two separate interventions or as a combination of both under one or more of GCF’s results areas. Pilot proposals must provide direct support to communities or Small and Medium Enterprises (SMEs) through a funding functionality such as small grants or extended line of credit. The proposals should focus on local actors, gender issues, and the needs of vulnerable communities.