Global Environment Facility
Study of GEF's
Overall Performance
Gareth Porter
Raymond Clémençon
Waafas Ofosu-Amaah
Michael Phillips

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ii Study of GEF's Overall Performance
FOREWORD
At its October 1996 meeting, the GEF Council asked the GEF Senior Monitoring and Evaluation Coordinator
to undertake a study of GEF's overall performance. This is the first study of the restructured GEF's overall
accomplishments. An independent evaluation of GEF's Pilot Phase was organized by the Implementing
Agencies' evaluation departments and completed in 1993.
The main audience for the study, in addition to the GEF Council, consists of the participants at the GEF
Assembly on April 1-3, 1998 in New Delhi. Other audiences are various cooperating partners at the country level,
the secretariats of the conventions for biodiversity and climate change, implementing and executing agencies,
nongovernmental organizations (NGOs), and private enterprises.
The terms of reference for the study was prepared by the GEF Senior Monitoring and Evaluation Coordina-
tor after consultation with Implementing Agency officials, GEF Council members, the secretariats of the conven-
tions for climate change and biological diversity, non-governmental organizations and others in April and May
1997. The terms of reference constitutes Annex 1.
The Senior Monitoring and Evaluation Coordinator recruited the core study team, composed of Gareth
Porter (team leader), Raymond Clémençon, Waafas Ofosu-Amaah, Michael Philips, and Gerardo Budowski. In
addition, another five international and sixteen national consultants were recruited. Their names are listed on the
preceding pages. All team members were selected on the basis of their high competence in requisite fields and their
independence relative to GEF and its projects.
The Senior Monitoring and Evaluation Coordinator also appointed the Senior Advisory Panel for the study.
This consists of experienced and knowledgeable persons from four developing and four industrial countries. The
members are M. S. Swaminathan, India (chairman); Maria Tereza Jorge Padua, Brazil; Brice Lalonde, France;
Hisham Khatib, Jordan; Wakako Hironaka, Japan; Rudolf Dolzer, Germany; Edward Ayensu, Ghana; and Richard
Bissell, United States. The principal objectives of the panel, as laid down in the TOR, are to provide strategic
guidance on the approach and implementation of the study and added assurance that it is complete in coverage
and a fully independent review of the accomplishments of GEF in the areas to be examined. The panel met on June
27 and October 27-29 in 1997 and on January 17, 1998. The panel's statement on the report is appended as
Annex 2.
The team members collected data for the period May(December 1997. Documents were collected from a
wide variety of sources, and meetings were held with all GEF entities, the convention secretariats, and other
international organizations. The study is particularly built on data collected by the core team members in ten
countries: Brazil, China, Egypt, India, Indonesia, Kenya, Mexico, Poland, Russia, and Zimbabwe. Additional
material was collected through smaller studies by local consultants in Argentina, Costa Rica, Côte d'Ivoire, Jordan,
Philippines, and Viet Nam.
Interviews were held in the sixteen countries with council members, GEF Focal Points and other relevant
government departments, implementing and executing agencies, NGOs, research institutions, and private enter-
prises as well as project personnel and stakeholders. Annex 3 lists the institutions and project visited. The
countries and projects studied represent a wide variety of efforts, country contexts, and policies, although they
may not be representative of all the 155 participating countries in GEF and all the variables that surround GEF-
assisted projects. Although desirable, that was not feasible.

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Foreword iii
The first draft study was sent to the GEF Secretariat, Implementing Agencies, and the Scientific and
Technical Advisory Panel (STAP) for comments on December 2, 1997. Their comments were received around
December 10, and the team made such amendments on this basis as it deemed required, especially concerning
factual errors, misunderstandings, and the like.
The second draft was dispatched to the GEF Council, convention secretariats, the sixteen countries, GEF
entities, Implementing Agencies, Senior Advisory Panel, and the GEF-NGO Network on December 19 for
comments. On the basis of the comments received, some amendments were made and the report was finalized on
February 5.
I am truly grateful to all those who participated and contributed to the study, especially in the sixteen
countries. Athough a large number of consultants and informants provided the information on which the study is
based, the views expressed in this final document are those of the authors, who are listed above. These views do
not necessarily represent the views of all team members, nor GEF. The description of GEF in Chapter I.
Introduction, was provided by the Senior Monitoring and Evaluation Coordinator. It is the judgment of the Senior
Advisory Panel that the study represents an honest and independent assessment of GEF. It is my hope that the
report will contribute to improving future endeavors to protect the global environment.
Jarle Harstad
Senior Monitoring and Evaluation Coordinator

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iv Study of GEF's Overall Performance
PREFACE
In the short time that GEF has had to develop since its 1994 restructuring, it has only recently begun to create
a portfolio of projects that reflect its new management structure, programming strategy and project cycle
procedures. It is thus too early to attempt to gauge the success of the GEF in accomplishing its objectives.
Therefore the study is not aimed at evaluating the performance of the GEF in terms of its impact on the global
environment in the four focal areas.
Instead, this study is explicitly directed at a set of issues related to the performance of GEF in terms of
institutions, procedures and policies. Since the restructuring, a number of concerns regarding the GEF's identity,
internal organization and project development procedures have been addressed. Thus, the study team identified
indicators of performance in different areas of activity--from the effectiveness of the GEF Focal Point system in
recipient countries to the effectiveness of the institutional structure to the degree of mainstreaming of the global
environment in the regular operations of the three Implementing Agencies.
The issues analyzed by the study team for the report were specified by the Terms of Reference (TOR) for the
study (Appendix 1). The TOR included a large number of issues related to GEF's overall performance. Unfortu-
nately, the team was unable to address every issue in the TOR due to the time constraints, unavailability of reliable
quantitative data and the inherent limitations of relatively brief country visits. Specifically, the team has not
addressed the adequacy of procedures for drawing and applying lessons from project experience, the efficiency of
GEF in disbursing resources after project approval, or the extent to which GEF has been able to clearly identify
and measure global benefits expected from its projects. The team has made an effort to be explicit about the
limitations of data wherever appropriate.
In most issues analyzed by the study team, the distinction between the Pilot Phase experience (1991­94) and
that of GEF 1 (since the end of 1994) is of critical importance. One way of gauging GEF's overall performance is by
comparing the situation at the end of GEF 1 with that which prevailed during the Pilot Phase. The team has made
that comparison explicitly where relevant. For some issues, however, such as the impact of GEF on country
policies, the distinction between Pilot Phase projects and GEF 1 projects may not be significant, and so it has not
been highlighted.
The team has made a number of recommendations for consideration by the GEF throughout the text. Of
these recommendations, it has identified seven which it regards as being of highest priority. These priority
recommendations are highlighted in the Executive Summary of the report.
The team has summed up its overall evaluation of the GEF's performance in the Conclusions to this report
(Section VIII). In that section, we have been careful to make judgments only upon reflection on the aggregated
findings from each subsection of the report.
Gareth Porter, Team Leader
Raymond Clémençon
Waafas Ofosu-Amaah
Michael Philips

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vi Study of GEF's Overall Performance
TABLE OF CONTENTS
Foreword ................................................................................................................................................ i
Preface .................................................................................................................................................. iii
Acronyms and Initials .......................................................................................................................... ix
Executive Summary ............................................................................................................................. xi
I.
Introduction to the GEF ................................................................................................................. 1
II. Provision of Resources for the Global Environment ...................................................................... 4
A. Introduction ...................................................................................................................................... 5
B. Are GEF Resources New and Additional? .......................................................................................... 5
Conclusions .............................................................................................................................. 6
Recommendations .................................................................................................................... 6
C. Comparison of GEF Funding with All Sources of Financing for the Global Environment ................. 6
Conclusions .............................................................................................................................. 8
Recommendation ...................................................................................................................... 8
D. Leveraging Additional Resources ...................................................................................................... 8
Leveraging Through Cofinancing and Associated Projects ............................................................... 8
Conclusions ............................................................................................................................ 13
Recommendations .................................................................................................................. 13
Leveraging Private Sector Investment ............................................................................................ 14
Conclusions ............................................................................................................................ 17
Recommendations .................................................................................................................. 17
III. Issues at the Country Level .......................................................................................................... 18
A. The Focal Point System in Recipient Countries ............................................................................... 18
Conclusions ............................................................................................................................ 21
Recommendations .................................................................................................................. 21
B. The Requirement for Projects to Be Country Driven ........................................................................ 21
Country-Driven Projects ............................................................................................................... 21
Conclusions ............................................................................................................................ 23
Recommendations .................................................................................................................. 24
C. Contribution of GEF to Awareness of Global Environmental Issues ................................................ 24
Indicators of Knowledge of GEF ................................................................................................... 24
Indicators of Awareness of Global Environment Issues .................................................................. 25
Conclusions ............................................................................................................................ 25
Recommendations .................................................................................................................. 26
D. Stakeholder Participation in GEF Projects ....................................................................................... 26
The Background: Previous Evaluations ......................................................................................... 26
The Policy Framework for Stakeholder Participation in GEF Projects ........................................... 27
Stakeholder Participation in GEF Projects ..................................................................................... 28

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Table of Contents vii
E. Experiences with Stakeholder Participation by Focal Area .............................................................. 29
Conclusions ............................................................................................................................ 30
Recommendations .................................................................................................................. 30
F. Impacts on Country Programs and Policies ...................................................................................... 31
Conclusions ............................................................................................................................ 32
G. Handling of Policies and Activities That Could Undermine Project Success .................................... 32
Conclusions ............................................................................................................................ 34
Recommendations .................................................................................................................. 34
H. Financial Sustainability of GEF Projects .......................................................................................... 35
Climate Change Projects ............................................................................................................... 35
Biodiversity Projects ...................................................................................................................... 36
Conclusions .................................................................................................................................. 37
Recommendations ......................................................................................................................... 37
IV. Institutional Roles and Relations ................................................................................................. 38
A. Mainstreaming of the Global Environment by Implementing Agencies ........................................... 38
Mainstreaming in the World Bank ................................................................................................. 38
Amount of Cofinancing of World Bank GEF Projects and Associated Bank Loans .................. 38
Lending for the Global Environment in the World Bank's Regular Portfolio ............................ 40
Incentives to World Bank Staff to Encourage or Manage Projects with Global
Environmental Benefits ..................................................................................................... 43
Extent and Quality of Integration of Global Environmental Concerns into Sectoral
Lending Strategies ............................................................................................................ 43
Programming on the Basis of Global Environmental Objectives .............................................. 45
Mainstreaming in the International Finance Corporation........................................................ 46
Conclusions ............................................................................................................................ 46
Recommendations .................................................................................................................. 46
Mainstreaming in UNDP ............................................................................................................... 47
Financing of GEF Projects and Association of GEF Projects with Non-GEF UNDP Projects ... 47
Funding of Non-GEF UNDP Projects That Provide Global Environmental Benefits ................ 48
Integration of GEF and Global Environment into Country Cooperation Frameworks ............. 49
Staff Incentives for Work on GEF Projects .............................................................................. 51
Conclusions ............................................................................................................................ 51
Recommendations .................................................................................................................. 51
Mainstreaming in UNEP ................................................................................................................ 51
Conclusions ............................................................................................................................ 53
Recommendations .................................................................................................................. 53
B. Cooperation Between GEF and the Conventions ............................................................................. 53
Guidance to GEF from the Conventions........................................................................................ 53
Conclusions ............................................................................................................................ 56
Recommendations .................................................................................................................. 56
GEF Financing of Enabling Activities ............................................................................................ 56
Conclusions ............................................................................................................................ 57
Recommendations .................................................................................................................. 57
C. Roles, Responsibilities, and Relations .............................................................................................. 57
Using the Comparative Advantages of Implementing Agencies ..................................................... 57
The Implementing Agency "Monopoly" Issue ................................................................................ 58
Conclusions ............................................................................................................................ 60
Recommendations .................................................................................................................. 60

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viii Study of GEF's Overall Performance
Secretariat(Implementing Agency Consultations on the Work Program ........................................ 60
Conclusions ............................................................................................................................ 61
Mechanisms for Coordination ....................................................................................................... 61
Joint Pipeline Reviews ............................................................................................................. 61
Focal Area Task Forces ............................................................................................................ 62
Executive GEFOP ................................................................................................................... 62
Conclusions ............................................................................................................................ 63
The Role of the Scientific and Technical Advisory Panel ................................................................ 63
Conclusions ............................................................................................................................ 64
Recommendations .................................................................................................................. 64
V. GEF Project Cycle Procedures ...................................................................................................... 65
A. Implementing Agencies' Project Cycles ........................................................................................... 66
Conclusions ............................................................................................................................ 69
Recommendations .................................................................................................................. 69
B. The Incremental Cost Requirement ................................................................................................. 69
Conclusions ............................................................................................................................ 71
Recommendations .................................................................................................................. 71
C. GEF Council Review of Projects ...................................................................................................... 71
Conclusions ............................................................................................................................ 72
Recommendations .................................................................................................................. 72
VI. Programming Issues ...................................................................................................................... 73
A. Role of Various Factors in Determining the GEF Portfolio ............................................................... 73
B. Overall Programming Issues ............................................................................................................ 75
Allocation of Resources Among the Focal Areas ............................................................................ 75
Conclusions ............................................................................................................................ 75
Balance Between Investment and Noninvestment Activities .......................................................... 75
Conclusions ............................................................................................................................ 77
C. Programming Issues in Biodiversity ................................................................................................ 77
Conclusions ............................................................................................................................ 80
Recommendations .................................................................................................................. 81
D. Programming Issues in Climate Change .......................................................................................... 81
Conclusions ............................................................................................................................ 83
E. Programming Issues in International Waters ................................................................................... 83
Conclusions ............................................................................................................................ 85
F. The Application of Incremental Costs as a Programming Tool .......................................................... 85
Conclusions ............................................................................................................................ 87
VII. Follow-up to the Pilot Phase Evaluation ..................................................................................... 88
Overall Assessment of the Follow-Up to the Pilot Phase Evaluation .................................................... 92
VIII. Conclusions ................................................................................................................................ 93
A. Resource Mobilization ..................................................................................................................... 93
B. Country-Level Issues ....................................................................................................................... 93
C. Institutional and Project Cycle Issues .............................................................................................. 94
D. Programming Issues ........................................................................................................................ 95
E. Overall Conclusion ......................................................................................................................... 95

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Table of Contents ix
Annexes .............................................................................................................................................. 96
1. Terms of Reference .......................................................................................................................... 96
2. Report of International Expert Advisory Panel............................................................................... 102
3. List of Interviews and Project Site Visits. ....................................................................................... 106
Tables
1. Cofinancing and Actual Leveraging in A Sample of Eighteen GEF Projects ...................................... 10
2. World Bank GEF Projects with Private Sector Commitments........................................................... 15
3. Description of GEF Focal Point Systems in Ten Countries ............................................................... 19
4. Financing for Biodiversity Proection through World Bank Loans ..................................................... 41
5. References to GEF in a sample of CCFs ........................................................................................... 50
6. Causes of Delays in Project Approval in Ten Country Studies .......................................................... 66
7. Distribution of GEF Funding by Project Type .................................................................................. 76
Figures
1. GEF: Institutional Structure .............................................................................................................. 3

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x Study of GEF's Overall Performance
ACRONYMS AND INITIALS
CAS
Country Assistance Strategy
CBD
Convention on Biological Diversity
CEO
Chief Executive Officer
COP
Conferences of the Parties
CCF
Country Cooperation Framework (of UNDP)
DAC
Development Assistance Committee
EA
Enabling Activity
FCCC
Framework Convention on Climate Change
GEFOP
GEF Operations Committee
IFC
International Finance Corporation
MOEF
Ministry of Environment and Forests
NGO
Non-Governmental Organization
OECD
Organisation for Economic Cooperation and Development
ODA
Official Development Assistance
OP
Operational Program
PDF
Project Preparation and Development Facility
PIR
Project Implementation Review
PV
Photovoltaic
QOR
Quarterly Operational Report
SAP
Strategic Action Program
SGP
Small Grants Programme (of UNDP)
STAP
Scientific and Technical Advisory Panel
TDA
Transboundary Diagnostic Analysis
TOR
Terms of Reference
UNDP
United Nations Development Programme
UNEP
United Nations Environment Programme

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xii Study of GEF's Overall Performance
EXECUTIVE SUMMARY
I. INTRODUCTION
other funding, because reliable and comparable data
were unavailable. However, it found the GEF to be the
This report presents the findings and recommen-
largest funder in the international waters focal area.
dations of the Study of the Overall Performance of the
The team also found that some agencies have signifi-
Global Environment Facility, which was requested by
cantly increased their funding in biodiversity and cli-
mate from previously low levels. However, it found
the GEF Council at its October 1996 meeting. The
GEF's role in funding activities that benefit the global
study focused on a set of issues related to institutions,
environment to be distinct in several ways in terms of
procedures, policies and programming of the GEF.
its programming and institutional strengths.
The study team proposed a number of recommenda-
tions for consideration by the GEF, including seven
Recommendations: GEF should regularly review
priority recommendations which are highlighted in
and compare its own portfolio and project pipeline with
this executive summary.
those of other institutions to ensure that it is either provid-
ing significant additional resources or demonstrating a
II. PROVISION OF RESOURCES FOR THE GLOBAL
comparative advantage over other institutions involved in
ENVIRONMENT
funding the same activities. In this regard, particular atten-
tion should be paid to GEF support for solar photovoltaics,
The study team analyzed issues related to the
energy-efficient lighting, and biodiversity trust funds.
provision of resources for the global environment both
directly through funding of the GEF itself and indirectly
GEF should work with the OECD and other appro-
through leveraging of financing by other agencies.
priate international institutions to ensure that reliable,
comparable data on financing measures to protect the glo-
New and additional resources: The study team
bal environment, including data on different types of
found that the concept of "new and additional re-
projects, is compiled and made available to the public.
sources" has not been defined by the international
bodies that have agreed on it as a principle. Therefore,
Leveraging of additional resources: The study
it could not establish whether or not GEF resources are
team found that GEF grants have leveraged additional
truly new and additional. It also found that a possible
funding for global environmental benefits from both
indicator of additionality is whether the GEF is treated
Implementing Agencies and other funding sources. On
as distinct from general development cooperation in
balance, the team found that the GEF has been more
national budgetary processes, and that in some coun-
successful in mobilizing cofinancing during GEF 1
tries this distinction has not been maintained.
than in the Pilot Phase. However, based on its study of
a sample of 18 projects, the team believes that the
Recommendations: The GEF Council should ad-
actual level of leveraging, strictly defined, has been
dress the need for a clear definition of "new and additional"
significantly smaller than the total level of cofinancing
financing for the GEF, including the indicators that should
reported. The team found that a high proportion of
be used in determining additionality.
World Bank loans that cofinance GEF projects for
climate and biodiversity have genuinely leveraged ad-
Donor countries should consider separating budget
ditional financing during GEF 1. However, in some
lines for global environmental measures in developing
instances such associated loans have brought disad-
countries and for contributions to GEF from budget lines
vantages, such as project delays. The team concluded
for development cooperation.
that there is a danger in giving too much emphasis to
leveraging as a measure of the GEF's success, and that
Comparison of GEF with other sources: The
it should be considered alongside a number of other
study team could not determine the significance of the
relevant indicators, such as GEF's impacts on policies
GEF's funding for biodiversity and climate relative to
and programs and the replicability of GEF projects.

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Executive Summary xiii
The study team was unable to conduct a systematic
III. ISSUES AT THE COUNTRY LEVEL
analysis of the likelihood that GEF projects will be
replicated.
The Focal Point system in recipient countries:
The study team found that the Focal Point system is
Recommendations: The GEF should adopt a rig-
not yet adequately institutionalized in some recipient
orous definition of "leveraging" that includes only funding
countries. Most have not set up formal coordinating
that is additional to existing funding patterns and that is
mechanisms for interacting with relevant government
expected to create global environmental benefits. It should
offices and other country stakeholders. Some Opera-
apply this definition in the Quarterly Operational Report
tional Focal Points are not clear on their roles. Others
and other relevant GEF documents. Implementing Agen-
have not been able to fully carry out their coordinating
cies should apply this more rigorous definition in their own
functions because of institutional weaknesses such as
databases and reports on cofinancing of GEF projects.
the inability of environment ministries to get more
powerful ministries to cooperate with them. In some
When there is sufficient experience with implementa-
cases, Focal Points have tended to limit information to
tion of GEF projects, the GEF's Senior Monitoring and
a relatively narrow circle of government stakeholders.
Evaluation Coordinator should commission a study of the
replicability of projects in the GEF portfolio.
Priority Recommendation:
Leveraging resources from the private sector:
The Focal Point System
The study team found that the GEF has been able to
mobilize a small but growing level of private sector
In order to enable Operational Focal Points
financing of GEF projects, but comparatively little by
to be more effective advocates for GEF issues
mainstream private financial institutions. Major barri-
in their country, the GEF Secretariat and
ers to increasing support from the financial sector
Implementing Agencies should broaden the
exist, particularly the GEF's long and complex ap-
existing Project Development Workshop for-
proval procedures and the greater risk of global envi-
mat by involving the Operational Focal
ronmental projects compared with normal commercial
Points as much as possible in planning and
projects. However, the team notes that GEF assistance
execution and by focusing more on the coor-
can be provided in a way that reduces risks to private
dination and information dissemination
firms and financial intermediaries and does not subsi-
functions of the Operational Focal Points.
dize private profit.
The GEF should provide resources for trans-
lation of basic GEF documents into the local
Priority Recommendation: Private Sector
language of those countries requiring such
translated documents.
The GEF Secretariat and Implementing
Agencies should engage business and banking
associations and mobilize financing from in-
The requirement for projects to be country-
dividual private financial sector companies,
driven: The study team found that the degree to which
such as banks, insurance companies and pen-
a project is "country-driven" is related primarily to the
sion funds. To interest the financial sector in
degree of country involvement in project design and
GEF projects, the GEF should use the "incre-
development. In most cases projects were either origi-
mental risk" of a potential private sector GEF
nated in part by the recipient country or the country
project as a way of determining the size of the
played an active role in helping to develop it. This
GEF grant.
helped ensure their ownership of the project. The
study team found some cases in which the "country
GEF should identify and apply techniques for
drivenness" of a project was slight but in which coun-
reducing the risk of the private investors of
try ownership was ensured by the fact that the country
participating in GEF projects, such as using
valued the project outcomes. The team found other
GEF funds to provide loan guarantees.
cases, primarily global projects, in which neither the
involvement of the government nor its interest in

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xiv Study of GEF's Overall Performance
project outcomes was sufficient to generate country
and comprehensive plans for public participation and
ownership. The team also found that the use of foreign
consultation with multiple stakeholder groups, espe-
consultants, although necessary in many instances, has
cially in the biodiversity focal area. Most of the projects
been criticized by recipient countries and tends to
are in the early stages of implementation, but the study
reduce local involvement necessary for projects to be
team found that some projects are already including
country driven and for recipient country ownership.
local stakeholders in key project activities. Projects
involving trust funds in particular have provided inno-
Recommendation: The GEF Council should adopt
vative opportunities for different stakeholders to par-
a policy, paralleling that for stakeholder participation,
ticipate in the same project at policy and operational
aimed at promoting the greater use of local and regional
levels. In some cases, however, the team found that
consultants in projects; encouraging an appropriate mix of
local communities had not been provided with feed-
local and foreign experts in GEF projects; and securing
back on the results of consultations.
greater recipient government participation in the screen-
ing, short-listing and selection of project consultants.
Recommendation: The GEF Secretariat should
work with implementing Agencies to develop quantitative
Contribution of GEF to awareness of global
and qualitative indicators of successful stakeholder involve-
environment: The study team found that awareness
ment at different stages of the GEF project cycle, and to
and understanding of the GEF and global environment
document best practices of stakeholder participation by
issues was very low outside the relatively small circle of
focal area.
officials involved with GEF projects, and that NGOs
and the private sector generally know little or nothing
Impacts on country programs and policies:
about the GEF. However, the team did find from its
Based on its analysis of projects in the ten countries
country studies that, in some cases, the GEF has made
visited by the team and six other country reports by
contributions to awareness of global environmental
local consultants, the study team found that in some
problems among strategically important constituen-
cases, GEF projects have had significant impacts on
cies.
country policies and programs that go beyond the
immediate objectives of the project. These impacts
include establishing new mechanisms for
Priority Recommendation:
intragovernment coordination and regional or subre-
Communications and Outreach
gional collaboration on issues of global environmental
importance, increasing investment in, or priority
The GEF Council should authorize and ad-
placed on, a particular technology or method for ad-
equately fund the development of a GEF out-
dressing a global environmental problem, persuading
reach and communications strategy that
the government to accept a greater degree of stake-
targets GEF's multiple constituencies, includ-
holder involvement in projects for the global environ-
ing the Focal Points and relevant government
ment, and contributing to the development of a
agencies, NGOs and civil society, the media
strategy or action plan. Given the relatively small size
and the private sector. The strategy should
of GEF projects, the team found that these changes
rely on simple, user-friendly materials about
represent a positive achievement.
the GEF and its operations, and should in-
clude provision of basic GEF documents in
Handling of policies and activities that could
local languages. This strategy should be coor-
undermine project success: In a number of instances,
dinated with the broadening of the Project
either government sectoral or macroeconomic policies
Development Workshops.
or private sector economic activities could undermine
the success of GEF projects. The team analyzed a
sample of seven projects in which risks to project
Stakeholder participation in GEF projects:
success were posed by such policies or activities. The
The study team found that the issuance of GEF guide-
team found that Implementing Agencies usually iden-
lines calling for stakeholder participation has been one
tified and raised such policy issues and activities with
of the significant accomplishments of GEF 1. As a
recipient countries, but in most cases, the identifica-
result, GEF 1 project designs have included detailed
tion was either too general or incomplete, and assur-

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Executive Summary xv
ances from the government regarding the policy or
The Implementing Agencies should provide for longer
activities in question were either not forthcoming or
project implementation periods--for example, five to seven
were not specific enough. In four of the six cases, the
years instead of three of five years--in cases in which
Implementing Agency took steps that brought about
project sponsors can show that extra time will be necessary
some reduction of the risk. In the two others the
to implement the project and demonstrate its viability for
outcome is still unclear. In one case, the chances of
future funders.
project success were clearly undermined by a failure to
take any follow-up action.
IV. INSTITUTIONAL ISSUES
Recommendations: The GEF project submission
Mainstreaming of the global environment by
format's description of project risks should call for identifi-
the Implementing Agencies: The study team devel-
cation of specific policies and sectoral economic activities
oped a separate set of criteria for evaluating the
that could negatively affect project success, as well as the
mainstreaming of the global environment in each of
steps that need to be taken to reduce the risks to project
the three Implementing Agencies. The study team
success from those policies and activities.
found that the World Bank has mainstreamed with
regard to cofinancing of GEF projects. However, it
The GEF should adopt a policy requiring that Imple-
found that the Bank has not done as much in its
menting Agencies must obtain clear, formal commitments
regular portfolio of projects in the biodiversity and
from recipient country governments regarding policies and
climate focal areas as it might have; that it has not
sectoral activities identified as increasing the risk of project
taken steps to create the staff incentives necessary to
failure before proceeding with project implementation.
put global environmental concerns on a par with tradi-
tional bank business; that it has not systematically
Financial sustainability of GEF projects: On
integrated global environmental objectives into eco-
the basis of an examination of the proposals for seven-
nomic and sector work or into the Country Assistance
teen projects in the countries it visited, the study team
Strategies (CAS) process, and that it has not adequately
found that serious financial planning for continuation
addressed the impact on the global environment of its
of project activities after completion of GEF funding
financing of fossil fuel power development. Finally, the
appears in less than half of the proposals. The study
team found that the Bank has not yet undertaken
team found that the sustainability of activities beyond
programming based on global environmental objec-
GEF funding of the project depends in part on the
tives on any significant scale, although it appears to be
project type. In near-commercial projects,
poised to take an important step in that regard, by
sustainability depends largely on their replicability by
entering into a "Strategic Renewable Energy Partner-
government or private investors, whereas noncommer-
ship" with the GEF.
cial biodiversity projects must be either self-financing
through trust funds or obtain additional grant financ-
The study team found that UNDP has increased
ing from donors or the government itself. The experi-
its cofinancing of GEF projects compared with a very
ence of the Pilot Phase indicates that biodiversity
low level in the Pilot Phase. The trend since 1995 has
projects are more likely to have serious problems of
been upward, although the team noted a significant
financial sustainability than climate projects.
proportion of this cofinancing is government funding
that would have been spent in any case. The team
Recommendations: The GEF Secretariat and
found that UNDP has put in place a set of positive
Implementing Agencies should require that project propos-
incentives for work on GEF projects, although they do
als contain a more thorough assessment of options for
not appear to apply to the Latin American region. It
achieving financial sustainability.
found that UNDP does not track projects or compo-
nents related to biodiversity conservation in its regular
The GEF Secretariat and Implementing Agencies
portfolio, and allowed renewable energy projects to
should encourage the broader use of biodiversity trust funds
drop significantly in the 1994-97 period compared
to help ensure the funding of biodiversity projects in perpe-
with the pre-GEF period. The latter trend was attribut-
tuity. The Implementing Agencies should continue to seek a
able primarily to UNDP's five year project cycle for
high rate of leveraging of other sources of trust fund capital.
1992-96, which began in the early Pilot Phase of GEF,

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xvi Study of GEF's Overall Performance
and UNDP has now taken steps aimed at reversing that
that UNEP has shown some improvement in submit-
trend in renewable energy in its regular portfolio.
ting project proposals that are consistent with the prin-
However, UNDP has not given similar emphasis to
ciple of additionality to core program activities, but
biodiversity. The team found that UNDP's lack of clar-
that further progress is needed in this regard.
ity about associated projects and its failure to main-
stream the GEF systematically in preparing its Country
Cooperation between GEF and the conven-
Cooperation Frameworks (CCFs) during GEF 1 indi-
tions: The study team found that the GEF has strictly
cates institutional obstacles to mainstreaming.
implemented the guidance of the conventions with
due regard for the GEF's own mandate and funding
The study team assumes that UNEP has
limitations and in a reasonably timely fashion. The
mainstreamed the global environment in terms of giv-
team found that guidance provided by the COP of the
ing adequate attention to the four focal areas in its core
CBD has been overly broad and would be more useful
activities, but found that UNEP has not provided any
if it focused on prioritization among ecosystems or
staff incentives for work on GEF projects. It also found
ecosystem types. The team also found that the GEF
Priority Recommendation: Mainstreaming by the Implementing Agencies
The World Bank should adopt public, measurable goals for the integration of global environmental objectives
into its regular operations, including goals related to: 1) staff incentives, 2) funding level and/or number of
GEF associated projects, 3) funding level and/or number of projects for the global environment in its regular
lending portfolio, and 4) integration into its sector work and the Country Assistance Strategy (CAS) process. It
should report regularly to GEF and to the public on its progress in achieving these objectives.
The World Bank should begin a transition from its role in financing conventional power loans to a new role in
financing sustainable energy technologies.
The World Bank should allocate increased financial resources to the Global Overlays program in order to
ensure adequate staffing for a substantially higher level of integration of global environment into sector work
and the CAS process.
The IFC should maintain a database of its projects with global environmental benefits, so that its
mainstreaming of global environment can be assessed in the future.
UNDP should establish a system of tracking projects and components that are relevant to the GEF focal areas
and set public, measurable targets related to: 1) funding levels and/or number of core-funded projects for
biodiversity conservation, alternative energy and international waters, 2) funding level and/or number of
GEF-associated projects, and 3) the Country Cooperation Frameworks (CCFs). It should report regularly to
GEF and to the public on its progress in achieving those targets. It should also consider making linkages
between potential GEF projects and potential core budget projects an explicit objective of the process of
preparing the Country Cooperation Frameworks.
UNEP should devise a system of staff incentives, involving at least a revision of staff evaluation criteria, to give
adequate consideration to GEF work.
The GEF Secretariat and UNEP should devote more staff time and resources to upstream consultation not only
in Washington but in Nairobi to ensure that all relevant UNEP program staff have adequate guidance in
formulating GEF proposals.

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Executive Summary xvii
made a major adjustment in approval procedures for
the GEF on the issue of the roles and responsibilities of
enabling activities (EA), which resulted in a significant
the Implementing Agencies and of the GEF Secretariat
acceleration of approvals in 1996-97. The team also
in reviewing projects for the work program, but that
found that the EA program does not appear to have
some issues could continue to be contentious in the
been as effective in achieving its objectives regarding
future. Both Implementing Agencies and the Secre-
national communications and reports to the conven-
tariat agree that the Secretariat has the responsibility to
tions as had been anticipated.
examine each proposal for incremental costs, eligibility
and consistency with the Operational Strategy and
Recommendations: The GEF should play a more
long-term portfolio development. They both also agree
proactive role in its relations with the conventions and
that the Secretariat's review of project proposals has
should, in consultation with Implementing Agencies, pre-
often been overly detailed and focused on nonstrategic
pare more detailed requests for guidance on those issues on
issues. The Implementing Agencies believe that the
which guidance would be most helpful.
Secretariat has used its review of incremental costs to
exceed its legitimate role. The team found, however,
The GEF Secretariat, the Implementing Agencies,
that the Secretariat's review of incremental costs does
and the convention secretariats should undertake a com-
on occasion require the assessment of issues that
prehensive review of enabling activities before the end of
would otherwise be considered the proper sphere of
1998 to determine how successful the projects have been,
the Implementing Agencies.
analyze the reasons for those that have failed, and consider
policy and programmatic responses to the problem.
Mechanisms for coordination: The study team
found that the mechanisms for coordination that have
The Implementing Agency "monopoly" issue:
evolved in GEF 1 have generally succeeded in raising
Although the original understanding among the three
the level of collaboration among Implementing Agen-
Implementing Agencies was that each would have a
cies. Joint pipeline reviews have reduced duplication
distinct role in the GEF based on its comparative ad-
and competition in projects. Focal area task forces
vantage, the study team found that the roles assigned
have already produced useful programming discus-
to the World Bank and UNDP have become blurred
sions in international waters, although the others have
during GEF 1. The team found that increasing the
only just begun to be used for such discussions.
number of organizations which can propose projects
directly to the GEF Secretariat could result in an in-
The role of STAP: The study team found that
crease in the number and types of viable GEF projects,
STAP has played a useful role in helping to define the
and that increased competition among Implementing
Operational Strategy and Programs, and its roster of
Agencies could help to reduce the transaction costs of
experts was found to have been valuable to Imple-
such a move. Although there could be some disadvan-
menting Agencies in internal review of projects. How-
tages to such a change, these disadvantages would
ever, the team found that STAP was less successful in
have to be weighed against the advantages.
its selective review of projects. Its project review for
the Secretariat-Implementing Agency consultations
prior to entry into the work program has now been
Priority Recommendation:
discontinued.
Implementing Agency Monopoly
Recommendation: The Council should provide a
The GEF Council should undertake a study
new, more sharply focused mandate for the STAP in light of
of the advantages and disadvantages of vari-
the change in the GEF's needs and the experience of STAP
ous approaches to permitting additional or-
during GEF 1.
ganizations to propose GEF projects directly
to the Secretariat and assume direct respon-
V. GEF PROJECT CYCLE PROCEDURES
sibility for GEF projects.
Implementing Agencies' project cycles: Recipient
countries complained to the study team about delays
Work Program roles and responsibilities: The
in the GEF project cycle, citing Implementing Agency
team found that agreement has been reached within
and GEF procedures, and disagreements between gov-

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xviii Study of GEF's Overall Performance
ernment and the agencies as causes. The study team
the early phase of the GEF because of the lack of
found that both the World Bank and UNDP have made
experience with Implementing Agencies, it has now
some progress in shortening their phases of the project
become routine that the GEF Secretariat checks on
cycle -- UNDP by combining the preparation of
consistency of final project proposals with earlier
project briefs and project documents and the World
Council comments. Both the Implementing Agencies
Bank by moving its submission of project briefs up-
and the Secretariat support the delegation of the func-
stream. The longest stage of the project cycle, however,
tion to the Secretariat, and such delegation would have
involves project preparation by the recipient govern-
significant savings in time and other costs to the GEF.
ment and the Implementing Agencies. The team found
that the benefit of shortening the World Bank's project
cycle by allowing a range of incremental cost estimates
Priority Recommendation:
at the concept stage outweighs the benefit of requiring
GEF Council Review
a single incremental cost estimate at the project con-
cept stage.
The GEF Council should seriously consider del-
egating the second review of project proposals to
Recommendation: In order to encourage contin-
the GEF Secretariat.
ued adherence by the World Bank to its streamlined project
cycle, the GEF Secretariat should allow the Implementing
Agencies to submit a range of estimates when a project is
VI. PROGRAMMING ISSUES
first submitted, on the understanding that a firm estimate
will be submitted for final approval.
Overall programming issues: The team found
that the allocation of resources among the four focal
Incremental cost requirement: The study team
areas has caused a shortfall within the International
found that the present process of determining incre-
Waters focal area that is likely to be exacerbated in the
mental costs has excluded the participation of recipi-
future. It further found that the GEF has effectively
ent country officials in most cases, because of the lack
balanced capacity building and investment activities in
of understanding of the concept and methodologies.
the GEF portfolio by combining both types of activities
Although the new streamlined incremental cost proce-
in the same project.
dures are an improvement over the original, the study
team doubts that they will be sufficient to persuade the
Programming issues in the focal areas: In the
majority of recipient country officials that they can and
Biodiversity focal area, the issue of prioritization is
should be involved in the process unless the GEF
subject to significant political constraints, and there
undertakes further efforts to engage them.
are practical limitations to applying a programming
strategy that is based on a scientific set of criteria.
However, the team found that the GEF had not been
Priority Recommendation:
able to focus on ecosystems of greatest global impor-
Incremental Costs
tance to the extent that would be desirable. It further
found that the GEF has not yet resolved some of the
A working group representing the GEF Secre-
conceptual and practical difficulties associated with
tariat and the Implementing Agencies should,
projects for sustainable use of biodiversity, and that
in consultation with the convention secretariats,
the dearth of published information on successful ex-
develop simpler, more straightforward guid-
periences in such projects is a major problem. In the
ance and communication for recipient country
Climate focal area, the team found that the present
officials on the calculation of incremental costs
emphasis on barrier removal is appropriate, but that
and a strategy for increasing their involvement
more emphasis may be needed in the future on com-
in the process of estimating those costs.
bining near-commercial barrier-removal projects, and
longer term buy-down projects. This may require a
rethinking of the present delineation of Operational
GEF Council review of projects: The study
Programs. In the International Waters focal area, the
team found that, although the GEF Council's second
team found that the approach to programming estab-
review of project proposals may have been justified in
lished a solid basis for international collaboration. The

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Executive Summary xix
approach to programming in the International Waters
topics. They have served to articulate the GEF mission
focal area has redirected GEF funding toward chal-
and strategy, focus GEF investments, and improve the
lenges that should have high priority and establishes
management of GEF operations. Some recommenda-
solid bases for international collaboration and national
tions, however, have not been adopted or have been
policymaking on cross-sectoral issues. The team also
adopted only partially. The participants in the restruc-
concluded that further initiative is needed in the con-
turing of GEF decided not to follow the recommenda-
taminant-based Operational Program on encouraging
tion to broaden the range of Implementing Agencies
the development of project proposals relating to re-
beyond the existing three. And contrary to the recom-
ducing developing countries' dependence on persis-
mendation by the Pilot Phase evaluation, the GEF
tent organic pollutants.
Council decided to continue programming resources
while the Operational Strategy was being drafted. With
Recommendations: The GEF Council should au-
regard to the recommendation on establishing a per-
thorize the GEF Secretariat and Implementing Agencies, in
manent monitoring and evaluation mechanism, a
consultation with the Secretariat of the CBD, to undertake
Council-approved monitoring and evaluation plan is
a formal exercise to identify the ecosystems and ecosystem
in the process of being implemented, based on shared
types within each Operational Program in biodiversity that
responsibility between the GEF Secretariat and the
should be the highest priorities for GEF in terms of a set of
Implementing Agencies. The plan provides for both
agreed criteria, including those specified in the Operational
internal project monitoring and external independent
Strategy.
project evaluations. When more of its components,
such as systematic inclusion of performance indica-
The GEF Secretariat should compile information on
tors, are in place, assessments of overall project perfor-
successful projects in sustainable use from NGOs and other
mance can be made on a more objective basis.
bilateral and multilateral agencies worldwide, and dis-
seminate them to Implementing Agencies and recipient
VIII. OVERALL CONCLUSION
country Focal Points.
The study team concluded that the GEF has
The application of incremental costs as a pro-
generally performed effectively with regard to rapidly
gramming tool: The study team found that the
creating new institutional arrangements and ap-
operationalization of the incremental cost concept as a
proaches to programming its resources in the four
programming tool has advanced markedly since 1995,
focal areas. The GEF has also been relatively successful
based on the degree of transparency and detail in
in leveraging cofinancing for GEF projects and has had
discussions of incremental costs in project documents.
some positive impacts on policies and programs in
Although cases of inflation of incremental cost esti-
recipient countries. A significant accomplishment has
mates may have occurred, the team found no evidence
been the advisement of stakeholder participation in
of a systematic tendency toward inflation of incremen-
GEF projects. On the other hand, the Implementing
tal cost estimates. The team believes that greater confi-
Agencies have made little progress in mainstreaming
dence can be placed in the final incremental cost
the global environment, and the team believes that
estimates for climate and ozone projects than for
much more needs to be done in several areas, includ-
biodiversity and international waters projects, because
ing strengthening the Focal Point system, improving
there is no single, commonly understood and widely
the process of calculating incremental costs, better
used methodology for calculating the incremental
planning for the financial sustainability of projects,
costs in the latter focal areas.
shortening the project cycle, and raising awareness of
the GEF and of global environmental issues.
VII. FOLLOW UP TO THE PILOT PHASE
EVALUATION
The study team believes that the progress made
in the brief period of GEF 1 and the potential for much
The study team found that the GEF Secretariat
greater success, particularly in mainstreaming, consti-
and Council have taken action on most of the recom-
tutes a basis for building a much stronger GEF in the
mendations of the Pilot Phase evaluation. They have
near future. The success of the GEF ultimately hinges,
prepared GEF's Operational Strategy and Programs,
of course, on political support in donor and recipient
and other documents defining more clearly the project
countries for mainstreaming global environmental
cycle, incremental cost calculations and many other
concerns into development.

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Introduction to the GEF 1
I. INTRODUCTION TO THE GEF
1.
The GEF is a financial mechanism that promotes
cisions taken by the Assembly and Council translate
international cooperation and fosters actions to protect
into effective actions. It coordinates the formulation of
the global environment. The grants and concessional
the work program, oversees implementation, and en-
funds disbursed complement traditional development
sures that GEF's operational policies are followed.
assistance by covering the additional costs (also known
as "agreed incremental costs") incurred when a na-
4.
The GEF serves as the interim financial mecha-
tional, regional, or global development project also
nism for the Convention on Biological Diversity and
targets global environmental objectives.
the UN Framework Convention on Climate Change. In
this regard, the GEF Council receives formal guidance
2.
The GEF was officially established in October
from the Parties to the Conventions and is accountable
1991, for a three-year Pilot Phase. The GEF has de-
to them. In its work related to international waters and
fined four focal areas for its programs: biological diver-
the phase out of ozone depleting substances, the GEF
sity, climate change, international waters and
is not accountable to a governing body of an interna-
depletion of the Earth's ozone layer. Efforts to stem
tional agreement. However, it does take into consider-
land degradation as they relate to the above four focal
ation guiding principles from Agenda 21 of the United
areas are also eligible for GEF funding. A total of 116
Nations Conference on Environment and Develop-
projects with GEF funding of $733 million were ap-
ment, and relevant treaties such as the Montreal Proto-
proved between 1991 and mid-1994. Based on experi-
col.
ence during the Pilot Phase, the GEF was restructured
in 1994. Thirty-four nations, including 13 recipient
5.
GEF's Implementing Agencies (IAs) are respon-
countries, pledged $2 billion to the restructured GEF's
sible for developing projects for GEF funding and
core fund. With this funding, additional project alloca-
implementing them through executing agencies in
tions totaling $883 million were approved by the GEF
specific countries and regions. The IAs are the United
Council through June 30, 1997. A second replenish-
Nations Development Program (UNDP), the United
ment of the GEF is currently in process and is planned
Nations Environment Program (UNEP), and the
to be completed in early 1998. It will provide new
World Bank. The World Bank also serves as GEF's
funds for the 1998-2002 period.
trustee. Each agency has created a GEF Coordination
Unit in its headquarters office, led by an Executive
3.
The governance, policy and implementation
Coordinator. In addition, the GEF "family" includes a
structure of the GEF are shown in Figure 1. The GEF
Scientific and Technical Advisory Panel (STAP) of 12
Assembly, Council and Secretariat comprise the
internationally-recognized experts. The STAP is an in-
Facility's governance structure. The GEF Assembly,
dependent advisory body that provides scientific and
which meets every three years, consists of representa-
technical guidance on GEF policies, operational strate-
tives of all participating countries--currently number-
gies and programs. The STAP maintains a Roster of
ing 155--and is responsible for reviewing GEF's
Experts, and all GEF projects must be reviewed by
general policies. The GEF Council is the main govern-
someone on this list.
ing body. It is responsible for developing, adopting
and evaluating operational policies and programs. The
6.
Each country participating in the GEF has a Po-
Council comprises representatives of 32 constituen-
litical Focal Point. In addition, each recipient country
cies--16 members from developing countries, 14 from
has a GEF Operational Focal Point. The role of the
developed countries and 2 from countries with transi-
Political Focal Point is to serve as the contact point
tional economies. It meets every six months. The GEF
with the GEF Secretariat, within their country, and
Secretariat services and reports to the Assembly and
with other members of the constituency in which their
Council. It is headed by a Chief Executive Officer
country is included on issues related to governance.
(CEO), who also serves as Chair of the Council. The
The role of the Operational Focal Point is to identify
Secretariat's responsibilities include ensuring that de-
project ideas that meet country priorities and ensure

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2 Study of GEF's Overall Performance
that GEF proposals are consistent with country priori-
meets at least quarterly and includes representatives of
ties and commitments under the global environmental
the Secretariat, IAs and STAP. In addition, representa-
conventions. The Operational Focal Points must en-
tives from the biodiversity and climate change conven-
dorse all project proposals for GEF in their countries.
tions participate in the GEFOP. Focal area Task Forces
in biodiversity, climate change and international wa-
7.
GEF projects are executed in the field by a wide
ters comprised of specialists from the Secretariat and
variety of organizations, ranging from government
IAs' GEF coordination units are fora for discussions of
agencies, international organizations (e.g., the Food
program and policy issues and for coordinating the
and Agriculture Organization (FAO) of the UN and the
pipelines of new projects within these focal areas. Fi-
World Meteorological Organization), private sector in-
nally, the GEF conducts an annual Project Implemen-
stitutions, and international, national and local non-
tation Review (PIR) to examine the status of GEF
government and civil society organizations. Several
projects that have been in implementation for at least a
projects for which the World Bank is the GEF imple-
year, and to identify lessons learned.
1 The PIR involves
menting agency are executed by the International Fi-
an internal review by each IA and an interagency re-
nance Corporation (IFC) and the Inter-American
view organized by GEF's Senior Monitoring and Evalu-
Development Bank (IDB).
ation Coordinator.
8.
Non-governmental organizations (NGOs) play
10.
The GEF funds three broad types of activities in
an active role in the GEF at a variety of levels. There is
its four focal areas. The vast majority of GEF resources
a network of 16 NGO GEF regional Focal Points that
are allocated to projects which are consistent with its
serve as points of contact, information and coordina-
Operational Strategy. The Operational Strategy reflects
tion between national and local NGOs and the GEF.
program guidance from the biodiversity and climate
Immediately preceding each GEF Council meeting, a
change conventions, and currently defines ten long-
one-day consultation with NGO representatives takes
term Operational Programs. Secondly, GEF finances
place. NGOs also participate as observers in Council
Enabling Activities in the biodiversity and climate
meetings. In addition, many GEF projects are executed
change areas to help countries identify their needs and
wholly or in part by NGOs.
prepare for projects which will help them meet their
obligations to the biodiversity and climate change con-
9.
A variety of coordination mechanisms have been
ventions. Enabling Activities include compilation and
developed within the GEF structure. The CEO meets
assessment of existing country information, as well as
annually with the heads of the Implementing Agencies,
development of strategies and action plans. Finally,
and more often with the Executive Coordinators in the
GEF funds a limited number of short-term response
IAs. The GEF Operations Committee (GEFOP) is the
measures that do not fall within the parameters of
forum through which members of the GEF family
long-term programs or enabling activities, but are high
regularly discuss major policy issues. The GEFOP
priority and yield immediate benefits at low cost.
1 For a report of the 1997 PIR, see Global Environment Facility, Project Implementation Review, 1997 (Washington, D.C.: January 1998).
This report, as well as the report of the results of the 1996 PIR, are available from the GEF Secretariat.

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Introduction to the GEF 3
FIGURE 1.
GEF: INSTITUTIONAL STRUCTURE
Conference of the
Conference of the
Parties: CBD
Parties: FCCC
CBD
FCCC
Secretariat
Secretariat
GEF Council
GEF Assembly
GEF
Chariman/CEO
and
Secretariat
NGO
GEF Implementing Agencies
Participation
World Bank
UNDP
UNEP
and
Influence
STAP
GEF Focal Points (est.300)
Cooperating
Countries (est. 160)
Advisory
Reporting

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4 Study of GEF's Overall Performance
II. PROVISION OF RESOURCES FOR THE GLOBAL
ENVIRONMENT
A. INTRODUCTION
expenditures in 1992 covered some $6 billion a year
for biodiversity conservation. On climate change, esti-
11.
This chapter examines the performance of GEF
mates of the costs of carbon emissions abatement have
as a direct provider of grant and concessional resources
varied widely, depending on the baseline assumptions
and as an instrument for leveraging resources from
adopted (such as GDP growth rate, rate of technologi-
other donors, governments, and the private sector.
cal change, and pricing regimes) and the reduction
targets to be achieved. 4 There is clearly great potential
12.
After restructuring, GEF donor countries com-
for measures that would result in short-term cost sav-
mitted $2 billion over four years to the first regular
ings as well as carbon emission reductions. Overall
funding period of GEF. Most donor countries hailed
investment needs to realize carbon emission abate-
the level of funding finally agreed to as a significant
ment opportunities in developing countries are large.
5
achievement. 2 Recipient countries and NGOs, how-
Although these could produce considerable savings
ever, considered the replenishment of GEF inadequate
down the road, sometimes offsetting costs, various
as well as a big step away from expectations that had
political and institutional barriers prevent large-scale
been raised at the Rio conference.
investments in such activities. No aggregate cost esti-
mates have been developed in the international waters
13.
The best estimates of funding needs in the two
focal area.
key GEF focal areas show that the resources available
today for global environmental activities in general and
14.
GEF was never intended to cover all the interna-
for GEF in particular are small. Although such aggre-
tional financing needs of global environmental pro-
gate estimates are plagued by great uncertainties, they
grams but rather to work in various ways as a catalyst
indicate the magnitude of the challenge. The World
for measures to address global environmental prob-
Conservation Monitoring Centre, for example, finds
lems. Given the limited resources available compared
that the cost of conservation of critical biodiversity is
with funding need estimates, GEF needs to program
around $20 billion per year, based on extrapolations
resources in ways that leverage additional resources as
from estimates provided in United Nations Environ-
much as possible from other sources. In this section,
ment Programme (UNEP) Biodiversity Country Stud-
the study team addresses three broad issues related to
ies. 3 Yet the center estimates that total national
the role of GEF in providing resources: whether GEF
2 During the Rio Conference, both Germany and France, the initiators of the GEF Pilot-Phase, as well as some smaller European countries
had advocated a substantial replenishment of GEF at around $3 billion. At the Participants Meeting in Beijing in May 1993, the working
numbers for replenishment advanced by the GEF Secretariat after consultations with all donor countries were 2 to 3 billion SDR (Special
Drawing Rights), which at that time corresponded to $2.8­$4.2 billion (GEF/RE.93/3, November 3, 1993).
3 BirdLife International, New and Additional Financial Resources for Biodiversity Conservation in Developing Countries 1987­1994 (Cambridge,
United Kingdom: 1996)--a study based on work carried out by the World Conservation Monitoring Centre, funded by the European
Commission.
4 Florentin Krause and others, Cutting Carbon Emissions: Burden or Benefit? (El Cerrito, Calif.: International Project for Sustainable Energy
Paths, 1995). The Organisation for Economic Cooperation and Development (OECD) has also done considerable work on the overall
economic effects of carbon taxes or emission quota allocations to different OECD countries. OECD, Global Warming, Economic Dimensions,
and Policy Responses (Paris: 1995).
5 For example, carbon emission reduction investment needs in India for an emission mitigation option that would not hurt the economy
have been estimated at $135 billion for all economic sectors and $42 billion alone for afforestation (Asian Development Bank, Climate
Change in Asia: India [Manila, Philippines: 1994], p. 119). A study done by the Asian Development Bank for Indonesia puts the additional
costs for only installing technologies to improve energy-efficiency in the transportation, industry, and electricity generation sectors, without
requiring sacrifices in economic development, at $1 billion annually (Asian Development Bank, Climate Change in Asia: Indonesia [Manila,
Philippines: 1994], p. 49).

