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.30/4
November 2, 2006
GEF Council
December 5-8, 2006

Agenda Item 8




EVALUATION OF THE EXPERIENCE OF
EXECUTING AGENCIES UNDER EXPANDED
OPPORTUNITIES IN THE GEF

SUPPORTED BY THE EVALUATION OFFICES OF THE EXECUTING AGENCIES OF THE
GEF

(Prepared by the GEF Evaluation Office)

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Recommended Council Decision


The Council, having reviewed document GEF/ME/C.30/4 Evaluation of the Experience of
Executing Agencies under Expanded Opportunities in the GEF and the management
response (GEF/ME/C.30/5) takes note of its recommendations and requests the GEF
Secretariat and the GEF agencies to collaborate:
a. to take immediate action to involve the Executing Agencies consistently in GEF
policy and strategy development; and
b. to provide a "level playing field" for Implementing and Executing Agencies.
The Council requests the GEF Evaluation Office to report through the Management Action
Record on the follow- up to this decision. Council notes that management has proposed
specific steps to implement these decisions in GEF/C.30/9, Roles and Comparative
Advantages of GEF Agencies, and agrees to review those proposals under that agenda
item.
The Council requests the Evaluation Office to initiate a longer term process of assessing
the GEF's core partnership philosophy and the consequences of the GEF's network
structure with a view to including its findings in the Fourth Overall Performance Study.

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Table of Contents

EXECUTIVE SUMMARY...................................................................................................................1

1. INTRODUCTION
...................................................................................................................3

2. SCOPE , METHODOLOGY AND PORTFOLIO OVERVIEW ................................................................4

3. CONTEXT AND RECENT DEVELOPMENTS ....................................................................................5

4. FINDINGS AND CONCLUSIONS....................................................................................................7

5. RECOMMENDATIONS ...............................................................................................................10

6. ISSUES FOR THE FUTURE..........................................................................................................12




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EXECUTIVE SUMMARY
1.
The participation in the GEF of other agencies than the Implementing Agencies (IAs)
was foreseen by the GEF Instrument at the outset. Seven Executing Agencies have been
granted access to GEF funding within their agreed scope for GEF operations , in 1999 and
2003, with the aim of increasing the capacity to prepare, implement, and mobilize resources
for global environmental projects.
2.
The Policy Recommendations for GEF-4 noted that significant potential for enhancing
the involvement of these agencies remained. This evaluation identifies key barriers to the
involvement of the Executing Agencies and provides related recommendations . The
evaluation focused on process issues and on quality at entry of project proposals as well as on
current levels of involvement of the Executing Agencies in the GEF, and made full use of
information from the Joint Evaluation of the GEF activity cycle and modalities.
3.
The Executing Agencies' participation in the total project portfolio of the GEF-3
replenishment remains at a rather modest share of 7.9 % for all seven Executing Agencies
combined and including both direct and indirect access involvement. There are, as of January
2006, 38 approved projects with Executing Agency involvement, including 18 projects under
direct access.
4.
This evaluation reconfirms findings by past reviews that all the Executing Agencies
have the relevant mandates and possesses technical capabilities to work on environmental
matters. It finds that the quality of Executing Agency projects proposed for inclusion in the
GEF Work Program is on par with internationally acceptable quality standards. The ability of
the Executing Agencies to source and ensure co-financing for GEF initiatives follows the
same pattern as for the Implementing Agencies.
5.
The lack of involvement of the Executing Agencies in development of new policies,
strategies and programs adds to the difficulties that the Executing Agencies face when
preparing proposals for new projects. Furthermore, Executing Agencies face a lack of an
incentive structure and budget allocations for their enhanced participation. The current low
level of involvement of the Executing Agencies in the GEF curtails the achievement of the
goals of the policy for Executing Agencies with Expanded Opportunities in the longer run.
6.
The evaluation reached the following overarching conclusion:
(1) The Executing Agencies with Expanded Opportunities face structural constraints
in the GEF.
These structural constraints are at two levels:
(2) The Executing Agencies are not involved as equal partners in the preparation of
new GEF policies, strategies and programs and in management of the GEF
portfolio.
(3) There is no "level playing field" for the Executing Agencies when preparing
project proposals.
7.
The evaluation provides two recommendations :
(1) Immediate action can be taken to involve the Executing Agencies consistently in
GEF policy and strategy development and decision making.

