Green Climate Fund Proposal Toolkit 2017 (PDFDrive)

Green Climate Fund Proposal Toolkit 2017:
Toolkit to develop a project proposal for the GCF
June 2017
Produced by Acclimatise and the Climate and Development Knowledge
Network (CDKN)
Acclimatise is a specialised advisory and digital application company that provides world-
class expertise in climate change adaptation and resilience. With experience in more than 60
countries, Acclimatise focuses on adaptation, and its work is helping to shape the emerging
climate finance architecture by utilising the skills and experience gained from advising regional
agencies and national governments, as well as some of the largest global businesses, in
developing and implementing adaptation strategies. Acclimatise supports its clients to access,
manage and channel the necessary financial resources for the implementation of climate
adaptation strategies, programmes and projects. Acclimatise is accredited as a private sector
observer organisation to the GCF. 
CDKN is a programme funded by the UK Department for International Development (DFID)

and the Netherlands Directorate-General for International Cooperation (DGIS) for the benefit
of developing countries. It aims to help decision-makers in developing countries design and
deliver climate compatible development. It provides demand-led research and technical
assistance, channelling the best available knowledge on climate change and development to
support policy processes at the country level.
Acknowledgements
The authors thank Areej Riaz from CDKN, Virginie Le Masson and Mairi Dupar from the
Overseas Development Institute (ODI), and Emma Doherty and Jim Stephenson from
PricewaterhouseCoopers (PwC). We also appreciated the valuable comments and
contributions of the GCF Secretariat. In addition, we are also immensely grateful to our external
peer reviewers from two of GCF’s Accredited Entities: Dr Mukhopadhyay from the National
Bank for Agriculture and Rural Development (NABARD), India, and Claudia Godfrey and Alberto
Paniagua from The Peruvian Trust Fund for National Parks and Protected Areas (PROFONANPE),
Peru, for their valuable comments based on their practical experience, which greatly improved
the final version of the toolkit.
This report should be quoted as:

Fayolle, V. and Odianose, S. (2017) Green Climate Fund Proposal toolkit 2017. London: Acclimatise
and Climate and Development Knowledge Network.
Front cover photo: Balaram Mahalder, Wikimedia Commons

https://commons.wikimedia.org/wiki/File:Farmer_in_the_haor.jpg
Green Climate Fund Proposal Toolkit 2017:
Toolkit to develop a project proposal for the GCF
By Virginie Fayolle
and Serena Odianose
June 2017
About the authors
Virginie is a Senior Consultant specialising in climate change finance and adaptation planning.
She leads the climate finance practice area at Acclimatise. Over the past six years, she has advised
public and private sector clients to access, manage and use international climate finance by
presenting work and leading stakeholder engagement processes. Over the past three years,
her focus has been mostly on supporting National Designated Authorities (NDAs) and project
developers in accessing the GCF. She holds a BSc in Economics from the University of Delaware
and an MSc in Environment and Development from the London School of Economics.
Serena is a Policy Researcher specialising in climate change adaptation and finance. She
carries out research and analysis on climate finance and on the integration of adaptation
into development plans and decision-making processes. She is currently providing technical
assistance to the governments of Burundi and Ivory Coast to access the GCF Readiness and
Preparatory Support Programme and develop their National Adaptation Plans. Serena holds a
BSc in International Relations and Diplomatic Affairs from the University of Bologna and Science
Po Strasbourg. She also holds an MSc in International Policy and Development Economics from
the University of Bologna.
iii
Contents
About the authors ii
Acronyms vi
Glossary of key terms vii
Summary xiv
Introduction 1
1. Essentials to know before developing a GCF project 3

1.1 What does the GCF support? 3
1.2 How much and what type of finance is available? 4
1.3 What are the roles of different actors? 5
1.4 What about the private sector? 7
2. Key project design elements 8

2.1 Results Management Framework 8
2.2 Interim Environmental and Social Safeguards 9
2.3 Gender Policy 9
3. The GCF proposal template 11
4. How to put together a GCF funding proposal: a stepwise approach 15

4.1 Step 1. How to define the project scope? 15
4.2 Step 2. How to develop a logic framework? 21
4.3 Step 3. How to assess project risks and identify mitigation measures? 24
4.4 Step 4. How to integrate gender into a project? 30
4.5 Step 5. How to assign indicators to measure progress? 34
4.6 Step 6. How to align a project against the GCF investment criteria? 40
4.7 Step 7. How to identify the rationale for GCF involvement? 45
4.8 Step 8. How to monitor, evaluate and report on a project? 47
4.9 Step 9. How to prepare a budget for your project? 49
4.10 Step 10. How to justify the level of concessionality of a project? 51
5. The GCF project cycle 56
6. How to get started? 58
7. Support available for the full proposal preparation 60
References 61
Annex 1. Illustrative example: Log frame from XacBank’s approved proposal 65
Annex 2. Performance Management Framework for mitigation 70
Annex 3. Performance Management Framework for adaptation 74
Annex 4. Performance Management Framework for REDD+ activities 79
Annex 5. Indicative indicators to select for each of the six GCF investment criteria 81
Endnotes 89
iv Green climate fund proposal toolkit 2017: Toolkit to develop a project proposal for the GCF
List of figures and tables

Figure 1. Stepwise approach to preparing a GCF funding proposal xvi
Figure 2. Two-step and one-step approval processes xviii
Figure 3. GCF funding windows 3
Figure 4. GCF strategic impact areas 4
Figure 5. Total project costs 4
Figure 6. GCF architecture 5
Figure 7. Support provided by the GCF’s Private Sector Facility 7
Figure 8. Six levels of logic models 8
Figure 9. Overview of the IFC’s Performance Standards 9
Figure 10. Six principles of the GCF’s Gender Policy 10
Figure 11. Three levels for integration of gender considerations into a funding

proposal 10
Figure 12. Key elements in undertaking a scoping analysis 16
Figure 13. Backcasting approach to developing a log frame 22
Figure 14. How to integrate gender into a project? 32
Figure 15. GCF investment criteria and their definitions 41
Figure 16. Elements of the mitigation core indicators 41
Figure 17. Elements of the adaptation core indicators 41
Figure 18. Elements of the paradigm shift potential criterion 42
Figure 19. Elements of the recipients’ needs criterion 44
Figure 20. Elements of the country ownership criterion 44
Figure 21. Elements of the efficiency and effectiveness criterion 46
Figure 22. How to estimate the total budget 49
Figure 23. How to calculate the amount of GCF financing required 51
Figure 24. Overview of the GCF project cycle and different actors involved at
each stage 57
List of figures and tables v
Table 1. National Designated Authority, Accredited Entity and Executing Entity 6
Table 2. Structure of the GCF funding proposal template form (version 1.1) 11
Table 3. Existing supporting tools for undertaking a scoping analysis for a climate
change project 18
Table 4. Selected data analysis methods 19
Table 5. Selected consultation methods 21
Table 6. Mitigation and adaptation fund-level impacts 22
Table 7. Mitigation and adaptation project/programme-level outcomes 23
Table 8. Illustrative example: A risk and mitigation measure from XacBank’s approved
proposal: ‘Business loan program for GHG emission reduction’ 25
Table 9. The IFC’s Performance Standards 26
Table 10. Risk levels and categories 27
Table 11. GCF ESMP requirements 29
Table 12. Illustrative example: Environmental and social report disclosure information

from XacBank’s approved proposal: ‘Business loan program for GHG emission reduction’ 31
Table 13. Illustrative example: GAP from XacBank’s approved proposal: ‘Business loan
program for GHG emission reduction’ 33
Table 14. Mitigation indicators 36
Table 15. Adaptation indicators 37
Table 16. REDD+ indicators 38
Table 17. Illustrative example: Indicators and corresponding means of verification,

baseline, target and assumptions from XacBank’s approved proposal: ‘Business loan
program for GHG emission reduction’ 39
Table 18. Examples of sustainable development indicators 43
Table 19. GCF reporting requirements 48
Table 20. Table for presenting the breakdown of cost estimates 49
Table 21. Schedule of cap on fees applicable to public sector projects/programmes 50
Table 22. Illustrative example: Financial market overview from XacBank’s approved

proposal: ‘Business loan program for GHG emission reduction’ 52
Table 23. GCF financial instruments 53
Table 24. Financial instruments and relevant terminology 54
Table 25. Debt seniority 55
Table 26. The phases of the GCF project cycle 56

vi Green climate fund proposal toolkit 2017: Toolkit to develop a project proposal for the GCF
Acronyms
AE Accredited Entity
CDKN Climate and Development Knowledge Network
CIF Climate Investment Fund
COP Conference of Parties
ECOSOC Economic and Social Council
EE Executing Entity
ESIA Environmental and Social Impact Assessment
ESMP Environmental and Social Management Plan
ESMS Environmental and Social Management System
ESS Environmental and Social Safeguards
FAA Funded Activity Agreement
GAP Gender Action Plan
GCF Green Climate Fund
GEF Global Environment Facility
GHG greenhouse gas
IE Implementing Entity
IEU Independent Evaluation Unit
IFC International Finance Corporation
ITAP Independent Technical Advisory Panel
IPCC Intergovernmental Panel on Climate Change
LDCs Least Developed Countries
M&E monitoring and evaluation
MSME Micro, Small and Medium Enterprises programme
NDA National Designated Authority
NGO non-governmental organisation
PMF Performance Measurement Framework
PPCR Pilot Program for Climate Resilience
PPF Project Preparation Facility
PS Performance Standards
REDD Reducing Emissions from Deforestation and Forest Degradation
RMF Results Management Framework
UNFCCC United Nations Framework Convention on Climate Change
vii
Glossary of key terms

Accredited Entity (AE): An entity that is accredited by the Board in accordance with the
Governing Instrument and relevant Board decisions.
Accreditation Master Agreement: Legal agreement that sets out the terms and conditions
for an entity’s use of GCF resources, which formalises the AEs’ accountability in carrying out
GCF-approved projects appropriately.
Adaptation: Adjustment in natural or human systems in response to actual or expected

climatic stimuli or their effects, which moderates harm or exploits beneficial opportunities.
Climate change: A change of climate which is attributed directly or indirectly to human

activity that alters the composition of the global atmosphere and that is in addition to natural
climate variability observed over comparable time periods.
Concept note: A project or programme concept document that provides basic information
about a project or programme to seek feedback on whether the concept is broadly aligned
with objectives and policies of the Fund.
Effectiveness: The capability of producing a desired result. Effectiveness constantly measures

if the produced/actual outputs meet the expected outputs.
Efficiency: A measurable concept, quantitatively determined by the ratio of useful output

to total input, which can be expressed by the mathematical formula r = P/C, where P is the
amount of useful output (product) produced per the amount C (cost) of resources consumed.
Efficiency focuses on achieving the maximum output with minimum resources, and may also
be expressed as a percentage of the result that can ideally be achieved.
Environmental and Social Impact Assessment (ESIA): A comprehensive document of a

project’s potential environmental and social risks and impacts, which is developed based on
key process elements generally consisting of i) initial screening of the project and scoping of
the assessment process; ii) examination of alternatives; iii) stakeholder identification (focusing
on those directly affected and other stakeholders) and gathering of environmental and social
baseline data; iv) impact identification, prediction and analysis; v) generation of mitigation
or management measures and actions; vi) significance of impacts and evaluation of residual
impacts; vii) consultation with and disclosure to project affected people, including setting up a
grievance mechanism; viii) documenting the assessment process in the form of an ESIA report.
Environmental and Social Management Plan (ESMP): A document prepared either as

part of an ESIA, or as a separate document accompanying the ESIA, describing the process of
management of the mitigation measures and actions identified in the ESIA study, including
the associated responsibility, timeline, costs and monitoring of key environmental and social
indicators described in the ESMP.
Environmental and Social Management System (ESMS): Process that institutions

have in place to make sure they adequately identify, assess, manage, mitigate and monitor
environmental and social risks and respond to problems that arise. All institutions seeking
accreditation to the GCF must have an ESMS. The strength of the ESMS can vary depending on
the accreditation category.
viii Green climate fund proposal toolkit 2017: Toolkit to develop a project proposal for the GCF
Environmental and Social Safeguards (ESS): A reference point for establishing criteria
for accrediting institutional capacities and entities seeking accreditation to the Fund, and for
identifying, measuring and managing environmental and social risks. Its main purpose is to
determine the key environmental and social risks the Accredited Entity intends to address in
the conceptualisation, preparation and implementation of funding proposals, and to provide
guidance on how these risks are to be managed. An ESS is based on the eight Performance
Standards of the International Finance Corporation.
Evaluation: A systematic assessment of the worth or utility of an intervention at a specific

point in time, for example whether a policy has been effective in achieving set objectives.
Executing Entity (EE): With respect to the GCF, an organisation that executes eligible activities
supported by the GCF under the oversight of the AEs. An AE can also perform the EE’s functions.
Exit strategy: A strategy which ensures that the ongoing activities, impact and results of the
project/programme are sustained after the Fund’s intervention.
Feasibility study: A preliminary study undertaken at the early stage of a project that helps to
establish whether the project is viable and what are the feasible options.
Financial and economic analyses: These two types of analysis have similarities and
differences. They both estimate the net benefits of a project investment based on the
difference between the situation with the project and without the project. The basic difference
between them is that the financial analysis compares benefits and costs to the company, while
the economic analysis compares benefits and costs to the whole economy. The economic
analysis is concerned with the positive and negative impacts of a project on the whole society;
it also covers the costs and benefits of goods and services that are not sold in the market and
therefore have no market price.
While financial analysis uses market prices to check the balance of investment and the
sustainability of a project, economic analysis uses economic prices that are converted from the
market price by excluding tax, profit, subsidy, etc. to measure the legitimacy of using national
resources for certain projects. Financial and economic analyses also differ in their treatment of
external effects (benefits and costs), such as favourable effects on health. Economic analysis
attempts to value such externalities in order to reflect the true cost and value to the society.
The inclusion of externalities raises difficult questions of their identification and measurement
in terms of money.
Financial and economic analyses are complementary: for a project to be economically viable,
it must be financially sustainable. If a project is not financially sustainable, there will be no
adequate funds to properly operate, maintain and replace assets.
Financial intermediation: A productive activity in which an institutional unit incurs liabilities

