G l o b a l E n v i r o n m e n t F a c i l i t y


GEF/ME/C.28/4
May 9, 2006
GEF Council Meeting
June 6-9, 2006














GEF PORTFOLIO PERFORMANCE REPORT, 2005





(Prepared by the Secretariat and the Implementing and Executing Agencies)

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Recommended Council Decision

The Council, having reviewed GEF/ME/C.28/4, GEF Portfolio Performance Report
2005, welcomes the overall finding that the GEF portfolio under implementation in 2005
was performing satisfactorily across all focal areas. The Council notes that the
responsibility for monitoring the performance of the GEF portfolio has been transferred
from the Office of Evaluation to the GEF Secretariat, which will fulfill its monitoring
responsibilities in collaboration with the Imple menting and Executing Agencies.

The Council recognizes the need for harmonization of monitoring tools across the
agencies to ensure more coherent aggregation of findings at the GEF corporate level. The
Council requests the Secretariat, in collaboration with the Implementing and Executing
Agencies and STAP, to develop a comprehensive Results Management Framework for the
GEF to be implemented in GEF-4 which will incorporate monitoring and reporting at
three levels: corporate, programmatic (focal area) and projects. The Secretariat is
requested to submit a proposal for an overall GEF Results Management Framework to the
Council for review at its meeting in December 2006. The annual Portfolio Performance
Report should be fully integrated into the overall GEF Results Management Framework.

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Table of Contents


Executive Summary ..................................................................................................................... iii

Introduction................................................................................................................................... 1

Key Findings of PPR 2005.............................................................................................................4

Challenges ......................................................................................................................................6
Indicator Development .................................................................................................................... 6
Biodiversity Focal Area .......................................................................................................... 6
Climate Change Focal Area .................................................................................................... 7
International Waters Focal Area ............................................................................................. 7
Land Degradation Focal Area ................................................................................................. 8
Multi-Focal Area/OP 12 (Integrated Ecosystem Management) ............................................. 9
Persistent Organic Pollutants (POPs)...................................................................................... 9
Ozone Depletion (ODS).......................................................................................................... 9
Monitoring Performance ............................................................................................................... 10
Risk Management Systems ........................................................................................................... 10

Towards a GEF Results-Management Framework ..................................................................11

Next Steps......................................................................................................................................12






Annexes

1. 2005 GEF Portfolio Overview and Portfolio Implementation Review .....................................13
2. UNDP Overview Report ............................................................................................................25

3. UNEP Overview Report.............................................................................................................35
4. World Bank Overview Report ...................................................................................................48
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EXECUTIVE SUMMARY

1.
The Annual Portfolio Performance Report (PPR) provides to the GEF Council and other
stakeholders information regarding the status of the health of the GEF portfolio currently under
implementation.
2.
In the context of the realignment of the roles and responsibilities of the newly
independent GEF Evaluation Office vis-à-vis the GEF Secretariat, the Portfolio Performance
Report 2005 (PPR 2005) has been prepared by the GEF Secretariat, through a Portfolio
Performance Review Process undertaken in collaboration with the Implementing and Executing
Agencies.
3.
This Council paper provides an overview of the key findings of the PPR 2005 as well as a
summary of progress made to date, challenges and next steps regarding the development of the
GEF Results Management Framework1, to be brought forward for Council consideration by the
end of 2006.
Key Findings
4.
The 2005 Project Implementation Review (PIR) included 392 ongoing full and medium
sized projects that had been under implementation for at least one year by June 30, 2005. This
number reflects the steadily growing portfolio of projects under implementation, from 135
projects in 1999.
5.
The total amount of GEF funds allocated to full and medium-sized projects under
implementation in FY 2005 was $2,113 million (including PDF grants for these projects).
6.
Based on project implementation reports, the overall finding from the 2005 PIR is that
the GEF portfolio under implementation was performing satisfactorily across all focal areas in
FY 2005.
Challenges
7.
The Portfolio Performance Review exercise revealed a number of challenges in the area
of portfolio performance monitoring.
8.
Over the years, GEF Focal Area Task Forces have been making strides to define core
focal area indicators and to develop tracking tools to improve the quality of M&E arrangements.
In particular, the Biodiversity Focal Area has made substantial progress and developed tracking
tools for GEF-3 projects under Strategic Priority One (Catalyzing Sustainability of Protected
Area Systems) and Strategic Priority Two (Mainstreaming Biodiversity in Production

1 A Draft policy recommendation currently under discussion in the fourth replenishment of the GEF Trust Fund
directs the Secretariat, GEF Agencies and the GEF Evaluation Office to develop a common set of quantitative and
qualitative indicators and tacking tools for each focal area to be used consistently in all projects with a view to
facilitating aggregation of results at the country and program levels and assessment of GEF transformational impact.


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Landscapes and Sectors). The system allows for key project level indicators to be rolled up to the
level of the biodiversity portfolio in order to present a consolidated picture of portfolio-level
coverage and outcomes. PPR 2005 presents the findings of the biodiversity tracking tools from
the first three fiscal years of GEF-3.
9.
While the use of project-level indicators have improved over the years, the identification
and use of appropriate indicators at the portfolio level and issues related to attribution still
present a challenge. Ability to roll up indicators from the individual project-level to the portfolio-
level and to track overall portfolio performance remains uneven across the GEF focal areas. In
all Focal Areas, work is underway to address these issues.
10.
In monitoring performance, there is great variety in definitions, tools, content, formats,
procedures, data collection methods, indicators, targets and objectives, quality of baselines, etc.
utilized by GEF agencies. Consequently, there is a need for harmonization or standardization
across the agencies to ensure more coherent aggregation of findings at the GEF corporate level.
11.
Most monitoring activities of GEF's Implementing and Executing Agencies, including
annual project performance ratings, are carried out by local project staff or agency program
managers. While this can ensure optimal feedback of lessons learned from project to program
level, it is a form of self-assessment and may bias reporting towards subjective and sometimes
overly-optimistic ratings.
12.
In terms of the project performance ratings, statistics regarding projects-at-risk reported
by the Agencies may provide more reliable information. In fact, the risk management systems
that are being implemented by the Implementing Agencies are intended to overcome the
shortcomings of the self ratings.
Towards a GEF Results-Management Framework
12.
While the issue of project level indicators in the context of project monitoring and
evaluation systems has been sufficiently dealt with, and cons iderable progress has been achieved
in some focal areas in developing portfolio level indicators, further work, both at a conceptual
and empirical level, needs to be undertaken. Towards this objective, the policy
recommendations currently under discussion in the fourth replenishment negotiations of the GEF
provides support towards developing a Results Management Framework for the GEF.
13.
In response to the challenges faced, the Secretariat will lead an interagency effort to
rethink and reconceptualize the portfolio performance review exercise as part of the larger effort
to develop a comprehensive Results Management Framework for the GEF to be implemented for
GEF-4, incorporating monitoring and reporting at three levels: (i) corporate level; (ii)
programmatic (focal area) level; and (iii) project-level.
14.
Among other things, this framework is intended to address:
a) Progress towards/achievement of GEF replenishment targets;
b) Outcomes achieved by projects that have completed implementation;

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c) Issues associa ted with implementation of the portfolio; and
d) Quality-at-entry of project proposals.
Next Steps
15.
In order to be able to collectively address the above issues, an Inter-Agency Working
Group on Results-Management, chaired by the Secretariat and comprised of representatives from
the Implementing and Executing Agencies, and STAP has been established.2 This Group will
develop an overall GEF Results Management Framework for review by the Council at its
December 2006 meeting. The Focal Area Task Forces will continue their work to develop and
improve their respective indicators and tracking tools in congruence with the development of the
framework. The annual PPR exercise will also be reconceptualized as part of the larger effort to
develop a comprehensive GEF Results Management Framework, to be implemented for GEF-4.
16.
To support this process, a request is being made for a Special Initiative for Results
Management in the FY07 Corporate Budget. This activity would be in line with the on-going
efforts to deve lop an overall GEF Results Management Framework.


2 The GEF Evaluation Office has offered to provide advice to the group.
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INTRODUCTION
1.
The Annual Portfolio Performance Report (PPR) provides to the GEF Council and other
stakeholders information regarding the status of the health of the GEF portfolio currently under
implementation.
2.
Reporting on portfolio performance was part of the Annual Portfolio Performance Report
(PPR) prepared by the GEF Monitoring and Evaluation Unit until 2004. In the context of the
realignment of the roles and responsibilities of the newly independent GEF Evaluation Office
vis-à-vis the GEF Secretariat, the responsibility for monitoring the GEF portfolio (and reporting
to the GEF Council) has been transferred to the GEF Secretariat, to be undertaken in
collaboration with the Implementing and Executing Agencies.
3.
Accordingly, the Portfolio Performance Report 2005 (PPR 2005) has been prepared by
the GEF Secretariat, through a Portfolio Performance Review Process undertaken in
collaboration with the Implementing and Executing Agencies. The GEF Evaluation Office has
separately submitted its second Annual Performance Report (APR 2005) for discussion at this
Council meeting.
4.
In addition, one of the policy recommendations under discussion for the fourth
replenishment of the GEF Trust Fund directs the GEF Secretariat, GEF Agencies and the GEF
Evaluation Office to develop a common set of quantitative and qualitative indicators and
tracking tools for each focal area to be used consistently in all projects with a view to facilitating
aggregation of results at the country and program levels and assessment of GEF transformational
impact. A complete Results Management Framework is to be developed by the GEF Secretariat
and brought forward for Council consideration by the end of 2006.
5.
This Council paper provides an overview of the key findings of the PPR 2005 as well as a
summary of progress made to date, challenges and next steps regarding the development of the
GEF Results Management Framework, to be implemented for GEF-4.
PERFORMANCE MONITORING OF GEF PROJECTS
6.
Currently, monitoring of GEF projects is conducted by GEF Implementing and Executing
Agencies through two interrelated exercises:
(a)
an internal agency exercise in line with regular agency project supervision
systems (at the project level and at the agency's portfolio level); and
(b)
a GEF corporate exercise ­ portfolio performance review conducted annually as
part of GEF corporate monitoring (at the portfolio level across all agencies).
7.
While agencies are concerned more with project implementation issues and monitoring
their own projects and portfolios, the main concern of GEF corporate monitoring is overall
"program" or "portfolio" level performance across all agencies and is conducted through an
iterative process that involves all agencies of the GEF. Implementing and Executing Agencies
are required to design M&E plans for GEF projects, monitor individual projects during
implementation, prepare annual Project Implementation Reports (PIRs) for on-going projects,
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and aggregate PIR findings in focal area summary reports and portfolio overview reports. This
information is then combined with findings of Terminal Evaluations of completed projects. The
final outcome feeds into GEF corporate monitoring as an assessment of the state of progress for
the entire GEF portfolio and is reported to the Council.
8.
GEF's existing corporate monitoring system via the PIRs has been in existence since
1996 and, with minor modifications, it has continued to be the main reporting tool to the Council
regarding portfolio performance exercise. It is a creative attempt to bridge the differences in
internal monitoring practices and systems across GEF's Implementing and Executing Agencies
and to create a platform in which monitoring information from GEF projects can be aggregated
in order to assess overall portfolio performance.
9.
Until FY2005, the annual PIR exercise was coordinated by the GEF Monitoring and
Evaluation Office. However, in 2005, in accordance with its new portfolio monitoring
responsibilities, the Secretariat took over the task of coordinating the PIR exercise and conducted
PIR 2005, following the same principles and procedures used in PIR 2004, with a few minor
additions. Assessment of Terminal Evaluations continue to be undertaken by the independent
GEF Evaluation Office as part of the APR exercise.
PORTFOLIO PERFORMANCE REVIEW PROCESS 2005
10.
The Portfolio Performance Review process is based on Project Implementation Reports
(PIR) prepared for all projects under implementation. The portfolio performance review exercise
was initiated in May 2005 when the Secretariat circulated PIR guidelines to all Implementing
(IAs) and Executing Agencies (EAs). Over the course of several months, GEF Agencies
submitted individual project implementation reports for all full and medium-sized GEF projects
(excluding enabling activities) that have been under implementation for at least one year, as of
June 30, 2005. As in previous years, these project implementation reports described and rated
each project's performance during the year. The Agencie s rated their projects under
implementation according to two criteria: implementation progress and progress towards
attaining development/global environmental objectives.3
11.
This year, in addition to submitting PIRs for individual biodiversity projects, the
Agencies were also requested to submit completed tracking tools for GEF-3 projects under
Strategic Priority One (Catalyzing Sustainability of Protected Area Systems) and Strategic
Priority Two (Mainstreaming Biodiversity in Production Landscapes and Sectors) that were part
of the PIR 2005 cohort. The tracking tools are central to the portfolio monitoring system that has
been established by the GEF Secretariat and the Implementing Agencies in the biodiversity focal
area. The system, which was developed for application at the start of GEF-3, allows for key
project level indicators to be rolled up to the level of the biodiversity portfolio in order to present

3 Six ratings were used by agencies: Highly Satisfactory (HS), Satisfactory (S), Marginally Satisfactory (MS),
Marginally Unsatisfactory (MS), Unsatisfactory (U) and Highly Unsatisfactory (US).
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a consolidated picture of portfolio level coverage and outcomes. The portfolio monitoring
system will continue to be implemented in the GEF-4 period.4
12.
The Secretariat compiled individual PIRs submitted by Agencies, entered them into the
GEF Database and created a separate PIR database to allow for analysis of ratings in order to
gauge overall portfolio performance. A detailed discussion of findings, together with descriptive
figures and charts, as well as a general GEF portfolio overview are provided in Annex 1.
13.
Individual project implementation reports were also made available to interagency focal
area task forces which reviewed the reports as well as focal area review reports prepared by each
of the agencies and convened to discuss any trends, issues and recommendations regarding their
respective portfolios. The Climate Change/ODS and Biodiversity Task Force meetings were
held on December 14, 2005; the International Waters Task Force meeting was held on December
20, 2005; and the Multi-focal area/OP 12 Task Force meeting took place on January 11, 2006.
Each focal area task force meeting produced a summary report which was submitted to the
Secretariat and circulated to all Implementing and Executing Agencies. These focal area reports
addressed issues related to the project review process and identified lessons and
recommendations to improve project design. These reports can be found on
http://thegef.org/results/results.html.
14.
In addition to the individual project implementation reports and focal area review reports,
each Implementing Agency prepared an overview report, presenting an overall analysis of
portfolio performance, trends, elapsed time between processing steps and co-financing for each
IA, based on project implementation reports, mid-term evaluations, completion reports and final
evaluations. These reports were submitted to the Secretariat by January 2006. Abbreviated
versions of these reports are presented in Annex 2, Annex 3, Annex 4. Full reports can be found
on http://thegef.org/results/results.html.
15.
In January 2006, the GEF Secretariat chaired an Inter-Agency Portfolio Performance
Review meeting with the following two main objectives:
(a)
To review performance of projects under implementation to prepare a report for
the June 2006 Council meeting; and
(b)
To discuss conceptual approach and collaborative arrangements to develop a
Results Management Framework for the GEF ­ a proposal to be prepared for
review by the GEF Council at its December 2006 meeting. 5

4 The Tracking Tools were introduced at the start of GEF-3 to assist with portfolio level monitoring of Strategic
Priorities One and Two and are to be submitted at three times in the life of the project: 1) with the project document
for work program inclusion or CEO endorsement (CEO approval for MSPs); 2) Within 3 months of completion of
the project's mid-term evaluation or report; and 3) With the project's terminal evaluation or final completion report,
and no later than 6 months after project closure.