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(2) The interaction with recipient countries and the preparation of project proposals
should provide a "level playing field" for Implementing and Executing Agencies.
8.
The Executing Agencies should be invited to participate in the Executive Coordinators
meetings. No other decision making entities should be set up parallel to existing ones to avoid
any future transparency issues regarding decision making processes. Care should be taken
that interactions on the RAF are fair to all partners in the GEF and all partners are invited to
take part in consultations.
9.
The Joint Evaluation on the GEF activity cycle and modalities recommends an
overhaul of the current activity cycle and modalities of the GEF. In this overhaul, care should
be taken to remove the barriers and constraints that Executing Agencies face when preparing
project proposals. Executing Agencies with direct access in only one focal area should
receive direct access to other focal areas based on their comparative advantage. The role of
the Executing Agencies in cases of indirect access through joint projects should be recognized
and made explicit and quantified in project documentation and the GEF database.
10.
In addition, the evaluation also recommends that the GEF should set in motion a
longer term process of assessing its core partnership philosophy and the consequences for the
structure of the GEF, including a final assessment of these issues in the Fourth Overall
Performance Study. The evaluation raises the question whether the GEF would benefit by
opening up to other agencies that have an established track record in collaborating with the
GEF through the Implementing Agencies. However, any "opening up" of the GEF would
have to be handled in a different and less bureaucratic manner than has been done for the
seven Executing Agencies, and take account of increased requirements for fiduciary standards
which will pose challenges for a future involvement of new partners.
11.
Some issues discussed in the evaluation have meanwhile evolved. The CEO has
decided in October 2006 to develop proposals to Council to abolish the corporate budget for
Implementing Agencies ; and instead increase the project fee to 10% for both Implementing
and Executing Agencies, which is expected "to promote level playing field among all GEF
Agencies". Executing Agencies are also to have an "enlarged scope of engagement" with the
GEF, particularly FAO and UNIDO, to reflect their comparative advantages.
12.
The draft report was shared with the Executing and Implementing Agencies for
comments, and discussed at a workshop in New York City in September 2006. Comments
received are included in this final version. Technical papers on several issues support the
evaluation report and can be found on the GEF Evaluation Office website, at www.thegef.org
(choose Evaluation Office, On-going Evaluations and Evaluation of the Experiences of the
Executing Agencies).

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1.
INTRODUCTION
13.
The participation in the GEF of other agencies than the Implementing Agencies (IAs)
was foreseen at the outset1. The Council paper GEF/C.12/10 of September 1998 reviewed the
experience and potential of expanding the opportunities for executing agencies to help
undertake GEF projects. Four reasons were provided for such expansion: a) leveraging
additional resources for the global environme nt; b) increasing the capacity to deliver high
quality projects; c) drawing on diversified ideas and experiences; and d) reducing and sharing
the administrative costs of project implementation, essentially to stabilize the growth of the
corporate budget. At that time collaboration existed between the Implementing Agencies and
the Asian Development bank (ADB), the Inter-American Development Bank (IADB), several
bilateral assistance agencies, NGOs and Foundations. Three options were provided for the
way forward: business as usual, expanding the shared implementation arrangements, and
introducing full responsibility for implementation in selected cases. The costs to the GEF of
the latter option were considered the lowest.
14.
The GEF Council further expanded these opportunities in May 1999 (GEF/C.13/3)
with the aim of increasing the capacity to prepare, implement, and mobilize resources for
global environmental projects. Initially, the regional development banks were included in this
effort. Three UN agencies followed in subsequent years, in light of new focal areas of the
GEF, for which these agencies were considered to have comparative advantages (the
International Fund for Agricultural Development (IFAD): land degradation; Food and
Agriculture Organization (FAO) a nd the UN Industrial Development Organization (UNIDO):
POPs).
15.
The experiences with the Executing Agencies under Expanded Opportunities were
reviewed regularly. An extensive review took place in 2003 (GEF/22/12). Although progress
was noted, the review also concluded that in order to fully exploit the comparative advantages
of the Executing Agencies, the Agencies would need to be able to more directly access GEF
funding for preparation of projects and be able to directly propose projects to Council. On the
basis of this review, the Executing Agencies were granted direct access to GEF funding
within their agreed scope for GEF operations. The four regional banks received direct access
for all focal areas, whereas the three UN agencies were given direct access in the areas in
which they were considered to have comparative advantages. The Executing Agencies would
assume full legal and financial accountability to Council for the projects they implemented
under direct access.
16.
The Policy Recommendations for GEF-4 (GEF/R.4/30, December 1, 2005) noted that
significant potential for enhancing the involvement of theses agencies remained and asked the
GEF Evaluation Office to prepare a review of the experience of the Executing Agencies for
Council consideration in December 2006. In June 2006, the GEF Council confirmed this
request and decided to finance this evaluation as a "special initiative". The Executing
Agencies announced at the Council meeting that they would support the evaluation through
in-kind contributions, ensuring that the evaluation would be given full access to their
experiences. This evaluation aims to identify key barriers to an appropriate involvement of the
Executing Agencies and provide recommendations to enhance the involvement of the
Executing Agenc ies in the GEF.


