The first step in project implementation is an agreement between GCF and the implementing AE on the necessary legal arrangements to get the funds flowing, called a Funded Activity Agreement (FAA). GCF then begins transferring financial assistance to the Accredited Entity in the form of a loan, grant, equity, or guarantee - depending on the nature of the approved project. Typically, GCF completes a series of financial disbursements during the life of the project.
This allows GCF to assess the impacts of the climate finance initiatives it supports and monitor its efficient and effective delivery. GCF assessments are designed to make sure that projects are effective in dealing with climate change, do not cause negative effects where the initiatives are targeted, and do not worsen existing inequalities. In implementing projects, AEs should comply with grant conditions and covenants, while also observing the implementation schedule of the project. This will help to ensure timely implementation by the AEs and enable additional disbursements by GCF.
GCF maintains an overview of project progress through its requirement for AEs to produce independent evaluation reports at regular intervals. These include one at the mid-point of the project, and a final evaluation after the project has closed.
The Intergovernmental Panel on Climate Change (IPCC) describes climate change as “…a change in the state of the climate that can be identified (e.g. using statistical tests) by changes in the mean and/or the variability of its properties, and that persists for an extended period, typically decades or longer. It refers to any change in climate over time, whether due to natural variability or as a result of human activity.”
Meanwhile, the United Nations Framework Convention on Climate Change (UNFCCC) defines climate change as “…a change of climate that is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and that is in addition to natural climate variability observed over comparable time periods.”
For details on other terms related to climate change, please check here.
Climate scientists have developed two approaches to deal with climate change issue:
However, the two recommended actions should not be mutually exclusive, as both of them need to be enacted simultaneously.
Further information on climate change adaptation and mitigation in Indonesia can be found here.
Climate finance refers to local, international or transnational financing, which may be drawn from public, private, and alternative sources of financing. Climate finance is critical to addressing climate change because large-scale investments are required to reduce GHG emissions.
In addition to mitigation actions, climate change funding is equally important for adaptation actions. Significant financial resources are also needed to enable countries to adapt to negative impacts and reduce the effects of climate change. In financing climate change projects, the following key aspects should be considered:
Untuk memfasilitasi penyediaan pendanaan iklim, Konvensi Kerangka Kerja PBB tentang Perubahan Iklim (UNFCCC) didirikan untuk menyediakan dana bagi negara-negara berkembang. Setelah Perjanjian Paris pada 2015, Green Climate Fund (GCF) diberi peran penting dalam melayani perjanjian dan mendukung tujuan menjaga perubahan iklim di bawah 2 derajat Celcius.
Climate change has greater impact on population that are most reliant on natural resources for their livelihoods and/or who have the least capacity to respond to natural hazards, such as droughts, landslides, floods, and hurricanes (UNFCCC), which is women and girls.
Women and girls face higher risks and greater burdens from the impacts of climate change, especially in situation of poverty. They are disproportionately affected by the impact of climate change, including higher mortality rate and poverty, due to the existing imbalance of gender relations. The existing unequal gender relations prevent women to participate in decision-making processes in climate-related planning and policy making, causing them to be more vulnerable and difficult to adapt to change.
However, women can play a critical role in response to climate change due to their local knowledge of and leadership in e.g. sustainable resource management and/or leading sustainable practices at the household and community level. Women’s inclusion at decision-making process led to improved outcomes of climate related projects and policies. In contrast, projects or policies that does not involve women’s meaningful participation in decision-making processes can increase existing inequalities and aggravate poverty rate.
Inclusive climate action means both reducing the effects of climate change on the most vulnerable and ensuring the benefits and burdens of climate action are equitable distributed. It addresses a growing burden on underrepresented or excluded social groups, who often suffer the most as a result of climate change that worsen existing social inequalities. The underrepresented, excluded social groups includes women, children, elderly, indigenous people, and persons with disabilities.
