Frequently asked questions

FREQUENTLY ASKED QUESTIONS

What is the Green Climate Fund (GCF)?

The Green Climate Fund (GCF) was created in 2010 by the United Nations Framework Convention on Climate Change (UNFCCC) to make a significant and ambitious contribution to accomplish the goals set by the international community to combat climate change.

The GCF's mission is to promote a paradigm shift towards low emission and climate-resilient development, by supporting countries to limit or reduce their greenhouse gas (GHG) emissions and adapt to the impacts of climate change.

GCF web page: http://www.greenclimate.fund/home

What is the National Designated Authority?

A National Designated Authority (NDA) is a government institution that works as an interlocutor between individual developing countries and the GCF. NDAs oversee GCF-funded activities in each country. The GCF only considers proposals endorsed by each country’s NDA which must provide a no-objection to the proposals and endorse them to the GCF for consideration. The no-objection is intended to ensure that the proposals are aligned with national priorities on climate change. Another important function of NDAs is to nominate sub-national, national and regional entities to be accredited by the GCF. International entities do not require the nomination of the NDA.

Peru’s NDA is the Ministry of economy and Finance, represented by Pedro Herrera Catalán, Director General for International Economy, Competence and Productivity.

Address: Jr. Lampa N°277 – Cercado de Lima, Peru

Telephone: (+51-1) 311-5930 / 610-5950

e-mail: [email protected]

The complete list of NDAs can be found at the following website:

http://www.greenclimate.fund/how-we-work/tools/country-directory

What are Accredited Entities?

Accredited Entities, as the name implies, are institutions that have been recognized as such by the GCF after an evaluation process that determines if such entities can prepare and submit proposals to access GCF resources, as well as administer, monitor, oversee and/or execute programs and projects approved by the GCF. They can be private or public institutions, sub-national, national. regional or international. Those sub-national, national or regional institutions that have been nominated by the NDA for their accreditation are considered as Direct Access Entities.

The accreditation process assesses the institutions' ability to manage GCF resources in line with fiduciary standards appropriate to the scale and type of funding sought, as well as the ability to manage environmental and social risks that may arise at program or project level. Entities that seek accreditation to access GCF resources are also evaluated in relation to the GCF’s Gender Policy.

Accredited Entities may submit programs or projects that they will execute themselves directly or may submit proposals to be executed by other institutions, according to their accreditation.

Currently, Profonanpe is the only institution accredited as a National Implementing Entity by the GCF in Peru, therefore is the only Direct Access Entity. Profonanpe’s accreditation allows it to submit proposals to the GCF to finance micro-size programs and projects (worth up to USD 10 million), of environmental and social category C (minimum or absent risk). Likewise, Profonanpe's current accreditation category allows it to manage and execute programs and projects, but not to transfer funds to other institutions. However, Profonanpe is currently going through a process to upgrade its accreditation to a category that will allow it to allocate grants for programs and project of environmental and social risk category B (medium risk).

Program and project proposals submitted to the GCF through Profonanpe must contribute to achieve the goals in the following impact areas:

Mitigation

- To reduce emissions from deforestation and degradation of forest and soil

Adaptation

- To increase resilience of livelihoods of most vulnerable people, communities and regions

- To increase resilience of health and well-being, and food and water security

- To increase resilience of ecosystems and ecosystem services

The complete list of Entities Accredited by the GCF to date may be consulted at the following website:

http://www.greenclimate.fund/how-we-work/tools/entity-directory

What are GCF’s fiduciary standards?

The fiduciary standards considered by the GCF include on one hand, the administrative and financial capacities, which imply capacities for administration, financial and accounting management, external and internal auditing, control framework, and contracting and procurement policies. On the other hand, are transparency and accountability standards, such as having in place a code of ethics, the ability to manage and disclose conflicts of interest, prevent financial mismanagement, and have policies against terrorism and money laundering.

These fiduciary standards will serve to monitor the proper use of resources in GCF-funded programs and projects.

What type of programs and projects does the GCF finance?

The GCF finances programs and projects related to mitigation and adaptation to climate change, whether in the public or private sector, and that promote low carbon and climate resilient development.

What are the criteria enforced by the GCF to evaluate the proposals?