1 Instrument for the Establishment of the Restructured GEF (Section VI and paragraph 20 (f)), effective July 7,
1994.

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17.
Early 2006 the Secretariat of the GEF reviewed the "Comparative Advantages and
Complementary Roles of the Implementing Agencies and the Executing Agencies of the
GEF" (GEF/C.28/15). The Executing Agencies prepared a joint response (GEF/C.28/CRP.5)
to this review, which noted that both their knowledge and resources were still underutilized by
GEF and recipient countries, and suggested that further steps should be taken to accelerate
their engagement in GEF operations.
2.
SCOPE, M ETHODOLOGY AND PORTFOLIO OVERVIEW
18.
The GEF portfolio of Executing Agencies with direct access is still relatively recent
and thin. This means that the results of Executing Agency involvement in terms of global
environmental benefits could not yet be established in this evaluation. The evaluation focuses
on process issues and on quality at entry of project proposals as well as on current levels of
involvement of the Executing Agencies in the GEF.
19.
This evaluation made full use of the Joint Evaluation of the GEF activity cycle and
modalities regarding the portfolio of the Executing Agencies and information on the
involvement of the Executing Agencies at the country level. By combining the data from the
Joint Evaluation with additional desk reviews and interviews, a comprehensive overview of
issues could be gathered and analyzed.
20.
The evaluation applied a combination of documentation review from a variety of
sources (Council, GEF Secretariat, GEF Evaluation Office, Executing Agencies and
Implementing Agencies), analysis of the Executing Agency GEF portfolio, and semi
structured interviews with key stakeholders, namely the GEF Secretariat, the three
Implementing Agencies and all Executing Agencies (focal points and operational staff) and a
few Council members, to gain insights from their respective perspectives. The evaluation
benefited from the detailed notes on the extensive interviews with stakeholders in the field by
the Joint Evaluation of GEF Cycle and Modalities.
21.
Desk reviews were carried out for a focused quality-at-entry assessment of Executing
Agency projects by perusing the available project documentation against a subset of GEF
Operational Principles and earlier quality assessments. Use was made of earlier quality
assessments, and specifically the M&E quality at entry assessment that was prepared for the
GEF Annual Performance Report 2005. For the latter, a total of 74 full size projects that were
CEO endorsed in FY 2005 were assessed, 68 of these were IA projects and 6 had EA
involvement (equally split between direct and indirect access). Additionally, due attention was
given to the processing of selected projects where Executing Agencies participated in
different capacities, either as a lead agency or contributing to a joint effort.
22.
Participation at the third General Assembly of GEF was useful to conduct interviews
and identify issues affecting the expanded opportunities. On 27 September 2006, a workshop
organized by the GEF Evaluation Office in New York allowed the presentation and discussion
of the first findings of the present evaluation to the Executing Agencies and collect their
reactions and suggestions.
23.
The data on the Executing Agency portfolios was provided by the database of the Joint
Evaluation for which the project data was verified by all concerned Agencies. Nevertheless,
discrepancies may still exist with Agency data, since the establishment of a fully reliable and
up to date GEF project management information system with data reconciliation is still a
work in progress.

