Download The Global Environmental Facility (GEF)

Swedish assessment
of multilateral organisations
200
8
The Global Environmental Facility (GEF)
Facts about the organisation
Mandate and direction of operations
The Global Environment Facility (GEF) is a financial mechanism for the United Nations Framework
Convention on Climate Change, the UN Convention
to Combat Desertification, the Convention on Biological Diversity and the Stockholm Convention on
Persistent Organic Pollutants. The GEF was started
in 1991 to offer funding for the new conventions
established as a result of the Rio Conference and to
counter the development of further new environmental funds linked to individual conventions. Its
mandate includes contributing to global environmental benefits by paying the incremental cost of making
major projects in developing countries more environment-friendly. The GEF core budget is divided into
‘focal areas’; each focal area is linked to a multilateral
environmental agreement. The largest focal areas are
biological diversity and climate change. Other areas
that receive funding are land degradation, persistent
organic pollutants, international waters, capacity
building and, to some extent, ozone depletion. The
GEF is also the secretariat for some other funds under
the Framework Convention on Climate Change: the
Special Climate Change Fund, the Least Developed
Countries Fund and the Adaptation Fund.
Governance, organisation and Swedish
participation
The GEF Council has 32 constituencies of both donor
and recipient countries. Sweden is in a constituency
with Finland and Estonia. Sweden and Finland rotate
every two years in leading the constituency.
The Secretariat is led by a Chief Executive Officer,
Monique Barbut, who took office in August 2006.
The World Bank is the Trustee of the Fund and
formally the GEF Secretariat is part of the World
Bank. The GEF also has its own independent Evaluation Office, a Conflict Resolution Commissioner for
complaints from developing countries and a Scientific
and Technical Advisory Panel that screens projects in
terms of their potential to fulfil the convention concerned.
In 2006 the group of implementing agencies carrying out projects in the field was expanded from only
consisting of the World Bank, UNDP and UNEP to
also include the regional development banks, the
FAO, IFAD and UNIDO. Since projects are implemented via implementing agencies, the GEF has no
field offices. 44 people work in the Secretariat in
Washington.
Background to the Swedish assessments
In April 2007 Sweden adopted its first strategy for multilateral development cooperation. One of the
strategy’s recommendations is to make regular structured assessments of the multilateral organisations
receiving Swedish support. The strategy’s key concepts – relevance and effectiveness – are intended to
guide the assessment of each organisation.
In spring 2008 assessments of multilateral organisations were conducted jointly by the Government
Offices, Sida and Swedish embassies in developing countries. These assessments will be used as one of
several inputs for budget decisions, the preparation of organisation strategies and policy dialogues. The
main intention is for them to increase knowledge of the individual organisations and form a basis for
following the development of each organisation. However, the assessments do not claim to be comprehensive. Nor should comparisons be made between organisations on the basis of this information. The forms
for these assessments are being developed and routines for what information is to be gathered, assessed
and reported are still being tested.
Financial information
Internal effectiveness
UN The GEF has disbursed USD 7.4 billion to 160
countries since it started in 1991 and has leveraged
USD 28 billion in co-financing. Before 2003, 75 per
cent of contributions to the GEF met OECD/DAC
aid criteria. This figure increased to 77 per cent in
2003 and 96 per cent from 2007.
Sweden has supported the GEF since its pilot phase.
At present 32 countries contribute to the GEF, which
is replenished every four years. Sweden’s historical
share is 2.62 per cent, making Sweden the ninth
largest donor. In the last replenishment the United
States sharply reduced its GEF contribution. Many
countries, including Sweden, provided extra contributions to make up the shortfall so that GEF-4
would be as large as GEF-3 in real terms. With this
extra contribution to GEF-4, Sweden is now the
seventh largest donor.
Sweden is contributing SEK 850 million to GEF-4,
including the extra contribution, making the total
Swedish funding 4.9 per cent of donor contributions
to GEF-4.
The GEF’s internal effectiveness is assessed as not so
good, but with positive trends. In connection with the
latest replenishment important reforms were adopted
to increase the effectiveness of operations and some
results can already be seen. The project cycle has
been shortened from an average of 66 months to 22
months. The method of calculating the incremental
cost of making projects in developing countries more
environment-friendly has been simplified. The dialogue
with recipient countries has been strengthened and a
Conflict Resolution Commissioner has been appointed.
