II. PROCEDURAL STEPS IN PROJECT CYCLE
Phase I: From Project Concept or Idea to Work Program Approval
Country focus
Country "Operational Focal Points"
10. Each recipient country will be invited to identify an operational focal point with which the Implementing Agencies will collaborate on GEF operational activities. The GEF focal point will be responsible for:
(a) acting as the principal contact point for all GEF activities in the country;
(b) reviewing project ideas and concepts, endorsing their consistency with respect to the national programs and the country's participation in the Climate Change or Biological Diversity conventions, and confirming their national priority;
(c) facilitating broad based as well as project-related consultation; and
(d) providing feedback on GEF activities.
Project Identification and Preparation
Project Identification
11. Project ideas should be identified in full consultation with the recipient country operational focal point. The Implementing Agencies will work with the operational focal point to develop project ideas that are consistent with the country's national programs and priorities as well as the GEF operational strategies.
12. The GEF will encourage and strengthen partnerships to address programs at the regional level. Regional programs and projects may be developed in all countries that endorse the GEF activity. GEF financing will only be provided to those eligible to receive GEF funding. Global program and project proposals will be designed to facilitate national-level efforts to achieve global environmental benefits.
Project Preparation
13. Careful preparation of project ideas is an essential prerequisite for quality projects. When a recipient country requests financial and technical help with project preparation, it may seek such assistance from a variety of sources. GEF project preparation funding is available through the Project Preparation and Development Facility (PDF). Where feasible, the PDF would normally complement other sources of finance for preparation of a project proposal: World Bank loans, UNDP technical assistance grants, bilateral finance, and private funds. GEF project preparation resources should be allocated on an incremental cost basis; that is, in proportion to the likely level of project preparation costs financed by the non-incremental financier.
14. Recourse to GEF project preparation funds will not always be necessary. There may be cases where GEF funds are not requested, or where the level of project preparation is sufficiently advanced that GEF resources are not required to prepare a project proposal for inclusion in the GEF work program. Whatever the source of project preparation financing, it is important for purposes of portfolio management that the Implementing Agencies keep the Secretariat informed of all project proposals under development for which GEF financing will be sought, and that the Secretariat maintains a project proposal tracking system.
15. PDF financing will be available for project proposal preparation under three blocks (Blocks A, B, and C). Table 1 is a summary of the objectives and approval procedures for each of the blocks.
Government Endorsement
16. Before any PDF funds are committed by an Implementing Agency, the project idea will be discussed, reviewed and endorsed at the country level by the operational focal point.
17. In addition to the reporting on PDF expenditures that will be included in the GEF Quarterly Operational Report, the Annual Report to the Council will include a review of PDF operations and expenditures.
GEFOP
GEF Operations Committee
18. The GEF Operations Committee (GEFOP) is an interagency committee with important responsibilities in the project cycle. The GEFOP is composed of representatives of the three Implementing Agencies, the Chairperson of STAP and, as appropriate, representatives of the secretariats of the Convention on Biological Diversity and the Framework Convention on Climate Change. The Committee is chaired by a representative of the GEF Secretariat.
GEFOP role in project preparation
19. With regard to the PDF, the GEFOP has a role under each of the three blocks. Under Block A, the GEFOP is informed of Block A grants approved by the Implementing Agencies. Every three months, the GEFOP will review the coverage and overall direction of Block A funded activities and will make recommendations concerning future Block A funding.
20. Proposals for Block B funding are to be submitted to the GEFOP for its review and recommendation as to whether the funding should be approved. The recommendations of GEFOP are submitted to the Chief Executive Officer (CEO) who is responsible for approving Block B funding.
21. Proposals for Block C funding are also to be submitted to the GEFOP for its review and recommendations on funding. If Block C funding is requested for a project proposal that has already been approved by the Council, the CEO may approve the Block C funding taking into account the recommendation of the GEFOP. If the Council has not approved the project proposal, then the CEO is authorized to approve Block C funding up to $750,000. For funding between $750,000 and $1 million, the CEO will consult with the Council prior to approval.
GEFOP role in project review
Government Endorsement
STAP expert technical review
Consultations
22. The GEFOP is also responsible for recommending to the CEO project proposals to be included in the work program to be considered by the Council at its regular meetings. Project proposals to be considered by the GEFOP for inclusion in the work program are to be prepared in an agreed project proposal format. Each project proposal must be endorsed by the recipient country operational focal point. Each project proposal must have attached to it a technical review by an expert chosen from the roster developed and managed by the STAP. Each project proposal must also record the consultations that have been undertaken with major groups and local communities during the preparation of the project.
Considerations for GEFOP review
23. Projects will be reviewed by the GEFOP taking into account the following considerations, as appropriate:
(a) Country Eligibility:
(i) within the financial mechanism:
. Party to Convention and
. Developing country; or
(ii) outside the financial mechanism:
. Eligibility under paragraph 9 (b) of the Instrument
(UNDP/World Bank criteria)
. Where relevant, party to Convention.
(b) Policy and Program Framework of the proposed project:
(i) Endorsement by recipient country operational focal point;
(ii) Consultation and coordination among Implementing Agencies;
(iii) Substantive eligibility: Consistency with GEF strategy and operational programs;
(iv) Linkages to:
a. Country/sector programs, national strategies, action plans;
b. Implementing Agencies in-country programmatic framework;
c. Pilot Phase activities;
d. Other focal areas;
e. Other programs and action plans at region/sub-regional levels.
(c) Technical review including:
(i) Specification of global benefits;
(ii) Thoroughness of technical reviews by experts from STAP
roster;
(iii) Response to recommendations of technical reviewers;
(iv) Plans to make natural resource use sustainable;
(v) Environmental assessment and measures to prevent or mitigate
potential damage;
(vi) Technology cooperation and transfer.