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24.
A SWOT analysis was carried out, which identifies the Strengths, Weaknesses,
Opportunities and Threats for an enhanced involvement of the Executing Agencies in the
GEF. This SWOT analysis provided the basis for the formulation of main findings and
recommendations. Supporting documentation is available on the GEF Evaluation office
Website; including technical papers on the historical evolution of the expanded opportunities,
the SWOT analysis, and quality-at-entry and portfolio issues.
25.
There are, as of January 2006, in total 38 approved projects with Executing Agency
involvement, representing both direct access and indirect access projects, the latter including
jointly implemented projects from the Pilot Phase2 through GEF-3. These comprise 18
projects prepared by Executing Agencies under d irect access, as well as 20 projects prepared
by Implementing Agencies with Executing Agency participation but not under expanded
opportunities. The majority of approved projects with Executing Agency involvement
originates from the international financial institutions (the 4 Regional Development Banks
and IFAD) and constitutes about 68% of the number of projects in the portfolio. From the
focal area perspective, 50% of the projects deal with the areas of Climate Change and
Biodiversity, with a relatively e ven distribution of the remainder among Land Degradation,
International Waters, POPs and Multi-focal areas. A large proportion of these projects are in
Asia (37%). Figure 1 gives an overview of the approved projects per Executing Agency
across all GEF Rep lenishment periods and includes jointly implemented projects with
Implementing Agencies. The distribution by focal area and region is also reflected.
Fig. 1 : ExA Portfolio Distribution
Approved ExA projects by Focal Area
Approved ExA Projects by Focal Areas
POPs
13%
Biodiversity
9
24%
Multi-focal
Areas
8
13%
7
3
6
Land
Degradation
5
13%
Climate Change
1
1
International
26%
4
Waters
1
1
11%
3
2

Nos. of FSP & MSP
3
1
2
2
Approved ExA projects by region
3
1
1
1
1
2
2
2
1
1
1
1
1
1
1
1
1
1
1
REG, 7,
AFR, 3,
0
21%
9%
ADB
IADB
IFAD
UNIDO UNDP/ADB
UNDP/UNIDO UNEP/FAO UNEP/IFAD UNEP/UNIDO
UNDP/UNEP/FAO
World Bank/ADBWorld Bank/EBRDWorld Bank/FAOWorld Bank/IADB
UNDP/UNEP/UNIDO
Asia, 12,
LAC, 5,
37%
Biodiversity
Climate Change
International Waters
15%
Land Degradation
Multi-focal Areas
Persistent Organic Pollutants (POPs)

ECA, 3,
CEX, 3,
9%
9%


3.
CONTEXT AND RECENT DEVELOPMENTS
26.
The involvement of the Executing Agencies in the GEF has to be analyzed within a
context of issues that affect them. These issues are partly external (problems in the project
cycle that affect all agencies and the introduction of the RAF) and partly due to delays
occurring in the process of ensuring the legal framework for direct access and enhanced
opportunities.


2 The Costa Rica Tejona Wind Power Project, GEF project id No. 60, was listed under the GEF Pilot Phase and
was jointly implemented by the World Bank and IADB.

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27.
Cycle Delays. The Joint Evaluation has identified increasing delays throughout the
project cycle. This is arguably the single main issue affecting the involvement of Executing
Agencies in the GEF. The Executing Agencies were invited to participate more fully in the
GEF at a time when participation became more difficult for all partners in the GEF.
Consequently, the Executing Agencies had to go through a steep learning curve in order to
make use of the enhanced access. The Executing Agencies are now more confident that they
are conversant with the processing of GEF projects.
28.
Legal Context. Executing Agencies' direct access to GEF financing can be depicted
as a staggered stop-and-go process, whereby Executing Agencies were granted different
levels of direct access to GEF resources at different times and sometimes with substantial
elapsed time between main decisions. The 1992 GEF Assembly encouraged Implementing
Agencies to work with Regional Development Banks on Framework Agreements to enable
them to act as Executing Agencies within the restructured GEF. However, it was not until
May 1999 that the Council granted the four Regional Development Banks (the African
Development bank (AfDB), ADB, the European Bank for Reconstruction and Development
(EBRD) and IADB) direct access for determining project eligibility and for approval of PDF-
B grants. Over three years later, in October 2002, ADB and IADB were granted expanded
access to PDF-A, medium- size (MSP) and full-size projects (FSP), in response to policy
recommendations of the Third Replenishment. Direct access was expanded to the UN
Agencies (IFAD, UNIDO and FAO) and to EBRD and AfDB one year later, in November
2003. The signing of the Memoranda of Understanding and Financial Procedures Agreement
between the Trustee (acting on behalf of the GEF) happened from June 2004 to June 2005,
when all Executing Agencies (except the EBRD) completed the legal requirements to have
direct access to GEF resources. The lengthy process to finalize the signing of the agreements
is mainly attributed to a lack of clarity on what requirements needed to be fulfilled, both for
the MoUs and the Legal Financial Agreements dealing with the fiduciary iss ues.
29.
Challenges posed by GEF-4 and the Resource Allocation Framework (RAF). The
recently introduced Resource Allocation Framework adds impetus to the aspect of country
ownership. However, it is not entirely clear at the moment what criteria are being used to set
the country priorities within the GEF context and to what extent the Country Focal Points
have been made aware of the comparative advantages of all the GEF Partnership Agencies.
The establishment of the new Resource Allocation Framework at country level, while
potentially increasing local ownership, may therefore pose special problems for an increased
participation of Executing Agencies. Given their low involvement so far in the GEF, countries
may perceive their involvement in project preparation as risky and consequently go for the
established Implementing Agencies.
30.
Recent developments. The CEO of the GEF met representatives of the Implementing
and Executing Agencies in Washington, DC, on October 11-13, 2006. The CEO announced
that a proposal will be submitted for Council consideration to enlarge the scope of
engagement with the Executing Agencies, particularly UNIDO and FAO, to reflect their true
comparative advantages. Furthermore, the CEO will propose to the Council that the
Implementing Agencies no longer receive a corporate budget and that project fees be
increased to 10%. According to the meeting, this will promote a more level playing field
among all the GEF agencies. Furthermore, the project cycle will be redefined, taking into
account the findings and recommendations of the Joint Evaluation of the GEF activity cycle
and modalities.