on its own account for the purpose of acquiring financial assets by engaging in financial
transactions on the market. The role of financial intermediaries is to channel funds from lenders
to borrowers by intermediating between them.
Funded Activity Agreement (FAA): Document signed by the AE and the GCF after the Board
has approved a project. It contains the project-specific terms.
Glossary of key terms ix
Funding proposal: Document containing information on a proposed climate change project

or programme, which is submitted by an Accredited Entity to the GCF Secretariat to access
GCF resources.
Gender: Refers to how societies and specific cultures assign roles and ascribe characteristics to
men and women on the basis of their sex. For example, many cultures share expectations that
women are more nurturing than men, and that men should be soldiers during wars.
Gender equality: As enshrined in international and national constitutions and other human
rights agreements, refers to equal rights, power, responsibilities and opportunities for women
and men, as well as equal consideration of the interests, needs and priorities of women and
men.
Gender equity: Refers to the process of being fair to women and men. To ensure equity,
measures often need to be taken to compensate for (or reduce) disparities in historical and
social disadvantages that prevent women and men from otherwise operating on an equitable
basis. Equity leads to equality.
Gender sensitivity: Refers to understanding of the ways people think about gender and
sociocultural factors underlying gender inequality. Gender sensitivity implies a consideration
of the potential contributions of women and men to societal changes, as well as the methods
and tools to promote gender equity and reduce gender disparities, and to measure the impact
of activities on women and men.
Green Climate Fund (GCF): At COP 16 in Cancun in 2010, governments established a Green
Climate Fund as an operating entity of the financial mechanism of the Convention under Article
11. The GCF will support projects, programmes, policies and other activities in developing
country Parties. The Fund will be governed by the GCF Board.
Independent Technical Advisory Panel (ITAP): Provides independent technical assessment

of, and advice on, funding proposals for the GCF Board. The Panel conducts the technical
assessments at the analysis and recommendations to the Board stage of the Fund’s project and
programme activity cycle. This is done in accordance with the Fund’s initial proposal approval
process, and in order to provide objective technical advice on funding proposals for the Board.
Indicator: A measurable characteristic or variable which helps to describe an existing situation

and to track changes or trends – i.e. progress – over time.
Investment criteria: Six investment criteria adopted by the Board, namely impact potential,
paradigm shift potential, sustainable development potential, needs of the recipient, country
ownership, and efficiency and effectiveness. There are coverage areas, activity-specific
subcriteria and indicative assessment factors that provide further elaboration. Please refer to
the Board Decision on Further Development of the Initial Investment Framework which provides
more detailed explanations of the Fund’s investment criteria.1
Least Developed Countries (LDCs): The world’s poorest countries. The criteria currently
used by the United Nations Economic and Social Council (ECOSOC) for designation as an LDC
include low income, human resource weakness and economic vulnerability.
x Green climate fund proposal toolkit 2017: Toolkit to develop a project proposal for the GCF
Level of concessionality: Refers to a measure of the ‘softness’ of a credit reflecting the benefit
to the borrower compared to a loan at market rate. Technically, it is calculated as the difference
between the nominal value of a Tied Aid Credit (see definition in this glossary) and the present
value of the debt service as of the date of disbursement, calculated at a discount rate applicable
to the currency of the transaction and expressed as a percentage of the nominal value.
Loan pricing: Refers to determining the interest rate for granting loans to creditors.
Loan tenor: The amount of time left for the repayment of a loan or contract, or the initial term
length of a loan. It can be expressed in years, months or days.
Log frame: One of the most used methods to articulate and clarify how a set of activities will
achieve the desired outcomes and objective of a project (or its ‘theory of change’). The log
frame represents a results map or results framework which is part of the Results Management
Framework (RMF). The log frame also captures basic monitoring and evaluation (M&E)
requirements. The project/programme’s log frame is critical to determining the costs at the
activity level required in the proposal template, the overall budget, and the timeline and key
milestones.
Mitigation: In the context of climate change, a human intervention to reduce the sources or
enhance the sinks of greenhouse gases. Examples include using fossil fuels more efficiently
for industrial processes or electricity generation, switching to solar energy or wind power,
improving the insulation of buildings, and expanding forests and other ‘sinks’ to remove greater
amounts of carbon dioxide from the atmosphere.
Monitoring: The systematic and continuous collection of information that enables

stakeholders to check whether an intervention is on track or achieving a set objectives.
National Designated Authority (NDA): A core interface and the main point of communication
between a country and the Fund. The NDA seeks to ensure that activities supported by the
Fund align with strategic national objectives and priorities, and help advance ambitious action
on adaptation and mitigation in line with national needs. A key role of NDAs is to provide no-
objection letters for project proposals.
Non-reimbursable grants: Unlike reimbursable grants, non-reimbursable grants are standard

transfers made in cash, goods or services for which no repayment is required. This amounts to
direct aid as opposed to repayable assistance.
Paradigm shift: A fundamental shift of all countries towards low-carbon and climate-resilient
sustainable development, in accordance with the GCF agreed results areas and consistent
with a country-driven approach.2 It should be noted that this is not an official definition from
the GCF and that the terms ‘paradigm shift’ and ‘transformational change’ are often used
interchangeably. The paradigm shift of a project corresponds to the degree to which the
proposed activity can catalyse impact beyond a one-off project/programme investment. This
can be emphasised by providing further details on the four related factors.
1. Potential for scaling up and replication: the proposal should illustrate how the proposed
project/programme’s expected contributions to global low-carbon and/or climate-
resilient development pathways could be scaled up and replicated, including a
description of the steps necessary to accomplish it.
Glossary of key terms xi
2. Potential for knowledge and learning: any potential for the creation or the strengthening of
knowledge, collective learning processes or institutions should be highlighted.
3. Contribution to the creation of an enabling environment: the sustainability of outcomes and

results beyond the completion of the intervention should be highlighted. The proposal
should explain how proposed measures will create conditions that are conducive to
effective and sustained participation of private and public sector actors in low-carbon
and/or resilient development that go beyond the programme.
4. Contribution to regulatory framework and policies: the proposal should elaborate on how
the proposed project/programme advances national/local regulatory or legal frameworks
to systematically drive investment in low-emission technologies or activities, promote
development of additional low-emission policies, and/or improve climate-responsive
planning and development.
Performance Measurement Framework (PMF): A set of indicators established by the GCF

to measure progress towards intended results based on the paradigm-shift objective, Fund-
level impacts and project/programme outcomes as outlined in the GCF’s mitigation and
adaptation logic models.
Pre-feasibility study: A preliminary study undertaken to determine if it would be worthwhile

to proceed to the feasibility study stage.
Project: A set of activities with a collective objective(s) and concrete outcomes and outputs
that are narrowly defined in scope, space and time; and that are measurable, monitorable and
verifiable.
Project Preparation Facility (PPF): Supports AEs in project and programme preparation. It is
especially targeted to support direct access entities, and micro-to-small size category projects.
The PPF can support project and programme preparation costs from all AEs, especially direct
access entities and especially for projects in the micro-to-small size category. Funding available
is up to US$1.5 million for each PPF request, and can be provided through grants and repayable
grants while equity may be considered for private sector projects through grants or equity.
Funding proposals developed with the PPF should be submitted to the GCF Board within two
years of the approval of a PPF request.
Project proponent: An individual, group or organisation that submits or proposes a project

or programme for review and acceptance by the GCF. A project proponent is often regarded as
one of the key roles that determine the concept and content of a project or programme and
create a detailed project description in the relevant GCF template forms at the concept note
and/or full funding proposal stages. It is also responsible for mobilising all relevant stakeholders,
including the country’s NDA/Focal Point, the beneficiaries and other local stakeholders. It can
be from the private or public sector. It can also be an existing AE of the GCF. If the project/
programme is successfully approved by the GCF, the project proponent will in many cases
become the EE of that project/programme. An AE can also perform the EE’s functions. ‘Project
proponent’ is often used interchangeably with the terms ‘project sponsor’ and ‘project initiator’.
Programme: A set of interlinked individual sub-projects or phases, unified by an overarching

vision, common objectives and contribution to strategic goals, which will deliver sustained
climate results and impact in the GCF result areas efficiently, effectively and at scale.
xii Green climate fund proposal toolkit 2017: Toolkit to develop a project proposal for the GCF
Quantitative indicators: Measures of quantity, including numbers, indexes, ratios or

percentages.
Qualitative indicators: These are subjective indicators and can be numerical. They can
measure, for instance, quality, opinions, perceptions, systems development or influence
(e.g. level of satisfaction). They are mostly used to measure non-material and often complex
multidimensional impacts.
Reimbursable grants: Assimilated to loans, reimbursable grants consist in contribution

provided to a recipient institution for investment purposes, with the expectation of long-term
reflows at conditions specified in the financing agreement. The provider assumes the risk of
total or partial failure of the investment; it can also decide if and when to reclaim its investment.
Results Management Framework (RMF): A life-cycle approach to results management

through measurements to improve decision-making, transparency and accountability. The
approach is in line with improving the way the Fund functions by achieving outcomes through
implementing performance measurement, learning and adapting, in addition to reporting
performance.
Senior loans: A senior bank loan is a debt financing obligation that holds legal claim to the
borrower’s assets above all other debt obligations. The loan is considered senior to all other
claims against the borrower, which means that in the event of a bankruptcy, the senior bank
loan is the first to be repaid before all other interested parties receive repayment.
Subordinate loans: Loans that, in cases of payment default or bankruptcy, have a lower
repayment priority compared with other company or project loans. Leverage is achieved as
subordinated debt strengthens a company/project’s equity profile and encourages commercial
lenders to provide senior debt financing. Concessional rates could also be used in cases where
high capital costs and risk perception barriers are being addressed
Term sheet: All funding proposals submitted to the Board for consideration should be
accompanied by a term sheet agreed to by the Parties – subject only to final internal approvals –
setting out, in summary form, the key terms and conditions relating to the proposed funded
activity (e.g. the elected GCF holding currency for disbursements or any specific deviation,
derogation or modification that the AE is seeking to make to this agreement in the FAA).
Theory of change: A methodology for planning, participation and evaluation that is used
to promote long-term change. The theory of change defines long-term goals and then
maps backward to identify necessary preconditions. The innovation of theory of change
lies in making the distinction between desired and actual outcomes, as well as in requiring
stakeholders to model their desired outcomes before they decide on forms of intervention to
achieve those outcomes. The theory of change is an inclusive process involving stakeholders
with diverse perspectives in achieving solutions. The ultimate success of any theory of change
lies in its ability to demonstrate progress on the achievement of outcomes. Evidence of success
confirms the theory and indicates that the initiative is effective. Therefore the outcomes in a
theory of change must be coupled with indicators that guide and facilitate measurement. The
added value of a theory of change lies in outlining a conceptual model that demonstrates the
causal connections between conditions that need to change in order to meet the ultimate
goals.
Glossary of key terms xiii
Tied Aid Credits: Official or officially supported loans, credits or associated financing packages
where procurement of the goods or services involved is limited to the donor country or to a
group of countries, which does not include all developing countries.
United Nations Framework Convention on Climate Change (UNFCCC): International

environmental treaty negotiated at the Earth Summit in Rio de Janeiro from 3 to 14 June 1992,
then entered into force on 21 March 1994.
Vulnerability: Degree to which a system is susceptible to, or unable to cope with, adverse
effects of climate change including climate variability and extremes.
xiv Green climate fund proposal toolkit 2017: Toolkit to develop a project proposal for the GCF
Summary
Responding to climate change challenges requires collective action from all countries,
governments, cities, communities, businesses and private citizens. With US$10.3 billion currently
pledged, the Green Climate Fund (GCF) is the world’s largest fund dedicated to the fight against
climate change. Designed to be the main financial instrument to mobilise US$100 billion per
year by 2020 from both public and private sources, the GCF is the centrepiece to address the
pressing mitigation and adaptation needs of developing countries.
What does the GCF support?

The GCF aims to support developing countries in achieving a paradigm shift to low-emission
and climate-resilient pathways. This is achieved by funding innovative and transformative low-
emission (mitigation) and climate-resilient (adaptation) projects and programmes developed
by the public and private sectors to contribute to the implementation of national climate
change priorities in developing countries. While it is relatively easy to tell what a mitigation
project or programme is (i.e. its contribution to the reduction of greenhouse gases in the
atmosphere, and/or whether it increases the capacity of an ecosystem to absorb them), the
blurred line between a general development project and an adaptation project has been a
contentious issue in the international climate finance debate, including at GCF Board meetings.
The relevant question is not whether a project is (also) a development project, but whether the
project contributes to adaptation (i.e. what the adaptation/additionality argument is). Cross-
cutting projects that deliver co-benefits in terms of both mitigation and adaptation are also
eligible for funding.
What makes a good GCF project?