5 A Draft policy recommendation currently under discussion in the fourth replenishment of the GEF Trust Fund
directs the Secretariat, GEF Agencies and the GEF Evaluation Office to develop a common set of quantitative and
qualitative indicators and tacking tools for each focal area to be used consistently in all projects with a view to
facilitating aggregation of results at the country and program levels and assessment of GEF transformational impact.
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The meeting was attended by 46 participants from the GEF Secretariat, GEF Evaluation Office,
WB, UNDP, UNEP, UNIDO, FAO, IADB, IFC, and STAP.
16.
Towards meeting the first objective, the findings of the overview reports prepared by the
Implementing Agencies as well as the focal area task force reports were consolidated by the
Secretariat, presented and discussed to identify key findings and recommendations.
17.
Towards the second objective, the Secretariat focal area teams and interagency task
forces made presentations and engaged in discussions regarding the progress achieved with
regard to the development of performance indicators in the respective focal areas. The GEF
Evaluation Office also made presentations on different approaches employed by GEF agencies to
monitor project performance, and performance monitoring experience at the GEF to date,
including the instruments that have been used (PIR, SMPR, APR, etc.), their limitations, existing
gaps and lessons learned. In addition, the Results Secretariat of the World Bank made a
presentation regarding on-going international efforts to harmonize results management practices
across development banks, multilateral agencies and donor agencies, lead by OECD-DAC, and
introduced the World Bank's approach towards results management.

KEY FINDINGS OF PPR 2005
18.
The 2005 Project Implementation Review (PIR) included 392 ongoing full and medium
sized projects that had been under implementation for at least one year by June 30, 2005. This
number reflects the steadily growing portfolio of projects under implementation, from 135
projects in 1999.
19.
The World Bank had the largest share of projects under implementation in FY 2005 with
42% of the portfolio, followed by UNDP with 38% and UNEP with 13%. Five percent of all
projects were implemented jointly by multiple IAs while 2% of the portfolio involved various
EAs (ADB, UNIDO, IADB, IFAD, EBRD).
20.
The total amount of GEF funds allocated to full and medium-sized projects under
implementation in FY 2005 was US$ 2,113 million (including PDF grants for these projects).
The World Bank had the largest share with 56% of the total GEF funding, followed by UNDP
with 28% and UNEP with 9%. Five percent of GEF allocation went to projects implemented
jointly with multiple IAs while 2% of the funds were allocated to projects that involved EAs
(ADB, UNIDO, IADB, IFAD, EBRD).
21.
As in previous years, projects in the biodiversity focal area (BD) represented the greatest
portion of the portfolio, at 42% with 164 projects. Together with biosafety projects, BD
portfolio constituted 45% of the total.
22.
An analysis of the data provided by the biodiversity tracking tools from the first three
fiscal years of GEF-3 is provided below:


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(a)
Eight of the nine (89%) measurable coverage targets for Strategic Priorities One
and Two for GEF-3 have already been achieved or exceeded.
(b)
For Strategic Priority One (Catalyzing Sustainability of Protected Area Systems):
(i)
26 countries have received support to strengthen their protected area
systems (GEF-3 target was 15);
(ii)
418 protected areas are currently being supported (GEF-3 target was 400);
(iii)
13% of these protected areas are new additions (GEF-3 target was 20%);
and
(iv)
96 million hectares of protected areas are being supported (GEF-3 target
was 70 million hectares).
(c)
Africa received the majority of support during the first three years of GEF-3 when
measured in terms of percent of the total coverage of hectares for Strategic
Priority One (52%) and Strategic Priority Two (38%) as well as in terms of the
number of protected areas that are receiving support under Strategic Priority One.
Two hundred and forty five or 58% of the total number of protected areas
supported by the GEF were located in Africa.
(d)
Fourteen African countries, representing nearly one-third of the continent, have
received support to strengthen their protected area systems.
(e)
For Strategic Priority Two (Mainstreaming Biodiversity Conservation in
Production Landscapes and Sectors), 81 total projects in the targeted sectors are
focusing on mainstreaming biodiversity into the sector (GEF-3 target was 5 per
sector or 20 total):
(i)
25 projects in agriculture;
(ii)
15 projects in fisheries;
(iii)
16 projects in forestry; and
(iv)
15 projects in tourism.

(f)
In addition, 36 million hectares (GEF-3 target was 20 million) in production
landscapes and seascapes are being supported under SP-2, and 30 countries (GEF-
3 target was 5) are promoting conservation and sustainable use of wild species.
(g)
Under Strategic Priority Three (Capacity Building in Biosafety), 126 countries
have participated in the project "Development of National Biosafety
Frameworks". As of June 2005, 40 countries had completed project activities and
had posted their national biosafety frameworks on the UNEP-GEF website. In
addition, 12 countries are completing demonstration projects for implementation
of NBFs (8 with UNEP and 2 each with UNDP and WB). The project "Building
Capacity for Effective Participation in the Biosafety Clearing House (BCH) of the
Cartagena Protocol" for 139 eligible countries was approved in March 2004 and is
under implementation.
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23.
In addition to the coverage information provided above, a complete analysis was
conducted of the portfolio outcome data generated by the biodiversity tracking tools. This
"outcome baseline", upon which portfolio progress will be measured, can be found in the
Biodiversity Focal Area Report. (http://thegef.org/results/results.html) The GEF-3 project cohort
will be tracked against this baseline throughout the course of individual project implementation
to assess achievement of portfolio-level outcomes of the cohort.
24.
Climate change (CC) was the second largest focal area in the 2005 PIR, with 127 active
projects, or 32% of the total. At 14% of the portfolio, there was an increase in the number of
projects for international waters (IW) during FY05. The remaining focal areas, ozone depletion,
multi-focal/OP12, persistent organic pollutants, and land degradation accounted for 10% of the
2005 PIR.
25.
In FY 2005, 24% of GEF projects were being implemented in the Latin America and the
Caribbean region, followed by 20% in Europe and Central Asia. Projects in both Africa and East
Asia Pacific constituted 18% of the portfolio each while South Asia had the least number of
projects, with 3% of the total.
26.
Based on project implementation reports, the overall finding from the 2005 PIR is that
the GEF portfolio under implementation was performing satisfactorily across all focal areas in
FY 2005. As outlined in Annex 1, GEF agencies have reported that the majority of the projects
under implementation in FY 2005 were performing well, with 63% of the portfolio rated
satisfactory, 10% highly satisfactory and 15% marginally satisfactory in terms of implementation
progress. In terms of progress towards achieving development/global environmental objectives,
62% of the portfolio was rated satisfactory, 12% highly satisfactory and 15% marginally
satisfactory. In both cases, about 6% of the projects were not rated.
CHALLENGES
27.
The Portfolio Performance Review exercise revealed a number of challenges in the area
of portfolio performance monitoring.
Indicator Development
28.
While the use of project-level indicators have improved over the years, the identification
and use of appropriate indicators at the portfolio level and issues related to attribution still
present a challenge. Ability to roll up indicators from the individual project level to the portfolio
level and to track overall portfolio performance remains uneven across the GEF focal areas.
29.
Over the years, GEF Focal Area Task Forces have been making substantial progress to
define core focal area indicators and to develop tracking tools to improve the quality of M&E
arrangements. However, the following challenges remain:
Biodiversity Focal Area
30.
The Biodiversity Focal Area task force has developed a tracking tool to monitor
performance of the projects of `Catalyzing Sustainability of Protected Areas (Strategic Priority
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One);' and, `Mainstreaming Biodiversity in Production Landscapes and Sectors (Strategic
Priority Two)' on programmatic indicators.
31.
For Strategic Priority One, monitoring protected area management effectiveness has been
identified as a useful outcome indicator at the project level that is easily rolled up to the portfolio
level. Going forward with its use, it will be important to assess its value in providing relevant
information on mana gement effectiveness for protected area systems.
32.
For Strategic Priority Two, the portfolio level indicators are quite diverse and reflect the
portfolio's wide-ranging interventions in spatial, sectoral, institutional, and market
mainstreaming. Portfolio level indicators include the coverage of biodiversity-friendly
management practices, hectares under product certification systems, degree of market
transformation, and improvements in the enabling environment. In order to address the difficulty
this diversity is posing for aggregation at the portfolio level, it may be necessary to examine sub-
portfolios or clusters of projects under this strategic priority in order to better roll up and assess
portfolio outcomes.
33.
As also noted in APR 2005, the Biodiversity Focal Area Task Force is investigating ways
to address the M&E concerns related to `capacity building for the implementation of Cartagena
Protocol on Biosafety (Strategic Priority Three)' and `generation and dissemination of best
practices for addressing current and emerging biodiversity issues (Strategic Priority Four),'
where, due to the inherent nature of the projects, designing good and cost effective M&E plans is
difficult. The Biosafety Strategy to be discussed at the June 2006 GEF Council contains
proposed portfolio and project level indicators for Strategic Priority Three, underlining the
challenge of aggregation and monitoring for results at the portfolio level.
Climate Change Focal Area
34.
The Climate Change Focal Area Task Force has made some strides in identifying
appropriate indicators for portfolio/program level performance, following the publication of the
"Measuring results from CC Programs" (2000). However, the inclusion and tracking of these
indicators at the project level have not been systematic. There remains considerable scope for
improvement in the provision of adequate baseline information, the methodology for making
baseline estimates, and the specification of "smart" indicators for each desired outcome.
35.
As also noted in APR 2005, the Climate Change Focal Area Task Force is currently
working to standardize programmatic and portfolio level indicators so that projects of each
strategic priority in the focal area will have a uniform set of indicators. It is proposed that for the
period of GEF 4, all projects must use the relevant indicators for the Strategic Objective which
they are addressing.
International Waters Focal Area
36.
Progress is being made in the International Waters Focal Area in developing portfolio
level process and stress reduction indicators and in addressing difficulties of establishing
baseline environmental status of targeted water bodies. The International Waters Focal Area
Task Force collaborated with the GEF Monitoring and Evaluation Unit to issue project-level
indicator guidance in 2002 in GEF Monitoring and Evaluation Paper # 10. This guidance was
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needed so that projects could be designed with similar indicators that could be rolled up to serve
in monitoring portfolio performance. During 2005, the Task Force developed an initial results
framework and tracking tool for clusters of projects and reported its work at the Inter-Agency
Portfolio Performance Review meeting in January 2006. In response to concerns that this
framework may create a burden on projects for annua l reporting, it is currently being simplified
and a new template is being developed to support effective use of the tracking tool in annual
reporting.
37.
In order to prepare for scaling up on-the-ground action in the Focal Area as
recommended by OPS3, the modality of a Strategic Partnership Investment Fund is being tested
in a number of regions. Results frameworks and indicators for such Investment Funds are under
development in cooperation with the GEF Evaluation Office using nutrient water pollution
reduction in the Danube/Black Sea Basin as an example.
38.
The Task Force is also working on the development of surrogate indicators and
methodologies for making projections for replication potential of GEF funded demonstration
projects. This work aims to address the long time-span required to achieve environmental
changes in transboundary waters, typically exceeding the duration of GEF projects. Given the
nature of the environmental concerns addressed, measurable results at a larger scale might take
several decades to achieve while typical GEF interventions last five to ten years. The long-term
GEF presence needed to achieve results is being tested with the series of Partnership Investment
Funds that extend up to one decade and leverage sufficiently large resources necessary to
produce measurable results in complex transboundary water systems.
39.
Finally, the inadequately addressed subject of groundwater poses a challenge, and
additional indicator work is underway with the GEF Evaluation Office on this topic.
Land Degradation Focal Area
40.
This focal area was established only three years ago and is in the process of developing
indicators as part of its overall knowledge management strategy. The Council has also asked for
a clearer definition of the global benefits that this focal area will generate. In response, as also
stated in APR 2005, the Land Degradation Focal Area Task Force, in collaboration with the GEF
Evaluation Office, is developing a framework to identify results indicators on the basis of
specific global environmental benefits. STAP has been requested to assist with three relevant
studies (global benefits, operationalizing the MA approach for land degradation, and the issue of
tradeoffs). The Task Force will develop standardized programmatic and portfolio level indicators
so that projects of each strategic priority in the focal area will have a uniform set of indicators.
Efforts in this focal area also seek to identify best practices and tools of analysis that can be
applied beyond GEF projects, especially for country programmatic partnerships (CPPs).
41.
The main challenge faced by the focal area is the fact that the environmental concerns
addressed are generally a result of natural resource management practices that have taken place
over long periods of time and are highly sensitive to political and social issues. As the APR
2005 also indicates, the Land Degradation Task Force is collaborating with the UN University to
develop a framework to track results of sustainable land management activities. This framework
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will serve as a basis for the subsequent development of GEF specific indicators for the Land
Degradation Focal Area.
Multi-Focal Area/OP 12 (Integrated Ecosystem Management)
42.
OP 12 was initially (1999) conceived as an operational program on carbon sequestration
but was later (2000) changed to its current title "integrated ecosystem management" reflecting an
integrated and multi-focal area approach to the management of natural systems. OP 12 projects
are intended to be multi-focal, dealing with two or more GEF focal areas, and synergistic, where
achievement of benefits in one focal area leads to increased benefits in another. Two of the most
crucial weaknesses of this young focal area are lack of guidance for project development and the
absence of an indicator system that duly reflects the thrust of OP12. So far, there has been no
indicator framework for Multi Focal Area/OP 12 projects and the portfolio. Hence, there is no
standard set of indicators at project and program level that would allow comparing projects or
monitoring the performance of the portfolio.
43.
In the past, the close link between Multi Focal Area /OP 12 and Land Degradation Focal
Area has often been raised in discussions in the GEF Council and the GEF family. There is an
inter-agency working group on indicators for the Land Degradation Focal Area that is in the
process of developing a standard set of indicators at the project and program levels. Since the
agreed indicator framework is universal for natural resources based interventions (it uses the
landscape approach that integrates the ecosystem approach), it might be feasible to apply and, if
necessary adapt, the framework to the Multi Focal Area/OP12 and develop a standard menu of
indicators for Multi Focal Area/OP 12 projects, taking into account the indicators developed by
the focal areas biodiversity, international waters, persistent organic pollutants and land
degradation (desertification and deforestation). In addition, indicators need be developed that
reflect the synergetic character of Multi Focal Area/OP12 projects and the minimization of trade-
offs between local livelihood-oriented and global environmental benefits. The latter one is a
crucial element of the Land Degradation Focal Area portfolio and its projects.
Persistent Organic Pollutants (POPs)
44.
As of December 15 2005, National Implementation Plans for the Stockholm Convention
were being funded by the GEF as enabling activities in 126 countries. In addition, there were
also 14 medium-size and full-size POPs projects that were approved by the GEF Council, for a
total GEF allocation of US$ 104 million.
45.
As the POPs Focal Area grows and shifts from the enabling phase to the implementation
phase, the POPs Focal Area Task Force will continue its work on the development of project and
program indicators and to finalise the POPs tracking tool, taking into account future
developments, in particular at the 2nd session of the COP to the Stockholm Convention.
Ozone Depletion (ODS)
46.
The ODS portfolio under review included a total of 10 projects with a combined GEF
contribution of about US$ 48.5 million. In general, the use of programmatic indicators across
the clusters within this small portfolio has been poor. Comparability and measuring the progress
of programming will require consistent use of programmatic indicators in the future. To address
9