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Provision of Resources for the Global Environment 5
has met the expectation that its funds would be new
lates that resources for global environmental measures
and additional to traditional development cooperation
in developing countries should be provided above and
resources, how significant GEF has been as a source of
beyond those allocated to traditional development co-
funding compared with other multilateral and bilateral
operation and not at the expense of development assis-
donors, and how successful GEF has been in leverag-
tance. International treaty language, however, does not
ing additional financial resources from Implementing
provide an operational definition of "new and addi-
Agencies and other sources, which GEF participants
tional" by, for example, defining a base year against
and the GEF Council have considered a key strategic
which official development assistance (ODA) and GEF
objective.
resource flows could be compared. Although develop-
ing countries tend to consider 1992 "the year of the Rio
B. ARE GEF RESOURCES NEW AND
conference" as the base year, many donor countries
ADDITIONAL?
maintain that "new and additional" simply refers to
funding efforts that go beyond the level of ODA re-
15.
Paragraph 2 of the GEF Instrument adopted by
sources that would have been allocated without the
GEF participants in March 1994 specifies that GEF
existence of GEF.
"shall operate . . . as a mechanism for international
cooperation for the purpose of providing new and
17.
Only a definition of "new and additional fund-
additional grant and concessional funding to meet the
ing" that is based on the level of development assis-
agreed incremental costs of measures to achieve agreed
tance level in a base year can be operationalized to be
global environmental benefits" in the four focal areas
used to determine whether donor countries have actu-
of climate change, biological diversity, international
ally met the obligation. A definition that requires the
waters, and ozone layer depletion. The rationale for
use of a counterfactual (what would have been the level
industrial countries' commitment to provide new and
of ODA in the absence of GEF?) cannot be used for that
additional financial resources for global environmental
purpose, because there is no objective basis for deter-
measures is that they have a historic responsibility for
mining if allocation of GEF resources in donor-country
global environmental problems and better means to
budgets has come at the cost of ODA resources. And it is
pay for measures to address them. This principle is
not clear what base year would be chosen for the pur-
acknowledged in the Preamble of the 1992 Framework
pose of comparison: Should it be 1991? 1992? Should
Convention on Climate Change, which states the
new and additional resources be calculated for each
"common but differentiated responsibilities" of devel-
successive GEF replenishment on the basis of the ODA
oping and industrial countries, based on different his-
level at the beginning of the replenishment?
tories of consumption of natural resources and
differences in their ability to pay for measures benefit-
18.
A second difficulty in answering the question is
ing the global environment. 6 Similarly, the Convention
the lack of clarity about what data should be used for
on Biological Diversity acknowledges that "special pro-
the base year and subsequent years. Should it be only
vision is required to meet the needs of developing
grant assistance? Grants and concessional loans? All
countries, including the provision of new and addi-
grant and grant-like flows? Nonconcessional loans?
tional financial resources and appropriate access to
The Official Development Assistance totals provided
relevant technologies." 7 Both conventions recognize
by the Organisation for Economic Cooperation and
that economic and social development and poverty
Development (OECD) Development Assistance Com-
eradication are the first and overriding priorities of
mittee (DAC) include a range of financial flows going
developing countries.
beyond grant assistance, including bilateral debt relief,
bilateral loans, and contributions to multilateral insti-
16.
"New and additional funding" is a political con-
tutions, including the World Bank and multilateral
cept, which leaves room for interpretation. Language
development banks. However, it has never been estab-
adopted by the climate change and biodiversity con-
lished what should be included in the yardstick for
ventions, the Rio Declaration and in Agenda 21 stipu-
determining "new and additional."
6 Preamble to the United Nations Framework Convention on Climate Change.
7 Preamble to the Convention on Biological Diversity.

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6 Study of GEF's Overall Performance
19.
One way of operationalizing the concept of "new
additional" funds for GEF. The study team is simply
and additional" as applied to GEF would be to take
unable to answer the question without clearer guid-
1992 as the base year and compare the gross ODA
ance from the GEF Council or another authoritative
levels in successive years. The OECD DAC figures
international body on operationalizing "new and addi-
show a decline in the total from close to $61 billion in
tional." Indeed, without such guidance, the concept is
1992 to a little more than $55 billion in 1996. Because
doomed to remain one without practical meaning.
DAC totals for ODA fluctuate significantly from year to
year, the choice of base year would strongly affect the
Recommendations
answer to the "new and additional" question: the over-
all ODA flow indicator fluctuates significantly from
23.
The GEF Council should address the need for a
year to year and, for example, reached close to $59
clear definition of "new and additional" financing for
billion in 1995 before falling to $55 billion in fiscal
the GEF, including the indicators that should be used
1996. Moreover, if only bilateral grants were counted,
in measuring additionality.
the trend would be shown to have gone up since 1992.
24.
Donor countries should consider separating
20.
More important, however, the study team also
budget lines for global environmental measures in de-
understands that DAC figures are unreliable and that
veloping countries and for contributions to GEF from
individual countries are known to underreport or
budget lines for development cooperation.
overreport resource flows because of both differential
completeness in reporting and methodological differ-
C. COMPARISON OF GEF FUNDING WITH ALL
ences in tracking ODA expenditures. 8 The study team
SOURCES OF FINANCING FOR THE GLOBAL
cannot vouch for the accuracy of the figures, therefore,
E
even assuming that DAC statistics on ODA constitutes
NVIRONMENT
the correct indicator to be compared.
25.
The study team attempted to analyze the signifi-
21.
Another indicator of the additionality of re-
cance of GEF funding in the context of overall financ-
sources provided to GEF that could be applied at the
ing in GEF's focal areas from all sources, bilateral and
individual country level would be whether national
multilateral. Although a fair amount of data is available
budgetary allocation processes recognize GEF as dis-
on the global environmental activities of various agen-
tinct from regular development cooperation, that is, as
cies, those data are often unreliable and cannot be
a mechanism whose objective is the realization of glo-
compared or aggregated due to differences in defini-
bal benefits and not of national development benefits.
tion or methodologies. Different agencies have differ-
Although, in some donor countries, GEF resources
ent definitions of what constitutes a biodiversity
appear to have been allocated on top of and indepen-
project or what exactly energy efficiency means. In
dently from development assistance budgets, in others
many cases, an agency's assistance on biodiversity or
they seem to have come out of an overall budget line
renewable energy or international waters is aggregated
for development cooperation. Where this happens,
with nonglobal environmental and energy work.
institutional barriers may be working against increased
funding levels for GEF and global environmental mea-
26.
The team tried to use OECD's DAC data base to
sures. Mid-level government officials have no incentive
obtain quantitative data on non-GEF assistance in the
to push funding for global environmental purposes if
four GEF focal areas. However, the DAC statistics are
they fear that this will entail trimming other budget
highly unreliable, because they rely on voluntary report-
lines of the same ministry.
ing by donor country agencies, which does not always
occur or is incomplete. When the reporting does occur,
Conclusions
it is not reviewed for its accuracy or definitional consis-
tency. Moreover, the team was also uncertain whether
22.
All these definitional and methodological prob-
bilateral contributions to GEF are aggregated with non-
lems stand in the way of a clear answer to the question
GEF spending in the data base, making comparisons
of whether donor countries have provided "new and
between GEF and other sources impossible.
8 Data from the DAC/OECD home page on the World Wide Web.

---

Provision of Resources for the Global Environment 7
27.
Given these difficulties, the team ultimately de-
photovoltaics (PVs), energy-efficient lighting, and
cided not to attempt to provide quantitative compari-
biodiversity trust funds, which have attracted particu-
sons of financing by GEF and other sources. Despite its
lar interest from funding and financing institutions.
inability to quantify total financing for the focal areas
For example, the GEF Solar Home Systems Project in
and, thus, the relative significance of GEF financing,
Indonesia, if not derailed by the country's financial
the team can make some broad observations about
crisis, will facilitate the purchase and installation of
financing for the global environment, based on inter-
200,000 solar photovoltaic systems in rural homes; at
views, country visits, and professional experience.
the same time, at least four other donors have separate
projects that fund another 120,000-130,000 rural so-
28.
Bilateral and multilateral agencies have increased
lar home systems. Likewise, some of the energy-effi-
their financing of global environmental activities in the
cient lighting projects under preparation by the
1990s, including those in biodiversity, climate change,
International Finance Corporation (IFC) will operate
and international waters. It is not clear whether this
through private sector intermediaries, possibly in the
increase accelerated or slowed in response to the estab-
same Central and East European countries in which
lishment of GEF. But the increase has taken place even
the European Bank for Reconstruction and Develop-
while overall development assistance flows have de-
ment has been establishing credit lines at commercial
creased. Some donors have established programs and
banks to help remove investment barriers to energy
institutional units dedicated solely to energy efficiency
efficiency, including energy-efficient lighting.
10
or to biodiversity. Several areas have experienced par-
ticularly notable increases in non-GEF support. For
31.
These examples do not mean that GEF should
example, there have been sharp increases in bilateral
not support photovoltaics or other technologies sup-
support for biodiversity trust funds from several do-
ported by other donors. In the Indonesian case, for
nors and rapid increases in support for renewable
example, the GEF solar project is significantly different
energy, particularly solar photovoltaics, by a number
from the bilateral projects in that it is helping to estab-
of bilateral agencies. Support for energy efficiency by
lish a rural PV credit system. But these examples un-
multilateral institutions has also greatly increased, par-
derline the growing need for close coordination with
ticularly in Central and Eastern Europe.
other donors and the need to take stock regularly of
how GEF projects compare with those of other donors.
29.
The one focal area in which it seems clear that
GEF is the largest funder is international waters, de-
32.
In the area of biodiversity, although GEF is one
fined as international collaborative efforts to reduce
of a number of donors supporting the capitalization of
threats to international waters at the regional or subre-
trust funds, GEF's continued involvement helps attract
gional level. 9 Several multilateral agencies have funded
additional donors. As others play an increasing role in
projects for generating activities to reduce threats to
capitalizing the funds, GEF could shift its orientation
international waters, primarily in the Mediterranean,
toward bridge funding to cover the first year of a trust
Baltic, Black, Caspian and Aral Seas, and the Danube,
fund's operation or could provide just the technical
Nile, and Mekong river basins but, unlike the GEF,
assistance on establishment and operation of the
they generally have not involved the same interna-
funds. GEF's continued involvement is important,
tional process of jointly evaluating threats and deter-
however, to ensure that at least part of the funds will
mining priorities.
go toward the global environment, not just the local
environment. In this regard, one approach would be
30.
As bilateral and multilateral assistance for global
for GEF to provide capital for a global window at an
environmental activities increase, GEF may find itself
environmental fund. This approach was used, for ex-
increasingly funding projects similar to those of other
ample, in the UNDP's Central American Fund for En-
agencies. This issue appears most pertinent for solar
vironment and Development.
9 Thus, the team does not consider investments in wastewater treatment or industrial pollution abatement as assistance for international
waters, despite the fact that they have impacts on international waters, because they are made primarily for national economic development
purposes.
10 Caspar Henderson, "EBRD Recaps Progress in Efficiency," Clean Energy Finance (newsletter), Vol. 2, No. 1, Spring 1997, p. 4., http://
solstice.crest.org/efficiency/cef/index/html

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8 Study of GEF's Overall Performance
33.
The study team encountered many examples of
Conclusions
poor coordination among donor agencies in the coun-
tries visited, leading the team to believe that the donor
39.
Because reliable and comparable data were un-
agencies are probably not well coordinated with GEF
available, the study team could not determine the sig-
or each other on planning and implementing financial
nificance of GEF's funding for global environmental
assistance related to climate change and biodiversity.
activities relative to non-GEF sources of funding for
There are exceptions to this generalization. An inter-
those activities, although it found GEF to be the largest
agency coordinating body has been formed on envi-
funder in the area of international waters. The team
ronmental trust funds, for example. In Central and
also found that other institutions have significantly
Eastern Europe, the London-based Project Preparation
increased their funding in biodiversity and climate.
Committee seeks to improve coordination between
However, it found GEF's role in funding to be distinct
donors and financial institutions in the field of envi-
in several ways. Given the fact that complete informa-
ronment investments. An Agenda 21 process in China
tion on the activities of other financing agencies in a
seeks to coordinate all donors on environmental activi-
given country is frequently unavailable, the
ties, and similar processes have started in Russia and
additionality and distinct advantage of a GEF project
Kenya, among other countries. But many countries do
in that country may also sometimes be unclear.
not have a mechanism for filling gaps and avoiding
duplication in GEF's focal areas.
Recommendations
34.
Even though other donors are funding projects
40.
GEF should regularly review and compare its
that are similar to GEF projects in some manner, GEF
own portfolio and project pipeline with those of other
funding is different from bilateral or multilateral
institutions to ensure that it is either providing signifi-
funders or multilaterals in other ways.
cant additional resources or demonstrating a compara-
tive advantage over other institutions involved in the
35.
First, GEF is able to program its resources on a
same activities. In this regard, particular attention
global basis with a minimum of influence on program-
should be paid to GEF support for solar photovoltaics,
ming decisions from political relationships. Other
energy-efficient lighting, and biodiversity trust funds.
multilateral and bilateral donors program their re-
sources on a country-by-country basis; their decisions
41.
GEF should work with OECD and other appro-
are often heavily influenced by broader economic and
priate international institutions to ensure that reliable,
political considerations.
comparable data on financing for measures to protect
the global environment, including data on different
36.
Second, GEF brings to projects a strong empha-
types of projects, is compiled and made available to the
sis on public involvement in initiation, design, and
public.
implementation. In some countries, this has opened
up decisionmaking processes and, in others, brought
D. LEVERAGING ADDITIONAL RESOURCES
in more NGO involvement than multilateral lenders
could have attracted.
LEVERAGING THROUGH COFINANCING AND ASSOCIATED
PROJECTS
37.
Third, GEF's more rigorous approval process
means that countries must think through and justify
42.
Since the beginning of the Pilot Phase, GEF has
GEF projects in greater detail than for most other
put great emphasis on leveraging additional financing
donors. This appears to result in better projects, al-
to enhance its impact on the four focal areas. Recogniz-
though it also makes the approval process longer and
ing that the funds available from GEF itself are small in
more complex.
relation to the needs, the GEF Council, GEF Secre-
tariat, and Implementing Agencies have all agreed on
38.
Fourth, GEF's association with the three Imple-
the objective of using GEF grants to leverage financing
menting Agencies gives it greater institutional capacity
from other sources.
for project preparation and implementation, including
impact on policy, than other donors.

---

Provision of Resources for the Global Environment 9
43.
The study team was asked to evaluate the success
fills the gap between the "business as usual" baseline
of GEF's efforts to mobilize financing from all sources.
scenario and a "sustainable development" baseline sce-
The team focused on leveraging through cofinancing
nario. It asserted that without the financing of a certain
of GEF projects by Implementing Agencies, either by
minimum set of sustainable development activities,
spending money from their own core operational re-
including those focused on health and poverty, it is
sources or by bringing in additional financing from
often impossible to implement the incremental cost
other donors or the private sector to cover part of the
activities of a GEF project. Therefore, according to
costs of a GEF project.
UNDP, the financing of such baseline activities should
be counted as leveraging by GEF.
44.
As of June 30, 1997, GEF had committed $861
million to regular projects during GEF 1. Based on
48.
The team believes, however, that this broader
figures provided by the Implementing Agencies on
definition of leveraging would be misleading. It would
cofinancing of GEF projects, the team found that the
mean that financing activities that are clearly in the
aggregate total of cofinancing during GEF 1 is just
national development interest of a country and that
under $2.2 billion. This represents a ratio of 2.5 addi-
have no effect or only the most indirect effect on the
tional dollars to one GEF dollar during GEF 1.
global environment would be regarded as a GEF ac-
complishment. In short, the distinction between na-
45.
During the Pilot Phase, GEF invested $733 mil-
tional development objectives and global environmental
lion in regular projects and the Implementing Agencies
objectives would be completely lost. It is the study
provided or mobilized $2.24 billion in cofinancing--
team's understanding that GEF was established based
almost exactly the same amount as in GEF 1. This
on the importance of maintaining that distinction.
amount represented three additional dollars for every
dollar provided by GEF. The comparison is somewhat
49.
Based on the study team's definition of leverag-
misleading, however, considering that one pilot
ing, project documents submitted by the Implement-
project accounted for $1.3 billion in cofinancing. For
ing Agencies were analyzed for a sample of eighteen
this reason, the study team found that GEF has on
full GEF projects, representing all the projects ap-
balance been more successful in mobilizing
proved for the GEF work program during the calendar
cofinancing during GEF 1 than during the Pilot Phase.
year of 1997 on which project documentation was
Furthermore, the team found the aggregate cofinancing
available at the time of the study. The contributions by
to represent a significant degree of leveraging of addi-
recipient governments and other funding entities to
tional funding--and activities for global environmental
these projects that were listed as cofinancing either in
benefit--by making GEF grants available.
the GEF Quarterly Operational Report (QOR) or in an
Implementing Agency's own summary of cofinancing
46.
Cofinancing by Implementing Agencies, other
totaled $774.2 million, of which $276.4 million was
donors, or the private sector is not always the same as
from recipient governments.
leveraging financial resources for global environmental
benefit, however. No definition of leveraging has been
50.
The study team analyzed the figures for govern-
provided by the GEF Council or Secretariat, so the
ment cofinancing and for total non-GEF contributions
term has been used in different ways by Implementing
to project financing for each project, based on data in
Agencies and the secretariat. The study team defined
the project document regarding the activities being
leveraged financing as financing in conjunction with a
financed. It counted these financial contributions as
GEF project that supports activities producing global
leveraging only if the funding was to generate global
environmental benefit and that would not have been
environmental benefit and would not have been spent
spent in the absence of the GEF project or that would
in the absence of the GEF project or if the GEF project
otherwise have been spent in ways that would have
caused the government to spend the same amount but
contributed to global environmental degradation.
in ways that had global environmental benefit.
47.
The study team recognizes that this is not the
51.
The results of this analysis are shown in Table 1.
only way that leveraging can be defined. In discussions
The study team found that in five of the eighteen
with the team, UNDP argued that leveraging should be
projects, most or all of the cofinancing listed in GEF
defined to include cofinancing for a GEF project that
documents represented actual leveraging and that gov-

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10 Study of GEF's Overall Performance
TABLE 1.
COFINANCING AND ACTUAL LEVERAGING IN A SAMPLE OF EIGHTEEN GEF PROJECTS
(MILLIONS OF U.S. DOLLARS)
Cofinancing as
Leveraging as
Project
GEF Funding
Used in the QOR
Strictly Defined
By
Project
By
Project
Government
Total
Government
Total
1. India Coal-Bed Methane
9.19
6.80
8.10
6.80
8.10
2. Uruguay Banados del Este
Biosphere Reserve
2.50
1.50
1.54
0.00
0.36
3. Bolivia Energy-Based Rural
Electrification
4.45
1.60
4.05
1.60
4.05
4. China Capacity Building for Rapid
Commercialization
8.80
8.90
18.84
?
8.5-18.84
5. China Energy Conservation
22.00
44.00
180.00
7.00
70.00
6. Indonesia Coral Reef Rehab.
and Management
12.00
13.00
48.00
1.50
3.20
7. Uganda Protected Areas Manage-
ment and Sustainable Use
10.00
9.30
96.80
0.00
26.00
8. Sri Lanka Medicinal Plants
4.57
20.72
20.72
.50
.50
9. Romania Integrated Protected Areas
5.00
1.60
1.60
0.00
0.00
10. Pakistan Protected Areas Management
10.80
15.70
15.70
0.00
0.00
11. Aral Sea Basin
12.00
12.00
47.50
0.00
18.30
12. Brazil Biomass Power Commercial
Demo
40.00
?
82.00
?
82.00
13. Reducing Biodiversity Loss at Cross
Border Sites in East Africa
12.65
1.70
5.77
1.20
5.27
14. Conservation of Wetlands and
Coastal Ecosystems in Med.
13.27
22.70
28.60
0.00
2.30
15. Brazil Energy Efficiency
20.00
100.00
177.00
0.00
3.00
16. Eritrea Conservation Management
4.99
?
10.80*
0.00
0.00
17. Argentina Patagonia
5.20
?
13.90*
0.00
0.00
18. Czech Republic Kyjof Waste Heat
5.09
4.00
14.00
4.00
14.00
Total
203.00
276.00
775.00
23.00 246-256
* Claimed as cofinancing in UNDP cofinancing data sheet but not in QOR.

---

Provision of Resources for the Global Environment 11
ernment spending involved substitutional activities
veraged $1.3 billion through substitutional activity,
benefiting the global environment.11 In three other
accounts for a large proportion of all leveraging in the
cases, the amount of GEF-leveraged financing was
Pilot Phase and GEF 1.
found to be significant but less than half of what was
claimed.12 In one case, leveraging was significant, but
54.
Nevertheless, based on this analysis of a sample
the project document reflected genuine uncertainty
of projects, the study team concludes that the amount
about whether the government funding for renewable
of financial leveraging, defined in a strict sense, is
energy activities would have been devoted to the activi-
significantly smaller than the total cofinancing based
ties supported by the project in the absence of the GEF
on the QOR and Implementing Agency data.
project, so a range of estimates for total leveraging was
used.13 In the other nine cases, the project documents
55.
The main mechanism for leveraging additional
indicated clearly that a high proportion of the funding in
resources for GEF has been World Bank loans associ-
question was for baseline activities and, in the case of
ated with GEF projects. The GEF Council and Secre-
government spending, that most or all of it would have
tariat have expressed a strong preference for World
been spent on the activities in the project in any case.14
Bank GEF projects that are associated with non-GEF
projects over "freestanding" World Bank GEF projects
52.
Total cofinancing found to be genuinely lever-
(which have no Bank loan financing) to increase the
aged in the eighteen projects in the sample is estimated
leveraging of GEF's limited resources. By linking a GEF
as $246-$256 million, which represents about one-
grant with a World Bank loan, GEF has hoped that the
third of the $775 million in cofinancing as identified in
Bank could persuade client governments to borrow for
the QOR or in Implementing Agency documentation.
projects that would provide global environmental ben-
The amount of government financing in this sample of
efits. However, whether World Bank loans associated
projects that was found to be genuinely leveraged was
with GEF projects have provided financing for activi-
$23 million, representing 8 percent of the $276 mil-
ties that are both additional and benefit the global
lion listed as cofinancing.
environment has been the subject of some debate since
GEF began.
53.
The study team cannot provide a quantitative
estimate of overall leveraging based on the analysis of
56.
Most of the funding for the World Bank's associ-
the sample. A few projects with real leveraging can
ated loans (84 percent of the total since the beginning
make up for many projects in which such leveraging is
of the Pilot Phase) has been in the climate change focal
absent. One-third of the leveraging in this sample of
area. The study team analyzed the portfolio of eight
eighteen projects is accounted for by the Brazil Biom-
World Bank-associated loans in the climate change
ass Power Demonstration project. And the Philippines
focal area during GEF 1 as of mid-1997 15 and seven
Geothermal Project during the Pilot Phase, which le-
during the Pilot Phase 16 to determine the extent to
11 India Coal-Bed Methane, Bolivia Energy-Based Rural Electrification, Reducing Biodiversity Loss at Cross-Border Sites in East A frica,
Brazil Biomass Power Commercial Demonstration, and Czech Republic Kyjov Waste Heat.
12 China Energy Efficiency, Uganda Protected Areas Management and Sustainable Development, and Aral Sea Basin projects. The China
Energy Efficiency project proposal claims $41--$91 million in domestic bank loans as part of the financing plan, despite the fac t that the
funding would only be available for commercialization of technologies in the event that applications of the energy services com pany
concept prove successful during the pilot program. The figure given in the Quarterly Operational Report for June 1997 for the China Energy
Conservation Project apparently assumes $55 million in commercial bank loans for that purpose. The study team concluded that su ch
financing should not be considered as cofinancing because there is no commitment by the founders and because project managers h ave no
control over the decision to finance. It should be considered, however, as leveraging through replication.
13 China Capacity Building for Rapid Commercialization.
14 In the case of Indonesia Coral Reef Rehabilitation and Management, the World Bank indicated that the project involves substitu tional
activities for government baseline spending on the site chosen for global biodiversity importance, which represents a relativel y small
percentage of its contribution to the project.
15 The eight projects in the portfolio of GEF 1 are: Brazil Biomass Commercial Demonstration, China Energy Conservation, Indonesi a
Renewable Energy Small Private Power, Indonesia Solar Home Systems, Latvia Solid Waste Management and Landfill Gas Recovery, Lithuania
Klaipeda Geothermal Demonstration, Senegal Sustainable and Participatory Energy Management, and Sri Lanka Energy Services Delivery.
The study team considered only the demand management and fuel substitution component of the Senegal project as its climate portion,
because the rest of the project involves sustainable management of a protected area and is considered to be in the biodiversity focal area.
16 The five Pilot-Phase projects on which information could be obtained were China Sichuan Gas Transmission and Distribution
Rehabilitation, India Alternative Energy, Philippine Leyte-Luzon Geothermal, Poland Coal-to-Gas, and Russian Federation Greenhouse Gas
Reduction. The study team was unable to contact the task managers for the other two Pilot-Phase, GEF-associated climate loans.

---

12 Study of GEF's Overall Performance
which these loans represent genuine leveraging by
without the GEF grant and would have provided the
GEF. The key issue in this examination was whether
biodiversity protection of the GEF-associated loan
the Bank would have made a very similar loan to the
project. In that case, the loan grew out of a World Bank
country in question in the absence of the GEF grant.
Forestry Sector Review in Argentina and the GEF grant
The team was able to interview the task managers of six
was considered incidental to the project.
of the nine associated loans for GEF 1 climate projects
and the task managers of five of seven Pilot Phase
61.
In some instances, GEF was the key to the
associated loans with regard to this question.
project being developed at all; in most cases, the avail-
ability of the GEF grant was necessary to the loan's
57.
Five of the six task managers of GEF 1 projects
focus on conservation of biodiversity in sites of global
interviewed indicated that the associated loan would
importance. The India Ecodevelopment Project origi-
not have been made without the GEF grant being
nated from the Indian government's exercise in creat-
available. In only one case--the demand management
ing a project especially for GEF, and the International
and fuel substitution component of the Senegal Sus-
Development Association (IDA) contribution resulted
tainable and Participatory Energy Management Loan--
from the project becoming too big for GEF to fund.
did the task manager say that the loan would have
Similarly, the Lake Victoria Environmental Manage-
been made regardless of GEF's involvement in the
ment project would not have happened without GEF
project. Thus, the team found that associated loans in
funding: it began entirely as a GEF project, but because
the climate focal area generally did leverage additional
the cost was greater than GEF could fund by itself, IDA
global environmental funding during GEF 1.
was asked to match the GEF grant. The Second Mada-
gascar Environmental Program Support project is a
58.
The examination of the Bank's Pilot Phase, GEF-
multidonor operation, the design of which was based
associated loans for climate projects, however, showed
on a process of analysis funded by GEF; it is not clear
that two (Philippine Leyte-Luzon Geothermal and In-
whether the loan would have proceeded at all without
dia Alternative Energy) would definitely not have gone
the presence of a GEF grant.
forward in the absence of the GEF grant, one would
definitely have proceeded, another would probably
62.
In the other cases, the World Bank would have
have gone ahead, and, in one case, the task manager
made a loan with some similarities to the GEF associ-
remained uncertain.
ated loan, but it would not have protected biodiversity
at all or would not have done so as effectively as the
59.
The study team also examined all eight of the
associated loan. In the case of the Pilot Phase Lao
Bank's loans for biodiversity associated with GEF
People's Democratic Republic Wildlife and Protected
biodiversity grants through the Pilot Phase and the two
Area Conservation Project, the Bank would not have
GEF-associated loans for biodiversity approved during
made a loan to support a protected area system in Laos
the Pilot Phase (Lao People's Democratic Republic
without GEF, although it would have gone ahead with
Wildlife and Protected Area Conservation and
a traditional forest management loan.
In the case of the
Biodiversity Conservation in Southeast Zimbabwe) to
Kerinci Seblat Integrated Conservation and Develop-
determine the extent to which they represent genuine
ment Project, the World Bank would have made a loan
leveraging of financing for global environmental ben-
for development projects in the Kerinci Seblat area re-
efits. Interviews were conducted with the task manag-
gardless of GEF's existence, but the projects would not
ers of all eight of these World Bank-associated loan
have been focused on protecting biodiversity, because
projects to find out whether GEF was crucial to the
the Indonesian Ministry of Forestry has a policy of not
biodiversity conservation benefits provided by these
borrowing, especially for biodiversity conservation.
loans. Again, the team asked the task managers
whether the World Bank would have made the loans in
63.
Similarly, in the case of the Indonesia Coral Reef
the absence of a GEF grant and, if so, whether the loan
Rehabilitation and Management (COREMAP) project,
projects would have been designed to protect
the Bank probably would have moved ahead on a coral
biodiversity as were the actual GEF-associated loans.
reef project without GEF, but it would not have in-
cluded sites of global importance. In all the other
60.
In only one of the eight associated loans--the
projects, the GEF loan was viewed as crucial to suc-
Argentina Biodiversity Conservation Project--did the
cessful biodiversity protection. Without the GEF
task manager believe the loan would have been made
grant, there would have been no ring of communities

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Provision of Resources for the Global Environment 13
committed to sustainable forest management sur-
complement GEF's portfolio. However, the potential
rounding the national park in the Senegal Sustainable
for leveraging inherent in this association was not real-
and Participatory Energy Management Project. In the
ized during GEF 1. Only two non-GEF UNDP projects
case of the Honduras Biodiversity in Priority Areas
in the GEF focal area were associated with GEF
Project, without the GEF grant, the Bank loan would
projects. The study team believes that it represents a
not have been based on a set of priority biodiversity
major untapped resource for leveraging in support of
conservation sites or on the broad participation of
GEF objectives, which should be a key objective in the
nongovernment stakeholders. And without the GEF
next phase of GEF.
grant, the Zimbabwe Conservation in Southeast Zim-
babwe Project would not have had the policy dialogue
67.
Apart from resources that GEF leverages through
between the World Bank and the government in 1994-
cofinancing, GEF may also leverage additional funding
96, which made possible key institutional and policy
for complementary activities through demonstration
reforms that were vital to the success of the project in
and replication. Many projects in the climate focal area
saving biodiversity.
anticipate that successful completion of their activities
will demonstrate to other funders that the technology
64.
The evidence indicates that during GEF 1, GEF
in question is commercially viable and will lead to
has leveraged global environmental benefits that
replication. In at least one case, the China Coal-Bed
would not otherwise have occurred in eight of nine
Methane Project, the project has already successfully
World Bank-associated loans that cofinanced GEF
demonstrated technologies for reducing methane
biodiversity projects and five of six associated loans
emissions and recovery of methane as a fuel in three
that cofinanced GEF climate projects.
sites, resulting in several agreements for joint ventures
for investment in similar projects in the future.
17
65.
The study team also found evidence that the use
of an associated Bank loan to leverage financing for a
68.
Other projects have been designed in the expec-
GEF project can have disadvantages for the GEF
tation of such replication by the private sector. The
project. When a country agrees to a GEF-associated
India Coal-Bed Methane Project is expected by project
Bank loan, some government agencies may also push
sponsors to attract private sector investments in the
for more activities in the project to generate foreign
technology. And in the case of the China Energy Con-
exchange with which to repay the loan. For example,
servation Project, if the energy service companies sup-
the World Bank staff in Indonesia reported that more
ported by the project are successful, domestic Chinese
such activities had to be included in the Kerinci Seblat
banks and the World Bank are ready to commit a total
project at the insistence of the Home Affairs Ministry,
of $100-$155 million to commercialization.
with the result that fewer funds were available for park
protection. Second, the associated loan may be caught
69.
Although evidence from a few individual cases
in domestic politics, causing long delays in start-up.
indicates that additional funding for the global envi-
The main cause of delay in the Egypt Red Sea Coastal
ronment should be generated by GEF projects through
and Marine Resource Management project, for in-
replication, the study team was unable to do a system-
stance, was that the World Bank loan was opposed by
atic analysis of the likelihood that GEF projects, par-
the Egyptian parliament. In addition, some countries
ticularly in the climate focal area, will be replicated.
that are highly indebted are likely to be reluctant to
take out loans for conservation in the foreseeable fu-
70.
The strong emphasis placed by GEF on leverag-
ture. Although the associated loan must remain the
ing is legitimate, given the relatively small size of the
main mechanism for leveraging additional resources
fund and the fact that it is one of the few quantitative
for the global environment, the study team believes
measures available for judging GEF success. The team
GEF must be aware of the problems it poses in certain
believes, however, that there is a danger in placing too
circumstances.
much emphasis on leveraging of financial resources by
GEF projects as a measure of success. An overemphasis
66.
UNDP has the advantage of being able to associ-
on total financial resources mobilized may distort pro-
ate GEF grants with its own grants, which could create
gramming decisions by tilting them in the direction of
a strong incentive for greater emphasis on projects that
projects that have the largest amount of cofinancing.
17 GEF, Project Implementation Review 1997, op. cit., p. 15.

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14 Study of GEF's Overall Performance
Although they are important, such totals are not an
LEVERAGING PRIVATE SECTOR INVESTMENT
accurate indicator of the impact of individual projects
or of the GEF portfolio as a whole.
75.
The study team recognized that the mobilization
of private capital for the global environment is a special
Conclusions
concern for GEF. Indeed, the private sector has an
increasingly important role in providing investment
71.
GEF has succeeded in using grants to mobilize
capital to developing countries, taking on much of the
resources on a significant scale, and its performance in
role traditionally played by multilateral development
GEF 1 has been superior, on balance, to its perfor-
banks. Private debt capital inflows into emerging mar-
mance in the Pilot Phase. The study team found that a
ket countries, which amounted to just $26 billion in
high proportion of World Bank-associated loans that
1984 (in 1996 dollars) had increased to $88.6 billion
have cofinanced GEF projects have actually leveraged
by 1996. Foreign direct investment into emerging
additional resources for global environmental benefit
market countries during this time jumped from $9.4
and those loans have been the primary mechanism by
billion to $109.5 billion. 18 Although this investment is
which financing has been leveraging by GEF. How-
focused primarily on fewer than a dozen nations, these
ever, it found that associated GEF projects with such
are countries that are important to GEF's mandate of
loans may carry some disadvantages in certain circum-
maximizing global environmental benefits.
stances. It also concluded that UNDP-associated
grants represent a large, untapped potential for such
76.
Increased financial flows can place more pressure
leveraging.
on natural resources and the environment. But they also
hold out enormous opportunity for raising the amount
72.
Using a rigorous definition of leveraging, the
of private sector investment in GEF projects. GEF's
study team found that the actual leveraging of resources
success in this regard has been growing but remains
for the global environment has been substantially less
small in comparison to the opportunity. Private sector
than the overall totals for cofinancing mobilized by the
financing has taken place or is expected to take place in
Implementing Agencies. The study team found, how-
forty-five GEF projects, including both Pilot Phase and
ever, that there is a danger in emphasizing leveraging
GEF 1. Of these, twenty-two are under way or nearly
too much as a measure of GEF's success. It should be
under way (see Table 2 below).19 Ten are in the ozone
considered along with a number of other relevant insti-
depletion focal area, ten are in climate change, and two
tutional and programmatic indicators.
projects involve both climate change and biodiversity.
There are no reported instances of international waters
Recommendations
projects leveraging private investment.
73.
The GEF should adopt a rigorous definition of
77.
Total private investment in these twenty-two
"leveraging" that includes only funding that is addi-
projects is $1.12 billion, but more than half of this
tional to existing funding patterns and that is expected
($754 million) is accounted for by the Philippines
to create global environmental benefits. It should ap-
geothermal project. Also, the total probably overstates
ply this definition in the Quarterly Operational Report
true private investment because in some cases, such as
and other relevant GEF documents. Implementing
China, India, and the Russian Federation, the invest-
Agencies should apply this more rigorous definition in
ments are coming from state or quasi-state enterprises,
their own databases and reports on cofinancing of GEF
not the private sector. A more conservative estimate,
projects.
subtracting these projects as well as the ozone projects
(because recipient country investment in them is man-
74.
When there is sufficient experience with imple-
datory) yields a figure of $910.5 million for total pri-
mentation of GEF projects, the GEF's Senior Monitor-
vate sector commitments to date in GEF projects.
ing and Evaluation Coordinator should commission a
Without the Philippines geothermal project accounts,
study of the replicability of projects in the GEF portfo-
the total is just $156.5 million.
lio.
18 Global Finance (September 1997), p. 184.
19 Jamison Suter, World Bank, personal communication, September 1997.

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Provision of Resources for the Global Environment 15
TABLE 2.
WORLD BANK GEF PROJECTS WITH PRIVATE SECTOR COMMITMENTS
Est. Amount
Leveraged (Millions
Country
Project/Concept Name
Funding Equity Name
of U.S. Dollars)
Global
Small- and Medium-Scale Enterprise
Small-scale private
Program (pilot phase)
enterprises
2.90
Global
Small- and Medium-Scale Enterprise
Small- and medium-scale
Program (replenishment)
enterprises
3.50
Belarus
Phaseout of Ozone-Depleting Substances
Local enterprises
8.80
Brazil
Biomass Power Commercial
Demonstration
Sponsor's equity
29.00
Bulgaria
Ozone-Depleting Substances Phaseout
Recipient enterprises
3.00
China
Efficient Industrial Boilers
Local private sector
68.60
Czech Republic
Kyjov Waste Heat Utilization
TEPLARNA Kyjov
10.00
Czech Republic
Phaseout of Ozone-Depleting Substances
Recipient enterprises
1.80
Hungary
Phaseout of Ozone-Depleting Substances
Recipient enterprises
1.50
India
Alternate Energy
TNPL and developers
44.00
Indonesia
Solar Home Systems
Local participants
72.30
Philippines
Leyte-Luzon Geothermal
Private contractor
620.40
Philippines
Leyte-Luzon Geothermal
Private contractor
133.90
Poland
Energy-Efficient Lighting
Recipient enterprises
1.60
Poland
Phaseout of Ozone-Depleting Substances
Local enterprises
14.00
Russian
Ozone-Depleting Substance
Federation
Consumption Phaseout (first tranche)
Recipient enterprises
12.70
Russian
Phaseout of Ozone-Depleting Substances
Federation
(second tranche)
Recipient enterprises
21.50
Slovak Republic
Ozone-Depleting Substances Reduction
Recipient enterprises
2.50
Slovenia
Phaseout of Ozone-Depleting Substances
Recipient enterprises
3.50
Sri Lanka
Energy Services Delivery
Private sector
23.30
Tunisia
Solar Water Heating
Private sector
13.60
Ukraine
Phaseout of Ozone-Depleting Substances
Local industries
32.20
78.
In nearly all cases of private investment in GEF
of such institutions will follow if project sponsors can
projects, the private sector party involved is the benefi-
generate well-designed, profitable projects. But to se-
ciary or sponsor of the project, such as the enterprise
cure their investment capital, it may be necessary to
that is converting to non-ozone-depleting equipment
include them in the up-front identification and develop-
or the developer of alternative energy projects.
There
ment of projects with high perceived risks.
are few instances in which GEF projects seek to leverage
private financial institutions, such as commercial banks,
79.
The study team could identify just five instances
insurance companies, pension funds, and other institu-
in which such third-party investors are playing (or
tional investment funds. In some cases, the involvement
soon will play) a key financial role in GEF projects.

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16 Study of GEF's Overall Performance
First, IFC's Renewable Energy and Energy Efficiency
outside review of private sector GEF proposals may
Fund is intended to attract roughly $175 million from
need to be restricted.
private sources for its initial capitalization. The private
managers of the fund have committed a portion of the
82.
Another procedural issue has to do with the
capital. The rest must still be raised. Second, IFC's
concept of incremental costs. In many cases, it may
Terra Capital Biodiversity Fund is intended to attract
not be these costs that are the barrier to commercial
roughly $40 million in private investment for its capi-
investment but the level of risk compared with
talization. Third, IFC's Hungary Energy Efficiency
projects normally financed. Under such circum-
Cofinancing Project uses GEF funds in the form of a
stances, the appropriate GEF role would be to help
guarantee to reduce the credit risk to private domestic
reduce the risk through such actions as providing a
financial institutions. Fourth, the World Bank's Indo-
partial guarantee, paying for some of the up-front
nesia Solar Home System Project will involve four local
transaction costs, or taking a range of other risk-
commercial banks that will provide lines of credit to
reduction steps rather than subsidizing the size of the
solar equipment dealers, who in turn will provide
firm's investment. Allowing Implementing Agencies to
credits to solar system buyers. Initially, the banks will
calculate the "incremental risk" as a way of determin-
use mainly World Bank funds, but after project
ing the size of the GEF grant could help target GEF
completion, it is anticipated that they will use their
grants more efficiently on removing the barriers to
own funds. Fifth, the IFC's Small- and Medium-Scale
private sector participation. The GEF Secretariat has
Enterprise Fund operates through private financial in-
reportedly shown considerable flexibility during the
termediaries, some of whom may ultimately lend their
last year on this issue. 20
own funds in addition to administering the on-lending
of GEF funds.
83.
Most private sector involvement in GEF is
through the World Bank, although IFC is playing an
80.
In the ten countries visited by the team, there
increasingly important role. The IFC reports that as of
was little active participation by the private sector in
December 1997, $69.3 million worth of IFC-spon-
GEF projects beyond providing procured equipment
sored GEF projects were under way and $68.7 million
and services or, in some cases, acting in an advisory
in the near-term pipeline. 21 IFC's GEF strategy is to
capacity. Despite the frequently expressed desire by
focus on near-commercial projects and those that are
Focal Point ministries and other government officials
commercial but highly risky to maximize the leverag-
to include the private sector, there appears to be little
ing of GEF funding and avoid using GEF in the form
tangible effort on their part to do so. In some cases,
of grants. For example, IFC has provided GEF assis-
those host country individuals involved in GEF do not
tance in the form of concessional loans and loan guar-
know how to involve the private sector. In other cases,
antees. The Energy Efficiency Cofinancing Project in
there is a reluctance to do so out of concern that GEF
Hungary is the only instance of GEF funds being
might simply end up subsidizing private companies.
provided in the form of a guarantee. Providing GEF
There are also a number of policy and regulatory barri-
assistance in the form of loan guarantees has the dual
ers to increased private sector involvement.
benefit of attracting private lenders to global environ-
ment projects and allowing the GEF loan guarantee
81.
According to Implementing Agency staff, one of
funds to be reused for another project (or expansion of
the main barriers to private sector involvement is the
the original project) if they are not called on to cover
long GEF approval process. Given the uncertainty,
financial losses.
risk, and high opportunity cost inherent in a GEF
project, private firms do not have sufficient incentive
84.
To date, IFC has spent few of its own funds to
to wait two or more years for approval. Streamlining
cofinance GEF projects, but this will change, since it
this process for private sector projects has been fre-
has already approved funds for cocapitalizing the Re-
quently suggested. Implementing agency staff also
newable Energy and Energy Efficiency Fund and the
note that when proprietary information is involved,
Terra Capital Biodiversity Fund at $35 million and $5
20 Louis Boorstin and Dana Younger, IFC, personal communication, December 1997.
21 Ibid.

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Provision of Resources for the Global Environment 17
million, respectively. IFC staff report that they are also
a leveraging standpoint. However, the lack of opera-
actively looking for opportunities to use existing IFC
tional experience to date, due in part to long start-up
credit lines for global environmental purposes. For
delays for some of the funds, has meant the team could
example, one proposed project involves the use of GEF
not evaluate the funds' effectiveness.
funds to leverage an existing IFC credit line in Argen-
tine commercial banks for improving the energy effi-
87.
The team found that major barriers to increasing
ciency of street-lighting.
support from the private sector exist, particularly
GEF's long and complex approval procedure and the
85.
In April 1996, the GEF Council reviewed a paper
comparatively greater risk of global environmental
prepared by the secretariat on increasing private sector
projects compared with normal commercial projects.
involvement in GEF. 22 Although the council did not
However, the team notes that GEF assistance can be
take any action based on the paper, there was a con-
provided to the private sector in a way that does not
sensus that increased private sector involvement was
subsidize private profits but instead reduces the risks
desirable. One of the paper's major recommendations
to private firms and financial intermediaries of com-
was that nongrant financing, such as concessional
mitting capital to projects with global environmental
loans and equity investments, should be pursued for
benefits. Such assistance can involve a variety of fi-
providing GEF support to private sector projects. New
nancing mechanisms, including instruments which
ways of attracting private investment to GEF projects
have below market returns (e.g. low interest rate loans)
are currently being explored by the secretariat. One
and/or contingent payment features (e.g. partial guar-
approach under consideration is the broader use of
antees which are forgivable if a project fails).
GEF funds in the form of loan guarantees, as in IFC's
Energy Efficiency Cofinancing Project in Hungary. An-
Recommendations
other approach being examined is the establishment of
a special environmental loan guarantee fund at the
88.
The GEF Secretariat and Implementing Agencies
Multilateral Investment Guarantee Agency, the risk
should engage business and banking associations and
insurance agency in the World Bank Group.
mobilize financing from individual private financial
sector companies, such as banks, insurance compa-
Conclusions
nies, and pension funds. To interest the private sector
in GEF projects, the GEF should use the "incremental
86.
The study team found that GEF has been able to
risks" of a potential private sector GEF project as a way
mobilize a small but growing level of private sector
of determining the size of the GEF grant.
financing of GEF projects. It has been particularly
successful at mobilizing funds from the direct benefi-
89.
GEF should identify and apply techniques for
ciaries of projects but has had comparatively little
reducing the risk of the private investors of participat-
success with mainstream private financial institutions.
ing in GEF projects, such as using GEF funds to pro-
The use of GEF funds to establish environmental in-
vide loan guarantees.
vestment funds shows great promise, particularly from
22 Global Environmental Facility, Draft "GEF Strategy for Engaging the Private Sector," GEF/C.7/12, March 7, 1996.

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18 Study of GEF's Overall Performance
III. ISSUES AT THE COUNTRY LEVEL
A. THE FOCAL POINT SYSTEM IN RECIPIENT
93.
Table 3 provides an overview of the different
COUNTRIES
approaches to coordination in the ten countries vis-
ited. It shows that most of the countries have not yet
90.
There are two types of GEF Focal Points--politi-
established any formal body for intragovernmental co-
cal (usually the country's representative on the GEF
ordination of activities related to the coordination of
Council, if the nation is a member) and operational
GEF activities.
(usually the ministry that provides financial and tech-
nical overview of GEF projects). The study team found
· Interagency mechanisms for pr
oject screening and
that the effectiveness and level of engagement of the
pipeline development.
In Russia, the Inter -Agency
Operational Focal Point are likely to be greater if the
Committee and state commissions together pr
ovide
country is a GEF Council member. Nine of the ten
interagency coor dination with r egard to GEF pr ojects.
countries visited by the core team during the study have
In Mexico, coor dination takes place thr ough the
political Focal Points who are council members. Al-
National Council for Sustainable Development. In
though council members have minimal staff and re-
China, this coor dination function is car ried out by a
sources, most appear to have established effective
panel of technical exper ts, which examines pr ojects
working relationships with the Operational Focal Point.
for technical soundness and fit with national criteria
and priorities. In Kenya, the National Review Panel
91.
According to the procedural steps in the GEF
provides this coor dination, but it is a r elatively new
project cycle, 23 the Focal Point is responsible for "
(a)
mechanism and, ther efor e, prematur e to assess its
acting as the principal contact point for all GEF activi-
impact. In India and Egypt, the Ministr
y of Envir on-
ties within the country, (b) reviewing project ideas and
ment and For ests and the Egyptian Envir onmental
concepts, endorsing their consistency with respect to
Affairs Agency , respectively , convene meetings of the
the national programs and the country's participation
ministries r elevant to GEF pr ojects as the need arises.
in conventions and confirming their national priori-
In Poland, a for mal coor dinating mechanism is still
ties, (c) facilitating broad as well as project-related
in the pr ocess of being cr eated. Some Focal Points
consultations with stakeholders,
(d) providing feed-
consider that GEF pr ojects have such small funding
back on GEF activities." An effective GEF Focal Point
that they do not war rant any special coor dination
can also help to develop the country's GEF pipeline by
effort.
identifying sound project ideas and can promote un-
derstanding of and interest in GEF by disseminating
· Policy coordination with Focal Points for the con-
information among government and nongovernmental
ventions. Frequent diver gence between positions
stakeholders.
towar d GEF taken by r ecipient countries in the GEF
Council, on one hand, and in one of the conven-
92.
The study team found significant variations
tions, on the other , reflects poor policy coor dination
among the countries visited in terms of the Opera-
among gover nment agencies. In most of the coun-
tional Focal Point undertaking these roles. Most Focal
tries visited, ther e wer e no institutionalized mecha-
Points are undertaking some form of coordination of
nisms for formal interaction between the GEF Focal
GEF-related activities at least within the government.
Point and the Focal Points (national secr
etariats) for
But most of the coordinating mechanisms are more
the conventions. This is true even in those countries
informal. Some play a lead role in the development of
in which the GEF Focal Points ar e housed within
GEF projects. Others believe they are circumvented by
the same ministr y as the convention Focal Points. In
more powerful agencies, such as the Ministry of Fi-
Zimbabwe, the Ministr y of Envir onment ser ves both
nance.
as the GEF and biodiversity convention Focal Points.
23 Global Environment Facility, The GEF Project Cycle, (Washington, D.C.: March 1996), p. 4.

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TABLE 3.
DESCRIPTION OF GEF FOCAL POINT SYSTEMS IN TEN COUNTRIES
C
Operational Focal Point
(Financial and Technical Aspects of
Functions of Operational
Mechanism for Intra-
Country
Political Focal Point
In-country GEF Activities
Focal Point
government Coordination
Brazil
Secretaria de Asuntos Internacionais SEAIN, although it appears that the Ministry of
Disseminates GEF information, analyzes and reviews
GTAP (Grupo Trabalho de Analisis de Projetos).
(SEAIN) (Secretariat for International Planning and Budget, Foreign Loans Division,
projects, conducts technical analyses of GEF policies
Affairs)
plays a role too.
and projects.
China
Ministry of Finance
Ministry of Finance (World Bank Department) for
Monitors GEF activities and collaborates with other
Ad hoc panel of technical experts provides
(World Bank Department)
financial aspects with technical support from the
relevant government offices responsible for GEF focal
advice on an as-needed basis to vet technical
National Environmental Protection Agency (NEPA) areas, such as NEPA Office of the Convention on
soundness of GEF projects and fit with national
Biological Diversity (CBD), the focal point for the CBD. criteria and priorities.
Develops GEF project pipeline.
Egypt
Egyptian Environmental
EEAA
Convenes interministerial meetings for review
Ad hoc interministerial meetings chaired
Affairs Agency (EEAA)
of GEF projects and other GEF issues.
by the focal point
India
Ministry of Finance, Department
Ministry of Environment and Forests (MOEF)
Conducts technical review of projects, coordinates
MOEF plans to establish a GEF "cell"
of Economic Affairs (DEA)
with other ministries, and convenes interagency
within MOEF.
meetings to review and approve projects. Ministry of
Finance (DEA) gives final approval and clearance.
Indonesia
Planning Ministry (BAPPENAS)
Planning Ministry and Ministry of Finance, with
Unclear which functions are performed by Operational No mechanism for collaboration or to ensure
technical support from Ministry of Environment
Focal Point. BAPPENAS keeps and updates a central
that Ministry of Environment's technical input is
"blue book" of all funding proposals and sends
always sought for all proposals.
approved projects to Ministry of Finance.
Kenya
Ministry of Finance
Ministry of Environment and Natural Resources,
Reviews all project proposals, follows up on projects, Thirty-eight-member National Review Panel,
National Environment Secretariat (NES)
and houses the coordinating offices of the two GEF
consisting of government agencies, NGOs,
enabling activities in biodiversity and climate change. Implementing Agencies, and the private sector.
Also liaises with the Inter-Ministerial Committee on
Its mandate is to review all proposals to ensure
Environment, Subcommittees on Biodiversity and
that they meet GEF criteria and are country
Climate Change.
driven.
Mexico
Ministry of Finance and
The National Council for Sustainable
Coordinates GEF activities.
Ministry of Finance and Public Credit (Directorate
Public Credit
Development.
of International Financial Organisms)
Poland
Ministry of Foreign Affairs
Ministry of Foreign Affairs
There were some indications that limited size of
Issues at the Country Level 19
Monitors GEF activities and disseminates information
on GEF activities and Council policies.
GEF funds does not warrant special coordination
efforts, however, a formal coordination
mechanism is now being developed and is in a
"process of advanced development."
Russia
State Committee for
State Committee for Environmental Protection
Coordinates GEF projects in Russia.
Strong centralized system, Inter-Agency
Environmental Protection
Committee and State Commissions.
Zimbabwe
Ministry of Tourism, Environment
Ministry of Tourism, Environment, and Mines
Coordinates GEF projects in Zimbabwe.
Ad hoc interministerial steering committees are
and Mines
(Department of Environment)
established on a project-by-project basis.