A good GCF (adaptation, mitigation or cross-cutting) project or programme should demonstrate
how it will contribute to achieving a paradigm shift to a country’s low-emission and climate-
resilient development pathway. To demonstrate this, project proponents should:
nnEnsure their funding proposal describes a long-term vision through its theory of change
and how this can be achieved through short-, medium- and long-term changes, including
by supporting systemic shifts through strategic investments in regulatory and policy
actions that have the potential to change behaviour in markets and economies beyond
one-off investments.
nnPromote country ownership through alignment with national climate change priorities and
comprehensive consultation and engagement with all relevant stakeholders, including the
National Designation Authority (NDA) the target group (especially vulnerable communities,
women, minority groups, etc.), government staff from different ministries or departments,
other relevant organisations and sector experts.
nnEmbed long-term sustainability in the project or programme’s design to ensure its impacts
will be sustained after financial support from the GCF and other funding sources runs out.
nnDemonstrate value for money and, where possible, secure up-front co-financing to
encourage crowding in, that is, stimulating long-term investments beyond the GCF
resources and the up-front commitments.
Summary xv
The GCF funding proposal template

Preparing a GCF funding proposal requires considerable research and consultation regarding
its design and costing. The funding proposal template (version 1.1) includes the following
sections:
A. Project/programme summary
B. Financing/cost information
C. Detailed project/programme description
D. Rationale for GCF involvement
E. Expected performance against investment criteria
F. Appraisal summary
G. Risk assessment and management
H. Results monitoring and reporting
I. Annexes.
What are the key GCF project design elements?

One of the key project design elements is the Results Management Framework (RMF), which
defines the elements of a paradigm shift towards low-carbon, climate-resilient, country-driven
development pathways within individual countries and across the Fund’s activities. The RMF
includes two key elements: the logic model and the Performance Measurement Framework
(PMF).
The logic model is further developed in the GCF proposal as a logic framework (or log frame)
that demonstrates how inputs and activities are converted to changes in the form of results
achieved at the project/programme, country, strategic impact and paradigm shift levels. The
log frame also captures basic monitoring and evaluation (M&E) requirements, which are also
key aspects of the RMF. The Accredited Entities (AEs) are primarily responsible for the M&E of
their projects or programmes and will report accordingly to the GCF. The PMF comprises a set
of indicators that allow the GCF to monitor results at the project, programme and aggregate
portfolio levels.
The GCF follows on an interim basis the International Finance Corporation (IFC)’s Performance
Standards (PS) as its Environmental and Social Safeguards (ESS) standards. The IFC PS consist
of one overarching standard (PS1) and seven standards covering specific environmental and
social issues (PS2–8). Project proponents are required to meet the objectives of the standards
relevant to their programme or project, in order to manage, mitigate or avoid the environmental
and social risks associated with their activities.
The integration of gender considerations within a funding proposal is another key requirement.
As per the GCF’s Gender Policy, all project proposals should include qualitative and quantitative
gender indicators; be aligned with the national policies and priorities on gender; and provide
equitable opportunities for women in stakeholder consultations and decision-making
xvi Green climate fund proposal toolkit 2017: Toolkit to develop a project proposal for the GCF
processes throughout the entire project cycle. In addition, it is highly recommended that
project proponents include in their proposal a Gender Action Plan (GAP), which provides an
overview of how gender equality will be promoted within the project. In line with the objective
of promoting gender equality in terms of access and impact of climate funding, programmes
and projects with well-designed gender elements may be given additional weight.
What are the key steps to put together a GCF proposal?

Project proponents can follow ten key steps that will guide them through the preparation and
submission of a fully fledged funding proposal. These steps may be undertaken iteratively rather
than strictly sequentially. A visual overview of the stepwise approach is provided in Figure 1.
This toolkit presents each of these steps alongside guidance on the tools and methods needed
to put a funding proposal together and fill in all sections of the GCF proposal template. For
each step we provide practical examples of how to demonstrate GCF requirements, using a
funding proposal developed by XacBank (Funding Proposal 028) to support a funding proposal
‘Business loan program for GHG emission reduction’ approved by the GCF Board in December
2016.
Figure 1. Stepwise approach to preparing a GCF funding proposal
STEP 1: STEP 8: STEP 9:

How to define the scope of a How to monitor, evaluate and How to prepare a budget for
project? report on a project? your project?
STEP 7: STEP 10:

STEP 2:
How to identify the rationale How to justify the level of
How to develop a log frame?
for GCF involvement? concessionality of a project?
STEP 3: STEP 6:
How to assess project risks How to align a project
and identify mitigation against the GCF investment
measures? criteria?
STEP 4: STEP 5:
How to integrate gender into How to assign indicators to
a project? measure progress?
Summary xvii
How to submit a funding proposal to the GCF?

Project proponents can submit funding proposals to the GCF – through an AE – spontaneously
on an ongoing basis or by responding to a request for proposals published on the GCF website.
Funding proposals submitted to the GCF should include a no-objection letter signed by
the National Designated Authority (NDA). Through the no-objection procedure, the NDA is
responsible for ensuring that funding proposals are aligned with national priorities.
The GCF project cycle includes seven main steps.
1. The AE or the NDA submits a concept note (voluntary).
2. The AE submits the project proposal to the GCF, in conjunction with a no-objection letter
signed by the NDA.
3. The GCF reviews selected sections of the proposal and the Independent Technical Advisory
Panel (ITAP) of the Fund undertakes a technical assessment and provides recommendations.
4. Based on the review and the technical assessment, the GCF decides whether or not to
approve the funding.
5. If the proposal is approved, a Funded Activity Agreement (FAA) between the AE and the
GCF is negotiated and signed.
6. The project enters the GCF portfolio, moving into the implementation phase. Funds are
transferred to the AE according to agreed tranches.
7. The project becomes effective, and the process of monitoring, evaluation and reporting
commences and continues until the project or programme closes and exits the Fund’s
portfolio.
So, how can you get started?

Project proponents can decide to prepare a one-step application (full proposal) or two-step
application (concept note followed by full proposal). While it is a voluntary step, developing a
concept note is highly recommended as experience has shown that it leads to better proposals.
This provides the opportunity to start a dialogue with the GCF Secretariat and receive valuable
feedback and guidance.
While it is highly recommended, it is not mandatory to identify an AE at the concept note stage.
The NDA can also submit a concept note without an associated AE and solicit feedback.
Once the concept note has been submitted, further technical assistance support is available –
through an AE – to turn a project concept note into a fully fledged funding proposal. The
Board will approve requests for support under the Project Preparation Facility (PPF) based on
an appropriate review and assessment against GCF’s investment criteria and a justification of
needs for project preparation funding with information on the underlying project.
xviii Green climate fund proposal toolkit 2017: Toolkit to develop a project proposal for the GCF
Figure 2. Two-step and one-step approval processes
Two-step approval process
Concept note
Not endorsed
Rejected Endorsed and
comments
Full proposal
Approved
Rejected Approved with
conditions
One-step approval process
Full proposal
Approved
Rejected Approved with
conditions
1
Introduction
The GCF, the world’s largest dedicated climate fund, is designed to help developing countries
achieve their ambition for low-carbon resilient development. This toolkit aims to guide project
proponents’ understanding of the key considerations to take into account to fulfil the GCF’s
requirements when developing funding proposals, by acquainting themselves with the following:
1. Essentials to know before developing a GCF project:

What does the GCF support?
How much and what type of finance is available?
What are the roles of different actors?
What about the private sector?
2. Key Project design elements:

Results Management ·Framework
Interim Environmental and Social Safeguards
Gender Policy
3. The GCF proposal template
4. How to put together a GCF funding proposal: a stepwise approach

Step 1: How to define the project scope?
Step 2: How to develop a logic framework?
Step 3: How to access project risks and identify mitigation measures?
Step 4: How to integrate gender into a project?
Step 5: How to assign indicators to measure progress?
Step 6: How to align a project against the GCF investment criteria?
Step 7: How to identify the rationale for GCF involvement?
Step 8: How to monitor, evaluate and report on a project?
Step 9: How to prepare a budget for your project?
Step 10: How to justify the level of concessionality of a project?
5. The GCF project cycle
6. How to get started?
7. Support available for the full proposal preparation.
Limitations of this guide

While this toolkit provides extensive guidance on the requirements for developing a GCF
funding proposal, it should be noted that a revised version of the GCF funding proposal
template is currently being developed by the GCF Secretariat. This toolkit is based on the
current template version 1.1.
In addition, this toolkit does not present the new, simplified process for micro-scale and small-
scale funding proposals (less than US$50 million) that are assessed to fall under the low/no-
risk Category C/Intermediation 3. The latter is still under discussion. It is envisaged that this
simplified process will include a revised full funding proposal template for micro- and small-
scale activities, and will involve simplifying the level of detail required in terms of feasibility
studies and other supporting documentation for these proposals.
2 Green climate fund proposal toolkit 2017: Toolkit to develop a project proposal for the GCF
Similarly, this toolkit does not cover the specificities from the Enhanced Direct Access; Micro,
Small and Medium Enterprises (MSME); and Mobilising Funding at Scale pilot programmes.
Users of this toolkit should also bear in mind that the GCF’s RMF, Gender Policy and interim ESS
are also likely to evolve following completion of the initial resource mobilisation period, based
on experience gained and lessons learned.
Chapter 1
3
1. Essentials to know before developing a GCF

project
The GCF is a financial mechanism established within the United Nations Framework Convention
on Climate Change (UNFCCC) and acts as the operating entity to implement the 2015 Paris
Agreement.
It was established through an agreement by 194 member countries at the 16th Conference of
Parties (COP) in 2010 under the Cancun Agreement to help developing countries respond to
climate change by investing in low-carbon resilient development.
The fund is expected to make a significant contribution to delivering the global objective of
providing US$100 billion in climate finance per year from public and private sources by 2020.
Figure 3 illustrates the two funding windows through which countries can access GCF funds:
adaptation and mitigation.
Figure 3. GCF funding windows
GCF
Mitigation funding Adaptation
windows
1.1 What does the GCF support?
The GCF finances low-emission (mitigation) and climate-resilient (adaptation) projects and
programmes developed by the public and private sectors to contribute to countries’ climate
change priorities. Cross-cutting projects that deliver co-benefits in terms of both mitigation and
adaptation are eligible for funding by the GCF. A project proponent will have to demonstrate
the climate change impact of its proposed project or programme in terms of mitigation,
adaptation or both.
When developing a GCF project, a project proponent should identify which strategic impact
areas its proposed project or programme contributes towards (noting that for an individual
project or programme, several can apply). Figure 4 presents the eight strategic impact areas for
adaptation and mitigation.
Chapter 1
Figure 4. GCF strategic impact areas
Mitigation strategic impact areas Adaptation strategic impact areas
Energy generation Health, food and Livelihoods of people

Transport
and access water security and communities
Reduced emissions Increased

from resilience of
Building, cities,
Ecosystems and Infrastructure and
Forest and land use industries and
ecosystem services built environment
appliances
Source: adapted from GCF infographics.
The proposed project or programme submitted will fall into one of the four GCF project size
categories (Figure 5).
Figure 5. Total project costs
Micro US$0–10 million
Small US$10–50 million
Medium US$50–250 million
Large US$ > 250 million
1.2 How much and what type of finance is available?
As of March 2017, the Fund has raised US$10.3 billion equivalent in pledges from 43 state
governments. So far, the major contributors have been (in chronological order of contribution):
the United States, Japan, the United Kingdom, France and Germany. However, developing
countries also pledged finance, including Chile, Colombia, Indonesia, Mexico, Mongolia,
Panama, Peru and Vietnam. The GCF provides four financial instruments: grants, concessional
loans, equity and guarantees (see section 4.10.2 for further information).
Chapter 1
Chapter 1. Essentials to know before developing a GCF project 5
1.3 What are the roles of different actors?
There are three main actors with a role to play in interacting with the GCF; putting a funding
proposal together; and, if successfully approved, overseeing and managing implementation
and completion of the project.
Figure 6. GCF architecture
Green Climate Fund
Executing Entities
ies
orit
h
Aut
ed
Accredited Entities
nat
Financial instruments
esig
al D
Grants Programmes and

ion
Nat
Loans projects
Guarantees
Equity
National Designated Authority

The NDA or Focal Point3 is the focal agency and point of contact with the GCF. The NDA/Focal
Point develops work programmes and oversees proposals. The list of NDAs and Focal Points is
available at www.greenclimate.fund/partners/countries/nda-directory.
Accredited Entity
An AE is accountable directly to the GCF’s Board for the overall management of projects, as well
as for the financial, monitoring and reporting aspects of project activities. The AE may be public
or private, and may include the following.
nnDirect access entities, which correspond to subnational, national or regional entities.