---

this issues, the ODS Focal Area Task Force aims to work together with other focal areas to
develop indicators and implement results-based monitoring, focusing on outputs, outcomes, and
impacts.
Monitoring Performance
47.
In monitoring performance, there is great variety in definitions, tools, content, formats,
procedures, data collection methods, indicators, targets and objectives, quality of baselines, etc.
utilized by agencies. Consequently, there is a need for harmonization or standardization across
the agencies to ensure more coherent aggregation of findings at the GEF corporate level
48.
Most monitoring activities of GEF's Implementing and Executing Agencies, including
annual performance ratings, are carried out by local project staff or agency program managers.
While this can ensure optimal feedback of lessons learned from project to program level, it is a
form of self-assessment and may bias reporting towards subjective and sometimes overly-
optimistic ratings.
Risk Management Systems
49.
In terms of the project ratings used in the PIRs, statistics regarding projects-at-risk in the
risk management systems of the Agencies may provide more reliable information. In recent
years, progress has been made by GEF's Imple menting Agencies in developing and
implementing such systems.
50.
The project at risk system that is being implemented by the Work Bank was intended to
overcome the shortcomings of the self rating system. Experience at the World Bank shows that
Implementation Progress and Development/Global Environment Objective ratings have tended
to be over-optimistic when compared to ratings that projects are given by the Operations
Evaluation Department upon completion. To address this deficiency, the World Bank introduced
in FY96 the concept of projects at risk as the basic measure of portfolio performance. This is
reflected in the Bank's PIR overview report (Annex 2).
51.
Similarly, UNDP's Risk Management System contributes to achieving results and
impacts by allowing systema tic and early project risk identification and analysis, and by
facilitating risk monitoring, and improving adaptive management. Risk management is
conducted through the life of a project using the Risk Module in ATLAS, UNDP's corporate
enterprise resource platform for project financial management. A discussion of how this system
operates is provided in UNDP's PIR overview report (Annex 3).
52.
UNEP also employs a risk management system which allows the identification of major
internal and external risks and provides a tool for action so that projects at risk are given early
and specific attention and that corrective action can take place before such projects experience
serious crisis (Annex 4).


10

---

TOWARDS A GEF RESULTS-MANAGEMENT FRAMEWORK
53.
While the issue of project level indicators in the context of project monitoring and
evaluation systems has been sufficiently dealt with, and considerable progress has been achieved
in some focal areas in developing portfolio level indicators, further work, both at a conceptual
and empirical level, needs to be undertaken. Towards this objective, the policy
recommendations currently under discussion in the fourth replenishment negotiations of the GEF
provides support towards developing a Results Management Framework for the GEF.
54.
In response to the challenges faced, there was consensus at the 2005 GEF Inter-Agency
Portfolio Performance Review (2005 PPR) meeting to rethink and reconceptualize the portfolio
performance review exercise as part of the larger effort to develop a comprehensive Results
Management Framework for the GEF to be implemented for GEF-4, incorporating monitoring
and reporting at three levels: (i) corporate level; (ii) programmatic (focal area) level; and (iii)
project-level.
55.
Among other things, this framework is intended to address:
(a)
Progress towards/achievement of GEF replenishment targets;
(b)
Outcomes achieved by projects that have completed implementation;
(c)
Issues associated with implementation of the portfolio; and
(d)
Quality-at-entry of project proposals.
56.
In undertaking this task, it was agreed that there is need to build on results management
frameworks, including projects-at-risk systems, currently in place or under development in GEF
Agencies. There were several suggestions that included:
(a)
exploring ways to connect the framework of the GEF replenishment programming
document more explicitly to monitoring systems;
(b)
revisiting the content, format and process associated with the annual project
implementation reports;
(c)
including GEF Secretariat staff as part of the agency project supervision/mid-term
review missions;
(d)
clarification and provision of guidelines for M&E systems in project design;
(e)
development and/or refinement of indicators at the initially proposed three levels
of the Results Management Framework;
(f)
employment of complementary monitoring instruments such as targeted reviews
and beneficiary surveys; and

11

---

(g)
consideration of the implications of the RAF in developing a GEF Results
Management Framework.

NEXT STEPS
57.
In order to be able to collectively address the above issues, an Inter-Agency Working
Group on Results-Management, chaired by the Secretariat and comprised of representatives from
the Implementing and Executing Agencies, and STAP has been established.6 This Group will
develop an overall GEF Results Management Framework for review by the Council at its
December 2006 meeting. The Focal Area Task Forces will continue their work to develop and
improve their respective indicators and tracking tools in congruence with the development of the
framework. The annual PPR exercise will also be reconceptualized as part of the larger effort to
develop a comprehensive GEF Results Management Framework, to be implemented for GEF-4.
58.
To support this process, a request is being made for a Special Initiative for Results
Management in the FY07 Corporate Budget. This activity would be in line with the on-going
efforts to develop an overall GEF Results Management Framework.

6 The GEF Evaluation Office has offered to provide advice to the group.

12

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Annex 1
GEF PORTFOLIO REVIEW FOR FY 2005

1.
This document provides an overview of the GEF Portfolio and projects under
implementation as of June 30, 2005. The source of information, regarding the GEF
Portfolio, was compiled and submitted by the Operations and Strategy Team of the GEF
Secretariat. The statistics regarding the overall GEF portfolio was supplied by the GEF
Database. The information about projects under implementation in FY 2005 was taken
from individual project implementation reports as well as agency overview reports,
submitted by the implementing and executing agencies.
Overall GEF Portfolio

2.
As of June 30, 2005, $5,588 million of GEF funds had been allocated to a total of
1,697 projects in approved GEF work programs, representing an increase of 9% over
total GEF allocations of $5,126 million as of June 30, 2004. This increase in allocations
was in line with the upward trend of the previous years. (Figure 1)
Figure 1.
Cumulative GEF Resources Allocation
(As June 30, 2005)
6000.0
5000.0
4000.0
3000.0
2000.0
US$ Billions 1000.0
0.0
2001
2002
2003
2004
2005
Year


3.
Of the 1,697 projects, 945 were full and medium-sized projects, compared to 826
projects by June 30, 2004, representing an increase of about 14 %. The total GEF
funding that was allocated for these projects was $5,275 million. Of these projects, 397
were implemented by the World Bank, 362 by the United Nations Development Program
(UNDP), 114 by the United Nations Environment Program (UNEP), 11 by Executing
Agencies (ADB, IADB, IFAD, and UNIDO) and 60 by multiple IAs.
4.
Additionally, 752 enabling activity (EA) projects for a total of US$313 million
had been approved as of June 30, 2005. Of these enabling activities 484 were
implemented by UNDP, 187 by UNEP, 38 by the World Bank, 38 by UNIDO and 5 by
multiple IAs (Table 1).

13

---

Annex 1

Table 1. GEF Project Allocations by Implementing and Executing Agencies
(as of June 30, 2005)

FSPs
MSPs
EAs
Totals
Agency
Project
GEF
Project
GEF
Project
GEF
Project
GEF
Count
Grant
Count
Grant
Count
Grant
Count
Grant
World Bank
293
2813
104
84
38
9
435
2905
UNDP
250
1436
112
95
484
127
846
1658
UNEP
47
255
67
51
187
92
301
398
ADB
4
35
3
2
0
0
7
38
UNIDO
0
0
0
0
38
21
38
21
IADB
2
7
0
0
0
0
2
7
IFAD
2
12
0
0
0
0
2
12
Multiple IAs
54
477
6
5
5
64
65
546
GEFSEC
1
3
0
0
0
0
1
3
Total
653
5038
292
237
752
313
1697
5588









Note: All grant amounts are in millions of US dollars





5.
In terms of number of projects, as shown in Figure 1, 26% of all GEF projects
were implemented by the World Bank, 49% by UNDP, and 18% UNEP, while 4% of
projects had more than one implementing agency. Executing Agencies accounted for 3%
of the portfolio.
Figure 1.
Percentage of Number of Projects by
Implementing Agency (As of June 30, 3005)
MTA EA
WB
4% 3%
26%
UNDP
49%
UNEP
18%


6.
Figure 2 shows the funding distribution among IAs: 52% was allocated to Bank
projects, 30% to UNDP projects, 7% to UNEP projects, and 10% to projects with
multiple IAs. Allocations to EAs constituted only 1% of the total GEF funding.

14

---

Annex 1

Figure 2.
Percentage of Total GEF Funding by
Implementing Agency (As June 30, 2005)
MTA
EA
10%
1%
UNDP
30%
UNEP
WB
7%
52%


7.
The distribution of GEF allocations for full and medium-sized projects in the
portfolio as of June 30, 2005, among focal areas were: 35% to biodiversity, 35% to
climate change, 14% to international waters, 3% to ozone, 8% to projects with multiple
focal areas, and 2% to persistent organic pollutants. During 2005, sustainable land
management represented 2% of the GEF allocation in the portfolio (Figure 3).
Figure 3.
Distribution of GEF Allocations by Focal Area
(As June 30, 2005)
LDMTF
OD POPs
IW
2% 8%
3% 3%
14%
BD
35%
CC
35%





15

---

Annex 1
8.
The breakdown of GEF allocations by focal area was as follows (Table 2):.

Table 2. GEF Project Allocations by Focal Area
(as June 30, 2005)


FSPs
MSPs
EAs
Totals
Focal Area
Project
GEF
Project
GEF
Project
GEF
Project
GEF
Count
Grant
Count
Grant
Count
Grant
Count
Grant
Biodiversity
268
1767
165
135
290
92
723
1994
Climate Change
215
1748
61
48
228
144
504
1941
International
Waters
88
761
18
16
0
0
106
777
Land
Degradation
9
80
11
10
0
0
20
91
Multi-focal
Areas
45
418
27
21
123
24
195
464
Ozone
Depletion
20
176
5
3
0
0
25
179
Persistent
Organic
Pollutants
8
88
5
3
111
52
124
143
Totals
653
5038
292
237
752
313
1697
5588









Note: All grant amounts are in millions of US dollars





Approved Commitments and Project Disbursements for Implementing Agencies

9.
Figure 4 shows GEF allocations, commitments, and disbursements for
Implementing Agencies (World Bank, UNDP and UNEP) as of June 30, 2005. The
cumulative work program allocation for Implementing Agencies from the start of the
GEF was US$5,548 billion. During FY 2005, 69 full-sized projects (FSP), 47 medium-
sized projects (MSP) and 44 enabling activities were approved totaling $592.26 million
in GEF funds. Cumulative disbursement for Implementing Agencies increased during
FY 2005 to $2,494 billion, up from $2,355 billion in FY 2004.
10.
The gap between approved commitments and actual disbursements was 57% in
2001 but has been decreasing since then; it dropped to 33 % in 2004 and has since then
increase to around 50 % in 2005 (Figure 4).

16

---

Annex 1
Figure 4. Cumulative GEF Portfolio
Allocation, Commitments and Disbursements
(for Implementing Agencies)
2000-2005
6000.0
5000.0
4000.0
Disbursements (cumulative)
3000.0
Approved Commitments
US$ million 2000.0
(cumulative)
Work program allocations
1000.0
(cumulative)
0.0
2000
2001
2002
2003
2004
2005

Overview of Projects Covered in the Project Implementation Review 2005

11.
The 2005 Project Implementation Review (PIR) included 392 ongoing full and
medium sized projects that had been under implementation for at least one year by June
30, 2005. This number reflects the steadily growing portfolio of projects under
implementation, from 135 projects in 1999.
12.
The World Bank had the largest share of projects under implementation in FY
2005 with 42% of the portfolio, followed by UNDP followed with 38% and UNEP with
13%. Five percent of all projects were implemented jointly by multiple implementing
agencies while 2% of the portfolio involved various executing agencies. (Figure 5)
Figure 5. GEF Projects Under Implementation
in FY 2005 by Agency
WB
5% 2%
UNDP
13%
42%
UNEP
Multiple IAs
38%
With EA (FAO, UNIDO,
ADB, EBRD, IADB)




17

---

Annex 1
13.
The total amount of GEF funds allocated to full and medium sized projects under
implementation in FY 2005 was $2,113 million (including PDF grants). The World Bank
had the largest share with 56% of the total GEF funding, followed by UNDP with 28%
and UNEP with 9%. Five percent of GEF allocation went to projects implemented
jointly with multiple implementing agencies while 2% of the funds were allocated to
projects that involved executing agencies.