To achieve inclusive climate action, an entity should:
After the Government of Indonesia ratified the Paris Agreement in October 2016, a governmental institution needed to be appointed as the focal point of a country – or the NDA – to be able to benefit from the GCF as source of fund. Since the Ministry of Finance’s main task is to formulate national financial policies and budgeting, the institution is considered to have the capacity and experience, hence the appointment as the NDA. The Minister of Finance Decree No. 756/KMK.010/2017 designated the Head of FPA to act on behalf of the ministry as NDA to the GCF. focal point negara – atau NDA – untuk bisa mendapatkan manfaat dari GCF sebagai sumber dana. Karena Kementerian Keuangan memiliki tugas utama merumuskan kebijakan dan penganggaran keuangan nasional, lembaga ini dianggap memiliki kapasitas dan pengalaman, sehingga ditunjuk sebagai NDA. Keputusan Menteri Keuangan No. 756/KMK.010/2017 menetapkan Kepala BKF untuk bertindak atas nama kementerian sebagai NDA untuk GCF.
According to the Decree of Minister of Finance No. 756/KMK.010/2017 on the Appointment of FPA as NDA of the GCF, the Fiscal Policy Agency is expected to fulfil the following tasks:
The accreditation process assesses whether applicants are capable of strong financial management and of safeguarding funded projects and programs against any unforeseen environmental or social harm.
A wide range of organizations can become AEs. That is why GCF has introduced a “fit-for-purpose” system to classify each applicant according to their capacities and how they address the climate finance needs of different countries.
While the scopes of accreditation vary, all entities need to meet a number of basic standards. These are based on:
Basic fiduciary standards set the baseline for appropriate financial management. This includes being able to demonstrate that financial inputs and outputs are properly accounted for, reported, and administered transparently in accordance with relevant regulations and laws, and with due accountability. Information about an organization’s overall administration and management must be available, consistent, reliable, complete and relevant. Accreditation applicants must also be able to display a track record in effectiveness and efficiency.
More details about basic fiduciary requirements are available here.
GCF's Social and Environment Policy sets out the requirements for accredited entities working with GCF to establish and maintain robust, systematic, accountable, inclusive, gender-responsive, participatory and transparent systems to manage risks and impacts from GCF-financed activities, pursuant to this policy and the ESS standards adopted by GCF. These requirements complement the accreditation framework and are considered in the accreditation and reaccreditation processes.
In accreditation process, GCF will assess the commitment, track record and consistency of the systems and approaches used by the entities and intermediaries with the ESS standards using the fit-for-purpose approach. As necessary, GCF will collaborate with the entities on measures to improve their capacities, including the deployment of necessary support and assistance through the GCF Readiness and Preparatory Support Programme.
Based on International Finance Corporation ( IFC), GCF uses the following performance standards:
The GCF Gender Policy and Action Plan is based on guidance by the United Nations Framework Convention on Climate Change (UNFCCC) that supports gender equality, justice and sensitivity. Detailed information on the GCF's approach to gender and climate change is available here.
The accreditation process assesses the capacity of applicants in terms of addressing gender – responsive systems at both the institutional and project/programme level.
While reviewing funding proposals submitted by AEs, the GCF Secretariat:
GCF’s innovative fit-for-purpose approach to approving organizations to become Accredited Entities (AE) recognizes their broad range of activities and capacities. Entities vary from small government and non-government groups managing activities of a few million dollars or less to large multilateral development banks funding activities ranging from hundreds of millions of dollars.
Fit-for-purpose is a tiered accreditation system which classifies applicant entities based on the nature of their organizations and the intended scale, nature and risks of their proposed climate finance activities.
Therefore, accreditation applicants implementing or intermediating projects and programs with little environmental and social risks and impacts are not required to have the same environmental and social management systems in place as compared to those handling higher levels of such risks.
The fit-for-purpose accreditation review is based on:
Proposed project and programme activity size is divided into four categories.
An entity accredited for a particular size category could submit a funding proposal for GCF consideration where the total costs for the project are within the maximum size category. (For example, an entity accredited for medium could submit a funding proposal that falls within the micro, small, or medium size category, but not large).
There are three types of specialized fiduciary standards. These standards allow an AE to undertake an activity by performing the specific fiduciary function related to the standard.
Applicants are also assessed how well they can manage environmental and social risks and impacts, based on their track record. Categories are divided into no or minimal risk, medium risk, and high risk. These categories also take into account whether the applicant will manage projects or intermediate GCF resources through the awarding of grants, on-lending, blending, undertaking of equity investments, or providing guarantees.
