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Project Preparation and Development Facility (PDF)
Considering the extensive development work that is required to produce either a full or a medium-sized project proposal, project proponents can request a preparatory grant from the PDF. PDF grants can be used to assess possible project sites, identify threats, root causes or key barriers, identify specific activities ("GEF interventions") to address these factors, evaluate institutional frameworks, meet and consult stakeholders, and identify co-funding opportunities. The operational focal point must endorse PDF proposals. There are three categories of PDF grants; the two most common for a biodiversity conservation project are "Block A" and "Block B."
Block A grants provide up to US$25,000 at the earliest stages of project development. Development and approval of a Block A typically takes 4-6 months from the time a project concept is submitted to an IA along with a letter certifying operational focal point endorsement of the project. PDF A funds are used to support development of the project concept either into a Block B application, or into a full or medium-sized project brief.
Block B grants provide up to US$350,000 for the development of full-size project briefs and project documents. Recently the GEF increased this amount up to US$700,000 for PDF B grants that involve the design of multi-country projects. Development and approval time for a Block B typically takes up to 24 months, and since preparation of a Block B proposal requires a substantial effort, they are sometimes preceded by assistance from a smaller PDF Block A grant. MSPs are not eligible for PDF Block B grants, though they are eligible for Block A grants.
Block C grants (up to US$1 million) provide additional financing, where required, for larger projects to complete technical design and feasibility work. Block C grants are normally made available after a project proposal is approved by the GEF Council.
Enabling Activity Grants
Grants for enabling activities - up to US$450,000 - help countries to prepare national inventories, strategies, policy analysis and action plans in cooperation with the Convention on Biological Diversity (CBD). GEF's biodiversity enabling activities have focused on assisting countries to prepare their National Biodiversity Strategies and Action Plans (NBSAPs) and/or their first national reports to the CBD Recently the upper limit for these grants was raised from US$350,000 to US$450,000, so that governments can assess their biodiversity-related capacity-building needs and define country-specific priorities. If requests for additional enabling activities assistance keep the total costs (new request and previous enabling activity assistance) to less than US$450,000, the additional resources may be approved by the CEO. If the requested increase results in a total cost of enabling activities above US$450,000, it must be submitted to the Council for approval.
Small Grants Program (SGP)
A SGP is administered by UNDP and provides grants up to US$50,000 to community-based organizations and NGOs for activities that address local biodiversity-related problems. Each country participating in the SGP has its own National Coordinator, National Selection Committee, and National Strategy. Project selection occurs at the national level by the Selection Committee and does not require GEF Council approval. The SGP is managed solely by UNDP. To date it has provided grants to more than 1200 NGO-executed projects. For more information on the SGP see: http://www.undp.org/sgp/
Environmental investment funds
It is also worth noting that some of the full- and medium-sized grants have supported environmental investment funds designed explicitly to finance biodiversity-based enterprises. Typically, the GEF provides grants for the "biodiversity overlay" to these funds (e.g. technical assistance, monitoring biodiversity impacts, etc.). Investment funds that have been supported include, for example: Eco-Enterprises Fund (EEF), Terra Capital Fund, and Small- and Medium-scale Enterprises Fund (SME).
Advantages and Disadvantages of GEF financing
- The GEF is an important source of large-scale grant funding.
- The GEF structure, grant selection process, and portfolio is publicly accessible. Information on all past and present projects can be found on the GEF web site.
- The GEF seeks to "mainstream" global biodiversity concerns into the regular project portfolios of the three IAs.
- The GEF funds a wide variety of institutions, including governments, NGOs, and the private sector. In particular, the GEF has become an important source to support NGO-led conservation projects.
- GEF has been the major funder of Conservation Trust Funds (see chapter on CTFs).
- GEF provides funding to support other innovative finance mechanisms, such as environmental investment funds, and is currently examining other innovative opportunities for deploying its capital.
- Can take a long time (three years or more) and significant commitment of resources to secure funding, particularly for full-size projects.
- The diverse range of actors involved in the project cycle can make project approval a complex process.
- Project proponents must learn to successfully negotiate complex project development procedures of IAs.
- Only incremental costs related to realizing global biodiversity benefits are funded directly.
- Short funding cycle limits potential to achieve financial sustainability.
- Country eligibility. To be GEF eligible, a county must be a party to the CBD. If working with The World Bank or UNDP, a country must fulfil the conditions that enable it to either borrow funds from The World Bank or to receive technical assistance from UNDP through a Country Program.