Figure 6. GEF Allocations for Projects Under
Implementation in FY 2005 by Agency
WB
9%
5%
2%
UNDP
UNEP
56%
28%
Multiple IAs
With EA (FAO, UNIDO,
ADB, EBRD, IADB)



14.
As in previous years, projects in the biodiversity focal area (BD) represented the
greatest portion of the portfolio, at 42% with 164 projects. Together with biosafety
projects, BD portfolio constituted 45% of the total. Climate change (CC) was the second
largest focal area in the 2005 PIR, with 127 active projects, or 32% of the total. At 14%
of the portfolio, there was an increase in the number of projects for international waters
(IW) during FY05. The remaining focal areas, ozone depletion, multi-focal, persistent
organic pollutants, and land degradation accounted for 10% of the 2005 PIR.

18

---

Annex 1
Figure 7. Number of Projects under
Implementation in FY 2005 by Focal Area
42%
45%
40%
32%
35%
30%
25%
20%
14%
15%
6%
10%
3%
2%
1%
5%
0%
0%
BD
CC
IW
Ozone
POPs
Biosafety
Land Deg
Multiple FA



15.
In terms of GEF allocations, the largest share of funds went to the BD focal area
with 38% of the total. Together with allocations to biosafety projects, the BD portfolio
under implementation in FY 2005 received 40% of the GEF funds.

Figure 8. GEF Allocations to Projects Under
Implementation in FY 2005 by Focal Area
38%
40%
35%
35%
30%
25%
18%
20%
15%
10%
5%
2%
2%
5%
1%
0%
0%
BD
CC
IW
Ozone
POPs
Biosafety
Land Deg
Multiple FA



16.
In FY 2005, 24% of GEF projects were being implemented in the Latin America
and the Caribbean region, followed by 20% in Europe and Central Asia. Projects in both

19

---

Annex 1
Africa and East Asia Pacific constituted 18% of the portfolio each while South Asia had
the least number of projects, with 3% of the total.

Figure 9. Regional Distribution of GEF Projects
Under Implementation in FY 2005
SA
3%
MENA
7%
LAC
24%
Global
9%
ECA
20%
EAP
18%
Afr
18%
0%
5%
10%
15%
20%
25%
30%



17.
Figure 10 presents a comparison with previous years. According to this figure,
both the MENA and the SA regions have experienced a decline in the number GEF
projects under implementation over the last five years.


20

---

Annex 1

Figure 10. Geographical Distribution of Projects Under Implementation
30
25
20
15
% of projects
10
5
0
AFR
EAP
ECA
Global
LAC
MENA
SA
2000
23
10
17
12
19
9
10
2001
20
11
17
10
22
10
10
2002
12
17
16
10
27
11
7
2003
17
21
11
13
25
10
3
2004
18
22
16
10
24
8
2
2005
18
18
20
9
25
7
3



PIR Ratings

18.
The PIR is a monitoring tool that relies on each IA and EA to report on and rate
project performance. Every year, the IAs and EAs rate their projects under
implementation according to two criteria: implementation progress and progress towards
attaining development/global environmental objectives. Six ratings are used by agencies:
Highly Satisfactory (HS), Satisfactory (S), Marginally Satisfactory (MS), Marginally
Unsatisfactory (MS), Unsatisfactory (U) and Highly Unsatisfactory (US). Figures 11 and
12 below provide the PIR 2005 agency ratings for implementation progress and progress
towards achieving development/global environment objectives respectively.

19.
As Figures 11 and 12 demonstrate, GEF agencies have reported that the majority
of the projects under implementation in FY 2005 were performing well, with 63% of the
portfolio rated satisfactory, 10% highly satisfactory and 15% marginally satisfactory in
terms of implementation progress. In terms of progress towards achieving
development/global environmental objectives, 62% of the portfolio is rated satisfactory,
12% highly satisfactory and 15% marginally satisfactory. In both cases, about 6% of the
projects were not rated.


21

---

Annex 1


Figure 11. PIR 2005 Agency Ratings on
Implementation Progress
(392 projects)
HU No rating
HS
MU
U
0%
6%
10%
2% 4%
MS
15%
S
63%




Figure 12. PIR 2005 Agency Ratings on Progress towards
Development/Global Environmental Objectives
(392 projects)
HUNo rating
HS
MU U 0% 6%
12%
2% 3%
MS
15%
S
62%





22

---

Annex 1
20.
In FY 2005, there were 258 Full sized projects under implementation. As Figures
13 and 14 demonstrate, GEF agencies have reported that the majority of the full-sized
projects under implementation in FY 2005 were performing well, with 66% of the
portfolio rated satisfactory, 9% highly satisfactory and 15% marginally satisfactory in
terms of implementation progress. In terms of progress towards achieving
development/global environmental objectives, 64% of the portfolio is rated satisfactory,
10% highly satisfactory and 17% marginally satisfactory. In both cases, about 5% of the
projects were not rated.





Figure 13. PIR 2005 Agency Ratings on Implementation Progress
(258 Full-sized projects)
HU
NR
HS
MU U 0% 5%
9%
2% 3%
MS
15%
S
66%

Figure 14. PIR 2005 Agency Ratings on Progress Towards
Development/Global Environmental Objectives
(258 Full-sized projects)
UHU
NR
HS
MU 2%0% 5%
10%
2%
MS
17%
S
64%



23

---

Annex 1
21.
In FY 2005, there were 134 medium sized projects (MSPs) under implementation.
As Figures 15 and 16 demonstrate, GEF agencies have reported that the majority of the
medium sized projects under implementation in FY 2005 were performing well, with
60% of the portfolio rated satisfactory, 13% highly satisfactory and 16% marginally
satisfactory in terms of implementation progress. In terms of progress towards achieving
development/global environmental objectives, 60% of the portfolio is rated satisfactory,
16% highly satisfactory and 12% marginally satisfactory.

Figure 15. PIR 2005 Agency Ratings on Implementation Progress
(134 MSPs)
U
HU
NR
HS
MU 4% 0% 6%
13%
1%
MS
16%
S
60%


Figure 16. PIR 2005 Agency Ratings on Progress Towards
Development/Global Environmental Objectives
(134 MSPs)
NR
U HU
HS
MU
7%
4%0%
16%
1%
MS
12%
S
60%

24

---

Annex 2
United Nations Development Programme

Global Environment Facility


Project Implementation Review 2005


Summary Overview Report









27 December 2005



25

---

Annex 2
Introduction

1.
The annual GEF Project Implementation Review (PIR) complements the regular
UNDP Monitoring and Evaluation procedures employed during project implementation.

2.
The PIR covers only a subset of the UNDP/GEF's portfolio. According to the PIR
selection criteria individual project information was collected for all full and medium-
sized projects under implementation for a minimum of one year, as of 30 June 2005. This
also includes the GEF National Dialogue Initiative (NCDI) that aims to strengthen
country ownership and involvement in GEF co-financed activities through a multi-
stakeholder dia logue process. Projects that were operationally completed before June 30,
2004, were not included in this year's review.

3.
In addition to reporting on the general performance of GEF projects,
implementation progress and impact achievements, the PIR overview report ­ now in its
ninth year ­ has been restructured to better inform the discussions between the GEF
Secretariat and the Agencies within the Focal Area Taskforces as part of the overall
Portfolio Performance Review (PPR). This summary report provides a brief, portfolio-
wide overview. The complete UNDP FY 05 PIR Overview Report, including focal area
analyses, is available at http://thegef.org/results/results.html.
Portfolio Overview

UNDP GEF PIR 2005 PORTFOLIO

4.
UNDP GEF PIR portfolio in 2005 comprises 159 projects receiving a total GEF
allocation of US$ 667.4 million. The annual Project Implementation Review has seen a
steady increase in the number of projects for which monitoring information needs to be
collected, analyzed and consolidated. In particular, from FY 00 to FY 03 the PIR
portfolio grew dramatically, doubling in size from 72 projects to 149. Over the last two
years the number of PIR projects has stabilized slightly above 150.

5.
GEF funding has followed a similar pattern of growth. Last year's minor decline is
explained by an increased share of medium-sized projects in the PIR portfolio.

26

---

Annex 2
700
180
600
160
140
500
GEF Funding
($ mill.)
120
400
No of Projects
100
300
80
200
60
100
40
FY99 FY00 FY01 FY02 FY03 FY04 FY05

PROJECT SIZE

6.
Out of the total 159 PIR projects, 109 are full sized projects (FSP) receiving GEF
funding of $ 1 million or above and 50 are medium sized projects (MSP), with GEF
funding below $ 1 million. The average size of GEF funding for a FSP is 5.8 million. The
average size for a MSP is 0.8 million.

7.
The vast majority of GEF resources (94 %) continue to be delivered through Full-
Sized projects. While medium sized projects represent more than one third of the total
number of PIR 05 projects they concentrate less than one fifteenth (6 %) of the total GEF
funding.

Figure 1. Distribution by project size .
Number of Projects PIR 2005
GEF Funding PIR 2005
MSP
FSP
FSP
MSP
31%
68%
94%
6%



8.
Compared to last year PIR the MSP share of the portfolio has decreased both in
number of projects (31% down from to 37% in the last FY) and GEF funding (6% down
from 9% in the last FY).

REGIONAL DISTRIBUTION


27

---

Annex 2
9.
The Asia & Pacific region concentrates the largest share of GEF allocations (30% of GEF
funding) followed by Latin America and the Caribbean (24%). The remaining 50% is distributed rather
evenly among the rest of the regions.
Table 1: PIR 05 Project Portfolio by Region

Portfolio by
GEF Funding
Percentage of
Number of
Percentage of all
Region
(US $ millions)
Total Funding
Projects
Projects
Global
44.8
7%
5
3%
Africa
79.0
12%
24
14%
Arab States
89.8
13%
24
15%
Asia & Pacific
201.4
30%
42
27%
Europe and CIS
94.8
14%
32
20%
Latin America
157.4
24%
32
20%
GRAND
667.4
100%
159
100%
TOTAL

Figure 2: Regional Distribution of GEF Funding.
% Funding by Region 2005
Latin
Global
America
Africa
7%
24%
12%
Arab States
Europe
13%
& CIS
14%
Asia &
Pacific
30%

10.
The historical distribution of GEF resources among regions has presented relatively small
variations. However, the two largest recipients of GEF funding (Asia Pacific and Latin America) are
losing ground and now together account for 50% of the resources, down from 58% last year. Europe and
the CIS has increased its share considerably from 8% to 14% in FY05 and for the first time has
surpassed Africa and Arab States in its share of GEF resources.

Figure 3: Evolution of Regional Distribution of GEF Funding.

28

---

Annex 2
PIR 2003/2004/2005 Comparison:
% Funding by Region
35%
30%
25%
2003
20%
15%
2004
10%
5%
2005
0%
Global
Africa
Arab States Asia & Pacific Europe & C.I.S Latin America


FOCAL AREA DISTRIBUTION

11.
The largest number of projects falls either under the Biodiversity or Climate
Change Area. Together they account for 85% of the number of projects in PIR 05. When
it comes to funding, the distribution of GEF resources among Focal Areas is relatively
more even, with IW receiving slightly below one third of the total GEF funding.

Table 2: PIR 04 Project Portfolio by Focal Area

Portfolio by Focal
Number of
Percentage of
GEF Funding
Percentage of
Area
Projects
Projects
(US$ millions)
Total Funding
Biodiversity
64
40%
225.5
34%
Climate Change
68
43%
231.5
35%
International Waters
23
15%
185.2
28%
Multi Focal
4
3%
24.2
4%
TOTAL
159
100%
667.4
100%

Figure 4: Focal Area Distribution of GEF
GEF Funding by Focal Area
Multi Focal
International
4%
Biodiversity
Waters
34%
28%
Climate
Change
35%


29

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Annex 2

12.
The funding share gap between BD and the other focal areas observed in the two
previous years continues to be eroded by a steady increase in CC, and particularly IW
funding allocations.

Figure 5: Evolution of Regional Distribution of GEF Funding by Focal Area

PIR 03/04/05: Distribution of GEF Funding by Focal Area
50%
40%
2003
30%
2004
20%
2005
10%
0%
Biodiversity Climate Change International
Multi-Focal
Waters


13.
In the medium sized projects portfolio nearly two thirds of the GEF resources are
allocated to biodiversity projects. Of the remaining, 40% is concentrated in the Climate
Change Focal Area. The large/ multi-country character if International Water projects
explain their small share of the MSP portfolio (5%) compared to 29% share of the FSP
portfolio.

Figure 6: Focal Area Distribution of GEF FS and MS portfolios

Full Size Portfolio
Medium Size Portfolio
Internatio
GEF Funding
GEF Funding
nal
Waters
Climate
29%
Change
Climate
40%
Change
34%
Multi
Focal
4%
International
Biodiversity
Waters
Biodiversi
53%
5%
Multi Focal
ty
2%
33%



14.
The largest percentage of medium-sized projects is found in the BD Focal area,
where 4 out of every 10 projects receive less than US $ 1 million in GEF funding.




30

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Annex 2
Table 3: Portfolio by Focal Area and Project Size
Focal Area
GEF Funding
No. of Projects
Total Funding
% FSP
% MSP
Total No.
% FSP
% MSP
Projects
Biodiversity
$ 227.1
91%
9%
64
60%
40%
Climate Change
$ 231.5
93%
7%
68
69%
31%
International Waters
$ 185.2
99%
1%
23
91%
9%
Multi Focal
$ 23.6
99%
1%
4
75%
25%
TOTAL
$ 667.4
94%
6%
159
69%
31%

PROJECT RATINGS

15.
Using the rating categories provided in the PIR guidelines a total of 22 projects
rated their progress towards project objective as highly satisfactory and 65 projects as
satisfactory representing in total four fifths of the PIR 05 portfolio. Fifteen projects rated
their progress at the objective level as marginally satisfactory and only three as
unsatisfactory. It is important to note that there is still some degree of subjectivity in
these assessments as a number of projects, particularly the older ones still have
qualitative or process rather than impact indicators. Annex D of the complete UNDP FY
05 PIR Overview Report lists all projects with either highly satisfactory or unsatisfactory
ratings along with a brief description of the reasons that justify the rating.