They may include national ministries or government agencies, national development
banks, national climate funds, commercial banks, other financial institutions, etc.
nnInternational access entities, which may be bilateral, multilateral or regional entities. They
may include bilateral development agencies (e.g. Deutsche Gesellschaft für Internationale
Zusammenarbeit, GIZ), multilateral development banks (e.g. World Bank), United Nations
agencies (e.g. United Nations Development Programme), regional development banks (e.g.
African Development Bank), intergovernmental organisations (e.g. World Wildlife Fund), etc.
Chapter 1
In addition to project management responsibilities, an AE may be an intermediary which

administers grants and loans while blending funds with its own and others’.
Executing Entity
A project proponent that is not an AE can act as an Executing Entity (EE). While an AE acts
as a country’s fund programme managers, the EE is in charge of executing eligible activities
supported by the GCF under the oversight of the AE. An AE can also execute projects itself.
In the former situation, when developing a GCF project, a project proponent should identify
an AE that will oversee the implementation and management of the proposed project or
programme. When selecting an AE, it is important to consider the potential risk category level
(A, B or C) and size (small, medium or large scale) of the proposed project and funded activities.
The AEs are classified according to the intended scale, nature and risks of their proposed
activities. In addition, a project proponent should identify areas of expertise that an AE can
provide to assist in developing the proposal (budgeting, economic and financial analysis,
pre-feasibility and feasibility studies, M&E, etc.). The list of existing AEs is available at www.
greenclimate.fund/partners/accredited-entities/ae-directory.
Table 1 summarises the main functions of the three actors.
Table 1. National Designated Authority, Accredited Entity and Executing Entity
Type of entity Role

National Designated Authority • Providing strategic oversight of a country’s
priorities
• Convening national stakeholders
• Providing nomination letters for the accreditation
of NIEs
• Providing no-objection letters for projects and
programmes
• Approving readiness support
Accredited Entity • Developing and submitting funding proposals for
projects and programmes
• Overseeing project and programme management
and implementation
• Deploying and administering a range of financial
instruments (grants, concessional loans, equity and
guarantees)
• Mobilising private sector capital for blending with
GCF and/or own resources
Executing Entity • Developing and submitting funding proposals for
projects and programmes through AEs
• Executing funding proposals
• Working under supervision and overall
management of the AE (no need for accreditation)
Chapter 1
Chapter 1. Essentials to know before developing a GCF project 7
1.4 What about the private sector?
The Private Sector Facility, the private sector arm of the GCF, was set up to maximise private
sector engagement to provide transformational solutions and catalyse private finance, through
two alternative mechanisms – the Mobilising Funding at Scale and MSME pilot programmes.
Figure 7. Support provided by the GCF’s Private Sector Facility
Private
sector
facility
Mobilise
funds from Support
institutional local MSME
investors
The Mobilising Funding at Scale pilot programme aims to mobilise funds at scale from Resources
institutional investors such as commercial banks, investment funds, insurance companies, Rai, N., Hossain, I., Soanes,
pension funds and sovereign wealth funds. To engage with these institutional investors, the M., Fayolle, V., Nasir, N. and
Fund intends to develop a range of investable financial products, some of which include green Mahid, Y. (2016) How can
bonds, commercial paper, syndications and club deals. Institutional investors can benefit from Bangladesh’s private sector
these products, which can help them to raise additional third-party capital for climate-related engage with the Green Climate
investments. Fund? London: International
Institute for Environment and
Through the MSME pilot programme, the GCF uses public finance to work with local micro, Development.
small and medium enterprises. The objective is to unlock innovative solutions for tackling http://pubs.iied.org/
climate change, in particular on adaptation, using requests for proposals to which all AEs able pdfs/10162IIED.pdf
to demonstrate a track record of successfully working with and financing MSMEs can respond.
2. Key project design elements
2.1 Results Management Framework
The GCF’s RMF defines the elements of a paradigm shift towards low-carbon, climate-resilient,
Chapter 2
country-driven development pathways within individual countries and across the Fund’s
activities. It includes two key elements: the logic model and the PMF.
Logic model
The logic model demonstrates how inputs and activities are converted to changes in the form
of results achieved at the project/programme, country, strategic impact and paradigm shift
levels. Figure 8 shows the levels of the logic model and indicates the estimated time required
to achieve the relevant results from the time of project inception. Generally speaking, the
attribution of funded activities to results achieved becomes increasingly difficult as one moves
from inputs to results achieved at the paradigm shift level.
Figure 8. Six levels of logic models
Results chain
Paradigm
Input Activity Output Outcome Objective
shift
Start of the Short term Short term Desired Desired long-term Desired long-term
intervention medium- to effects (15+ years) effects (15+ years)
e.g. financing of e.g. commercially long-term effects
e.g. senior loans projects that viable energy e.g. reduced e.g. shift to
increase generation efficiency and e.g. lower energy emissions low-emission
of renewable energy, renewable energy intensity of from buildings, sustainable
efficient use of projects are buildings, cities, cities, development
MSMEs identified, financed industries and industries and pathways
and implemented appliances appliances
Source: GCF, 2014b.4
In other words, the logic models for adaptation and mitigation represent the results chain and
the theory of change. In the proposal, the logic model is reflected in the log frame (Section H
of the proposal template) which will enable project proponents to demonstrate a long-term
vision in the changes and impacts to be achieved through the project. Section 4.2 provides
detailed guidance on how to develop a log frame.
Performance Measurement Framework

The PMF is the performance measurement system intended to monitor the Fund’s results
at the project, programme and aggregate portfolio levels. It includes a set of indicators that
measure progress towards intended results based on the paradigm-shift objective, Fund-level
impacts, and project/programme outcomes outlined in the Fund’s mitigation and adaptation
logic models. See Annexes 2–4 for the full list of indicators presented in the GCF’s PMF.
Chapter 2. Key project design elements 9
2.2 Interim Environmental and Social Safeguards
The GCF’s interim ESS are based on the IFC’s eight PS and their objectives. These consist of
one overarching standard (PS1) and seven standards covering specific issue areas (PS2–8). PS1
covers the elements that need to be in place to ensure the remaining seven standards are
implemented.
Chapter 2
Figure 9. Overview of the IFC’s Performance Standards
Ps 1: Assessment and management of environmental and social risks and impacts
PS 2 PS 3 PS 4 PS 5 PS 6 PS 7 PS 8
Labour and Resource Community Land acquisition Biodiversity Indigenous Cultural heritage
working efficiency health, and conservation and peoples
conditions and pollution safety and involuntary sustainable
prevention security resettlement management of
living natural
resources
2.3 Gender Policy
The GCF emphasises the importance of gender equality in terms of access and impact of climate
funding. The Governing Instrument of the Fund pursues gender balance in the appointments
of members of its Board and Secretariat, and establishes a clear mandate to enhance a gender-
sensitive approach in the Fund’s processes and operations.
The GCF’s Gender Policy aims to:
nnachieve greater, more effective, sustainable and equitable climate change results, outcomes
and impacts through the adoption of a gender-sensitive approach
nnbuild resilience to climate change equally for men and women, as well as to ensure that
men and women equally contribute to and benefit from activities supported by the Fund
nnaddress or mitigate risks for women and men associated with adaptation and mitigation
activities financed by the Fund
nnreduce the gender gap of social, economic and environmental vulnerabilities exacerbated
by climate change.
The Gender Policy is built on six fundamental principles (Figure 10).
The Fund promotes gender-sensitive solutions to all its activities in all countries, while taking
into account different national realities and priorities.
The integration of gender considerations within a funding proposal is one of the key
requirements to access the Fund and takes place at three interrelated levels: NDA, AE and EE.
Figure 10. Six principles of the GCF’s Gender Policy
Commitment to gender equality and equity

Chapter 2
Inclusiveness in terms of applicability to all the Fund’s activities
Accountability for gender and climate change results and impacts
Country ownership, alignment with national policies and priorities and inclusive stakeholder participation
Competencies throughout the Fund’s institutional framework
Equitable resource allocation between women and men
Figure 11. Three levels for integration of gender considerations into a funding proposal
NDA
AE
EE
The NDA should ensure that funding proposals are aligned with countries’ gender policies as
well as their climate change policies and priorities using, as appropriate, the countries’ gender
expertise (e.g. gender advisors from different ministries, university academics, representatives
of civil society organisations) to review climate change plans, programmes and projects.
The AE has the main responsibility for implementing the GCF’s Gender Policy, working
alongside the EE, through the development and implementation of the funding proposal
supported by results reporting. This includes developing a funding proposal which must
draw on a context and gender assessment and integrate qualitative and quantitative gender
indicators. Development of the proposal should be informed by stakeholder consultations and
decision-making processes that include equitable opportunities for women and men to be
involved and to lead activities. Further guidance on how to integrate gender equality into a
funding proposal through the development of a GAP is provided in section 4.4.
11
3. The GCF proposal template

Filling in the GCF’s proposal template requires considerable research, consultation and thinking
regarding a project’s design and costing. The development costs and the process to obtain the
no-objection letter from the NDA will vary considerably depending on the project scale, the
financial instruments used, the country of implementation and the AE selected.
Once all the information required to complete the template is available, the proposal should
be entered into the GCF’s funding proposal template (version 1.1) at www.greenclimate.
fund/library/-/docs/list/574044. Sections A, B, D, E and H of the funding proposal (see Table 2)
require detailed inputs from the project proponent. For all other sections, project proponents
have discretion in how they wish to present the information. Project proponents may either
incorporate information directly into the proposal, or provide summary information in the
proposal with cross-reference to other project documents such as a project appraisal document.
Chapter 3
Project proponents are expected to develop their funding proposals in close consultation with
the country’s NDA and with due consideration of the GCF’s investment framework, ESS, Gender
Policy and RMF.
Table 2. Structure of the GCF funding proposal template form (version 1.1)
Section Description
A – Project/programme summary

A.1. Brief project/programme
information
A.1.1. Project/programme title Provide the full title of the proposed project/programme.
A.1.2. Project or programme Indicate if the proposal is associated with a project or a programme.
A.1.3. Country(ies)/region Enter the country (or countries) or region in which the proposed project/
programme will be implemented.
A.1.4. National Designated Insert the name of the NDA.
Authority(ies)
A.1.5. Accredited Entity Insert the name of the AE.
A.1.5.a. Access modality Indicate which mode of access the entity is using to access the Fund’s
resources: direct or international.
A.1.6. Executing Entity/ Insert the name of the EE(s) who will channel funds, execute, carry out
beneficiary or implement the funded activity under the overall management and
supervision of the AE.
A.1.7. Project size category (total Indicate the scale of intended activities for the proposed project/programme:
investment, million US$) micro (≤10), small (10 < × ≤ 50), medium (50 < × ≤ 250) or large (>250).
A.1.8. Mitigation/adaptation Indicate if the proposed project/programme targets mitigation, adaptation
focus or cross-cutting (both mitigation and adaptation).
A.1.11. Results areas Mark all the relevant results areas of the Fund’s initial RMF that are applicable
to the proposed project/programme.
Section Description
B – Financing/cost information

B.1. Description of financial Provide a breakdown of cost estimates analysed according to major cost
elements of the project/ categories. Present a financial model that includes projection covering the
programme period from financial closing through final maturity of the proposed GCF
financing with detailed assumptions and rationale. Summarise the financial
instrument(s) to be used in support of the project/programme, and how
the choice of financial instrument(s) will overcome barriers and leverage
additional public and/or private finance to achieve project objectives.
B.2. Project financing State the amount of financial contributions needed for the proposed project/
information programme. The ‘total project financing’ should be the sum of ‘requested
GCF’ amount and ‘co-financing’ amount. Provide a breakdown by financial
instrument. Provide strong economic and financial justification for the
concessionality that GCF provides, particularly in the case of grants. Please
Chapter 3
note that the level of concessionality should correspond to the level of the
proposal’s expected performance against the investment criteria.
B.3. Financial market overview Provide an overview of the size of total banking assets, debt capital markets
if applicable and equity capital markets which could be tapped to finance the proposed
project/programme. Provide also an overview of market rates (i.e. one-year
Treasury bill, five-year government bond, five-year corporate bond (specify
credit rating) and five-year syndicate loan.
C – Detailed project/programme description
C.1. Strategic context Describe relevant national, subnational, regional, global, political and/or
economic factors that help to contextualise the proposal, including existing
national and sector policies and strategies.
C.2. Project/programme Describe the baseline scenario (i.e. emissions baseline, climate vulnerability
objective against baseline baseline, key barriers, challenges and/or policies) and the outcomes and the
impact that the project/programme will aim to achieve in improving the
baseline scenario.
C.3. Project/programme Describe the main activities and the planned measures of the project/
description programme according to each of its components. Provide information on
how the activities are linked to objectives, outputs and outcomes that the
project/programme intends to achieve.
C.4. Background information Describe the quality of the management team, overall strategy and financial
on project/programme profile of the sponsor (EE) and how it will support the project/programme
sponsor (EE) in terms of equity investment, management, operations, production and
marketing.
C.5. Market overview Describe the market for the product(s) or services including the historical
(if applicable) data and forecasts. Describe the competitive environment including the list
of competitors with market shares and customer base and key differentiating
factors (if applicable). Provide pricing structures, price controls, subsidies
available and government involvement (if any).
C.6. Regulation, taxation and Provide details of government licences or permits required for implementing
insurance (if applicable) and operating the project/programme, the issuing authority, and the date of
issue or expected date of issue. Describe applicable taxes and foreign exchange
regulations and details on insurance policies related to the project/programme.
Chapter 3. The GCF proposal template 13
Section Description
C.7. Institutional/ Describe in detail the governance structure of the project/programme,

implementation including but not limited to the organisation’s structure, roles and
arrangements responsibilities of the project/programme management unit, steering
committee, EEs and so on, as well as the flow of funds structure.
C.8. Timetable of Provide a project/programme implementation timetable.
project/programme
implementation
D – Rationale for GCF involvement
D.1. Value added for GCF Describe the value added by the Fund’s support and the project/programme’s
involvement long-term sustainability after the Fund’s intervention. Provide a justification
for the amount of funding requested and the financial instrument(s)
proposed, in order to close the funding gap and bring the project/programme
Chapter 3
to fruition. In the case of grant funding without repayment contingency,
present a convincing financial and/or economic argument to ensure that the
Fund maximises its use of resources.
D.2. Exit strategy Explain how the project/programme sustainability will be ensured in the
long run, after the project/programme is implemented with support from
the GCF and other sources.
E – Expected performance against investment criteria
Demonstrate the project/programme’s expected performance against the Fund’s investment criteria.
For each investment criterion, identify activity-specific sub-criteria and indicators in the Fund’s
investment framework.
E.1. Impact potential Specify the climate mitigation and/or adaptation impact, using the four core
indicators provided in the Fund’s investment framework.
E.2. Paradigm shift potential (1) Potential for scaling-up and replication (e.g. multiples of initial impact
size) for both mitigation and adaptation; (2) potential for knowledge and
learning; (3) contribution to the creation of an enabling environment; (4)
contribution to the regulatory framework and policies.
E.3. Sustainable development Provide the expected environmental, social and health, and economic
potential co-benefits. Also provide the gender-sensitive development impact, which
will aim to reduce gender inequalities in climate change impacts. These
co-benefits and wider positive impacts may be drawn from an economic
analysis of the proposed activities and can be strengthened with more
qualitative factors.
E.4. Needs of the recipient Describe the scale and intensity of vulnerability of the country and
beneficiary groups and elaborate how the project/programme addresses the
identified needs.
E.5. Country ownership Demonstrate the following factors, amongst others: (1) existence of a
national climate strategy and coherence with existing plans and policies; (2)
capacity of AEs or EEs to deliver; and (3) engagement with NDAs, civil society
organisations and other relevant stakeholders.
E.6. Efficiency and effectiveness Make the case for strong cost-effectiveness and financial soundness.
Section Description
F – Appraisal summary