- Biodiversity focus. A Project must clearly address biodiversity conservation objectives as outlined in the GEF Operational Strategy. However, a Biodiversity focus can be combined with other focal areas, such as Climate Change, under the Integrated Ecosystem Management approach (OP 12).
- Global benefits. A project must identify and quantify its global benefits. Funding requests should seek GEF financing only for the incremental costs of measures to achieve global environmental benefits.
- Rigorous analysis. A Project must identify the key root and proximate causes of problem, the barriers to conservation, and detail a logical sequence of activities (interventions) to reduce or eliminate threats and address root and proximate causes.
- Policy component. A project should recognize and address policy or institutional framework weaknesses as they exist within country.
- National priorities. A project must be supportive of national priorities and programs. It must be country-driven and endorsed by an eligible host government.
- Co-financing. A project must raise significant co-financing to complement the national or regional "baseline" funding.
- Cost effectiveness. The project should be cost effective.
- Replicability. The project should be replicable, thereby providing higher leverage of GEF resources.
- Financial sustainability. The project must include a plan to achieve financial sustainability at the conclusion of GEF support.
- Stakeholder participation. A project should engage the broad participation of key stakeholder groups in project design and decision-making.
- Monitoring and Evaluation. A project should include plans for monitoring and evaluating the results.
- Scientific foundation. A Project should document and substantiate scientific claims.
- Implementing Agency support. The project should have strong support of IAs both during project preparation and implementation.
The step-by-step approach and standard procedures to gain GEF approval of a project are known as the GEF project cycle. The steps and documentation required are determined by the type of project:
- Full-size projects go through each step of the project cycle and are approved by the Council.
- Medium-sized projects go through expedited processing. The most significant difference is that project approval has been delegated by the Council to the CEO.
- Enabling activities requiring less than US$450,000 in GEF funds also qualify for expedited processing where approval has been delegated to the CEO. Those requiring more than US$450,000 follow full-size project processing procedures.
Source: "GEF Project Cycle" - GEF/C.16/Inf.7
Project Cycle: Full-sized Projects
The steps described below should be followed to receive approval of a full-sized project or of an enabling activities project of more than US$450,000. These steps are sequential and assume that a project proposal has cleared each step before proceeding to the next one. The preparation of a project proposal may be abandoned at any of the steps, and a proposal should not be considered approved until it completes the final step. Though mentioned below, medium-sized project cycles are looked at in more detail later in this chapter.
Phase I: Project Concept Development
- In each case, a project proponent approaches an Implementing Agency which provides advice on the GEF eligibility of the proposal and information about the Agency's own processing requirements.
- PDF-A. The IA can provide Project Preparation and Development Facility financing not exceeding US$25,000 (PDF-A) for concept development work at the national level. PDF-A requests must be endorsed by the GEF national operational focal point. Expanded Executing Agencies do not have access to the PDF-A at this stage of the project cycle.
- While PDF-A funding is available for preparing medium-sized projects, no PDF funding is available for enabling activity projects under expedited procedures requesting no more than US$450,000. See Annex 1 for the sample format for a PDF-A request.
Box 1. Items Eligible for PDF-A
Funding can cover: (i) local consultations, national hearings, and/or workshops to discuss specific project and/or program ideas, including translation into local languages where appropriate and the preparation of background papers that could facilitate discussion; (ii) travel costs for local experts to visit neighboring countries for consultations and discussions on potential transboundary projects; (iii) consultancies to developed program and/or project options, including the preparation of terms of reference for feasibility studies, strategy papers and, where possible, the preparation of such papers; (iv) scientific, technical and environmental reviews of proposed projects to ensure that they warrant further consideration; and (v) costs of external expertise, as appropriate.
Step 1 Project Concept Document (See Annex 2 for a sample format)
- The Secretariat does not prescribe any particular format for this document. The document must, however, provide sufficient coverage of items set out in the Project Review Criteria. (see GEF Project Cycle document).
- The Concept Document is also submitted to the other Implementing Agencies, the relevant Expanded Executing Agencies, the relevant convention secretariat, and the STAP (Scientific and Advisory Panel) Chairman for comment, and these comments are taken into consideration by the GEF Secretariat in its decision on pipeline entry. There is a 10-day circulation period, followed by a project review meeting involving the relevant IA.
Click here for an example of a project concept document.
- The Secretariat reviews the concept document against the project review criteria that are relevant for that type of project, and applies the criteria for conceptual conformity only, reflecting the fact that little, if any, preparation has taken place on the ground. The Secretariat rules only on the eligibility criteria, and the IAs are responsible for the technical content of the concept. Secretariat ruling on eligibility will also take into consideration the strategic issues associated with development of the broader GEF portfolio.