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20 Study of GEF's Overall Performance
In China, the National Envir onmental Pr otection
disposal, they could not do an adequate job of coordi-
Agency ser ves as the Focal Point for the biodiversity
nation. The Egyptian Focal Point believed that he had
convention but also plays an active r ole (as technical
to provide some small incentive, such as lunch or
Focal Point for GEF) in many GEF matters in col-
travel expenses, for other agencies to attend inter-
laboration with the Ministr y of For eign Af fairs.
agency meetings. Some Focal Points have made no
attempt to secure funds from national budgets on the
94.
The team identified several problems encoun-
grounds that they are acting as Focal Points for GEF
tered by at least some Focal Points in the ten countries
more than for their governments. This was particularly
visited. First, there is a lack of clarity on the mandate,
the case for the political Focal Points, whose representa-
terms of reference, and functions. In one country,
tional responsibilities sometimes extend beyond their
there was even some confusion as to which agency is
countries to a group of countries within the region.
the Focal Point. Although this points mainly to inter-
nal coordination weaknesses of a recipient govern-
97.
The lack of broad consultation with and dissemi-
ment, further clarity in the role of the Focal Point
nation of information to stakeholders is a problem
relative to other government agencies (including
with some Focal Points. Due to its strong government
parastatals and government-funded research and sci-
focus, GEF information emanating from the Focal
entific institutions), Implementing Agency country of-
Point sometimes remains within a close-knit group of
fices, and institutions preparing proposals would
government agencies. In Indonesia, for example, the
enhance the effectiveness of the Focal Point system.
study team found that many government organizations
and research institutes do not know what types of
95.
A second problem concerned institutional and
proposals are eligible for GEF funding. It appears that
budgetary constraints. Five of the ten Operational Fo-
the Russian Federation Focal Point has not included
cal Points in the countries visited were located in the
some relevant government agencies in its consulta-
environment ministry or agency. However, there is
tions. In Egypt, NGOs said they were not being con-
some evidence that worldwide, a much higher propor-
sulted. In Brazil, interested NGOs complain that the
tion of Operational Focal Points are located in environ-
Focal Point will not accept proposals from them.
ment ministries. 24 That situation appears to present
special problems for Focal Point coordination, because
98.
The final problem identified by the study team
of the relative weakness of environment ministries.
concerned the limited availability of language-specific
This weakness stems from the low priority accorded to
information about GEF. Focal points need easy-to-
the environment in most recipient countries compared
understand information to help them with their infor-
with ministries dealing with economic affairs. Environ-
mation dissemination responsibilities, and those
ment units usually have no statutory powers to coordi-
interviewed expressed the strong desire for such mate-
nate other ministries and lack sufficient political
rials. In Russia and Egypt, however, the team found no
influence to get other ministries to respond. In India,
official GEF information available in local languages,
the Ministry of Environment and Forests (MOEF)
and the country study in Viet Nam reported that only
complained that, in the past, a number of biodiversity
the GEF Project Cycle document was available in Viet-
projects had gone to the Ministry of Finance's Depart-
namese.
ment of Economic Affairs (the political Focal Point)
without consulting MOEF. In Egypt, the Environmen-
99.
The GEF Secretariat and the Implementing
tal Affairs Agency indicated that other ministries had
Agencies have been aware of problems and shortcom-
been unresponsive to its requests as Focal Point for
ings in the Focal Point system and have taken some
attendance at meetings or feedback.
steps intended to redress them. Since 1996, the Imple-
menting Agencies have collaborated in carrying out a
96.
The lack of budgetary resources for GEF func-
series of project development workshops designed to
tions exacerbates the problem. Some Focal Points
provide government officials, NGOs, and project staff
noted that without some budgetary resources at their
with training and basic information on project devel-
24 According to a 1996 UNEP document, 62 percent of the sixty Operational Focal Points that had been designated up to that point were
located in environmental ministries (United Nations Environment Programme, "Enabling Activity Proposal for PDF Block B Grant" (August
31, 1996), p. 2.)

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Issues at the Country Level 21
opment and design. As of mid-1997, forty-one such
B. THE REQUIREMENT FOR PROJECTS TO BE
workshops had been held or were planned either in
COUNTRY DRIVEN
individual countries or in regions. UNDP is planning
to translate a "beginner's guide to GEF" into multiple
104. The requirement for GEF projects to be "country
languages.
driven" is a paramount principle in GEF legislative,
strategic, and operational documents. The GEF Instru-
100. However, the experiences of the ten countries
ment states that projects must be "country driven and
visited indicate that GEF efforts to strengthen the Focal
based on national priorities designed to support sus-
Point system need to be more carefully targeted. An
tainable development, as identified within the context
evaluation of the Project Development Workshops by
of national programs."
the three Implementing Agencies in 1997 suggested
that the current version of the workshops may need
105. The study team examined two key questions:
substantial revision and that Operational Focal Points
what constitutes a "country-driven project" and what
might be asked to manage the workshops. The work-
is its impact on country ownership of a project as
shops could also focus much more centrally on prob-
defined as the level of commitment to and support for
lems of coordination, both on projects and policy and
a project on the part of the recipient country's govern-
on stakeholder involvement.
ment and nongovernmental stakeholders? Although it
is desirable for projects to be country driven, it is
Conclusions
country ownership that is a prerequisite for the success
and long-term sustainability of a project.
101. The study team found that the GEF Focal Point
system is not yet adequately institutionalized in some
COUNTRY-DRIVEN PROJECTS
countries. Some Focal Points have not yet set up stand-
ing coordinating mechanisms for interactions with
106. In the absence of a GEF definition of a project
other ministries, country representatives to the con-
being country driven, the study team considered two
ventions, or NGO stakeholders. Some are not clear on
possible indicators that a project is country driven:
their roles, and others are unable to carry them out
Focal Point endorsement of a project and the degree of
adequately because of internal weaknesses, such as the
recipient country involvement in project development
unwillingness of powerful ministries to cooperate.
A
and management.
common weakness is the tendency to limit information
to a relatively narrow circle of government stakeholders.
107. Country Focal Point endorsement of a project is
required by GEF as evidence that it is country driven.
Recommendations
It does not appear, however, to be a reliable indicator
of its being country driven. Such an endorsement pro-
102. In order to enable Operational Focal Points to be
vides no evidence of the inclusiveness of the process
more effective advocates for GEF issues in their coun-
and the involvement of other government, private sec-
try, the GEF Secretariat and Implementing Agencies
tor, and civil society stakeholders. Some country Focal
should broaden the existing Project Development
Points are attempting to include a broad range of
Workshop format by involving the Operational Focal
stakeholders in their decisionmaking processes by es-
Points as much as possible in planning and execution
tablishing multistakeholder coordination mechanisms,
and by focusing more on the coordination and infor-
but others have not yet done so.
mation dissemination functions of the Operational Fo-
cal Points.
108. The degree of recipient country involvement in
project development and management is a more reli-
103. The GEF should provide resources for transla-
able indicator of the degree to which a project is coun-
tion of basic GEF documents into the local languages
try driven. Therefore, the team focused on how
of those countries requiring such translated docu-
projects were initiated, designed, and managed as an
ments.
indication of how strongly they are country driven.
109. Three different patterns of country involvement
in project development were found. In the first, project
proposals clearly originated in the recipient countries

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22 Study of GEF's Overall Performance
and reflected predominant recipient country influ-
terested in developing solar energy to carry out rural
ence. The India Ecodevelopment Project was an Indian
electrification in areas off the main grid, so GEF cli-
creation and design, although the scale of the project
mate-related projects are a relatively high priority. The
was strongly influenced by World Bank advice. Simi-
Indonesia Solar Homes Project fits into the country's
larly, in the India Alternate Energy Project, design and
policy to install one million solar homes within the
preparation were undertaken primarily by the Ministry
next nine years. So, even though the project may not
of Non-Conventional Energy Sources and the Indian
be country driven, the team found that the project has
Renewable Energy Development Authority. In Mexico,
country ownership.
the Protected Areas Program was said by Mexican
officials to be designed primarily by national agencies,
112. Some projects that have little recipient govern-
although major differences with the World Bank
ment input, however, enjoy much less support. Due to
emerged in the development process. Thus, these
their international nature, regional and global projects
projects are highly country driven, even though Imple-
require that the Implementing Agencies play an impor-
menting Agencies also played major roles in their de-
tant catalytic role; these projects are usually endorsed
velopment. Stakeholders in these cases consider that
at the request of that agency. If the outputs are not
the projects to have strong country-level support.
considered a high priority in a country's national inter-
ests, ownership and commitment may be low. One
110. A second pattern was one in which the Imple-
example is the regional, climate change enabling activ-
menting Agency came up with the initial idea and
ity in Kenya, Building Capacity in Sub-Saharan Africa
played a large or even dominant role in development
to Respond to the U.N. FCCC (Framework Conven-
but with significant input from the recipient govern-
tion on Climate Change). According to most
ment. The Biodiversity Conservation in Southeast
interviewees, the project was prepared by a multina-
Zimbabwe Project, for example, was initiated by the
tional team of energy and climate specialists and is
World Bank (to be associated with its Wildlife Manage-
executed by an NGO based in Senegal. Kenya, Zimba-
ment and Environmental Conservation project). The
bwe, and Ghana are involved in the project. In Kenya,
Viet Nam Protected Areas for Resources Conservation
concerns were expressed about lukewarm commit-
Project was brought to the State Planning Committee
ment because of the limited role played by the recipi-
by UNDP, which provided most of the impetus for its
ent country. UNDP is working with Kenya to redress
design. In the Philippines and Jordan, the Implement-
misunderstandings and to ensure full buy-in by all
ing Agencies initially advanced the suggestion for GEF
stakeholders.
biodiversity projects to the government agencies and
were the main force in designing them. The Lake
113. Regional projects involving private sector part-
Victoria Environmental Management Project involving
nerships may encounter similar problems because they
Kenya, Tanzania, and Uganda was also initiated and
are often initiated by the Implementing Agencies in
primarily designed by the World Bank. These projects
collaboration with private entities. The Photovoltaic
are much less country driven than those in the first
Market Transformation Initiative implemented by IFC
category. They can, however, still enjoy government
in India, Kenya, and Morocco have raised to concerns
and nongovernmental stakeholder support to the ex-
in India and Kenya about the low level of involvement
tent government agencies and other relevant stake-
by government stakeholders in project development.
holders believe that they have been adequately
Although IFC consulted with and informed the gov-
involved in the process.
ernments about the initiative in both cases, the team
heard complaints in both countries that some officials
111. In the third pattern, projects are initiated by the
first found out about national participation in the
Implementing Agency and have little recipient country
project when an IFC consultant visited the country.
involvement in design and development. For example,
These complaints suggest that either inadequate consul-
according to Indonesian officials, all of Indonesia's
tation with recipient country stakeholders by the Imple-
climate projects were initiated primarily by the World
menting Agencies or inadequate intragovernmental
Bank and developed with little government input. Al-
coordination can undermine country ownership of a
though the government did not play an active role in
project.
project design or development, it is possible for them
to have strong country support if they are closely
114. These examples show that country ownership of
linked to existing government policy. Indonesia is in-
projects does not necessarily depend on initiation or

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Issues at the Country Level 23
development of a project by the recipient government.
which foreign consultants are required. UNDP indi-
Rather, it depends on the degree of participation by
cated in its comments on an earlier draft of this report
government and nongovernmental stakeholders in its
that it does not use international consultants so heavily
development and the degree of coincidence with the
in Latin America and the Caribbean as in other regions.
country's interests.
118. According to the Implementing Agencies, all
115. Recipient countries differ in the degree to which
project decisions (including hiring of consultants) are
they have an interest in GEF focal areas. When a
the responsibility of recipient governments. The team,
country views a focal area as a priority in its environ-
however, encountered instances in which international
mental or development strategy, GEF projects are
consultants played an unwelcome role in the prepara-
likely to gain more commitment and ownership. On
tion and implementation phases, leading to conflicts
the other hand, some countries are not interested in
between Implementing Agency and recipient country
establishing a strategy for mitigating climate change, to
stakeholders. The team was unable to corroborate the
cite one focal area. Under those circumstances, coun-
allegations made about the international consultants in
try ownership of a climate change project is likely to be
all cases. It did take note, however, of the general
weak unless the project is linked to an important
dissatisfaction regarding the use of foreign consultants,
national need. The draft 1997 Project Implementation
based on some general perceptions about them:
Review (PIR) of GEF lists a number of projects in
which national ownership has been enhanced by the
· They ar e expensive (compar ed with local exper ts)
coincidence of project goals and national needs, such
and drain pr oject r esour ces.
as providing economic/livelihood benefits, creating a
· They ar e not as knowledgeable about cultur e-spe-
forum for influencing the environment policy frame-
cific issues, political sensitivities, and idiosyncrasies
work, or enhancing mine safety.
that might war rant par ticular appr oaches.
· They compr omise a pr oject's sustainability because
116. Although the Implementing Agencies have im-
at the end of the assignment they take away with
proved their efforts to use national and subregional
them the exper tise and knowledge acquir ed.
experts at all stages of the project cycle, there contin-
· Reliance on shor t-ter m consultants on pr oject-spe-
ues to be dissatisfaction in developing countries with
cific assignments pr ovides no means of capturing
the reliance on foreign consultants. In all countries
their collective exper tise for futur e projects or for
visited, the team found that the use of foreign consult-
consistency and continuity .
ants in some instances has reduced government and
local participation in projects at the design phase. The
119. These concerns are compounded by the lack of
issue came up in relation to at least one project in each
mechanisms or procedures to document country-level
country visited. In the India Ecodevelopment Project,
project experiences for future use. Some of the GEF
for example, the government insisted that the World
project preparation activities involve cutting-edge or
Bank not involve foreign consultants at the design
precedent-setting approaches, especially on incremen-
phase of the project. In Egypt, 20 percent of the funds
tal costs and stakeholder participation. GEF's project-
for the Lake Manzala Engineered Wetlands Project
had
related expertise and experience reside in the
already been spent on foreign consultants before
Implementing Agencies. Although this is a strength of
project implementation.
the system, cost-effective ways of documenting con-
sultants' experiences need to be identified so that these
117. Foreign consultants are often necessary in areas
are integrated into lessons on which all members of the
in which domestic expertise is lacking--for example,
GEF family can draw. These could be integrated into
projects involving novel concepts and technologies.
the PIR process as part of a set of best practices in the
The study team did not find evidence of concerted
field to be used on a continuous basis to inform project
efforts to team local and foreign experts to present
design and development.
opportunities to build and strengthen local capacities
in such situations. Implementing agencies relied on
Conclusions
foreign consultants for the calculation of incremental
costs in nearly all the countries visited by the study
120. The team found that country-driven projects and
team. There may be some variations among Imple-
country ownership are related but not synonymous. A
menting Agencies and among regions in the extent to
project may not be country driven in origin, but it can

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24 Study of GEF's Overall Performance
ultimately enjoy country ownership if recipient coun-
donors, and international environmental NGOs. In
try stakeholders play a role in its development and
this crowded field, the incremental impact of GEF is
execution or if it is viewed as coinciding with country
difficult to identify. Therefore, the team identified in-
needs. "Country driven" should be seen as a dynamic
dicators of direct GEF impact on public awareness
rather than a static concept. More GEF projects will
relating to knowledge about GEF and to knowledge
become more country driven with time as recipient
about global environmental issues.
governments initiate more project concepts and be-
come more involved in project design and preparation.
INDICATORS OF KNOWLEDGE OF GEF
121. The team found that a number of projects have
126. The study team looked for evidence of the visibil-
achieved country ownership, even when the role of
ity of GEF and an understanding of how it works. It
national stakeholders in the initial project design was
found that GEF has extremely low visibility in some
limited, because the country finds the project valuable.
countries. In Indonesia and India, the team was told
It also found that a minority of projects, including a
that most people do not distinguish between the
number of global and regional projects, have enjoyed
World Bank and GEF. In Poland, those who have
limited recipient commitment but that these concerns
heard of GEF are likely to view it as an adjunct of the
can be addressed by strengthening the Focal Point
World Bank. Even when GEF projects attract media
system.
attention, as in Belize, the project is associated with the
Implementing Agency. GEF is least well known within
122. Although foreign consultants may be necessary
the private sector. The head of the Chamber of Com-
in many instances (and in some cases, a mix of local
merce of India indicated that there is little awareness of
and foreign consultants may be the best approach), the
GEF within Indian industry, for example, and he was
reliance by Implementing Agencies on foreign experts
unaware that GEF funded private sector projects.
instead of on national and subregional expertise has
come under criticism, because it tends to reduce the
127. The level of understanding of GEF varies among
local involvement necessary for country-driven
different constituencies. Even country officials who are
projects and country ownership.
concerned with GEF-related activities, such as
Agenda
21 and global environmental conventions, are not fa-
Recommendations
miliar with GEF criteria or how to access GEF re-
sources. Those who are involved with GEF activities
123. The GEF Council should adopt a policy, parallel-
and have some basic knowledge about GEF as a source
ing that for stakeholder participation, aimed at pro-
of external funds often lack understanding of the fund-
moting the greater use of local and regional
ing criteria in the focal areas. GEF was described in one
consultants in projects; encouraging an appropriate
instance as a "Washington-based black box." There is
mix of local and foreign experts in GEF projects; and
even less understanding of GEF among nongovern-
securing greater recipient-government participation in
mental stakeholders. In Egypt, the small grants coordi-
the screening, short-listing, and selection of project
nator, the general coordinator of the Egyptian steering
consultants.
committee, and a group of fifteen NGOs with whom
the team met all agreed that NGOs are generally unin-
C. CONTRIBUTION OF GEF TO AWARENESS OF
formed about GEF. In India, an NGO representative
GLOBAL ENVIRONMENTAL ISSUES
said that the NGO sector is "completely GEF-illiterate."
In some cases, even field-level staff of the Implement-
124. The study team assessed GEF's contribution to
ing Agencies were not fully briefed about GEF.
increased awareness of global environmental issues. In
some countries the low level of awareness of global
128. In sharp contrast, the GEF Small Grants
environmental issues means that any knowledge of the
Programme (SGP) has relatively high visibility among
GEF focal areas, even from a narrow local perspective,
NGOs. In most countries with SGPs, NGOs and other
represents an increase in awareness.
stakeholders could associate it with a local coordina-
tor. Most of these coordinators are effectively inte-
125. The major difficulty in making such an assess-
grated into the NGO, United Nations, and donor
ment, however, is that many other players are involved
communities. In Kenya, Poland, and Zimbabwe, for
in GEF's focal areas, including U.N. agencies, bilateral
example, SGP offices have established effective work-

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Issues at the Country Level 25
ing relationships with the players in both regular envi-
133. The study team collected a few examples of cases
ronmental activities as well as with GEF 1 projects in
of media coverage either directly or indirectly inspired
anticipation of the scale-up of some SGPs.
by GEF projects. In Egypt, the coordinator of the GEF
climate enabling activity convinced newspapers to
129. The team found at least two major factors con-
carry a number of articles on climate change for a
tributing to the low level of awareness and understand-
period of weeks--a first in local coverage. In its 1997
ing of GEF. First, current GEF information does not
PIR, UNDP reports that two projects (in Belize and
reach all of GEF's diverse constituencies. GEF's main
Papua New Guinea) have stimulated policy debates in
contacts in most countries are the Focal Points, usually
the media. In Viet Nam, during the six months prior to
the Ministries of Finance, Environment, or both. They
the team's visit, some 200 articles on biodiversity were
receive considerable amounts of information from the
published in local newspapers at least partly as a result
GEF Secretariat, but, in some cases, make no system-
of the GEF-funded Biodiversity Action Plan.
atic effort to ensure that this information is dissemi-
nated to the relevant stakeholders. Furthermore,
134. Some GEF projects generate considerable de-
several countries commented about the highly techni-
bate--negative or positive--about GEF's focal areas.
cal nature of GEF documentation and the fact that it
During its early preparatory phase, the Tana River
was not available in the local language.
Primate Reserve project in Kenya generated debate on
public participation and sustainable use projects in
130. Second, those who know about GEF appear to
Kenya, whereas the Photovoltaics for Households
have few incentives to promote it. In many countries,
Project in Zimbabwe has elevated local knowledge
particularly the larger ones visited by the study team,
about solar energy as an option. Another project con-
GEF is one of many donors and viewed as a small fund
taining components that have attracted considerable
with complex rules and procedures. Some Focal Points
media interest is the designation of the Belize Barrier
claimed that they were reluctant to encourage govern-
Reef as a World Heritage Site in the Belize Sustainable
ment agencies to submit proposals because of the
Development and Management of Biologically Diverse
lengthy development and approval process. Even
Coastal Resources Project.
within the Implementing Agencies' country offices, the
incentives to disseminate information about GEF be-
135. GEF enabling activities have contributed to the
yond the key ministries with which they work are
development of networks of constituencies on global
weak. In some cases, field-level staff are not well
environmental issues (among academic research and
trained or briefed on GEF programming and criteria.
NGO communities). On both climate change and
Some Implementing Agency staff identify GEF as a
biodiversity, there is evidence that growing networks
potential funding source but the complex project cycle
of interest groups that have been involved in enabling
exacts a high price in terms of time, raising the need for
activities now exist and may continue their involve-
extreme commitment in promoting a project, other-
ment. GEF in Egypt has created a large network of up
wise it would not get far.
to 500 institutions and professionals involved in the
climate change area, according to the project manager.
131. In recognition of the low level of awareness and
The Viet Nam country study reported that three years
understanding of GEF at the country level, GEF estab-
of work preparing the GEF-funded Biodiversity Action
lished the Communications Working Group. In mid-
Plan had created a network of government staff, local
1996, the group reached agreement on the division of
consultants, academics, and others working on
responsibilities for raising awareness about GEF and
biodiversity conservation. The constituencies for
global environment issues. It is now developing an
biodiversity conservation include more than one thou-
overall GEF communications strategy.
sand forest staff trained for one month in biodiversity
conservation, many of whom had never heard of
INDICATORS OF AWARENESS OF GLOBAL ENVIRONMENT
biodiversity or global environmental problems before.
ISSUES
Conclusions
132. Indicators of GEF's impact on awareness of global
environmental problems include GEF-inspired media
136. These examples of GEF impacts on public aware-
coverage of global environmental issues and the devel-
ness from country studies lead the study team to con-
opment of networks on global environmental concerns.
clude that, at least in certain countries, GEF has had

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26 Study of GEF's Overall Performance
some impact on awareness of global environmental
141. GEF defines stakeholders as the "individuals,
issues. These impacts are obviously small in relation to
groups, or institutions that have an interest or stake in
the problem as a whole, although they sometimes
the outcome of a GEF-financed project," including
involve strategically important constituencies.
governments, Implementing Agencies, and executing
agencies. Although this definition does not mention
137. GEF is not well known or understood in recipi-
NGOs, they make up one of the most prominent
ent countries, because of lack of incentives for Imple-
groups of stakeholders in GEF activities. NGOs range
menting Agencies and Focal Points to promote it and
from policy advocacy groups operating at the interna-
the absence of a well-targeted communication and
tional or national level to grassroots institutions and
outreach strategy.
groups operating at an intermediate level, serving as
spokespersons on behalf of communities in the rural
Recommendations
areas. Some groups focus on technical issues, includ-
ing research and academic institutions and "think
138. The GEF Council should authorize and ad-
tanks," whose input can be important in some highly
equately fund the development of a GEF outreach and
technical projects. Some NGOs operate indepen-
communications strategy that targets GEF's multiple
dently; others, such as those in some economies in
constituencies, including the Focal Points and relevant
transition, are partially funded by state budgets. The
government agencies, NGOs and civil society, the me-
team found that GEF projects have worked with the
dia and the private sector. This strategy should rely on
full range of stakeholders, although in most cases the
simple, user-friendly materials about GEF and its op-
main participants have been policy advocacy groups.
erations, and should include provision of basic GEF
documents in local languages. This strategy should be
142. A number of studies have evaluated the perfor-
coordinated with the broadening of the Project Devel-
mance of GEF on stakeholder participation either in
opment Workshops.
the Pilot Phase or in a specific set of GEF 1 projects.
The Independent Evaluation of GEF's Pilot Phase con-
D. STAKEHOLDER PARTICIPATION IN GEF
ducted in 1994 found unsatisfactory participation by
PROJECTS
affected populations. It documented the need for a
more systematic means of fostering mutually beneficial
139. The GEF policy on stakeholder involvement re-
collaboration with multiple stakeholders, especially
quires that all GEF projects provide for, among other
NGOs. In 1995 Climate Network Europe commis-
things, "consultation with and participation, as appro-
sioned a series of studies on the role of participation in
priate, of major groups and local communities
several GEF climate change projects, including the
throughout the project cycle." 25 To evaluate GEF's
Renewable Resource Management Project in India. The
overall performance in the area of stakeholder partici-
study found that, although there had been limited
pation, the study team examined the policy framework
NGO participation at the design phase, the implemen-
created by GEF as well as the practices associated with
tation phase had involved a wider group of stakehold-
stakeholder participation in projects.
ers. It also found that GEF guidelines are so complex
and lengthy as to practically exclude the involvement
THE BACKGROUND: PREVIOUS EVALUATIONS
of smaller stakeholders at the design phase.
140. The benefits of stakeholder participation include
143. The NGO Working Group produced a report in
enhancing country ownership; ensuring that the needs
1996 with case studies of NGO participation in GEF
of affected communities are adequately met; improv-
projects (these include acting as advocates, facilitating
ing project design, implementation, and evaluation;
policymaking, contributing to project development
and helping to strengthen the capacities of NGOs and
and implementation, and providing outreach for
civil society groups. Such benefits can contribute to
GEF). It found four types of problems: difficulties,
achieving desired project impacts and sustainability.
such as cash flow problems arising out of the World
Bank's complex and often slow procurement proce-
dures; competition with nonlocal consultants, who
25 Global Environment Facility, Public Involvement in GEF-Financed Projects (Washington, D.C.: June 1996), p. 2.

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Issues at the Country Level 27
tend to be favored by the World Bank; lack of under-
147. UNEP adopted a policy and procedures relating
standing of complex GEF/World Bank procedures and
to public availability of documentary information on
decisionmaking processes; and dissatisfaction with the
GEF operations in 1993. 27 In 1994, its executive com-
rules that prohibit the use of GEF funds for capacity
mittee approved a policy and procedures for public
building, which is necessary to increase NGO capacity
participation in its GEF operations. This was designed
to absorb project funds.
to foster public involvement in GEF operations and
provides a detailed list of groups encompassed in its
144. A second study produced for the GEF Council
definition of "public." 28 Basically, these two sets of
meeting, Promoting Strategic Partnerships between GEF
documents provide for public access to information,
and the NGO Community,26 although not an evaluation
consultations with relevant stakeholders, and provi-
of GEF performance, noted that GEF has not taken full
sion of opportunities for stakeholder involvement in
advantage of the potential of NGOs, academic institu-
implementing UNEP's GEF projects. Both sets of
tions, and private sector groups. It made many recom-
policy documents, however, make explicit references
mendations on facilitating the greater participation of
to the fact that the provisions are for the "sole purposes
such groups, including expedited access to medium-
of UNEP's participation in GEF, pending the adoption
sized grants.
approval of an agency-wide directive," an indication of
the documents' unique and precedent-setting nature.
THE POLICY FRAMEWORK FOR STAKEHOLDER PARTICIPATION
IN GEF PROJECTS
148. Like UNEP, UNDP has adopted policies on the
disclosure of public information and documentation.
145. In response to recommendations by the
Indepen-
The policies on participation have specified a broader
dent Evaluation of the Pilot Phase and other studies, the
group than NGOs, highlighting the importance of civil
GEF Secretariat issued clear policy guidelines on stake-
society organizations 29 and attempting to engage
holder participation in projects, requiring that stake-
smaller groups, such as community-based organiza-
holders are identified clearly and consulted with
tions, in UNDP's work. Its policy statement on this
throughout the project cycle. The study team noted
issue lists three principal objectives: encouraging
that these guidelines were developed by the GEF Sec-
policy dialogues among government, civil society orga-
retariat in collaboration with the Implementing Agen-
nizations, and donors; supporting capacity-building
cies and that they present a comprehensive and
needs of civil society organizations; and enhancing the
far-reaching policy framework. It has added a social
capacity of UNDP offices to strengthen such partner-
scientist to the staff who is responsible for reviewing
ships. It is partially in recognition of its experiences with
cross-cutting issues and lessons. The officer reviews
and emphasis on establishing partnerships with such
project proposals and comments on the integration of
groups that UNDP assumed responsibility for the SGP.
stakeholder issues.
149. The World Bank's policies for involving stake-
146. The effectiveness of GEF policy guidelines de-
holders not in the public sector (particularly NGOs) in
pends on the responses of the Implementing Agencies
its projects fall into three categories: those relating to
and recipient governments. Stakeholder participation
involving NGOs in project preparation, those relating
is closely linked to the issue of transparency and ac-
to environmental assessments, and those relating to
countability in the operations of the Implementing
disclosure of public information. These policies have
Agencies. The team, therefore, examined agency poli-
emerged in response to the increasing importance of
cies regarding stakeholder participation and public
NGOs in development activities and the need for the
access to project information.
Bank to guide its staff to ensure early involvement of
26 Promoting Strategic Partnerships Between GEF and the NGO Community. A Report from the GEF-NGO Working Group (Washington,
D.C.: February 29, 1996), GEF/C.7/Inf.8.
27 "UNEP Administrative Note: Policy and Procedures Related to Public Availability of Documentary Information on GEF Operations."
28 Public includes the scientific community; representatives of environmental, consumer, women's youth, indigenous peoples' educational
and social and economic development associations or groups; and NGOs that may have an interest in or may be affected by a GEF/UNEP
activity or decision.
29 UNDP defines civil society organizations as including NGOs, people's organizations, women's and youth groups, grassroots movements
and organizations of indigenous peoples, consumer and human rights groups, and so on.

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28 Study of GEF's Overall Performance
NGOs in all stages of Bank project processes.
30 The
153. The following types of stakeholders have been
Bank has initiated annual meetings with the NGO
-
involved in Pilot Phase and GEF 1 projects (based on
World Bank Committee and has instituted a policy
frequency of involvement and in terms of institutional
that advocates that prospective borrowers use NGOs
31
capacity-building impact): academia, international
wherever appropriate. In the environment sector, the
NGO constituencies, national and local NGOs, and the
Bank's Operational Directive 4.01 expects prospective
private sector. GEF projects involving trust funds have
borrowers to take the views of affected groups (includ-
generally been effective vehicles for securing broadly
ing tribals and indigenous people) and local NGOs
based participation of these different groups within the
fully into account, especially in preparing environ-
same project. They have also demonstrated flexibility
mental assessments.
in opening doors for private sector groups, such as the
tourism industry. There may be a need for more de-
150. World Bank projects that cover areas inhabited
tailed disaggregation of stakeholders to ensure that the
by indigenous societies are required to delineate an
full range of players in the industries and activities
action plan to deal with indigenous communities' con-
involved in each focal area can be identified and effec-
cerns. Countries are expected to hold consultations
tively integrated early in the process.
with affected groups in these environmental assess-
ments of projects. Its 1994 policy on disclosure of
154. The project documents place significant emphasis
information expands the range of documents that are
on consultations with NGOs and local communities,
to be made available through its Public Information
but there is a wide range of understanding of what
Center or, in the case of the environmental informa-
"consultations" means. These could be as limited as pro
tion, in the client country at a public place that is
forma "briefings" or as detailed as ongoing interactions
accessible to affected groups and local NGOs. The
and joint planning with NGOs. The latter is the desired
policy for disclosure of information on the Bank's GEF
option, as it emphasizes genuinely local representation
operations goes beyond this and provides for more
in consultations as well as clarity on the expected out-
open access to GEF project-related information.
comes of these consultations. A potential pitfall of such
emphasis on consultations is that they may be viewed as
151. The GEF policy requires that projects monitor
an end in themselves, especially if there is no provision
and keep a record of stakeholder consultations with
for feedback to the local communities. During the coun-
major groups and local communities during project
try visits, team members heard complaints from com-
preparation. Although the Implementing Agencies
munity members that they did not receive any reports
regularly keep records of such consultations, the team
about the outcome of many consultations.
notes that GEF's specific integration of this activity into
its policy guidelines has elevated the policy signifi-
155. GEF projects have established a variety of institu-
cance of this practice.
tional mechanisms to bring government and nongov-
ernmental stakeholders together. The Russian
STAKEHOLDER PARTICIPATION IN GEF PROJECTS
Biodiversity Project, for example, established the joint
International Expert Council on Protected Areas and
152. The study team examined project documents for
the thirteen-member Lake Baikal Supervisory Com-
more concrete indicators of plans for stakeholder par-
mittee, which consists of six nongovernmental repre-
ticipation. The indicators noted include the types of
sentatives from the local, academic, scientific, social,
stakeholders identified, the provisions for consultation
and NGO communities. In the Mexico Protected Areas
with stakeholders, the representative nature of the in-
Project, in each of the ten protected areas that form the
stitutional frameworks that are set up, the extent to
core of the project, technical advisory committees
which NGO stakeholders play an executing role in
make provision for the active participation of stake-
projects, and the financial allocations that the projects
holders, such as indigenous communities.
make to support such activities.
30 This policy note (OPN 10.05) was reissued as an Operational Directive in 1989 and was replaced in March 1997 by GP 14.70 with
specific references to different groups, such as "private organizations that pursue activities to relieve suffering, promote the interest of the
poor, protect the environment, provide basic social service, or undertake community development."
31 The World Bank defines NGOs as "groups and institutions that are entirely or largely independent of government."

---

Issues at the Country Level 29
156. The study team also examined reliance on non-
education and for institution strengthening). Although
governmental stakeholders for the execution of GEF
some stakeholders may benefit from these education
projects. Some projects use such groups to execute
activities, a limited budget focusing specifically on
projects or as contractors or subcontractors. UNDP
stakeholder issues is unlikely to secure more than just
reports in its 1997 PIR that 84 percent of its full GEF
a one-time full participation exercise.
projects involve NGOs in one of two roles--project
execution or policy/advisory--and has recently issued
160. GEF 1 projects appear to be paying closer atten-
guidelines on NGO execution of projects. The large
tion to these budget provisions, because adequate bud-
sums of money involved in GEF projects and the lim-
get allocations can ensure that consultations are
ited technical and administrative skills of local NGOs
meaningful for the lifetime of projects. Some GEF 1
to absorb or manage such funds effectively may ac-
projects have allocated more than 50 percent of total
count for the limited role of nongovernmental stake-
project costs for local-level activities that involve com-
holders in this regard.
munity participation in planning, such as
"microplanning" (India Ecodevelopment),
157. The study team found that this approach is more
"ecomanagement"
(China Nature Reserves Manage-
likely in the case of a trust fund than in other types of
ment), and "area/village development activities" (Indo-
projects. For example, the three biodiversity projects
nesia Kerinci Seblat). The UNDP 1997 PIR notes that
in Brazil, Mexico, and Costa Rica were initiated by
the ecological zoning subproject of the larger Pilot
governments but eventually turned over to NGOs--
Phase Regional Support for the Conservation and Sus-
Fundacion Getulio Vargas in Brazil, Mexican Fund for
tainable Use of Natural Resources in the Amazon
Nature Conservation, and the National Parks Founda-
Project has allocated more than 25 percent of its bud-
tion in Costa Rica--for implementation. This practice
get to consultations and that 50 percent of staff time
could yield many benefits, including institutional ca-
has been spent on stakeholder issues. It is important to
pacity building and improved working relationships
note, however, that in many instances all public aware-
between public and nongovernmental sectors.
ness components of projects--training programs,
workshops, publication of information, subcontract-
158. GEF 1 projects appear to be making greater at-
ing, and so on--can be and are categorized as stake-
tempts to specify how statements about stakeholder
holder participation.
participation will be followed through in projects. The
team's review of work programs for GEF 1 projects
E. EXPERIENCES WITH STAKEHOLDER
shows significant discussion between the Implement-
PARTICIPATION BY FOCAL AREA
ing Agencies and the GEF Secretariat on the means of
verifying statements in project documents regarding
161. Biological Diversity.
Stakeholder participation
stakeholder participation. The Implementing Agencies
issues in biodiversity projects present a complex set of
provided clarifications and descriptions of how stake-
problems for project design and implementation, in-
holders will be identified, consulted, and otherwise
cluding: the inherent tension between traditional ap-
involved in the project.
proaches to biodiversity conservation (planning and
"policing" protected areas) and the survival and liveli-
159. One indicator of the potential of provisions in
hood needs of local communities; the need to secure
project documents to achieve optimal participation is
the collaboration of communities in "buffer zones" that
the level of budget resources allocated for consulta-
might be established as part of reserve management;
tions. In some projects, it is difficult to separate con-
the need to promote a biodiversity conservation ethic
sultation activities from the public education and
that accommodates new management partnerships be-
awareness components. (Indeed, some of these activi-
tween protected area managers, the users of resources,
ties may overlap.) This was particularly true of some
and community groups; and the relatively limited ex-
Pilot Phase projects. For example, the Russia
perience and expertise within Implementing Agencies
Biodiversity Project is funded by a $25
-$26 million
working on an interdisciplinary basis on each of these
GEF grant. It allocates $75,000 to support stakeholder
issues within the same project. Therefore, biodiversity
work groups as part of the biodiversity policy support
projects often require long, painstaking processes to
component (an amount that implies this is not as high
ensure stakeholders' participation and to reconcile it
a priority as other activities, especially when compared
with biodiversity protection goals.
with the 11 percent allocations for public support and

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30 Study of GEF's Overall Performance
162. These lengthy processes may be one of the
holders have been involved, although most of the
tradeoffs associated with all aspects of GEF project
projects identify NGO groups as potential partners.
preparation; these processes have given GEF projects
in some countries a reputation as complicated, repeti-
166. One GEF 1 international waters project that is
tive, cumbersome, and excessively long. Nevertheless,
designed to engage NGOs is the Lake Victoria Environ-
these processes can have a positive impact on stake-
mental Management project. In Kenya, OSIENALA
holder participation. For example, the Biodiversity
(Friends of Lake Victoria), a local NGO that acts as an
Conservation in Southeast Zimbabwe Project has iden-
intermediary for the smaller, less well-organized com-
tified five key stakeholder groups that are now devel-
munity groups in the villages surrounding the lake,
oping proposals for possible participation in the
was involved in early consultations with communities.
project. The process of consultation with and among
However, since the government took over project co-
these groups is providing the basis for different (and
ordination, such interactions have subsided. Critics
sometimes conflicting) interests to be better defined.
claim that this shift is evidence of the government's
reluctance to work with existing NGOs and that it is
163. Biodiversity projects may also require provisions
taking its time to set up its own "NGOs" to participate
for resettlement, land and property use rights, gender
in this project. Team members visiting one of the
or other special groups' concerns, and complex social
communities on the Kenyan side of the lake found that
assessments. One factor that could improve the suc-
neither community members nor local authorities had
cess of GEF projects is the strengthening by Imple-
much knowledge of the specifics of the project and the
menting Agencies of methodologies for mainstreaming
potential role that they could play in it.
social and gender concerns specifically in environment
projects, especially through increasing reliance by
Conclusions
Implementing Agencies on the expertise of social sci-
entists and the systematic documentation of experi-
167. The study team found that the issuance of GEF
ences with social concerns in project implementation.
guidelines on stakeholder participation in GEF-fi-
The 1997 Project Implementation Review highlights
nanced projects has been one of the significant accom-
the "lack of explicit treatment of gender issues in
plishments of GEF 1. They provide the basis for one of
project implementation reviews."
the most extensive and far-reaching policies on public
involvement in, and disclosure of information on,
164. Climate Change. Climate change projects are
projects.
more likely to involve private sector stakeholders than
biodiversity projects. Projects involving new energy
168. The team found that GEF 1 project designs have
technologies require more private sector stakeholder
involved detailed and comprehensive plans for public
involvement at the design phase to secure their input
participation, especially in the biodiversity focal area.
regarding such issues as assumptions about market
Most of these projects are in the early stages of imple-
performance of technologies. A large and varied group
mentation, but the team found that some projects are
of private and public sector organizations, including
already including local stakeholders in key project
solar industries, parastatals, and public utilities, are
activities. Projects involving trust funds in particular
involved in implementing the Photovoltaics for House-
have provided innovative opportunities for different
holds and Community Use project in Zimbabwe. The
stakeholders to work together on the same project at
IFC-executed Small and Medium-Scale Enterprise Pro-
policy and operational levels. In some cases, however,
gram has approved NGOs as an appropriate group of
local communities have not been provided with feed-
intermediaries.
back on consultations. The team finds, therefore, that
careful monitoring and evaluation of progress in actual
165. International Waters.
Due to their
implementation of GEF guidelines and project provi-
transboundary nature, international waters projects in-
sions for stakeholder participation is needed.
volve upstream policy-oriented activities that engage
stakeholders in the technical and scientific communi-
Recommendations
ties as well as government policymakers. The projects
often make provision for these stakeholders to be fully
169. The GEF Secretariat should work with Imple-
engaged in the preparation and implementation of
menting Agencies to develop quantitative and qualita-
these strategies. Few local or community-based stake-
tive indicators of successful stakeholder involvement

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Issues at the Country Level 31
at different stages of the GEF project cycle and to
174. Some GEF projects were found to be directly
document best practices of stakeholder participation
responsible for helping countries establish new mecha-
by focal area.
nisms for intragovernmental coordination. Egypt had
no mechanism for coordinating its national policy to-
F. IMPACTS ON COUNTRY PROGRAMS AND
ward climate change when the GEF climate change
POLICIES
enabling activity was implemented. However, the
chairman of the Egyptian Organization for Energy
170. The study team was asked to evaluate the impact
Conservation and Planning told the team that the
of GEF projects on country programs and policies. The
steering committee for the environmental assessment,
team considered how the projects have helped to create
which meets every three months to assess progress,
broader changes in the way in which recipient countries
was going to become the national committee on cli-
deal with issues related to the four focal areas.
mate change and would be the main vehicle for dis-
cussing possible Egyptian participation in joint
171. As with the assessment of GEF's impact on
implementation projects, for example. In Kenya, the
awareness of global environmental issues, the team
study team learned that the Pilot Phase Institutional
encountered difficulty in some cases in isolating GEF's
Support to Protect East African Biodiversity project,
contribution to changing policies and programs in
which was completed in December 1996, had estab-
recipient countries. Other activities and actors also have
lished the first unit for biodiversity within the Ministry
provided impetus for such changes. For example, many
of Environment and Natural Resources intended to
countries have been adopting measures to incorporate
coordinate the activities of all government ministries
the results of the Rio process and Agenda 21 into na-
relevant to the problem.
tional plans, policies, and programs. Bilateral and multi-
lateral agencies are supporting many of these efforts.
175. A second observed impact of GEF projects is the
Thus, in some instances, the impacts of GEF projects are
higher government priority given to an activity benefit-
difficult to distinguish from those of other agencies,
ing the global environment. Most of the examples of
including those of the recipient government itself; in
this found by the study team are from the climate focal
others, the relationship between the GEF project and
area. The Pilot Phase China Issues and Options in
the new policy or program is reasonably clear.
GHG Emissions Control Project led to a new policy
dialogue with the World Bank on energy efficiency and
172. To analyze the impacts on policy and program of
renewables, which in turn resulted in a new level of
GEF projects, the team relied on the informed assess-
Chinese interest in investing in clean energy projects.
ments of government officials and stakeholders in the
According to officials of the Indian Renewable Energy
countries visited as well as officials and assessments of
Development Agency (IREDA), the India
Implementing Agencies. This analysis does not repre-
Biomethanation Project created a distinct shift in per-
sent an exhaustive examination of such project im-
ception of the importance of creating energy from
pacts within the ten-country sample of projects. The
waste and led the government to spend $60 million in
study team did not attempt to include every example
three years on that technology. The Mexico Efficient
of projects that have impacts that are within the scope
Lighting Project is cited as evidence of a government's
of the project's explicit objectives, such as new strate-
shift in priority relating to efficiency improvements.
gies or action plans or mechanisms for
The Poland Coal-to-Gas Project is credited by some
intragovernmental or international collaboration.
observers with having significantly increased aware-
ness among government officials of the importance of
173. The study team found that GEF projects in the
coal-to-gas conversions. The Pilot Phase Mexico Pro-
ten countries had five types of impacts on recipient
tected Areas Program is credited by both Mexican
government policies or programs: establishment of
environment ministry officials with having played a
new mechanisms for intragovernmental coordination,
crucial role in convincing the Mexican government to
higher priority given to a particular activity benefiting
significantly increase its budgetary outlays for pro-
the global environment, new mechanism for regional
tected areas, which previously had been woefully inad-
or subregional collaboration on a global environmental
equate.
issue, acceptance of greater stakeholder participation
in projects, and development of a national strategy and
176. The third type of effect of GEF projects--new
action plan for a global environmental problem.
intergovernmental collaboration at regional or subre-

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32 Study of GEF's Overall Performance
gional levels on a global environment problem--was
179. The changes that the study team found attribut-
found in the GEF international waters projects project
able in whole or in large part to GEF generally involve
for Lake Victoria, which had as one of its objectives the
new ways of addressing or giving priority to global
establishment of new mechanisms to carry out such
environmental issues.
collaboration. The Lake Victoria Project has estab-
lished a regional secretariat representing the govern-
Conclusions
ments of Kenya, Tanzania, and Uganda to harmonize
water quality and monitoring standards for the lake. It
180. Based on analysis of projects in the ten countries
is also facilitating the creation of the Lake Victoria
visited by the study team, the team found a number of
Fisheries Organization to regulate fishing more effec-
significant GEF project impacts on country policies
tively. In this case, it is clear that the creation of these
and programs, including some going beyond immedi-
new institutions for international collaboration were
ate project objectives. Other actors clearly played some
stimulated by the GEF project.
role in certain cases, but in other cases, the GEF can
claim the credit. Given the relatively small size of GEF
177. The fourth type of impact of GEF projects has
projects, the team found that these changes represent a
been to convince recipient governments to accept
positive achievement.
more extensive involvement of nongovernmental
stakeholders than is usually normal in project develop-
G. HANDLING OF POLICIES AND ACTIVITIES
ment and/or implementation. For a variety of political,
THAT COULD UNDERMINE PROJECT SUCCESS
social, and cultural reasons, many recipient countries
have not established collaborative relationships with
181. Macroeconomic or sectoral policies and eco-
civil society groups. At the same time, global environ-
nomic activities may undermine GEF projects either
mental benefits in themselves do not tend to receive
by creating perverse incentives that frustrate market
high priority in many countries unless they are linked
penetration, as in the case of energy pricing, or by
to social and economic priorities, mainly poverty re-
impinging physically on the project area, as in the
duction. A potential benefit of the increased involve-
cases of building roads through protected areas, min-
ment of civil society groups is the likelihood of
ing, unsustainable logging, or damaging tourism de-
creating an appropriate forum for these different pri-
velopment. One of the challenges faced by the
orities to be combined within the context of securing
Implementing Agencies, therefore, is how to deal effec-
global environment benefits. In the case of the India
tively with such policies and activities at each stage of
Ecodevelopment Project, for instance, the Ministry of
the project cycle.
Forestry adopted an approach to community partici-
pation in management of protected areas that it had
182. This can be done in several ways. Any such threat
resisted in the past.
to the project needs to be identified early in project
design, discussed with project proponents, and re-
178. A fifth policy impact--the development of a
ferred to in project documents. Assurances of actions
strategy and action plan--occurs most frequently in
to remove or prevent the threat need to be secured in
the biodiversity focal area, as many governments have
negotiations on the project agreement. In addition, if
sought GEF support to establish an overall biodiversity
the policies or activities do, in fact, appear to under-
strategy. The China Biodiversity Conservation Action
mine project effectiveness during implementation, the
Plan, which resulted from a Pilot Phase Pre-Investment
Implementing Agency must take action through repre-
Facility project approved in March 1992 and was com-
sentations to the government and, if necessary, halt
pleted in 1994, has resulted in the development of
disbursements to bring about action to remedy the
several plans, for example, such as the agricultural
situation. Unless commitments to avoid or prevent
biodiversity action plan, the National State Oceanic
undermining actions are written into the project docu-
Administration's marine biodiversity action plan, and a
ment, such issues can be contentious.
mangroves action plan. These have led to project pro-
posals, such as the wetlands management project (sub-
183. Given the small size of its projects, GEF does not
mitted for GEF funding through UNDP). It has also led
have the ability to leverage fundamental policy
to the funding of the GEF Nature Reserves Manage-
changes on issues in which the economic stakes are
ment project approved in 1995.
high domestically, particularly in countries with large
economies. However, the Implementing Agency can

---

Issues at the Country Level 33
insist that a specific activity in a particular area not
rather than in terms of specific sectoral activities. That
interfere with the project. It may sometimes be desir-
left open the possibility of differences in interpretation
able to proceed with the project in spite of the activity.
over what would be permitted within or near the
But when the threat of perverse incentives or physically
project site. And in the Congo project, the World Bank
damaging activities is severe and when the Implement-
correctly identified logging as a threat to the project,
ing Agency determines that the policy or activity in
but only within the national park and not in adjoining
question cannot reasonably be expected to end, it may
areas. It also did not identify gold mining specifically
not be desirable to go ahead with project development.
as one of the activities that could disrupt the project,
although it specified the requirement for gazetting pri-
184. The team looked into how the Implementing
ority project sites in the project brief.
Agencies have dealt with projects in which govern-
ment policy or sectoral activities constitute a signifi-
187. The study team found that the Implementing
cant problem. Based on the sixteen country studies as
Agency has usually failed to obtain adequate formal
well as interviews with Implementing Agency task
assurances from governments in project agreements
managers, regional coordinators, and thematic special-
about policies and activities that could affect project
ists, the team identified seven cases of projects now in
success. In only two of the seven case studies did the
implementation in which government policies or
Implementing Agencies obtain formal assurances from
sectoral activities could pose significant threats to
the government that were adequate. In the case of
project success and on which the handling of the issue
India Ecodevelopment, the World Bank raised the
could be documented. This is just a sample of a much
problem of development activities that might impinge
larger universe of projects in which this issue is relevant.
on project success--logging practices, road building,
mining, cement manufacturing, and tea and teak plan-
185. The study team found that Implementing Agen-
tations--during project development and insisted that
cies have generally identified in project documents
the project agreement include assurances that the gov-
policy issues or sectoral activity that could pose signifi-
ernment would not permit such activities either in the
cant risks to the project and have raised the issues with
project area or in areas adjoining it. In part as a result,
recipient governments during project design. In all
the Indian Ministry of Environment and Forests drew
seven case studies, the Implementing Agency included
up a list of twenty-nine development projects that had
some mention of such threats in project documents.
to be kept at a reasonable distance from the project
However, in five of the seven cases, the identification
sites. And, in the case of Indonesia Kerinci Seblat, the
was either too general or incomplete. In two cases
government agreed to preclude road construction or
(Jordan Consolidation and Conservation of Azraq
upgrading within the protected area until management
Wetlands and Dana Wildlands Project and Egypt Red
and zoning plans were completed for the project area.
Sea Coastal and Marine Resource Management
Project), the Implementing Agency failed to identify a
188. But in the Congo Wildlands case, the assurances
key problem. In the Jordan biodiversity conservation
given by the government in the grant agreement did
project, the problems of tourism, copper mining and
not cover logging adjacent to but outside a priority
grazing were identified, but the government's subsi-
reserve, nor did it specifically mention mining. In
dies for grazing were not. Similarly, in the case of the
1996 the Bank learned that the government had
Egypt Red Sea Coastal and Marine Resource Manage-
granted a fifteen-year renewable logging and process-
ment project, the World Bank identified unregulated
ing permit on a concession close to one of the priority
tourism, but did not identify government subsidies to
sites and granted a mining exploration permit within
develop tourism, in the form of the sale of coastal land
one of the priority sites. In the Philippines case, the
at bargain basement prices, as an issue that had to be
World Bank made the implementation of legislation on
addressed in the project preparation stage.
a National Integrated Protected Areas System a condi-
tion for a sectoral adjustment loan to deal with the
186. In both the Philippine Conservation of Priority
problem of economic activities that might impinge on
Protected Areas Project and the Congo Wildlands Pro-
the project's success. But the legislation was ambigu-
tection and Management Project, the problem was lack
ous on whether minerals or geothermal energy explo-
of specificity in identification of threats by the World
ration activities are forbidden within the protected
Bank. In the Philippine case, the World Bank identi-
areas. The absence of specific agreements on the activi-
fied the threat in terms of the absence of gazetting
ties in question leaves uncertainty as to whether such

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34 Study of GEF's Overall Performance
activities will be allowed in the future. In the case of
not acted to get more explicit, formal assurances from
Zimbabwe Photovoltaics, the government gave UNDP
the Philippine government on the interpretation of the
assurances that tariffs on photovoltaic components for
protected areas system legislation. In the Egyptian
the project itself would be reduced, but not on those
case, the Bank has not followed up on the
photovoltaic components beyond the project's dura-
government's subsidized sale of coastal land or tourism
tion. And in the Jordan Consolidation and Conserva-
development, which has resulted in the allocation of
tion Project and the Egypt Red Sea Coastal and Marine
more than 40 percent of the Red Sea coastline to
Resource Management cases, the government did not
tourism developers and speculators by mid-1997. This
give UNDP formal assurances that grazing and tourist
development appears to have undermined the pros-
development land subsidies would not be provided.
pects for project success, because it moots the develop-
ment of a coastal and marine management plan that
189. In all but one case (India Ecodevelopment),
would guide the allocation of land for tourism and
some follow-up was needed in the implementation
biodiversity protection.
phase of the project with regard to policies or sectoral
activities that present a risk to project success. In four
Conclusions
of the six cases where it was needed, either the Imple-
menting Agency or the project staff has taken steps that
191. The study team found that more than half the
have brought about some reduction of the risk. In the
projects studied have had some problems in the han-
Indonesia case, when the state government tried to put
dling of policies and activities that could have negative
a new road through the protected area in violation of
effects on project outcomes. In most cases, assurances
the project agreement, the Bank resisted it, threatening
from the government regarding the policy or activities
to halt fund disbursement. In the Congo case, the Bank
in question were either not forthcoming or were not
considered the logging and mining concessions a vio-
specific enough; in some cases, the identification was
lation of the grant agreement, even though the govern-
incomplete or lacking in specificity. Implementing
ment argued that the grant agreement only covered
Agencies have generally followed up where it was
logging concessions inside the priority sites and that
needed, in some cases threatening to threatening to
mining was not mentioned as an undesirable activity.
halt disbursement, and these interventions have usu-
The World Bank acted in early 1997 to suspend dis-
ally had a favorable impact on the situation. In one
bursements on the project in large part because of
case, the chances of project success were clearly under-
these activities, although the suspension was techni-
mined, and in two others, the outcome is still not clear.
cally based on the government's failure to fulfill finan-
cial obligations. 32 Disbursements were resumed after
Recommendations
the government made financial restitution and agreed to
an environmental assessment of the mining operation as
192. The GEF project submission format's description
a basis for determining its future and the logging com-
of project risks should call for identification of any
pany agreed to measures to ensure that it would not
specific policies or sectoral economic activities that
negatively affect conservation in the core reserve.33
could negatively affect project success, as well as the
steps that need to be taken to reduce the risks to
190. In the Jordan case, the project staff itself negoti-
project success from those policies and activities.
ated an agreement with the government to obtain regu-
lation of copper mining in the project area but was
193. The GEF should adopt a policy requiring that
unable to stop mining completely. In the cases of the
Implementing Agencies obtain clear, formal commit-
Zimbabwe Photovoltaics, UNDP discussed the tariffs
ments from recipient country governments regarding
on photovoltaic components in general with the gov-
policies and sectoral activities identified as increasing
ernment and has now obtained assurances that the
the risk of project failure before proceeding with
tariffs will be lowered. However, the World Bank has
project implementation.
32 See letter from Jean-Louis Sarbib, vice-president, Africa Region, to Nguila Moungana Nkombo, minister of the economy, finance, and
planning (January 10, 1997) in GEF Secretariat files.
33 Letter from Lars Vidaeus, executive coordinator, World Bank GEF Operations, to Mohammed T. El-Ashry, CEO and chairman, GEF
(June 9, 1997) in GEF Secretariat files.