The information to fill this section can be drawn from the project/programme appraisal document.
F.1. Economic and financial Provide the results of the detailed economic and financial analysis (including
analysis the financial model). Also, demonstrate the economic and financial
justification (both qualitative and quantitative) for the concessionality that
GCF provides.
F.2. Technical evaluation Provide an assessment from the technical perspective, if a particular
technological solution has been chosen.
F.3. Environmental, social Describe the main outcome of the Environmental and Social Impact
assessment, including Assessment (ESIA) and specify the Environmental and Social Management
gender considerations Plan (ESMP), and how the project/programme will avoid or mitigate
negative impacts in accordance with the Fund’s (ESS) standard. Also describe
Chapter 3
how the gender aspect is considered in accordance with the Fund’s Gender
Policy and Action Plan.
F.4. Financial management and Describe the project/programme’s financial management and procurement,
procurement including financial accounting, disbursement methods and auditing.
G – Risk assessment and management
G. Risk assessment and Identify any substantial technical, operational, financial, social and
management environmental risks that the project/programme may face, and propose
respective risk mitigation measures.
H – Results monitoring and reporting
H. Results monitoring and Provide the logic framework of the proposed project/programme.
reporting
Supporting documents
Annexes • No-objection letter from NDA
• Feasibility study
• Integrated financial model that provides sensitivity analysis of critical elements (xls format)
• Confirmation letter or letter of commitment for co-financing commitment
• Project/programme confirmation (term sheet)
• Environmental and Social Impact Assessment (ESIA) or Environmental and Social Management Plan
(ESMP)
• Appraisal report or due diligence report with recommendations
• Evaluation report of the baseline project
• Map indicating the location of the project/programme
• Timetable of project/programme implementation
• Procurement plan
• Detailed budget
• Gender Action Plan (GAP)
• Economic analysis
15
4. How to put together a GCF funding proposal: a

stepwise approach
This section presents a stepwise approach to guide project proponents through the preparation
of a fully fledged funding proposal. For each step, the toolkit provides a detailed overview of
the information required as well as the tools and methods to put a proposal together and fill in
all sections of the GCF funding proposal template.
Step 1 illustrates how to undertake a scoping analysis in order to gain a better understanding
of the contextual and strategic background of the project and define the baseline scenario.
Step 2 presents how to structure a logic framework (log frame) to demonstrate how the
project’s activities will allow its objectives to be achieved. Step 3 provides guidance on how
to identify potential risks to a project, including social and environmental risks (based on the
GCF environmental and social risk categories; see Table 10) and the corresponding mitigation
measures that could be used. Step 4 focuses on gender, providing guidance on how to
integrate this dimension into a project. Step 5 explains how to use and assign indicators for
your project, which will help the GCF to measure progress and performance. Step 6 presents
the six GCF investment criteria and how to align your project with them. Step 7 illustrates how
to justify the added value of GCF involvement and the sustainability of the project (the so-called
exit strategy). Step 8 provides an overview of the GCF’s monitoring, evaluation and reporting
responsibilities. Step 9 provides guidance on how to prepare the budget and complete the
budget-related sections of the GCF proposal. Step 10 helps project proponents to identify to
Chapter 4
the GCF the amount of financing they want to request and the most appropriate financial
instrument.
In practice, these steps may be undertaken iteratively rather than strictly sequentially. In
addition, there will probably be ongoing iteration between direction and guidance provided
by the GCF Secretariat, and ownership and information coming from the AE, EE, beneficiaries
and the NDA.
Putting together a GCF funding proposal requires investment of time and human resources. It is
important to note that proposals need to be submitted at least three months before the Board
meeting. As Board meetings are time constrained, it is advisable to submit proposals as early as
possible to be reviewed at a particular Board meeting (the GCF tends to meet three or four times
per year). The applicant can then work backwards to allow enough time to develop their funding
proposal. It is also important to identify and inform the selected AE and the NDA of the intention
to submit a proposal so that they are aware and can provide the appropriate support.
4.1 Step 1. How to define the project scope?
The first step is to define the project scope. A scoping analysis will provide the project
proponent with a better understanding of the strategic context in which the project will take
place, and will inform the description of the baseline scenario in the project proposal.
This section provides an overview of the tools and methods to conduct a scoping analysis and
to enable project proponents to:
nndescribe the prevailing environmental and climate conditions in the project’s target area
nnoutline the regulatory, socioeconomic, political and institutional context that informed the
proposed interventions
nnidentify potential threats and barriers to the project (social, technological, financial,
ecological, institutional) and how they are going to be addressed/overcome
nndescribe the baseline scenario.
In order to gather the necessary information to complete a scoping analysis, a project

proponent may be required to:
nnundertake desktop research and a literature review
nnconduct new research and studies
nnconsult relevant stakeholders.
Figure 12. Key elements in undertaking a scoping analysis
Desktop
research and
literature review
Chapter 4
Conduct new Stakeholders’

research and consultations
studies
4.1.1 Desktop research and literature review

Project proponents should identify relevant studies and undertake desktop research to compile
the existing information about:
nnimpacts of and vulnerabilities to climate change in their country, with particular focus on
the project’s target area (for adaptation projects)
nnexpected impacts of climate change on energy demand, energy efficiency and renewable
energy on greenhouse gas emissions (for mitigation projects)
nnReducing Emissions from Deforestation and Forest Degradation (REDD+), and the role
of conservation, sustainable management of forests and enhancement of forest carbon
stocks in developing countries.
This information generally can be found in national documents, but should be complemented
with information included in international reports such the Intergovernmental Panel on
Climate Change (IPCC) Assessment Reports.
Chapter 4. How to put together a GCF funding proposal: a stepwise approach 17
The literature review could focus on the following.
nnNational priorities on climate change can be found in Intended Nationally Determined

Contributions (INDCs) or Nationally Determined Contributions (NDCs) as well as any
national, subnational and sectorial policy documents related to climate change (e.g.
national communications to the UNFCCC, climate change national policy, programme or
strategy).
nnClimate change impacts and vulnerabilities, including adaptation needs (ideally

disaggregated by gender and age), can be found in national vulnerability and risk
assessments as well as adaptation policy processes such as the National Adaptation
Programmes of Action (NAPAs) or National Adaptation Plans (NAPs).
nnCountry’s energy demand, energy efficiency and renewable energy priorities,

options and impacts can be found in greenhouse gas inventories, technology needs
assessments, energy-related policy documents, Low-Emission Development Strategies and
Plans (LEDs), Nationally Appropriate Mitigation Action (NAMA) and other available studies.
nnNational strategies or action plans relating to REDD+, and the role of conservation,
sustainable management of forests and enhancement of forest carbon stocks,
including National Forest Reference Emission Level (FREL) and/or Forest Reference Level
(FRL), as well as National Forest Monitoring Systems (NFMS) for the monitoring and
reporting on REDD+ activities.
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nnSustainable development priorities and potential options can be found in
sustainable development policy documents, Poverty Reduction Strategy Papers (PRSPs),
environment- and gender-related policy documents and other relevant sector policies.
nnEvaluation reports from ongoing or past climate change projects/programmes

to draw lessons on achieved successes and/or failures related to the project/programme
design, implementation and evaluation. This process will allow the project proponent to
avoid overlaps with existing initiatives, while building on their achievements and filling
potential gaps. This also provides project proponents an opportunity to identify the
potential for scaling up and replication, which informs the paradigm shift potential of the
project.
nnPast studies that assess (quantitatively or qualitatively) the costs and benefits of
climate change projects or activities, such as cost–benefit analysis, cost-effectiveness
analysis or multi-criteria analysis, economic valuation studies of natural resources and
ecosystems and their services, including contingent valuation and willingness-to-pay
methods.
Table 3. Existing supporting tools for undertaking a scoping analysis for a climate
change project
Tool Description
Vulnerability A key instrument to identify and prepare for changing risks. It
and adaptation provides information for decision-makers on the extent and
assessment (if magnitude of likely risks attributable to climate change, as well as
adaptation) suggesting priority policies and programmes that can prevent or
reduce the severity of future impacts.
Vulnerability A form of participatory impact assessment focusing on community
reduction perceptions of vulnerability to climate change and capacity to
assessment adapt, which assesses the results of projects using pre-set indicators
(if adaptation) that measure the reduction in vulnerability and adaptive capacity.
Vulnerability reduction assessment indicators are organised around
four key categories: i) description and assessment of current
vulnerability; ii) future vulnerability; iii) description and assessment
of current adaptation/risk-management projects and strategies;
iv) description and assessment of the system’s capacity to adapt in
the current environment and into the future.
Vulnerability Provides precise indications on the location of sites at risk due to
mapping (if a potentially catastrophic event that could result in death, injury,
adaptation) pollution or other destruction. In the context of climate change,
vulnerability refers to the state of susceptibility to damage from
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exposure to climate hazards, and the ability of the environment/

society/economy to cope with, and recover from, such exposure
as well as to manage incremental and long-term climate change.
Identifying vulnerability is therefore a necessary prerequisite to
develop low-emission climate-resilient plans and strategies and
to ensure that societies are resilient in the face of climate change.
Once vulnerability has been determined, it is useful to map this
information to identify the likely location(s) of vulnerable sectors
and people for a range of possible climate futures.
Greenhouse gas Account for the amount of greenhouse gas emissions discharged
inventories into the atmosphere. Article 4.1a of the UNFCCC requires that all
(if mitigation) countries periodically publish and make available to the Conference
of the Parties (COP) inventories of anthropogenic emissions and
removals by sinks of all greenhouse gases not controlled by the
Montreal Protocol.5 Project proponents should look for national
greenhouse gas inventory reports. Other sources of reference are:
• UNFCCC Greenhouse Gas Inventory6
• IPCCC National Greenhouse Gas Inventories7
• ISO 14064, Greenhouse Gas Accounting and Verification.8
Greenhouse Involves a national-level analysis of the potential costs and impacts
gas mitigation of various technologies and practices that have the capacity to
assessment mitigate climate change. The key goals of this assessment are: i) to
(if mitigation) provide policy-makers with an evaluation of those technologies
and practices that can both mitigate climate change and contribute
to national development objectives; and ii) to identify policies and
programmes that could enhance their adoption.
Tool Description
Technology Assists developing country Parties to the UNFCCC to determine
needs their technology priorities for the mitigation of greenhouse gas
assessment emissions and adaptation to climate change.
Forest Reference Reference levels are expressed as tonnes of CO2 equivalent (t CO2eq)
Emission Level; per year for a reference period against which the emissions
Forest Reference and removals from a results period will be compared. Thus
Level (if REDD+) reference levels serve as benchmarks for assessing each country’s
performance in implementing REDD+ activities. Reference levels
need to maintain consistency with the country’s greenhouse gas
inventory estimates.
National Forest Reliable data on forest areas and forest area changes are key to
Monitoring any functional measurement and reporting of forest carbon. These
Systems (if systems use a combination of remote sensing and ground-based
REDD+) forest carbon inventory approaches for estimating anthropogenic
forest-related greenhouse gas emissions by sources and removals
by sinks, forest carbon stocks and forest area changes.
4.1.2 New research and studies