The GCF has identified the following six criteria to assess investment proposals:

  • Impact potential: Potential to reach the GCF’s objectives and results areas.
  • Paradigm shift potential: Potential to catalyze impacts beyond the program or project’s impact and to have a transformational effect in the intervention’s sector or scope.
  • Sustainable development potential: Potential to provide broad benefits and address national development priorities and policies.
  • Need of the recipient: Consideration of the vulnerabilities and financial needs of the recipient country.
  • Country ownership: The program or project contributes to the national objectives of climate change management, and the recipient country has the capacity to carry out the activities proposed for financing.
  • Efficiency and effectiveness: Financial and economic strength of the program or project.

For more information regarding proposal approvals visit the following link: https://www.greenclimate.fund/funding/proposal-approval

What kind of programs and projects will the NDA prioritize for submission to the GCF?

In addition to the impact areas established by the GCF, funding proposals should be framed within the Nationally Determined Contributions (NDCs) made under the UNFCCC and, if applicable, by any of the following:

  • Components of the Organization for Economic Cooperation and Development (OECD) Environmental Performance Assessment Action Plan linked to climate change.
  • Other instruments, plans and/or programs that contribute to coping with the effects of climate change.

Based on the analysis of these documents, the priority areas for intervention in Peru are: Water and Sanitation, Energy, Solid Waste, Forestry, Agriculture, Transportation, Industrial Processes, Fisheries and Aquaculture, and Health.

Who can submit proposals to the GCF?

Proposals for the GCF are presented by Acredited Entities together with a no-objection letter from the NDA. However, an executing entity that has not been accredited may send concept notes to the GCF in coordination with the NDA in order to receive feedback.

Who can submit program or project proposals to Profonanpe to be sent to the GCF and be funded?

Any public or private institution that wishes to access GCF resources to finance programs or projects can request them through Profonanpe, provided that the proposal (i) falls within Profonanpe’s lines of action concerning mitigation and adaptation; (ii) complies with GCF and Profonanpe fiduciary standards ; (iii) complies with GCF and Profonanpe environmental, social and gender policies; and (iv) falls within the size and risk limits for which Profonanpe has been accredited by the GCF.

For the public sector, it is important to mention that GCF funds can only be used to increase or complement public funds currently destined to climate change mitigation and/or adaptation programs or projects, and in no case can they replace them.

Which are Profonanpe’s environmental, social and gender policies?

Environmental, Social and Gender Policies (ESGPs) aim at preventing and mitigating potential adverse environmental and social impacts and risks that may arise during the implementation of Profonanpe’s programs and projects, as well as to ensure that environmental and social benefits are created for the local populations involved.

ESGPs apply across all programs and projects managed by Profonanpe. For this reason, they should be considered both in the programs and projects executed by Profonanpe, as well as in those that are executed by other institutions and financed through Profonanpe.

Profonanpe’s 11 ESGP’s are as follows:

  • ESGP 1. Evaluation and management of environmental and social impacts and risks
  • ESGP 2. Compliance with regulations
  • ESGP 3. Biological diversity conservation
  • ESGP 4. Climate change
  • ESGP 5. Preventing pollution
  • ESGP 6. Stakeholders' involvement and participation
  • ESGP 7. Gender approach
  • ESGP 8. Indigenous Peoples
  • ESGP 9. Cultural heritage
  • ESGP 10. Involuntary resettlement and/or restrictions to the use of renewable natural resources
  • ESGP 11. Occupational safety

All institutions benefiting from financing through Profonanpe must review and determine which policies must be activated depending on the program or project’s characteristics. Due to their relevance and importance, the analysis and implementation of five ESGPs are mandatory, and at least these must be monitored and evaluated. These mandatory ESGPs are ESGP 1, ESGP 2, ESGP 6, ESGP 7 and ESGP 11.

How frequently will the calls for proposals submission be published?

The NDA will issue quarterly calls for the presentation of programs or projects that wish to access GCF resources. These calls will be scheduled at least four months before the GCF Board’s meetings so as to ensure a reasonable period to evaluate the proposal.

What is the origin of the funds?

Funding for these programs and projects comes from grants made by countries, private companies and individuals. More information on the resources mobilized can be found at the following website: https://www.greenclimate.fund/how-we- work/resource-mobilization.

What is the maximum amount of a program or project that may be financed by the GCF through Profonanpe?

Currently Profonanpe is accredited to present proposals to the GCF to finance micro size programs or projects (up to USD10 million).