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Issues at the Country Level 35
H. FINANCIAL SUSTAINABILITY OF GEF
its near-term implementation, such as establishing
PROJECTS
fully functional intragovernmental coordination
mechanisms. Likewise, the necessary time frames for
194. The GEF portfolio is still young and most
the Guyana Sustainable Forestry Project and the Papua
projects are not yet completed, so it is premature to
New Guinea Biodiversity Program were underesti-
reach conclusions about the long-term sustainability of
mated. In cases in which time frames are insufficient,
projects. Nevertheless, information provided by the
the GEF grants do not necessarily have to be increased,
Implementing Agencies, government officials, NGOs,
just disbursed over a longer period. In other cases,
and others provides a general picture of the post-
both a longer time frame and a larger GEF contribution
project outlook for many projects.
may be needed. Such may be the case for the Zimba-
bwe biodiversity project.
195. The financial sustainability of a project--that is,
its continuance or expansion beyond the disbursement
CLIMATE CHANGE PROJECTS
of GEF funds--can be influenced by a number of
factors: its ability to attract government and commu-
198. The projects that appear to be most sustainable
nity buy-in, the cost of continuing the project, and the
are those that involve support for near-commercial
degree to which improvement of management skills,
practices, programs, or technologies. For near-com-
training, and general institutional development have
mercial projects, post-GEF sustainability is defined by
been emphasized during the project. These are impor-
the projects' replicability. Thus, the sustainability of
tant determinants for all projects but appear to be
the project can be measured largely by its expansion
especially important for those that have little or no
into additional communities. Project sponsors expect
commercial potential. Conversely, the sustainability of
the Brazil Energy Efficiency Project, for example, to be
near-commercial projects, such as some of the energy
widely replicated.
projects, largely depends on their ability to push (or
pull) the market and, thus, to stimulate replication
199. Many of the energy projects under the Opera-
using private funds.
tional Programs (OP) 5 and 6 categories, such as the
India Alternate Energy (wind power component), Po-
196. Projects involving capacity building appear to be
land Efficient Lighting, India Biomethanization (abat-
among the most sustainable. The 1996 PIR highlights
toir anaerobic digestion sub-project), and Mexico
three projects as being successful in this regard--
Efficient Lighting projects, involve near-commercial
UNDP's Monitoring and Research Network for Ozone
activities and have good prospects for replication. The
and Greenhouse Gases in the Southern Cone Project,
India Alternate Energy project, which funded a modest
the related Global Monitoring of Greenhouse Gases
wind energy demonstration, has helped facilitate an
Including Ozone Project, and UNDP's Sustainable De-
expansion of wind power well beyond what the GEF
velopment and Management of Biologically Diverse
subsidy covered. The project helped stimulate subse-
Coastal Resources Project in Belize. All three are insti-
quent investment roughly the equivalent of 800 mega-
tutional development types of projects, as opposed to
watts of additional wind power capacity.
investment projects. Although these may well help set
the stage for environmentally sustainable development
200. Other projects involve financial approaches that
practices, they are also less risky than investment
are explicitly designed to keep the project operating
projects. For countries reluctant to commit resources
after GEF funds are fully expended. These include the
to sustainable practices in energy, forestry, land use,
World Bank's Brazil Energy Efficiency project, the
and so forth, it may be both financially and politically
Bank's Indonesia Solar Home System Project, and
easier to support these monitoring and institutional
IFC's Hungary Energy Efficiency Cofinancing Project.
kinds of activities on a recurring basis.
In the Indonesian project, solar dealers will receive
GEF grant funds, some of which they can invest in
197. In some cases, projects have needed a longer
strengthening their businesses. The initial start-up cost
time frame than permitted to implement the project
will be high for the dealers, and the GEF grants will
activities, demonstrate success, and achieve financial
help pay for this higher price. By the time the GEF
sustainability. For example, the Lake Victoria project
grant funds are disbursed, it is hoped that the start-up
may need five to seven years instead of the expected
costs will have dropped enough for dealers to continue
three to five years to resolve certain issues that impede
operating without subsidies.

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36 Study of GEF's Overall Performance
201. Although some generalizations can be made
ernment decision that continuing the activity is in its
about what kinds of projects are near-commercial, this
development interest. Projects that include commer-
will vary by country and market conditions. For ex-
cial elements such as ecotourism or nontimber enter-
ample, solar photovoltaics appear to be increasingly
prises stand a greater chance of achieving financial
commercial in a number of countries and the Indone-
sustainability because such elements can pay at least a
sia Solar Home System project seems poised to imple-
portion of the recurrent costs. IFC's Small- and Me-
ment a sustainable PV credit system, but
dium-Scale Enterprises Project and Terra Capital Fund
GEF-supported PV efforts in India and Zimbabwe may
are GEF's main efforts to exploit commercial
face difficulties in continuing without GEF funds. In
biodiversity opportunities.
the India Alternate Energy Project, the greater financial
sustainability of the wind power sub-projects com-
205. Because grant-making agencies and organiza-
pared with the PV sub-projects may be due to higher
tions change over time, the need for most biodiversity
PV marketing costs, lower consumer awareness of PV,
projects to attract additional grant funds may not be
and more limited ability for beneficiaries to pay for PV
sustainable in the long term. Hence, many such
technology. 34
projects are seeking to establish trust funds. In the GEF
Pilot Phase, six out of thirty biodiversity projects had
202. Most of the climate portfolio involves near-com-
GEF-funded trust funds. So far, seven projects in the
mercial projects, although some projects only hold the
operational phase have or anticipate having them.
promise of demonstrating near-term improvements in
Trust funds provide ongoing funding because only the
a particular technology or practice, thereby reducing
interest earnings of the fund are used. If well-managed,
the time it takes to become commercial. The ability of
the fund will finance the project in perpetuity.
these more innovative or risky projects (which fall
within the OP7 category) to attract commercial financ-
206. Some GEF Council members are concerned that
ing is not as important as their contribution to improv-
capitalizing a trust fund involves a much larger com-
ing the economics and increasing the knowledge base
mitment of GEF funds than simply paying for the near-
of a given technology or practice. This increases the
term costs of a project. For example, a protected area
chances of attracting new (noncommercial) funding
project that might cost GEF $5 million over five years
for the project or its replication so that further ad-
would require a trust fund of $20 million to yield $1
vances can be made. Examples include the Brazil Bio-
million annually (based on annual interest earnings at
mass Gasification project and the upcoming India
5 percent). On the other hand, without a trust fund,
Solar Thermal hybrid project. So far, no such noncom-
many projects with recurrent costs are likely to either
mercial GEF projects have been completed, so their
return to GEF for subsequent grants or disappear.
sustainability remains uncertain.
207. One indicator of a noncommercial project's like-
203. The increased orientation of climate projects to-
lihood of attracting future resources is the degree of
ward technology commercialization and market trans-
political support generated by the project within the
formation and accompanying private sector financing
host government. A proportionately large government
increases the sustainability of the GEF climate portfo-
contribution can sometimes signify stronger support
lio. The trend toward private sector financial involve-
for the project's objectives and, thus, a willingness to
ment is due partly to project sponsors' desire to ensure
support the project once GEF funds have been spent.
financial sustainability and partly to the need for this
For example, the Government of Indonesia has con-
involvement to finance such near-commercial projects.
tributed $500,000 to supplement the $1 million from
GEF for the Rhino Protection Project. This program is
BIODIVERSITY PROJECTS
achieving more success than most other GEF projects
in Indonesia and has received commitments for addi-
204. With few exceptions, projects in the biodiversity
tional funds at the end of the GEF project cycle. A high
portfolio that do not have trust funds are unlikely to
proportion of government funding does not necessar-
become financially sustainable without subsequent
ily mean the government will pay recurring costs later,
grants from a bilateral or multilateral donor or a gov-
however. It does not even mean strong government
34 Global Environment Facility, Project Implementation Review 1996 (Washington, D.C.: 1997), p. 13.

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Issues at the Country Level 37
support for all the project's aims. Although the Gov-
was the case, for example, with the biodiversity
ernment of Indonesia is providing $13 million toward
projects in Argentina and Viet Nam and the climate
the $47 million Kerinci Seblat Park Project, the project
project in Brazil. In other cases, a second grant was
has run into major problems, in part because of con-
sought because the project was expanding into new
flicting interests among different government agencies.
areas or involved more time than was originally antici-
pated. In nearly all cases, the second grant sought and
208. GEF project submissions are required to include
awarded has been larger than the first one.
a specific discussion of financial sustainability. Al-
though many submissions give this topic only superfi-
Conclusions
cial attention, others contain plans for post-GEF
financing. For example, the China energy conservation
211. The study team found that the post-GEF
project included several domestic banks in project
sustainability of projects is likely to vary greatly from
preparation activities to familiarize them with energy
project to project. Financial sustainability in the near-
performance contracting and prepare them for even-
commercial climate projects differs fundamentally
tual financial support of performance contracting once
from that in largely noncommercial biodiversity
the project is completed. Similarly, the India solar
projects. The former depends largely on replicability
thermal project is predicated on the state government
by government or private investors, whereas the latter
of Rajasthan raising electricity tariffs so that the state
must be either self-financing through trust funds or
electric utility will be able to collect enough ratepayer
obtain additional grant financing from donors or the
funds to pay for the solar-generated electricity when
government. The experience of Pilot Phase projects
the GEF funds are fully spent. The Indonesia
now completed indicates that biodiversity projects are
COREMAP coral reef project anticipates strengthening
more likely to have serious problems of financial
legal structures to allow coastal communities to charge
sustainability than climate projects.
fishing user fees that would capitalize a fund to pay for
reef maintenance.
212. In some cases, unreasonably short project time-
tables have made it difficult to implement project ac-
209. In general, however, serious financial planning
tivities, demonstrate success, and achieve financial
for project continuation in the post-GEF period ap-
sustainability. The GEF family has not always been
pears uncommon. The team's review of seventeen in-
realistic about the time needed to implement some
vestment project submissions in the ten focus
projects, particularly in the biodiversity focal area.
countries found that financial sustainability was ad-
dressed in more than a cursory manner in just seven
Recommendations
cases. Many of the submissions confuse sustainability
and project success. Most list factors the sponsors hope
213. The GEF Secretariat and Implementing Agencies
will contribute to sustainability, but few discuss how
should require that project proposals contain a more
recurrent costs will be met.
thorough assessment of options for achieving financial
sustainability.
210. One indicator of sustainability is the extent to
which project sponsors return to GEF for a second
214. The GEF Secretariat and Implementing Agencies
grant. Of projects approved during the Pilot Phase and
should encourage the broader use of biodiversity trust
now completed, the proportion applying for another
funds to help ensure the funding of biodiversity
grant is relatively high in the biodiversity focal area: six
projects in perpetuity. The Implementing Agencies
out of eight completed projects. Five of these are coun-
should continue to seek a high rate of leveraging of
try-specific projects and one is a global project. In
other sources of trust fund capital.
contrast, only five out of fifteen completed (or nearly
completed) climate change projects have applied for a
215. The Implementing Agencies should provide for
second grant. Of these, only one is a country-specific
longer project implementation periods--for example,
project. It should be noted, however, that in some
five to seven instead of three to five years--in cases in
cases, although it was not specifically agreed to at the
which project sponsors can show that extra time will
outset, a follow-up grant was expected, as GEF fi-
be necessary to implement the project and demon-
nanced the preparation of management plans or feasi-
strate its viability for future funders.
bility studies that would lead to implementation. This

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38 Study of GEF's Overall Performance
IV. INSTITUTIONAL ROLES AND RELATIONS
A. MAINSTREAMING OF THE GLOBAL
MAINSTREAMING IN THE WORLD BANK
ENVIRONMENT BY IMPLEMENTING AGENCIES
219. The World Bank is unique among the three
216. One of the measures of GEF's success is the
Implementing Agencies in that it is a lending institu-
extent to which the three Implementing Agencies
tion with a centralized structure directed by a full-time
"mainstream" the global environment. In the GEF Cor-
executive board. It has a large and varied portfolio of
porate Budget for fiscal 1998, mainstreaming is de-
active projects and concentrates authority and re-
fined as having two dimensions: first, increasing the
sources in its country departments.
Although the Bank
number of GEF projects with cofinancing and, second,
is client oriented, it has significant resources with which
increasing the number of GEF-type projects in regular
to influence client governments' investment priorities.
operations of the Implementing Agencies.
35 In fact, the
three agencies have committed themselves to increas-
220. The indicators chosen by the study team for
ing the resources committed as direct cofinancing of
evaluating progress in mainstreaming in the World
GEF projects and "associated, complementary, and
Bank are:
follow-up activities" in the four focal areas.
36 The study
team took these two criteria as a starting point for
· The amount of cofinancing of GEF pr ojects and fi-
creating its own operational definition of
nancing of associated W orld Bank loans that add
mainstreaming. However, the team also noted that
further global envir onmental benefits
cofinancing statistics can be misleading and difficult to
· The number and dollar amounts of loans in the r
egu-
compare.
lar World Bank por tfolio that complement the GEF
portfolio in the four focal ar eas
217. The study team determined that the definition of
· Whether inter nal incentives for W orld Bank staf f to
"mainstreaming" the global environment for the pur-
push for and manage pr ojects with global envir on-
pose of this study must incorporate criteria going be-
mental benefits ar e equal to those for the r egular loan
yond funding levels for GEF and non-GEF projects
portfolio
and that it must reflect the wide differences of struc-
· The extent and quality of the integration of global
ture, culture, type of operation, and level of resources
envir onmental objectives into sectoral and adjust-
among the three Implementing Agencies. So the team
ment lending operations
developed a set of criteria for mainstreaming that are
· The extent to which the Bank does pr ogramming on
specific to each agency.
the basis of global envir onmental objectives, as dis-
tinct fr om countr y objectives.
218. Analyzing mainstreaming in the World Bank in-
volves more criteria than for the other two Implement-
Amount of Cofinancing of World Bank GEF
ing Agencies. In addition, the Bank's GEF portfolio as
Projects and Associated Bank Loans
well as regular portfolio of projects is much larger in
financial terms. Therefore, the space allocated to the
221. The World Bank agreed as part of the "Imple-
World Bank is substantially greater than that allocated
menting Agency Work Program" adopted by GEF in its
to UNDP and UNEP. In contrast, the criteria for assess-
Corporate Business Plan for fiscal 1998
-2000 that its
ing mainstreaming in UNEP are fewer and its GEF
mainstreaming would be judged by whether "an in-
portfolio and regular budget are much smaller than
creasing proportion of Bank GEF projects" are "associ-
those of UNDP, so the analysis for UNEP is corre-
ated in an integrated way with regular Bank
spondingly shorter.
operations." 37 World Bank data show that, as of Sep-
35 Global Environment Facility, GEF Corporate Budget for FY98, GEF/C.9/4 (April 1, 1997), p. 13.
36 Global Environment Facility, GEF Corporate Business Plan F99-FY01, FEF,C.10/4 (October 3, 1997), p. l 3.

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Institutional Roles and Relations 39
tember 1997, 44 percent of World Bank GEF projects
Total cofinancing mobilized by the Bank for GEF,
approved during GEF 1 were associated with World
thus, represents more than three dollars for every dol-
Bank loans, whereas 56 percent were freestanding--
lar of GEF funds. Most of this total was accounted for
that is, they did not have a World Bank loan as part of
by climate change projects, for which the Bank pro-
their financing.
vided $1.244 billion compared with $284 million
from GEF itself--a ratio of 4.4 to 1. The study team
222. This is identical to the percentage that held during
found this to be a significant accomplishment in
the GEF Pilot Phase. However, the Bank's record of
mainstreaming and an important contribution to
cofinancing through associated loans is much better in
GEF's success.
GEF 1 than in the Pilot Phase, because only two World
Bank­associated loans during the Pilot Phase were fully
225. Total World Bank cofinancing in GEF 1 is
integrated with GEF projects (i.e., financing the same
slightly less than the $2.227 billion mobilized by the
activities that are financed by GEF grants), whereas
Bank during the Pilot Phase. But since about two-thirds
more than 40 percent were fully integrated during GEF
of the total Pilot Phase cofinancing was accounted for by
1, according to data provided by the World Bank GEF
a single project (the Philippines Leyte-Luzon Geother-
coordination unit. Moreover, nearly one-fourth of the
mal), the team found the Bank's performance in mobi-
associated loans during the Pilot Phase were associated
lizing cofinancing in GEF 1 to be substantially more
for convenience only, according to a World Bank task
effective than it was during the Pilot Phase.
force report in mid-1996. Some of the loans that are
categorized as associated loans by the World Bank do
226. The Bank generated the bulk of its financing for
not fund activities that are related to the global environ-
GEF climate projects through associated loans. Of the
ment and are not considered as cofinancing in the
total of $3.2 billion in Bank-generated financing for
World Bank compilation of GEF project financing sub-
GEF-related climate projects, almost 70 percent was
mitted to the study team. The study team found eight
mobilized through Bank loans associated with GEF
associated loans in the Pilot Phase on which the World
projects rather than from government counterpart and
Bank did not claim any cofinancing for the global envi-
other donor financing of freestanding World Bank-
ronment in its own financial records, but only three
implemented GEF projects.
such associated loans in GEF 1.38
227. An even higher proportion of the cofinancing for
223. As of mid-1997, the World Bank had provided
World Bank GEF biodiversity projects came through
$490 million of its own funds for cofinancing of GEF
associated World Bank loans. Of the total of $691
projects in the form of loans for Bank projects associ-
million mobilized by the World Bank for GEF
ated with projects in the GEF 1 work program. That
biodiversity-related projects approved for GEF work
total represents 75 cents for every dollar put into
programs through June 30, 1997, 86 percent ($597
World Bank GEF projects by GEF itself, including
million) was accounted for by loans associated with
freestanding and associated projects. This amount is
GEF projects. The Bank's mobilization of cofinancing
slightly less than the amount during the Pilot Phase
for biodiversity through associated loans on an annual
($554.6 million).
basis is shown in table 4 below.
224. When all cofinancing mobilized by the World
Lending for the Global Environment in the World
Bank, including from governments, other funders, and
Bank's Regular Portfolio
the private sector, are added to direct Bank
cofinancing, the total cofinancing for World Bank GEF
228. For the purpose of assessing the World Bank's
projects in GEF 1 as of mid-1997 was $2.003 billion.
mainstreaming of the global environment, the study
37 Global Environment Facility, GEF Corporate Business Plan FY98-00, GEF/C.8/6 (September 4, 1996), Annex 2, p. 3.
38 The Pilot Phase-associated loans included in this category are: Ecuador Biodiversity Protection, Red Sea Coastal and Marine Resource
Management, Ghana Coastal Wetlands Management, Mexico Protected Areas, Philippines Conservation of Priority Protected Areas, Poland
Coal-to-Gas, Seychelles Biodiversity Conservation and Marine Pollution Abatement, and Turkey In-Situ Conservation of Genetic Biodiversity.
The GEF 1 projects are: Central Africa Regional Environment Information Management, China Efficient Industrial Boilers, and China
Nature Reserves Management.

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40 Study of GEF's Overall Performance
team distinguished between the Bank's financing of
Bank's executive board. Therefore, the study team con-
projects linked with GEF and its financing of and
cluded that fiscal 1991, fiscal 1992, and fiscal 1993
mobilization of resources for relevant projects in its
should not be considered part of the GEF period for
regular portfolio. Although cofinancing GEF projects
purposes of comparison with the pre-GEF period. The
is an important dimension of mainstreaming in the
comparison between pre-GEF and GEF period Bank
Bank, the study team believes that the Bank's success
lending for biodiversity and energy is based on fiscal
in increasing lending for the global environment is
1994 as the first post-GEF year.
another measure of its success in mainstreaming.
Therefore, the criterion of lending for global environ-
233. Bearing these difficulties in mind, the team as-
mental objectives in projects not associated with GEF
sembled the data on the Bank's non-GEF lending on
requires that overall Bank lending in the focal areas be
biodiversity from fiscal 1988 through fiscal 1997. The
analyzed in two separate categories: its mobilization of
data are shown in Table 4 opposite. During the fiscal
funding for the global environment in connection with
1988-94 period, the Bank's non-GEF-related lending
GEF and its mobilization of such funding through
totaled $645 million, for an annual average of $107
loans unconnected with GEF.
million. During the period from fiscal 1994­97, repre-
senting the GEF period, the total was $325 million for
229. To assess this dimension of mainstreaming in the
an annual average of $81.3 million. However, virtually
Bank, the team analyzed the World Bank's lending for
the entire difference between the pre-GEF and GEF
GEF projects for biodiversity protection and energy
periods is accounted for by a single IDA project (Kenya
efficiency and renewable energy that was unrelated to
Wildlife Services) for $142 million in 1992. When that
GEF projects. It did not evaluate the Bank's perfor-
project is removed from the data, they show no clear
mance in regard to international waters because of a
trend line. The only conclusion that can be reached
combination of time constraints and the complexity of
from the data is that biodiversity lending in the World
separating out the data on Bank lending that are most
Bank's regular portfolio unrelated to GEF has not in-
comparable to GEF financing for international waters.
creased from the pre-GEF period.
It did not examine the ozone focal area, because the
Bank does no lending related to ozone depletion.
234. When all cofinancing connected with World
Bank loans for biodiversity associated with GEF
230. In the case of biodiversity, the team found that a
projects is added to the annual World Bank
high proportion of World Bank loans associated with
biodiversity lending totals, overall World Bank financ-
GEF biodiversity projects either would not have been
ing for biodiversity since fiscal 1993 is shown to aver-
made or would not have financed activities that effec-
age $133 million annually compared to an average of
tively protect biodiversity of global importance. There-
$115 million annually during the pre-GEF period. It
fore, the study team believes that Bank loans associated
can be concluded that GEF has accounted for the
with GEF can be separated legitimately from regular
relatively small overall increase in the average annual
non-GEF Bank loans to evaluate the success of the
level of World Bank lending for biodiversity since
Bank in generating greater interest in biodiversity
fiscal 1993. The World Bank's GEF chief executive
lending without the aid of grant assistance.
coordinator argued to the team that the more success-
ful the World Bank is in identifying opportunities for
231. A major methodological problem in regard to
associating loans with GEF financing of biodiversity
this dimension of mainstreaming is that constructing
conservation, the less successful it will be in its lending
an annual trend line for lending in a particular sector
for that purpose apart from GEF. The coordinator
may be misleading, both because project approvals
suggested that he would expect the level of lending for
may cluster in certain years rather than being evenly
biodiversity conservation in the Bank's regular portfo-
distributed over several years and because a single
lio to decline as more and more borrowing countries
large project can cause a major spike in the trend line.
and Bank task managers become aware of the opportu-
nity to obtain a "global premium" associated with pro-
232. A second methodological problem involves the
tection of biodiversity of "global importance." This
time lag between the creation of GEF and appearance
argument is in line with the conclusion reached by an
of a regular bank loan in annual statistics. It usually
earlier internal World Bank study that found a trend
takes at least two to three years between the beginning
among IDA countries to avail themselves increasingly
of project development and final approval by the
of GEF grant financing for biodiversity conservation

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Institutional Roles and Relations 41
TABLE 4.
FINANCING FOR BIODIVERSITY PROTECTION THROUGH WORLD BANK LOANS, INCLUDING NON-BANK
CONTRIBUTIONS, FISCAL 1988­93 AND FISCAL 1994-97
(MILLIONS OF U.S. DOLLARS)
Fiscal 1988-1993
Fiscal Year
Not GEF-associated
GEF-associated*
1988
21.40
0.00
1989
13.20
0.00
1990
244.40
0.00
1991
45.60
0.00
1992
245.00
44.00
1993
76.40
0.00
Total
645.00
44.00
Fiscal 1994-1997
Fiscal Year
Not GEF-associated
GEF-associated*
1994
70.40
15.30
1995
110.70
0.00
1996
3.20
0.00
1997
141.00
191.00
Total
325.30
206.00
* Based on dates of GEF work plan approvals.
Sources: Pilot phase-associated loan data from computer run submitted by World Bank Global Environment Coordination Division,
January 14, 1998. Data for 1988-96 from "The IBRD/IDA Projects Containing Biodiversity Elements: fiscal 1988­96," annex to Andrew
Keck, "Biodiversity in World Bank Projects: A Portfolio Review," Land, Water, and Natural Habitats Division, Environment Department,
World Bank, draft, n.d. Data for 1997 based on Gonzalo Castro and Kerstin Canby, "Biodiversity in World Bank Projects," January 9, 1998,
table 3. Castro and Canby include in their annual totals data on GEF-funded projects as well European Union-funded Brazil Rain Forest
Trust Fund projects, neither of which involves World Bank lending and are, therefore, excluded from the fiscal 1994-97 table.
and to do less borrowing from the World Bank for that
related lending for biodiversity conservation, even as it
purpose. 39
made loans linked with--and, thus, made more attrac-
tive by--GEF grants. This view is based on the as-
235. It is impossible to prove or disprove this argu-
sumption that there are some biodiversity
ment based on existing data. The study team believes
conservation projects that would not be funded by
that it would have been possible for the World Bank to
GEF because they are not of global importance but
identify more opportunities for biodiversity projects
would be in the interest of a potential borrowing coun-
that are in the national development interest of the
try. However, to the extent that the GEF policy is
country in question and, thus, increase its non-GEF-
perceived as not distinguishing between biodiversity of
39 See C. Andrew Keck, "Biodiversity in World Bank projects: A Portfolio Review," Land, Water and Natural Habitats Division, Environment
Department, World Bank (no date), p. 3.

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42 Study of GEF's Overall Performance
global importance and biodiversity of national impor-
sons with the previous period regarding supply-side
tance, it increases the risk that potential borrowing
management in general.
countries would refuse to borrow for biodiversity con-
servation unless it is linked with a GEF grant.
240. An assessment of the Bank's lending for renew-
able energy development must take into account the
236. The main methodological problem associated
fact that geothermal energy, which was financed by
with assessing climate-related lending in the Bank's
both the Bank and GEF in the past, has become com-
regular portfolio is determining what kinds of loans to
mercialized to the point that neither are funding it any
include within the scope of the inquiry. The Bank
longer. Lending for nongeothermal renewable energy
provides financing affecting energy efficiency not only
unconnected to GEF during the entire period from
through end-user efficiency components of energy sec-
1990 to 1993 included four projects totaling $273
tor loans but in supply-side management components,
million. But from fiscal 1994 through fiscal 1997, the
such as reducing power sector losses and district heat-
Bank made only one such loan in its regular portfo-
ing as well. Nonenergy sector loans, including hous-
lio--an $18 million component within the Indonesia
ing, transportation, industrial pollution, and
Second Rural Electrification loan approved in fiscal
municipal services, also affect energy efficiency.
1995. The other loans for renewable energy have all
been linked with GEF grants. Moreover, the Bank's
237. The study team decided to focus primarily on
project pipeline includes no loans for nongeothermal
non-GEF World Bank project components involving
renewable energy development without GEF fund-
end-use energy efficiency, both because complete data
ing.40
on financing of nonenergy sector loans with impacts
on energy efficiency are unavailable and because the
241. The World Bank GEF Coordinating Unit argued
benefits to the environment are often incidental to
that the World Bank should not be expected to lend for
economic considerations.
renewable energy technologies apart from GEF, be-
cause they are not commercial. The study team recog-
238. With regard to end-use efficiency, data compiled
nizes that borrowing countries would not take out
by its Operations Evaluations Department indicate that
loans for most of the projects financed by GEF and by
Bank lending has increased during the GEF period,
bilateral agencies on a grant basis. On the other hand,
compared with the extremely low level of funding
it is also clear that loans can be made for some renew-
during the pre-GEF period. During the 1980
-93 pe-
able energy technologies in some countries without the
riod, the Bank financed only about $110 million for
addition of a GEF grant. For example, India borrowed
end-use efficiency components in eighteen energy sec-
$100 million from the Asian Development Bank in
tor projects. During the 1994­97 period, the Bank has
1996 for the generation of 125 megawatts of cumula-
financed components on end-use efficiency totaling
tive power through biomethanation of industrial efflu-
$245 million, most of which was for three large
ent, bagasse-based cogeneration of power, and wind
projects. And outside the energy sector, two projects in
and solar-thermal energy.
the Europe and Central Asia region have been ap-
proved for heating efficiency in residential buildings
242. The study team notes that the viability of renew-
for $310 million. The Bank, therefore, is now lending
able energy projects in a particular country may de-
approximately sixteen times more for end-use effi-
pend in part on whether the government has created
ciency than it was in the pre-GEF period.
an atmosphere in which the renewable technology can
be competitive through energy pricing reform and
239. With regard to supply-side management in gen-
other energy policy reforms. In any effort to encourage
eral, no data could be obtained on the pre-GEF Bank
a transition to less reliance on fossil fuel for energy, this
lending. Although the Bank has financed projects for
aspect of the Bank's energy lending strategy would
improving the efficiency of district heating in Eastern
need to be given much greater emphasis. The team
Europe and China in recent years at a cost of $350
found no evidence that the Bank has made this objec-
million, it is not possible to make meaningful compari-
tive part of its energy lending strategy.
40 "World Bank Pipeline of Renewable Energy Projects (FY98-00)," submitted to the study team by the World Bank GEF Coordinating
Unit.

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Institutional Roles and Relations 43
243. The Bank has, thus, maintained roughly the same
Extent and Quality of Integration of Global Environ-
level of lending for biodiversity in its regular portfolio
mental Concerns into Sectoral Lending Strategies
as in the "pre-GEF" period. Regarding climate-related
projects, it is lending many times more annually in the
247. The Bank's primary mechanism for integrating
GEF period for end-use efficiency than it was in the
global environmental concerns into sector lending op-
previous period. Renewable energy lending, however,
erations is the country economic and sector work pro-
has fallen compared with the pre-GEF period.
gram undertaken with the borrower, which is
supposed to provide analytical frameworks for evaluat-
Incentives to World Bank Staff to Encourage or Man-
ing development strategies and donor assistance activi-
age Projects with Global Environmental Benefits
ties. Ideally, the sectoral component of this program,
based on the supporting analytical work already done
244. One issue regarding incentives for Bank staff is
by the Bank, would always include a thorough analysis
whether the budget for task managers for GEF projects
of how existing management of energy resources and
and the continuity of task managers was on a par with
biodiversity affects the long-term sustainability of the
regular Bank lending projects. The World Bank Coor-
economy as well as the global environment. And it
dinating Unit indicates that during the Pilot Phase,
would identify opportunities for promoting both de-
GEF was treated "like second-class citizens." The prob-
velopment objectives and global environmental ben-
lem was raised by the coordinating unit with regional
efits in loan projects to be included in the Bank's
management, and a major improvement in regard to
lending strategy to the country and for the policy
these indicators occurred during GEF 1. A survey done
dialogue with the government.
by a World Bank task force in 1996 indicated that most
GEF task managers were satisfied with their budget
248. Such systematic integration does not appear to
and would be happy to be a GEF task manager again.
take place, nor did the study team find evidence of any
strong impetus toward it. The Bank's Operational
245. Another problem for the World Bank is the fail-
Policy on Economic Evaluation of Investment Opera-
ure of Bank management to recognize and reward
tions states that global externalities should be identi-
work on GEF as equal in importance to its regular
fied in sector analysis. 41 But in practice it has remained
business. GEF projects are much smaller than regular
a low priority. As the Bank's administrative budget has
Bank projects but are often equally or more complex
shrunk in recent years, country departments are under
and challenging. Yet the Bank's evaluation system is
strong pressure to produce more projects with less
not set up to give equal recognition to GEF managers.
staff time and money. One consequence is that country
When asked about the system of incentives with re-
sector work, which had once been a relatively large
gard to work on GEF, Bank regional coordinators indi-
part of the work program, now receives fewer re-
cated that it is difficult for management to recognize
sources and less time, and it has been even more
work on GEF projects as much as on regular projects
difficult to increase the attention given to global envi-
that are many times larger.
ronmental concerns.
246. Furthermore, country department management
249. The Global Overlays Program, launched in 1996
has no incentive to focus on opportunities for GEF or
by the Bank's Environment Department, shows how
global environmental benefits when they are under
and at what cost policies and investment priorities
pressure to produce higher volumes of loans on a
would change if global environmental objectives were
smaller budget. According to Bank staff, the transfer of
added to conventional sectoral objectives. The overlay
budget and staff to new country directors, which be-
for a given country and sector explicitly identifies
gan in 1995, has led to a significantly greater preoccu-
"win-win" opportunities for protecting the global envi-
pation with traditional Bank business--first in Africa
ronment, while advancing national development strat-
and then in other regions. These pressures constitute
egies. It also points to activities for global benefits
an additional disincentive for country directors to give
whose incremental costs would be appropriate for GEF
GEF the same attention as traditional Bank operations.
funding. The program has produced guidelines for
41 World Bank, Environment Department, Global Environment Division, Mainstreaming Biodiversity in Development, Environment
Department Papers No. 029 (November 1995), p. 20 and footnote., p. 23.

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44 Study of GEF's Overall Performance
climate change overlays; three of these have been com-
exchange earner made no reference to the potential
pleted, and more climate and biodiversity overlays are
threat to marine biodiversity. In another, the CAS calls
being prepared.
for adding power generation capacity but contains no
reference to the need for development of alternative
250. Despite their potential value for making sectoral
energy. And, in a third, the CAS refers to a possible
lending strategies more responsive to global environ-
loan for biomass power but fails to note any relation-
mental objectives, however, the global overlays pro-
ship with climate change. One CAS fails to refer to the
gram has not yet had significant impact on sector
country's importance to global biodiversity conserva-
analysis in the regional offices. Several obstacles to
tion.
their widespread use by those who make decisions on
sector analysis still remain to be removed, according to
254. This sample suggests that neither the global envi-
Environment Department staff. The main problem is
ronment nor GEF have yet been integrated systemati-
that the program has not had an adequate budget. It is
cally into the CAS process. The most glaring weakness
coordinated by a person working on a less than half-
in integrating environmental issues into the CAS ap-
time basis and has too few resources to be effective in
pears to be the failure to note linkages between sectoral
creating demand for global overlays on the part of
loan strategies and global environmental concerns or
regional management. Many managers in the regional
between GEF programs and strategies, particularly in
offices are not yet sufficiently acquainted with the
climate change. The study team found that climate is
global overlays program, and more needs to be done to
completely absent from discussions of energy sector
help them understand it clearly.
and infrastructure issues in the CAS.
251. Country assistance strategies (CASs) are docu-
255. According to interviews with Bank staff, in the
ments that formalize the Bank's lending strategy for the
vast majority of cases the CAS is based on sector
next three years. They are the basis for the Bank's
analysis in which the global environment is weak or
policy dialogues with client governments and the main
absent. Moreover, government National Environmen-
vehicle by which the executive board reviews the
tal Action Plans and other environmental strategies, on
Bank's assistance strategy in a borrowing country.
which the CAS process also relies, seldom identify and
They reflect the views of the Bank as well as of the
examine the shortcomings of government sector poli-
borrowing government on investment priorities and
cies and their impact on biodiversity loss and climate
lending strategy for the country.
change. 42 And the CAS teams seldom request the help
of environmental specialists, which would require that
252. The study team examined the CASs for the ten
money be spent from tight budgets. In addition, there
countries it visited. Eight of the CASs were finished in
is no mandate from Bank management to integrate the
1997, one in 1996, and one in 1995, which was up-
global environment into the CAS. Bank procedures for
dated in 1996. The team found that fewer than half of
the CAS provide that global environmental issues and
them referred to World Bank GEF projects either in
the role of GEF are to be discussed only "when appro-
specific or generic terms and that nearly half of them
priate."
make no reference at all to GEF. Only two of the ten
link renewable resource problems in the country to the
256. The study team also looked at a third aspect of
global issue of biodiversity loss, and none link the
integrating environmental concerns into sectoral lend-
energy sector with climate change, despite Bank loans
ing strategies--the elimination of loans that contribute
involving power generation.
to environmental degradation. The Bank has an Opera-
tional Policy on Environmental Assessment that re-
253. In a few cases, the failure of the CAS to make
quires systematic screening of all projects for their
such linkages was particularly striking. In one case, the
impact on biodiversity and prevention or minimiza-
discussion of Bank support for tourism as a foreign
tion of adverse impacts. In recent years, environmental
42 Stefano Pagiola and John Kellenberg with Lars Vidaeus and Jitendra Srivastava, Mainstreaming Biodiversity in Agricultural Development:
Toward Good Practice, World Bank Environmental Paper No. 15 (Washington, D.C.: 1997), pp. 24-25.
43 The World Bank, Environment Department, Land, Water, and Natural Habitats Division, The Impact of Environmental Assessment: The
World Bank's Experience (Washington, D.C.: November 1996), p. xv; Robert Goodland, World Bank staff, private communication.

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Institutional Roles and Relations 45
assessments have become more systematic and have
procedure represents a positive development. How-
taken place earlier in project design and preparation
ever, the new policy explicitly rules out rejecting a loan
than when they were in the 1989 -92 period; the result
on the basis of its impact on the global environment.
is that project design is usually influenced positively.
But the actions required by the environmental assess-
260. The World Bank's Global Environment Coordi-
ment are often defined in the staff appraisal reports
nation Division defends this policy by arguing that the
and project agreements too generally to be effective.
climate change convention does not permit the Bank to
This problem is often undetected until mid-way
"force" a country to accept a higher cost alternative on
through implementation or even later.
43
the ground that it has lower global impacts. It argues
that rejecting any loans for fossil fuel power projects
257. In 1995 the Bank adopted a new policy of not
on global environmental grounds would be inconsis-
supporting any project that would result in the signifi-
tent with the FCCC, because the agreement does not
cant conversion or degradation of natural habitats,
require non-Annex 1 countries to control their green-
provided that the habitat is officially designated as
house gas emissions. 46 But, no language in the FCCC
critical. But the policy allows conversion even of such
forces the Bank to approve any specific type of loan;
critical habitats if there are no feasible alternatives, if
the Bank has not acted in the past on the assumption
the environmental assessment demonstrates that ben-
that it is obligated to approve whatever energy sector
efits substantially outweigh the costs, or if acceptable
loan is cheapest for its clients. The Bank has estab-
mitigation measures (usually compensatory protected
lished a wide range of environmental conditions on
areas equal to the habitat) are implemented. The study
lending in the energy sector, including narrow limits
team was unable to obtain any data on how often such
on the type of coal projects it finances, stringent re-
conversion has taken place.
quirements for reducing sulfur dioxide and other pol-
lutants and a complete prohibition on nuclear power
258. The World Bank's conventional power project
projects, against the wishes of client governments, be-
portfolio has obvious implications for emission of
cause such environmental conditions increase the
greenhouse gases. The Bank has approved 170 loans in
costs of power generation for the borrower.
the electric power sector since 1990, totaling more
than $24 billion, mostly for countries that will not
261. The team recognizes that a transition from the
have to reduce their greenhouse gas emissions in the
Bank's traditional role in financing conventional power
next decade. 44 These loans will result in the emission of
fossil fuel power projects to a new role in financing
an estimated 10 billion tons of carbon in the projects'
sustainable energy cannot be accomplished swiftly or
lifetimes. 45
easily. And any change in the present policy will re-
quire political decisions by the major donor countries
259. The Operational Policy Committee approved in
represented on the Bank's executive board. But the
November 1997 a recommendation in the Environ-
team believes that continued financing by the World
ment Department's draft energy and environment
Bank for such projects is inconsistent with
policy paper that task managers run their net present
mainstreaming of the global environment in the Bank's
value calculations on fossil fuel loans both with and
regular operations.
without a $20 per ton of carbon emitted shadow price
for the global externalities associated with fossil fuel
Programming on the Basis of Global Environmental
use. If the value drops significantly with the shadow
Objectives
price included, this would signal that the proposed
project will have significant global environmental im-
262. Global environmental programming would re-
pacts and that alternatives should be considered. This
quire setting aside a substantial portion of total lending
44 See Hagler Bailly, Stockholm Environment Institute, and IIEC, The Effect of a Shadow Price on Carbon Emissions in the Energy Portfolio of the
Bank: A Backcasting Exercise, Final Report to the Global Climate Change Unit, Global Environment Division, World Bank (June 13, 1997), p. I-1.
45 See Institute for Policy Studies and International Trade Information Service, The World Bank and the G-7: Changing the Earth's Climate for
Business, at http://www.igc.org/ifps/publicat/wb-g7-report/executive summary.en.html.
46 For an early statement of the Bank's position on "consistency" with the FCCC, see World Bank, The World Bank and the UN Framework
Convention on Climate Change, Environment Department Papers, no. 008 (Washington, D.C.: March 1995), pp. 4-5.

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46 Study of GEF's Overall Performance
for global environmental objectives and inviting coun-
does not keep statistics on investments by focal area or
tries to submit project proposals that would meet eligi-
investments with alleged global environmental ben-
bility criteria. It would mean refocusing the Bank's
efits, generally. Nor is IFC able to produce a complete
corporate strategy on the production of global "com-
list of projects in either category.
mons" benefits in sector lending and setting program-
matic goals for global environmental problems, such as
265. Mainstreaming by IFC in its non-GEF portfolio is
the amount of forest to be brought under effective
inhibited by the fact that even larger clean energy
protected area management or greenhouse gas emis-
projects are usually at or above the low end of IFC's
sions to be reduced through development of renewable
financing range ($20 million). Because most renewable
energy technologies.
energy and energy efficiency projects are too small for
the agency to invest in directly, IFC established the
263. A policy paper drafted within the Bank in 1997
GEF-supported Renewable Energy and Energy Effi-
proposed that the Bank enter into a "strategic renewable
ciency Fund in 1996, designed to help finance the
energy partnership" with GEF by allocating a significant
smaller clean energy projects.
portion of its energy lending to support development of
renewable energy technologies, to which GEF would
Conclusions
add grant resources amounting to one-fourth of the total
fund. According to the World Bank's Executive Coordi-
266. The study team found that the Bank has
nator for GEF Operations, the strategic renewable en-
mainstreamed the global environment effectively in
ergy partnership was adopted in principle by the Bank's
terms of cofinancing and leveraging resources in con-
Operational Policy Committee in November 1997, and
junction with GEF projects. However, it has not done
a task force is now being convened to formulate recom-
as much to build up its regular loan portfolio with
mendations on how the partnership would be struc-
regard to biodiversity or renewable energy as it could
tured. Still to be determined is how much the Bank
have with the necessary commitment and resources. It
would commit to the partnership and whether the Bank
has not created all the staff incentives necessary to put
would establish a special fund or would simply set a
global environmental concerns on a par with tradi-
target for lending for renewable energy. The study team
tional bank business. The Bank has not succeeded in
believes that this partnership could be a significant first
systematically integrating global environmental objec-
step by the Bank to mainstream the global environment
tives into economic and sector work or into the CAS
through global programming.
process, nor has it taken meaningful action to reduce
the impact of its traditional role as financier of fossil
MAINSTREAMING IN THE INTERNATIONAL FINANCE
fuel power development. And it has not yet under-
CORPORATION
taken any programming based on global environmen-
tal objectives, although it appears to be poised to take
264. Another member of the World Bank Group, IFC
an important step in that regard. Overall, the team
is the largest multilateral source of loan and equity
found that, although the World Bank's cofinancing of
financing for private sector projects in the developing
GEF projects is a significant accomplishment in
world. Apart from its management and cofinancing of
mainstreaming the global environment, it has fallen
GEF projects, it appears that IFC has begun to put
well short of its potential for mainstreaming.
increased emphasis on projects with global environ-
mental benefits in recent years, particularly in the
Recommendations
climate focal area. It has already approved financing
for a small run-of-the-river hydro project in Nepal and
267. The World Bank should adopt public, measur-
is close to approving financing of a wind power project
able goals for the integration of global environmental
in Costa Rica. Other projects related to the global
objectives into its regular operations, including goals
environment, including ecotourism projects, are now
related to: 1) staff incentives, 2) funding level and/or
in the pipeline. IFC also asserted that global benefits
number of GEF associated projects, 3) funding level
can arise from IFC investments not explicitly intended
and/or number of projects for the global environment
to benefit the global environment, such as elimination
in its regular lending portfolio, and 4) integration into
of natural gas flaring in oil and gas investments. The
its sector work and the Country Assistance Strategy
study team could not assess the degree of change in
(CAS) process. It should report regularly to GEF and to
IFC emphasis on such projects, however, because IFC
the public on its progress in achieving these objectives.

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Institutional Roles and Relations 47
268. The World Bank should begin a transition from
UNDP pr ojects
its role in financing conventional power loans to a new
· Extent of integration of GEF and the global envir
on-
role in financing sustainable energy technologies.
mental concer ns into countr y cooperation frame-
works or other countr y dialogues.
269. The World Bank should allocate increased finan-
cial resources to the Global Overlays Program in order
Financing of GEF Projects and Association of GEF
to ensure adequate staffing for a substantially higher
Projects with Non-GEF UNDP Projects
level of integration of global environment into sector
work and the CAS.
273. UNDP mobilized some cofinancing in 42 percent
of its GEF projects during GEF 1. This represents a
270. The IFC should maintain a database of its
major improvement of its performance in generating
projects with global environmental benefits, so that its
cofinancing during the Pilot Phase, when such
mainstreaming of global environment can be assessed
cofinancing is provided in only 14 percent of its GEF
in the future.
projects. 47
MAINSTREAMING IN UNDP
274. With regard to direct cofinancing from its core
budget, UNDP provided $15.6 million to GEF projects
271. UNDP is a grant-making institution focused pri-
during GEF 1, whereas it provided no cofinancing to
marily on poverty eradication and promoting sustain-
GEF projects from its core budget during the Pilot
able human development. It allocates its development
Phase.
resources to developing countries on the basis of ob-
jective factors, such as population and per capita in-
275. UNDP claims total cofinancing in full GEF
come, so most of its funds go to the least developed
projects of $213.5 million during GEF 1, which would
countries. UNDP has a decentralized system of project
account for 48 percent of the total financing (including
planning: UNDP country offices have authority to pro-
GEF financing) of UNDP GEF projects. However, the
gram the funds allocated to the country over a three-
study team found discrepancies between figures pro-
year cycle (changed from a five-year cycle in 1996).
vided for specific projects in its data sheet on
UNDP/GEF projects represent approximately 7 per-
cofinancing and the project documents. 48 Taking these
cent of UNDP's annual budget of about $1.1 billion.
discrepancies into account, the study team found that
the actual cofinancing total for UNDP GEF projects is
272. The study team identified the following criteria
$195.5 million. Moreover, the study team found that
as most appropriate for assessing the degree of
in a number of UNDP GEF projects, cofinancing by
mainstreaming in UNDP:
governments is for baseline activities that would have
been funded regardless of the GEF projects in question.
· Extent of UNDP financial contributions to GEF
projects and of financing non-GEF pr ojects associ-
276. UNDP committed itself at the Heads of Agency
ated with GEF pr ojects
Meeting in 1996 to "integrate the new UNDP program-
· Number and total funding of pr ojects in UNDP' s regu-
ming cycle to the GEF work program to produce more
lar por tfolio that pr ovide global envir onmental ben-
projects benefiting from joint financing by UNDP and
efit in the four focal ar eas
other donors." 49 UNDP figures for the past three years
· Incentives and r ewar ds for UNDP staf f work on GEF
do show a significant increase in financing for GEF
projects compar ed with those for work on r egular
projects from other sources. UNDP GEF projects ap-
47 All figures cited for UNDP cofinancing are based on data supplied by UNDP in "Cofinancing in UNDP/GEF Projects Operational Phase
as of FY97," submitted by UNDP on October 3, 1997, and "UNDP/GEF Pilot Phase Co-financing Projects" (n.d.).
48 UNDP claims a total of $27 million in cofinancing for the Madagascar Environment Biodiversity Program on its cofinancing data sheet,
but the regional coordinator confirmed that the total cofinancing for the UNDP-managed components of the project was $6.7 million. And
the $5.4 million claimed as cofinancing for the Republic of Yemen Socotra Archipelago Project is identified in the project brief as "parallel
financing" for regular development activities from various U.N. agencies, including UNICEF and WHO, which would have been spent
regardless of the GEF project. The study team notes that such ongoing financing of development activities is sometimes counted as cofinancing
in UNDP project briefs and data sheet and sometimes not.
49 GEF, GEF Corporate Business Plan FY98-00, op. cit., p. 15.