Where comprehensive information is not available, new research and studies can be undertaken
to fill information gaps. These activities will focus on filling the gaps in knowledge and data
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on the impacts of, and vulnerabilities to, climate change, as well as the mitigation potential
(t CO2eq per year) for the target area and population.
A number of tools and methods are available to undertake the studies and fill in these gaps. An
overview of selected tools and methods is provided in Table 4.
Table 4. Selected data analysis methods
Tool Description
Trend analysis A method of analysis in which information is collected in the attempt to
identify a pattern or trend in the information.
Cost–benefit A systematic approach for calculating and comparing the benefits
analysis and costs of a project. It is used to determine what option
provides the best approach to achieve a specific objective with the
maximum benefits.
Cost- A form of economic analysis that compares the relative costs and
effectiveness outcomes (effects) of different courses of action. While the cost–
analysis benefit analysis assigns a monetary value to the measure of effect,
the cost-effectiveness analysis is most useful when analysts face
constraints which prevent them from conducting a cost–benefit
analysis, such as the inability to monetise benefits. It is the most
common form of analysis in governments, as it allows evaluating
and comparing the costs of alternative ways of providing similar
kinds of outputs.
Endnotes
Tool Description
Causal loop A tool for mapping a set of relationships forming a ‘system’ – such
diagram as a policy, a strategy or a regulation. The result is a ‘picture’ showing
causal links among key drivers or influential variables that affect the
system’s behaviour or outcomes. Thus a causal loop diagram reveals
the systemic relationships (structures) underlying a complex system.
Multi-criteria A decision-making method (also called multi-criteria decision
analysis analysis) developed to analyse complex problems, which involves
choosing between alternatives with conflicting objectives. Multi-
criteria analysis helps to analyse problems that are characterised by
any mixture of monetary and non-monetary objectives by breaking
the problem into more manageable pieces to allow data and
judgements to be brought to bear on the pieces, then reassembling
the pieces to present a coherent overall picture to decision-makers.
The purpose is to serve as an aid to thinking and decision-making,
but not to take the decision. As a set of techniques, multi-criteria
analysis provides different ways of disaggregating a complex
problem, measuring the extent to which options achieve objectives,
weighting the objectives and reassembling the pieces.
Problem/solution A methodology including three steps for identifying main problems,
tree along with their causes and effects, helping project planners to
formulate clear and manageable objectives and strategies for how
to achieve them.
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4.1.3 Stakeholders’ consultations

In line with the GCF’s Best Practices for Country Coordination and Multi-Stakeholder
Engagement, the project proponent is required to identify and consult relevant stakeholders
to gather contextualised information on the target area and population. Consultations should
involve the target population, inclusive of ethnic minorities, disabled, elderly, children, women,
indigenous peoples and others.
A wealth of quantitative and qualitative methods are available to undertake consultations.

The project proponent may select the most appropriate approach based on the type of
information to be gathered and the expertise required, also taking into account literacy and
cultural aspects. Participatory approaches may be used where appropriate.
Relevant stakeholders to consult may include government ministries, departments and

agencies; private sector organisations; civil society organisations; non-governmental
organisations (NGOs); universities and/or research institutions; and regional organisations.
As per the GCF’s Gender Policy, the project proponent should ensure that stakeholders’
consultations are gender equitable.
Table 5. Selected consultation methods
Method Description
Surveys Surveys are structured on a series of questions to obtain a view of, or to

appraise, a certain area of study. They may be administered electronically,
via phone or post, as well as face to face. Surveys are used to gather and
compare information from a large number of people. They are not suitable
for gaining a detailed understanding of a specific issue, and should be
combined with qualitative methods such as focus groups, interviews or
workshops.
Focus Small groups of stakeholders where specific issues are explored in depth
groups through a structured but open-ended discussion, led by a trained facilitator.
Structured to test the opinion of specific categories of stakeholders on a
specific issue, focus groups can help reduce inhibition and promote open
discussion by gathering similar types of people (e.g. women) in the group.
Interviews Interviews may be undertaken individually or with more than one
interviewee. One-on-one interviews have the advantage of allowing
enough time to learn what key stakeholders think or know about a certain
topic, as well as to develop a more detailed understanding of their opinions.
Workshops Workshops with different types of relevant stakeholders can provide the
opportunity to discuss and share knowledge, views and lessons learned on
a specific issue.
Chapter 4
The information gathered through the scoping analysis will inform Section C of the GCF
funding proposal template; the baseline scenario against which the project’s success is
measured (see Step 2 – How to develop a logic framework?); and the identification of potential
risks to the project (see Step 3 – How to assess project risks and identify mitigation measures?).
4.2 Step 2. How to develop a logic framework?
The logic framework (log frame) is one of the most often-used methods to articulate and
clarify how a set of activities will achieve a project’s desired outcomes and objectives (its theory
of change). The theory of change represents the long-term vision of the project and how this
can be achieved through short-, medium- and long-term changes.
Hence the log frame serves as a results map that also captures the basic monitoring and
evaluation (M&E) requirements. The project/programme’s log frame is critical to determine the
costs at the activity level required in the proposal template, the overall budget, the timeline
and key milestones.
There are several ways to develop a log frame. The RMF method used by the GCF develops
the log frame through a process of backcasting. Backcasting (the opposite of forecasting) is a
planning process that starts with the desired future (paradigm shift and objectives) and works
backwards to identify the outcomes, outputs, activities and inputs required to connect the
future with the present (baseline) situation. The model’s logic can then be verified by working
from the baseline, up through the activities and onwards to the objective. The process to
develop the log frame using a backcasting approach is shown in Figure 13.
Figure 13. Backcasting approach to developing a log frame
A shift to low-emission sustainable development pathways (mitigation)

1. Desired future:
and/or
paradigm shift
Increased climate-resilient sustainable development (adaptation)
What objectives (e.g. low-emission

2. Objectives energy access and power generation
(or Fund-level impacts) (mitigation); enhanced livelihoods of the
What needs to most vulnerable people (adaptation)) are
be done today to pursued to achieve the paradigm shift?
connect the
future to the What outcomes (e.g. infrastructures,
present? 3. Outcomes policy, training etc.) need to be in place for
the objective to be achieved?
What outputs (e.g. products and services)
4. Outputs need to be in place for the outcomes to
be achieved?
Baseline What activities need to be undertaken to
(present situation) 5. Activities
produce the outputs?
What inputs need to be provided to

6. Inputs
undertake the activities?
Chapter 4
As illustrated in Figure 13, following a top-down approach, the project proponent can first
identify the paradigm shift potential of the project, that is, the ability of the project/
programme to contribute to a shift to low-emission sustainable development and/or to
climate-resilient sustainable development.
The paradigm shift therefore represents an overarching vision of the project, which is then
broken down into objectives or fund-level impacts. The objectives correspond to aggregate
changes the project will achieve in one or more of the GCF’s eight strategic impact areas (see
Figure 4 and Table 6).
Table 6. Mitigation and adaptation fund-level impacts
Fund-level impacts and GCF strategic impact areas

Mitigation
• Low-emission energy access and power generation

• Low-emission transport
• Energy-efficient buildings, cities and industries
• Sustainable land use and forest management
Adaptation
• Enhanced livelihoods of the most vulnerable people, communities and regions
• Increased health and wellbeing, and food and water security
• Infrastructure and built environment resilient to climate change threats
• Resilient ecosystems
The outcomes describe changes that need to be in place for the objective to be achieved.
The GCF provides different categories of outcomes for mitigation and adaptation projects. The
project proponent will have to select in the proposal which outcomes the project/programme
will achieve. The outcomes used by the GCF for mitigation, adaptation and REDD+ are listed
in Table 7.
Table 7. Mitigation and adaptation project/programme-level outcomes
GCF Project/programme-level outcomes

Mitigation
• Increased gender-sensitive low-emission development mainstreamed in government
• More small, medium and large low-emission power suppliers
• Lower country energy-intensity trajectory
• Increased use of low-carbon transport
• Stabilisation of forest coverage
Adaptation
• Strengthened government institutional and regulatory systems for climate-responsive
development planning
• Increased generation and use of climate information in decision-making
• Strengthened adaptive capacity and reduced exposure to climate risks
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• Strengthened awareness of climate threats and gender-sensitive risk reduction processes
REDD+
• Reduced emissions (t CO2eq) from deforestation
• Reduced emissions (t CO2eq) from forest degradation
• Reduced emissions and increased removals (t CO2eq) through the conservation of forest
carbon stocks
• Reduced emissions and increased removals (t CO2eq) through the sustainable
management of forests
• Increased removals (t CO2eq) through the enhancement of forest carbon stocks
The outcomes are then further broken down in outputs, which describe high-level products
and services to be achieved as a result of project/programme outcomes (e.g. more small,
medium and large low-emission power suppliers).
The outputs will be achieved through specific activities and corresponding inputs. The activities
correspond to direct services to be provided under the project (e.g. capacity-building training;
increased investment in renewable energies). These will be realised through dedicated inputs –
financial resources (e.g. GCF’s grants/concessional loans) and human efforts.
Eventually, the logic of the log frame can be verified by working from the baseline, up through
the inputs and onwards to the objective. An example of a complete log frame is provided in
Annex 1, based on an approved project proposal: ‘Business loan program for GHG emission
reduction’.
When developing the log frame, the following levels require the use of indicators.
nnOutput level: To demonstrate how the expected results of the project/programme will
contribute to achieving the identified outputs.
nnOutcome level (country level): To demonstrate how the expected results of the project/
programme will contribute to achieving the selected outcomes.
nnFund impact level (objective): To demonstrate how the outcomes included in the
project/programme will achieve results that contribute to the identified strategic impact
areas of the GCF.
The log frame will help complete Section H – Results monitoring and reporting of the
GCF funding proposal. To complete this section, project proponents will have to assign specific
indicators and corresponding means of verification to allow the GCF to measure and monitor
the expected results identified in the log frame. Step 3 explains how to categorise risks for
your project based on the GCF’s requirements, and how to assess risks and identify mitigation
measures.
4.3 Step 3. How to assess project risks and identify mitigation measures?
Project proponents are expected to identify any substantial technical, operational, financial,
social and environmental risks that the project/programme may face, and propose respective
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risk mitigation measures.
For each risk, the project proponent will have to indicate the:
nncategory: technical and operational; financial; or social and environmental
nnlevel of impact: low (less than 5% of project value), medium (between 5.1 and 20% of
project value) or high (over 20% of project value)
nnprobability of the risk occurring: low, medium or high.
Risks can be addressed by developing a risk management plan, in which the project proponent
will identify foreseeable risks, estimate impacts and define responses to potential issues. A risk
management plan requires a risk management strategy to determine how the identified risks
can be avoided or managed through mitigation measures, to reduce the probability of the risk
occurring.
4.3.1 Risk mitigation

Risk is the potential of exposing something of value to damage or loss. All projects have
associated risks that need to be considered when designing and implementing a project. Risk
mitigation entails modifying the project design or including additional activities to reduce the
likelihood the risk will occur. In the proposal, the project proponent should explain how the
mitigation measures will lower the probability of the identified risks occurring, and to what
extent. An example of a risk and respective mitigation measure is provided in Table 8.
Table 8. Illustrative example: A risk and mitigation measure from XacBank’s

approved proposal: ‘Business loan program for GHG emission reduction’
Selected Risk Factor 5

Description Risk category Level of impact Probability
of risk
occurring
Technology-related risk, e.g. Technical and Low Low
failure of installed renewable operational (<5% of project
energy and energy efficiency value)
components, installed
technologies not suited for
required task, inexperienced
staff unable to operate
the equipment to achieve
efficiency gains
Mitigation measure(s)
The technological elements of proposed products will either be verified through
supplier documentation of testing, or tested in collaboration with XacBank’s local
partner Building Energy Efficiency Center (BEEC), which XacBank has worked with on
many projects. In addition to verifying the actual functionality of the products, XacBank
will provide technical advisory to ensure the selected product is appropriate for the
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task required of it. Finally, the primary focus of awareness raising activity with regard
to energy efficiency and renewable energy will centre around reducing perception of
risk with these products (closing technological knowledge risk). Many MSMEs know
that these products exist, but they perceive them as a risky investment. Making them
aware of the extensive testing and risk reducing measures that are integrated into the
program will cull more interest in participation.
Project proponents should also describe any other potential issues that will be monitored
as ‘emerging risks’ during the life of the projects: issues that are not yet raised to the level
of ‘risk factor’, but that will need monitoring. These could include issues related to external
stakeholders such as project beneficiaries or the pool of potential contractors.
4.3.2 Environmental and social risks

For environmental and social risks, the project proponent should refer to the ESS of the GCF,
which are based on an interim basis on the International Finance Corporation (IFC)’s eight PS
and their objectives.
The IFC PS consist of one overarching standard (PS1) and seven standards covering specific
issue areas (PS2–8). PS1 covers the elements that need to be in place to ensure the remaining
seven standards are implemented. Table 9 below gives an overview of the topics covered in
IFC PS1–8.
Table 9. The IFC’s Performance Standards
Performance Standard Objectives

PS1 Assessment and (a) Identify funding proposal’s environmental and social risks
Management of and impacts
Environmental and (b) Adopt mitigation hierarchy: anticipate; avoid; minimise;
Social Risks and Impacts, compensate or offset
including:
(c) Improve performance through an Environmental and
• Policy (or equivalent Social Management System
documents)
(d) Engagement with affected communities or other
• Process for identifying stakeholders throughout funding proposal cycle. This
risks and impacts includes communications and grievance mechanisms
• Management
programme
• Organisational capacity
and competency
• Process for monitoring
and evaluation
• External
communications
PS2 Labour and Working (a) Fair treatment, non-discrimination, equal opportunity
Conditions (b) Good worker–management relationship
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(c) Comply with national employment and labour laws

