Update on the work of the Transitional Committee

Update on the work of the Transitional Committee for the Design of the Green Climate Fund Carol Mwape for sustained capacity building in support of international climate change negotiations pour un renforcement durable des capacités en appui aux négociations internationales sur les changements climatiques european capacity building initiative ecbi european capacity building initiative européenne de renforcement des ecbi

The UNFCCC Transitional Committee for the Design of the Green Climate Fund • 40 members (15 developed and 25 developing countries) nominated by the UN regional groups, LDCs and SIDS • LDCs represented by Zambia and Bangladesh • mandate of designing the Green Climate Fund according to the TORs outlined in Appendix III of 1 CP/16 • GCF intended to be the operating entity of the financial mechanism of the convention and to be under the guidance and authority of the Conference of Parties european capacity building initiative ecbi • TC-GCF established by decision 1 CP/16 of the Conference of the Parties at the UN Climate Conference in Cancun, Mexico (2010)

MAIN ISSUES OF NEGOTIATION UNDER THE TC Relationship between the GCF and the Conference of Parties; ii. Legal status of the GCF; iii. Independence of the secretariat; iv. Windows; v. Direct access vi. Private sector vii. Transitional arrangements for the operationalization of the GCF european capacity building initiative ecbi i.

WORK OF THE TRANSITIONAL COMMITTEE • TC 2: Japan 13 -14 July 2011. discussed issues arising under each WS. A group of developing countries presented a document providing text for the operationalization of the Green Climate Fund • TC 3: Switzerland 11 -13 September 2011. main agenda item was to work on the report outline that set out the recommendations and operational documents for approval by COP 17 • TC 4: South Africa 16 -18 October 2011. finalize draft report for adoption by TC and submission to COP 17 for approval. Final work of the TC before COP 17 in Durban, South Africa european capacity building initiative ecbi • TC 1: Mexico 28 -29 April 2011. Inception meeting. established four work streams (WS I: Scope, guiding principles and cross-cutting issues, WSII Governance and institutional arrangements, WSIII Operational modalities, WSIV Monitoring and evaluation

TC. 3 Geneva: Proposal for GCF Definitions “Implementing Entities” means the national legal entities and multilateral organizations that have been accredited by the GCF Board as meeting its criteria for accessing funding in order to implement eligible activities approved by the GCF. “Funding Entities” means the national legal entities and multilateral organizations that have been accredited by the GCF Board as meeting its criteria for accessing funding in order to approve and fund eligible activities. european capacity building initiative ecbi “Eligible activities” means projects, programmes and other types of activities eligible for financial support by the GCF.

TC. 4 Cape Town: Proposal for revised draft language european capacity building initiative ecbi

Enhanced Direct Access european capacity building initiative ecbi 5. 4. 1 Direct Access 47. Recipient countries will nominate competent sub-national, national and regional implementing entities for accreditation to receive funding. The Board will consider additional modalities that further enhance direct access, including through funding entities with a view of enhancing country ownership of projects and programmes.

ISSUES OF CONCERN FOR DEVELOPING COUNTRIES • The role of national entities in the approval of projects • The private sector facility providing for direct access to the fund • Authority given to the GCF Board to add, modify and remove funding windows without COP approval • Procedure for selection of a permanent Trustee after the interim period for the World bank elapses • Process for conferring legal status on the GCF not elaborated european capacity building initiative ecbi • Limited role of the COP in relation to the GCF

ISSUES OF CONCERN FOR DEVELOPED COUNTRIES european capacity building initiative ecbi • Restriction of windows to adaptation and mitigation (absence of REDD+ window) • Restriction of financial inputs to developed countries when there was indication of will by some developing countries to contribute to the Fund • COP endorsement of host country • Limited weight given to the private sector facility compared to direct access

CURRENT STATUS OF WORK OF THE TC • Draft report not perfect and incomplete but offers a starting point for further work • General acceptance of the report by 38 TC members • US and Saudi Arabia objected to having the report adopted by TC and objected submission for approval by COP 17 • No consensus reached and report was considered by TC to be submitted to COP 17 for further consideration and approval european capacity building initiative ecbi • TC members expressed views on the draft report. Zambia on behalf of LDCs expressed concern on authority provided for the GCF Board to add, modify and remove funding windows without COP approval. LDCs also emphasised the need for national decision making on projects

IMPLICATIONS FOR DURBAN european capacity building initiative ecbi • Further consideration of the TC report and governing instruments could open the text to negotiations by Parties • Anticipated operationalization of the Fund may not be achieved if report doesn’t get approved at COP 17 • Negotiations on long term finance and sources of finance under the LCA could be negatively affected • Means of implementation for adaptation, mitigation (1. b. ii) may be not be assured and could affect progress in thematic negotiations

european capacity building initiative ecbi

WORK OF THE TC • 17 th October TC members reviewed the draft report in smaller groups for expression of views • 18 th October Co Chairs conducted consultations on issues of divergent views • Evening of 18 th October Co chairs presented a report with recommendations to COP 17 and an appendix of the GCF governing instrument. The instrument sets out the design of the GCF. european capacity building initiative ecbi • Mid 16 th October TC members met to decide on the work programme for the remaining task