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48 Study of GEF's Overall Performance
proved in 1995 had financing from governments,
cycle beginning in 1992 was obviously a major ob-
NGOs, and other funding entities of only $24.6 mil-
stacle to progress in this regard, but UNDP's under-
lion, whereas those approved in 1996 and 1997 had
standing of associated projects is a more fundamental
financing from other sources of $88.3 million and
problem that must be addressed. However, the team
$66.4 million, respectively.
notes that the GEF Council has not provided clear
guidance on what constitutes an associated project,
277. A second form of cofinancing of GEF projects is
and that some confusion is to be expected under those
the financing of an associated project. The team found
circumstances.
only three cases in which UNDP identified projects as
"associated projects." Moreover, UNDP's use of the
281. The team believes that there is considerable po-
term "associated project" in project documents and in
tential for UNDP to generate interest on the part of
its comments on an earlier draft of this report indicates
recipient countries in GEF-associated projects by using
that UNDP was unclear about the term's meaning dur-
the additional grant money from GEF as an incentive
ing GEF 1.
for such associations. Success in this effort will de-
pend, however, on the degree to which global environ-
278. In the case of the Yemen Socotra Archipelago,
mental concerns in general and GEF in particular are
UNDP referred to the "Government of Yemen Trans-
integrated into the planning of country programming,
port Development for Socotra Project as an "associated
which is addressed separately below. The improve-
project." But that regular UNDP project has little or
ment by UNDP of coordination between energy
nothing to do with biodiversity conservation and sus-
projects funded with core resources and GEF-financed
tainable use. And in the case of the Viet Nam Creating
energy projects--one of the objectives of its "Sustain-
Protected Areas for Resource Conservation project,
able Energy Global Programme"--is obviously one
UNDP listed all UNDP and GEF projects in Viet Nam
prerequisite for achieving an adequate level of associ-
related to biodiversity or environmental awareness as
ated projects.
associated projects.
Funding of Non-GEF UNDP Projects That Provide
279. UNDP argues that the baseline costs of GEF
Global Environmental Benefits
projects are the equivalent of regular UNDP projects
that are linked with GEF grants, which provide the
282. Statistics on UNDP's regular portfolio of projects
global environmental benefit and are, therefore, "asso-
show that UNDP still does not have a system to track
ciated projects." The study team believes this argument
its funding of biodiversity conservation projects.
50
represents a misunderstanding of the concept of asso-
Therefore, the study team was unable to determine the
ciated projects. The team assumes that GEF-associated
pattern of spending over recent years in this area. The
projects are those that either are closely related to a
absence of any statistical tracking of biodiversity
GEF project (blended with it or complementing it) or
projects or any new initiative to increase project fund-
that involve a change in the design of an otherwise
ing for biodiversity conservation suggests that there
unrelated project that is intended to benefit the global
has been no new emphasis on biodiversity in the
environment. Defining associated projects to mean a
UNDP portfolio since the creation of GEF.
project involving only baseline activities that are not
altered because of the association with the GEF project
283. The data show that UNDP has reduced the num-
would deprive the concept of any value in leveraging
ber of projects and total funding for new and renew-
additional funding related to the global environment.
able energy since it began tracking that subsector of
energy projects in 1993. From twenty-two projects for
280. Based on this definition, the study team found
a total of $22.6 million in 1993, renewable energy as a
that UNDP has not yet begun to mainstream with
category fell gradually to only eleven projects for a total
regard to associated projects. UNDP's five-year project
of $5.1 million in 1996. 51
50 Documentation and Statistics Office, Bureau for Programme Policy and Evaluation, United Nations Development Programme,
Compendium of Ongoing Projects, UNDP/Series A/Nos. 22-27, 1992-96. UNDP informed the study team in January 1998 that UNDP is
changing its project classification scheme but did not indicate whether it would begin tracking biodiversity projects under the new system.
51 Ibid.

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Institutional Roles and Relations 49
284. UNDP project statistics indicate that in fiscal
events for UNDP and government counterpart staff. So
1997 UNDP continued to provide four times more
far, more than thirty countries have participated in such
grant funding for "conventional sources of energy (pe-
events. Third, core resources are being used to support
troleum, coal, and gas)" than it did for "new and
project identification and design, pilot activities, and
renewable sources of energy." 52 UNDP commented
resources mobilization for sustainable energy projects in
that assistance for "energy planning and conservation,"
at least thirty countries, according to UNDP's deputy
for which funding was one-third higher than for con-
executive coordinator.
ventional energy sources, also includes projects related
to renewables. However, it is impossible to tell from
288. These changes should give UNDP the capacity to
project statistics how much of that category was for
leverage shifts in its regular portfolio toward many more
promotion of new and renewable energy.
new and renewable energy projects during GEF II. The
study team notes, however, that biodiversity protection
285. Commenting on the decisions made early in the
has not received comparable attention during GEF 1.
1992-96 program cycle, UNDP's Energy and Atmo-
sphere Program acknowledged that the overall decline
Integration of GEF and Global Environment into
in regular UNDP program funds and availability of
Country Cooperation Frameworks
GEF funding for climate change projects had caused a
"noticeable tendency within UNDP to give lower prior-
289. Closely related to the degree of mainstreaming
ity to funding energy projects under the regular IPF
by UNDP through associated projects and project
programme," which it noted was "counter to the spirit
funding in its regular portfolio is the integration of the
and intention of GEF." 53
global environment into the Country Cooperation
Framework (CCF) process. The CCF presents the de-
286. These patterns and trends on energy projects in
velopment priorities agreed to by the country and
UNDP's regular portfolio reflect the priorities deter-
UNDP and the strategy for addressing those priorities
mined in 1992 -93, when core funds were committed
through projects over three years. It provides an op-
to projects for the fifth five-year cycle (1992
-96).
portunity for UNDP to integrate global environmental
UNDP had little flexibility to reprogram funds during
concerns into their cooperation with client govern-
the final two years of GEF 1, when mainstreaming was
ments and to align their strategies with those of GEF.
discussed with GEF. The allocations among categories
UNDP's response to the GEF Secretariat's inquiry
of projects, including environment and natural re-
about ways that the agency had mainstreamed the
source management, within country programs are ne-
global environment during GEF 1 specifically referred
gotiated both between UNDP resident representatives
to "ensuring that, in the current process, GEF opera-
and their country counterparts, on the one hand, and
tions are part of the Country Programme Cooperation
among recipient government agencies, on the other
Framework." The CCF process is an opportunity to
hand, and are, therefore, difficult to reopen.
identify UNDP projects related to biodiversity or cli-
mate change that could be linked with GEF projects, as
287. UNDP has taken some key steps that should make
well as possible core UNDP projects that would have
it possible to make a dramatic shift in the project portfo-
both global and national benefits.
lio toward a much greater emphasis on new and renew-
able energy: First, UNDP has adopted a three-year cycle,
290. The study team assessed the extent to which GEF
which is no longer "front-loaded" but is a rolling project
operations were integrated into CCFs by examining
approval and implementation process that allows for a
the frameworks that were available for thirteen of the
major shift in the energy portfolio to take place progres-
sixteen countries visited by the team or for which
sively in the next several years. The first such three-year
country studies were done by local consultants. Nine
cycle began in 1997. Second, UNDP has introduced the
of the thirteen were completed in 1997, three in 1996,
Initiative for Sustainable Energy, a policy document that
and one in 1995. The team looked for indications of
serves as the basis for national and regional training
the extent to which the CCFs identified opportunities
52 UNDP, Compendium of Ongoing Projects as of 31 December 1996, Series A/no. 27, p. 43.
53 Energy and Atmosphere Programme, United Nations Development Programme, UNDP Initiative for Sustainable Energy (New York: June
1996), p. 75.

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50 Study of GEF's Overall Performance
TABLE 5.
REFERENCES TO GEF IN A SAMPLE OF CCFS
References to
Refers to GEF Only
Refers to GEF
Refers to Linkage between
GEF Country
As Source of Funding Programs or Priorities
UNDP Project and GEF Project
Russian Federaton (1997)
Egypt (1997)
Brazil (1997)
Indonesia (1995)
India (1996)
China (1996)
Poland (1996)
Zimbabwe (1997)
Mexico (1997)
Jordan (1997)
Argentina (1997)
Viet Nam (1997)
Philippines (1997)
for projects relating to biodiversity, climate, or interna-
shown in summary form in table 5 below. The team
tional waters either independent of GEF funding or
found that, in most cases, the CCFs refer to GEF only
separate from but linked to GEF projects.
in the "Resource Mobilization Target Table" for the
planning period covered by the document or in a
291. In general, the team found that the CCFs intro-
passing reference as a source of financing for UNDP
duced broad themes relating to the global environ-
projects. Only three of the thirteen CCFs referred to
ment, sometimes stated in extremely general terms,
GEF objectives directly or indirectly. And in only one
such as "conservation and use of biodiversity" (Argen-
case was any linkage between a non-GEF UNDP
tina), and sometimes in slightly more concrete terms,
project and a GEF project made. Only one CCF re-
such as "implement biodiversity and conservation
ferred to a UNDP project as a GEF project. And none of
measures for important wetlands and wildlands" (Jor-
the documents foreshadowed the association of GEF
dan) or "promotion of the use of renewable energy"
grants with UNDP grants in one of the focal areas.
(Egypt). But the CCFs seldom went beyond this gen-
eral level of program objectives to identify specific
293. Based on this sample, it appears that the CCFs
types of projects to be developed during the planning
have given greater prominence conceptually to global
period. There are some exceptions to this general pat-
environmental issues in country program planning.
tern: the Russian Federation CCF was specific about
But the study team could not ascertain the likelihood
types of projects contemplated and even project sites,
that any of them will generate an increase in core-
and the India and China CCFs were more concrete
funded UNDP projects relating to the global environ-
than most. But for the most part, the CCFs appear to
ment. The team found that, although some CCFs have
reflect a stage of planning in which it is too early to
referred to GEF priorities and programs, they have not
identify opportunities for linkages between core bud-
yet systematically begun to link GEF's operations with
get projects and GEF projects or even levels of alloca-
regular portfolio projects. Indeed, most of the CCFs
tion of core resources to different types of projects.
ignore GEF except as a source of funding for UNDP
projects. This may be a result of having been written
292. The team analyzed the ten CCFs in terms of how
too early in the planning process. The question arises,
they treated GEF and GEF projects in relation to
therefore, whether these documents could be written
UNDP core projects. The results of this analysis are
somewhat later in the process and be explicitly de-

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Institutional Roles and Relations 51
signed to identify specific core projects related to
taken steps that give it the capacity to increase dramati-
biodiversity, climate, and international waters.
cally the role of renewable energy in its regular project
portfolio, although biodiversity does not appear to
Staff Incentives for Work on GEF Projects
have been given parallel emphasis. UNDP has adopted
a set of positive incentives for staff work on GEF
294. Generally speaking, UNDP does not have the
projects, although Latin America may be a weak point
same problem in rewarding work on GEF projects as
in that regard. The CCFs have begun to refer to GEF
the World Bank, because regular UNDP projects are
projects and programs but have not yet systematically
usually in the same range of cost as GEF projects. So
integrated global environmental concerns into lending
working on GEF projects is not given less recognition
strategies. And the lack of clarity in UNDP about asso-
in most UNDP country offices. This problem does arise
ciated projects indicates that there are still institutional
in Latin America, however; many regular UNDP
obstacles to the mainstreaming of the global environ-
projects are substantially larger there, with significant
ment and GEF in UNDP's program planning.
cofinancing by governments.
Recommendations
295. According to UNDP staff, the agency intends to
establish a system that will reward work on GEF by
298. UNDP should establish a system of tracking
recognizing GEF project funding as leveraging of addi-
projects and components that are relevant to the GEF
tional resources. Thus, every time the Focal Point for
focal areas and set public, measurable targets related
GEF in a UNDP country office has a project approved,
to: 1) funding levels and/or number of core-funded
the officer will leverage additional sources of financing,
projects for biodiversity conservation, alternative en-
which will be considered as one component in the
ergy and international waters, 2) funding level and/or
officer's performance evaluation. The incentive for
number of GEF-associated projects, and 3) the Coun-
working on GEF projects will, thus, be biggest in
try Cooperation Frameworks (CCFs). It should report
Africa, where there are the least non-GEF opportuni-
regularly to GEF and to the public on its progress in
ties for obtaining cofinancing from governments.
achieving those targets. It should also consider making
However, the new incentive system will not work in
linkages between potential GEF projects and potential
Latin America, where cofinancing opportunities are
core budget project an explicit objective of the process
numerous; it is precisely in Latin America that such
of preparing the Country Cooperation Frameworks.
incentives are needed.
MAINSTREAMING IN UNEP
296. As an additional incentive to work on GEF
projects, UNDP, in coordination with the GEF Secre-
299. UNEP, unlike the World Bank and UNDP, is not
tariat, offers training in logframe (logical framework)
a funding agency and does not normally implement
program development, which is considered advanta-
country-level development-related projects. It has a
geous for career advancement in UNDP, exclusively to
budget approximately one-thirtieth the size of
staff working on GEF projects. It appears that this
UNDP's, and that budget has shrunk drastically in the
incentive makes working on GEF projects at least as
last few years.
attractive as work on regular UNDP projects, if not
more attractive, again except in Latin America, where
300. It is not reasonable to expect UNEP to be able to
the incentives for working on GEF projects appear to
provide cofinancing for GEF projects. The nature of
be much weaker.
UNEP projects is such that it is much more difficult to
mobilize additional financing from other sources than
Conclusions
it is for the other Implementing Agencies. UNEP part-
ners in the science and environmental communities
297. The study team found that UNDP had made
generally do not have access to the resources of
measurable progress in providing cofinancing for GEF
sectoral and development agencies, and governments
projects compared with the Pilot Phase. It found that
are less willing to finance regional and subregional
the coincidence of UNDP's five-year project cycle and
activities. The criteria for mainstreaming for UNEP
the beginning of the GEF Pilot Phase made it extremely
must be significantly different from those applied to
difficult for UNDP to mainstream the global environ-
the other two Implementing Agencies.
ment in its regular portfolio during GEF 1. UNDP has

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52 Study of GEF's Overall Performance
301. UNEP already has a mandate to focus on reduc-
ers with GEF's objectives and procedures. The GEF
ing global environmental threats. The study team,
Secretariat found on a mission to UNEP headquarters
therefore, assumes that UNEP is in fact giving suffi-
in April 1996 that some UNEP staff who were prepar-
cient attention to the global environment in its regular
ing GEF project proposals were still unaware of the
operations. Apart from this criterion, the study team
Operational Strategy. 54
believes that the most appropriate criteria for assessing
mainstreaming in UNEP are the incentives provided by
306. Since then, UNEP has taken several initiatives to
UNEP for its personnel to work on GEF projects and
acquaint senior management, substantive units, and
the extent to which UNEP has followed the principle
regional offices with GEF's policies, procedures, and
that GEF programming should be additional to
operational guidelines, including a retreat for senior
UNEP's regular program activities.
management, workshops at headquarters and in all
regional offices, and distribution of a manual on UNEP
302. With regard to personnel incentives, UNEP's
GEF operations.
GEF Core Unit has informed the study team that it has
not instituted any special incentives for GEF work.
307. UNEP's familiarization efforts and consultations
Furthermore, it has observed that overall there are
with the GEF Secretariat have led to an improvement
strong disincentives to UNEP staff becoming involved
in UNEP's programming with regard to the
in GEF matters, because of the complexity and dura-
additionality requirement. During 1997 UNEP sub-
tion of the process of project approval.
mitted a larger number of proposals that are additional
to UNEP's core program activities and otherwise con-
303. With regard to the additionality of its core man-
form to GEF eligibility requirements than in 1996.
date, one UNEP official observed that, in the early
UNEP's proposal for Global International Waters As-
phase of GEF 1, UNEP program staff looked on GEF as
sessment, which should make a major contribution to
little more than another source of financial support for
future GEF programming in international waters, was
programs that were being cut and that they sought
approved for inclusion in the work program, as were
funding from GEF for whatever they could not get
fourteen Project Preparation and Development Facility
funded elsewhere. During GEF 1, UNEP developed a
(PDF) grants dealing with biodiversity conservation,
number of project proposals that represented parts of its
international waters, and ozone depletion.
regular work program for which funding has been cut.
308. However, UNEP was still submitting proposals
304. In 1996 most of UNEP's proposals for regular
in 1997 that were not consistent with any GEF Opera-
projects (thirteen of eighteen) were not approved by
tional Program and lacked sufficient evidence of coun-
GEF for inclusion in the work program. Most of the
try involvement. Specifically, the Pilot GEF
projects were rejected because they were either not
Informational Network Project and the Integrated En-
recipient country focused or did not appear to be
vironment and Socio-Economic Information System
country driven. But in several cases, the reason given
Project Proposals were viewed by the GEF Secretariat
was that GEF cannot fund activities of international
as agency driven and potentially funding existing ac-
organizations that are supposed to be supported by
tivities of UNEP. The submission of such projects for
their regular budgets. Some of these proposals were
inclusion in the work program suggests that the prin-
resubmitted in slightly different form, despite the
ciple of additionality had not been completely ac-
secretariat's advising UNEP that the GEF could not
cepted by UNEP, despite the awareness-raising efforts
fund existing programs of agencies.
that have been carried out.
305. The problem of pressure from program units to
309. The study team believes that greater efforts by
promote their projects appears to have arisen because
both the GEF Secretariat and UNEP are needed to
of a widespread lack of understanding on the part of
ensure that all relevant UNEP staff have a clear under-
UNEP program officers of how GEF operates. Until
standing of the requirements for eligibility for GEF
1996 only one or two officials staffed UNEP's GEF unit
funding, including the principle of additionality to
and little effort was made to familiarize program offic-
core budget activities.
54 Ken King, GEF Secretariat, "Mission to UNEP: Back-to-Office Report " (May 1, 1996)

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Institutional Roles and Relations 53
Conclusions
short-term cost-effectiveness, long-term cost-effective-
ness, or a combination of the two. The COP responded
310. The study team found that UNEP has not pro-
by calling for a mixed strategy. Although the Opera-
vided any incentives for work on GEF projects and that
tional Strategy emphasizes projects with a long-term
it could devise some simple ways to improve the situa-
impact on the problem, it embraces short-term mea-
tion. It also found that UNEP has shown some im-
sures as well.
provement in submitting GEF project proposals that
are consistent with the principle of additionality to
315. In its initial guidance to GEF in April 1995, the
core program activities, but that further progress is
FCCC COP called for primary emphasis on enabling
needed in this regard.
activities, such as planning and capacity building, to
facilitate implementation of "effective response mea-
Recommendations
sures." It called for strengthening research and techno-
logical capabilities of convention implementation by
311. UNEP should devise a system of staff incentives,
developing countries that are parties to the conven-
involving at least a revision of the staff evaluation
tion. It further called for emphasis on improving pub-
criteria, to give adequate consideration to GEF work.
lic awareness of climate change and response measures
and for financing formulation of national programs to
312. The GEF Secretariat and UNEP should devote
address climate change issues and support their imple-
more staff time and resources to upstream consultation
mentation and agreed activities to mitigate climate
not only in Washington but in Nairobi to ensure that
change. These points were integrated into the eligibil-
all relevant UNEP program staff have adequate guid-
ity criteria for climate enabling activities.
ance in formulating GEF proposals.
316. As a result of the guidance from the COP of the
B. COOPERATION BETWEEN GEF AND THE
FCCC, GEF has allocated some 10 percent of its re-
CONVENTIONS
sources for regular projects in the climate change focal
area ($35 million out of $364 million) to short-term
313. As the institutional structure managing the finan-
measures, whereas about 90 percent of the funding has
cial mechanism for the Framework Convention on
been allocated to long-term measures within the Op-
Climate Change (FCCC) and the Convention on Bio-
erational Programs. 56
logical Diversity (CBD) on an interim basis, GEF is
supposed to function "under the guidance [of], and be
317. At its second session, the COP of the FCCC
accountable to, the Conferences of the Parties, which
expressed concern about "difficulties encountered by
shall decide on policies, program priorities, and eligi-
developing country parties in receiving the necessary
bility criteria for the purposes of the conventions."
55
assistance from the Global Environment Facility," re-
The study team has examined the two main dimen-
ferring to operational policies on eligibility criteria,
sions of the relationships between GEF and the two
disbursement, project cycle and approval, as well as
conventions: GEF's implementation of the guidance
the application of the concept of incremental costs. It
issued by the two Conferences of the Parties (COPs)
also expressed concern about difficulties of non-Annex
and the effectiveness of GEF in funding enabling ac-
I parties in obtaining funds for preparing their national
tivities to support the implementation of the conven-
communications. The COP called for "steps to facili-
tions by countries eligible for GEF assistance.
tate the provision of financial resources for implement-
ing measures to mitigate climate change, including
GUIDANCE TO GEF FROM THE CONVENTIONS
"pragmatic application of [the] concept of incremental
costs on a case-by-case basis." It also called for GEF to
314. As the GEF Secretariat began preparing the GEF
"expedite the approval and the disbursement of finan-
Operational Strategy in 1995, it presented a report to
cial resources" for non-Annex I countries preparing
the first meeting of the COP of the FCCC, which asked
their national communications. GEF response to this
for guidance on whether the strategy should focus on
guidance is assessed below.
55 Instrument for the Establishment of the Restructured Global Environment Facility (Washington, D.C.: 1996), paragraph 6, p. 7.
56 Data compiled by the GEF Secretariat.

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54 Study of GEF's Overall Performance
318. Guidance from the CBD COP has focused on a
guidance from COP II. These were revised in April
number of "programme priorities." The guidance from
1997 to reflect the guidance provided by COP III.
COP I of the CBD in 1994 had thirteen separate parts.
The guidance from COP II covered national programs
321. The Operational Programs were still going
and reports, the need for expedited procedures, public
through revision when COP II guidance was issued.
involvement, modalities of support for the clearing-
The secretariat had planned originally to publish the
house mechanism, support for general measures for
final version in April 1997 but decided to delay publi-
conservation and sustainable use and for in situ and ex
cation until June to revise it to include mention, wher-
situ conservation, and sustainable use of components
ever appropriate, of the activities called for by COP III.
of biodiversity. Guidance from COP III covered capac-
A proposal on benefit sharing has already been drafted
ity building for biosafety, assessment and monitoring
by the secretariat in collaboration with the CBD Secre-
(including taxonomy), and indigenous and local com-
tariat; the two bodies are still in the process of reaching
munities. It also covered support for activities on agri-
consensus on a final version to be presented to COP IV
cultural biodiversity (or agrobiodiversity), the
in May 1998. In addition, the secretariat committed to
clearinghouse mechanism, targeted research, aware-
write policy papers and reviews on assessment and
ness and understanding, and in situ and ex situ conser-
monitoring, incentive measures, genetic resources,
vation. It further reiterated earlier guidance on
and indigenous and local communities.
incentive measures, including compensation for op-
portunity costs forgone by communities. And it asked
322. The issue of whether the COP guidance on
GEF to collaborate with the CBD Secretariat in prepar-
biodiversity should be translated into a new Opera-
ing a proposal on "the means to address the fair and
tional Program was debated among the GEF Secre-
equitable sharing of benefits arising out of genetic
tariat, the CBD Secretariat, and the Implementing
resources."
Agencies for several months before the secretariat de-
cided in early 1997 to issue a policy note explaining to
319. The approach adopted by the secretariat in re-
the GEF Council how agrobiodiversity activities would
sponding to the guidance of the CBD's COP was to use
be integrated into the existing Operational Programs
the existing framework of Operational Programs as
on biodiversity. The COP's guidance on
much as possible. It was concerned about the possible
agrobiodiversity was extremely broad, referring to the
proliferation of Operational Programs, which makes
FAO's Global Plan of Action on Agriculture and Ge-
programming of GEF resources more difficult. It was
netic Resources as well as the COP's own multiyear
also aware that the greater the change in the existing
program, which involves six program components.
framework required to implement a given COP guid-
GEF had already explicitly included activities relating
ance, the longer it would take to respond and the more
to conservation and sustainable use of agrobiodiversity
political support would be needed. Thus, the secre-
in its Operational Programs in biodiversity before the
tariat preferred to implement the guidance through
COP guidance. However, GEF could not realistically
enabling activities wherever possible or through revis-
include all of the possible activities outlined in the
ing the Operational Strategy where necessary, rather
guidance within the scope of those Operational Pro-
than adding a new Operational Strategy.
grams, so the secretariat's policy note focuses on those
activities that would be relevant to GEF's mandate and
320. The secretariat took advantage of drafting the
capabilities. 57
Operational Strategy and Operational Programs to in-
tegrate priorities identified by the COP into those
323. The note indicates that the role of GEF will be to
documents before they were approved as a means of
help remove specific constraints to sustainable use of
responding to the guidance. The GEF Secretariat con-
biodiversity important to agriculture. The note identi-
sulted the CBD Secretariat and incorporated guidance
fies three distinct GEF responses to the guidance: em-
from COP I into the Operational Strategy before it was
phasizing biodiversity concerns in applying the
approved by the GEF Council in October 1995. The
Operational Programs, revising the operational criteria
secretariat also developed the Operational Criteria for
for enabling activities, and encouraging Implementing
Enabling Activities in June 1996 based in part on the
Agencies to assist with country-driven, short-term re-
57 "A Framework for GEF Activities concerning Conservation and Sustainable Use of Biological Diversity Important to Agriculture," draft (n.d.).

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Institutional Roles and Relations 55
sponse measures in agrobiodiversity and inclusion of
believed was the slowness of the GEF Secretariat to
pilot components and demonstration of techniques in
provide support for the clearinghouse mechanism of
project proposals.
the CBD.
324. The secretariat's follow-up to the COP guidance
328. COP II requested that GEF "explore the modali-
on capacity building for biosafety has taken the form of
ties" of providing support to developing countries for
approving a pilot project that covers
(a) building
capacity building in relation to the operation of the
awareness, stock taking, identification of options, and
clearinghouse mechanism. At a GEF Operations Com-
development of strategies for biosafety in eighteen
mittee meeting in May 1996, the CBD Secretariat pro-
countries and (b) regional workshops open to all GEF-
posed that the project matrix for enabling activities
eligible countries. The project has been sent to the GEF
should include something on the clearinghouse
Council for final endorsement.
mechanism, and it was agreed that the idea was sound.
The Operational Criteria for Biodiversity were modi-
325. In the cases of some issues covered by COP
fied in June 1996 to include participation in the clear-
guidance, the secretariat had already approved
inghouse mechanism as an eligible activity.
projects that addressed the COP's concerns even be-
fore the guidance was issued. In the case of taxonomy,
329. However, the GEF Secretariat did not include in
the Costa Rica Biodiversity Resources Development
the revised Operational Criteria the specific cost ranges
Project, approved in June 1995, was intended to com-
for participation in the clearinghouse mechanism, on
plete an inventory for five major plant and animal
the grounds that the CBD was still in the process of
groups in Guanacaste Conservation Area and sur-
designing the clearinghouse mechanism. After wide-
rounding buffer zones as well as to develop human
ranging consultations with the CBD Secretariat and
capacity and institutional capacity for future taxo-
several of the delegations most interested in the issue,
nomic projects. The Inventory, Evaluation, and Moni-
the GEF Secretariat presented its proposed modalities
toring of Botanical Diversity in Southern Africa Project
for GEF assistance to capacity building in relation to
was approved in April 1996 to build the capacity of
the clearinghouse mechanism at the COP III in No-
102 professionals and support staff in ten countries to
vember 1996. The COP requested that GEF
inventory, evaluate, and monitor some 30,000 species
operationalize the revised criteria as soon as possible;
of flowering plants and ferns.
in April 1997 the GEF Secretariat developed cost
ranges for various hardware, software, and training
326. With regard to incentive measures, including
costs for using the Internet as guidelines for preparing
ways of compensating benefits forgone, GEF has now
enabling proposals.
approved a project that specifically includes provision
for compensating communities for benefits forgone in
330. The CBD Secretariat strongly believed that the
conservation of biodiversity. In the Ghana Natural
GEF Secretariat should have moved much faster on
Resources Management and Biodiversity Project, ap-
allowing countries to draw on enabling activities to
proved in July 1997, communities are to be compen-
participate in the clearinghouse, noting that it took
sated through alternate livelihood activities for the
more than a year to complete the task. The GEF Secre-
benefits forgone by taking forest reserves out of pro-
tariat, however, believed that it should receive the
duction.
guidance of the COP before making the decision, par-
ticularly because the clearinghouse mechanism itself
327. The CBD Secretariat confirmed that the GEF Sec-
had not yet been designed by the CBD Secretariat.
retariat had generally integrated the guidance from the
COP into the relevant GEF documents. However, it
331. The study team notes that the apparent tentative-
viewed the Operational Criteria for Enabling Activities
ness of the COP's guidance, combined with the un-
as designed primarily for the climate convention rather
completed plans for the mechanism itself, was the
than the biodiversity convention. Specifically, the CBD
primary cause of the delay in acting on the issue of the
Secretariat emphasized the much greater importance
clearinghouse mechanism.
to the CBD of the clearinghouse mechanism, intended
to disseminate convention-related information, which
332. The larger problem in cooperation between GEF
was not reflected in the Operational Criteria. The CBD
and the conventions regarding the guidance provided
Secretariat also expressed frustration about what it
by the CBD is that guidance has been overly broad in

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56 Study of GEF's Overall Performance
scope, yielding so many priorities that it tends to make
4.4 months and that many of them take two months or
GEF programming more diffuse than focused. Ideally,
less. From May 1996 to June 1997, GEF approved
the CBD would provide GEF with a scientifically based
forty-six climate enabling activities covering fifty-nine
methodology for prioritizing among ecosystems. The
countries.
study team recognizes that this is politically unrealistic
given the nature of the COP's makeup. However, it
337. By the time of the Kyoto meeting of the COP of
would be desirable for the CBD's guidance to be more
the FCCC, seven non-Annex 1 parties (Argentina,
focused.
Uruguay, Senegal, Mexico, Micronesia, and Zimba-
bwe) had submitted their national communications to
Conclusions
the FCCC. All seven have received GEF grants for
enabling activities.
333. The study team found that GEF has sought and
strictly implemented the guidance of the conventions
338. As of January 1998, more than forty countries
wherever possible. The team also found that the guid-
that have received EAs had submitted their first na-
ance provided by the COP of the CBD has been overly
tional reports to the CBD, and more are expected by
broad in scope and has not included guidance on
the time of COP IV in May 1998. Some of these
prioritizing GEF programming in regard to ecosystems
reports, mostly from African countries, are "interim"
or ecosystem types.
reports rather than complete reports, according to the
CBD Secretariat, but the vast majority are complete.
Recommendations
339. As early as 1996 the convention secretariats be-
334. The GEF should play a more proactive role in its
lieved that many countries would not be able to com-
relations with the conventions and should, in consul-
plete their reports, even after receiving funding for
tation with Implementing Agencies, prepare more de-
preparing them, without more direct support. At the
tailed requests for guidance on those issues on which
October 1996 GEF Council meeting, the idea of a
guidance would be most helpful.
global support project for fulfillment of national obli-
gations under the two conventions was discussed, and
GEF FINANCING OF ENABLING ACTIVITIES
PDF Bs were drafted by UNDP in early 1997 for both
biodiversity and climate. The PDF B for the "Global
335. GEF enabling activities (EAs) are intended to
Support Program for Enabling Activities in
build the capacity of recipient countries to implement
Biodiversity" was approved in June 1997. It involves
objectives of the biodiversity and climate conventions.
hiring international consultants to provide direct ad-
Activities supported in these projects include training,
vice and support to officials working on biodiversity
research, education, and institution strengthening for
strategies and action plans and first national reports to
preparation of national plans and strategies as well as
the CBD. The support would take the form of work-
first national communications to the two convention
shops, a "hotline," and a "help desk."
secretariats. In addition, because all non-Annex 1 par-
ties to the Climate Change Convention, developing
340. A similar PDF B for a "National Communications
country parties to the CBD, and economies in transi-
Support Program" in regard to the FCCC was ap-
tion otherwise eligible for GEF funding are entitled to
proved in March 1997, and a full project proposal for a
EA's, they are considered important to maintaining
$3.6 million program is now under discussion with the
broad global political support for the conventions.
secretariat. It argues that such a support program is
needed as "insurance" against the failure of recipients
336. As a result of the expedited procedures, by June
of GEF climate enabling activities to deliver their na-
1997 the average elapsed time had been reduced to six
tional communications. The UNDP staff working on
months for climate EAs according to the FCCC Secre-
climate EAs told the study team in June 1997 that as
tariat. 58 Data provided by UNDP show that the average
many as thirty of the enabling activities might not
time between receipt of the proposal and final CEO
achieve their intended objective without further out-
approval for its entire portfolio of biodiversity EAs is
side help.
58 Study team meeting with FCCC Secretariat, Bonn, June 16, 1997.

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Institutional Roles and Relations 57
341. The CBD Secretariat asserted in an interview
C. ROLES, RESPONSIBILITIES, AND RELATIONS
with the study team that the GEF Secretariat's response
to the request for funding for a support program for
USING THE COMPARATIVE ADVANTAGES OF IMPLEMENTING
national communications was too slow and inad-
AGENCIES
equate. The GEF Secretariat, however, has been skepti-
cal about the alleged need for additional support. It
345. One of the underlying principles of GEF is using
argues that models of how to write national plans for
the comparative advantage of each Implementing
biodiversity already have been widely circulated and
Agency. The three agencies of the Pilot Phase signed an
that the enabling activities are already supposed to
agreement in November 1991 that identified their re-
build the capacity to write the national reports.
spective roles in GEF. When GEF was restructured, the
three agencies agreed that they would revisit the ques-
342. The requests for substantial amounts of GEF
tion of their respective roles at some future time. But
funding for further assistance to countries in meeting
the 1991 agreement was included as an annex to the
obligations to the two conventions suggest that the EAs
GEF Instrument. The agreement provided that each
have not been as effective as anticipated and, in some
agency would have its own "area of emphasis" within
cases, may not be effective at all. Whether GEF funds
GEF: UNDP would be the primary agency for capacity
these support programs or not, the future of enabling
building and technical assistance, UNEP would have
activities as a means of bolstering the two conventions
the primary role in scientific and technical analysis and
requires much more careful thought.
environmental management, and the World Bank
would be the primary agency for investment projects.
59
Conclusions
346. This original understanding no longer appears to
343. The study team found that GEF has sought and
be a meaningful way of distinguishing the relevant
strictly implemented the guidance of the conventions
strengths and appropriate roles for the Implementing
with due regard for GEF's own mandate and funding
Agencies. The World Bank has not limited itself to
limitations. The team also found that the guidance
infrastructure or investment-type projects for many
provided COP of the CBD has been overly broad in
years. Typically, World Bank projects include a range
scope and has not included guidance on prioritizing
of components, including technical assistance and
GEF programming in regard to ecosystems or ecosys-
support. Pure investment projects are found only in
tem types. It found that GEF has made a major adjust-
the ozone-depleting substances and climate focal ar-
ment in procedures, which resulted in enabling
eas.
activities being funded rapidly during 1997 but that
the enabling activities program does not appear to be
347. Meanwhile, UNDP has been implementing some
as effective in achieving its objectives regarding na-
projects in the climate focal area that are either invest-
tional communications as anticipated.
ment projects (defined as those that generate an in-
come stream) or have an investment component.
60
Recommendations
Although these are small investment projects or com-
ponents compared with those of the World Bank, the
344. The GEF Secretariat, the Implementing Agencies,
size of such projects is growing and UNDP is expected
and the convention secretariats should undertake a
to increase the number and size of investment-oriented
comprehensive review of enabling activities before the
GEF projects in the future. This development also has
end of 1998 to determine how successful the projects
created friction; the World Bank has expressed con-
have been, analyze the reasons for those that have
cern that UNDP's approach is too government oriented
failed, and consider policy and programmatic re-
rather than being attuned to the need to ensure that
sponses to the problem.
59 Instrument for the Establishment of the Restructured Global Environment Facility op. cit., "Principles of Cooperation Among the Implementing
Agencies," Annex D, pp. 30-31.
60 Includes Bolivia Energy-Based Rural Electrification, China Promoting Methane Recovery and Utilization from Mixed Municipal Refuse,
Ghana Renewable Energy-Based Electricity, and Uganda Photovoltaics for Rural Electrification.

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58 Study of GEF's Overall Performance
GEF investment supports private sector initiatives.
Meanwhile, UNDP has sought to preserve a special
351. Some of the most important comparative advan-
niche in technical assistance within GEF, despite the
tages of each Implementing Agency, therefore, may
fact that the World Bank usually has technical assis-
depend on both the country and the type of institu-
tance components in its projects.
tional process and policy issues involved in a project.
These advantages cannot be easily formalized, nor
348. The World Bank clearly has the greatest expertise
would it be advantageous to do so.
on its staff with regard to investment projects, includ-
ing economic expertise. But, although the Bank may
352. The blurring of distinctions among the Imple-
still have a comparative advantage in implementing
menting Agencies is an inevitable result of the kinds of
large infrastructure projects, the three Implementing
projects that have evolved in response to recipient
Agencies are not so clearly differentiated in regard to
country needs. It is not necessarily harmful to the
most of the types of projects that GEF funds. The team
mission of GEF. Indeed, it could result in greater
notes that Implementing Agencies hire consultants for
responsiveness to country demands and greater effi-
a wide range of activities involved in GEF projects, so
ciency in project preparation if more than one agency
the distinctions among agencies in regard to technical
is capable of implementing the same type of project.
capacity for project implementation have become
The potential harm from the increased competition
quite blurred.
can be reduced through upstream consultations on
project pipelines among the Implementing Agencies,
349. The blurring of the original tripartite definition
which are already being implemented with positive
of roles and responsibilities does not mean that the
effect.
Implementing Agencies do not have comparative ad-
vantages in regard to projects. In many countries, the
THE IMPLEMENTING AGENCY "MONOPOLY" ISSUE
World Bank has a history of dialogue on policy reforms
at the macroeconomic and sectoral levels and a will-
353. The subject of comparative advantage of the
ingness to take tough stances in negotiating project
three Implementing Agencies is directly related to the
conditions to create the necessary sectoral policy envi-
question of whether these three agencies should be the
ronment for success of a site-specific investment
only ones with the right to implement GEF projects.
project. UNDP has the greatest in-country presence
This issue has been raised by a number of NGOs and
worldwide of the three agencies, in the form of resi-
some countries, who believe that the present situation
dent representatives in each country, and the broadest
unnecessarily restricts access to GEF funds. It has not
network of contacts. Moreover, UNDP is often viewed
been clearly defined up to now, and it is unclear
by recipient governments as a nonthreatening party
whether a change in the present Implementing Agen-
and, therefore, can more easily convene local stake-
cies would be more likely to take the form of adding a
holders to develop consensus on policy issues.
specific set of agencies or of establishing criteria for
Implementing Agencies that would leave the ultimate
350. UNEP's comparative advantage in GEF is its abil-
number open ended.
ity to catalyze scientific-technical analysis of global
environmental problems. UNEP has the best links with
354. Assuming that both alternatives are to be consid-
environmental agencies and scientific networks and
ered, the team has identified several criteria as appro-
enjoys particularly close working relations with some
priate for the examination of this issue:
African countries. Although UNEP has not tradition-
ally undertaken national-level projects, it has executed
· Would incr easing access to GEF funds beyond the
activities at the national level in support of regional
existing Implementing Agencies incr
ease the flow of
and global projects. In GEF 1, UNEP has become
project pr oposals to GEF and impr ove GEF pr ogram-
heavily involved in enabling activities and has imple-
ming?
mented some country-level projects. The executive
· Would opening the field to additional or
ganizations
director of UNEP has stated that the agency would
increase transaction costs of pr oject cycle manage-
focus on international waters, global and regional as-
ment?
sessment in biodiversity and climate change, enabling
· Would having mor e Implementing Agencies inevita-
activities, and providing support to the Scientific and
bly dilute the commitment of GEF to its ten opera-
Technical Advisory Panel (STAP).
tional principles for development and implementa-
tion of GEF' s work pr ogram?

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Institutional Roles and Relations 59
· Would gr eater competition among agencies enhance
GEF now has in programming in climate and
or diminish the ef fectiveness of the existing GEF
biodiversity is that the GEF is getting fewer good
operations within the Implementing Agencies?
project proposals than it has the resources to support.
· Would additional agencies be as accountable for
The existing Implementing Agencies obviously have an
project quality?
interest in avoiding a situation in which its staff time is
spent on developing project proposals that could be
355. Regarding the first issue of increasing access to
rejected in favor of an alternative proposal. However, a
GEF funds, the study team encountered complaints
heavier flow of high quality projects would be desir-
from officials in Poland and China to the effect that
able in terms of GEF programming goals, because it
some types of projects or project components were
would allow a closer fit with strategic objectives to be
ruled out by Implementing Agency preferences. Chi-
achieved over time.
nese officials argued that the three agencies tended to
reject proposals that did not match their own agendas,
358. The study team believes that opening up the
regardless of GEF's operational strategy and programs.
circle of Implementing Agencies would increase some
They proposed that GEF should allow regional devel-
transaction costs, because the GEF Secretariat would
opment banks to be Implementing Agencies as well.
have to consult with a larger number of agencies.
Obviously, country-level officials do not want to have
However, such a step would also reduce some transac-
their project concepts rejected, and this argument can-
tion costs, especially by increasing the competition
not be regarded as entirely disinterested. But the argu-
among agencies for GEF funds, which would tend to
ment that the limited choice of Implementing Agencies
make the agencies more efficient and more responsive
is likely to narrow the range of projects that are funded
in regard to the project cycle. Although it is possible
also cannot be easily dismissed.
that allowing a wider range of agencies to implement
GEF projects would reduce the incentive for task man-
356. NGO representatives presented a variant of this
agers of the existing Implementing Agencies to work
argument in their 1996 working paper on promoting
on GEF project executions, that risk would be small if
partnerships between GEF and the NGO community:
the funds allocated to additional agencies were to rep-
"Typically, [Implementing Agency] task managers are
resent a relatively small proportion of the total.
primarily responsible for ensuring that the large, mul-
timillion dollar projects that are central to their basic
359. Regarding the commitment to operational prin-
work programs are successfully executed. They have
ciples, the experience of the past three years suggests
little time and limited incentives to pay attention to the
that it is likely to take a relatively long time for larger
processing of small or mid-sized GEF projects that are
agencies, such as multilateral banks, to adjust fully to
not components of their basic work program."
61 Al-
GEF's operational principles. It would probably be less
though the expedited procedures for medium-sized
of a problem, however, for NGOs, which are already
projects, which require less preparation than larger
involved in international cooperation on the environ-
projects, were intended to encourage submission of
ment.
smaller projects from a range of sources, they do not
resolve the problem that World Bank officials have an
360. In addition, on the issue of accountability for
incentive to focus on larger projects. On the other
project quality, the study team believes that the ability
hand, UNDP often manages smaller projects, includ-
of various organizations to provide such accountability
ing those in the range of $50,000 to $100,000, in its
varies greatly and that it is a legitimate criterion for
regular portfolio, so this generalization does not ap-
eligibility on becoming a GEF Implementing Agency.
pear to apply to its incentive structure.
However, the team believes that such accountability
does not depend exclusively or even primarily on the
357. Apart from the issue of project quality, increasing
having an intergovernmental governing bodies. It de-
access to GEF funds would certainly have the effect of
pends primarily on the mechanisms adopted by the
increasing the number of proposals that are submitted
organization for screening project proposals and for
to GEF for consideration. One of the problems that
monitoring and evaluation of project implementation.
61 Promoting Strategic Partnership Between GEF and the NGO Community, op. cit.

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60 Study of GEF's Overall Performance
Conclusions
365. The management of the secretariat and that of
the three Implementing Agencies agreed at a manage-
361. The study team found that increasing the num-
ment retreat in July 1996 to a new procedure for
ber of Implementing Agencies could result both in an
project review, under which the secretariat would con-
increase in the number of project proposals submitted
sult bilaterally with each of the Implementing Agencies
to the GEF and a broadening of their range. It also
on the work program. It was agreed that these bilateral
found that increased competition among Implement-
consultations would "primarily address eligibility and
ing Agencies would help reduce the transaction costs
programmatic aspects of activities proposed for fund-
of permitting additional organizations to be Imple-
ing in light of GEF policies, operational strategy, and
menting Agencies. Although there could be some
operational programs."
short-term sacrifice of commitment by the GEF family
to its operational principles, depending on which or-
366. Secretariat and Implementing Agency respon-
ganizations become Implementing Agencies, and some
dents all agree that this shift has resulted in a reduction
reduced incentive for existing Implementing Agencies
in conflict among Implementing Agencies and more
to work on GEF projects, these risks would have to be
efficient use of time. However, the shift to bilateral
weighed against the advantages.
consultations has left UNEP feeling more
marginalized, because it does not have joint upstream
Recommendations
discussions with UNDP or the World Bank.
362. The GEF Council should undertake a study of
367. Moreover, the shift from multilateral to bilateral
the advantages and disadvantages of various ap-
consultations has given much greater responsibility
proaches to permitting additional organizations to
than previously to the GEF Secretariat for analyzing
propose GEF projects directly to the Secretariat and
projects and determining whether they should be
assume direct responsibility for GEF projects.
cleared for GEF Council review. Implementing agen-
cies have believed that the secretariat has sometimes
SECRETARIAT-IMPLEMENTING AGENCY CONSULTATIONS ON
screened projects not only for consistency with GEF
THE WORK PROGRAM
requirements but for issues of project quality--issues
that they believe are outside the secretariat's proper
363. In the GEF Instrument, the role of the secretariat
purview.
is to "coordinate the formulation and oversee the
implementation of program activities pursuant to the
368. Interviews with Implementing Agency partici-
joint work program, ensuring liaison with other bodies
pants indicate that the GEF Secretariat has often raised
as required." 62 The secretariat has carried out this func-
issues of technical detail that the Implementing Agen-
tion through formal consultations with the Imple-
cies believe fall within the responsibility of the Imple-
menting Agencies, but it has the responsibility of
menting Agencies themselves. Implementing agency
advising the CEO on whether or not to include a
participants generally concede that the GEF Secretariat
project proposal in the work program of GEF.
has a legitimate role to play in screening projects to
ensure that they meet GEF eligibility requirements, are
364. The original mechanism for consultations on
consistent with the strategies underlying the Opera-
project proposals was the GEF Operations Committee
tional Programs, and have correctly calculated the in-
(known as GEFOP), which involved the GEF Secre-
cremental costs of the project. But they are united in
tariat, all Implementing Agencies, the convention sec-
wanting the secretariat to avoid micromanaging the
retariats, and STAP. Most participants agree that
project preparation by the Implementing Agencies.
GEFOP tended to create unnecessary conflicts among
Implementing Agencies as well as between the secre-
369. The climate focal area has generated contentious
tariat and the agencies. The secretariat believes that the
issues in the bilateral process, primarily because of the
GEFOP process encouraged efforts by one agency to
problem of incremental costs in climate projects.
gain the support of another agency for its proposals.
World Bank coordinators and officials from the re-
62 Instrument for the Establishment of the Restructured Global Environment Facility, op. cit., Paragraph 21(b), p. 11.

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Institutional Roles and Relations 61
gional bureaus have complained that the GEF Secre-
MECHANISMS FOR COORDINATION
tariat has questioned their judgments on technical as-
sumptions underlying incremental cost calculations.
373. Since the beginning of GEF 1, the secretariat and
The secretariat argues, however, that it cannot carry
Implementing Agencies have had to evolve a new set of
out its responsibility for checking on these calculations
mechanisms for coordination. These tools include
without addressing the assumptions underlying the
regular portfolio consultations among Implementing
analysis, component by component. That, in turn,
Agencies, focal area task forces, cross-sectoral task
requires it to address the technical background of the
forces, and the Executive GEF Operations Committee.
project. In essence, the secretariat argues that in cli-
mate projects, incremental costs cannot be separated
Joint Pipeline Reviews
from technical issues, which are, therefore, a necessary
part of its project review function.
374. In 1995 the World Bank and UNDP instituted
periodic joint portfolio reviews to avoid duplication
370. The management of the secretariat recognizes the
and competition in particular countries. At first, these
need to focus bilateral consultations on broader strate-
were carried out informally between regional coordi-
gic issues and not on narrow technical issues or project
nators. As more confidence was built in the process,
quality. However, it is unwilling to give up the author-
information on project pipelines was more fully
ity to review projects for the quality of incremental cost
shared. Interviews with regional coordinators suggest
calculations because of the concern that, without such
that the working relationship between the World Bank
a secretariat review, incremental costs will creep up-
and UNDP for pipeline reviews improved with the
ward.
replacement in 1996 of GEFOP meetings with bilateral
consultations. In 1996 the process of joint pipeline
371. A consensus on the issue was registered in the
review by region was formalized by the two agencies'
findings of a September 1997 GEF Retreat--that the
GEF coordinators.
GEF Secretariat's role in project review should focus
on incremental costs, eligibility, consistency with strat-
375. Implementing agencies agree that the joint pipe-
egies, operational programs and policies, and long-
line reviews have significantly reduced duplication of
term portfolio development. That consensus strongly
projects, which was viewed as a serious problem by
implies that the number as well as the detail of secre-
World Bank task managers surveyed by a Bank task
tariat comments on projects will diminish in the future
force in 1996. When the reviews reveal a potential
and that the transaction costs of the project cycle for
duplication or overlapping of proposed projects, dis-
Implementing Agencies should also be reduced.
cussions at a higher level between UNDP and the
World Bank have sometimes been required. In some
Conclusions
cases, the issue has been resolved by UNDP agreeing to
let the World Bank implement the project. In others,
372 The study team found agreement among Imple-
the two agencies have agreed to develop complemen-
menting Agencies and the GEF Secretariat that the
tary projects. In the Latin American region, for ex-
secretariat's review of project proposals has in the past
ample, the World Bank and UNDP agreed on
often been overly detailed and focused on nonstrategic
complementary projects on the Meso-American Bio-
issues. However, it also found that the secretariat's
logical Corridor and on the Argentina Patagonian
review of incremental costs does require assessments
Coastal Zone Management Plan. At the same time,
of issues that would otherwise be considered the
UNDP and the World Bank have also agreed to col-
proper sphere of the Implementing Agencies. The dif-
laborate on a growing number of GEF projects. These
ferences between the secretariat and Implementing
include renewable energy projects in China and Sri
Agencies on the issue now appear to focus primarily on
Lanka and biodiversity projects in Madagascar, Hon-
the problem of incremental costs and technical details.
duras, and Brazil and on the Red Sea. They have also
The team concluded that attempting to define pre-
collaborated on a PDF A for the Tanzania Eastern Arc
cisely the scope of the secretariat's role in project re-
Mountains Project.
view may not be practical.
376. No broad joint pipeline reviews between UNEP
and the other two Implementing Agencies have oc-
curred yet at the global level. However, UNDP has had

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62 Study of GEF's Overall Performance
informal consultations on GEF project pipelines at the
ties, such as enabling activities, it became more formal-
regional level in Latin America through UNEP's re-
ized and more politicized. At times, it was chaired by
gional office in Mexico. UNEP has proposed the estab-
the GEF deputy CEO and attended by executive coor-
lishment of regular trilateral review meetings, but the
dinators rather than biodiversity specialists. And ef-
World Bank and UNDP have not agreed. The World
forts by the task force to have a joint pipeline review on
Bank's GEF coordinating unit indicated that the Bank
enabling activities in biodiversity were frustrated by
does not feel the same urgency about joint pipeline
differences on issues that had implications for an ex-
review with UNEP that it feels with UNDP, because
panded portfolio of such projects by UNEP. In 1997
UNEP does not have a mandate to implement country-
the task force began to discuss the issues of a possible
based projects.
operational program on agrobiodiversity and priorities
in programming.
Focal Area Task Forces
381. The international waters task force met four
377. Task forces were created in 1996 for discussion
times between November 1996 and September 1997.
of project, policy, and programming issues that arise in
Unlike the other groups, this task force was not created
the climate, biodiversity, and international waters focal
initially to deal with enabling activities, nor has it had
areas, usually by teleconference. Task forces are infor-
any new operational programs to handle. Instead, it
mal institutions without terms of reference or other
was established explicitly to focus on strategic issues
procedural guidelines, so the frequency of meetings
related to the Operational Programs and the pipelines
and the manner in which they have been conducted
of the Implementing Agencies in international waters.
have varied across the three focal areas.
63
Agency participants believe that it has been a valuable
forum for discussing operational programs and eligi-
378. The climate task force was created primarily to
bility requirements, providing, in effect, the upstream
discuss and agree on the Operational Strategy and
consultation on projects envisioned by the Procedures
Programs in the focal area and on guidelines for en-
for GEF Operational Programming issued in March
abling activities regarding national communications to
1997. The task force has also conducted a pipeline
the FCCC. Although the discussions focused on guide-
review in light of operational program goals for the
lines for the enabling activities, no final agreement was
next three to four years. As a result of task force
formalized and task force members report some confu-
discussions of Operational Program number 10, which
sion about what had been agreed; the GEF Secretariat
had been largely inactive, two new project ideas within
adopted a different understanding than the Imple-
the operational program have been developed.
menting Agencies. The differences were never resolved
in the task force.
Executive GEFOP
379. After its January 1997 meeting, the climate task
382. In early 1997, a new GEF Operations Committee
force did not meet again for eight months. Implement-
was established (often referred to as the Executive
ing agency task force members were under the impres-
GEFOP), comprising the assistant CEO (and, as neces-
sion that task force meetings had been replaced by
sary, the CEO), the coordinator and deputy coordina-
bilateral consultations between the secretariat and the
tor of each of the Implementing Agencies, the
Implementing Agencies. The task force resumed meet-
executive secretaries of the Convention on Biological
ing in September 1997 and dealt with a wide range of
Diversity and the Framework Convention Climate on
programmatic issues.
Change, and the chairperson of STAP. The primary
purpose of this mechanism, as reflected in the "Proce-
380. The biodiversity task force was originally in-
dures for GEF Operational Programming" document,
tended to be ad hoc and informal to stimulate discus-
is to discuss policy and strategic issues raised in pro-
sion among the technical specialists on biodiversity.
posed work programs and long-term issues in the
But when the task force dealt with issues on which one
portfolio.
or more Implementing Agencies had political sensitivi-
63 All projects in the ozone layer depletion focal area are short-term measures, and it has not been the subject of a focal area task force.