(d) Social assessment and consultation including:
(i) Demonstration of local participation/consultation in
project preparations and measures for on-going participation
and consultation in project implementation;
(ii) Role of local communities;
(iii) Role of indigenous people;
(iv) Resettlement plans if human populations are going to be
resettled;
(v) Plans for public awareness, environmental education, and
social communication;
(vi) Gender considerations.
(e) Capacity building
(i) Training;
(ii) Institution building;
(iii) Planning and policy development;
(iv) Targeted research;
(v) Linkage of capacity building to enabling activities and
to investment.
(f) Financial information:
(i) Funding and budget, including cost-effectiveness;
(ii) Overhead and management costs of Implementing Agencies
and executing agencies;
(iii) Use of PDF resources;
(iv) Co-financing from other sources and the Implementing
Agencies;
(v) Financial sustainability.
(g) Incremental cost (preliminary estimates):
(i) Correct application of methodology;
(ii) Procedures for estimation and agreement with recipient
country;
(iii) Reasonableness of estimates and assumptions for baselines
and projects; and
(iv) Lessons of experience from comparable cases.
(h) Monitoring and Evaluation:
(i) Provision for monitoring and evaluation;
(ii) If continuation of previously funded project, requirement
that evaluation has been completed and recommendations of evaluation
have been taken into account in formulation of project being proposed.
CEO proposes work program
24. On the basis of its review, the GEFOP recommends to the CEO projects to be included in the work program. The CEO determines the content of the work program proposed to the Council for approval.
Council Approval
25. The Council approves work programs at its regular meetings. In its review of the work program, the Council will focus primarily on the strategic and policy issues raised therein. Council Members may also provide written technical comments on specific project proposals.. Such written comments should be submitted to the Secretariat no later than three weeks after the conclusion of the Council meeting concerned.
STAP
26. Consistent with criteria approved by the Council, STAP may selectively identify projects for review of their scientific and technical aspects.
Phase II: From Work Program Approval to Project Approval
Implementing Agency prepares final project document
27. Once the work program is approved, the Implementing Agency is responsible for the further preparation of any of its project proposals in the work program. In preparing a final draft project document for approval, each agency is to take into account the comments made by the Council during its consideration of the work program, and subsequent technical comments submitted by the Council Members.
28. The Implementing Agencies are accountable to the Council for the preparation and cost-effectiveness of the projects they prepare, for the implementation of the operational policies, strategies and decisions of the Council, and for the activities of the executing agencies working through it. It is expected that the Implementing Agencies will follow their own internal procedures when preparing final draft project documents while ensuring that any additional policies or operational requirements for use of GEF funds are met.
Incremental costs
29. An important consideration in preparing the final draft project document will be the negotiation with the recipient country of the "agreed incremental costs" of the project. The Secretariat will develop guidelines to be followed by the Implementing Agencies in their negotiations with a recipient country.
Circulation of project document to the Council
30. Before an Implementing Agency undertakes final approval of a GEF-financed final draft project document in accordance with its internal procedures, the final draft project document will be endorsed by the CEO. Before endorsing the final draft project document, the CEO will circulate the draft document to Council Members with a request that they submit any comments that they may have to the Secretariat within four weeks. If at least four Council Members consider that the project is not consistent with the Instrument or GEF policies and procedures, they may request that the draft document be reviewed at a Council meeting before its approval. The CEO will then submit the draft project document to the next regular Council meeting.
STAP and Implementing Agencies review
31. STAP and the Implementing Agency will also receive the final draft project document prior to endorsement.
STAP
32. The Council may request STAP to review a project document prior to CEO endorsement.
CEO endorsement
33. The CEO will endorse the draft project document for final approval by the Implementing Agency if he ascertains that it is consistent with the project proposal approved by the Council in the work program and GEF policies and procedures. Recognizing that the costing of project proposals for purposes of the work program is quite tentative, the CEO will examine the final budget of the draft project, including the incremental cost calculations.
Approval by Implementing Agency and Recipient Country
34. The Implementing Agency is responsible for final approval of the project document in accordance with its internal procedures. The recipient government will also approve the final project document.
Phase III: From Project Approval to Project Completion
Reporting and project implementation review
35. Each Implementing Agency will be responsible for monitoring project implementation. The GEF Secretariat should be kept informed about progress in the implementation of the projects through semi-annual reports. The Secretariat will organize an annual Project Implementation Review of all GEF activities. The Implementing Agencies and STAP will participate in this review. Each project will be reviewed to determine: status of implementation, progress towards the objectives of the project, compliance with GEF policies, project modifications made, and an assessment of potential problems. The results of the project implementation review will be summarized and distributed to the Council.
STAP
36. On the basis of the project implementation review, and consistent with criteria approved by the Council, STAP may selectively identify projects for further review of the scientific and technical aspects of the project implementation.
Monitoring and Evaluation
37. In addition, once a Monitoring and Evaluation Policy is approved by the Council, the Secretariat will prepare guidelines to implement the policy. The Implementing Agencies will be expected to implement the guidelines in each of their projects and to report on their implementation.
Project completion
38. Whenever a project is fully disbursed or substantially completed, a final evaluation report will be prepared by the Implementing Agency. This report should explicitly address the performance of the project and assess whether it has achieved its objectives. Guidelines for final project evaluation will be prepared by the Secretariat on the basis of the monitoring and evaluation policy approved by the Council.
39. The evaluations should assist the GEF, with the advice of STAP, to ascertain whether the Facility is achieving its overall objective of providing global environmental benefits in the four focal areas. The evaluation guidelines will clarify the role of STAP in evaluating the scientific and technical aspects of project implementation and the scientific and technical effectiveness of the GEF portfolio.
