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System of Transparent Allocation of
Resources - STAR
GEF Familiarization Seminar
January 17-19, 2012
Ramesh Ramankutty
Head, Operations & Business Strategy
INTRODUCTION
• Issues from GEF4 to GEF5
– GEF Council requested reforms in resource allocation
framework (RAF)
– Recipient countries requested new rules
– GEF evaluation office provided useful comments
• This presentation demonstrates how the GEF meets these
new challenges
OUTLINES
– What is new from GEF-4 RAF to GEF-5 STAR
– Impacts of the new things
– Overall allocations of the GEF-5
– Future development of the STAR
WHAT IS NEW IN THE GEF-5 STAR?
NEW ALLOCATION AREA AND COUNTRIES
GEF-4 RAF
• Areas: Biodiversity and
climate change
• Country categories:
– Individual and group
– LDC and SIDS in group
GEF-5 STAR
• Areas: Biodiversity, climate
change, and land
degradation
• Country categories:
– All the countries are equal
– No group countries
A NEW MAJOR COMPONENT
GEF 4 RAF
• GEF Benefits Index
(GBI)
GEF 5 STAR
• GEF Benefits Index (GBI)
• GEF Performance Index (GPI)
• GEF Performance
Index (GPI)
 Social Economic Development
Index measured as GDP index
(GDPI)
NEW RULES
GEF-4 RAF
• Caps:
– 10% for BD and 15% for CC
• Floors:
– No
• Others:
– 50% rule,
– Set-aside 10%
GEF-5 STAR
• Caps:
– 10% for BD and LD, 11% for CC
• Floors:
– $2 mn in CC, $1.5 mn in BD,
and $0.5 in LD
• Others:
– Flexibility for small countries (90%
rule),
– More weight (25%) for marine
scores in GBIBD,
– 5% of CC scores are from
countries’ forested areas
– Set-aside 20%
PROGRAMS NOT YET IN THE STAR
• International waters
• Persistent organic pollutants and sound chemicals
management
• Corporate budgets
• National dialogue initiative
• Country support program
• Regional and global projects/programs
• Small grants programs
• Earth fund (private sector)
GDP-BASED INDEX (GDPI)
• GDPI = GDP-0.04
• Rationale: Poorer countries need more funds
to build capacity for GEF project
development and implementation
Key message: the higher the GDP per capita, the lower the
country’s GDPI
GEF BENEFITS INDEX IN BD
• GBIBD = 75% × Terrestrial Score + 25% ×
Marine Score
– Terrestrial Score = 40% × Representative Species + 40% ×
Threatened Species + 10% × Representative Eco-region +
10% × Threatened Eco-region
– Marine score = the credits from all of the marine species
located in the territorial waters of the country
Key message: Reward countries with more species and eco-regions
GEF BENEFITS INDEX IN LD
GBILD = 60% × proportion of dryland area + 20%
× proportion of rural population + 20% ×
global share of land area affected
Key message: Reward countries with high proportion of dryland area
COUNTRY’S ALLOCATION SCORE (CAS)
• CASBD = GPI × GDPI-0.04 × GBIBD 0.8
biodiversity
for
• CASCC = GPI × GDPI-0.04 × GBICC 0.8
change
for climate
• CASLD = GPI × GDPI-0.04 × GBILD 0.8
degradation
for land
Key message: A country has only one GPI and one GDPI , but three GBIs
WHAT ARE THE IMPACTS OF THESE CHANGES?
IMPACT OF GDPI ($4.25 bn scenario
US$/ cap/yr
15.0%
20000
Difference over baseline
12.1%
17861
GDP/cap (US$) in 2008
10.0%
16000
14000
7.4%
5.0%
12000
10112
0.0%
DR Congo
United Republic of
Tanzania
0.0%
Morocco
10000
8000
Chile
Trinidad and
Tobago
-4.7%
-5.0%
2764
-10.0%
18000
180
482
6000
4000
-7.0%
2000
0
Key message: GDPI cuts up to 7% from the rich and adds up to 12% to the poor.
$2,760 GDP per capita is the threshold.
Impact of a “no group” allocation
GEF-4 RAF
• Individual countries in CC :
– 50
• Individual countries in BD:
– 58
• Individual countries in LD:
– None
GEF-5 STAR
• Individual countries in CC :
– 144
• Individual countries in BD:
– 144
• Individual countries in LD:
– 143
IMPACT OF FLOORS ON ALLOCATIONS
Number of countries floored
Floors
($m)
Share of resources to floored
countries over the total
Biodiversity
Climate
change
Land
Climate
Land
Biodiversity
degradation
change degradation
2
70
62
102
11.6%
9.1%
50.4%
1.5
57
45
75
7.1%
7.8%
43.4%
1
44
30
52
3.6%
3.4%
20.1%
0.5
36
15
8
1.5%
0.9%
1.5%
Key message: Using $2, $1.5 and $0.5 mn as floors will ensure a small country to have at least one
project, and no more than 10% of resources to be allocated to the floored countries.
IMPACT OF NEW CAPS ON ALLOCATIONS
CC Cap scenarios
Cap =15%
Cap = 11% (in
(baseline)
the STAR)
Allocation reduced
Allocations
increased
Allocations
increased and status
changed
Allocations not
affected
Number of
countries
0%
-26.7%
1
0%
7.3%
71
0%
4.4% and 2.8%
2
0%
0%
70
Key message: Capping one country will benefit 73 countries
OVERALL IMPACTS
Allocation distributions
140
Number of countries
120
100
80
GEF 4
GEF 5
60
40
20
0
10
20
30
40
50
60
70
80
90
100 110 120 130 140 150 160 170 180 190 200 More
$ Million
Key message: The number countries with allocation amounts less than four million
dollars each reduced from about 130 in GEF 4 to about 110 in GEF 5
STAR ALLOCATION AS OF DECEMBER 30TH,
2011
Allocation
Project Amount
PPG Amount
Grant Utilized
Allocation
Remaining after
Grant Utilization
% Utilized by
Grant
Cleared PIFs
Grant Utilized
plus Cleared PIFs
Allocation
Remaining after
Grant Utilization
and Cleared PIFs
% Utilized by
Grant and
Cleared PIFs
BD subtotal
1,080,040,000
274,570,621
2,193,499
276,764,120
803,275,880
26%
31,002,519
307,766,639
772,273,361
28%
CC subtotal
1,259,990,000
243,609,242
855,378
244,464,620
1,015,525,380
19%
13,739,000
258,203,620
1,001,786,380
20%
LD subtotal
384,940,000
103,520,745
646,888
104,167,633
280,772,367
27%
7,392,110
111,559,743
273,380,257
29%
2,724,970,000
621,700,608
3,695,765
625,396,373
2,099,573,627
23%
52,133,629
677,530,002
2,047,439,998
25%
STAR Total
CONCLUSIONS
The GEF used new methodology and updated indicators to meet the
challenges of donors and recipient countries
The new allocation system (STAR) is
• more completed than the GEF 4 RAF
• increasing the shares of allocation to the least developed
countries
• providing wider and more even allocations
• ensuring small countries to have enough funds to
implement at least one project in GEF 5 period
• more transparent in resource allocations
NEXT STEPS
• Develop new GBI for persistent organic
pollution and international waters
• Improve GBIBD, GBICC and GBILD
• Update and improve GPI and GDPI
Thank you for your attention
Questions?