Box 2 Eligibility Requirements
Any eligible individual or group may propose a project, which must meet two key criteria: It must reflect national or regional priorities and have the support of the country or countries involved, and it must improve the global environment or advance the prospect of reducing risks to it. Country eligibility to receive funding is determined in two ways. Developing countries that have ratified the relevant treaty are eligible to propose biodiversity and climate change projects. Other countries, primarily those with economies in transition, are eligible if the country is a party to the appropriate treaty and is eligible to borrow from the World Bank or receive technical assistance grants from UNDP.
- In sum, GEF projects must:
- Be country-driven and endorsed by host government
- Produce identifiable, quantifiable global benefits
- Include participation of all affected groups and transparency
- Be consistent with the Conventions
- Possess strong scientific and technical merit
- Be financially sustainable and cost-effective
- Include rigorous processes for monitoring, evaluation, and incorporation of lessons learned
- Play a catalytic role that leverages other financing
- Contain a budgeted communication component
Step 2 First GEF Decision: Secretariat Review for Concept Agreement and Entry to GEF Pipeline
- The first GEF decision point is Concept Agreement prior to the project entering the GEF pipeline. The purpose of Concept Agreement is to provide the opportunity for upstream comments and general agreement on the concept put forward by a proposal, i.e. before the IA has expended major resources or made significant country commitments.
- Endorsement by the country operational focal point is not required for review of project concepts prior to entry into the GEF pipeline.
- At the May 1999 Council Meeting, an understanding was reached that the pipeline information would be made available at least one Council Meeting prior to the one at which the project was presented for Council approval for inclusion in the work program. Pipeline entry, therefore, is a requirement for all projects that require approval by the Council - full-size projects, and enabling activities requesting more than US$450,000.
- Concept review by the Secretariat and formal listing in the GEF pipeline is not a requirement for medium-sized projects, whose concepts are usually reviewed by the IA; a project proponent however has the right to submit a medium-sized project concept document to the Secretariat for eligibility review. Expanded Executing Agencies cannot review or approve medium-sized project concepts; they have to send the concepts to one of the Implementing Agencies or to the Secretariat for review.
- The Secretariat can make one of the three following decisions: (i) not eligible; (ii) eligible subject to certain requirements; (iii) eligible. For (ii) and (iii), the Secretariat also reaches an understanding with the IA regarding the level of project preparation that is required for work program inclusion and CEO endorsement respectively, consistent with the project review criteria for those steps. The Secretariat employs a Concept Agreement Review Template (see Annex C in GEF project cycle document) or reviewing the Concept Document against the project review criteria and to document agreements reached with the IA.
Step 3 Phase II: Project Preparation
- During this phase, the IA manages the preparation of a project (including medium-sized projects or enabling activity projects requesting no more than US$450,000 under expedited procedures) in the GEF pipeline. Preparation of a project in the pipeline may be financed by PDF-B resources if these are available. Preparation of a medium-sized project may be financed by a PDF-A grant only. No project development resources are made available for enabling activity projects following expedited procedures.
PDF-B: In some cases, an IA may also seek a grant of up to US$350,000 for project preparation costs. This option is only available for full-sized projects, including enabling activity projects requesting more than US$450,000. To streamline the review process, requests for PDF-B may be submitted at the time entry is sought to the pipeline, as the PDF document is also sent to the other IAs, to the relevant Expanded Executing Agencies, the relevant convention secretariat, and the STAP Chairman. In fact, an application for PDF-B can double as a Concept Document provided it contains the information required for Concept Agreement Review as described in the Project Review Criteria referred to above. Each PDF-B request must be endorsed by the national operational focal point of the recipient country, and approval is given by the CEO. PDF-Bs for those projects that have entered the GEF pipeline will be circulated for review and for CEO approval within five working days on a rolling basis. For an example of a PDF-B request click here. Also see Annex 4 for a sample format.
Box 3. Items Eligible for PDF-B
PDF-B funds can normally be used; (i) to provide information necessary for the preparation of GEF
project proposals including pre-feasibility, feasibility, basic costing, technical and scientific design
parameters, and the development of a financing plan, including an assessment of incremental costs;
(ii) for in-country preparation of the project proposal, including project workshops, consultation with
interested parties and stakeholders, and local participation, where warranted in project design; (iii) for
national and/or sectoral preparatory work required for the design of the proposed GEF activity. This
could include assistance in preparing sectoral plans and programs (such as energy, industry, or
agriculture) which have a direct bearing on project design; national policy analysis; and inventories and
data analysis in support of the proposed project; and (iv) for small community-based activities to prepare
for project implementation.