(d) Protect workers, in particular those in vulnerable categories
(e) Promote safety and health
(f ) Avoid use of forced labour or child labour
PS3 Resource Efficiency and (a) Avoid, minimise or reduce project-related pollution
Pollution Prevention (b) More sustainable use of resources, including energy and
water
(c) Reduced project-related greenhouse gas emissions
PS4 Community Health, Safety (a) To anticipate and avoid adverse impacts on the health and
and Security safety of the affected community
(b) To safeguard personnel and property in accordance with
relevant human rights principles
PS5 Land Acquisition and (a) Avoid/minimise adverse social and economic impacts from
Involuntary Resettlement land acquisition or restrictions on land use
(i) Avoid/minimise displacement
(ii) Provide alternative project designs
(iii) Avoid forced eviction
(b) Improve or restore livelihoods and standards of living
(c) Improve living conditions among displaced persons by
providing
(i) Adequate housing
(ii) Security of tenure
Performance Standard Objectives

PS6 Biodiversity Conservation (a) Protection and conservation of biodiversity
and Sustainable (b) Maintenance of benefits from ecosystem services
Management of Living
(c) Promotion of sustainable management of living natural
Natural Resources
resources
(d) Integration of conservation needs and development
priorities
PS7 Indigenous Peoples (a) Ensure full respect for indigenous peoples
(i) Human rights, dignity, aspirations
(ii) Livelihoods
(iii) Culture, knowledge, practices
(b) Avoid/minimise adverse impacts
(c) Sustainable and culturally appropriate development
benefits and opportunities
(d) Free, prior and informed consent in certain circumstances
PS8 Cultural Heritage (a) Protection and preservation of cultural heritage
(b) Promotion of equitable sharing of cultural heritage
benefits
Source: GIZ and WRI (2015)9
Chapter 4
The GCF requires all project proponents to assess and manage the environmental
and social risks associated with their activities and to adopt the IFC’s approach to risk
categorisation, which consists of three risk categories: low (C), medium (B) and high (A)
risk. Table 10 provides an overview of the risks and relevant categories.
Table 10. Risk levels and categories
Risk level Funding Intermediation Examples

proposals
High Category A Intermediation 1 (I-1) Activities with potentially
Activities with When an intermediary’s significant adverse environmental
potential existing or proposed and/or social risks and impacts,
significant adverse portfolio includes, or which are diverse, irreversible
environmental is expected to include, or unprecedented, such as
and/or social risks, substantial financial large-scale forestry, agriculture
and/or impacts exposure to activities or renewable energy projects;
that are diverse, with potential significant projects affecting highly sensitive
irreversible or adverse environmental ecosystems; projects with large
unprecedented. and/or social risks, and/ resettlements; projects affecting
or impacts that are indigenous or tribal populations;
diverse, irreversible or projects with serious occupational
unprecedented. or health risks; and projects that
pose serious socioeconomic
concerns.
Risk level Funding Intermediation Examples

proposals
Medium Category B Intermediation 2 (I-2) Activities with mild adverse
Activities with When an intermediary’s environmental and/or social
potential existing or proposed risks, and/or impacts that are
mild adverse portfolio includes, or few in number, generally site-
environmental is expected to include, specific, such as adaptation
and/or social risks, substantial financial of crops or farming; forest
and/or impacts exposure to activities management; energy efficiency
that are few in with potential limited of industry; small- to medium-
number, generally adverse environmental scale renewables; small-scale
site-specific, largely or social risks and/or agricultural initiatives.
reversible and impacts that are few
readily addressed in number, generally
through mitigation site-specific, largely
measures. reversible and readily
addressed through
mitigation measures; or
includes a very limited
number of activities
with potential significant
adverse environmental
and/or social risks, and/
or impacts that are
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diverse, irreversible or
unprecedented.
Low/no Category C Intermediation 3 (I-3) Activities with minimal or no
Activities with When an intermediary’s adverse environmental and/
minimal or existing or proposed or social risks, and/or impacts,
no adverse portfolio includes such as education and training;
environmental financial exposure public broadcasting; small-
and/or social risks, to activities that scale reforestation; health and
and/or impacts predominantly have family planning; monitoring
minimal or negligible programmes; plans and studies;
adverse environmental advisory services.
and/or social impacts.
Source: GCF (2017)10
Project proponents should undertake an ESIA to identify, predict and assess the type and scale
of potential environmental and social impacts, and to appraise alternative options and design
appropriate mitigation, management and monitoring measures.
The scope and depth of the ESIA will be proportional to the level of risks and impacts, and
will address the specific requirements of applicable ESS standards. The specific focus of the
assessment will be determined by the requirements of the applicable ESS standards. For
category A, projects that are expected to have significant environmental and social impacts, a
full and comprehensive ESIA is required. For category B, projects with limited impacts and well
developed mitigation and monitoring measures, a limited-focus ESIA and ESMP will suffice.
Category C projects, having no expected significant environmental and social impacts, may
not require any assessments although a pre-assessment should confirm that the project is
indeed in category C.
Informed by the ESIA, the project proponent should prepare an ESMP defining resources, roles
and responsibilities to manage the identified impacts and to implement mitigation measures.
The ESMP should include a description of the prioritised activities planned to mitigate impacts,
a timeline, and identification of resources to ensure the ESMP can be delivered. Where the
project involves existing facilities, an environmental and social audit may be required, and the
corresponding ESMP may include remediation, recompense or management of any residual
environmental and social issues. The ESMP should also define monitoring requirements to
determine whether mitigation is successful.
The development of the ESMP is the responsibility of the AEs. However, if the AE is acting as
an intermediary, the EE will be in charge of fulfilling the project-level ESMP requirements and
will conduct the necessary due diligence and oversight to ensure that these requirements are
fulfilled.
Table 11. GCF ESMP requirements
Environmental and social impacts ESMP requirements

Potential involuntary resettlement A resettlement action plan11 or, if specific activities or locations have not
impacts yet been determined, a resettlement policy framework proportional to
the extent of physical and economic displacement and the vulnerability
Chapter 4
(consistent with the objectives and
requirements of PS5 on land acquisition of the people and communities is required. A resettlement framework will
and involuntary resettlement) include provisions for the development and implementation of site-specific
resettlement action plans. These plans or frameworks will complement the
social assessment of the project on this specific issue.
Potential impacts on biodiversity Impacts on biodiversity and ecosystem services are to be avoided, and
(consistent with the objectives and if avoidance of impacts is not possible, measures to minimise impacts and
requirements of PS6 on biodiversity restore biodiversity and ecosystem services will be implemented. Mitigation
conservation and sustainable measures may include biodiversity offsets (to be considered only after
management of living natural appropriate avoidance, minimisation and restoration measures have been
resources) applied). These measures need to be supported by sound science and long-
term management. Evidence of secured funding should also be provided.
For projects that have potential impacts on critical habitats, a biodiversity
action plan is required that describes the long-term mitigation, conservation
outcomes, monitoring and evaluation programme.
Potential impacts on indigenous An indigenous peoples development plan or, if specific activities or
peoples locations have not yet been determined, an indigenous peoples planning
(consistent with the objectives and framework12 is required. The scope and extent of such plans will be
requirements of PS7 on indigenous proportional to the vulnerability of the indigenous peoples and the extent
peoples) of the impacts on the customary rights of use and access to land and natural
resources, socioeconomic status, cultural integrity, indigenous knowledge and
skills, and overall welfare. The planning framework should include provisions
for the development and implementation of site-specific indigenous peoples
plans. These plans and frameworks will complement the social assessment of
the project on this specific issue.
Source: GCF (2016e)13

For activities requiring financial intermediation, the GCF requires the AE, acting in an
intermediary function, to develop an ESMS to identify and manage the risks associated with its
portfolio on an ongoing basis. The ESMS is a set of management processes and procedures to
identify, analyse, control and reduce the environmental and social impacts of an organisation’s
activities in a consistent way, and to improve performance in this regard over time. The complexity
of the ESMS will vary depending on the risk exposure that the intermediary is expected to
manage. The ESMS will be designed to meet the needs of intermediaries and can be integrated
into existing risk management systems operating within intermediaries.
4.3.3 Information Disclosure Policy

The ESIA and the ESMP should be made public as per the GCF’s Information Disclosure Policy.
The AEs should disclose the following to the public.
nnCategory A projects: the ESIA and an ESMP at least 120 days in advance of the AE’s or GCF’s
Board decision, whichever is earlier.
nnCategory I-1 programmes: the ESMS at least 120 days in advance of the AE’s or GCF’s Board
decision, whichever is earlier.
nnCategory B projects: the ESIA and an ESMP at least 30 days in advance of the AE’s or GCF’s
Board decision, whichever is earlier.
Resources
nnCategory I-2 programmes: the ESMS at least 30 days in advance of the AE’s or GCF’s Board
Demetriades, J. (nd) Gender decision, whichever is earlier.
Chapter 4
indicators: what, why and how?

Brighton, UK: BRIDGE, Institute The reports will be made available in both English and the local language (if not English)
of Development Studies. via electronic links on both the AE’s and the GCF’s website (in the case of the GCF website,
www.oecd.org/dac/gender- upon submission of a funding proposal to the Board). Proposals relating to projects/programmes
development/43041409.pdf that do not have any significant environmental or social impact (Category C or Category l-3) do
European Commission (nd) not require any additional advance information disclosure.
A guide to gender impact
assessment. Brussels: European An example of information disclosure from an approved proposal is provided in Table 12.
Commission.
http://ec.europa.eu/social/ The information provided in this step will inform Section G – Risk Assessment and
BlobServlet?docId=4376 Management of the GCF Funding Proposal. Step 4 explains how to integrate gender in the
project design and how to develop a GAP.
March, C., Smyth, I. and
Mukhopadhyay, M. (1999)
A guide to gender analysis 4.4 Step 4. How to integrate gender into a project?
frameworks. Oxford: Oxfam.
www.ndi.org/sites/default/ In order to integrate gender into a project or programme, project proponents have to develop a
files/Guide%20to%20 gender assessment and a Gender Action Plan (GAP). This entails undertaking a comprehensive
Gender%20Analysis%20 socioeconomic and gender assessment (complementary to the ESS requirements), including
Frameworks.pdf relevant gender-equitable stakeholders’ consultations and engagement. The gender assessment
Oxfam (2014) ‘Quick guide to and the GAP should be submitted as an annex of the proposal. This will provide the GCF, AE and
gender-sensitive indicators’. EE with an overview of how gender equality will be promoted within the project.
Oxford: Oxfam.
www.fsnnetwork.org/sites/ Informed by the gender assessment, the GAP should include the following aspects.
default/files/ml-quick-guide-
to-gender-indicators-300114- nnDefining gender-responsive objectives. Project proponents should determine how the
en.pdf project/programme can respond to the needs and interests of women and men in view
of the specific climate change issue to be addressed, and identify the drivers of change
and the gender dynamics to achieve the project/programme adaptation or mitigation

goals. The participation of people from diverse socioeconomic and ethnic backgrounds is
necessary in the goal-setting process.
nnMainstreaming gender in the project activities. Project proponents should define

activities and inputs that are required to achieve the changes established in the objectives
of the proposed project or programme.
Table 12. Illustrative example: Environmental and social report disclosure information from XacBank’s
approved proposal: ‘Business loan program for GHG emission reduction’
Environmental and social report(s) disclosure

Basic project/programme information
Project/programme title MSME business loan program for GHG emission reduction
Accredited entity XacBank LLC
Environmental and social safeguards (ESS) category Intermediation 2 (I2)
Environmental and Social Impact Assessment (ESIA) (if applicable)
Date of disclosure on accredited entity’s website N/A
Language(s) of disclosure N/A
Link to disclosure N/A
Chapter 4
Other link(s) N/A
Environmental and Social Management Plan (ESMP) (if applicable)
Other link(s) N/A
Resettlement Action Plan (RAP) (if applicable)
Other link(s) N/A
Any other relevant ESS reports and/or disclosures (if applicable)
Description of report/disclosure Environmental and Social Management System (ESMS)
Date of disclosure on accredited entity’s website 2016-11-11
Language(s) of disclosure English and Mongolian
Link to disclosure English: http://xacbank.mn/en/552/about-xacbank/
socialresponsibility/eco-bank/esms
Mongolian: http://xacbank.mn/mn/552/about-xacbank/
socialresponsibility/eco-bank/esms
Other link(s) N/A
nnSelecting outputs, outcomes and impact indicators for monitoring and reporting
purposes. Each objective results in activity(ies) which require(s) inputs (e.g. budget line)
and is evaluated by indicator(s), means of verification and targets. Project proponents can
refer to the RMF to select the relevant gender-sensitive indicators for both adaptation and
mitigation. The AE/EE will be required to collect gender- and age-disaggregated baseline
data to inform the GAP.
nnDetermining the institutional arrangements for implementation and monitoring of

the GAP.
After developing the GAP, project proponents should plan for gender equitable
stakeholders’ consultations and engagement at all phases of the proposed project or
programme. In addition, project proponents should allocate sufficient resources to fund
the identified activities necessary to integrate gender equality within a project or programme
(hiring relevant experts for their advice, capacity-building for project staff members, etc.) and
should verify that AEs’ budgets are adequate for the supervision and reporting of the project’s
gender elements implemented by EEs. Figure 14 synthesises the key elements needed to
integrate gender into a project.
Table 13 provides an example of how to mainstream gender in a project’s activities, outputs and
outcomes, and the use of relevant indicators. This GAP was developed by XacBank (Funding
Proposal 028) to support the funding proposal ‘Business loan programme for GHG emission
reduction’ approved by the GCF Board in December 2016.
Chapter 4
Figure 14. How to integrate gender into a project?
Undertake a comprehensive socioeconomic