16.
The picture for the ratings on progress towards achieving project outcomes looks
fairly similar. A total of 133 projects report satisfactory or highly satisfactory progress.
Nineteen projects rate implementation progress as marginally satisfactory and two
projects rate it as unsatisfactory. These figures translate into a PIR 05 implementation
success rate of 85 %.

Figure 7: Distribution of ratings for project Objective.
Ratings at Objective Level 03/04/05
70%
60%
50%
40%
2003
30%
2004
20%
2005
10%
0%
HS
S
MS
U
NA


31

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Annex 2
Figure 8: Distribution of ratings for project Outcomes.
Ratings at Outcome Level 03/04/05
80%
70%
60%
50%
2003
40%
2004
30%
2005
20%
10%
0%
HS
S
MS
U
NA


Elapsed time

GEF pipeline to programme inclusion

17.
The average time required for UNDP GEF projects approved in FY 05 to move
from GEF pipeline entry to program inclusion (entry into the Work Programme after
Council approval) is 1123 days or slightly above three years. This period includes PDF
development and implementation.

18.
For the 22 full sized projects approved in FY 05 the elapsed time is 1273 days. Not
counting 3 slow maturing projects that entered the GEF pipeline before FY 00 the
average time required drops more than six months to 1062 days.

Figure 9. Elapsed time from GEF pipeline entry to Program inclusion
1600
1400
1200
1000
800
600
400
200
0
FY03
FY04
FY05


32

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Annex 2


Programme inclusion to Project Agreement

19.
It took on average 411 days from GEF Council approval (Program Inclusion) to
project agreement signature for the 35 projects that obtained UNDP project agreement
signature in FY05. Out of the 35 projects, 22 were full sized and 13 medium sized. The
average elapsed time for full sized projects is 512 days. For medium-sized projects is 241
days.

20.
In the case of full sized projects signed in FY 05 the large majority (73%) were
approved in FY03 or FY 04. The remaining 7% were signed in FY 02 or FY01. Without
counting these slow maturing "outliers", the average elapsed time for 16 out the total 22
full size projects drops significantly to 383 days.

21.
There are not outliers (projects approved on or before FY02) in the medium sized
project cohort. All medium sized projects signed in FY05 were approved either in FY03
or FY04.


Figure 10: Elapsed time from Program Inclusion to Project Agreement
450
400
350
300
250
200
150
100
50
0
FY03
FY04
FY05

Projects at Risk Systems

22.
UNDP/GEF Risk Management System will contribute to achieving results and
impacts by allowing systematic and early project risk identification and analysis, and by
facilitating risk monitoring, and improving adaptive management.

23.
A new Risk Management module has been specifically designed and added to
ATLAS, UNDP's corporate enterprise resource platform for project financial
management, as the main electronic tool to implement the Risks Management system. As
of November 2005 risk management for all UNDP/GEF projects under implementation
will be carried out through ATLAS.

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Annex 2

Early project risk identification and assessme nt

24.
Starting at the project development UNDP Programme Officers are required to
identify all risks pertaining to the project and report through the Risk Module in ATLAS.
Programme Officers report on 7 standard risk categories, i.e. environmental, financial,
operational, organizational, political, regulatory, strategic, others. The standard categories
coincide with factors that have historically been identified as main factors that adversely
affect project outcomes. Standard categories contribute to ensuring that the key risks are
monitored (not overlooked) and allow aggregation at the portfolio level.

25.
Risks with high potential for causing damage are identified as "critical". Critical
risks are those assessed to have medium or high impact and a probability of occurrence
above 50%. All financial risks associated with financial instruments such as revolving
funds, microfinance schemes, or capitalizations of ESCOs are automatically classified as
critical on the basis of their innovative nature.

Risk Monitori ng and Adaptive Management

26.
Any risk reported has to be accompanied by a management response prepared by
the Programme Officer. The management response might include a risk mitigation plan
(describing either adaptation measures and/or a contingency plan) or a decision to
monitor risk more closely. Both risk classification and the management response are
updated at least every six months.

27.
A key feature of the Risk Management System is the classification of projects
according to their level of risk. ATLAS' Risk Module can generate management reports
at any time listing all projects with one or more critical risks in any particular region or
GEF Focal Area. Regional and Focal Area Managers will use this information to identify
priority projects for supervision.

28.
Risk Monitoring at the portfolio level will be facilitated by reports generated by
ATLAS on all projects that have not updated their risk classification or the risk
management response for more than six months since the last update.

29.
In addition to monitoring and responding to risks, ATLAS allows monitoring and
management of actual key problems that the project is facing. The "issues" tab included
in the Risk Module serves this function following a similar logic to the management of
risks. Programme Officers report on problems and provide a management plan to address
them. As long as the problem persists, it appears as active in the project overview page.
Once it is worked out, it is indicated by clicking the "solved" box.

30.
Annex G of the full report includes screen prints of: i) the different pages of the
Risk Management module for a particular project; and ii) sample risk and issue
management reports that can be generated by the system.


34

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Annex 3








Annex 3



Project Implementation Review 2005



Summary Overview Report



January 2006

35

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Annex 3
I. Portfolio Overview

The subset of projects covered by the UNEP 2005 Project Implementation Review (PIR)
comprises 65 medium (MSP) and full size (FP) projects that started implementation on or before
June 30, 2004 and were in implementation for at least part of FY 2005. It includes projects that
were operationally completed during FY05. Co-implemented projects for which UNEP is not the
lead agency and individual country enabling activities were not included in this analysis. The
FY05 PIR portfolio has 6 projects more than that of the previous year (the PIR for FY04 included
59 projects) which indicates a deceleration of portfolio growth when compared with portfolio
expansion between FY02 and FY04.7
The total value of the portfolio examined in FY05 is $430 million of which $212 million from
GEF and $218 in co-financing. The overall portfolio co-financing ratio is about 1:1, with the
biodiversity focal area performing slightly better than climate change and international waters in
mobilizing cash and in-kind contributions. Actual project expenditures against the GEF allocation
are $125 million or 59% of the total GEF contribution as of June 30, 2005. This confirms the
financial health of the portfolio considering that most expenditure reports for the second quarter
(due 30 June 05) had not yet been received from executing agencies at the time of preparation of
individual PIR reports and therefore had not yet entered into the accounting system. Annex 1 of
the complete UNEP FY05 PIR Overview Report includes disbursement figures for each project.
This report can be found at http://thegef.org/results/results.html.
The portfolio includes projects in all focal areas with a majority of projects (45%) addressing
biodiversity (see Table 1 and Figure 1 below), which is consistent with the project distribution
pattern of previous years. For the first time the PIR comprises projects addressing land
degradation (LD) and persistent organic pollutants (POPs), one for each focal area. The Overview
Report quoted above contains specific sections on Land Degradation (LD) and Persistent Organic
Pollutants (POPs). The section on LD includes and analysis of the first UNEP GEF project
approved under Sustainable Land Management (OP15) along with relevant results and lessons
from on-going cross-cutting land degradation projects approved under biodiversity OP1 ­ arid
and semi-arid ecosystems ­ , or relevant multi-focal OP12 ­ on integrated ecosystem
management.
The UNEP portfolio on Climate Change remains small with a total of 6 projects, only one more
than in FY04 PIR. For the PIR analysis the Technology Transfer Networks (TTN) Phase II:
Prototype verification and expansion at the country level project, approved in the multi-focal area
category, was included in the CC section given its stronger relevance to this focal area.
International Waters projects account for 39% of the value of the overall portfolio and about 42%
of the funding allocated to FPs.
Medium-sized projects represent about 55% of all projects but their value is only 13% of the total
portfolio. Biodiversity has a significant share of the MSP portfolio with about 51% of total
resources allocated to MSPs. The total number of MSPs and their share of the portfolio have
remained stable when compared with the previous year.
The average size of MSPs is close to $806,000 across the portfolio. The average size of FPs ­
close to $6.3 million ­ is not representative of the portfolio given that one BD and one IW project

7 The active UNEP GEF portfolio increased 100% between FY02 and FY03 and 37% between FY03 and
FY04.

36

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Annex 3
have considerably larger-than-average funding. 8 The mean size of projects would be
approximately $5 million once the two largest projects are removed from the calculation.
Table 1: Portfolio by focal area, project size and value

No. of Projects
GEF Funding (US$millions)

Total
FP
MSP
Total
FP
MSP
Biodiversity
27
8
19
93.4
79.4
14.0
Climate Change
6
3
3
19.2
16.3
2.9
International Waters
16
11
5
82.9
78.6
4.3
Land Degradation
1
0
1
0.7
0
0.7
POPs
1
0
1
1.0
0
1.0
Multiple Focal Areas
6
3
3
11.6
8.6
3.0
Ozone
8
4
4
3.4
1.8
1.6
TOTAL
65
29
36
212.2
184.7
27.5

Figure 1: GEF Funding by Focal Area

Multiple Focal Areas

5%
POPs
Ozone

0%
2%
Land Degradation

0%
Biodiversity

45%




International Waters
39%
Climate Change

9%










8 The GEF funding for the Development of National Biosafety Frameworks and Reversing Environmental
Degradation in the South China Sea and Gulf of Thailand projects is $31.3 and $16.7 million respectively.
This affects the average for all FS projects.

37

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Annex 3
Figure 2: Portfolio by Focal Area and Project Type
Multiple Focal Areas
FS
MSP
10%
Multiple Focal
Areas
Ozone
8%
POPs
14%
Ozone
POPs
0%
Biodiversity
3%
11%
28%
Land
Degradation
Land Degradation
Biodiversity
3%
0%
53%
Climate Change
10%
International Waters
International
38%
Waters
Climate Change
14%
8%
In line with UNEP's role in the GEF and its comparative advantage the portfolio comprises a
large number of global, regional and multi-country projects. The combined number of projects in
these categories represents some 68% of all projects and 88% of GEF funding (See Table 2 and
Figure 3 below). MSPs supporting the implementation of national biosafety frameworks and
projects providing technical assistance and capacity building for phasing-out ozone depleting
substances comprise a significant proportion of single country projects. Interestingly, there are 7
global MSPs addressing issues in all focal areas, with the exception of ozone depletion.
Table 2: Project Coverage

No. of Projects
GEF Funding (US$millions)

Total
FP
MSP
Total
FP
MSP
Global
10
3
7
22.5
15.8
6.7
Regional/sub-regional
20
9
11
72.5
63.6
8.9
Multi-country
14
10
4
92.5
88.7
3.8
Single Country
21
7
14
24.7
16.6
8.1
TOTAL
65
29
36
212.2
184.7
27.5














38

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Annex 3
Figure 3: Project Coverage
Project Coverage
GEF Funding
100
25
Multi-country
Regional/su
Single
90
b-regional
Country
Regional/sub-
80
20
regional
Multi-
70
country
60
15
50
Global
Single
40
10
US$ Million
Global
Country
30
Number of Projects
20
5
10
0
0
Table 3 and Figure 4 show the geographic distribution of the portfolio. The figures for each
region represent the number of regional and single -country projects under implementation.
Country participation in muti-country initiatives is not accounted for in the total for each region.
Europe and the CIS has the largest number of projects as a result of the concentration of ozone
initiatives in the region. Africa follows with 13 projects, and Latin America & the Caribbean with
11 projects. The largest share of GEF resources corresponds to the LAC region (19%), followed
by Africa (12.3%). It is worth noting that the LAC region has a significant IW portfolio
comprising 5 FPs with a total cost of $33.8 million or 82% of GEF resources in the region.

Table 3: Geographic Distribution

No. of Projects
GEF Funding (US$millions)

Total
FP
MSP
Total
FP
MSP
Africa
13
3
10
26.3
19.0
7.3
Latin America & the Caribbean
11
6
5
41.1
37.1
4
Asia and the Pacific
3
1
2
18.4
16.8
1.6
Europe and the CIS
14
6
8
11.5
7.4
4.1
Global and Multi-regional
24
13
11
114.9
104.4
10.5
TOTAL
65
29
36
212.2
184.7
27.5






39

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Annex 3
Figure 4: Portfolio by Region
Portfolio by Region - Number of Projects
Portfolio by Region - GEF Funding
Africa
Africa
13
26.3
Latin America & the
Latin America & the
24
Caribbean
Caribbean
Asia and the Pacific
41.1
Asia and the Pacific
11
114.9
Europe and the CIS
Europe and the CIS
18.4
3
Global and Multi-regional
Global and Multi-regional
14
11.5

II. Portfolio Performance
Project ratings by UNEP were generally based on the 4 points scale system in the GEF Secretariat
Guidelines for the PIR 2005: highly satisfactory (HS), satisfactory (S), marginally satisfactory
(MS), and unsatisfactory (U). However, a number of project task managers provided intermediate
ratings (S to HS and MS to S) for several projects and it was therefore decided to maintain these
ratings rather than try to translate them to the 4 points scale system. Figures 5 and 6 below
include the six rates.
The majority (80%) of projects in the 2005 portfolio are reaching their objectives, with 52
projects rating satisfactory (S) or above. Fourteen projects were rated highly satisfactory (HS) and
38 projects satisfactory (S)9. Nine projects were found marginally satisfactory (MS) vis-à-vis
progress in meeting their development objectives, while 1 project was found unsatisfactory (U)10.
Three projects were not rated, one of which is undergoing a terminal evaluation and the other two
because it was felt that available information was not sufficient to establish the level of
accomplishment of development objectives. The focal area sections in the Overview Report
provide additional details and analysis.
The final ratings of 9 projects which underwent terminal evaluations during the period are as
follows: 1 project rated HS (Integrated Management of Land Based Activities in the Sao
Francisco Basin); 2 rated H/HS; 3 rated S; and 3 rated MS/S.
When project PIR ratings are compared with those of the last two years, the percentage of the
portfolio rated as HS slightly decreased between 2003 and 2004 from 24% to 18%, and increased
again this year to 21%. On the other hand, the number of projects rated MS for achievement of
development objectives increased from 3 projects rated MS in 2004 to 9 projects (14%) in 2005.
This reflects efforts to applying the project rating criteria in a more stringent and consistent
manner across the various focal areas and projects.
It should be noted that there usually is a correspondence between rates of "progress in achieving
Development Objectives (DO)" and ratings for "Implementation Progress (IP)". However, there
are situations in which although a project may be progressing satisfactorily, objectives may not be

9 We include here projects which were rated MS/S and above. Projects rated MS are excluded from this
count.
10 The project rated Unsatisfactory is part of the Ozone portfolio. Chapter IV in the complete PIR FY05
Overview Report provides additional information on the reasons for this rating.