It is still too early to draw conclusions about the impact
of some of the other reforms. It remains to be seen
whether recipient countries will make more use of
the new implementing agencies, but the hope is that
broader choice will result in greater national ownership. The most important components of a system of
results-based management are in place, but it is not
yet possible to see the effects since the reforms were
introduced with GEF-4, i.e. in July 2006. Indicators
have been elaborated for all the focal area strategies.
The evaluation presented to the Council in April
2008 indicates that the portfolio is performing well.
The link between the resources assigned to
recipient countries and the activities they have
carried out has been strengthened with the introduction of a new resource allocation framework.
The One World Trust, a British organisation, and an
analysis published in the Journal of Environment and
Development have described the GEF as one of the
most transparent organisations operating in development cooperation.
Council work is complicated by the GEF’s relationship to the multilateral environmental agreements
for which the GEF is a financial mechanism. The
Secretariat is governed both by the Council and by
the multilateral environmental agreements, which
have different views about what the GEF should
prioritise. This inbuilt conflict weakens the Council
and causes frequent dissatisfaction among parties to
the conventions.
Swedish contributions
2005 2006 2007
Total paid in Swedish
contributions, SEK million
138
165
251
- of which contributions from
the Government Offices,
SEK million
138
165
251
0
0
0
- of which multilateral/
bilateral support from Sida
SEK million
Assessment
Relevance in relation to Swedish
development objectives
The GEF is relevant to Swedish development objectives in line with Sweden’s policy for global development. It is specially focused on one of the thematic
priorities for Swedish development cooperation,
environment and climate. The GEF is the largest
global fund for environment and development. The
GEF contributes to sustainable development, to
improving the living conditions of poor people, to
a better local and global environment and to the
ability of developing countries to implement their
commitments on conventions. The facility is one of
a kind and relevant to the Millennium Development
Goal of environmentally sustainable development.
In connection with the most recent replenishment
it was decided that the GEF will strengthen the link
between development and environment by better
integrating GEF-funded projects in partner countries’
poverty reduction strategies.
External effectiveness
The overall assessment of external effectiveness is
that it is not so good. Since the GEF is a financial
mechanism without its own field operations, its
external effectiveness must be measured using more
indirect metrics. Other agencies execute the projects
and the role of the GEF is limited to coordination,
policy-making, oversight, fund-raising and decisionmaking. The effectiveness of the GEF in these roles is
now being questioned because the rate at which funds
are used has decreased considerably since the new
resource allocation system was introduced. At the
same time, many donors have recently chosen to place
major finance for climate and development outside
the GEF.
have a high degree of national ownership and integration into nationally owned development plans in the
Philippines and a moderately high degree of ownership and integration in Samoa.
Trends
Monique Barbut has put an extensive reform agenda
into effect since taking office as Chief Executive
Officer on 1 July 2006. Although this has led to
positive developments, the position of the GEF in
the international architecture for environmental aid
is being threatened by both internal and external
factors. For example, an important actor like the
United States has reduced its support because the
new resource allocation system was not introduced
for all operations.
To sum up, the GEF has become more effective and
transparent and is well on the way to establishing a
results-based system. However, donor countries have
begun to choose to channel their environmental aid
to other institutions that are decoupled from the UN
environmental agreements; one example is the World
Bank’s new ‘Climate Investment Funds’.
Production: Press, Information and Communication Department • October 2008 • Tel: +46-8-405 10 00 • Website: www.sweden.gov.se/mfa • Article no: UD 09.029
The GEF’s external effectiveness depends in part
on the actions of the implementing agencies. Partner
countries choose which agencies they want to work
with and more than 60 per cent of projects are carried
out by the World Bank or UNDP. The GEF Council
only approves payments to projects that are in line
with its strategies for the focal areas concerned. Some
ineffectiveness is built into this system because the
implementing agency is a ‘second layer’, one result
being a longer project cycle. This extra layer is an obstacle to accountability when problems or difficulties
arise in the implementation of the project and in reporting. It is not always obvious, either to the recipient
country or to the Council, whether a problem is due to
deficiencies on the part of the implementing agency
or on the part of the GEF. This structure also makes
the GEF relatively invisible at country level. However, the structure does permit better coherence and
provides the possibility of coordinating environmental aid and integrating GEF-funded projects into the
implementing agencies’ own country programmes.
The Evaluation Office has conducted an evaluation of
the GEF portfolio in the Philippines and Samoa for
1992–2007. That study showed that GEF projects