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September 2007
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A Letter from the CEO
Dear Colleague: Here at the GEF, as we experience cooler temperatures, we are revving up for a busy fall. We are very pleased that this has been such a rewarding summer. We have made great progress: the actions described below are in line with what the Council decided.
Project Cycle A big step forward is the new project cycle. The new version of the project cycle simplifies the approval process for projects, simplifies documentation requirements, and shortens the project cycle to an average of 22 months from approval of project concept to endorsement.
The revised GEF project cycle consists of four basic steps: 1. The GEF agencies submit the project concept documented in a 4-8 page Project Identification Form (PIF), which is endorsed by the country’s operational focal point. The GEF CEO reviews the PIFs, which are circulated among all GEF agencies, STAP, and relevant Convention Secretariats for comments. The review of a PIF focuses on the following elements:
2. The CEO constitutes the work program from PIFs cleared since the last work program, taking into account the level of resources available in the GEF Trust Fund. Then the GEF Council approves the work program. The Council will review four work programs every year: one at each Council meeting, and two intersessionally with decision by mail. The work program document focuses on policy and strategic issues for Council consideration and describes the overall programmatic coherence of the concepts. 3. The CEO endorses projects, confirming the final GEF grant amount. Then the GEF agencies submit the projects for approval to their respective internal authorities. The Secretariat reviews full project proposals in terms of the following conditions: high likelihood that the project will deliver its outcomes and will generate appropriate global environmental benefits that are consistent with focal area strategies; cost-effectiveness; compliance with GEF’s monitoring and evaluation policy; and whether the project preparation grant has been used in a cost-effective way. 4. The final step consists of implementation supervision, monitoring, and final evaluation. As part of its monitoring responsibilities, the Secretariat will conduct an Annual Monitoring Review, which will be based on the Project Implementation Reports submitted by the GEF agencies. The key issues to be monitored will include implementation progress, focal area’s strategic objectives, performance indicators, projects at risk, actions to achieve sustainability and replicability, stakeholder involvement, and co-financing status. In order for all GEF family participants to implement the new project cycle smoothly and for reasons of transparency, the GEF Secretariat is currently preparing an Operations Manual, which will detail policies and procedures. Public Private Partnership Through GEF’s Public Private Partnership (PPP), developing countries now have a new partner in their fight to stem environmental degradation. The PPP is a strategic investment program to foster innovative technological and financial solutions to intractable environmental problems in developing countries. The partnership launches with an innovative inducement prize approach that generates capital for global competitions resulting in breakthroughs to solve complex environmental challenges adopted to developing countries. The PPP’s first project will drive innovation through a global prize competition to bring second generation liquid biofuels for transport production technology to developing countries. Additional programs are being developed to address wastewater treatment in fragile coastal areas and payments for ecosystem services. Future projects will be developed in partnership with the private sector.
While the private sector may be interested in funding environmental solutions in developing countries, unknown and uncertain market conditions in these countries present significant risks and barriers. Through the PPP, the private sector can gain support to overcome development risks and ensure technology and resources are directed where they are needed most. Focal Area Strategies At the Council meeting in June 2007, Council Members discussed Focal Area Strategies and Strategic Programming for GEF-4, and agreed that Council Members would submit comments in writing to the Secretariat. Based on comments received from 14 Council Members and Alternates, the Secretariat circulated a revised document on July 26. The focal area strategies have been revised, taking into account the comments made during the June Council meeting and the written comments received by the Secretariat. As agreed in June, the Council is invited to approve by mail the revised focal area strategies that have been posted on the GEF web site.
Incremental Costs
Recently, the GEF Evaluation Office conducted an analysis of how incremental cost assessments have been undertaken in GEF projects. They concluded that, while the principle of incremental funding is alive and well in GEF, there continues to be a weak understanding and much confusion about incremental cost concepts and procedures. Most project documents are of low quality and compliance when measured against GEF requirements for incremental cost assessment and reporting. In addition, as currently applied, incremental cost assessment and reporting do not add value to project design, documentation, and implementation. GEF’s proposed approach, documented in the Operational Guidelines for the Application of the Incremental Cost Principle, consists of five steps and simplifies the process of negotiating incremental costs. The proposed operational guidelines describe a pragmatic, strategic, and cost-effective approach for determining incremental costs—clarifying definitions and linking incremental cost analysis to results management and the GEF project cycle. The guidelines help make determination of incremental costs of a project more transparent during the preparation period, and hold project proponents accountable during its implementation. All the changes mentioned above—project cycle, focal area strategy, incremental cost, PPP—are part of my vision of a more efficient, dynamic, and streamlined GEF. This summer we have made great strides towards this vision. I look forward to working together with you in the fall as we move ahead in this exciting, new direction. Kind regards, Monique Barbut
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