40

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Annex 3
fully met by the time the project comes to a close. An example of this situation is the Biodiversity
Indicators for National Use project that has made steady progress in its implementation (and was
therefore rated HS for implementation progress) but does not seem likely to achieve a key
oucome of the project ­ i.e., the wide application of the indicators ­ within the planned
timeframe, resulting in a DO rating of only MS/S.
Among 52 projects that were also reviewed in PIR FY04, 32 maintained the previous rating (a
majority with S ratings), 12 improved and 8 projects received a lower rate.
The small size of the portfolio and the uneven distribution of projects across the various regions
do not allow for a conclusive comparison of project performance between regions. Figure 5
should therefore be interpreted with caution, particularly the column for Asia, because there are
only 3 projects in this region. The largest proportion of projects rated HS (after Asia which has 2
out of 3 projects rated HS) corresponds to Europe and the CIS. The largest proportion of projects
rated MS are in Africa, almost 30% of the overall portfolio in this region. Latin America and the
Caribbean and the Global category have the smallest percentage of projects rated MS. Given that
there is only one project rated unsatisfactory it would be wrong to conclude that Europe and the
CIS have the largest percentage of least performing projects.

Figure 5: Ratings by Region
DO Ratings by Region
100%
HS
80%
S/HS
60%
S
40%
MS/S
MS
20%
U
0%
Africa
Latin America
Europe and
Asia
Global and
and the
the CIS
Multi-regional
Caribbean

Figure 6 summarizes the ratings by focal area. Again, this table should be interpreted with caution
given the uneven distribution of projects across focal areas. The number of projects for each
rating are shown in the columns of figure 6.










41

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Annex 3
Figure 6: Ratings by Focal Area
100%
3
1
2
1
2
80%
1
1
2
U
60%
2
MS
11
6
MS/S
5
4
S
40%
1
S/HS
2
1
HS
20%
8
3
1
1
2
1
0%
POPs
Ozone
Biodiversity
Multi-focal
Climate Change
Land Degradation
International Waters

When PIR ratings are compared with the overall rating of terminal (or end-of-phase) evaluations
completed in FY05 there seems that the disconnect is not significant. In 4 cases the evaluators
reached the same conclusions as the UNEP GEF task managers concerning overall performance
(2 projects rated S and two HS). In 3 cases project rates were slightly downgraded by the
evaluators (1 project from S to MS and 2 projects from S to MS/S). Finally in one case the
evaluator gave a slightly higher rating than that of the task manager (from S to S/HS). Given the
small sample of projects it is difficult to assess whether this result indicates a trend towards
improving consistency of ratings. UNEP intends to continue monitoring the "disconnect" or
deviation between PIR ratings and evaluation ratings with a view to improve its project
monitoring system.

III. Portfolio Management and Monitoring and Evaluation
In 2003 DGEF established the Divisional Review and Oversight Committee (DROC) and the
Annual Review Meeting (ARM) to strengthen portfolio quality, management and oversight.
During 2005 the DROC met consistently to review new proposals to ensure quality of project
submissions. The oversight function initially assigned to this large body of professional staff has
now being vested in the DGEF Senior Management Team composed of the Director and acting
Deputy Director of the Division, the Portfolio Manager, the Focal Area Senior Programme
Officers, and the head of the fund management section. This team also has an active role in the
project-at-risk system. Quarterly reviews of projects in the "at-risk" category will analyze the
situation of each project and will follow up on any risk mitigation and remedial actions identified.
Several changes were made during FY05 to the UNEP GEF monitoring and evaluation
procedures in order to implement the new GEF M&E Policy. The monitoring and evaluation
functions were clearly divided between the Portfolio Manager in UNEP GEF and the Evaluation
and Oversight Unit (EOU) respectively. All evaluation activities are now under the responsibility
of EOU who reports to the Executive Director of UNEP and informs the Governing Council

42

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Annex 3
through the Committee of Permanent Representatives. It was decided that independent project
Mid-term Evaluations would only take place for FPs and for MSPs with durations of 4 years or
more or as the need arises (projects-at-risk, strategic or complex projects, etc.) while for other
projects various participatory mid-term review methodologies would be applied as part of the
monitoring function, and as a tool for adaptive project management.
It should be noted that EOU has prepared a revised UNEP Evaluation Policy. The draft is being
reviewed by senior management before submission to the UNEP Committee of Permanent
Representatives. The revision of the UNEP Evaluation Policy has been an opportunity to integrate
a number of good evaluation practices derived from GEF interventions and also to adjust current
UNEP evaluation practices to evolving international standards including those proposed by the
UN Evaluation Group. As part of this process, the UNEP evaluation rating system with a 5 points
scale (Excellent, Very Good, Good, Satisfactory, Unsatisfactory) has been replaced with a 6
points scale (HS, S, MS, MU, U and HU). This will facilitate comparison of ratings across GEF
implementing agencies. GEF Terminal Evaluations initiated in the first half of FY06 are already
using the 6 points scale rating.
Another evaluation procedure introduced recently is the establishment of criteria to monitor and
evaluate the quality of project terminal evaluations. This is an effort to improve quality at all
levels of the M&E processes in the organization. The system builds on the GEF guidelines for
conducting terminal evaluations. Independent evaluators are informed about these criteria at the
beginning of their assignment so that they understand the parameters by which their work will be
evaluated (e.g., completeness of the report vis-à-vis the terms of reference, coherence between
evaluations findings and conclusions, recommendations and ratings, quality of evaluative
evidence, etc.). The "evaluation quality assessment" forms completed by EOU are sent along with
the project terminal evaluation report to GEF OE. The evaluation quality assessment is also a tool
to improve the roster of evaluation consultants maintained by EOU because it provides the means
to assess the work of consultants in a more comparable, objective and transparent manner.
The third ARM took place at the end of October 2005. It brought together DGEF professional
staff including project Task Managers out-posted in the various regions, the Chief and staff of the
UNEP Evaluation and Oversight Unit, and UNEP professionals from various divisions involved
in GEF project implementation. The team leader of the GEF Third Overall Performance Study
(OPS3), the Chief of the GEF Office of Evaluation, a staff from the GEF Secretariat, and Philippe
Roch (long standing GEF Council member) were special guests and contributed their valuable
experience to the meeting.
Key topics of the ARM was the analysis of findings of OPS3, and planning for the next phase of
the GEF, including implications of the Resource Allocation Framework (RAF) system. The
operationalization of the RAF will bring significant changes in the UNEP GEF programming and
in portfolio management. The outsourcing and relocation of staff to respond to the challenges of
the RAF will also have implications for the operation of the Focal Area task forces and the
DROC.
A partnership session with UNDP took place on the last day. The Deputy Executive Coordinator
of UNDP GEF briefed UNEP staff on UNDP country programming process, and the knowledge
management system among others. Collaboration under the recently signed UNDP-UNEP MOU,
was discussed as well as the IAs experience in implementing joint projects. The recently
approved methyl-bromide phase-out initiative in Eastern Europe jointly implemented by UNEP
and UNDP was presented as a good practice of collaboration.
The M&E session benefited from a presentation by Rob van den Berg on the new GEF M&E
Policy and the future direction of the GEF Office of Evaluation. There was consensus among
ARM participants that the UNEP -GEF M&E system requires further streamlining and revision to

43

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Annex 3
avoid duplication of reporting processes and capturing essential information to guide future
portfolio development and application of lessons learnt. In particular, it was felt that the templates
for project M&E plans need to be revised and that guidance for adequate budgeting of M&E
activities are necessary to assist project proponents and task managers. It was also clear that the
PDF stages should devote sufficient time and resources to establish baselines and develop
feasible and meaningful M&E plans.
The ARM was preceded by a two-days training on project and portfolio management by the
World Bank. The purpose was to familiarize UNEP GEF staff with the project cycle of the WB,
from the country programming stages, through implementation and terminal evaluation, with
emphasis on quality assurance processes, adequate project supervision and risk management.
PROGRESS IN THE IMPLEMENTATION OF THE "PROJECT-AT-RISK SYSTEM"
The UNEP project "Risk Management System" (RMS) defines risk management as the
systematic process of identifying, analyzing and responding to project risk with the objective of
identifying risks before they become problems and of designing and implementing mitigation
measures in project implementation processes. At the project design stage risk factors are
identified and ranked. These include project management risks (internal) such as those related
with the project management structure (e.g., roles and responsibilities of project team) and project
context risks (external) such as political stability, environmental conditions, economic conditions
or other. A risk statement identifying the potential problem (condition and consequence), an
analysis of risk exposure (how exposed is the project) and the actions planned to handle the risk,
including the person(s) responsible for each action and the date(s) by which actions should be
completed form the mitigation plan.
In 2005 all UNEP GEF projects were systematically reviewed to identify risks and the Risk
Management System forms were attached to the individual PIR reports. This is the first year that
all projects complete a risk analysis during implementation stages, following last year's pilot
experience which included only a set of existing projects.
The revised UNEP database (under completion) allows the DGEF management to track a number
of factors (flags) in the project-at-risk system, such as milestone dates, disbursement rates,
frequency of reporting by executing agency, that will facilitate portfolio management.
As mentioned above and as agreed at the ARM, the Senior Management Team in UNEP DGEF
will play a crucial role in the analysis and follow up of risk mitigation measures and remedial
action.
IV. Project Cycle
In response to the GEF Secretariat request to analyze the project cycle, UNEP reviewed last year
the processing time for 28 GEF FPs approved by UNEP between 1997 and 200511 and 57 MSPs
approved by UNEP between 1998 and 2005. The following are the findings of this preliminary
analysis:

11 Exclusions from the analysis are: projects approved during the Pilot phase; projects that became effective
prior to FY1997; co-implemented projects; and those that have been approved by Council but are not yet
approved by UNEP.

44

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Annex 3
1. FULL-SIZE PROJECTS
Analysis of the processing of 28 UNEP/GEF FPs approved by UNEP between 1997 and early
2005 reveals that there has been a steady and significant increase of 54% (749 days to 1157 days)
between GEF approval of a PDFB grant and full-size project approval by UNEP (see cumulative
figures in brackets in Table 4). This is due entirely to an increase in the length of the PDFB cycle:
there has been no significant change over time in the processing of full-size projects after Council
approval (appraisal and internal approval).
Similarly, there has been no significant change in the processing time of PDFBs (GEF approval to
UNEP approval). The increase is attributable to a lengthening in the time given to PDFB
activities (i.e., project preparation). Such an increase in length of PDFB implementation is mostly
due to the need of ensuring strong public and stakeholder participation in project development
and sufficient project quality for work programme inclusion. It also reflects the necessary time to
finalize co-financing agreements.


GEF approval of PDFB grant to approval of FP by UNEP: 1157 days (38 months). This cycle
includes stages as follows:
· Council approval to project approval by UNEP: 369 days (12.1 months), of which 320 days
(10.5 months) for appraisal (Council approval to CEO endorsement) and 49 days (1.6
months) for processing of IA approval: (CEO endorsement to UNEP approval)
· PDFB maturation (approval by GEF of PDFB to approval by Council of FSP): 590 days (19.4
months), which includes: 122 days (4.0 months) for PDFB internal approval (GEF approval
to IA approval); and 90 days (3 months) approximately for FSP review (submission to Work
Program to Council approval)
MEDIUM -SIZED PROJECTS
Analysis of 57 MSPs approved by UNEP between 1998 and early 2005 reveals an average
processing time (GEF CEO approval to UNEP approval) of 110 days (3.6 months). The analysis
reveals differences on a year by year basis, though cumulatively there has been no significant
change since 2000. The annual variations point to a danger in comparing "performance" in one
year against that in another. Between 2003 and 2004, there was a 70% increase in processing time
(96 days to 166 days), but this was due to one extraordinary project that took 557 days between
GEF approval and UNEP approval. 52% of projects have been appraised and approved within 90
days; and 84% within 180 days.
PDFA
Nineteen of the 57 projects had been prepared using PDFA resources. The average time between
approval by UNEP of the PDFA and approval by the GEF CEO of the eventual MSP grant was
636 days (20.9 months).