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Institutional Roles and Relations 63
383. Despite the desire of the Executive GEFOP to
Agencies. The STAP proposal for the scope of the
avoid dealing with project-specific issues, it has also
Operational Programs in climate was accepted by the
been called on to review a number of projects referred
secretariat without any significant change. STAP's ex-
to it by the GEF Secretariat, either because they raised
pert workshops on the transport sector, clean coal,
significant new policy issues or because disagreement
renewable energy, and energy efficiency, and planning
between the secretariat and the Implementing Agency
for adaptation to climate change have made intellec-
could not be resolved in bilateral consultations. The
tual contributions on these issues.
Executive GEFOP has also been preoccupied with the
issue of operational procedures for bilateral consulta-
387. In the biodiversity area, STAP initially played a
tions on work programs, on which Implementing
relatively limited role in providing scientific and tech-
Agencies have pressed for substantive changes.
nical advice. However, the STAP workshop on land
degradation contributed to the GEF framework for
Conclusions
land degradation projects. It also contributed to the
work by UNEP, in collaboration with UNDP, identify-
384. The study team found that the coordinating
ing six concepts for projects dealing with land degra-
mechanisms that have evolved in GEF 1 have generally
dation. Another recent STAP workshop on sustainable
increased the level of coordination and collaborative
use of biodiversity resources was regarded by Imple-
thinking. The joint pipeline reviews have been suc-
menting Agencies as a useful contribution.
cessful in reducing duplication and competition in
projects. The focal area task forces have already pro-
388. STAP also contributed to a more strategic, long-
duced useful programmatic discussions on interna-
term approach, advocating a "basinwide" concept of
tional waters, whereas the biodiversity and climate
programming that would link currently independent
task forces have just begun to be used for that purpose.
GEF projects operating in the same drainage basin,
The Executive GEFOP, which is less than a year old,
such as the Black Sea-Danube-Dnieper. STAP also ad-
has only begun to move into broader operational
vocated the development of a Global International
policy coordination.
Waters Assessment, analogous to the Global
Biodiversity Assessment being implemented by UNEP.
THE ROLE OF THE SCIENTIFIC AND TECHNICAL ADVISORY
PANEL
389. STAP has recently conducted a survey of Imple-
menting Agency users of the reviews by its roster of
385. STAP was given a mandate by the GEF Council at
experts. The reviews by the STAP Roster of Experts
its October 1995 meeting that focused on three main
were found by the World Bank and UNDP regional
functions: to give strategic, scientific, and technical
coordinators to be extremely valuable as a tool for
advice on Operational Strategies and Programs; to de-
improving external review of project proposals. World
velop and maintain a roster of experts to review indi-
Bank task managers judged the quality of the reviewers
vidual projects; and to provide objective scientific and
to be high. 64 Only 6 percent of the reviews were con-
technical advice on the GEF portfolio and selective
sidered inadequate. However, some gaps and weak-
review and evaluation of projects.
nesses in the roster have been noted, especially an
overrepresentation of experts from Europe and North
386. Implementing Agencies and GEF Secretariat fo-
America. This has been corrected by a recent addition
cal area specialists credit STAP with significant contri-
of more than fifty experts, most of whom are from
butions on strategic advice regarding operational
Eastern Europe, Asia, Africa, and Latin America.
programs. STAP's most significant contribution ap-
pears to be providing the intellectual underpinnings of
390. STAP's role in the review of projects for the
the Operational Programs in the climate focal area,
GEFOP consultations was generally found by World
both through individual writings of the STAP climate
Bank and UNDP regional coordinators to be much less
working group and through formal and informal con-
useful than STAP roster reviews. STAP decided to
sultations with the GEF Secretariat and Implementing
discontinue those reviews in 1997.
64 Global Environment Facility, "GEF Experiences in Incorporation the Work of STAP," GEF/C.10/5 (October 3, 1997).

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64 Study of GEF's Overall Performance
391. STAP has conducted selected reviews of projects
at the request of the council with regard to only three
projects (Lake Victoria Project, the Rajasthan Solar
Thermal Project, and Phase 1 of the Alternatives to
Slash-and-Burn Project). The GEF Secretariat reported
that the review of the Lake Victoria project was found
by the World Bank to be overly broad and not con-
fined to scientific and technical issues, whereas, in the
Rajasthan Project, the review was not regarded by the
Bank as sufficiently timely. STAP did not undertake
any selective reviews on its own.
Conclusions
392. The study team found that STAP has played a
useful role in helping define the Operational Strategy
and Programs and that its roster of experts has been
valuable to Implementing Agencies in internal review
of projects. But it has been less successful in its selec-
tive review of projects and its review of projects for the
secretariat -Implementing Agency consultations on
work program.
Recommendations
393. The GEF Council should provide a new, more
sharply focused mandate for the STAP in light of the
change in GEF's needs and the experience of STAP
during GEF 1.

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GEF Project Cycle Procedures 65
V. GEF PROJECT CYCLE PROCEDURES
394. One of the major challenges facing GEF is to
Mexican officials that the length of time between
ensure that its procedures for managing the project
project concept and final approval by the World Bank
cycle are cost-effective. 65 The process of getting GEF
was fortunate in this regard. Similarly, the task man-
projects approved is perceived by recipient countries
ager reported that the India Ecodevelopment Project
as lengthy, cumbersome, and frequently marked by
was a stronger project because more than a year was
unexplained delays. In the countries visited by the
taken between appraisal and negotiation of the loan to
study team and covered by local consultants, govern-
work out some differences both within the Bank and
ment and Implementing Agency officials were asked
between the Bank and the Government of India.
The
about their experience with the GEF project cycle.
Brazilian national energy program indicated that GEF's
Government officials almost always viewed it as too
procedural complexity, including the linkage of the Bra-
lengthy and cumbersome, especially in view of the size
zil Energy Efficiency Project to a World Bank loan, had
of the grants. In only one of those countries (Argen-
helped the project, because it focused the agency on
tina) did an official assert that the efficiency of the
matters that had previously been underemphasized,
project approval process had improved over time.
such as marketing and evaluation.
395. Table 6 shows the incidence of different causes
397. But the team also found that lengthy delays in the
for slowness in the project cycle as viewed by officials
project cycle often increase transaction costs without
in ten countries. Government and Implementing
contributing equivalent value to the project. Chinese
Agency officials often cited different reasons for delays
officials noted, for example, that such delays caused
in approval or disbursement. Their explanations are
severe problems in their planning process. In some
not mutually exclusive, of course, but point to mul-
cases, the length of the project cycle even undermined
tiple sources of delay. In five of the ten countries in
the prospect of project success. The three- to four-year
which answers were received on delays, officials men-
delay in approval of the associated World Bank loan
tioned delays that were either not identified as to
for the Red Sea Coastal and Marine Resource Manage-
source or that the Implementing Agency had allegedly
ment project, for instance, resulted in the project get-
failed to explain. In six countries, GEF procedures or
ting started only well after the Egyptian Tourist
the lack of an operational strategy were mentioned as
Development Authority had allocated more than 40
the cause of delay. Disagreements between govern-
percent of the Red Sea coastline to developers for
ment and Implementing Agencies were cited as the
tourism, severely reducing the potential impact of the
cause in three countries, and either inefficiency on the
GEF project that was supposed to produce a manage-
part of the Implementing Agencies or their procedures
ment plan that would guide allocations for tourism
were cited in five countries. Not included in the data
and for protected areas. In the case of the Poland Coal-
were instances of delays attributed to problems within
to-Gas Project, the situation in Poland changed dra-
the recipient government, although such instances
matically in the three years between entry into the GEF
arise frequently.
work program and approval by the World Bank. By the
time implementation began, many other entities had
396. Of course, a longer process for project approval
already undertaken coal-to-gas conversion projects in
does not always have a net negative impact on the final
the country.
project. The study team found instances in which ei-
ther project sponsors or the Implementing Agency task
398. The study team examined the factors affecting
manager indicated that the delay had ultimately im-
the GEF project cycle, including GEF's project cycle
proved project design, implementation, or both. In the
procedures and their impact on transaction costs for
Mexico Protected Areas Program, the team was told by
recipient countries and Implementing Agencies. These
65 Instrument for the Establishment of the Restructured Global Environment Facility, op. cit., paragraph 4, p. 6.

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66 Study of GEF's Overall Performance
TABLE 6.
CAUSES OF DELAYS IN PROJECT APPROVAL IN TEN COUNTRY STUDIES
Unidentified or No
Government-
Implementing
Information from
Implementing Agency
Country
Agency
GEF Procedures
Implementing Agency
Disagreements
Argentina
Brazil
China
Egypt
India
Indonesia
Philippeans
Poland
Russia
Viet Nam
procedures may increase the transaction costs of pre-
400. The submission of project concepts by recipient
paring GEF project proposals either to recipient coun-
country governments and other sources to Implement-
tries or Implementing Agencies or both. They may
ing Agencies is the first major potential procedural
raise costs by increasing the length of time required for
issue in the project cycle. Most project ideas that have
a project concept to reach the implementation stage by
been generated at the country level have been rejected
increasing the staff time and "nuisance cost" of getting
by the Implementing Agency rather than by the secre-
a proposal through the approval process successfully
tariat in the consultations with the Implementing
or by discouraging the submission of proposals to GEF
Agencies. Both World Bank and UNDP procedures call
that would advance its objectives. Three project cycle
for country offices to screen projects for GEF eligibility
procedural issues were identified by either recipient
before passing them on to headquarters. But at UNDP,
countries or Implementing Agencies as increasing
there was relatively little such screening at the begin-
transaction costs significantly:
ning of GEF 1. The review of project ideas at headquar-
ters increased both the time required to respond to
·
Implementing Agencies' project cycles
project initiators and the risk that the latter would
·
Requirement for incremental cost calculations
experience frustration over the process.
·
Procedures for GEF council review of projects.
401. In fiscal 1995 and fiscal 1996, data submitted by
A. IMPLEMENTING AGENCIES' PROJECT CYCLES
Implementing Agencies and compiled by the GEF Sec-
retariat showed that the agencies rejected far more
399. The project cycle for a GEF project has three
project ideas than were developed and submitted to
distinct components: project development, GEF review
the secretariat for review: in 1995 the Implementing
and approval, and approval by the Implementing
Agencies developed only twenty-nine project ideas (5
Agency. Most of the time in the project cycle--from
percent of the total received) for submission as part of
project concept to the beginning of the implementation
the work program, whereas 180 project ideas (30 per-
phase--is accounted for by preparation of the project
cent of the total) were declared ineligible or rejected
proposal by the government and interactions between
for other reasons. 66
the project proponents and the Implementing Agency.
66 Global Environment Facility, Annual Report 1995 (Washington, D.C.: 1996), Annex C, Table 3, p. 4.

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GEF Project Cycle Procedures 67
402. At the end of fiscal 1995, the Implementing
project development phase, the roles of Implementing
Agencies had backlogs of project proposals on which
Agencies and recipient country governments vary from
they had not acted, either because the agency was
one project to another, depending on a variety of
waiting for government endorsement, was seeking to
factors. In countries with more project preparation
integrate the idea into another project, was not sure of
capacity, the government is more likely to play the
its eligibility, or needed more information. Most of the
dominant role, whereas in countries with less capacity,
projects in this backlog were ultimately either rejected
the Implementing Agency plays a more proactive role
or cleared by the Implementing Agencies. Some
and is more likely to shape the proposal.
projects, however, died of neglect without any action
having been taken. A UNDP official commented that,
407. The procedures of the World Bank and UNDP
during the 1994 -96 period, when a high volume of
require that the potential recipient country take formal
project ideas were being submitted in many forms,
responsibility for preparing the project document for
processing often took a long time, and some projects
GEF, although Bank staff prepare the contract with the
were never acted on.
country. Both these agencies, however, have frequently
taken initial project ideas that were not eligible for GEF
403 One cause of delay was the inability of GEF to
funding and turned them into GEF project concepts.
make a decision on the eligibility of a project in the
The Egypt Energy Efficiency Project, for example, was
absence of operational strategy and programs. The study
originally written in a way that did not meet GEF re-
team heard from recipient country officials in several
quirements, and UNDP had to develop it into a project
country visits that Implementing Agencies were unable
that could be submitted to the GEF Secretariat.
to tell the recipient government whether the project
would be eligible because the operational program in
408. Both UNDP and the World Bank must review
the focal area had not yet been completed. That source
and approve the proposed project internally and nego-
of delay should have been eliminated by the publication
tiate and sign the final contract with the recipient
of the GEF Operational Programs in April 1997, but for
country, although the Bank's procedures in this regard
most officials interviewed, their only experiences with
are more complex and lengthy. The study team exam-
GEF procedures predated this publication.
ined the evolution of the project development phase
and GEF approval-to-signature phase of the project
404. Despite the decentralization of responsibility for
cycles of the Implementing Agencies to identify key
GEF project screening to country offices, review and
bottlenecks and actions taken during GEF 1 to stream-
screening of project ideas by UNDP offices remained
line the process.
spotty in 1997. In some countries, according to UNDP
officials, it is done inadequately or not at all. A UNDP
409. Differences between the Implementing Agency
paper on UNDP/GEF project cycle management writ-
and the project sponsors in the recipient country are
ten in 1997 noted that headquarters was still "assuming
one cause of delay during this phase of the project
tasks that should be carried out at the country level."67
cycle. In a number of cases encountered by the study
team in its country visits, it took a year or more of
405. Moreover, officials in Argentina, China, and Bra-
negotiations between the Implementing Agency and
zil specifically complained that it takes too long for the
recipient country before agreement could be reached
Implementing Agency to inform them of the status of
on a project brief or the final project document. In the
project ideas or the reason for it being turned down. In
Lake Victoria Environment Management Project, for
the case of Argentina, proponents of project ideas were
example, disagreements between the Government of
reported as claiming that in some instances they re-
Kenya, on the one hand, and the World Bank and
ceived no response at all.
UNEP, on the other, regarding stakeholder participa-
tion resulted in a lengthy delay in project preparation.
406. Once the decision is made by an Implementing
In the case of the India Ecodevelopment Project, differ-
Agency to proceed with formulation of a proposal for
ences between the World Bank and India caused a
submission to GEF for review, the longest pre-imple-
year's delay between the Bank's internal appraisal and
mentation phase of the project cycle begins. In this
negotiation of the project agreement.
67 "Final Proposal: Project Identification, Formulation and Approval Processes, UNDP/GEF Project Cycle Management" (May 28, 1997), p. 3.

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68 Study of GEF's Overall Performance
410. The necessity for project proponents within re-
413. The World Bank GEF project cycle until late 1996
cipient governments to obtain consensus among key
took about twenty-seven months on average. Develop-
government and nongovernmental stakeholders on the
ment of the project concept to work program approval
proposed project is also an important factor in the
took about eighteen months. But work program ap-
length of time required for this phase of the project cycle.
proval to Bank approval took another nine months
because of a more complex process of internal approval
411. Another major cause of delay in the past was the
than UNDP's.69 A major bottleneck for the Bank was
uncertainty of UNDP staff that the project brief would
that it had only presented project documents to GEF for
be approved by the GEF Secretariat. That uncertainty
review relatively late in the process of preparation--
reduced the incentive to write the project document,
only after many months of development of the proposal.
which required a significantly greater amount of work,
As in the case of UNDP, the GEF review process added
at the same time as the project brief. So work on the
four months to the World Bank's GEF project cycle. The
project document did not begin until after GEF ap-
Bank's project proposal was already so advanced in
proval of the project brief, adding at least several
preparation during the GEF review process that Bank
months to the UNDP project cycle. The UNDP project
staff could only wait for the GEF process to be com-
cycle was shortened during 1997 by combining the
pleted before proceeding with staff appraisal of the pro-
processes of writing the project brief and the project
posal and negotiation of the project agreement.
document. Thus, a project can be appraised by the
country Project Appraisal Committee even before final
414. In late 1996, the Bank implemented the recom-
approval by the GEF Council, and the agreement can
mendation of a task force report intended to shorten
be signed quickly after that approval.
the GEF project cycle and began to submit project
proposals to GEF at a much earlier phase of develop-
412. This streamlining has been facilitated by several
ment, when it was still essentially a project concept
developments, according to UNDP regional coordina-
rather than a detailed proposal. That meant that the
tors. First, since 1996, PDF funds have been used to
four months taken up for GEF review of the proposal
develop the project and the accompanying process of
would not be additional, because development of the
approval of the PDF request by the GEF Secretariat;
proposal could continue without interruption. So the
this has given UNDP staff a much better idea of what
period from project identification to GEF Council ap-
the secretariat expects in relation to a particular project
proval could be reduced from eighteen to fourteen
and greater confidence that the brief will be approved.
months. (This project cycle reform applied mainly to
Second, the beginning of upstream consultations with
biodiversity projects, because most of the Bank's GEF
the secretariat in 1997 further increased UNDP staff
projects in the climate focal area are developed initially
confidence that the final project brief would be ap-
by non-GEF Bank staff and are designated as GEF
proved and, thus, the incentive for early work on the
proposals only at a relatively late stage.)
project document. Third, as the project brief has in-
cluded more detail on budgets and activities, the dif-
415. But the Bank's efforts to reduce the total project
ferences between project brief and project document
cycle by four months by realigning its internal project
have been reduced. UNDP's submission to the GEF
cycle with that of GEF have run up against a GEF
Corporate Budget for 1998 indicates that processing
procedural obstacle: the secretariat's requirement for a
time for the average project from project identification
relatively well-defined estimate of the incremental costs
to agency approval has been reduced from twenty-one
of the project. Because the proposal was still in an early
to sixteen months. 68 The study team could not verify
stage of development, World Bank staff were unable to
that figure, but it believes that a substantial streamlin-
provide such an estimate and instead substituted a range
ing of the project cycle has taken place.
of possible incremental costs, to be refined later.
68 GEF, GEF Corporate Budget for FY98, op. cit., Annex 2, p. 1.
69 GEF, GEF Corporate Business Plan FY98-00, op. cit., Annex 2, p. 3. This account of the average elapsed time of the World Bank project
cycle differs from that presented in a task force report in mid-1996, which showed an average cycle of twenty-three months. See World
Bank, Environmentally Sustainable Development, Report of Task Force on Streamlining Bank-GEF Procedures, Annex V, p. 1.

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GEF Project Cycle Procedures 69
416. The secretariat rejected that alternative, however,
"agreed incremental costs" of activities in the four focal
on the ground that the GEF Council would not accept
areas are eligible for funding. The same principle is
such an "open-ended" incremental cost estimate, fear-
included in the language of the biodiversity and climate
ing that it would encourage the use of higher-end
conventions, for which GEF is the financial mechanism.
estimates. The World Bank GEF Coordinating Unit
believes that the requirement for a specific figure for
421. The main reason that the incremental cost prin-
incremental costs forces the unit either to come up
ciple has been so prominent in GEF's operations is that
with an estimate that is not yet reliable or add months
donors want to ensure that the grants for activities for
to the GEF project cycle.
the global environment are not actually replacing
funding that would otherwise be committed by the
Conclusions
recipient government. Indeed, donor contributions to
GEF are premised on the continued use of incremental
417. The GEF project cycle is long and complex and
costs as the cost-sharing principle.
has generated much complaint by recipient countries.
However, the study team found that both UNDP and
422. In May 1995 the GEF Council approved a secre-
the World Bank have implemented significant reforms
tariat paper setting out in detail the approach for esti-
of their GEF project cycle--UNDP, by combining the
mating agreed incremental costs and financing
preparation of project briefs and project documents,
modalities, while calling for its "flexible application."
and the World Bank, by moving its submission of
The essence of the incremental cost concept presented
project briefs upstream, so that it can still continue
in the secretariat paper is simple: the costs of the
project preparation through the stage of GEF approval.
eligible activities are to be compared with the costs of
The largest component of the project cycle involves
the activities for national development for which they
project preparation by the recipient government and
substitute or modify. The difference between the two
the Implementing Agencies.
sets of costs is the incremental cost of GEF-eligible
activities. Incremental costs are viewed as the burden
418. The team found that the benefit of shortening the
accepted by the country in choosing activities that
World Bank's project cycle by realigning it with that of
benefit the global community instead of those that
GEF far outweighs the benefit of enforcing a require-
simply benefit the country itself.
ment for a single cost estimate at the project concept
stage. An estimate that it is simply halfway between
423. The main problem associated with incremental
two ends of the estimated range does not appear to
costs has been the identification and quantification of
provide any greater assurance of cost minimization
the "baseline"--the projection into the future of na-
than the full range itself.
tional development activities related to the proposed
GEF project. The secretariat paper acknowledges that
Recommendations
determining what constitutes a "plausible" baseline
well into the future involves not only calculations of
419. In order to encourage continued adherence by
what is economically attractive but assumptions about
the World Bank to its streamlined project cycle, the
what is politically feasible in each country; this
GEF Secretariat should allow the Implementing Agen-
baseline is likely to be subject to different interpreta-
cies to submit a range of estimates when a project is
tions, depending on the perspective of the actor in
first submitted, on the understanding that a firm esti-
question. Regional coordinators for the World Bank
mate will be submitted for final approval.
and UNDP told the team that establishing the baseline
inevitably involved a degree of subjectivity and that it
B. THE INCREMENTAL COST REQUIREMENT
was possible to come to different conclusions about
the incremental costs, depending on the assumptions
420. One of the fundamental principles underlying
made about a reasonable expectation of government
GEF operational programming has been the require-
expenditures for environmental purposes. The prob-
ment that GEF fund only the incremental costs of a
lem is particularly acute when the country in question
project--that is, only the costs of those activities that
is experiencing an economic-financial crisis, creating
provide a global environmental benefit that do not also
strong pressures on budgets. This problem is espe-
provide national economic development benefits. A
cially relevant to calculating the incremental costs of
basic provision of the GEF Instrument is that the
GEF biodiversity projects.

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70 Study of GEF's Overall Performance
424. Some task managers and regional coordinators in
However, the new procedures have had no impact on
the Implementing Agencies, particularly in the World
the way in which Implementing Agencies prepare
Bank, also complained that the requirement for doing
project proposals. The World Bank GEF Coordinating
incremental cost calculations for protected area
Unit did not view the document as marking any dra-
projects in the biodiversity focal area is meaningless
matic change in the requirements for incremental cost
and simply constitutes unnecessary "busy work." They
analysis. The unit's specialist on incremental costs told
argue that the GEF requirement for detailed analysis of
the study team that the World Bank will continue to
such projects raises the transaction costs of project
submit the same six-page incremental cost analysis as
preparation without yielding any benefit.
before, including a cost matrix, even for protected area
projects. The Bank's practice will not change, primarily
425. As a result of such complaints and general confu-
because the GEF unit wants to reduce the risk of
sion among recipient countries about the incremental
having to respond to questions.
cost requirement, GEF moved to streamline the opera-
tional guidelines on incremental costs as they applied
428. The new streamlined procedures obviously had
to biodiversity projects. At a GEF Management Retreat
not reached recipient countries by the time the study
in July 1996, it was agreed that criteria for
team carried out its country visits. However, the team
"biodiversity rapid incremental cost assessment" were
found that the requirement for incremental costs is
to be developed, with streamlined guidelines for cli-
problematic for most recipient country officials. The
mate change projects to follow. 70 Draft streamlined
country studies do refer to a few instances--mostly in
procedures for incremental cost assessment were sent
the climate focal area--in which project managers in
to the Implementing Agencies in March 1997, and the
recipient countries have been actively involved in in-
final version was distributed in July 1997.
cremental cost calculation. 71 However, the country
studies also found that most officials of the relevant
426. The streamlined procedures make a sharper dis-
agencies had not been involved in initial incremental
tinction than the original procedures between
substitu-
cost calculations. These officials indicated that they do
tional and complementary activities in terms of
not understand the concept of incremental cost and
incremental cost requirements. Substitutional activi-
regard it as something done by the Implementing
ties are those that change baseline development activi-
Agency. The agencies confirmed that in the vast major-
ties in ways that benefit the global environment,
ity of cases, international consultants are hired to un-
whereas complementary activities have no direct or
dertake the incremental cost calculation.
major impact on other economic activities. The new
guidelines indicate that proposals involving comple-
429. Many officials of recipient countries lodged
mentary activities would require evidence of assur-
strong complaints about incremental costs, either in
ances that existing levels of financing for protected
terms of its lack of clarity or the process by which it is
areas will continue and that cost sharing and financial
decided. The Mexican Environmental Project Ap-
sustainability will be built into the project to justify the
proval Committee said that the incremental cost proce-
incremental costs. Substitutional activities, however,
dures were so frustrating that people "do not want to
will require further effort to separate baseline and
apply to GEF." GEF project officers in China expressed
incremental costs, including establishment of a system
strong criticism of the process of calculating incremen-
boundary that captures all major effects of the pro-
tal costs, charging that calculations were made by in-
posed activity and an incremental cost matrix.
ternational consultants hired by GEF without
consulting the officers, that it caused delays in project
427. The new streamlined procedures thus simplify
development, and that it resulted in reductions in
the incremental cost requirement considerably for
project activities that the officers believed were some-
most biodiversity project proposals, which are no
what arbitrary. In Brazil, a project sponsor in the cli-
longer required to include an incremental cost matrix.
mate focal area complained that the incremental cost
70 "Final Minutes of the GEF Management Retreat, July 24-25, 1996," Memorandum from Mohammed T. El-Ashry to Rafael Asenjo,
Ahmed Djoghlaf, and Lars Vidaeus (October 18, 1996).
71 The Energy Ministry in Argentina, the Climate Change Project Coordinator in Jordan, the Ministry of Non-Conventional Energy
Sources in India, and the Foreign Assisted and Special Projects Office in the Philippines.

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GEF Project Cycle Procedures 71
analysis was meaningless and should be replaced with
Implementing Agency makes any changes necessary in
a different formula for cost sharing. Some officials from
the proposal and finalizes the document according to
Russia and Kenya also indicated that there were no real
its own procedures and submits it to the CEO of GEF.
negotiations on the figures, but that the Implementing
Agency's consultant unilaterally determined the
433. On ascertaining that the project document re-
amount.
flects any comments that were made by the council,
the CEO forwards the project document to council
Conclusions
members for a second review. That review was origi-
nally supposed to take no more than four weeks, but
430. The study team recognized that the incremental
Implementing Agency officials indicate that it has now
cost concept must be retained, because it is necessary
become six weeks in practice, and in some cases even
to ensure proper cost sharing and, therefore, contin-
longer. After that review is completed, the CEO issues
ued donor support. However, the team found that the
an endorsement letter, which allows the funds to be
incremental cost requirement has raised transaction
released to the Implementing Agency for the project.
costs, primarily by reducing the active involvement of
project proponents in preparation of the proposal and,
434. The study team asked Implementing Agency and
secondarily, by adding more time to the project cycle.
GEF Secretariat officials for their views on this aspect
Although the new streamlined incremental cost proce-
of GEF project cycle procedures and found unanimous
dures are an improvement, the study team doubted
agreement that the second review of project proposals
that it will be sufficient to persuade most recipient
by the council is not necessary and could be eliminated
country officials that they can and should be involved
without any sacrifice in project quality. The GEF In-
in the process. The team found that, in the absence of a
strument requires only that the council review project
more comprehensive effort to increase understanding
proposals once, but the procedure has evolved
of the concept and to engage the officials in the process
through a series of council decisions that have signifi-
of calculating it, these individuals are likely to remain
cantly lengthened the project cycle. As the project
passive spectators to the process.
cycle is now implemented, review by the council in
two separate parts of the cycle can take up to thirteen
Recommendations
weeks. And because the project proposal generally has
to be nearly ready for negotiation of the final project
431. A working group representing the GEF Secretariat
agreement, no progress can be made on project devel-
and the Implementing Agencies should, in consultation
opment while the Implementing Agency waits.
with the convention secretariats, develop simpler, more
straightforward guidance and communication for re-
435. The purpose of the second council review of
cipient country officials on the calculation of incremen-
project proposals is to verify that any comments made
tal costs and a strategy for increasing their involvement
earlier have in fact been reflected in the revised project
in the process of estimating those costs.
document. Such verification is now done by the GEF
Secretariat during the brief period between the receipt
C. GEF COUNCIL REVIEW OF PROJECTS
of the final project document and forwarding the
document to the council for the second review. Al-
432. One feature of the GEF project cycle procedures
though in the early phase of GEF 1, a few projects were
that clearly adds to the length of time required for
rejected by the council at the second review, this has
approval is the GEF Council review of projects. In the
not happened for the past two years. The secretariat
present project cycle procedures, after a proposal has
believes that, although the second review may have
been discussed in bilateral consultations for inclusion
been justified in the early phase of GEF 1 because of
in the work program and a recommendation is made to
lack of experience with the Implementing Agencies,
the CEO, the CEO sends the draft project document to
the process has now become so routine that actual
council members four weeks before a council meeting.
review by the council is no longer necessary. Both the
Members then have three weeks after the council meet-
Implementing Agencies and the secretariat support the
ing in which to send the secretariat technical com-
delegation of the function of verifying the necessary
ments on the project proposal. Following this, the
changes to the secretariat.

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72 Study of GEF's Overall Performance
Conclusions
Recommendations
436. The study team found that eliminating the sec-
437. The GEF Council should seriously consider del-
ond Council review of project proposals would have
egating the second review of project proposals to the
significant savings in time and other costs to GEF.
GEF Secretariat.

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Programming Issues 73
VI. PROGRAMMING ISSUES
A. ROLE OF VARIOUS FACTORS IN
within and among programs, and from GEF's Opera-
DETERMINING THE GEF PORTFOLIO
tional Strategy and Operational Programs. The second
are the bottom-up, supply-side factors, which result
438. During the Pilot Phase, GEF lacked a formal
from the opportunities that present themselves in the
governance structure as well as a strategic program-
proposals for GEF funding, driven by country priori-
matic approach in the four focal areas. The basic re-
ties and Implementing Agency interests.
sponsibility for testing project ideas addressing global
environmental issues fell to the designated GEF Imple-
442. The GEF Council has played an important role in
menting Agencies. They were to identify, develop, and
determining strategic direction in GEF programming.
implement project ideas in consultation with the GEF
It did not passively accept the draft Operational Strat-
Secretariat. Meetings of GEF participants provided
egy presented to it in 1995 but insisted on changes.
broad oversight and political guidance. One of the few
For example, the council rejected a proposed program-
programmatic guidelines given was that about 40 per-
ming strategy in biodiversity that would have relied on
cent of GEF funds should be used for climate change
scientific criteria regarding species richness and ende-
and 40 percent for biodiversity projects. This alloca-
mism. The main influence of the GEF Council on
tion rule has been maintained during GEF 1.
programming, beyond approval of the Operational
Strategy and Programs, has been its continuation of the
439. Programming during the Pilot Phase was driven
informal division of resources among the four focal
largely by the project proposals that the Implementing
areas, which has meant that about 80 percent of GEF
Agencies and international NGOs had already devel-
funding has gone to biodiversity and climate. The
oped. Almost overnight, GEF provided considerable
council has also determined that efforts to phase out
funding for the biodiversity focal area, in which there
ozone-depleting substances should receive a small
were many more project ideas than could be funded by
portion of GEF funds, because developing countries
non-GEF sources. The identification of suitable climate
already have access to resources from the Montreal
change projects, however, took more time. The Pilot
Protocol Fund.
Phase work program is, therefore, slightly skewed to-
ward biodiversity, which accounts for fifty-eight
443. The conferences of the parties to the biodiversity
projects costing a total of $332 million, compared with
and climate conventions have contributed to shaping
forty-one climate change projects totaling $259 million.
the GEF portfolio by providing guidance on program-
ming. The Conference of Parties to the FCCC called for
440. The lack of a systematic approach to program-
a combination of short-term and long-term measures,
ming resources was strongly criticized by the Indepen-
and the Conference of Parties to the CBD has asked
dent Evaluation of the Pilot Phase and was a high
GEF to integrate a wide range of activities into the
priority for GEF 1. However, the ad hoc programming
Operational Strategy.
approach did enable the new mechanism to operate
experimentally at a time when negotiations on the
444. The direct influence of the secretariat on pro-
climate change and biological diversity conventions
gramming has been felt mainly in the international
had barely begun.
waters focal area, as discussed in more detail later in
this chapter.
441. During GEF 1, two kinds of factors have deter-
mined the composition of the work program. The first
445. The Operational Strategy was developed by the
are the top-down, demand-side factors resulting from
GEF Secretariat in consultations with the Implement-
decisions of the GEF Council and the conventions
ing Agencies and the convention secretariats. Although
affecting programming, from efforts made by the GEF
some complaints were expressed that the secretariat
Secretariat and Implementing Agencies to set priorities
tended to ignore comments that did not fit its view

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74 Study of GEF's Overall Performance
during these consultations, the Operational Strategy
als that fits most closely with the strategic objectives of
was ultimately fully endorsed by the heads of all three
the Operational Strategy and Operational Programs.
Implementing Agencies. And the document was dis-
To maximize that strategic fit, it is obviously important
cussed extensively and finally adopted by the GEF
that the strategy and Operational Programs be thor-
Council.
oughly understood by project originators in recipient
countries. The study team found that this understand-
446. The strategy establishes programmatic and stra-
ing varies considerably among countries and among
tegic criteria and principles for GEF project selection
agencies within countries.
and development. It defines ten Operational Programs,
which are intended to provide "a conceptual and plan-
449. In countries with the greatest project design ca-
ning framework for the design, implementation, and
pacity, such as Argentina, Brazil, China, India, and,
coordination of a set of projects to achieve a global
Russia, the team found that some key agency officials
environmental objective in a particular focal area."
72
are familiar with one or both documents. In China, for
Based on the Operational Strategy, draft Operational
example, the four-ecosystem approach of the Opera-
Programs were developed by the GEF Secretariat in
tional Programs in the biodiversity focal area was criti-
cooperation with the Implementing Agencies and
cized in the Chinese context. The Brazilian
STAP. The first draft is dated October 9, 1996, and the
Environment Ministry was also familiar with the Op-
final printed version appeared in June 1997. The ten
erational Strategy, and in Argentina, the Operational
programs defined in the Operational Strategy and de-
Strategy was said to be important in developing ideas
tailed in the Operational Programs document are:
for programs. The Indian Operational Focal Point,
however, noted that the Operational Programs are not
Biodiversity
widely disseminated among ministries.
OP1: Arid and Semiarid Zone Ecosystems
OP2: Coastal, Marine, and Freshwater Ecosystems
450. In some other countries, neither the Operational
OP3: Forest Ecosystems
Strategy nor Operational Programs are understood by
OP4: Mountain Ecosystems
the agencies that should be initiating project ideas. In
some cases, the absence of translations of the docu-
Climate Change
ments into local languages is a problem, as indicated in
OP5: Removal of Barriers to Energy Efficiency
Viet Nam and Egypt. In Egypt, however, officials of the
and Energy Conservation
Organization for Energy Conservation and Planning
OP6: Promoting the Adoption of Renewable En-
indicated that the strategy and Operational Programs
ergy by Removing Barriers and
Reducing Imple-
are "very voluminous and sophisticated" and that they
mentation Costs
had not had time to read them. In Kenya, most officials
OP7: Reducing the Long-Term Costs of Low
did not have a detailed understanding of the criteria for
Greenhouse Gas-Emitting Energy Technologies
funding in the Operational Programs, and, in both
Kenya and Zimbabwe, there was misapprehension on
International Waters
how land degradation--an issue of primary concern to
OP8: Water Body-Based Operational Program
these countries--fits into the Operational Programs. In
OP9: Integrated Land and Water Multiple Focal
Indonesia, key officials at the Environment Ministry
Area Operational Program
appeared to be poorly informed on how GEF works.
OP10: Contaminant-Based Operational Program
451. GEF projects generally fit declared national
447. In response to recent guidance from the conven-
policy objectives--that is, they pursue objectives that
tions, transport energy and carbon sequestration have
are stated government policy and for which some legis-
now been designated as Operational Programs 11 and
lative framework or official government action pro-
12, respectively.
gram exists. This is particularly the case for
biodiversity conservation (support for national park
448. One of the challenges in programming GEF re-
systems), climate change (renewable energy pro-
sources is how to promote a supply of project propos-
grams), and the phaseout of ozone-depleting sub-
72 Global Environment Facility, GEF Operational Strategy (Washington, D.C.: 1995), p. 7.

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Programming Issues 75
stances (for which the requirement is that a country is
456. This allocation of resources among the focal areas
signatory to the Montreal Protocol).
has had significant implications for programming pro-
cesses and outcomes in the focal areas during GEF 1.
452. Implementing agencies play a key role in shaping
Biodiversity and climate change have had more funds
the GEF portfolio. They differ markedly in the degree
than were absorbed by the number of proposed
to which they proactively work with governments to
projects that were judged acceptable. Meanwhile, the
develop project ideas. World Bank data indicate that
international waters focal area, which had received an
about one-third of the project ideas emanating from
indicative allocation of 12 percent of total resources for
governments have been jointly developed by the Bank
GEF 1--4 percent less than its indicative allocation
and the government agency, and two-thirds are gener-
during the Pilot Phase--reached the point in 1997 that
ated exclusively by the government. But by the time
it could no longer accept any projects because existing
project concepts reach World Bank headquarters, vir-
commitments were greater than the amount available.
tually every one has become a jointly developed
By July 1997, international waters had PDF B projects
project idea. Thus, the fit with GEF Operational Pro-
either already approved or close to approval that
grams and Strategy is usually quite close.
would put the total funding commitments for the focal
area at $240 million, the upper end of the indicative
453. UNDP country offices have tended in the past to
allocation for the fiscal 1999-2000 period.
send most projects directly to headquarters for pro-
cessing. The degree of knowledge of GEF Operational
457. The shortage of funding for international waters
Strategy and Programs at the country level is a major
in relation to the demand was an advantage in that it
factor in determining what proportion of project ideas
allowed the GEF Secretariat to be more selective re-
emanating from government agencies can be submit-
garding project proposals. But it also suggests the need
ted for review by the GEF Secretariat. UNDP indicates
for an adjustment in the indicative funding figures for
that, in the climate area, only about half the projects
the focal areas. Ideally, biodiversity and climate change
they receive are "GEF-able," because project origina-
focal areas should be close to the point at which all
tors did not understand what GEF could fund.
available funding is absorbed by quality projects and
international waters should be slightly above that
454. The Implementing Agencies' own organizational
point as well.
strengths, mandates, and requirements also influence
the pipeline of GEF projects. The World Bank has an
458. The study team notes that the projected resource
internal need to minimize staff time and other transac-
programming ranges proposed by the GEF Secretariat
tion costs and has been directed by the GEF Council to
for fiscal 1999-2001 would again allocate only about
contribute to GEF through cofinancing, so it seeks to
10 percent of total GEF resources to international wa-
maximize the number of GEF projects that can be fully
ters. That would mean that the entire focal area would
blended with World Bank loans. That need probably
receive only $220 million--$20 million less than was
biases the World Bank GEF portfolio in the direction
allocated in fiscal 1997-2000. The team is concerned
of larger projects.
that this could create an even greater gap between
eligible projects and the funding available in the inter-
B. OVERALL PROGRAMMING ISSUES
national waters focal area than emerged during GEF 1.
ALLOCATION OF RESOURCES AMONG THE FOCAL AREAS
Conclusions
455. GEF's programming of resources among the four
459. The study team found that the existing and
areas has been guided by the general view of the council
planned allocation of funds for the international waters
that biodiversity and climate are of primary importance,
focal area is likely to be inadequate, given the experi-
because of their link with the two global conventions.
ence of GEF 1.
Thus, the GEF work program as of July 1997 showed
that the biodiversity and climate change focal areas had
BALANCE BETWEEN INVESTMENT AND NONINVESTMENT
respectively received 38 percent and 38.7 percent of the
ACTIVITIES
total resources allocated, whereas 11.3 percent had gone
to international waters, 7 percent to ozone, and multifo-
460. Another programming issue is whether an ad-
cal area projects had received 5 percent.
equate balance has been struck in GEF programming

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76 Study of GEF's Overall Performance
TABLE 7.
DISTRIBUTION OF GEF FUNDING BY PROJECT TYPE
(US$ MILLIONS)
Pilot Phase
GEF 1
Stand-Alone
"Integrated"
Stand-Alone
"Integrated"
Capacity
Investment and
Trust
Capacity
Investment and
Focal Area
Building
Capacity Building Funds Total
Building
Capacity Building
EA's
Total
Biodiversity
54
214
64
332
6
246
15
267
Climate Change
41
218
249
186
315
22
355
Int'l Waters
3
115
118
59
59
Ozone
4
4
109
109
Multifocal
3
17
20
90
90
Total
101
568
64
733
24
819
37
880
Total (percent)
14
77
9
100
3
93
4
100
Source: GEF Secretariat, Quarterly Operational Report, June 1997.
between investment activities, on the one hand, and
463. Potential recipient countries are by far the largest
capacity building, training, and research activities, on
source of project ideas (accounting for 47 percent of
the other. If GEF is to be effective as a catalyst for
the total, compared with 16 percent for NGOs and 25
increased policy and programming emphases on ac-
percent for the Implementing Agencies themselves
tivities that yield both local and global environmental
during fiscal 1997). 74 Data on project ideas by category
benefits and are sustainable in the long run, it must
are available only for fiscal 1995-96 and do not distin-
support recipient countries in both types of activities.
guish on the basis of the source of the idea. It can be
assumed that they are broadly representative of gov-
461. In the early period of the GEF Pilot Phase, GEF
ernment preferences, even if the percentages for gov-
work programs were clearly divided into a work pro-
ernment-originated ideas would be slightly different.
gram for investment projects and a work program for
The Implementing Agencies' data on project ideas sub-
technical assistance projects. 73 The question of balanc-
mitted by category for those years show that the over-
ing investment and technical assistance projects, thus,
whelming majority have been related to capacity
stems from this clear distinction in the beginning of GEF.
building. Capacity building, technical assistance, and
research proposals represented 75 percent of the
462. To consider this issue, the study team first re-
projects submitted. 75
viewed the number of project ideas submitted to the
Implementing Agencies, according to category, as re-
464. Analysis of the GEF portfolio of approved
ported in the GEF Annual Reports for fiscal 1995 and
projects (Pilot Phase and GEF 1) led the study team to
fiscal 1996. These data indicate recipient countries'
conclude that GEF has addressed the ongoing needs
perceived needs in regard to capacity building and
for capacity building and investments by integrating
investment activities. Then, it reviewed the GEF port-
them in regular projects. With some few exceptions,
folio of approved projects to see how the two were
regular GEF projects cannot be clearly differentiated
balanced in GEF programming.
between capacity building and investments projects.
73 Global Environment Facility, "Report by the Chairman to the December 1991 Participants' Meeting," Part One: Main Report (November
1991), p. 13.
74 These figures are preliminary and based on partial data submitted by Implementing Agencies during fiscal 1997. See Global Environment
Facility, Draft Annual Report of the GEF, FY97, GEF/C.10/9, Annex G.
75 GEF, Annual Report 1995, op. cit., Annex C, Table 2, p. 4; Annual Report 1996, Annex B, Table 5.

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Programming Issues 77
As shown in table 7, when the amount of funding is
GEF 1 has not funded any trust funds, although some
considered, 77 percent of Pilot Phase and 93 percent of
are now in the pipeline.
GEF 1 projects were "integrated" projects involving
both capacity building and investment components.
468. Programming during GEF 1 has, thus, been
guided by an explicit assumption that projects should
465. The investment components of these "integrated"
generally include both "investment" and "capacity-
projects concentrate on activities such as physical in-
building" components and that capacity building
frastructure for conservation, credit guarantees, con-
should not become a separate category of projects.
struction, or equipment purchase options (for
This reflects the council's opposition to funding capac-
example, to stimulate the expansion of alternative en-
ity-building activities that are not linked directly to
ergy technologies, to improve the management of pro-
regular projects. This general orientation toward inte-
tected areas or to purchase vehicles and other
grating capacity building with investment activities
equipment to assist with management). In addition,
was further reinforced in May 1997 when the GEF
these projects also make provision for training, policy,
Council adopted a set of principles for financing of
and research activities. For example, in the
targeted research. These require that GEF-funded re-
biodiversity focal area, the World Bank's large
search projects be designed either to support a specific
projects--usually thought of as "investment"
group of projects or an individual operational pro-
projects--are all focused on developing management
gram. Because of this "supportive" requirement for
plans, monitoring and evaluation systems for pro-
targeted research, it is anticipated that the funds flow-
tected areas, and biodiversity conservation and have
ing into such projects will be limited to a small share of
budgets for capacity building in the millions of dollars.
total GEF programming resources.
A large investment project such as the World Bank's
Indonesia Kerinci Seblat incorporates capacity-build-
Conclusions
ing elements with a budget of almost $6 million of a
total of $15 million in GEF funding.
469. The study team concluded that GEF has used the
most effective approach to balancing capacity-building
466. The twenty-eight projects that we could catego-
and investment activities in the portfolio, which is to
rize as stand-alone capacity building in the Pilot Phase
combine both types of activities in the same project.
accounted for 14 percent of Pilot Phase funding,
whereas the seven stand-alone capacity-building
C. PROGRAMMING ISSUES IN BIODIVERSITY
projects in the GEF 1 portfolio represent less than 5
percent of that funding. Most of these are regional
470. The study team identified two primary issues in
climate change projects (including Climate Change
the programming of GEF resources in the biodiversity
Capacity Building; Global Change Systems for Analy-
focal area: can and should GEF do more to set priori-
sis, Research, and Training; and Asia Least-Cost
ties for specific ecosystems or ecosystem types? And
Greenhouse Gas Abatement Strategy) and were imple-
should GEF deliberately allocate more resources to
mented by UNDP or UNEP.
projects on sustainable use of biodiversity and less on
projects on protected areas?
467. Biodiversity trust funds, which account for six of
fifty-nine biodiversity projects and 9 percent of the
471. On the issue of priorities, the first question to be
Pilot Phase funding, represent a separate category, be-
assessed is whether GEF has done enough to focus
cause they involve managing the GEF contribution to
available resources on the ecosystems or countries that
yield investment income with which to fund project
loom largest in biodiversity loss. The Pilot Phase
activities. The study team found that the project objec-
Evaluation criticized GEF because it found only a "par-
tives of trust funds, like other types of projects, inte-
tial correlation" between the portfolio of biodiversity
grate both types of interventions. Resources of trust
projects and the areas of greatest global importance.
funds have been used to fund "soft" investments, such
Setting priorities by country or ecosystem may be par-
as vehicles and equipment for park management ac-
ticularly difficult for GEF, however, both politically
tivities, demonstration projects, and other high capi-
and practically.
tal-cost activities, as well as for staff, training, and
recurrent costs. With the exception of the $5 million
472 Numerous scientifically based approaches have
contribution to the Terra Capita Biodiversity Fund,
been advanced as the base for setting priorities in

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78 Study of GEF's Overall Performance
biodiversity conservation, such as the use of such crite-
amphibian biodiversity, only one country eligible for
ria as species richness or endemism of an ecosystem,
GEF funding (Venezuela) has not received support for
concentration of species that are at particularly high
a biodiversity project. 76
risk of being lost ("hotspots"), and the expanse of
relatively undisturbed forest capable of providing
476. Countries receiving GEF grants for biodiversity
habitat for both large and small species. These have
that are among the top twenty-five in concentration of
also been criticized, however, for failing to distinguish
biodiversity have received 60 percent of the funding,
among different types of ecosystems.
whereas countries in the next twenty-five received 16
percent of the funding. Islands and groups of islands
473. GEF's programming strategy in this area was es-
with high endemism but fewer species overall received
tablished in the Operational Strategy as developing a
4 percent of the funding, and other countries received
portfolio of projects "from a broadly representative
the remaining 19 percent of the funding. This repre-
base of globally important ecosystems," while "recog-
sents a substantial increase in concentration of re-
nizing the potential importance of particular species
sources compared with the Pilot Phase, when 54
and endemism-rich ecosystems." The Operational
percent of the funding went to the most important
Strategy noted in an endnote that no consensus had
twenty-five countries and 28 percent went to countries
been reached among biodiversity specialists on what
that were not among the top fifty.
approach to use for priority setting and acknowledged
the need for further efforts to develop a GEF approach.
477. Although GEF's programming resources have
But no such broader study of priorities has been done
produced a reasonable allocation of resources relative
by or for GEF.
to megadiversity countries, this does not mean that
GEF has focused its programming on the sites of great-
474. The secretariat indicated to the study team that it
est global importance within each country. Countries
has defined "globally important" biodiversity as
sometimes push for protection of sites that are not of
biodiversity located in ecosystems that are included on
the greatest global importance by objective criteria,
one of the lists compiled by international organiza-
and the Implementing Agency does not always insist
tions, bilateral agencies, NGOs, or international con-
that the sites chosen be those of greatest importance.
servation treaties. Such lists include the World
Heritage Sites, the Ramsar list of threatened wetlands,
478. Moreover, the criterion of inclusion on a global
and IUCN's Global Representative System of Marine
list does not provide a very fine screen for determining
Protected Areas.
priorities in programming. Just three of the global lists
consulted by the GEF Secretariat and Implementing
475. This GEF strategy is not intended to concentrate
Agencies in determining the eligibility of a project--
resources on countries with the greatest concentration
the Ramsar Convention, UNESCO Biosphere Reserves,
of biodiversity, whether measured by species richness
and World Heritage Sites--include about 1,000 sites
and endemism or other criteria. Yet the Implementing
worldwide, and not all of the biosphere reserves are
Agencies have, in practice, tended to focus more on
chosen on the basis of global importance.
what are known as "megadiversity countries" in devel-
oping their biodiversity portfolios. Indeed, GEF re-
479. In addition, GEF has no strategy for ensuring
sources have been relatively well focused on countries
that resources for biodiversity conservation are going
with the highest concentration of biodiversity during
to those ecosystem types that are most important or
GEF 1. Whereas during the Pilot Phase only six of the
that representatives of each type are funded over a
ten countries with the highest allocation of resources
given period of time.
were among the top twenty-five countries in species
richness and endemism, all ten of the countries with
480. The study team recognizes that there have been
the highest share of resources allocated to biodiversity
significant political constraints on GEF's ability to set
in GEF 1 are in this key category. Moreover, of the top
priorities in its project spending in biodiversity: the
ten countries in density of mammal, bird, reptile, and
adoption of any strategy that would focus on ecosys-
76 On the ranking of countries in species richness and endemism, see World Conservation Monitoring Centre, Priorities for Conserving
Global Species Richness and Endemism, (London: June 1994).