- Country Endorsement. For all projects submitted for inclusion in the work program, including those projects approved by the CEO - medium-sized projects and enabling activities requesting no more than US$450,000 under expedited procedures - the IA must obtain the endorsement of the GEF operational focal point in the recipient country. Countries may choose to follow the streamlined country endorsement process outlined in Box 4.
Box 4. Streamlined Country Endorsement
Endorsement by the country operational focal point is a requirement for (i) any approval of funds from the Project Development Facility (PDF); and (ii) a project to enter the work program. Endorsement from the national operational focal point is not a requirement to submit a Project Concept Document for review prior to entry into the GEF pipeline. Nevertheless, a number of country operational focal points have objected to the inclusion in the GEF pipeline of concepts for projects to be carried out in their respective countries that have not been endorsed by the focal point, and they have insisted on endorsement prior to concept submission. To reduce multiple country endorsements and streamline project processing, countries may choose, on a case-by-case basis, to have an endorsement by the national operational focal point provided at the time of a PDF-B request suffice as an endorsement for the project proposal subsequently submitted for inclusion in the work program. If a country were to choose this option, the letter of endorsement from the country for the PDF-B request should clearly state that the operational focal point does not want to endorse the project again prior to inclusion in the work program (with the exception of medium-sized projects, country endorsement submitted with a PDF-A request will not suffice as an endorsement for subsequent project processing; an additional country endorsement is required for a PDF-C, usually requested for further project preparation after a project has been approved by the Council or recommended for work program inclusion by the CEO. For medium-sized projects, countries may choose to have an endorsement of the PDF-A suffice as an endorsement for the project brief subsequently submitted for CEO approval by stating this clearly in the letter of endorsement for the PDF.).
However, if the Secretariat were to determine that the project design had fundamentally changed between approval of the PDF-B and the project proposed for work program inclusion or that there were specific country commitments in the project proposal that required clarification, then the Implementing Agency would be requested to solicit a new endorsement from the national focal point prior to inclusion of the proposal in the work program. National focal points who wish to endorse concepts prior to their entry into the GEF Pipeline may continue to do so. The IA developing the concept for pipeline entry will be responsible for (i) informing the focal point about concepts submitted for review prior to entry into the GEF pipeline; and (ii) advising them on GEF requirements regarding formal country endorsements in the GEF project cycle. In all cases, the GEF Secretariat will inform the relevant focal point of concepts that have entered in the GEF pipeline.
STAP Roster Review. For each project in the GEF pipeline, the IA must seek a scientific and technical review from an expert selected from the STAP Roster. In exceptional circumstances, due to the nature of the project, the IA may use another reviewer if the Chairman of STAP agrees. The IA must append the review to the project proposal and explain how it has responded to the comments. STAP roster reviews are not required for projects that do not require Council approval (and are therefore not in the GEF pipeline). Click here for an example of a STAP review.
Step 4: Project Brief (See Annex 5 for a sample format)
- Project Brief. The three Implementing Agencies will undertake primary responsibility for project review prior to completion of a Project Brief. Expanded Executing Agencies must identify an IA with which to work, prior to submission of request for PDF-B or submission of project brief for work program inclusion, whichever occurs first. After project preparation, the IA submits a Project Brief with a Project Cover Note that documents or cross-references conformity with GEF policies and programs according to the project review criteria for work program inclusion. Project review and associated upstream consultations for work program inclusion will be based on IA undertakings in the Project Cover Note. A formal project review meeting will be held only as an exception to resolve disagreements about the application of project review criteria. Here are two examples of project briefs (World Bank and UNDP respectively).
- PDF-C. The IA may also submit a request for a grant of up to US$1 million (PDF-C) to provide additional financing - where required for large projects - to complete technical design and feasibility work. As in the case of a PDF-B request, PDF-C resources should normally complement other sources of finance for preparation of a project proposal. GEF project preparation resources should be allocated on an incremental cost basis, taking into account the likely level of financing by the GEF in relation to the other co-financiers.
- The CEO approves PDF-Cs as follows: PDF-C grants up to US$1 million for projects that have been approved by the Council; PDF-C grants up to US$750,000 for projects not yet approved by Council; and, in consultation with the Council, PDF-C grants between US$750,000 and US$1 million for projects not yet approved by Council. Country endorsements are a requirement for PDF-Cs.