45

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Annex 3
Table 4: Project Cycle for Full Size Projects
PDFB
Number
PDFB IA
PDFB
FP
FP IA
FP
Year
approval to
of
approval
maturation
appraisal
approval
appraisal/approval
FP
projects
total
effectiveness
97 -
5
113.7
244.8
344.8
39.8
384.6
749.0
2000
*(113.7)
(224.8)
(344.8)
(39.8)
(384.6)
(749.0)
2001
6
88.3
382.5
281.3
69.7
351.0
907.7
(101.0)
(313.6)
(310.2)
(56.1)
(366.3)
(828.3)
207.8
624.4
354.2
48.2
402.3
1289.2
2002
6
(149.5)
(433.2)
(325.7)
(53.3)
(379.0)
(1037.8)
2003
3
114.3
827.3
190.0
17.0
207.0
1148.7
(142.0)
(507.1)
(305.4)
(47.9)
(353.2)
(1061.6)
2004 &
8
76.3
812.5
357.9
50.6
408.5
1378.7
05
(122.3)
(590.4)
(320.4)
(48.6)
(369.0)
(1156.7)

28




* Note: Figures in brackets are Cumulative averages



Table 5: MSP Processing: CEO approval to IA approval

Annual averages:

Cumulative average:

Fiscal Year
No. projects
Total days Av. days
No. projects
Total days Av. days
1998
4
263
65.8
4
263
65.8
1999
3
373
124.3
7
636
90.9
2000
7
934
133.4
14
1570
112.1
2001
7
935
133.6
21
2505
119.3
2002
10
752
75.2
31
3257
105.1
2003
15
1438
95.9
46
4695
102.1
2004
8
1324
165.5
54
6019
111.5
2005
3
251
83.7
57
6270
110.0

For the PIR FY05 UNEP reviewed the elapsed time of 4 FP and 6 MSPs endorsed by the CEO in
FY05 and which have already been approved by UNEP at the time of reporting to check whether
there had been any changes in the average times and trends noted above. The elapsed time for
these projects is presented in Tables 6 and 7 below. In the case of FPs there is an outlier that was
approved as tranche 2 of an earlier project (with only 196 days). If this project is removed, the
average number of days from PDFB approval to effectiveness for the 3 projects analyzed is 1,036
days which is closer to the findings of the earlier study (1,378 days for years 2004 & 2005). The
average number of days from PDFA approval to effectiveness of MSPs in this cluster is 801 days.
There is no baseline for comparing these averages because previous analyses only considered the

46

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Annex 3
elapsed time between CEO approval and IA approval. The average number of days elapsed
between CEO endorsement and IA approval in this group is 71 days, less than the previous year.
Table 6: Elapsed time for FPs endorsed by CEO during FY05
Year FY05 PDFB maturation FP appraisal
FP IA approval
PDFB approval to FP effectiveness
FP 1
506
182
94
782
FP2(*)
0
101
95
196
FP3
843
481
94
1,418
FP4
659
189
61
909
Total days
2,008
953
344
3,305
Av days
502
238
86
826
(*) Desert Margins Programme, Tranche 2
Table 7: Elapsed time for MSPs endorsed by CEO during FY05
Year FY05 PDFA maturation
MSP effectiveness
PDFA approval to FP effectiveness
MSP 1
720
126
846
MSP 2
826
101
927
MSP 3
446
38
484
MSP 4
784
25
809
MSP 5
556
110
666
MSP 6
1,050
27
1,077
Total Days
4,382
427
4,809
Av days
730
71
801


47

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Annex 4



WORLD BANK

PROJECT IMPLEMENTATION REVIEW

FY05






SUMMARY REPORT





May 3, 2006


48

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Annex 4
OVERVIEW
1.
The World Bank Group's GEF approved portfolio 12 at the end of FY05 comprised 288
full sized projects (FSP), 101 medium sized projects (MSPs) and 37 Enabling Activities,
representing grant commitments of US$2.796 billion that are associated with an additional
US$13.8 billion in co-financing. GEF grant commitments increased by 7.5% in nominal terms
over FY04, which was lower than the rate of 13% achieved in that year and the average annual
growth rate of 12% since 1991.

2.
The GEF approved 27 FSPs and 9 MSPs in FY05. The average FSP size declined to $7.2
million compared with $9.1million in FY04 and the ten year average of $10 million. There was a
slight increase in the growth rate of MSP commitments with a 12.5% increase in FY05 compared
with 11% in FY04 but well below the average of 27% between FY01 and FY03 and continuing
what appears to be a longer term decline in MSP use in the Bank. In sum, during the past four
years, though the number of new projects is keeping pace with the longer term yearly average, the
average GEF grant size is falling and total commitments are growing at a slower rate, 9% per
annum, than during the first ten years of the GEF when it grew at 13%.

3.
There were minor changes from FY04 in distribution by Focal Area that were mostly
consistent with trends in recent years. The climate change (39%) and biodiversity (35%) focal
areas continue to have the largest shares of GEF commitment but each declined by one
percentage point since FY04, while the share of international waters increased by one percentage
point to 14% a steady growth from 10% in FY00. The share of projects in the Multi-focal area
had increased in recent years and though there were six additional projects the share remained the
same at 6%. The share of ODS projects also remained unchanged at 5% while land degradation
and POPs projects are just beginning to enter the portfolio (less than 1% each).

4.
The most noticeable change in the distribution by region was a fall in the Latin American
and Caribbean Region's (LCR) share to 20% from 26% in FY04. This was due to delays in
submissions for Council approval as a result of institutional changes in the region. Subsequently,
in FY06, the Region has significantly increased its submissions and should be back to its
historical share. The main gainers were IFC (9%) up by two percentage points and to a lesser
extent ECA (20%) and AFR (16%) both up by 1%. The share of the other regions remained the
same. For MSPs, though LCR continues to have the highest proportion of commitments its share
declined while ECA's again increased.

5.
The Bank's active portfolio13 in FY05 comprised 225 projects (167 FSPs and 61 MSPs)
with total GEF Grant commitments of US$1.46 billion. This was an increase in commitments of
less than 1% over FY04 compared with increases of 5.6% and 3.4% respectively in the previous
two years. The active portfolio reflects the pattern of entries and exits in any given year. During
FY05 the Bank's Board approved 32 FSPs, the highest number since the GEF began (31 were
approved in FY04), while 14 projects closed resulting in a net increase of 18. For MSPs there
were 14 approvals by Regional Management and 19 closures, which resulted in a decline by 5
projects. The portfolio is beginning to mature as 85 FSPs and 41 MSPs have now been completed
and closed.


12 All projects approved by the GEF Council through FY05 and directly managed by the World Bank Group.
13 All projects approved by the GEF Council and Bank Management through FY05, excluding those
cancelled or closed up to the end of the FY.

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Annex 4
PORTFOLIO PERFORMANCE
6.
Eleven indicators have been identified to measure portfolio performance. These are
discussed in each section below and an explanation of each indicator is also provided. Because of
the relatively small number of cases in each year for some indicators, and due to the volatility of
annual results, four year averages are also presented for comparison and in assessing trends. The
relatively small universe of GEF projects also makes disaggregated statistical analysis less robust,
for example at the regional or focal area level, but such results can be indicative of trends. Table 1
presents a summary of these indicators.
PROJECT OUTCOMES
7.
Fourteen projects exited the portfolio in FY05, of which only five were evaluated by IEG
at the time of writing in December 2005. All five were rated in the range of satisfactory
outcomes14, including one which was rated Highly Satisfactory, the Senegal Sustainable and
Participatory Energy Management Project. In comparison, 78% of projects under the Bank's
Sustainable Development (ESSD) Network (environment, rural and social development sectors)
Bankwide were rated in the range of satisfactory in FY05. The net disconnect ratio for GEF
projects was zero, meaning there was no difference between the rating in the final supervision
report and the Independent Evaluation Group (IEG's) evaluation rating. Given the small universe
of GEF projects it is more useful to look at longer term trends.
Table 1
Summary of Performance Indicators for the GEF Portfolio

Indicator
GEF
GEF
GEF
Bankwide
GEF
ESSD
FY03
FY04
FY05
ESSD
Average
Average
FY05
FY02-05
FY02-05
IEG at least
80
80
10015
78
84
78
Satisfactory Outcomes
Net Disconnect
0
0
0
3
0
9
Sustainability Likely
70
78
100
83
80
72
or Highly Likely
Progress towards
93
96
89

88
92
GEO (at least
satisfactory)
Implementation
89
89
89

85
89
Progress (at least
satisfactory)
Projects at Risk
8
11
11
16 (IBRD)
11
14
Commitment at Risk
14
13

na


Realism
100
88
72
na
87

Proactivity
100
80
67
na
89

Elapsed Time:
587
392
499
na
490
NA
Council to Bank
Management
Approval
Elapsed Time: Bank
208
191
150
na
204
NA
Management
Approval to
Effectiveness

14 Includes projects rated moderately satisfactory
15 The number of evaluated exits was small (5) hence the outcome is not statistically robust.

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Annex 4

8.
Eighty five FSPs have been completed since 1997 with seventy six already evaluated by
IEG (MSPs are not evaluated by IEG). Overall, the GEF results are more positive than
comparable sectors and the Bankwide IBRD16 portfolio. Eighty four percent of the 76 GEF
projects evaluated by IEG were rated in the satisfactory range. For projects which closed more
recently, between FY02 and FY05, the average satisfactory rating was also 84% (Table 1 above).
By comparison, the rating in the satisfactory range for projects under the ESSD network was 78%
for the same periods. In the case of the energy sector the satisfactory rating was 86% for FY05 (7
projects only) and 81% for FY02-05. For the Bank as a whole, QAG reported that 76% of
projects achieved satisfactory outcomes in the period FY00 to 04. Since 1991 the averages in the
main sectors in which GEF is engaged were: environment (66%), rural (65%) and energy and
mining (66%). Against this background, GEF results which have been consistently in the 75%
range and now above 80% are encouraging. As part of the portfolio improvement plan for FY06
the results for completed GEF projects will be examined to identify the relevant factors that might
be contributing to their better performance.

9.
By Focal Area, for FY02 - 05, all Ozone projects were in the satisfactory range, 89% of
IW projects, 82% of biodiversity projects and 80% of climate change projects.

10.
The Bank's FY04 Annual Review of Portfolio Performance (ARPP) found the strongest
correlation with outcomes to be Borrower performance in implementation, irrespective of
interaction with other factors. But Bank performance in supervision was also important as this
can lead to timely identification and mitigation of risk. For the GEF cohort, Bank performance
was rated at 79% satisfactory by IEG (Bankwide or ESSD comparable data were not available).
LIKELIHOOD OF ACHIEVING SUSTAINABILITY
11.
According to IEG, sustainability reflects the resiliency to risks of a project as measured
by the likelihood that its estimated net benefits will be maintained or exceeded over the project's
intended useful life.

12.
All the GEF projects evaluated by IEG in FY05 were considered likely to be sustainable.
The four year GEF average of 80% was higher than the ESSD average of 72% for the same
period, but less than the result for energy and mining which was 84%. Post implementation
impact studies carried out by the Bank's GEF team and confirming previous lessons showed the
three most important factors affecting sustainability were:
· finance, whether the project was able to develop sustainable financing streams prior to
closing in order to continue support for the operation
· Government commitment either to continue supporting relevant institutional structures
including provision of staff, to pass supportive policies, or to provide financial resources
· Changes in the overall enabling environment. For example, privatization of a public
utility does not encourage demand side management as public and private goals might
diverge
PROJECTS AT RISK
13.
For FY05, 11% of GEF projects, representing 11 projects, were at risk of not achieving
their objectives. This is the same proportion as in FY04 and is also identical to the four year
average for FY02-05. Six of the projects at risk in FY05 were in AFR, representing 27% of the

16 Includes IDA.

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Annex 4
portfolio, three in LCR, one each in ECA and SAR and none in MNA or EAP. Among Focal
Areas, four were in IW, four in biodiversity, two in climate change and one in MFA. Bankwide
for FY05, 16% of projects in the IBRD portfolio were at risk and the FY02-05 GEF average of
11% is less than the ESSD network average of 14% for these four years.

14.
To some extent, the pattern of GEF projects at risk reflects the wider context in which
GEF operates. For example, in FY05 25% of all Bank projects in AFR were at risk while only 6%
of projects in EAP were at risk. The ARPP also found the Africa Region to have the highest
proportion of projects at risk between FY00-04, though for the GEF portfolio this high risk in
AFR did not translate into more unsatisfactory outcomes. Furthermore, the countries which
topped the list of projects at risk in the IBRD portfolio (data for FY04) are also represented in the
FY05 GEF cohort: Nigeria (53%), Argentina (37%), Uganda (32%), as well as Brazil (17%).17

15.
A common characteristic in these countries is poor country environment including
macroeconomic crises and political instability. In addition the following are the main underlying
factors which directly contributed to projects at risk in the GEF portfolio:

· weak implementation capacity, which is reflected in procurement and disbursement
delays.
· low levels of government commitment reflected in slow decision making such as in
provision of counterpart funds or in making key appointments .
· complex projects for example involving innovative financing instruments that are
difficult to implement, multiple executing agencies or too many components
· poor M&E systems or limited use of the system, resulting in an inability to quickly
identify and tackle implementation issues
· regional (IW) projects which exhibit many of the above features
REALISM AND PROACTIVITY
16.
The quality of supervision is also related to the degree of realism in project ratings. The
realism index is defined by QAG as the ratio of actual problem projects to total projects at risk
(i.e., the extent to which task teams themselves identified projects at risk of not achieving their
objectives). The realism index for FY05 was 55% which is a significant fall from the previous
three years (100%, 100% and 80% for FY02, FY03 and FY04 respectively).

17.
The proactivity index is defined as the proportion of projects rated as actual problem
projects twelve months earlier that have been upgraded, restructured, suspended, closed, partially
or fully canceled, or located in a post-conflict country with a Board-approved transition strategy.
For FY05 the proactivity index fell slightly to 79% from 80% in FY04 and was lower than the
longer term FY02-05 average of 89% which means that greater attention to adaptive management
is required.
PROGRESS TOWARD ACHIEVEMENT OF GLOBAL ENVIRONMENT OBJECTIVES
18.
Full Sized Projects : The significant change in FY05 was the introduction of the six point
rating system. As a result several projects which in previous years would have been rated fully
satisfactory were rated moderately satisfactory (20% in FY05) but considered by the Bank as in
"the range of satisfactory." Thus the proportion of projects in the range of satisfactory was 89%

17 Additionally, Ghana, Georgia and Turkey which placed 4th, 6th and 8th in the ARPP study, though not in
the FY05 GEF cohort, were in the FY04 GEF cohort.

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Annex 4
compared with 92% to 96% in the previous three years. All Regions achieved ratings higher than
80%. By Focal Area, biodiversity and climate change projects exceeded 90% satisfactory but IW
projects achieved only 73%.

19.
Medium Sized Projects : The results for MSPs were similar to those found for FSPs with
87% satisfactory.
IMPLEMENTATION PROGRESS
20.
Full size projects: The change in pattern of results for implementation progress is
similarly affected by the introduction of the new rating system. Ninety percent of projects were
rated in the satisfactory range while the proportion of projects rated in the unsatisfactory range
was slightly lower (10%) than in FY04 (12%).

21.
Medium Size Projects: For MSPs, a slightly lower proportion than for FSPs, 88%, was
in the satisfactory range.
ELAPSED TIME ANALYSIS: FULL SIZED PROJECTS
GEF Council Approval to Bank Management Approval

22.
The volatility in the annual average elapsed time is again visible in the results for FY05
where the time between GEF Council Approval and Bank Management Approval increased by
about 100 days or 25%, to 490 days, but is close to the five year average of 502 days and
continues the alternate rise and fall pattern of the previous six years. This pattern was explained
in a study of elapsed time in FY05 based on analysis of five years data which showed that the
annual results are clearly a function of the degree and number of outliers in any given year.