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Programming Issues 79
tems with the greatest species richness or endemism or
another multilateral development bank for the pur-
on the most threatened ecosystems or largest relatively
pose of biodiversity protection. By having a clearer set
undisturbed forest ecosystems would be opposed by
of priorities for global biodiversity conservation, GEF
some members of the GEF Council. Indeed, sugges-
can shift the incentive for some countries regarding
tions by the secretariat as to establishing priorities in
borrowing for biodiversity projects.
biodiversity funding as part of the Operational Strategy
were criticized by the council. It is not surprising,
484. The secretariat and Implementing Agencies
therefore, that the secretariat has advanced a set of five
could collaborate through the Biodiversity Task Force
priority ecosystem types under its Operational Pro-
in identifying certain ecosystems and ecosystem types
gram on arid and semiarid ecosystems but has pro-
as priorities for funding in the coastal, marine, and
posed no further prioritization within the other three
freshwater ecosystems Operational Program, the forest
Operational Programs in biodiversity.
Operational Program, and the mountain ecosystems
Operational Program. Such identification would be
481. There are some arguments against GEF moving
based on species richness and endemism as well as the
toward greater emphasis on megadiversity countries or
severity of the threats facing them and the estimated
countries under greatest threat. Given the limited
chances of actually saving the ecosystem's biodiversity
quantity of funds, it may make sense to focus on the
through GEF interventions. It might also take into
quality of each project rather than on whether the
account the existing pattern of funding by donors,
project fits a particular priority based on criteria of
including both gaps and areas of heavy concentration.
species richness, endemism, threat, or other scientific
Most of these considerations are explicitly mentioned
criteria. Because GEF will not be able to fund enough
in the Operational Strategy, although not elaborated in
projects to have any hope of achieving a strategic target
the Operational Programs for biodiversity.
based on one of the other scientific approaches, accord-
ing to this argument, it might better focus on projects
485. With regard to the second main issue considered
that can provide models for the entire bilateral and
by the study team--the allocation of funds for pro-
multilateral funding community in terms of type of
tected areas or for the sustainable use of biodiversity--
intervention rather than a site-specific criterion. This
it is clear that GEF must try to support both types of
approach is consistent with GEF's overall operational
activities. The GEF Operational Strategy states that
principle of a diverse portfolio of projects that "provide
operational programs in biodiversity will cover "long-
lessons beyond their immediate impact" and "catalyze
term protection and sustainable use of biodiversity"
complementary actions or have a multiplier effect."
and lists various types of activities in both categories
that would be included in the scope of the programs.
482. But this argument does not require the abandon-
Neither the Operational Strategy nor the Operational
ment of conscious prioritization in programming. GEF
Programs in Biodiversity suggest how much emphasis
remains the most important source of funding for
should be placed in programming resources for these
biodiversity worldwide. Maximizing its influence on
two types of activities.
global biodiversity conservation requires greater focus
on a subset of ecosystem types that are higher priori-
486. Thus far, the GEF biodiversity portfolio has been
ties, even within each major ecosystem category, based
concentrated heavily on protected area conservation
on an agreed set of criteria. A strategy for prioritizing in
projects. Of the twenty-seven biodiversity projects
biodiversity programming would give the GEF Coun-
funded in the GEF 1 work program, only the Central
cil greater assurance that the biodiversity portfolio is
African Republic Bangassou Dense Forest project and
directing funding to projects that have the greatest
Sri Lanka Conservation and Sustainable Use of Medici-
impact on the status of earth's biodiversity.
nal Plants project are wholly or primarily for sustain-
able use. In addition, the Guyana Iwokrama Rain
483. An even more important reason for a higher level
Forest project funded in the Pilot Phase is a demon-
of prioritization in GEF biodiversity programming is to
stration project on guidelines for sustainable use of
reduce the incentive for recipient countries to claim all
tropical forests. However, at least nine GEF 1 projects
their biodiversity as being of global importance and to
that are primarily for protected areas also have sustain-
have recourse to GEF funding for conservation when
able use components. Fifteen protected area projects
they could and should borrow from the World Bank or
do not have a sustainable use component.

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80 Study of GEF's Overall Performance
487. The GEF Corporate Business Plan for FY 1999-
firms for changing their techniques for exploiting bio-
2001 recognizes this imbalance, while noting that pro-
logical resources.
tected areas are the cornerstone of biodiversity and
that GEF will still need to provide adequate support
491. Furthermore, some GEF biodiversity specialists
for "significant but poorly protected areas." The study
view the idea of removing barriers to the sustainable
team agreed there is a need for more emphasis in the
use of biodiversity as not well thought through. They
portfolio on sustainable use in view of the increasing
point out that biodiversity is a global issue only be-
pressures on biodiversity from economic activities in
cause of values other than the use value of biodiversity,
productive landscapes. However, the team believes
including its option and existence values. Unlike cli-
that a number of issues should be considered carefully
mate, for which there are genuine joint benefits created
before allocating significantly greater GEF resources to
by removing barriers to win/win solutions, in
sustainable use activities.
biodiversity there is a serious threat that supporting
new uses of biological resources can result in the loss
488. The first issue is whether the additional resources
of these values. For example, opening markets for spe-
would come at the expense of adequate funding for
cies of tropical fruit can result in elimination of the forest
protected areas. The number of existing protected ar-
and the biodiversity for which it provides habitat.
eas in ecosystems of global importance that are consid-
ered "paper parks" or that clearly need strengthening is
492. Successful examples of the sustainable use of
so great that GEF could absorb many more funds in
biological diversity are rare, but NGOs have demon-
financing just protected area activities alone.
strated in small-scale projects in Africa and Central
America that successful applications are possible. In El
489. Sustainable use projects, which generate signifi-
Salvador, for example, wood ducks migrating up and
cant national benefits, should be capable of attracting
down the coast were being systematically killed for
more cofinancing, including government commit-
food until NGOs convinced communities that they
ments of funds, than protected area projects. However,
could get more protein from setting nests for the birds
there is still too little experience to be able to say
and harvesting some eggs, leaving enough to sustain
whether such cofinancing will be forthcoming. Addi-
the duck populations. A need exists, however, to col-
tional funding for sustainable use projects in GEF 2
lect examples of successful experiences in sustainable
should not be greater than the increment in funding
use projects and disseminate them widely among
for the focal area as a whole over GEF 1.
Implementing Agency staff as well as staff of recipient
agencies.
490. Furthermore, a number of conceptual issues re-
lated to sustainable use projects have not yet been
493. Some biodiversity specialists are concerned
satisfactorily resolved. 77 It is difficult to differentiate
about rapidly increasing funding for sustainable use at
many types of sustainable use activities from regular
a time when conceptual and practical problems of how
development activities. Some observers wonder if fi-
to reconcile increased use of biodiversity and conser-
nancing a project for a shift from unsustainable to
vation of ecosystems have not been worked out.
sustainable logging, for example, is a legitimate use of
GEF funds. It could only be justified if there are signifi-
Conclusions
cant barriers to the private sector undertaking such
clearly economic projects. The problem is that the
494. The study team found that in the biodiversity
project would be economic for the economy as a whole
focal area, the issue of priorities has been subject to
but not for the private sector, which can make more
significant political constraints, and there are practical
profit by applying more destructive but cheaper tech-
limitations on GEF applying a programming strategy
niques. One unresolved issue, therefore, is whether
based on a scientific set of criteria. However, the team
GEF is or should be prepared to compensate private
found that GEF had not been able to focus on ecosys-
77 A workshop sponsored by STAP in November 1997 discussed the problems associated with sustainable use projects. For a summary
of the discussion, see Eduardo Fuentes, "Back to Office Report on the STAP Sustainable Use Workshop, Malaysia, November 24-26," UNDP,
New York.

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Programming Issues 81
tems of the greatest global importance to the extent
the incremental cost concept, because GEF was ex-
that would be desirable. It further found that GEF has
pected to pay for the difference in cost between a more
not yet resolved some of the conceptual and practical
expensive but lower greenhouse gas
-emitting energy
difficulties associated with projects for sustainable use
technology and a lower-cost fossil-fuel alternative. It
of biodiversity. A major problem in developing viable
was not contemplated that GEF would finance projects
sustainable use projects is the dearth of published infor-
for energy efficiency, because they would be economic
mation on successful experiences in such projects.
projects for the recipient country. But after extensive
discussions, the GEF Council added the two barrier
Recommendations
removal programs on the grounds that these "win-win"
solutions would not happen without GEF financing.
495. The GEF Council should authorize the GEF Sec-
The rationale, as outlined in the Operational Strategy,
retariat and Implementing Agencies, in consultation
is that there are "cultural, institutional, administrative,
with the Secretariat of the CBD, to undertake a formal
technical, policy-related, and financial learning barri-
priority-setting exercise to identify the ecosystems and
ers" to market penetration by climate-friendly tech-
ecosystem types within each Operational Program in
nologies. GEF, therefore, would finance the costs of
biodiversity that should be the highest priorities for
removing those barriers, making it possible for "win-
GEF in terms of a set of agreed criteria, including those
win" projects to be implemented.
specified in the Operational Strategy.
500. Based on both numbers of projects and total GEF
496. The GEF Secretariat should compile information
resources allocated, the barrier removal approach has
on successful projects in sustainable use from NGOs
received most of the emphasis, thus far. As of July 1,
and other bilateral and multilateral agencies world-
1997, twenty-three projects in GEF-1 had been ap-
wide, and disseminate them to Implementing Agencies
proved in the barrier removal category for a total of
and recipient country Focal Points.
$179.9 million, compared with only three projects in
the buy-down category for a total of $93.3 million.
D. PROGRAMMING ISSUES IN CLIMATE CHANGE
Thus, the buy-down projects constituted just 12 per-
cent of the total number of projects and 34 percent of
497. In the climate change focal area, GEF faces the
the total funding during GEF 1. Although the Opera-
challenge of programming resources to have the maxi-
tional Programs did not exist during the Pilot Phase,
mum impact in the long run on emissions of green-
the secretariat has retrospectively categorized projects
house gases in GEF-eligible countries. This raises two
with the result that twenty-one Pilot Phase projects
distinct programming issues involving priorities:
costing GEF $125.6 million are considered to have
Should more or less emphasis be placed on any of the
been barrier removal projects, compared with only two
Operational Programs in the focal area? How much
projects costing $37.7 million that are considered to
should GEF focus its resources on countries with the
have been buy-down projects. So buy-down projects
highest emissions of greenhouse gases?
represented 9 percent of the projects and 23 percent of
the Pilot Phase funding in the climate focal area.
498. The GEF climate portfolio is based on three Op-
erational Programs (OPs)--removal of barriers to en-
501. Each approach in the climate portfolio has dis-
ergy conservation and efficiency technologies that are
tinct advantages and drawbacks. First, barrier removal
already commercial (OP5), removal of barriers to re-
projects are a good deal cheaper than buy-down
newable energy technologies that are already commer-
projects. The average cost per project in OP5 and OP6
cial (OP6), and buying down the cost of renewable
during GEF 1 through July 1997 was $7.8 million,
energy technologies that are not yet commercially vi-
compared with $31 million for the average project in
able (OP7). But a key programming issue in the cli-
OP7. This sharp difference in cost per project makes it
mate focal area is how many funds should be allocated
possible to do more barrier removal than buy-down
to barrier removal projects and how many to buying
projects per amount of money spent.
down costs of promising technologies?
502. Moreover, barrier removal projects, which are
499. The original strategy envisioned by the secre-
obviously much more in the self-interest of the recipi-
tariat was to focus on buying down the cost of promis-
ent country, generate higher amounts of cofinancing
ing technologies. That strategy was directly related to
per project, although the difference is much less dra-

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82 Study of GEF's Overall Performance
matic than the difference in cost. Barrier removal
relative importance of the barriers removed by the
projects in the GEF 1 portfolio have brought four
project and those that still remain.
dollars of cofinancing for every dollar spent by GEF,
whereas buy-down projects have generated three dol-
506. The main risk inherent in the barrier removal
lars for every GEF dollar. It is argued, therefore, that
category will continue to be the possibility that a
the cost of buying down technologies is greater than
project will fail because some key barriers cannot be
GEF can afford to finance and the barrier removal
removed. However, even if a buy-down project is suc-
approach has to be the mainstay of the portfolio.
cessful in achieving sufficiently rapid reduction in
costs, the technology in question will also face the
503. But each type of project has its own distinct risk.
same risk of not being able to surmount various social,
Buy-down projects carry the risk that GEF will be
policy, and administration barriers.
investing in a technology that is not going to be one of
the "winners" in the long run. Given the long period of
507. Another source of controversy surrounding bar-
gestation for such technologies (possibly decades), it is
rier removal projects is the secretariat's insistence that
difficult to anticipate which technologies will achieve
commercial demonstration not be included in the
the steepest learning curve and reduce costs to the
scope of barrier removal projects. The rationale for this
point of market penetration first. GEF has tried to
position is that once barriers have been removed, it is
reduce that risk by inviting projects related to seven
up to the private sector to finance demonstrations. But
different technologies and by its readiness to revise the
photovoltaics and wind power technologies may be
list in light of experience. Nevertheless, there is a
simultaneously cost-effective in off-grid applications
substantial risk that the technologies that are now
but not cost-effective for on-grid applications in the
being backed may turn out to be the wrong ones. This
same country. So UNDP has argued that it may be
risk is often referred to as the "technology risk."
necessary to have a small commercial demonstration
component within a larger barrier removal project to
504. Barrier removal projects, however, carry the risk
promote the on-grid application of the technology.
that GEF may not be able to remove all the constraints
Thus, for some of the technologies that are becoming
to commercial viability and that the energy efficiency
mainstays of the GEF climate portfolio, there may no
or renewable energy technology will remain stymied
such thing as a pure barrier removal project.
by barriers that were beyond the project's ability to
influence. One of the problems that such projects face
508. The question of allocation of GEF resources by
is that governments may temporarily remove a barrier,
country is framed starkly by the statistics on emissions
such as tariffs or subsidies for the purpose of the
of greenhouse gases. The top ten greenhouse gas-emit-
project itself but later reimpose the barrier. Moreover,
ting countries among those eligible for GEF projects
the range of barriers to commercialization of a technol-
account for nearly one-third of all emissions of carbon
ogy that may be encountered in a single market may be
from fossil fuel burning worldwide. So they are clearly
rather large, and some may only become known dur-
crucial to the success of the global climate change
ing the lifetime of the project. UNDP argues that it is
regime. And the programming of resources in the cli-
not realistic to expect each project to come up with a
mate change focal area since the beginning of the Pilot
way to remove every barrier, as the Operational Strategy
Phase reflects the importance of these ten countries.
and Programs now require. UNDP believes that it may
They received $308 million or 87 percent of the total
be necessary and desirable to fund follow-up projects
funding for countries in the climate Operational Pro-
that would build on the first project's achievements.
grams ($355 million). Twenty-seven other countries in
which GEF projects were funded, accounting for only
505. Thus far, none of the completed barrier removal
a tiny percentage of the world's carbon emissions from
climate projects have come back for follow-on grants.
fossil fuel burning, received the remaining 13 percent
It may be premature to draw any conclusion from that
of the country-based funding.
fact, but it is far from clear that GEF will have to fund
barrier removal projects repeatedly in the same coun-
509. This allocation represents a relatively high degree
try. The study team believes that the complete elimina-
of concentration, considering GEF's mandate to cata-
tion of all barriers, whether by the project itself or by
lyze activities worldwide through its project funding.
other means, is not necessarily a precondition for suc-
It has been argued that concentrating GEF projects on
cess. The degree of project success will depend on the
the biggest countries is a mistake, because the sheer

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Programming Issues 83
size of the economic systems makes it more difficult
based Operational Program and the integrated land
for GEF projects to have an impact in those countries.
and water multiple focal area) require international
According to this view, GEF should be looking prima-
collaboration, whereas the third (the contaminant-
rily for the most promising laboratory for technology
based Operational Program) does not. The programs
innovation, rather than the countries that are now
focused on international collaboration put primary
emitting the most greenhouse gases, in the hope that
emphasis, at least in the first phase of development, on
the project will be emulated elsewhere, including
creation of institutional mechanisms and diagnosis of
high-emitting countries. But although it is important
the problem and less on investment activities to correct
to have projects in a relatively wide range of countries,
problems.
in view of the different economic and institutional
conditions that exist in each, projects must ultimately
514 Because it is not tied to any existing convention,
succeed or fail within the high-emitting countries and
the international waters portfolio could develop more
they should be the main focus of GEF climate funding.
slowly than the climate and biodiversity focal areas: as
of June 1997, only six projects had been approved in
Conclusions
GEF 1 and five in the Pilot Phase. Another feature of
this development, however, was that the GEF Secre-
510. The study team found that the present emphasis
tariat was more proactive than in any other focal area,
in the climate portfolio on barrier removal is appropri-
encouraging cooperation among Implementing Agen-
ate, given the risks inherent in any innovative project
cies and between the agencies and recipient countries
intended to promote long-term change toward adop-
in developing project proposals for various water bod-
tion of climate-friendly technologies. It further found
ies. The twenty projects in the pipeline as of September
that more emphasis may be needed on combined bar-
1997--particularly those in OP8--reflect greater com-
rier removal and buy-down projects, requiring a re-
monality of approach than is found in project propos-
thinking of the present delineation of Operational
als in the climate and biodiversity focal areas.
Programs. The team found that GEF has allocated an
Moreover, the international waters portfolio is the only
appropriately high proportion of climate funding to
one in which more proposals have been submitted to
high-emitting countries.
the secretariat than could be approved with the funds
available. Thus, the secretariat has had to say no to a
511. The study team found that the present allocation
number of projects that do not fit into its strategy for
of funding in the climate change focal area across
developing an international waters portfolio.
recipient countries is appropriate, given the need to
both affect the countries of greatest importance to
515. Another advantage in this focal area that has
climate as well as to experiment with different types of
contributed to a more strategic allocation of GEF re-
projects in a variety of settings.
sources is that it can achieve broad coverage of relevant
international waters while at the same time setting
E. PROGRAMMING ISSUES IN INTERNATIONAL
priorities on the expenditures, given the limited num-
WATERS
ber of large marine ecosystems worldwide and the fact
that one project normally addresses the sources of
512 Programming in the international waters focal
degradation of the entire ecosystem. Of forty-nine
area can be distinguished from programming in the
large marine ecosystems, twenty-five are located in or
other focal areas by three characteristics: It emphasizes
near highly industrialized countries. Of the remaining
international collaboration rather than unilateral na-
twenty-four, GEF now has full projects or PDFs in
tional action. It is not guided by an international con-
eleven, with two more in the pipeline.
vention. And the amount of funding available has
turned out to be less than the amount than can be
516. The centerpiece of the GEF strategy on interna-
absorbed by eligible project proposals submitted by
tional waters is the concept of "strategic joint fact
Implementing Agencies.
finding" as a means of arriving at a consensus on what
actions are needed to address threats. In strategic joint
513. Based in part on these circumstances, GEF has
fact finding, collaborating states establish technical
adopted a distinctive strategy for the focal area that has
teams that work to establish a common baseline of
strongly shaped the international waters portfolio.
facts and analysis of the problem in the form of a
Two of the Operational Programs (the water body­
transboundary diagnostic analysis (TDA), which is

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84 Study of GEF's Overall Performance
then used to set national priorities for actions to ad-
based projects--mostly related to ocean pollution
dress threats to international waters in the form of a
from ships--accounted for nearly 60 percent of the
strategic action program (SAP). This approach repre-
total funding in the focal area ($68.9 million out of
sents an elaboration of those developed in the past by
$118.4 million total). Marine pollution from ships
UNEP and other international organizations to address
accounts for only about 10 percent of contamination of
collaboration on problems of shared water bodies. In
international waters, whereas at least 80 percent is
OP8 and OP9, these TDAs and SAPs are required for a
believed to emanate from land-based sources. The in-
project to be eligible for GEF funding. The GEF strat-
dependent evaluation criticized GEF's priorities in the
egy has been to make funding of investment, technical
Pilot Phase for too much emphasis on ship-generated
assistance, or capacity-building components of a
pollution and called for greater emphasis on pollution
project contingent on the successful completion of
from land-based sources. International waters pro-
these initial stages of the project.
gramming in GEF 1 has focused primarily on large
marine ecosystems and freshwater basins involving
517. The use of strategic joint fact finding and SAPs as
international collaboration; integrated land and water
the primary components of projects appears to be the
projects was a second priority. Of a total of $62.4
most appropriate approach for OP8 and OP9. It has
million allocated in the international waters portfolio
some major advantages over an approach that funds
during GEF 1, $47.3 million (75 percent) has been
investment or technical assistance projects that have
allocated to large marine ecosystems and freshwater
not been preceded by such processes: first, it builds
basins and the remainder to integrated land and water
the capacity of recipient countries for international
projects.
collaboration as well as domestic cross-sectoral plan-
ning and policymaking. Second, it provides GEF with
520. Within the contaminant-based Operational Pro-
the means of ensuring that national actions are well
gram, moreover, the secretariat has turned down sev-
targeted and that recipient countries have demon-
eral ship-related projects on the grounds that they did
strated commitment to them before they are funded.
not fit GEF's priorities, despite the fact that such
Third, because the issues are of high national concern
projects are included within the scope of the Opera-
to participating countries, there is some basis for hop-
tional Program. Thus far, no project relating to global
ing that the structures for international collaboration
pollutants has been funded, although a project on
and national coordination and policymaking estab-
mercury contamination is now in the pipeline. The
lished by the projects will remain viable after GEF
absence of any such projects is unfortunate in view of
funding is ended.
the fact that persistent organic pollutants have now
been recognized as a priority environmental issue by
518. The SAPs that are supported by GEF grants will
the world community and a global treaty is to be
generate proposals for actions, most of which are
negotiated beginning in 1998. The importance of this
clearly in the national interest of the countries con-
issue suggests that more efforts should be made by the
cerned, because they deal with reducing the pollution
secretariat and Implementing Agencies to explore op-
of lakes and coastal zones and increasing the produc-
portunities for assisting eligible countries in reducing
tivity of those waters under national jurisdiction. If
dependence on persistent organic pollutants.
they are correctly formulated, therefore, the SAPs will
show that the incremental costs of most of the actions
521. A development that could affect future GEF pro-
are relatively small, covering only components re-
gramming in the international waters focal area is the
quired to remove or reduce the transboundary effects
funding of a UNEP project to carry out a three-year
of environmental degradation. So it is vital that the
Global International Waters Assessment. This will en-
TDA is done properly. Because the processes of negoti-
gage government experts on each continent in evaluat-
ating the SAPs are still at an early stage, even in the most
ing the environmental status and priority threats to
advanced projects (the Black Sea and Danube), it is too
international waters in the region, establishing a com-
early to know how they will address this issue. But there
mon analysis of data on which countries could propose
is an obvious danger that the SAPs will produce requests
actions. The project is intended to provide an authori-
for GEF funding that are unrealistically high.
tative scientific basis for policymaking on international
waters, just as the Intergovernmental Panel on Climate
519. The international waters portfolio has changed
Change has done for the climate change issue.
It
dramatically since the Pilot Phase, when contaminant-
should help strengthen political commitment by states

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Programming Issues 85
to collaborative efforts to address problems of marine
development interests of the recipient country, and
pollution from land-based sources, overfishing, and
how the alternative scenario provides global benefits.
other threats. It can also be expected to generate a larger
It should make a convincing case that the project has a
volume of GEF project proposals for investment and
positive incremental cost.
technical assistance. These regional assessments, if suc-
cessful, could also be the basis for proposing revisions of
525. The study team examined the discussions of in-
the Operational Programs in international waters.
cremental costs in project proposals included in the
1995 and early 1996 work programs. The examination
Conclusions
revealed seriously deficient incremental cost calcula-
tions in at least ten projects. 78 In one case (Mauritius
522. The study team concluded that the approach to
Marine Protection and Biodiversity Conservation),
programming imbedded in the Operational Strategy
there was no mention of incremental cost in the docu-
and International Waters Operational Programs has
ment at all and no indication as to why GEF's contribu-
redirected GEF funding toward challenges that should
tion was $3.3 million. In another case (India
have high priority and establishes solid bases for inter-
Ecodevelopment), the definition of incremental cost
national collaboration and national policymaking on
was clearly incorrect. In a third, it was difficult to
cross-sectoral issues. The team also concluded that fur-
distinguish baseline activities from incremental cost
ther initiative is needed in the contaminant-based Op-
ones. In several projects, there was no explanation for
erational Program on encouraging the development of
the incremental cost calculation. In two climate
project proposals relating to reducing developing coun-
projects (China Efficient Industrial Boilers and India
tries' dependence on persistent organic pollutants.
Solar Thermal-Electric), the baseline calculation was
clearly not according to GEF procedures and, in the
F. THE APPLICATION OF INCREMENTAL COSTS
former case, the secretariat was concerned that an
AS A PROGRAMMING TOOL
artificially narrow definition of the system boundary
could conceal potentially negative incremental costs.
523. The requirement for distinguishing incremental
from baseline costs as the basis for funding is one of
526. In February 1996, the secretariat issued the final
GEF's tools for programming its funds. It allows the
version of the GEF policy toward incremental costs, as
Implementing Agencies and the secretariat to direct
revised in light of comments made during the May 1995
funds toward activities that contribute global environ-
Council meeting. A new reporting format for incremen-
mental benefits rather than toward those that are solely
tal costs included a requirement that the costs and
in the development interests of the recipient country.
domestic as well as global environmental benefits of the
In the Pilot Phase, there was no requirement for incre-
baseline and alternative courses of action be summa-
mental cost calculation in project proposals, and deci-
rized in a simple matrix. That requirement and the
sions on project approval were made on the basis of
circulation of a draft in early 1997 of streamlined proce-
whether or not the project would generate net eco-
dures for incremental cost assessments have brought
nomic benefits to the recipient country.
about a fundamental change in project proposals, re-
flecting increased understanding of the concept and
524. The study team examined whether GEF has been
methodology by the Implementing Agencies.
successful in applying the incremental cost concept in
a way that is methodologically clear, well-conceived,
527. A review of GEF Secretariat memoranda on the
and rigorous. To ensure the objective of cost-effective
outcomes of eight bilateral reviews with the World
programming, the incremental cost calculations ac-
Bank and UNDP during 1997 showed that nine of
companying project proposals should present a level
twenty-five project briefs had failed to do the incre-
of detail that makes clear how the baseline scenario
mental cost matrix in the format shown in the incre-
was constructed, how it is related to the economic
mental cost policy paper. However, an examination of
78 The Guatemala Integrated Biodiversity in the Sartum-Mantagua Region, Mauritius Marine Protection and Biodiversity Conservation,
Regional Capacity-Building Network for Southern African Botanic Diversity, Central African Republic Bangassou Dense Forest, China
Nature Reserves Management, India Ecodevelopment, Indonesia Kerinci Seblat Integrated Conservation and Development, Lake Victoria
Environmental Management, China Efficient Industrial Boilers, and India Solar Thermal-Electric projects.

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86 Study of GEF's Overall Performance
the incremental cost matrices themselves revealed that
531. UNDP regional coordinators asserted that there
the differences in format were minor in every case but
were no cases in UNDP GEF projects in which the GEF
one (Pakistan Protected Areas Management Project), in
contribution to incremental costs had been increased
which no matrix was presented at all. In the other
as a result of a revision. The coordinator for Latin
cases, the matrices showed clearly the assumptions
America indicated that UNDP usually reduces substan-
about domestic benefits and global benefits in the
tially the original incremental cost request accompany-
baseline and alternative courses of action and distin-
ing project proposals received from recipient
guished among individual components of the project,
governments. These proposals usually contain lists of
so that it is possible to tell in each case whether the
activities for which GEF funding is requested, along
benefits accrue to the global environment or to na-
with the government's own cost estimates. UNDP win-
tional development.
nows out activities it believes would not be eligible for
funding, either because they do not fall within opera-
528. Of course, incremental cost calculations may still
tional programs or because they are not truly incre-
use a method or assumption that is invalid. Neverthe-
mental to baseline activities. Most of the activities
less, they are now far more transparent than they were
eliminated by UNDP, according to the coordinator, are
a year or two earlier, and gross departures from a
those that are not truly incremental. The coordinator
reasonable process of calculation are correspondingly
estimates that the original request is reduced overall by
less frequent.
30­50 percent in most cases and that the generaliza-
tion applies equally to climate, biodiversity, and inter-
529. A second issue examined by the study team was
national waters projects.
whether there is a systematic tendency for incremental
costs to be inflated in the project preparation process.
532. World Bank regional coordinators indicated that
Some in the secretariat believe that both recipient
it is difficult to inflate the incremental costs of a climate
countries and Implementing Agencies have incentives
project artificially, noting that they are reviewed by
to inflate incremental costs--the country because it is
several individuals in each case and that such an effort
primarily interested in grant assistance for national
is not likely to remain undetected. They also note that
development purposes and the agency because it
task managers have no incentive to inflate the incre-
wishes to please the client government and because
mental costs of climate change projects, even if the
higher incremental costs mean larger administrative
client government is disappointed by the result, be-
budgets for projects. Anecdotal evidence suggests that
cause it does not increase the administrative budget.
officials who initiate projects in recipient countries
sometimes find it in their interest to request GEF
533. For some climate projects in the Commonwealth
funding for activities they know should be part of the
of Independent States region, the final incremental
baseline, because they are in the interest of the coun-
cost was reduced substantially from the original pro-
try. At an Intergovernmental Panel on Climate Change
posal: the Hungary biomass project was in the pipeline
workshop on the costs of mitigation actions, for ex-
as a $20 million project for eighteen months but is now
ample, several countries reportedly suggested that they
being sent to the GEF Council as a $5.8 million
had no incentive to calculate the incremental costs of
project. The Ukraine coal-bed methane project was
GEF climate projects accurately.
listed as a $20 million project for three years but has
now been reduced to $12 million. The Czech Republic
530. The team found no evidence, however, of Imple-
Kyjov Waste Heat project has recalculated the incre-
menting Agencies knowingly cooperating with efforts
mental costs five times and is now listed as a $5 million
to get more funding from GEF than would be objec-
project, whereas the original proposal was in the range
tively justified. Agency regional coordinators cite many
of $3.8 -7.6 million. Projects on ozone-depleting sub-
instances in which incremental costs have actually
stances are similarly difficult to inflate, according to
gone down from the original estimate, and attribute
World Bank coordinators; the usual result is that final
departures from that to the inherent difficulty of esti-
incremental costs are within a few percentage points of
mating incremental costs in biodiversity rather than to
the original estimate.
perverse incentives.

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Programming Issues 87
534. World Bank regional coordinators indicated that
biodiversity projects have not been subject to a single,
commonly understood methodology for calculation of
incremental costs as have climate and ozone projects.
The possibility that these estimates are in some in-
stances higher than they would be if done by an inde-
pendent entity cannot be ruled out. A similar
possibility exists for international waters projects.
535. However, the study team did not find any consis-
tent pattern in which the Implementing Agencies have
constructed inflated incremental cost estimates. In
some cases, they appear to have applied the incremen-
tal cost concept to either reduce the costs to GEF
compared with what would have been requested by
recipient countries or have done the calculation in
ways that do not lend themselves to inflating the size of
the grant. These data cannot be verified by the study
team, but it has no data from other sources that would
lead it to doubt the overall picture these data present.
Conclusions
536. The study team found that the operationalization
of the incremental cost requirement by GEF has ad-
vanced markedly since 1995, based on the degree of
transparency and detail in discussions of incremental
costs in project documents. Although some instances
of inflation of incremental cost estimates may have
occurred, the study team found no evidence of a gen-
eral pattern of such inflation. The team concluded that
greater confidence can be placed in the final incremen-
tal cost estimates for climate and ozone projects than
for biodiversity and international waters projects.

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88 Study of GEF's Overall Performance
VII. FOLLOW-UP TO THE PILOT PHASE EVALUATION
537. In May 1994 an evaluation of the GEF Pilot
543. Recommendation 3 of the Pilot Phase evalua-
Phase was issued by an independent panel of experts.
tion: Reform GEF's leadership, management, and or-
The evaluation, requested by GEF participants (since
ganizational relationships.
replaced by the GEF Council), was part of an effort to
learn from the experience of the Pilot Phase to guide
544. The Pilot Phase evaluators found that "the
future planning for GEF. The GEF Council, GEF Sec-
present operation arrangement is a major impediment
retariat, and Implementing Agencies have taken steps
to the effective professional leadership and manage-
to respond to the evaluation's recommendations. A
ment of GEF as a unique international entity." Specifi-
fundamental restructuring of GEF took place through
cally, the evaluators found that the decisionmaking
which the GEF Council and GEF Secretariat were es-
processes for project development are complex, cum-
tablished, the GEF Instrument was adopted, the Op-
bersome, and costly; accountability at policy, program,
erational Strategy and Operational Programs were
and project levels is diffused; and coordination ar-
promulgated, a clear governance structure was estab-
rangements among the Implementing Agencies are in-
lished, and the permanent monitoring and evaluation
effective. The evaluators specifically recommended
office was created. The following is a point-by-point
four measures:
review of developments in GEF reform since the 1994
report was issued. Detailed discussions of many of the
545. First, establish a GEF Secretariat that is organiza-
reforms are contained elsewhere in this report.
tionally, administratively, and functionally independent
from the Implementing Agencies and organizations.
538. Recommendation 1 of the Pilot Phase evalua- This recommendation has been carried out.
tion: Clearly articulate the GEF mission.
546. Second, make STAP an independent advisory
539. Recommendation 2 of the Pilot Phase evalua- body. This recommendation has likewise been carried
tion: Develop program objectives and strategy.
out.
540. The Pilot Phase evaluators found that GEF's
547. Third, prepare guidelines for host countries to
raison d'être was unclear, the overarching objectives
propose programs to address global environmental
and strategy of GEF had not been fully elaborated, and
concerns. Guidelines have indeed been prepared, al-
clear objectives and strategies were lacking. They
though some host-country officials still express con-
asked, "What is GEF's niche in global environmental
cerns that these guidelines are too complex.
affairs that sets it apart from other international en-
deavors dealing with environmental issues?"
548. Fourth, broaden the range of organizations eli-
gible to implement and execute programs and projects
541. Since the Pilot Phase evaluation was issued, the
with GEF funds to include--in addition to the World
GEF Instrument and operational strategy, approved in
Bank, UNDP, and UNEP--the regional development
October 1995, have articulated the GEF mission. A
banks, other United Nations agencies, governments,
number of other written materials pertaining to the
and NGOs. Some of these organizations have become
GEF project cycle, Operational Programs, and incre-
more involved in the execution of GEF projects. In a
mental cost calculations have further articulated the
few cases, UNDP has delegated implementation au-
GEF mission and framed its objectives and strategies.
thority to an outside agency. For example, UNDP del-
egated authority to the Asian Development Bank to
542. For more discussion and evaluation on these issues,
implement the Asia Least-Cost Greenhouse Gas Abate-
see chapter VI on the use of the Operational Strategy and
ment Strategy Project in GEF's Pilot Phase. In general,
Operational Programs.
however, the recommendation to expand the number

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Follow-up to the Pilot-Phase Evaluation 89
of Implementing Agencies that can sponsor and over-
and projects. However, the PIRs do not constitute
see projects and receive direct GEF funding has not
independent evaluations, because they are prepared by
been implemented.
the Implementing Agencies and do not go into depth
on individual projects.
549. For more discussion and evaluation of these issues,
see chapter IV, section C, on the institutional relationships
556. The Pilot Phase evaluation recommended the
between the GEF Secretariat and Implementing Agencies,
creation of monitoring and evaluation systems for indi-
on STAP, and on expanding the number of Implementing
vidual GEF projects. In May 1995, the GEF Council
Agencies, and chapter V on GEF project cycle procedures
specified that the work program will include "opera-
and guidelines.
tional monitoring and evaluation, scientific and tech-
nical monitoring and evaluation, and evaluation of
550. Recommendation 4 of the Pilot Phase evalua- strategic and cross-program issues." To provide an
tion: Clarify and establish clear lines of authority independent check on GEF operations, an indepen-
for GEF.
dent monitoring and evaluation office was established
at the GEF Secretariat in April 1996. To ensure inde-
551. The Pilot Phase evaluators specifically recom-
pendence from the secretariat and the Implementing
mended that the new GEF Secretariat be empowered
Agencies, the Senior Monitoring and Evaluation Coor-
with programming and budgeting oversight functions,
dinator reports directly to the GEF Council in evalua-
authority to allocate GEF resources for the programs
tion matters. He reports to the CEO in monitoring and
and budgets endorsed by the GEF Council, and the
administrative matters. The current evaluation of
responsibility of reporting to the council regularly on
GEF's overall performance and a separate evaluation of
the administration of GEF programs and budgets. The
"lessons learned" are coordinated by him.
GEF Instrument, approved by the council in October
1995, clarifies these lines of authority. Through the
557. In April 1997, the Council approved a monitor-
instrument's adoption, this recommendation has been
ing and evaluation framework and plan for the GEF.
79
largely carried out.
But to date, the monitoring and evaluation budget has
not been sufficient to facilitate the systematic incorpo-
552. See chapter IV, section C, for more on GEF institu-
ration of monitoring and evaluation components into
tional roles and relationships.
all GEF projects. Instead, individual project perfor-
mance is determined largely by the Implementing
553. Recommendation 5 of the Pilot Phase evalua- Agencies themselves. World Bank policy requires that
tion: Establish a permanent mechanism for identifying
key performance indicators for all its projects be estab-
lessons and promoting their application in GEF pro-
lished during project appraisal. However, the February
grams.
1995 paper "Monitoring and Evaluation: Making
Headway" by the Bank's Operations Evaluation De-
554. The Pilot Phase evaluators found that no GEF-
partment found that there has been inadequate atten-
wide system had been set up to gather and disseminate
tion to monitoring and evaluation of Bank projects at
information systematically on project identification,
either the appraisal stage or during implementation.
design experience, and Implementing Agency opera-
On the other hand, the 1996 PIR states, "The Bank
tions or to track and monitor GEF strategies, opera-
reports that over 50 percent of its existing GEF
tions, and projects. The evaluators also stated that such
biodiversity projects have performance indicators that
a system should be independent of the Implementing
are being tracked regularly." This suggests that the
Agencies.
World Bank is doing a better job of tracking the perfor-
mance of its GEF projects than its non-GEF projects.
555. The main mechanism for gathering and dissemi-
nating information on GEF programs and individual
558. The study team was not able to verify the degree
projects is the annual project implementation review
to which the performance tracking of the Bank's GEF
(PIR). The PIR is intended to provide feedback on the
projects is in fact taking place. Neither was the team
successes and problems of GEF strategies, operations,
able to determine whether such indicators are in place
79 Framework and Work Program for GEF's Monitoring, Evaluation, and Dissemination Activities, GEF/C8/Rev. 1, April 1, 1997

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90 Study of GEF's Overall Performance
and are being tracked for the rest of the Bank's GEF
563. The GEF monitoring and evaluation program is
portfolio (besides the biodiversity component) or
still in an early phase of implementation, so its effec-
whether such tracking systems are operating at UNDP
tiveness cannot yet be evaluated. Yet, implementation
and UNEP for their GEF projects. The 1996 PIR does
is proceeding. All three Implementing Agencies are
concede the need for "improved monitoring and evalu-
cooperating with the monitoring and evaluation team
ation systems in projects."
and have components of a comprehensive program in
place. Timetables are in place for the systematic incor-
559. The monitoring and evaluation coordination team
poration of project performance indicators, although
estimates that performance indicators will be in place
timetables have not yet been set for many other com-
for all World Bank GEF projects by July 1998. UNDP
ponents of the monitoring and evaluation plan, such as
and UNEP, while working toward the same goal, have
the preparation and implementation of performance
not yet set dates for completion of this objective.
indicators for GEF programs, socio-economic impact,
institutional impact, and environmental impact.
560. Thus, at this time the determination of a project's
success is largely subjective because there is not neces-
564. Recommendation 6 of the Pilot Phase evalua-
sarily a set of predetermined indicators of success
tion: Following the development of GEF strategies,
against which a project's performance can be evalu-
establish common guidelines for the management of
ated. Where such indicators do exist, the extent to
GEF operations by implementing organizations and
which they are used in project evaluations is unclear.
undertake an independent review of their capacities.
561. In addition to performance indicators, the moni-
565. The Pilot Phase evaluators were concerned about
toring and evaluation plan calls for adoption of risk
the institutional capacity and operational procedures
rating and baseline determinations in all project sub-
of the Implementing Agencies and also the extent to
missions; and independent mid-term project evalua-
which they would incorporate GEF objectives into
tions where project duration will exceed three years.
their non-GEF operations. They believed such capacity
Risk rating is being done in all World Bank submis-
concerns could be addressed in part through the
sions and is increasingly being done by the other
streamlining of project development procedures; pro-
Implementing Agencies. Baseline information address-
mulgation of focal area strategies as well as guidelines
ing what a host government would do in the absence of
on such subjects as participation, incremental cost
a GEF project is routinely included in incremental cost
calculations, definition of global benefits,
analyses. But full baseline determinations that address
sustainability, and innovation; and training of Imple-
the state of affairs with regard to a country's loss of
menting Agency and developing country staffs on
forest cover, improving energy efficiency, etc. are not
these concepts and practices.
being systematically performed by any of the Imple-
menting Agencies. The monitoring and evaluation
566. The Operational Strategy and Operational Pro-
team plans to address this issue soon. Independent
grams have been developed to provide guidance on
mid-term evaluations are not being done systemati-
how GEF should address each focal area. In addition,
cally, although the UNDP and UNEP have undertaken
efforts have been undertaken to streamline project
such reviews of some of their larger and lengthier
development procedures. The streamlining and sim-
projects. Instead, the World Bank--and to a lesser
plification process is ongoing. Guidelines on incre-
extent, the UNDP and UNEP--tend to conduct project
mental cost calculations and stakeholder participation
monitoring and interim evaluations internally, for ex-
have been developed but not on sustainability or inno-
ample through the use of staff supervisory reports.
vation.
562. The GEF monitoring and evaluation plan calls for
567. There has been no independent review of Imple-
a number of non-project-specific evaluations and the
menting Agency capacities; it was not within the terms
establishment of performance indicators pertaining to
of reference of the study team to undertake such a
GEF's programs (e.g. the ten operational programs),
review.
GEF's socio-economic impacts in host countries, GEF's
impacts on host-country institutions and policies, and
568. For discussion and evaluation of the effectiveness of
GEF projects's environmental impacts. Some initial
guidelines for the management of GEF operations, see
work has been done to develop these.
chapter IV, section C, on GEF roles and responsibilities;

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Follow-up to the Pilot-Phase Evaluation 91
chapter III, section D, on stakeholder participation; chapter
III, section B on country-driven projects and section D on
V on GEF project cycle procedures; and chapter V, section
stakeholder participation.
A, on project implementation issues.
576. Recommendation 8 of the Pilot Phase evalua-
569. Recommendation 7 of the Pilot Phase evalua- tion: Establish mutually beneficial collaboration with
tion: Improve participation in the GEF program at the
nongovernmental organizations.
country and community levels.
577. As stated under recommendation 7 above, public
570. The Pilot Phase evaluators were concerned about
participation has generally improved in GEF project
inadequate participation by governments and commu-
development, and the GEF process is one of the most
nities in identifying and shaping Pilot Phase GEF
inclusive project development processes in some
projects. They believed such participation was neces-
countries. Yet many local NGOs continue to express
sary for GEF to have broader impact within a country,
concerns about their limited access to information and
such as developing and strengthening national envi-
involvement in GEF project development other than in
ronmental action plans and generally increasing con-
the Small Grants Programme. They state that they are
cern for the global environment.
often consulted in a token manner or only after a
project has been under development for some time. In
571. The study team found that in rapidly industrial-
some cases, ministries concede that they intentionally
izing countries, the government is the primary initiator
exclude NGOs from participation in project design.
of project ideas and participates actively in project
This is based in part on the ministries' opinion that
development; in some other countries, the Implement-
most NGOs are ill equipped to participate in the tech-
ing Agencies play the dominant role in project devel-
nical and financial analyses involved in project formu-
opment. Most recipient government officials do not
lation and are more suitably used for project
participate in the process of calculating incremental
implementation and information dissemination. It is
costs, which is usually done by foreign consultants.
also based on the ministries' belief that most NGOs
will not be constructive and will instead, through the
572. Recipient governments are gradually increasing
continuous raising of objections, obstruct worthwhile
their ability to develop project concepts that are eli-
projects.
gible for GEF funding, as indicated by an increasing
proportion of project ideas received by Implementing
578. The picture is quite different for certain interna-
Agencies that meet eligibility requirements.
tional NGOs. The Implementing Agencies commonly
consult with and involve international organizations in
573. In some of the countries visited by the study
preparation of GEF projects. In such cases, the NGOs
team, broadly based participation was limited by the
are tantamount to consulting firms; as such, they must
government. Key government ministries are often ei-
abide by the Implementing Agencies' rules on confi-
ther marginalized or completely circumvented in iden-
dentiality and participation, including the sharing of
tifying and preparing GEF projects. The Focal Point
information with other NGOs.
ministry itself sometimes excludes some ministries
from GEF decisionmaking.
579. For more on NGO involvement in GEF project devel-
opment, see chapter III, section D, on stakeholder partici-
574. The GEF Secretariat has promulgated guidelines
pation.
for stakeholder participation in GEF projects that go
beyond existing Implementing Agency policies on
580. Recommendation 9 of the Pilot Phase evalua-
public involvement in GEF-related activities. Strategies
tion: Ensure that strategies and program guidelines are
for stakeholder involvement are a required part of
in place before program initiatives are undertaken with
every project proposal. However, not all projects have
the funds anticipated from the replenishment for GEF
implemented the guidelines in practice. The GEF Sec-
II.
retariat is in the process of developing indicators of
stakeholder participation in GEF projects.
581. This recommendation has to do with the timing
of new initiatives relative to the preparation of relevant
575. For more information on government and public
guidelines and strategies. The Pilot Phase evaluators
participation in GEF project development, see in chapter
were concerned that funds would start to be allocated

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92 Study of GEF's Overall Performance
for certain focal areas or new projects prior to the
ments in better-defined categories, and improve over-
adoption of the guidelines and strategies called for
all management of GEF operations. These were all
under recommendation 2.
serious efforts to improve clarity, coordination, man-
agement, and ultimately the effectiveness of GEF. In
582. This recommendation was not followed by GEF.
general, these actions have been effective and benefi-
The basic strategies of GEF are contained in the Opera-
cial. Indeed, GEF does have a clearer identity and
tional Strategy, which was presented to the GEF Coun-
strategy. It is better organized and better managed, and
cil in October 1995. Earlier in 1995, however, while
NGOs are more involved.
the strategy was still being drafted, the council decided
to program $280 -$340 million or roughly 15 percent
584. But in some cases, GEF has either not imple-
of its total resources. 80
mented the recommendation or has implemented it
partially. It did not refrain from funding projects dur-
OVERALL ASSESSMENT OF THE FOLLOW-UP TO THE PILOT
ing the period before the Operational Strategy and
PHASE EVALUATION
Programs were adopted, nor did it choose to imple-
ment the recommendation to broaden the range of
583. The GEF Secretariat and GEF Council have taken
Implementing Agencies beyond the existing three. And
action on most, but not all, recommendations in the
although project cycle procedures have been stream-
Pilot Phase evaluation. They have prepared documents
lined, as called for in the independent evaluation, it is
on the GEF Instrument, Operational Strategy, Opera-
arguable that the reforms to date have not adequately
tional Programs, project cycle, incremental cost calcu-
addressed the problem. The recommendation for a
lations, and many other topics. These have served to
permanent mechanism for identifying and applying
articulate GEF mission and strategy, focus GEF invest-
lessons has only been partially implemented, thus far.
80 Global Environment Facility, Annual Report 1995, p. 2.

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Conclusions 93
VIII. CONCLUSIONS
585. GEF has had to evolve quickly as a funding
new and additional, but it did find that some countries
mechanism for global environmental measures in de-
have not distinguished between funding for GEF and
veloping countries in general and for the Framework
general development cooperation, which does not en-
Convention on Climate Change and the Convention
courage additionality.
on Biological Diversity in particular. Endowed with
limited resources and an untested organizational struc-
588. GEF has been able to mobilize a small but grow-
ture and facing high expectations and considerable
ing level of private-sector financing for projects, but
political constraints, GEF has had fewer than four
relatively little from private financial institutions. Ma-
years of regular operations to create the institutional,
jor barriers to increasing support from the financial
policy, and procedural bases for a system of selecting
sector exist, particularly GEF's long and complex ap-
and implementing effective projects to reduce global
proval procedures and the comparatively greater risk
environmental threats.
of GEF projects compared with regular commercial
projects. Thus, the study team concluded that more
586. The ultimate test of GEF's performance will be a
could be done by the GEF family to increase the attrac-
combination of the cumulative impact of GEF projects
tiveness of GEF activities to the private sector.
on the physical state of the environment and its ability
to influence policies and catalyze activities for global
B. COUNTRY-LEVEL ISSUES
environmental benefit by others. The study team as-
sessed the performance of GEF only in mobilizing
589. The study team examined some dimensions of
resources for protection of the global environment, in
GEF's performance at the country level, including the
making its presence felt in recipient countries, in creat-
strength of the Focal Point system, GEF's impact on
ing an effective set of organizational arrangements and
country policies and programs and awareness of the
project cycle procedures, and in programming GEF
global environment, and stakeholder participation in
resources. In conducting the Overall Performance
GEF projects. It found that, although it has made
Study, the study team was conscious of the brevity of
modest contributions to raising awareness of global
the operational phase of GEF, the relatively small size
environment issues, GEF has not been able to achieve
of GEF funding, and of the relativity of the indicators it
visibility in recipient countries beyond a small circle of
chose to assess GEF's success.
government officials and NGOs.
A. RESOURCE MOBILIZATION
590. Moreover, in some countries the Focal Point sys-
tem in recipient countries has not yet been adequately
587. Considering the magnitude of investment needs
institutionalized, in the sense of having formal coordi-
in the focal areas and the small amounts available to
nating mechanisms for interacting with relevant gov-
GEF, it has to leverage resources as effectively as pos-
ernment offices and other country stakeholders. The
sible for global environmental benefits. As intended by
study team recognized that the weaknesses of the Focal
the donor countries, the availability of GEF grants has
Point system reflect the political realities in individual
succeeded in leveraging significant additional funding
countries but found that the lack of a comprehensive
for projects from a number of sources, particularly
GEF strategy for strengthening Focal Points and com-
through World Bank loans associated with GEF
municating with key constituencies in recipient coun-
projects, although the study team found that the extent
tries has also limited progress in this area.
of genuine leveraging of funds has been overstated in
GEF documents. It also believes that there is a danger
591. Based on its analysis of projects in the sixteen
of placing too much emphasis on leveraging in relation
countries on which it had country reports, the study
to other measures of GEF's success. The team could
team found that in some cases, GEF projects have had
not establish whether or not the funding for the GEF is
significant impacts on country policies and programs

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94 Study of GEF's Overall Performance
that go beyond the immediate objectives of the
and complexity of directives from the latter. Although
projects. Given the relatively small size of the GEF
its initial system for processing proposals for enabling
projects, the team found that these changes represent a
activities was far too time-consuming, GEF has also
positive achievement.
responded effectively to the request of the Conven-
tions to streamline its procedures for approval of en-
592. A key project issue is how successful GEF has
abling activities, resulting in a major acceleration of the
been in providing for the financial sustainability of
process. The problem of how best to assist countries in
GEF-funded activities. The study team found that most
preparing national reports to the conventions, how-
project proposals in GEF 1 did not contain serious
ever, remains unresolved.
financial planning for continuation after GEF funding.
It also noted, however, that GEF has not been realistic
596. The team found that increasing the number of
about the time needed in some cases to demonstrate
organizations authorized to propose projects directly
the project's value and viability to potential future
to the GEF Secretariat could result in an increase in the
funders.
number and types of viable GEF projects, and that
increased competition among Implementing Agencies
593. A significant achievement of GEF is its leveraging
could help to reduce the transaction costs of such a
of greater stakeholder participation in project design,
move. Although such a move could also have some
development, and implementation than would have
disadvantages, the team believes it would have to be
been the case otherwise. The study team found that the
weighed against the advantages.
issuance of GEF guidelines calling for stakeholder par-
ticipation resulted in project designs that include de-
597. The calculation of incremental costs of projects
tailed and comprehensive plans for public
has been one of the most difficult aspects of the transi-
participation issues, especially in the biodiversity focal
tion of GEF from the Pilot Phase to the operational
area.
phase. Implementing Agencies had not mastered the
concept in the early phase of GEF 1, based on their
C. INSTITUTIONAL AND PROJECT CYCLE ISSUES
project proposals. However, by the end of GEF 1 they
had at least begun to make systematic presentation of
594. The study team found that GEF's institutional
cost estimates. The methodology has become increas-
structure has evolved from a rudimentary set of ar-
ingly standardized in climate change, but legitimate
rangements to a relatively effective set of mechanisms
differences still arise over baseline assumptions. With
for coordination and decisionmaking in a short period.
regard to biodiversity, the team had much less confi-
The team found that despite differences in culture,
dence in the rigor of the calculations. The team found
mandate, and structure among Implementing Agencies
that the most serious problem with incremental cost
and between them and the Secretariat, the GEF has
calculations is that recipient country officials are gen-
taken a series of organizational and procedural steps
erally excluded from the process, because they do not
that have resulted in the first systematic coordination
understand the incremental cost concept or the possi-
of pipeline development among the Implementing
bility of negotiating with the Implementing Agencies
Agencies, the streamlining of the project review pro-
on the basis of a range of incremental cost estimates
cess, and the beginning of joint consideration of the
reflecting different assumptions.
key strategic issues in programming. The Implement-
ing Agencies have also made some progress in shorten-
598. The main shortcoming identified by the team is
ing their own project cycles. Although the project cycle
that the Implementing Agencies have done much less
is still lengthy, the team noted that some of the key
to mainstream the global environment in their regular
factors contributing to the length of the project cycle
operations than the team believed was possible. Al-
are under the control of recipient government rather
though the World Bank has made a significant contri-
than GEF.
bution to GEF through its cofinancing of GEF projects,
neither the Bank nor UNDP has done as much as it
595. GEF has implemented the guidance of the
could to integrate global environmental concerns into
Framework Convention on Climate Change and the
its regular project programming. Although UNDP was
Convention on Biological Diversity in an appropriate
restricted in this regard by its five-year project plan-
and timely manner, especially considering the number
ning cycle during GEF 1, it could have done more to

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Conclusions 95
integrate the global environment into programming in
should be financed by the country itself. The team is
its Country Cooperation Frameworks over the past
conscious of the difficulty of clearly delineating activi-
two years. The Bank has taken no meaningful steps to
ties for global benefit that should be financed by the
reduce the global environmental impact of its tradi-
GEF from those that are for national benefit and
tional role as financier of fossil fuel power develop-
should therefore be financed by governments them-
ment. Nor has it put into place the necessary staff
selves.
incentives for encouraging work on GEF projects.
UNEP has been slow to internalize the principle that
E. OVERALL CONCLUSION
GEF projects should be additional to the core activities
of an Implementing Agency and has not provided any
601. The study team concluded that the GEF has
incentives for staff work on the GEF.
generally performed effectively with regard to rapidly
creating new institutional arrangements and ap-
D. PROGRAMMING ISSUES
proaches to programming its resources in the four
focal areas. The GEF has also been relatively successful
599. GEF has made considerable progress in pro-
in leveraging cofinancing for GEF projects, and has
gramming resources strategically for greatest global
had some positive impacts on policies and programs in
benefit within the four focal areas. Considering that no
recipient countries. A significant accomplishment has
agreed basis for programming resources existed when
been the development of the Operational Strategy and
GEF became operational in 1994, the team views the
Operational Programs, and the advancement of stake-
development of the Operational Strategy and Opera-
holder participation in GEF projects. On the other
tional Programs, in cooperation with the convention
hand, the Implementing Agencies have made little
secretariats and based on convention guidance, as one
progress in mainstreaming the global environment,
of the most significant achievements of GEF. The team
and the team believes that much more needs to be
also found that the GEF has successfully balanced
done in several areas, including strengthening the Fo-
capacity building and investment activities in the port-
cal Point system, improving the process of calculation
folio by generally combining both types of activities in
of incremental costs, better planning for the financial
the same project.
sustainability of projects, shortening the length of the
project cycle, and raising awareness of the GEF and of
600. The study team concluded that GEF has per-
global environmental issues.
formed well in its choices of project interventions to be
supported in the biodiversity, climate, and interna-
602. The study team believes that the progress made
tional waters focal areas. Although the team recognizes
in the brief period of GEF 1 and the potential for much
that there are political factors that may restrict the
greater success, particularly in mainstreaming, consti-
GEF's freedom with regard to prioritization in the
tutes a basis for building a much stronger GEF in the
biodiversity focal area, it found that greater priority
near future. The success of the GEF ultimately hinges,
setting is necessary, in part to establish a clearer dis-
of course, on political support in donor and recipient
tinction between biodiversity conservation that should
countries for mainstreaming global environmental
be financed by the global community and that which
concerns into development.