Box 5. Items Eligible for PDF-C
Access to PDF-C funds would normally be limited for those projects which: (i) have been approved by the Council, but require more technical work; (ii) are large scale, normally infrastructure, projects which require considerable technical design and engineering feasibility work; and (iii) where all preconditions of project preparation have been met, including national consultations, technical and engineering pre-feasibility work, and country commitment.
Step 5: Second GEF Decision: Secretariat Review for Work Program Inclusion
- The Secretariat reviews the project brief on the basis of the Cover Note and the Project Review Criteria applicable for work program inclusion. At this stage the brief is expected to be at an advanced stage of preparation, because it will be the basis of approval by the Council (the majority of the work financed under a PDF-B grant is expected to be complete). The Project Brief (and the Cover Note) is also submitted to the other Implementing Agencies, relevant Expanded Executing Agencies, the relevant convention secretariat, and the STAP Chairman for their comments.
- Work Program submission to Council. The CEO is responsible for incorporating projects into the Work Program submitted for Council approval, provided such projects had been in the GEF Pipeline at the time of any previous Council Meeting. Up to four Work Programs are submitted each year: one is always submitted at each of the two Council Meetings and one may also be submitted inter-sessionally between successive meetings.
- Council approvals. At a Council Meeting, the Council may approve the Work Program in whole. The Council does not approve individual projects. This approval is subject to comments made at the meeting or by Council Members in writing within three weeks of the meeting. Projects submitted to Council inter-sessionally are considered approved on a no objection basis. If any Council Member requests it on GEF policy grounds, approval of any project submitted inter-sessionally would be withheld until it had been approved, as part of a Work Program, at a Council meeting. The CEO will therefore not submit a project inter-sessionally if, in the CEO's judgment, it requires a discussion on policy grounds.
- In approving a project, the Council will also approve the fee payable to the IA for managing it. This fee covers all phases of the Agency's work, including earlier administration of any preparation work and all subsequent supervision, monitoring, reporting, and evaluation. Where an Agency shares implementation responsibilities with an executing agency, the fee will also include any amounts to be paid by the IA to the executing agency.
- Projects that have been approved by the Council for work program inclusion are now ready for further preparation and appraisal by the Agency.
Phase III: Project Appraisal
- In this phase, the IA appraises the project. This phase only applies to those projects that received Council approval for work program inclusion, such as full-sized projects and enabling activity projects requesting more than US$450,000. Projects submitted for CEO approval under expedited procedures are already considered fully appraised.
- During appraisal, the IA finalizes agreement with the host government, including agreement on incremental costs.
Third GEF Decision: Secretariat Review for CEO Endorsement
Step 6: Project (appraisal) document
- An IA seeks the CEO's endorsement of a project approved for inclusion in the work program by the Council on the basis of the Project (Appraisal) Document for the overall project (including the non-GEF financed components) that it would submit for its own internal final approval. Council has delegated the endorsement review to the Secretariat except for those projects it specifically reserves, at the time of approval for work program inclusion, for its own review. For an example of a project appraisal document click here
- The Secretariat reviews the document for consistency with the project brief approved by Council. For the minority of projects that Council reserved for its own review, a three-week comment period is allowed.
Phase IV: Project Approval and Implementation Supervision
- In this phase, the IA would submit the final Project Document for approval to its Board or equivalent authorizing body as the case may be. (Approval procedures differ between IAs and between project types.) No final approval should be sought for part of the project through the organization's regular approval process (such as their executive board) nor any commitment made before the CEO has endorsed the project document.
Box 6. Annexes to a Final Project Document.
Annex 1: Project Design Summary
Annex 2: Project Description
Annex 3: Estimated Project Costs
Annex 4: Incremental Cost Analysis
Annex 5: Financial Summary
Annex 6: Procurement and Disbursement Arrangements
Annex 7: Project Processing Schedule
Annex 8: Documents in the Project File
Annex 9: Statement of Loans and Credits
Annex 10: Country at a Glance
Annex 11: Stakeholder Analysis and Participatory Approach
- During project implementation, the IA will supervise the implementation of the project, and submit to the Secretariat annual Project Implementation Reviews reports, or evaluations conducted, for the annual Project Implementation Review carried out by the Monitoring and Evaluation team. The project may be subject to the Implementation Quality Reviews (IQRs) of the Secretariat.
- Project Completion and Evaluation. All projects upon completion should have terminal evaluation reports which are made public. Terminal evaluation reports should also be submitted to the Secretariat.
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