GEF’s support to capacity development – latest update on GEF’s policy Energy and Environment Practice Meeting September, 2005 Bratislava, Slovak Republic

Context, CD and GEF Importance of capacity building has been acknowledged but developing sustainable capacity remains a challenge. What is capacity? capacity building? Key questions of an ongoing debate. Past decade witnessed steadily increasing requests from the global Conventions to build the capacity. The GEF approved “Strategic Approach to Enhance Capacity Building”… and identifies CD as “a strategic priority that cuts across all focal areas”. _Capacity_Building_FINAL.pdf _Capacity_Building_FINAL.pdf The likely introduction of a Resource Allocation Framework (RAF), further reinforces the need for countries to increasingly focus on developing national capacities to enhance their performance in project delivery and ensure the existence of adequate capacity at all levels.

NCSAs and Beyond.. NCSA is the first Pathway in GEF’s Strategic Approach to Enhance Capacity Building. UNDP and UNEP are currently implementing NCSA Enabling Activity projects in 150+ countries. All countries have decided to produce an action plan at the end of the NCSA process that will identify follow-up actions to address capacity constraints through both internal and external funding, including the GEF. GEF’s Strategic Approach is based on the premise that the outputs of the NCSA EA projects will be used for project development.

GEF Resources for Capacity Development Methods for access to GEF Resources (Pathways) 1. National Capacity Self- Assessments NCSAs 2. Enhanced attention to capacity building in regular projects 3. Targeted and cross- cutting capacity building projects 4. Program for critical capacity building activities in LDCs & SIDS

Towards a Strategy for CB-2 No OPs or SPs are available from the GEF Sec. Instead we have generic “Interim Guidelines” which sets out some broad parameters and operational principles. Project development is a trial-by-error process, where we will learn-as-we-go. Opportunity to push the boundaries for what is eligible, and develop innovative projects.

NCSA is a conditionality for Cross-cutting capacity building projects (21 countries in this region) Capacity for what? –Aim for policy-driven, high impact projects, with mainstreaming as core objective –The objective of CB-2 projects should be to address urgent capacity needs that enhance ability to meet obligations under the Conventions and provide support for mainstreaming MEAs into national policy frameworks Strengthened CD components in regular GEF projects and targeted FA capacity building projects to be funded from FA resources

A Few Words on the Funding.. $20 million available in GEF-3 (up to June 2006). To date UNDP has only approved four PDF-As. Until the end of GEF-3 significant supply of funds and a low demand from recipient countries. Important to have diverse portfolio of projects from all regions and sectors, to achieving critical learning and best practices. GEF-4 ( ) - high demand and limited supply. Most recent resource allocation scenario from the GEF Sec. identifies between $30-47 million for targeted x-cutting CD projects. GEF Sec. has indicated additional funds could be made available if early project shows impact and countries consider CB-2 projects a priority. The cross-cutting capacity building projects will be Medium-sized projects with funding not exceeding the level provided by GEF to expedited enabling activities (translates into max US $500,000).

Eligibility Criteria I Technical Eligibility –Must address three focal areas –Objective mainstream MEA –Description of mainstreaming process, methodology, and procedures –Cannot fit in an existing OP/SP –Impact not confined to an ecosystem or geographical area –Address key capacity constraints (barriers) identified by NCSA or other capacity assessment processes –Strengthen / modify /complement existing multi- sectoral processes that can promote policy harmonization and realize cost efficiencies –Focus on environmental governance system

II Incremental reasoning –Difficult to quantify, therefore emphasize reasoning –Based on assessment of baseline capacities (NCSA) –Describe project scenario: additional capacity required for implementing 3 MEA; GE has been neglected; III. Cost sharing –Given the enabling nature of capacity building activities, many such activities will be funded on an agreed full-cost basis. However, given the nature of cross-cutting capacity building and the shared benefits costs should be shared too (by partnership arrangements).

IV. Partnerships –Projects should be designed as strategic partnerships with relevant national structures and on-going processes (PRSP, Decentralization, EU accession) –Partnerships are central to sustaining capacity building activities, and proposals ensuring national and local commitment and building on complimentary initiatives will be encouraged. Partnerships with other donors will be considered co-financing. V. M&E: impacts to be measured against baseline –Projects should have outcome and impact indicators –Projects should include activities related to learning and feeding lessons into implementation

Some Operational Principles from Interim Guidelines –National ownership and leadership – focal point support, demand driven, based on NCSAs, etc. –Cost-effective. –Mainstreaming - integrate activities related to global environment management into national development plans and programs. –Cross-cutting - activities equally involving and impacting more than one GEF focal area (climate change, biodiversity, land management, international waters, POPs and ozone. –Consistency with Convention guidance. –Application of good practice. –Agreed indicators for measuring outcomes. –Sustainability.

Regional Projects Priorities should be based on the needs identified in NCSAs The scope and activities of a regional project should support and compliment the activities of national capacity building and demonstrate cost-effectiveness and economy of scale. Funding for regional projects will be part of national allocations, and is likely to reduce the amount countries can access for national projects.

Recommendations for Follow-up Possible areas for future capacity building activities post NCSAs. –Financing Instruments / Environmental Fiscal Reform / Economic Valuation; –Educational / Informational Instruments and Environmental Education; –Monitoring, Evaluating, Reporting, and Learning; –Institutional Set up/Structure(s) to address Cross Cutting Issues / Synergies and Common Requirements Under the Conventions; –Development of Capacity Building Initiatives for Individuals, and; –Improvement in Policy, Legislative and Regulatory Frameworks and their Enforcement/Mainstreaming of global environment management into national development plans and programs.

Examples of X-cutting CD Projects Bulgaria: Integrating Rio conventions into the national and regional development policies in Bulgaria. Armenia: Developing institutional and legal capacity to optimize information management and monitoring system for GE. Tajikistan: Community Learning and Institutional Capacity Building for Global Environmental Management and Poverty Reduction. Latvia: Developing Capacities in Education and Research for Strengthening Global Environmental Management. Uzbekistan: Strengthening multi-sectoral, cross-institutional coordination in Rio Convention implementation through targeted institutional strengthening and professional development.

Learning Mechanism NCSA Global Support Programme, UNDP/UNEP joint initiative will provide methodological support and knowledge management mechanism to the NCSAs; It will also provide substantive inputs to implementation of the Strategic Approach and to all Pathways.