23.
Moreover, the FY05 study showed that although there was potential for saving up to 3
months through a reduction and/or greater efficiency in the GEF processing steps, substantial
savings would require scaling back the design requirements for GEF project work program entry.
Furthermore, the major problems that contributed to delay were country specific. In FY05, the
main reasons for long elapsed time were related to limited capacity in recipient governments to
manage project preparation, changes in institutional arrangements, and the time it takes to secure
co-financing packages. The new GEF Red Zone strategy which calls for projects to be cancelled
that have received CEO endorsement two years previously and have not been approved by the
GEFIA's Management should lead to a reduction in average elapsed time.

BANK MANAGEMENT APPROVAL TO EFFECTIVENESS
24.
The average time taken for projects to become effective continued the declining trend
since 2002 and fell by 20% in FY05 to 150 days from 191 days in FY04. It is still higher than the
Bank standard of 120 days but is similar to the overall Bank average where about 30% to 40% of
projects are typically above the standard. There are no GEF specific reasons to explain
effectiveness delays.
ELAPSED TIME ANALYSIS: M EDIUM SIZED PROJECTS
25.
MSPs are also characterized by annual volatility in elapsed times. For FY05, the average
preparation time (GEF pipeline entry to Bank Country Management Approval) fell to eight

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Annex 4
months (for 15 projects) from 2.3 years on average for the previous five years (FY01 to 04) when
44 MSPs were approved. The average processing time increased two-fold from FY02 to 04 from
1.7 to 3.4 largely due to outliers (see above discussion on FSPs), three projects which each took
more than five years to prepare.
RESULTS FROM MONITORING AND EVALUATION STUDIES
POST-IMPLEMENTATION IMPACT STUDY RESULTS
26.
During FY05, the Bank's GEF team completed the post-implementation impact studies
begun in late FY04 of four GEF projects. A cluster of 4 energy efficiency (EE) climate change
projects, completed in or prior to 2000 was selected for the first review of this type: Poland
Efficient Lighting Project (PELP); Mexico High Efficiency Lighting Pilot (ILUMEX); Thailand
Promotion of Electricity Energy Efficiency (TPEEE); and Jamaica Demand Side Management
(JDSMP). The studies were undertaken by independent consultant teams. The preliminary results
were presented in a workshop held in Washington in May, 2005.

Findings

27.
All four projects had objectives of developing DSM capacity, reducing electricity
consumption and GHG emissions, and developing technical and financial program models that
could be replicated.

28.
The results were:

Y
Major market transformation in the residential sector, primarily with respect to lighting,
but also including refrigerators and air conditioners (in Thailand)
Y
No significant transformation in the institutional, commercial or industrial sectors,
despite having targeted those sectors in Thailand and Jamaica
Y
Significant and sustainable energy savings and GHG emission reductions associated with
the transformation of the residential markets
Y
Significant program replication and extension, both in the countries themselves and in
surrounding countries
Y
Some development of capacity for DSM and energy efficiency within government
institutions but with moderate to significant gaps remaining
Y
Significant benefits for consumers in terms of cost savings and improved product quality
Y
Significantly enhanced opportunities for distributors and retailers of energy efficient
equipment
Y
Significantly improved competitiveness of manufacturers (in Thailand only)
Y
Small contribution to the integration of energy efficiency objectives into energy policies
Y
Minimal to modest contribution to the mainstreaming of global environmental issues into
energy policies
Y
Modest contribution to the development of procedures and tools needed to for global
flexibility mechanisms such as CDM/JI.

29.
Key features and impacts of the four projects are summarized in Table 2 below. As
shown, three of the four projects were implemented by the countries' power generating utilities
(publicly-owned), with the exception being Poland. All four projects took place in the mid-
1990s, during a period where the Bank/GEF favoured support for DSM projects (since then, DSM
projects have generally been rejected in favour of market transformation projects). On a cost per

54

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Annex 4
tonne basis, three of the projects were clearly successful, with the exception being Jamaica.
Conclusions and lessons learned are discussed in the Bank's PIR report available on line.



Table 2
Overview of Project Features and Impacts

Aspect
PELP
ILUMEX
JDSMDP
TPEEE
Implementation
Netherlands EE
CFE (Main Electric
JPS (Main Electric
EGAT (Main
Entity
Lighting (NECEL)
Utility)
Utility ­ now
Electric Utility)
Privatized)
Timing
1995-1998
1995-1998
1994-1999
1993-2000
World Bank/GEF
$5M
$10M
$3.8M
$9.5M
Contribution
Total Program Cost
$5M
$23M
$9.85
$59.3M
GHG Reductions
0.53 Mt
0.76 Mt
0.014 Mt
5 Mt
(Direct)
($10/t)
($30/t)
($700/t)
($12/t)
GHG Reductions
3.6 Mt
5.0-9.0 Mt
0.2-0.3 Mt
27-45 Mt
(Total)
($1.40/t)
($2.50/t - $5/t)
$33/t - $49/t
($1.30-2.20/t)

STOCKTAKING ANALYSIS OF M EDIUM SIZED PROJECTS

30.
The overall objective of this study was to review the performance and impact of MSPs in
order to assess their value added to the Bank's agenda for addressing global environmental issues.

Main Findings

Outcomes
· At the time the study was conducted 24 MSPs had been completed and evaluated, of
which, 90%achieved ratings of at least satisfactory for key performance indicators.
Project completion reports almost without exception suggest that MSPs have been a
positive experience for the executing agency, the Bank and project beneficiaries.
However, it should be pointed out that MSPs are not subject to review by OED
consequently self assessments could be overly optimistic.

Bank Regional Approaches
· There is considerable regional variation in how MSPs are used. Two Regions, LCR and
AFR, had specific strategies to develop and implement MSPs. In the case of the former
to work with non-traditional partners. In the case of the latter, to work in countries with
no lending program and to prioritize "environment" on the countries' agenda..

Costs and Time
· Over the last few years the time required and the cost of preparing MSPs has risen in part
due to fixed costs associated with Bank-required financial management assessments and
procurement plan preparation.

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Annex 4
· The average costs to the Bank of managing MSPs are relatively high. The relatively
small size of MSPs (when compared to FSPs) has not resulted in correspondingly lower
management costs.
· Project preparation costs can be lower when more experienced NGOs are involved.

Bank Decentralization
· Costs could be lowered with decentralized MSP management through Bank Country
Offices, which could also facilitate dialogue with non-traditional partners.

Leveraging Additional Resources
· MSPs have proved to be an effective financing tool to leverage additional project funding
from other donors, government, NGOs and the private sector. Having the Bank as the
implementing agency has often been a magnet to attract more interest and resources.

Strategic Purpose
· MSPs often serve a broader strategic purpose for the Bank (i.e. engaging non-traditional
partners such as NGOs, working in countries with no lending program such as South
Africa, prioritizing environment on the countries' agenda, paving the way for a larger
project)

Capacity Building
· Building NGO capacity which can lay the groundwork for participation in larger projects.
· Bank Task Teams provide a high level of technical competence in the GEF focal areas
and provide good examples in LCR of working well with NGOs including those
representing indigenous people.
· Most MSP executing agencies had little or no experience doing business with the Bank.
As a result Bank requirements related to procurement and financial management were
initially difficult to grasp. But learning these had a positive impact on these agencies as
institutional capacity was built.

Trends
· The declining trend in using the MSP modality of support is likely to continue, although
the introduction of the RAF could result in a change in the business model for countries
with small allocations. Cost and staff time considerations have been the principal reasons
for the decline in MSPs.
· Moving forward, while MSPs will not be developed in large numbers in any Region
including the IFC, most managers do not want them eliminated from Bank operations and
expect to continue to use them when circumstances warrant.

Other MSP Advantages

· MSPs are Flexible . It is relatively easy to make design changes during implementation
which helped many MSPs achieve desirable and/or different outcomes.
· MSPs are less complex. MSP objectives tend to be less complex and more targeted
which may be an important contributing factor in their overall success.
· The results of MSPs can be used as leverage in engaging governments in policy dialogue.
· Allows the Bank an "entry point" into countries with no lending program and helps to get
"environment" on the country's agenda
· Allows the Bank to participate in operations where small projects are deemed appropriate

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· Allows the Bank an opportunity to work with non-traditional partners (NGOs, indigenous
groups etc.) at the community level.
· MSP results have potential to be "scaled-up" into larger Bank or Bank/GEF operations.
· High probability of achieving "satisfactory" results gives the Bank a positive profile at
the grass-roots level.

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FOCAL AREA SUMMARIES
CLIMATE CHANGE
Portfolio Status

31.
There are 17 OP 6 (Renewable Energy), 9 OP5 (energy efficiency) projects; 1 OP11
(transport) project, 4 STRM projects and 1 OP 7 project. While 79% and 78% of projects were
rated at least satisfactory on GEO and IP respectively, the difference from the FY04 results is
accounted for by the new MS category. The proportion of projects at risk, 12.5% was little
different to the result for the overall GEF portfolio, which was 13%.

32.
The implementation of projects under the OP 5 is satisfactory as demonstrated in the
portfolio review. In particular, the role of GEF in developing financial mechanisms for EE is
particularly noteworthy. The Op 6 portfolio under implementation suggests that the GEF is
playing a key role in the design of comprehensive rural electrification programs that involve both
traditional grid-extension approaches as well as innovative off-grid approaches. The GEF
supported off-grid programs have been particularly successful in Asia, where programs in
Bangladesh, Sri Lanka and China continue to show strong progress in renewable energy market
development.

33.
In response to council concerns over the slow progress of the Solar thermal projects, the
World Bank completed a review of its Solar thermal portfolio which includes four projects in
Egypt, Morocco, Mexico and India. Each project has encountered significant delays. The report
found that solar thermal electricity technology is worthy of continued GEF support. The benefits
of a successful industry, particularly for developing countries, are significant. The technology is
not new, but stalled in its development path. All required technology elements are essentially
already in place. The major outstanding issue is the need for cost reduction, and this study
concludes that there is no fundamental reason why the technology could not follow a similar cost
reduction curve to wind energy and eventually be cost competitive. However robust, long term
support mechanisms will be required.
INTERNATIONAL WATERS
Overview
34.
The IW portfolio for PIR analysis, which comprises 17 Full-sized projects and 3 MSPs,
reflects two basic models to improve governance of trans-boundary water resources: (1) River
drainage basin model which finances national and sub-national projects in riparian countries
through Investment Facilities attached to larger Strategic Partnerships (Black Sea/Danube
Nutrient Reduction Model) and (2) Regional, often `foundational' programs consisting of highly
coordinated and jointly implemented activities among riparian or littoral states aimed at
protecting or rehabilitating trans-boundary aquatic ecosystems.

35.
The overall performance is 73% satisfactory on both progress towards achievement of
global environment objectives and implementation progress, which is much lower than the
overall GEF portfolio average of approximately 90% for several years. Four IW projects closed
subsequent to the FY04 PIR; OED reviews for all report satisfactory outcomes.

36.
The projects at risk (25%), is also relatively high for the IW focal area, compared with
11% for the overall Bank-GEF portfolio. They are at risk mainly due to implementation delays
resulting from slow release of counterpart funds, procurement delays and weak management

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performance. However, recent key management attention paid to each of these four projects
holds promise for what are seen as non-systemic bottlenecks to improving performance in the
near-term.

37.
Projects continue to show strengths in enabling policy reforms through legal agreements
(Lake Ohrid), contributing to measurable and discrete pollution reduction (Danube / Black Sea
country-specific interventions), and dialogue on upstream riparian inclusion (Senegal and
Mekong). Considerable progress has been made in fostering inter-project, and inter-
implementing agency coordination in the case of the Western Indian Ocean and Argentina ­ La
Plata regional portfolios. Areas of challenges continue to be in sustaining government
commitment to GEF development objectives (Bulgaria Wetlands and Georgis ARET) and
delivering needed institutional strengthening and concomitant reforms (Niger and Lake
Chad).
BIODIVERSITY
Performance.
38.
In common with the overall GEF FSP portfolio, the introduction of the six point rating
scale introduced greater realism in the ratings of biodiversity projects. In the range of satisfactory
outcomes the ratings for progress toward achievement of global environment objectives (GEO)
and implementation progress (IP) in FY05 were 91% and 85% respectively compared with 90%
for both categories in FY04. But the new category of marginal satisfactory (MS) accounted for
24% for each indicator. It is not clear whether the effect of this change will be to bring more
scrutiny to the projects now falling in the MS category, together with those rated at risk. There
were four projects at risk representing, 12% of projects in the biodiversity portfolio.
PORTFOLIO IMPROVEMENT PLAN
39.
During the past year the Bank-GEF team continued to emphasize the importance of
monitoring and evaluation and provided training for task teams. This is a continuing activity and
although some improvements occurred, greater success depends on complementary efforts on the
part of the Bank as a whole. The two studies reported above (on impacts and on MSPs) were part
of an M&E thrust to provide useful feedback that would help in strengthening the portfolio. Post
implementation impact studies are now underway for four biodiversity projects in Ecuador and
Uganda, (reports in draft), Bhutan and Indonesia (fieldwork pending).

40.
The Portfolio Improvement Plan for FY06/07 will be developed following the inter-
agency PPR consultations. However, the following items have already been identified for follow
up: · M&E will again receive emphasis, including provision of training aimed at upgrading the
skills of thematic specialists and GEF Regional Coordinators to enable them to more
effectively review project M&E plans.
· Efforts to monitor proactivity more closely are also underway to ensure that task teams
actively attempt to improve the status of projects at risk through adaptive management.
Teams will be required to report on a regular basis on progress being made.
· Coordinate with an on-going review of the EAP GEF portfolio to identify reasons for the
high rate of unsatisfactory outcomes for completed projects in the region
· Undertake a thematic based analysis of the ICRs, and OED evaluations of the completed
FSPs as well as completion reports for MSPs to identify specific outcomes and lessons
learned
· Complete the post-implementation impact assessment of biodiversity projects.

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