For projects managed by an Accredited Entity, the environmental and social risk levels are classified as:
Projects involving investments through financial intermediation functions (grant award or on-lending/blending) or through delivery mechanisms involving financial intermediation, should refer to the following environmental and social risk levels:blending) atau melalui mekanisme pengiriman yang melibatkan intermediasi keuangan, harus merujuk pada tingkat risiko lingkungan dan sosial berikut:
More information about GCF’s fit-for-purpose accreditation approach is available here.
Yes. An AE can apply to include any additional capacities it has developed over time. This will then increase its fit-for-purpose accreditation type. This allows it to seek GCF funding for projects and programs at a higher financial level than its current classification.
The AE may apply through the OAS by creating a new application seeking for an upgrade of its relevant functions.
Five years. GCF is currently working on ways to assess AEs for re-accreditation.
The GCF Secretariat and the Accreditation Panel aim to decide within six months after receiving necessary and complete documentation whether to recommend an application to the GCF Board. If organizations also apply for readiness support, this process may take longer.
The GCF Secretariat and the Accreditation Panel aims to make a decision within three months for organizations meeting fast-track requirements. These are organizations that have already been accredited by the Global Environmental Facility (GEF), Adaptation Fund and the Directorate-General Development and Cooperation – EuropeAid of the European Commission (DG DEVCO)
National and subnational applicants in Small Island Developing States (SIDS) and Least Developed Countries (LDCs) Fees are able to receive waivers of some accreditation fees when seeking accreditation for micro and small size categories of projects.
Accreditation fees are based on the total projected costs of the proposed climate finance project or activity within a programme at the time of the application. There are four categories which refer to the total projected costs of the activity, irrespective of the portion that is funded by GCF.
More details on accreditation fees are available here.
Yes
In 2017, applications during Stage I will be checked by the GCF Secretariat in accordance with the GCF Board’s decision to prioritize applications from:
The Accreditation Panel provides independent advice to the GCF Board about individual applications for accreditation. It is made up of six senior experts, who are evenly balanced representations from developed and developing countries. Members of the Accreditation Panel serve for three years.
Accreditation Panel members provide specialized knowledge on a range of issues that factor into accreditation decisions, including good practice in fiduciary principles and standards, environmental and social safeguards, and recognized good practice in accreditation procedures. They can also consult with other relevant experts when necessary.
More details about the Accreditation Panel here.
Please direct your inquiries to: ndagcf-indonesia@kemenkeu.go.id.
Any legal entity registered in Indonesia may access GCF by acting as Accredited Entity (AE) or Executing Entity (EE). AE can be private or public and can be either international or national entity, who is responsible for presenting funding applications to GCF, and then overseeing, supervising, managing, and monitoring the overall GCF-approved projects and programs.
Alternatively, EE can also apply as direct implementer of funding proposals. Minimum eligibility of becoming EE is legal registration in Indonesia and authority to conduct all activities related to the purpose of the proposed project meeting Indonesia’s Pipeline of Thematic Areas. The organization may take form of multinational or national corporations; international and national banks/financial institutions; international and national NGOs, foundations, and multilateral institutions; or trade or professional associations.
The organization must have a proven track record of at least 3 (three) years in developing, managing and implementing climate change projects including renewable and clean energy development; industrial processes and product use; agriculture; land-use, land use change, and forestry (including peat fires); waste; oceans management and climate change; and livelihoods of people and communities.
Funding proposal of projects must meet Indonesia’s Pipeline of Thematic Areas, namely:
Funding proposals must include an Impact Assessment to ensure the project meets the Environmental and Social Standards (ESS), including gender, of the GCF. Every project the GCF Board agrees to fund must be approved, which is expressed via a no objection letter, by the NDA.No-Objection Letter), oleh NDA.
An Accredited Entity (AE) can access GCF resources to undertake climate change projects and programs by submitting funding proposals to the GCF at any time. AE may submit a concept note for feedback and recommendations from the Fund, in consultation with the National Designated Authority (NDA) or Focal Point, in this case the Fiscal Policy Office of Indonesia.Concept Note) untuk mendapatkan masukan dan rekomendasi dari GCF, dengan berkonsultasi dengan National Designated Authority (NDA) atau Focal Point yang ditunjuk, dalam hal ini Badan Kebijakan Fiskal di Indonesia.
More details on the review process can be found here.
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