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4.
FINDINGS AND CONCLUSIONS
31.
This evaluation reconfirms earlier findings by past reviews that all the Executing
Agencies have the relevant mandates and possess technical capabilities to work on
environmental matters. Indeed, the four regional development banks and the UN agencies
seem to strengthen the foundation of the GEF Partnership to address emerging strategic
operational needs by drawing on a wider experience base and creating new avenues to
leverage additional resources. It seems that within their regional and/or technical outreach,
they constitute a good match to work with GEF, as evidenced by their institutional capacity to
identify, develop, implement, mo nitor and evaluate projects in their respective niches. All
have representation in the field (national and/or regional) either by own staff or counterparts.
Conclusion 1: The Executing Agencies with Expanded Opportunities face structural
constraints in the GEF
32.
The overarching conclusion from this evaluation is that the Executing Agencies face
two kinds of structural constraints: on the policy and strategic level and on the level of
preparing project proposals. The lack of involvement of the Executing Agencies in
development of new policies, strategies and programs adds to the difficulties that the
Executing Agencies face when preparing proposals for new projects. Furthermore, Executing
Agencies face a lack of an incentive structure for their enhanced participation. There is no
direct access to the GEF corporate budget,3 nor to PDF-A4 imprest accounts. Significant
challenges to a full and equitable engagement with GEF thus remain a hurdle for all
Executing Agencies. Even though some progress has been made, Executing Agencies are still
not fully involved in the major decision making processes, resulting in the perception that
most decisions are made without due consideration of the concerns and viewpoints of the
Executing Agencies.
Conclusion 2: The Executing Agencies are not involved as equal partners in the
preparation of new GEF policies, strategies and programs and in management of the
GEF portfolio
33.
The limited involvement of Executing Agencies in policy and strategy development in
the GEF is largely due to historical precedent since the GEF was originally established with
only the three Implementing Agencies in mind, with budgetary provisions made available to
enable these Agencies to fully take part in the GEF management structures. The GEF has
evolved since that time with the inclusion of the Executing Agencies who all bear cross-
cutting responsibilities in their respective regions and areas of expertise, but the original
consultation and decision making structures remained largely unchanged. This syste mic
constraint results in a sub-optimal and at times strained relationship between the GEF
Secretariat and the Executing Agencies. The involvement of the Executing Agencies in the
strategic development of the GEF has improved in recent times but the lack of budget
allocations to the Executing Agencies for this work hinders their involvement.
34.
Specifically, areas where involvement of Executing Agencies is facing constraints can
be listed as follows:


3 The GEF corporate budget stands at around US$ 3 million for FY06 per IA.

4 See the Joint Evaluation of the GEF activity cycle and modalities.

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· Executive Coordinators Meetings. The Executing Agencies are not included in these
meetings. Agendas and proceedings are not distributed to the Executing Agencies who
are later informed, sometimes verbally, about decisions taken in such meetings.
· Informal meetings. The same applies to ad-hoc meetings between the CEO or the GEF
Secretariat and Implementing Agencies.
· Task Forces and other technical meetings. While in the past Executing Agencies did
not participate in such meetings, they are currently invited, albeit not routinely, to
attend meetings in those focal areas where they have direct access. Participation is
often via teleconferencing.
· Information flows on policy matters. While it seems that such flows have improved,
the issue here is that Executing Agencies are not involved in policy decisions of GEF,
which often affects them.
· RAF. The involvement of Executing Agencies in the RAF has been irregular. While
some agencies have been asked for comments, others were not. The RAF endorsement
letters reflect an imbalance in Agency involvement.