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96 Study of GEF's Overall Performance
ANNEX 1.
TERMS OF REFERENCES FOR A STUDY OF GEF'S OVERALL PERFORMANCE
(INCLUDING SCOPE OF WORK FOR THE EXPERT ADVISORY PANEL)
I. BACKGROUND
ference on Environment and Development, and relevant
international treaties such as the Montreal Protocol.
The Global Environment Facility (GEF) is a fi-
nancial mechanism that promotes international coop-
The "Instrument for the Establishment of the
eration and fosters actions to protect the global
Restructured GEF", the GEF Operational Strategy and
environment. The grants and concessional funds dis-
other key documents and Council decisions have laid
bursed complement traditional development assis-
down additional objectives and guidelines for the GEF
tance by covering the additional costs (also known as
itself as well as for GEF-supported projects. These are
"agreed incremental costs") incurred when a national,
i.a.
regional, or global development project also targets
·
to establish GEF as the principal mechanism for
global environmental objectives. The GEF has defined
global environment funding;
four focal areas for its programs: biological diversity,
climate change, international waters and ozone layer
·
to ensure a governance structure that is transpar-
depletion. Efforts to stem land degradation as they
ent and democratic in nature;
relate to the above four focal areas are also eligible for
·
to promote universality in its participation and to
GEF funding.
provide for full cooperation in its implementa-
tion among UNDP, UNEP and the World Bank;
After a Pilot Phase of three years, the Restruc-
tured Global Environment Facility (GEF) was made
·
to secure that projects are country-driven;
operational in 1994 with a pledged core fund of US$ 2
·
to support capacity building and enabling activi-
billion. Project approvals have increased steadily over
ties (These activities are designed to help coun-
the years, and now total about US$ 1.6 billion.
tries fulfill their commitments under the two Rio
Conventions on climate change and on
The GEF Council, comprising 32 members from
biodiversity and relate to national reporting and
developing and developed countries, as well as coun-
development of national strategies in these two
tries in transition, is the governing body. GEF's Imple-
focal areas);
menting Agencies (IAs) are UNDP, UNEP, as well as
the World Bank, which also serves as GEF's trustee.
·
to create participatory schemes in the local con-
The Scientific and Technical Advisory Panel (STAP) is
text at all stages of project design and implemen-
an independent advisory body that provides strategic
tation, particularly by involving local stakeholder
scientific and technical advice.
communities and NGO expertise;
·
to gain experience with a broad range of projects
The GEF serves as the interim financial mecha-
in order to identify highly effective approaches
nism for the Convention on Biological Diversity and
that can be replicated in different settings and
the UN Framework Convention on Climate Change. In
regions or serve as demonstration models in the
this function the GEF receives formal guidance from
public and private sectors;
the Conference of the Parties to the Conventions and is
accountable to them. In its work related to interna-
·
to make use of innovative technologies and pro-
tional waters and the phase out of ozone depleting
cedures;
substances the GEF takes into consideration guiding
·
to use the most cost-effective instruments avail-
principles from Agenda 21 of the United Nations
Con-
able; and

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Annex 1. Terms of Reference 97
·
to encourage co-financing arrangements and fol-
ments, the study will assess the extent to which effec-
low-up activities supported by recipient and do-
tive cooperation mechanisms and procedures have
nor governments, multilateral aid organizations,
been established among the GEF Secretariat, IAs,
NGOs, and the private sector.
STAP, convention secretariats, and other cooperation
partners. The study will also examine the extent to
The study of GEF's Overall Performance will not
which the GEF has encouraged integration of global
address the first two bullet points, but will otherwise
environmental objectives into mainstream operations
assess to what extent the GEF has achieved, or is on its
of multilateral and other aid organizations.
way to achieving, the main objectives and guidelines
laid down during the Pilot Phase in 1991 and during
GEF'S PROGRAMMING EFFORTS
the restructuring in 1994. The 1994 Independent
Evaluation of the GEF will serve as useful background
The study will assess GEF's approaches and strat-
material in this respect.
egies to operationalize Convention guidance and
Council decisions. With a primary focus on the Opera-
The study report will be an input for the GEF
tional Strategy and Operational Programmes, it will
Assembly to be held in early 1998, but is equally
address criteria and priorities for developing the over-
intended to inform all GEF stakeholders, particularly
all portfolio, project selection, the choice of viable
the convention secretariats, the GEF Council, govern-
concepts, technologies and designs as well as systems
ments Implementing Agencies, executing agencies,
for learning from experience, as well as demonstration
NGOs and the interested public.
and replication of promising approaches.
II. SCOPE OF WORK
PROJECT IMPLEMENTATION LESSONS
PROVISION OF RESOURCES
The GEF's project portfolio is still at an early
stage of implementation, and therefore does not allow
The study will firstly assess the GEF's role as a
for conclusive aggregated analyses of outcomes and
catalyst in providing and leveraging resources for glo-
impacts. However, the nearly 100 projects that have
bal environmental efforts by developed and develop-
been under implementation for more than one year
ing country governments, multilateral and other
have just been subjected to the second
Project Imple-
institutions and the private sector. It will also study
mentation Review. Likewise, an ongoing "Evaluation of
whether GEF's "incremental cost financing" has had
Project Lessons" will provide useful portfolio insights.
the effect of mobilizing new and additional resources
for global environment efforts.
The study will distill and present the main les-
sons learned from GEF's project monitoring and evalu-
ISSUES AT THE COUNTRY LEVEL
ation activities.
GEF has been assigned the role to assist develop-
III. SUBJECT AREAS FOR ASSESSMENT
ing countries' efforts to fulfill their responsibilities un-
der the Convention on Biological Diversity and the UN
1. INCREASING RESOURCES FOR GLOBAL ENVIRONMENTAL
Framework Convention on Climate Change. The study
EFFORTS
will examine this role as well as the modalities of
cooperation between the GEF Secretariat, implement-
The study team shall:
ing and executing agencies vis-à-vis host governments,
1.1
assess the effectiveness of the GEF in providing
national institutions and stakeholder groups in
additional funds for developing countries' global
projects, and the extent to which GEF has helped
environmental efforts;
promote global environmental objectives in recipient
countries beyond the narrow project settings.
1.2
assess the extent to which the GEF in the pilot
and present phases has been able to leverage
INSTITUTIONAL ISSUES AND PROCEDURES
other resources for developing countries global
environmental efforts beyond GEF contribution
On the basis of GEF's roles and functions with
in the form of co-financing (e.g. counterpart,
regard to the international conventions and agree-
Implementing Agencies, bilateral), parallel fi-

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98 Study of GEF's Overall Performance
nancing and financing for complementary and
grating GEF activities into the country environ-
follow-up activities.
mental programs and contexts.
1.3
assess the frequency of use of the incremental
2.5
examine to what extent studies and national com-
cost approach in project preparation, especially
munication efforts, supported by the GEF, have
in GEF's more recent portfolio, and its effects on
encouraged involvement of local expertise and
identifying and selecting cost-effective ways of
have promoted institutional capacity building;
achieving global environmental benefits as well
2.6
examine the effectiveness of modalities of coop-
as linking developmental and global environ-
eration between the IAs and recipient govern-
mental objectives.
ments under varying circumstances, and the
1.4
assess the efficiency of the GEF mechanism in
degree to which the identification and imple-
disbursing financial resources once a project is
mentation of projects is country-driven;
approved by the GEF Council and the Imple-
2.7
examine the degree to which participation of
menting Agencies.
national or local interest groups and NGOs has
been institutionalized or otherwise secured in
2. GEF POLICY ISSUES AT THE COUNTRY LEVEL
decision making during project identification,
design and implementation;
The assessment will be based mainly on information
resulting from visits to a sample of host countries.
2.8
assess how consideration is given to the principle
that GEF-funded efforts should become finan-
The study team shall:
cially sustainable once the project is completed
i.e. what efforts are made to secure long term
2.1
assess the GEF's contribution to country-level
government, private sector or other stakeholder
processes that prepared countries to implement
contributions, or to establish trust funds, user
the Convention on Biological Diversity and the
fees or other revenue schemes for recurrent cost
UN Framework Convention on Climate Change;
financing in various focal areas and national con-
assess its assistance to countries towards fulfill-
texts.
ing their reporting requirements to the Conven-
tions, towards establishing national action plans
2.9
For transboundary projects, assess the adequacy
and towards taking related measures in compli-
of collaboration mechanisms and approaches be-
ance with the Conventions;
tween the various national and international ac-
tors involved.
2.2
Examine how incremental costs are negotiated
and agreed between the host governments and
3. INSTITUTIONAL ISSUES AND PROCEDURES
GEF in project preparation;
2.3
examine to what extent environmental policies
In close coordination with the convention secretariats
which have a bearing on the success of GEF-
in order to avoid unnecessary overlaps with their on-
funded projects (e.g. price regimes) have been
going reviews of GEF, the team shall:
addressed in project documents, agreements and
3.1
examine how relations between the CBD and the
during project implementation;
UN FCCC and the GEF have evolved, especially
2.4
consider the extent to which GEF has contrib-
with regard to operationalizing convention guid-
uted to an increased awareness and support of
ance in programs and projects; identify possible
the global environment agenda at the country
areas where further or clearer guidance would
level; assess the GEF's information sharing activi-
assist GEF's programming efforts.
ties and contact network with relevant institu-
3.2
examine the information sharing and the formal
tions/organizations in participating countries.
and informal collaboration and coordination be-
Consider whether institutions and organizations
tween the relevant convention secretariats and
implementing GEF-funded projects have devel-
the GEF Secretariat, as well as between the Par-
oped and contributed to transmitting a corporate
ties to the Conventions and the GEF Council
identity and organizational mission, and exam-
members;
ine whether the GEF Focal Point system is inte-

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Annex 1. Terms of Reference 99
Further, the team shall:
·
demand side versus supply side measures
(e.g. providing better technologies for supply-
3.3
examine GEF's contribution to mainstreaming
ing energy versus reducing energy demand at
global environmental concerns into regular op-
the source);
erations and policy advice in the participating
agencies; examine the extent to which proce-
·
capacity building and research activities ver-
dural steps have been taken in the IAs to secure a
sus investment activities;
better integration of global environmental con-
4.3
assess broadly how successful the GEF has been
cerns in programmatic objectives and at the
in supporting projects which can be expected to
project level;
result in clearly identifiable global environmental
3.4
assess the current GEF procedures and guide-
benefits in the short or long run; and in
lines for Project Cycle Management, including
operationalizing and disseminating the incre-
planning, implementation, monitoring and
mental cost concept in a useful way;
evaluation, as well as estimating the baseline
4.4
assess whether the GEF via its project portfolio in
situation of projects and selection of project indi-
the four focal areas is making use of viable con-
cators. Consider whether the expedited proce-
cepts, approaches, designs and technologies; as-
dures for project approval are well balanced with
sess whether the GEF is focusing on
regard to securing quality at entry as well as
environmental issues or areas which constitute
expedient decision making.
large threats or hold the promise of big gains;
3.5
examine the division of work and the mecha-
discuss whether GEF is striking an adequate bal-
nisms for cooperation between the GEF Secre-
ance between supporting established project
tariat, the Implementing Agencies, STAP,
types on the one hand and encouraging
executing agencies, NGOs, and other relevant
innovativeness, experimentation, new and un-
organizations; assess to what extent the roles are
proved approaches and designs on the other.
complementary and whether the cooperation is
4.5
examine the extent to which the composition of
effective in utilizing the combined institutional
the GEF project portfolio is driven by the priori-
competence in a satisfactory way;
ties defined in the Operational Strategy, the Op-
3.6
assess the adequacy of the procedures and
erational Programs or other GEF key document;
achievements of the GEF Secretariat and Imple-
assess the cooperation between the Secretariat
menting Agencies in drawing lessons for ongoing
and Implementing Agencies with governments,
amendments and improvements of operations
NGOs and other stakeholders to prioritize and
and management.
identify projects that respond to GEF objectives,
4.6
assess the extent to which GEF activities have
4. GEF'S PROGRAMMING EFFORTS
contributed to, or have the potential to contrib-
ute to, learning from experience, demonstration
The team shall:
and replication effects.
4.1
describe how GEF's program objectives, goals
and criteria have evolved on the basis of the
5. PROJECT IMPLEMENTATION LESSONS
above-named conventions, international agree-
ments, the GEF Instrument, the Operational
Drawing mainly on the experience of the 1996 GEF
Strategy, Operational Programs, as well as other
Project Implementation Review, the "Evaluation of
Council documents or decisions.
Project Lessons", as well as its own first hand informa-
tion, the team shall:
4.2
discuss GEF's programming efforts concerning:
5.1
Discuss the main lessons learned in project
·
balancing of focal areas;
implementation to date, i.a.:
·
short term and long term measures (e.g. im-
·
Prospects for sustainability and replication of
mediate reduction of greenhouse gas through
project outcomes, including global environ-
technology transfer versus capacity building
mental benefits;
to teach energy conservation measures);

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100 Study of GEF's Overall Performance
·
Ways in which global environmental benefits
executing agencies, STAP, NGOs and other organiza-
and incremental costs are estimated in
tions and with the preparation of the final report.
projects;
National or regional team members will be re-
·
Experience with timely provision of co-fi-
cruited to take part in the conduct of the country
nancing and government counterpart contri-
studies. These will have general competence in the
butions;
same areas as the international team members, and
·
Experience with stakeholder involvement;
good overview of the national issues, institutions and
persons in the relevant fields.
·
Private sector (NGO and for-profit) involve-
ment in the project;
An International Expert Advisory Panel of about
·
Experience with regional collaboration
6 - 7 renowned members with extensive background
mechanisms;
and knowledge of global environmental issues and
·
The extent to which the project includes inno-
measures will be convened by the GEF Senior Moni-
vations, and is carrying out innovative ap-
toring and Evaluation Coordinator. It is envisaged that
proaches; and
the International Panel will meet at the inception and
final stages of the study.
·
Information exchange and communication,
including demonstration and replication of
The principal objectives of the panel are to pro-
viable projects.
vide strategic guidance on the design and execution of
the study, add assurance that the study is complete in
6. FOLLOW-UP OF THE 1994 INDEPENDENT EVALUATION
coverage and a fully independent review of the accom-
plishments of the GEF in the areas examined (see
Describe and assess the adequacy of the follow-up of
attached Terms of Reference for the Panel).
the 1994 Independent Evaluation of the GEF.
V. MODE OF WORK
IV. STUDY TEAM
The team members will familiarize themselves
The study team will consist of a core team of
with a Background Study that is being prepared for the
international experts and a number of national or re-
GEF Secretariat, as well as other relevant GEF docu-
gional experts.
ments, including the May 1994 Independent Evaluation
of the GEF. Further documentary work on the basis of
The team leader will have a high international
country, institutional and project files is envisaged.
standing, acknowledged integrity and good knowledge
of global environmental issues. He or she will lead the
The team will prepare an Inception Report,
main work of operationalizing the study and be re-
which is designed to operationalize the study, and
sponsible for the drafting the final report. He/she will
which will be discussed at, and finalized after, a semi-
be employed full-time for the duration of the project
nar with the Advisory Panel, GEF staffs and selected
and be situated in the in GEF Monitoring and Evalua-
individuals. The report will contain an overview of
tion Unit in the GEF Secretariat and work under the
data sources, plans for how to address the various
guidance of the Senior Monitoring and Evaluation Co-
study issues, outlines of questionnaires or structured
ordinator.
interview guides as well as a more detailed list of
interviewees and modes and schedules for the imple-
The other international team members will be
mentation of the study.
renowned focal area experts, with experience in policy
and program formulation, evaluation, and/or manage-
The number of countries visited by the study
ment of environmental or development assistance.
team members will be limited to 10. The countries
Most international team members will participate in
were selected on the basis of the following criteria:
country visits. Some are expected to be available for
other work such as conducting interviews with the
·
Number of GEF projects and size of funds allo-
convention secretariats, the GEF Implementing and
cated,

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Annex 1. Terms of Reference 101
·
Good representation of the various focal areas,
tions, including in stakeholder involvement in GEF
policy and projects and in Implementing Agencies
·
Countries hosting well performing as well as less
assistance processes.
well performing projects,
·
Length of GEF involvement,
The principal objectives of the Panel are to pro-
vide strategic guidance on the approach and imple-
·
Various institutional models for responding to
mentation of the study and added assurance that the
GEF initiatives,
study is complete in coverage and a fully independent
·
GDP per capita,
review of the accomplishments of the GEF in the areas
·
Geographical representativeness.
to be examined.
Teams comprising two international members
The Panel will be convened early in the imple-
and one national member will conduct studies in Bra-
mentation of the Overall Performance Study to review
zil, China, Egypt, India, Indonesia, Kenya, Mexico,
the study's scope of work, the method of conducting
Poland, Russia, and Zimbabwe. In order to seek a more
the study, and the work plan developed by the study
comprehensive picture of GEF at the country level,
team. This meeting is expected to occur in June, 1997.
structured interviews by local consultants will be con-
At this first meeting, the Panel will select from its
ducted in Argentina, Costa Rica, Côte d'Ivoire, Jordan,
members a Chairperson. On the basis of its review, the
Philippines, and Vietnam.
Panel will prepare a report to the Senior M&E Coordi-
nator and the study's Team Leader on its views regard-
On the basis of specific agreements in each case,
ing the work plan and approach.
the Country Focal Points assisted by the field missions
of the Implementing Agencies (IAs) of the GEF, the
The Panel will be convened a second time to
World Bank, UNDP and UNEP will assist in the prepa-
review the draft final report of the study team. This
ration for the country assessments.
The main report
meeting is expected to occur in October, 1997. The
will consist of 60-80 pages plus appendices, including
Panel will meet with the Team Leader and other mem-
i.a. list of all interviews and data sources. It will be
bers of the evaluation team to review and provide
written in MS Word 6.0.
guidance on their preliminary findings and conclu-
sions. The Panel will prepare a report to the Senior
VI. S
M&E Coordinator which provides its comments and
COPE OF WORK FOR THE EXPERT
suggestions on the report, and recommendations for
ADVISORY PANEL
further study. This report will be submitted by the
Senior M&E Coordinator to the GEF Council and GEF
An international Expert Advisory Panel will be
Assembly, together with the final study report.
convened by the GEF Senior Monitoring and Evalua-
tion Coordinator to provide overall guidance to the
In addition to these two formal meetings, the Expert
study team. It will be made up of 6-7 members with
Advisory Panel will be available to consult with the
extensive background in and excellent knowledge of
Senior M&E Coordinator, the study's Team Leader,
global environmental issues and measures. Panel
and individual team members on matters related to the
members will be representative of different regions of
conduct, at various stages, of the Overall Performance
the world and GEF stakeholder groups, including
Study.
NGOs and have expertise in key aspects of GEF opera-

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102 Study of GEF's Overall Performance
ANNEX 2.
REPORT OF THE INTERNATIONAL EXPERT ADVISORY PANEL FOR THE STUDY
OF GEF'S OVERALL PERFORMANCE
JANUARY 1998
Upon encouragement from the GEF Council at
able numbers and there is no agreement as to criteria.
its Spring 1997 meeting, the Senior Monitoring and
A global organization/mechanism to establish the va-
Evaluation Coordinator in the GEF Secretariat con-
lidity of such numbers does not exist. Nevertheless, it
vened an International Expert Advisory Panel to pro-
is clear that levels of funding for the environment, and
vide guidance to the Study of GEF's Overall
to address global environmental problems in particu-
Performance and to assure that the study is complete
lar, are still inadequate in relation to the threats and
in coverage and a fully independent review.
problems. New and additional resources are urgently
needed by GEF, national governments and other inter-
The Panel met in Washington, D.C. on June 27,
national organizations, based on common but differ-
1997, to review the Terms of Reference and Inception
entiated responsibilities among nations. The donors
Report for the study and on October 27-29, 1997, to
need to be careful, however, not to further degrade the
review the first draft of the report prepared by the
concept of "new and additional", given its importance
study team. The Panel provided detailed reactions,
to the underlying political support for the GEF.
comments and guidance to the GEF Senior Monitoring
and Evaluation Coordinator and to the study team to
There would be considerable benefit in establish-
assist it in completing the report of the study. The final
ing more coordinated strategies at the country level to
draft of the team's study was shared with the Panel for
address environmental problems. In this regard, the
further review and comment prior to the completion of
Panel supports the recommendation of the study team
the study, and a third meeting was held in Paris on
that GEF implementing agencies, in association with
January 17, 1998, to prepare this report. All the com-
national governments, initiate Environmental Consul-
ments to the draft study by Council members and
tative Group meetings at the country level. Such
others were shared with the Panel.
groups would be made up of all donors providing
climate, biodiversity and other GEF mandate-related
In addition to its comments on the study report
assistance to the country, as well as a range of govern-
itself, the Panel agreed on a number of conclusions and
ment agencies and other organizations, including the
recommendations to the GEF Council on the topics
private sector, interested in environmental issues. The
examined by the Overall Performance Study. These are
objective of these consultative groups would be to
presented in this report.
advise on the reduction of duplication, identification
of gaps where additional efforts are needed, ways to
MOBILIZATION OF RESOURCES FOR THE GLOBAL
make optimum use of resources to address global envi-
ENVIRONMENT
ronmental problems, and how to assure the continua-
tion and sustainability of activities initiated with
Based on the information analyzed for the study,
support from the GEF.
it appears that there has been a gradual overall increase
in investments for the environment over the last five
The Panel believes that it is important to empha-
years. Levels of official development assistance (ODA)
size the international public good nature of the GEF
may have decreased, but overall--including invest-
and the need to sustain funding for global environ-
ments by developing countries themselves and the
mental investments over time. The Panel would also
private sector--there has been an increase. This con-
note the responsibility of the developed countries with
clusion is necessarily tentative, since there are no reli-
regard to their own policies and programs that influ-

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Annex 2. Report of Senior Advisory Panel 103
ence global environmental outcomes. The recent
UNDP is limited to date. However, it also noted that, to
Kyoto Conference clarified those responsibilities and
be effective, this kind of mainstreaming has to be built
the importance of action by developed counties in
on partnerships between these implementing agencies
their own realms even as the GEF focuses on global
and governments in recipient countries. Overall coun-
environmental issues in developing countries.
try strategies and programs are not the product of the
World Bank and UNDP alone. National and donor
The GEF should explore additional ideas and
priorities are focused on poverty alleviation, sustain-
mechanisms to expand the involvement of the private
able livelihoods, and elimination of gender inequity.
sector in addressing global environmental issues. This
However, the linkages between these priorities and
would include not only private businesses, but also the
environmental issues, including global environmental
major international philanthropic foundations and en-
issues, are clear and important. To take one example in
vironmental organizations. The Panel recommends
the area of climate change, the energy investments
that the GEF consider organizing a workshop with
(especially fossil fuels) create special challenges for the
private sector organizations such as the World Busi-
World Bank in the evident contradiction between
ness Council for Sustainable Development to suggest
greater energy production and the reduction of green-
opportunities for greater involvement of the private
house gases. The Panel, except for one member, be-
sector. The Panel is concerned about the level of re-
lieves that the Bank will have to do more to take such
sources available to address the issues in the interna-
global impacts into account. The World Bank and
tional waters focal area. The lack of parity with other
UNDP should make greater efforts at the country level
focal areas is addressed in the study team's report, and
to raise awareness of these linkages and of the impor-
the Panel strongly believes that the international com-
tance of addressing environmental issues, and in this
munity will have to address this in the near future in
way increasingly mainstream them in their country
order to enable the GEF and other organizations to
assistance strategies and programs. The proposed na-
devote additional resources.
tional committees for GEF could also help in this
regard. The implementing agencies, in carrying out the
Similarly, the GEF should initiate further steps to
GEF mandate, may also need to re-examine the poten-
identify mechanisms for the expanded involvement of
tial for influencing their other partners, such as the
the international scientific and academic communities
International Monetary Fund.
in the effective implementation of its mandate.
The general roles of the three implementing
There is a need for greater public awareness and
agencies within the GEF should, in the near term,
understanding of global environmental issues and the
remain basically as they are evolving. The Panel ex-
role the GEF is playing to address them. Some of this
pects that this would mean that the World Bank would
effort could be carried out by the GEF directly. In
likely be the major financing channel for disbursing
addition, national committees for GEF, which should
GEF resources. Among the World Bank institutions,
include government, NGO, business, scientific and
the majority of Panel members, through not all, finds
other representatives, could be formed to play a role in
that the International Finance Corporation has signifi-
this regard. There may also be opportunities to work
cant potential to expand its GEF-related financing. As
with regional groupings in this area, as well. At the
for the UNEP, the Panel notes the broad international
country level, the implementing agencies should make
discussion about UNEP's future in recent years, and
greater efforts to describe and identify GEF-funded
the fact that the UN Secretary-General has called for a
activities with the GEF rather than with the agencies
review. The Panel hopes that UNEP will make con-
themselves.
structive strides to play such a useful role as envisioned
for it by the GEF founders. In the future a fourth
INSTITUTIONAL ROLES AND RELATIONSHIPS
"partner" might be the private sector, including foun-
dations--not necessarily as implementing agencies,
The GEF has emphasized the importance of
but as a fuller partner within the GEF, for example, for
mainstreaming the global environment in the Imple-
technology transfer. The recommended workshop
menting Agencies. The Panel is disappointed to note
with the World Business Council for Sustainable De-
the study team's conclusion that mainstreaming of
velopment might explore ways this partnership could
global environmental concerns into the regular (non-
be developed and institutionalized.
GEF) strategies and programs of the World Bank and

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104 Study of GEF's Overall Performance
The Panel believes that the GEF should devote
ing agencies for GEF approval. The Panel stressed that,
continued efforts to streamline the procedures for de-
in fact, neither should it be the role of the implement-
signing, approving and implementing projects, and to
ing agencies to micro-manage projects, since recipient
make these procedures simpler and more nationally-
countries should have the principal project manage-
driven, but without abandoning high quality stan-
ment responsibility.
dards. The UNDP-managed Small Grants Programme
has, by all reports, been very successful in this regard,
The Panel noted the valuable and important
and the new expedited medium-sized project proce-
work performed by the STAP since the creation of the
dures also have potential to make significant strides in
GEF. However, it noted that during the past five years,
this direction. In view of this, the Panel suggests that
a number of other strong, government-approved sci-
the GEF consider raising the ceilings for maximum
entific bodies have been created, including the subsid-
project size under the Small Grants Programme and
iary bodies of the two conventions for which the GEF
under the medium-sized projects procedures with a
is the interim financial mechanism. The Panel recom-
view to increasing the percentage of the projects
mends that the Council review the future mandate,
funded by the GEF that benefit from expedited proce-
scope and role of the STAP taking into consideration
dures. In addition, as a step toward expediting project
the existence of these other bodies.
approval procedures, the Panel concurs with the study
team's recommendation that the GEF Council seri-
COUNTRY-LEVEL ISSUES
ously consider delegating its second review of project
proposals to the Secretariat.
It is important that there is a correspondence
between the project idea and country interests, priori-
The Panel noted the discussion in the draft study
ties and policies. It is not a prerequisite that the idea
report of the merits of expanding the number of GEF
always originate in the country, since the benefits of
implementing agencies from the existing three. This is
GEF projects are designed to transcend national priori-
not a new issue, and has been the subject of a number
ties. Project management should be "driven" by orga-
of NGO letters to the Chairman of the Panel. Upon
nizations and individuals of the stakeholder country or
consideration of the arguments on both sides of this
countries. Finally, ownership is closely related to, and
issue, the Panel believes that, for the moment, the GEF
reflected in, the long-term sustainability of project
should focus on consolidating its strengths and
activities. Thus, even though an idea for a GEF-funded
streamlining procedures and should not, at least for
project may initially come from outside the country, it
the near future, expand the number of implementing
is essential that management responsibility be with the
agencies. However, the Panel encourages the three
country and that the country commitment to and own-
existing implementing agencies to look for increased
ership of the activity be such that it will be sustained
opportunities to involve regional development banks
following the completion of the GEF project.
and other suitable organizations in GEF programs
implemented through them. In addition, the Panel
The Panel believes that the study team brought
recommends that the GEF undertake a study to exam-
out a number of good points on the issue of the use of
ine the potential for lowering transaction costs by in-
foreign consultants in GEF projects, and the impact
cluding other organizations as GEF implementing
this can have on country ownership. The Panel recog-
agencies.
nizes that in areas related to the global environment
there is sometimes a need for expertise from outside
The Panel believes that it is essential for the
developing countries. However, the Panel believes that
effective operation of the GEF that there be a Secre-
the need for foreign consultants is likely more often to
tariat that plays a strong coordinating and catalytic role
be the exception rather than the rule, and that GEF's
within the GEF family. Its focus should be on strategic
implementing agencies should give a strong emphasis
and policy issues, aimed at creating common systems
to involving local and regional expertise in the design,
and approaches for the GEF as a whole. It should
analysis and implementation of GEF projects, includ-
promote strategic alliances within the GEF family and,
ing PDF activities.
for example, with the climate change and biological
diversity convention secretariats. The GEF secretariat's
The GEF's emphasis on stakeholder participation
role should not include micro-management or detailed
has led a number of countries to recognize the positive
review of project designs presented by the implement-
contributions that NGOs and other stakeholders can

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Annex 2. Report of Senior Advisory Panel 105
make to the solution of global environment and na-
In order to ensure greater clarity in the criteria
tional development problems. The Panel encourages
for calculating and negotiating the incremental costs
the GEF to continue its emphasis on stakeholder par-
on which GEF-funded projects are based, the Panel
ticipation and to look for ways to do more in this area,
endorses the recommendation of the study team that a
especially in the area of monitoring and evaluation.
working group of representatives from the GEF and
The creation of national committees for GEF involving
convention secretariats and implementing agencies be
a wide range of organizations and interests, as sug-
formed to explore ways to make the process of deter-
gested earlier, might help identify the ways this could
mining incremental costs more flexible and easier for
be done.
recipient countries.
The GEF has a key role to play in raising aware-
PROGRAMME ISSUES
ness of global environmental issues in the countries
where it works, and in this way helping assure that
In terms of the allocation of resources among
these considerations are increasingly reflected in coun-
developing countries, the Panel endorses the view ex-
try policies, regulations and priorities. The Panel rec-
pressed by the study team that further efforts for prior-
ognizes that the process of impacting policies and
ity setting would be desirable in all focal areas. For
programs has just begun, especially in those countries
example, within "Climate Change" high emitting
where GEF resources are dwarfed by the scale of other
countries or regions with conducive policies for abate-
investments. In particular, the Panel recognizes the
ment and promising technologies should be the main
contributions of the Small Grants Programme to
focus of GEF funding. International waters needs en-
mainstreaming environmental concerns more broadly
hanced attention by GEF and other relevant organiza-
in the countries where it has functioned. The Panel
tions. This requires additional funds.
encourages the Council to look for additional mecha-
nisms through which the GEF, working with its imple-
FINAL COMMENTS
menting agencies, the climate and biological diversity
conventions and others, can help create a broader
The Panel believes that the world requires a well-
public understanding of global environmental issues
run multilateral mechanism for worldwide "ecological
in developing countries. One such mechanism might
security". Global environmental issues cannot be left
be for GEF to provide support to media resource cen-
exclusively to the multitude of bilateral negotiations
ters in some countries.
and efforts underway. That multilateral funding
mechanism is the GEF. The GEF should be continued
PROJECT ISSUES
and strengthened.
The Panel recommends that all GEF projects
Based on its review of the Overall Performance
incorporate a specific withdrawal strategy in their de-
study and the draft report, the Panel believes the study
sign. Such a strategy would address how the activities
team has conducted an honest and independent as-
supported by the project would be sustained over the
sessment of the GEF. The Panel compliments the team
long term following completion of GEF funding.
on its work. It also compliments GEF's Senior Moni-
While the specific approaches will vary project by
toring and Evaluation Coordinator on the procedures
project, the Panel believes it is very important to focus
followed in designing and carrying out the study,
on long term sustainability at the beginning of project
which have contributed greatly to the quality and ob-
support. The Panel believes that the analysis con-
jectivity of the assessment. The Panel believes that the
ducted for the design of each GEF project should
study will be very useful to the GEF family and others
identify the costs of long-term sustainability. The
interested in the GEF, and recommends that compre-
sources of such future support clearly would need to
hensive assessments of the accomplishments of the GEF
be identified over time, but it is useful to identify likely
be conducted at appropriate intervals in the future when
future requirements at the outset so that proactive
there will be additional basis for determining the im-
measures can be taken to assure continuity.
pacts and effectiveness of GEF-funded activities.

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106 Study of GEF's Overall Performance
ANNEX 3.
LIST OF INTERVIEWS AND PROJECT SITE VISITS
A. IMPLEMENTING AGENCIES (Headquar-
- Selected NGOs
ters)
- PROCEL (National Energy Efficiency Pro-
- UNDP
gram), Rio de Janeiro
- UNEP
- SEAIN (Ministry of Planning - GEF Focal
- The World Bank
Point)
- Secretariat of International Affairs
B. SCIENTIFIC AND TECHNICAL ADVI-
- UNDP Brazil Country Office
SORY PANEL (STAP)
- Wind Energy Test Center, Recife
- World Bank Resident Mission
C. CONVENTION SECRETARIATS
- WWF Brazil
- Secretariat of the Convention on Biological
Diversity
- Secretariat of the UN Framework Convention
2. CHINA
on Climate Change
- Chinese Academy of Sciences
- Chinese Academy of Environmental Sciences
D. GEF SECRETARIAT
- Energy Research Institute
- Forestry Department of Hubei Province
E. COUNTRY VISITS:
- Hubei Province Governor's Office
1. BRAZIL
- Ministry of Coal Industry
- Agencia para Aplicação de Energia (Energy
- Ministry of Communications
Efficiency Organization), São Paulo
- Ministry of Finance, World Bank Department
- Ceara State Ministry for Transportation, En-
- Ministry of Foreign Affairs
ergy, Communication and Works, Fortaleza
- Ministry of Forestry, GEF Nature Reserves
- CEPEL (National Energy Testing Lab), Recife
Project Office
- CHESF (regional electric utility) Biogas
- National Environment Protection Agency
Project Staff
- Shennongjia Nature Reserve
- COELCE (Ceará State Utility with renewable
- State Economic and Trade Commission
energy program), Fortaleza
- State Planning Commission
- DNAEE (Energy Regulatory Agency)
- State Science and Technology Commission
- EMBRAPA-CENARGEN
- Tsinghua University, Institute for Nuclear En-
- Fundacion Pro-Natura
ergy Technology (INET)
- GTAP (Inter-Ministerial Panel for GEF
- UNDP China Country Office
Projects)
- World Bank Resident Mission
- Instituto Sociedade, População e Natureza
(Small Grants Coordinating NGO)
3. EGYPT
- Instituto Brasileiro do Meio Ambiente e dos
- Egyptian Environmental Affairs Agency
Recursos Naturais Renovaveis - Ministerio de
Meio Ambiente, dos Recursos Hidricos e da
- Ministry of Agriculture, Undersecretariat for
Amazonia Legal
Afforestation
- Ministry of Energy, Department of Decentral-
- New and Renewable Energy Authority
ized Energy
- Organization for Energy Conservation and
- Ministry of Science and Technology
Planning

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Annex 3. List of Interviews and Project Site Visits 107
- Red Sea Governorate
- Indonesian Institute of Sciences, Bogor
- Red Sea Coastal and Marine Resource Man-
- Institute of Technology, Bandung
agement Project Office
- International Finance Corporation (IFC)
- Tourism Development Authority
Country Office
- UNDP Egypt Country Office
- Ministry of Agriculture: Agency for Agricul-
- UNEP
tural Research and Development, Bogor
- US Agency for International Development
- Ministry of Environment
(USAID) Office of Environment
- Ministry of Finance: Directorate General for
- World Bank Resident Mission
External Funds; Bureau of Planning and Inter-
national Cooperation
4. INDIA
- Ministry of Forestry: Directorate of Programme
- Al Kabeer Exports Ltd. (Biomethanation
and Directorate General of Forest Protection
project), Hyderabad
- Ministry of Mines and Energy
- Center for Science and Environment
- National Development Planning Office
- Confederation of Indian Industries
(BAPPENAS)
- Development Alternatives
- The Nature Conservancy
- Energy Management Centre
- Sudimara (private solar firm), Jakarta
- GTZ Resident Mission, Bangalore
- UNESCO Country Office
- Indian Institute of Public Administration
- UNDP Indonesia Country Office
- Indian Institute of Science, Bangalore
- UNIDO Country Office
- Indian Renewable Energy Development Au-
- US Agency for International Development
thority (IREDA)
(USAID)
- Ministry of Economic Affairs
- World Bank Resident Mission
- Ministry of Environment and Forests
- World Wild Fund for Nature
- Ministry of Non-Conventional Energy Sources
- YBUL (NGO), Jakarta
- National Cleaner Production Center
- Tamil Nadu Energy Development Agency,
6. KENYA
Chennai
- Climate Network Africa
- Tamil Nadu Electricity Board, Chennai
- Embu Clinics (Small Grants Project NGO)
- UNDP India Country Office
- Food and Agriculture Organization (FAO)
- Vestas India Ltd. (wind machine manufac-
Kenya Country Office
turer), Chennai
- International Finance Corporation
- Winrock International
- Kenya Association of Manufacturers
- World Bank Resident Mission
- Kenya Wildlife Service
- World Wildlife Federation
- Lake Victoria Environmental Management
Programme, National Secretariat
5. INDONESIA
- Ministry of Energy, Renewable Energy Unit
- Agency for the Assessment and Application of
- Ministry of Environment: National Environ-
Technology (BPPT)
ment Secretariat
- Asian Development Bank Resident Mission
- Ministry of Finance
- Association of South-East Asian Nations
- Ministry of Planning and National Development
- British Petroleum Indonesia
- Ministry of Water
- BP Solar
- National Environmental Action Plan (NEAP)
- Center for Environmental Studies, Bogor Ag-
secretariat
ricultural University
- OSIENALA (Friends of Lake Victoria)
- Department of Forest Resources Conserva-
- Rural Initiatives for Sustainable Development
tion, Bogor Agricultural University
(RISDEV - Small Grants Project NGO)
- Indonesian Biodiversity Foundation
- Total Oil Kenya Limited
- UNDP Kenya Country Office

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108 Study of GEF's Overall Performance
- Wildlife Clubs of Kenya
- Lighting Project Implementing Agency ­ Pol-
- World Bank Resident Mission
ish Efficient Lighting Project (PELP)
- World Conservation Union
- Ministry of Economy: Department of Indus-
trial Policy; Department of Multilateral Eco-
7. MEXICO
nomic Relations; Ozone Layer Protection Unit
- Centro de Estudios del Sector Privado para el
- Ministry of Environmental Protection, Natural
Desarrollo Sustentable (Cespedes)
Resources and Forestry
- Comisión de Ecología de la Confederación de
- Ministry of Environment (General Directorate
Camaras Industriales (CONCAMIN)
of State Forests)
- Comisión Nacional para el Uso y
- Ministry of Finance: Foreign Department
Conocimiento de la Biodiversidad (CONABIO)
- Ministry of Foreign Affairs: Department of UN
- Conservación Internacional
System
- Fondo Mexicano para la Conservación de la
- National Foundation for Environmental Pro-
Naturaleza
tection
- Instituto Nacional de Ecología
- National Fund for Environmental Protection
- Instituto Nacional de la Pesca
and Water Management
- Organismos Financieros Internacionales,
- Polish Ecological Club, Krakow
Secretaría de Hacienda y Crédito Publico
- Polish Energy Efficiency Agency
- PNUMA
- Polish Environmental Partnership Foundation
- PNUD
- Puszcza Bialowieska, Gruszki
- Pronatura A.C.
- Social Ecological Institute
- Recursos Naturales y Pesca, Secretaria de
- UNDP Poland Country Office
Medio Ambiente
- Voivod Office of Krakow, Environment Pro-
- Secretaria de Energía
tection Department
- Secretaría de Medio Ambiente, Recursos
- World Bank Resident Mission
Naturales y Pesca
- Secretaría de Relaciones Exteriores, Dirección
9. RUSSIA
General de Cooperación Técnica y Cientifica
- Biodiversity Conservation Center
- The Nature Conservancy, Mexico Program -
- Institute of Energy Saving and Ecological
Arlington
Problems, Moscow
- The Nature Conservancy
- March for Parks, NGO
- Ministry of Energy and Fuels: Department on
8. POLAND
Energy Efficiency; Institute of Energy Saving
- Agricultural University Faculty of Forestry,
and Ecological Problems
Department of Forest Utilization
- Ministry of Science and Technology
- Association for Nature "WOLF"
- Russian Energy Efficiency Demonstration
- Bank for Environmental Protection (BOS)
Zones, Moscow
- Bialowieza Forest Protection Society, Bialowieza
- Russian Federal Service for Hydrometeorol-
- City of Krakow, Mayor's Office
ogy and Environmental Monitoring
- District Heating Company, Krakow
- Socio-Ecological Union
- Ecofund
- State Committee of the Russian Federation for
Environmental Protection: Centre for Prepa-
- Food and Agriculture Organization (FAO)
ration and Implementation of International
- Foundation for Energy Efficiency, Krakow
Projects on Technical Assistance; Ozone De-
- Industrial Chemistry Research Institute,
pleting Substances Phase-Out Project Imple-
Ozone Layer Protection Unit
mentation Group
- Institute for Environmental Protection
- UNDP Russia Country Office
- Institute for Sustainable Development
- World Bank Resident Mission
- Institute of Waste Management
- WWF Russian Programme Office

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Annex 3. List of Interviews and Project Site Visits 109
10. ZIMBABWE
- Masvingho Provincial Government, Parks De-
- Africa 2000/GEF Small Grants Programme
partment
- Biomass User's Network
- Ministry of Environment
- Campfire Association
- Ministry of Finance and Economic Planning
- Chiredzi District Council
- National Parks Department
- Environment 2000
- Save Valley Conservancy
- Forestry Commission
- The Southern Center
- GEF Photovoltaics Project Coordination Office
- UNDP Zimbabwe Country Office
- Glen Forest Training Centre
- University of Zimbabwe, Center for Applied
- Jebesa Pfungwa (NGO)
Social Studies
- Mahenye District Campfire Committee
- World Bank Resident Mission
F. PROJECT SITE VISITS
Country
Project
Focal Area
Date of Visit
Brazil
Biomass Integrated Gasification and Generation Project
Climate Change
7/97
(Pilot Phase)
China
Development of Coal-bed Methane Resources Project:
Climate Change
7/97
Kailuan Coal Mining Administration
(Pilot Phase)
China
Nature Reserves Management Project: Shennongjia
Biodiversity
7/97
Nature Reserve
(GEF I)
Egypt
Red Sea Coastal and Marine Resource
Biodiversity
8/97
Management: Hurghada
(Pilot Phase)
India
Alternate Energy (Wind Power) Project: the State
Climate Change
7/97
of Tamil Nadu
(Pilot Phase)
India
Development of High Rate Biomethanation Processes:
Climate Change
8/97
Al Kabeer Slaughterhouse
(Pilot Phase)
Indonesia
Indonesia Solar Homes Project: Sudimara Co.,
Climate Change
8/97
Pelabuhan Ratu
(GEF I)
Kenya
Lake Victoria Environmental Management
International Waters
8/97
Project: Kisumu
(GEF I)
Poland
Forest Biodiversity Protection: Bialowieza
Biodiversity
7/97
Primeval Forest
(Pilot Phase)
Poland
Coal-to-Gas Project: Jura Housing Corporation &
Climate Change
7/97
Jura Cooperative in Chestahova, Krakow
(Pilot Phase)
Russia
Biodiversity Conservation: Losiny Ostrov National
Biodiversity
7/97
Park & Prioksko-Terrasny State Biosphere Reserve
(Pilot Phase)
Russia
Phase-out of Ozone Depleting Substances: Joint
Ozone Depletion
7/97
Stock Company "Garmonia" (aerosol company)
(GEF I)
Zimbabwe
Biodiversity Conservation in S. E. Zimbabwe:
Biodiversity
8/97
Gonarezhou National Park
(Pilot Phase)

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110 Study of GEF's Overall Performance
- Zimbabwe Electricity Supply Authority
- Instituto Meteorologico Nacional
(ZESA)
- Superior Direction of Cooperation and Inter-
- Zimbabwe Energy Research Organization
national Affairs
(ZERO)
- Fundecooperación
- Zimbabwe Women's Bureau
3. CôTE D'IVOIRE
G.
"DESK" STUDY COUNTRIES
- Ministry of the Environment
1. ARGENTINA
- Deputy Director of the Environment and Focal
- Ministerio de Relaciones Exteriores, Secretaría
Point, Convention on Biodiversity Focal Point
de Relaciones Exteriores y Asuntos
- Technical Advisor to the Minister of the Envi-
Latinoamericanos, Dirección de Cooperación
ronment and Focal Point, Convention on Cli-
Internacional (Ministry of Foreign Relations
mate Change
and Latin American Affairs Secretary, Interna-
- Programme Cadre de Géstion des Aires Protégés
tional Cooperation Direction)
- Gulf of Guinea - Large Marine Ecosystem
- Secretaría de Energía, Ministerio de Economía
Project Office
de la Nación (Secretariat of Energy, Ministry
- GEF Small Grants Programme (IVC/93/G51)
of Economy of the Nation)
- UNDP Côte d'Ivoire Country Office
- Consejo Nacional de Investigaciones
- Community-Based Natural Resource and
Científicas y Técnicas (CONICET) - Atmo-
Wildlife Management Project
sphere Sciences Department, Universidad de
- Environment Impact Assessment Unit, Minis-
Buenos Aires (UBA)
try of the Environment
- GEF Biodiversity Enabling Activity Coordina-
- Agence Africaine d'Assistance pour
tion Unit
l'Environnement et le Développement (NGO)
- Dirección Nacional de Fortalecimiento
- Projet Efficacité Energé tique dans les
Institucional, Secretaría de Recursos Natu-
Bâtiments
rales y Desarrollo Sustentable de la Nación
- Projet de Lutte contre les Végétaux
- Natural Resources and Sustainable Develop-
Acquatiques Envahissants Les Plans d'Eau
ment National Secretariat
pour Améliorer la Diversité Biologique
- National Parks Administration
- Groupement d'Intérêt Economique des
- National Institute of Agropecuarian Technol-
Femmes de Bezibozouzoua(NGO)
ogy (INTA)
- Côte d'Ivoire Ecologie (NGO)
- GEF PDF project - Conservation of
- NEAP Technical Advisor
Biodiversity in Threatened Ecosystems
- Project Manager - Elevage de la Faune
- UNDP Country Office
Sauvage et Culture des Champignons
- Asociación Ornitológica del Plata
- Fundación Vida Silvestre
4. JORDAN
- Fundación Recursos Naturales y Medio
- Project Manager: Azraq Oasis Conservation
Ambiente
Project
- Fundación Patagonia Natural
- GEF National Focal Point, Ministry of Planning
- Royal Society for the Conservation of Nature
2. COSTA RICA
(RSCN)
- Ministerio de Ambiente y Energía
- Jordan Biogas Company
- Wildlife Conservation Society
- Friends of Environment Society
- Fundación de Parques Nacionales
- Jordan Biogas Project
- PNUD
- GEF Small Grants Program National Coordi-
- Instituto Nacional de Biodiversidad
nator

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Annex 3. List of Interviews and Project Site Visits 111
- University of Jordan, Jordan Country
- Protected Areas and Wildlife Bureau, Ninoy
Biodiversity Study Office
Aquino Protected Area and Wildlife Nature
- Project Coordinator, Climate Change Project
Center
- Royal Society for the Conservation of Nature
- Philippine Sustainable Development Network
(RSCN)
(NGO)
- General Corporation for Environment Protec-
- Foundation for the Philippine Environment
tion (GCEP)
- NGOs for Integrated Protected Areas, Inc.
- UNDP Philippines Country Office
5. PHILIPPINES
- Conservation of Priority Protected Areas
6. VIETNAM
(CPPAP), Protected Areas and Wildlife Bureau
- Policy Division, NEA (National Focal Point)
- CPPAP, Ninoy Aquino Protected Area Wild-
- UNDP Vietnam Country Office
life and Nature Center
- Institute of Meteorology and Hydrology
- Kitanglad Integrated NGOs (Host NGO)
- Conservation and Environment Division, For-
- CPPAP Mt. Kitanglad Range National Park,
est Protection Department
Provincial ENR Office
- Ministry of Agriculture & Rural Development
- Leyte-Luzon Geothermal Project
- Ministry of Industry: Energy Institute
- PNOC-Energy Development Corporation
- Ministry of Planning and Investment: Foreign
- Regional Progamme for the Prevention and
Economic Relations Department
Management of Marine Pollution in the East
- WWF Indochina Programme
Asian Seas
- Department of Zoology, Institute of Ecology
- Environmental Management Bureau
and Biological Resources
- Environmental Protection and Monitoring Di-
- Cuc Phuong Training Center
vision, Department of Energy
- Energy Economics Division

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