35.
The Executing Agencies have participated through their GEF focal points, operational
staff and evaluation units in the recent GEF Evaluation Office exercises, namely the Joint
Evaluation of the GEF activity cycle and the present evaluation, and were fully involved in
the development of the GEF M&E policy. The Executing Agencies have also been invited to
contribute to the establishment of the new STAP roster of experts by nominating technical
experts and assisting in the identification of expertise gaps in the existing roster. A wider
disparity exists when it comes to the relationship with the GEF Council and the Trustee. The
Executing and Implementing Agencies can only address the Council when so invited. The
rapport with the Trustee appears to be less than ideal given the perceived lack of adequate
guidelines on what and how communication channels are to be used for issues pertaining to
disbursements and financial arrangements, specifically for indirect access projects.
Conclusion 3: There is no "level playing field" for the Executing Agencies when
preparing project proposals
36.
The Executing Agencies' participation in the total project portfolio of the GEF-3
replenishment remains at a rather modest share of 7.9 %5 for all seven Executing Agencies
combined and including both direct and indirect access resources. Furthermore, a breakdown
of this figure shows that more than half of the total approved allocation to Executing Agencies
falls under indirect access. This uneven distribution is a cause for concern from the
perspective of the Executing Agencies as it suggests a lack of recognition regarding the
strategic role they can and are expected to play within the GEF Partnership. The Work
Program amounts approved in GEF-3 for the Executing Agencies as of August 2006 are
depicted in the tables below.


5 This 7.9 % was calculated based on the total allocation for approved projects in GEF-3, including the Council
approvals in June and Aug 2006. The total approved GEF-3 project allocations up to August 2006 stands at
US$ 2,582,247,782 (source: JE database and PMIS). This figure doesn't include the allocations for enabling
activities, only PDF resources and GEF project budgets have been considered. The total approved allocation for
enabling activities in GEF -3 was US$ 143.95 Mi, out of which US$ 11.42 Mi (8%), was allocated to one
Executing Agency, UNIDO.

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Table 1: Overview Direct Access portfolio of Executing Agencies (ExAs) in GEF-3
Work Programs (WP)
Agencies
No. of Projects
Approved WP amounts
Share of total
(in $ millions)
approved WP
amounts (%)

FSP
MSP
FSP
MSP
Total

ADB
4
3
50.56
2.28
52.83
2.0%
IADB
4
1
15.82
1.00
16.82
0.65%
EBRD
0
0
0
0
0
0.0%
AfDB
0
0
0
0
0
0.0%
FAO
0
0
0
0
0
0.0%
IFAD
3
1
19.84
0.64
20.48
0.8%
UNIDO
1
0
2.65
0
2.65
0.1%
All ExAs
12
5
88.9
3.9
92.8
3.6%

Table 2: Overview Indirect Access portfolio of Executing Agencies in GEF-3
(aggregated data)

No. of Projects
Approved WP amounts
Share of total approved
(in $ millions)
WP amounts (%)

FSP
MSP
FSP
MSP
Total

All ExAs
11
2
109.70
2.00
111.70
4.3%

37.
The figures in Table 2 include all joint projects with Executing Agency involvement,
also encompassing projects where arrangements have been worked out that enable direct
access to resources by the Executing Agencies.6
38.
The total participation of Executing Agencies in Enabling Activities in GEF-3 was
also small, amounting to 8% of all approved Enabling Activities. The total approved amount
for enabling activities in GEF -3 was US$143.95 million, out of which $ 11.42 million (8%)
was allocated to UNIDO, the only Executing Agency with an Enabling Activit y portfolio.
This signified a substantial participation in the total share (32%) of approved Enabling
Activities for POPs. The table below gives an overview of UNIDO's participation in enabling
activities.
Table 3: Overview ExA Enabling Activities portfolio in GEF-3 (in million US$)

Total No.
Total Approved
Share of total
Share of total
approved (%)
approved for
POPs (%)
UNIDO
18
$ 11.41
8%
32%

39.
With the RAF in effect, countries were requested to endorse all their project proposals
by September 2006. Although the endorsement exercise is currently under review, its
preliminary results reveal an increasing imbalance in the proposed project distribution among
the 10 agencies. The initial round of proposals for the climate change and biodiversity focal
areas included only 5 Executing Agencies projects, out of 241 (2%), accounting for 3% of the
total country-endorsed allocations. An additional 4% of allocations for joint projects may also
include Executing Agencies, but not under direct access. These figures show no positive
evolution in Executing Agencies' involvement when compared to GEF-3.


6 For example the project WB/IADB ACICAFOC-CCAD: "Central American Indigenous and Peasant
Coordination Association for Community Agroforestry (ACICAFOC) and the Central American Commission on
the Environment and Development (CCAD) "

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40.
The desk review of the Executing Agency project portfolio indicates that the quality of
projects proposed for inclusion in the GEF Work Program is on par with internationally
acceptable quality standards on aspects of monitoring and evaluation, participatory processes,
and other quality dimensions that are also reflected in the operational principles for
development and implementation of the GEF work program.
41.
The ability of the Executing Agencies to source and ensure co-financing for GEF
initiatives follows the same pattern as for the Implementing Agencies. The financial
institutions (the four Regional Development Banks and IFAD) seem to exhibit a greater
leveraging capacity than FAO and UNIDO. This could be related to the fact that GEF funds
are oftentimes used to "soften" loans that in turn provide for the bulk of the co- financing.
42.
The important constraints are the lack of transparency and the resulting
unpredictability, especially with regard to policy shifts and resource allocations, which should
come as no surprise given the lack of information exchanged between the GEF Secretariat and
the Agencies during the approval process. This in turn leads to a heightened sense of
uncertainty since it is not always sufficiently made clear why certain proposals "made it"
while others fell through. This evaluation and the Joint Evaluation ha ve identified that this
lack of transparency revolves around:
· Inadequate and irregular information flow: this pertains especially to the status of
project proposals in the decision making process and the lack of timely guidance and
feedback from the GEF secretariat on queries by the Executing Agencies.
· Overall GEF policies and strategies (such as undisclosed focal area criteria of what
types of projects will be funded at a given time, RAF allocations, policies on
adaptation and CDM).
· Operational policies and procedures (which procedures apply to which types of
projects, definitions and language, the Operations Manual limited to the GEF
Secretariat, access to special funds).
· Project management (project status, tracking in the cycle, actual expenditures,
decisions made, accountability).
43.
As has been pointed out by many recent evaluations, the database of GEF projects is
not reliable. A specific point important for the Executing Agencies is that the database does
not provide full recognition of the role of Executing Agencies when projects are submitted
through an Implementing Agency.
5.
RECOMMENDATIONS
44.
While there are opportunities to enhance the involvement of Executing Agencies, it
seems that there is a structural limit to their participation in the GEF. The Instrument and the
current structure of the GEF are based on the primary role of the three Implementing
Agencies. The question could be raised whether that primary role is still actual and whether
the role of "Implementing Agency" should not be opened up to agencies that have a
comparative advantage to support recipient countries to achieve global environmental
benefits. Such a fundamental rethinking of the way the GEF operates would result in changes
to the Instrument of the GEF, which are not feasible in the short run. In the next section on
"issues for the future", some issues are highlighted which could be considered for further
analysis in the coming years.
45.
The current low level of involvement of the Executing Agencies in the GEF curtails
the achievement of the objectives of the policy for Executing Agencies with Expanded

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Opportunities in the longer run. There is evidence of fatigue of operational staff in Executing
Agencies to work with GEF due to the complexity and timelines of the project cycle and the
unpredictability of financing. Indeed, it is becoming increasingly challenging to justify time
and resources spent on a rather lengthy project development process combined with high
levels of uncertainties surrounding the approval process. This is further exacerbated by
disruptions in disbursements during project implementation as expe rienced during occasional
funding interruptions. The opportunity cost associated with GEF project development is
progressively approaching a point where the operational staff at the Agencies (task managers)
become discouraged and would not deem it worth t he time and effort spent vis-à-vis the
potential benefits an approved project would bring.
Recommendation 1: immediate action can be taken to involve the Executing Agencies
consistently in GEF policy and strategy development and decision making
46.
The Executing Agencies should be invited to participate in the Executive Coordinators
meetings. It is probably not feasible to suddenly increase the participation at such meetings
from 3 to 10 representatives of agencies. Therefore it is suggested to arrange the participation
of the Executing Agencies on a rotating basis. The regional banks could be represented by one
participant and the UN agencies by a second participant. Agendas and minutes for the
Executive coordinators and ad-hoc meetings should always be prepared and distributed to all
agencies and country focal points. 7 No other decision making entities should be set up parallel
to existing ones to avoid any future transparency issues regarding decision making processes.
Furthermore, involvement in current decision making in the GEF may also allow the
Executing Agencies to voice concerns or complaints for which currently they would need to
approach the CEO or the Council.
Recommendation 2: the interaction with recipient countries and the preparation of
project proposals should provide a "level playing field" for Implementing and Executing
Agencies
47.
The Joint Evaluation on the GEF activity cycle and modalities recommends an
overhaul of the current activity cycle and modalities of the GEF. In this overhaul, care should
be taken to remove the barriers and constraints that Executing Agencies face when preparing
project proposals.
48.
Executing Agencies with direct access in only one focal area should receive direct
access to other focal areas based on their comparative advantage as well. With the increased
emphasis on the inter- linkages between focal areas and the linkage between global
environmental benefits and sustainable development, the arguments for keeping Executing
Agencies confined to one specific focal area are no longer as valid. This will entail
renegotiation of the relevant Memoranda of Understanding.
49.
The role of the Executing Agencies in cases of indirect access through joint projects
should be recognized and made explicit and quantified in project documentation and the GEF
database.
50.
Care should be taken that interactions on the RAF are fair to all partners in the GEF
and all partners are invited to take part in consultations.


7 It is recognized that minutes of the Executive Coordinators meeting of September 21, 2006 were so distributed.

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6.
ISSUES FOR THE FUTURE
51.
As noted above, the current structure of the GEF gives a special role to the
Implementing Agencies, which has led to providing these Agencies with substantial corporate
budgets and involvement in crucial decisions of the GEF, such as the selection of the
candidates for Chief Executive Officer and Chairman of the Council. Direct access of
Executing Agencies to GEF funding is in their view hindered by remaining "second class
partner" within the GEF on corporate issues. Whether or not the GEF continues as a
partnership with first and second class partners, or whether it would turn into a more equal
partnership, is an issue that would need to be explored within the Council and would need to
be settled by the Assembly of the GEF.
Recommendation 3: The GEF should set in motion a longer term process of assessing its
core partnership philosophy and the consequences for the structure of the GEF,
including a final assessment of these issues in the Fourth Overall Performance Study
52.
The perception of the Executing Agencies is that the corporate budget provides an
advantage to the Implementing Agencies when preparing project proposals. Meanwhile, the
CEO has decided in October 2006 to develop proposals to Council to abolish the corporate
budget for Implementing Agencies and raise the project fee with a percentage point to allow
all agencies receiving project fees to undertake corporate activities. This poses the challenge
to develop a clear linkage between corporate "fees" and corporate products. Providing
transparency on the uses of the corporate "fee" will reduce the perception amongst partners
that it provides an advantage when preparing project proposals.
53.
It should be recognized that with the current seven Executing Agencies the full
potential of agencies with comparative advantages to be involved in the GEF as equal partner
is not yet realized. Several international agencies have track records as executing agencies
without enhanced opportunities and have the potential to contribute with innovative solutions
to global environmental concerns. For instance, the international atomic energy agency
(IAEA) has fully prepared medium size projects submitted through an Implementing Agency,
one already approved and under implementation. The Organization of American States has
prepared and implemented most of UNEP's international waters portfolio in Latin America.
Several international NGOs, such as the World Wildlife Fund, Conservation International and
The Nature Conservancy have prepared and implemented many GEF projects in the
biodiversity focal area.
54.
This evaluation did not study the experiences or comparative advantages of these
agencies, but raises the question whether the GEF would benefit by opening up even more,
especially to agencies that have an established track record in collaborating with the GEF
through the Implementing Agencies. However, it is also clear from this evaluation that any
"opening up" of the GEF would have to be handled in a different and less bureaucratic
manner than has been done for the seven Executing Agencies. Furthermore, the requirements
for fiduciary standards have since been increased in the GEF-4 policy recommendations,
which will pose additional challenges for a future involvement of new partners.

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