and gender assessment (complementary to
Allocate sufficient Gender analysis and ESS requirements), including relevant
resources to fund stakeholders’ gender-equitable stakeholders’
gender aspects consultations consultations and engagement
Verify that adequate

budget is allocated to
Resource allocation Define gender-responsive
AEs for monitoring/ Objectives
and budgeting programme objectives
reporting on gender
elements How to
integrate
Plan for gender- gender into a
equitable Mainstream gender in
Gender equitable project? activities and inputs
stakeholders’ stakeholders’ Activities
consultations and required to achieve changes
consultations established in objectives
engagement at all phases
Identify gender-sensitive
Determine institutional indicators and targets that will help
arrangements for Implementation and assess whether desired objectives have
Outputs, outcomes and
implementation and monitoring institutional been achieved; collect gender- and
impact indicators
monitoring of GAP; define arrangements age-disaggregated baseline data;
roles and responsibilities ensure monitoring and evaluation
against gender indicators
Table 13. Illustrative example: GAP from XacBank’s approved proposal: ‘Business loan program for GHG
emission reduction’
Activities Indicators Timeline Responsible

and targets organisations (excluding
the NDA/Focal Point)
Impact: Increased number of energy efficiency and renewable energy related business enterprises managed by women and men
Outcome: Improved access to energy efficiency and renewable energy finance by women and men
Means of verification: Gender disaggregated data assessed against appropriate indicator to measure enhanced access for women to energy
efficiency and renewable energy loans
Output 1: 50% of loan clients fund-wide are women-led MSMEs
• Develop outreach programmes targeted Loan data of MSME clients Gender ratio XacBank branch offices
at industries with high rates of women disaggregated by gender achieved by
involvement (e.g. light industry, service and classified as women- third year of
industry) led based upon achieving programme
• Develop outreach programmes targeted at one of the three criteria operation and
existing XacBank clients that are women-led below: until programme
MSMEs 1. Greater than 50% completion
• Create materials and train bank employees ownership by women

in how to formalise informal SMEs, as many 2. At least 30% women
women-led SMEs are informal and operated on company board or
out of their homes in the Ger district in senior management
positions
Chapter 4
• Provide information to non-women-led
MSMEs on how to become classified as 3. At least 40% of employees
women-led, and aid them in doing so are women
• Work with women-led MSMEs to ensure that At least 50% of
the offerings are able to match up with their participating MSMEs must
particular financing needs be women-led.
• Implement knowledge-sharing and client
recommendation practices with local
women’s Economic empowerment NGOs
Output 2: Equal interest from men and women-led MSMEs in participating in programme
• Undertake targeted advertising in women in Data on potential SME Throughout XacBank marketing
business forums and organisations. programme client meetings the programme department and other
• Undertake knowledge-sharing with local and inquiries disaggregated operation relevant departments
women’s economic empowerment NGOs, in by sex
both directions. On the one hand, the MSME All inquiring companies
programme will receive input regarding to be classified as either
the needs of these organisations, on the women-led or not,
other hand, they will become aware of the regardless of if they end
gender-focused programme, and encourage up participating in the
women-led MSMEs they aid to incorporate programme. This data will be
energy efficiency and renewable energy compared to target ratios
measures in their businesses. Aim for 50% of company
• Spread awareness on the gender diversity inquiries from women-
dimensions of the project through marketing led SMEs, adjust gender-
and publicity strategies targeted marketing based.
Activities Indicators Timeline Responsible

and targets organisations (excluding
the NDA/Focal Point)
Output 3: Ensure local businesses’ capacity building on climate finance competencies is equally shared
between genders
• Establish gender equity in local talent • Outsourcing At all points Relevant local organisation/
identification and recruitment employment statistics wherein local consultants
to be disaggregated by outsourcing is
gender conducted
• Aim for 50% of all
external advisors to be
women
Output 4: Knowledge management products highlighting equal gender access to climate finance programmes
to be prepared and disseminated
• Highlight gender goal achievement status Every quarter of XacBank • Highlight gender goal
and report on gender disaggregated programme operation Marketing achievement status
statistics in progress report team and report on gender
• Publish case studies to represent XacBank disaggregated statistics
gender diversity of the programme and Business in progress report
disseminate these on public forums Banking • Publish case studies
department to represent gender
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diversity of the
programme and
disseminate these on
public forums
The information provided in this step will help project proponents to develop a GAP, which
should be submitted as an annex to the GCF Funding Proposal. Step 5 explains how to identify
and select the relevant indicators to measure your project’s progress.
4.5 Step 5. How to assign indicators to measure progress?
An indicator is a quantitative or qualitative factor that provides simple and reliable means to
measure achievement, to reflect the changes connected to an intervention, or to help assess
the performance of a development actor. The GCF will use indicators to evaluate the progress
and performance of a project. Project proponents should therefore use the relevant indicators
that will help the Fund to assess whether the expected results have been achieved.
The indicators to be used from the GCF’S PMF are different for mitigation, adaptation and
REDD+ interventions, and include the following.
Mitigation/REDD+ core indicators:
nnTonnes of carbon dioxide equivalent (t CO2eq) reduced as a result of GCF-funded projects

or programmes
nnCost per ton of carbon dioxide equivalent (t CO2eq) decreased for all GCF-funded mitigation
projects or programmes
nnVolume of finance leveraged by GCF funding (disaggregated by public and private sources).
Adaptation core indicators:
nnTotal number of direct and indirect beneficiaries; number of beneficiaries relative to total
population.
The core indicators inform the logic models for adaptation and mitigation. Additional indicators
can be selected by the project proponent based on the content of the project/programme
and can be used to complement the adopted core indicators. Gender disaggregation for
the indicators should be applied where possible (see section 4.4). In the process of selecting
indicators, project proponents should take into account the perspectives of a wide range
of project stakeholders, most importantly the intended beneficiaries, national and local
governments, and EEs. Annexes 2 and 3 present the full list of indicators presented in the
GCF’s PMF for mitigation and adaptation, respectively. Whereas at the paradigm shift and fund
impact levels the REDD+ PMF uses the same core indicators as for the mitigation PMF, the
project/programme outcomes and outputs levels require the use of specific REDD+ indicators
(see Table 14). The full PMF for REDD+ activities is provided in Annex 4.
Tables 14–16 present the list of indicators from the mitigation, adaptation and REDD+ PMFs
that will inform the logic framework in the GCF funding proposal. Project proponents will select
Chapter 4
the indicators relevant for their projects/programmes at the paradigm shift, fund impact and
project/programme outcome levels.
In addition to selecting appropriate indicators, the project proponent should indicate in the
log frame the means of verification, the baseline target, and assumptions at the Fund-level
impact, outcome and output levels.
4.5.1 Means of verification

This refers to the data sources (progress reports, interviews, surveys etc.) used to determine the
indicators, and specifically how the data will be collected. Accountability (who will collect data)
and frequency (how often data will be collected) can be detailed further in Section H.2 of the
proposal – Arrangements for Monitoring, Reporting and Evaluation. Examples of means
of verification may include:
nnproject evaluations: semi-annual and annual reports, mid-term and terminal evaluations
nnmonitoring programmes and reports
nngeographic information systems (GIS) data
nninterviews with relevant stakeholders
nninformation from experts and/or the public
nnsurveys.
Table 14. Mitigation indicators
Expected results Indicators

Paradigm shift
Shift to low-emission, M-1 Tonnes of carbon dioxide equivalent (t CO2eq)
sustainable development emitted by countries receiving mitigation funding
pathways [core indicator]
M-2 Cost per t CO2eq decreased for all GCF-funded
mitigation projects
[core indicator]
M-3 Volume of public and private funds catalysed by
the Fund
[core indicator]
Fund impact level
1.0 Increased low-emission 1.1 Level of national/regional capacity (megawatts,
energy access and power MW) from low emission sources (renewable energy)
generation
2.0 Increased access to low- 2.1 Emissions levels from vehicles
emission transport
3.0 Increased energy efficiency 3.1 Annual energy savings (gigawatt hours, GWh)
Chapter 4
in buildings, cities and

industries
4.0 Sustainable land use 4.1 Forest area under improved management and
and forestry management reduced carbon emissions practices
including REDD+
Project/programme outcomes
5.0 Increased gender-sensitive 5.1 Number and gender sensitivity of policies, laws
low-emission development and sector strategies supported by the Fund
mainstreamed in government
6.0 More small, medium and 6.1 MW of capacity from low emission sources
large low-emission power
suppliers
7.0 Lower country energy 7.1 Energy savings (GWh)
intensity trajectory
8.0 Increased use of low- 8.1 Number of passengers (disaggregated by gender
carbon transport where possible) using low-emission vehicles
8.2 Modal share (by transportation type)
9.0 Stabilisation of forest 9.1 Rate of net deforestation and forest degradation
coverage
9.2 Trend in women/men’s livelihood from
sustainable forestry
Source: GCF (2014b)14

Table 15. Adaptation indicators

Paradigm shift
Increased climate-resilient Total number of direct and indirect beneficiaries; number of beneficiaries relative
sustainable development to total population
Fund impact level
1.0 Increased resilience and 1.1 Percentage reduction in the number of people affected (cf. CRED definition)15
enhanced livelihoods of the by climate-related disasters, including the differences between vulnerable groups
most vulnerable people, (women, elderly, etc.) and the population as a whole
communities and regions
1.2 Number (percentage) of households adopting a wider variety of livelihood
strategies/coping mechanisms
2.0 Increased resilience of 2.1 Percentage of food-secure households (reduced food gaps)
health and wellbeing, and
2.2 Percentage of households with year-round access to adequate water (quality
food and water security
and quantity for household use)
2.4 Area (hectares, ha) of agricultural land made more resilient to climate change
through changed agricultural practices (e.g. planting times, new and resilient
native varieties, efficient irrigation systems adopted)
3.0 Increased resilience of 3.1 Value of infrastructure made more resilient to rapid-onset events (e.g. floods,
infrastructure and the built storm surges, heatwaves) and slow-onset processes (e.g. sea-level rise)
Chapter 4
environment to climate
3.2 Number of new infrastructure projects or physical assets strengthened or
change threats
constructed to withstand conditions resulting from climate variability and change
(e.g. to heat, humidity, wind velocity and floods)
4.0 Improved resilience of 4.1 Area (ha) of habitat or extent (kilometres, km) of coastline rehabilitated (e.g.
ecosystems reduced external pressures such as overgrazing and land degradation through
logging/collecting); restored (e.g. through replanting); or protected (e.g. improved
fire management; flood plain/buffer maintenance)
4.2 Number and area of agroforestry projects, forest–pastoral systems, or
ecosystem-based adaptation systems established or enhanced
5.0 Strengthened government 5.1 Degree of integration/mainstreaming of climate change in national
institutional and regulatory and sector planning and coordination in information sharing and project
systems for climate-responsive implementation
development planning [core indicator]
6.0 Increased generation and 6.1 Evidence that climate data are collected, analysed and applied to decision-
use of climate information in making in climate-sensitive sectors at critical times by government, private sector
decision-making and men/women.
[core indicator]
6.2 Perception of men, women, vulnerable populations and emergency response
agencies of the timeliness, content and reach of early warning systems
[core indicator]

7.0 Strengthened adaptive 7.1 Extent to which vulnerable households, communities, businesses and
capacity and reduced public sector services use improved tools, instruments, strategies and activities
exposure to climate risks (including those supported by the Fund) to respond to climate variability and
climate change
[core indicator]
8.0 Strengthened awareness 8.1 Percentage of target population aware of the potential impacts of climate
of climate threats and risk change and range of possible responses
reduction processes [core indicator]
Table 16. REDD+ indicators

Paradigm shift
Shift to low-emission, sustainable development M.1 Tonnes of carbon dioxide equivalent (t CO2eq) emitted by
pathways (forest cover and forest carbon loss is countries receiving mitigation funding
slowed, halted and reversed) [Core indicator]
M.2 Cost per t CO2eq decreased for all Fund-funded
Chapter 4
mitigation projects
[Core indicator]
M.3 Volume of public and private funds catalysed by the Fund
[Core indicator]
Fund impact level
4.0 Reduced emissions from land use, Tonnes of carbon dioxide equivalent (t CO2eq) reduced
deforestation, forest degradation, and (including increased removals) from REDD+ activities
sustainable management of forests and
conservation and enhancement of forest
carbon stocks
A. Reduced emissions (t CO2eq) from deforestation Reduced emissions (t CO2eq)
B. Reduced emissions (t CO2eq) from forest Reduced emissions (t CO2eq)
degradation
C. Reduced emissions and increased removals Reduced emissions and increased removals (t CO2eq)
(t CO2eq) through the conservation of forest carbon
stocks
D. Reduced emissions and increased removals Reduced emissions and increased removals (t CO2eq)
(t CO2eq) through the sustainable management of
forests
E. Increased removals (t CO2eq) through the Increased removals (t CO2eq)
enhancement of forest carbon stocks
Source: GCF (2014d)17

4.5.2 Baseline
The baseline provides a reference point with which to compare future changes. Information on
the baseline can be drawn from the activities undertaken during the scoping analysis. In the
log frame, the baseline is a measure of the current situation for a specific indicator.
The baseline value/condition affects the way the target is expressed (e.g. percentage of
population served, or percentage increase from the baseline condition).
4.5.3 Targets
Targets are commitments that indicate what project proponents want to achieve and by when.
They serve a number of important functions in a project, including:
nnsetting and quantifying the expected results of a project
nnproviding a reference to measure progress about the project in view of what is expected
to be achieved.
Final targets correspond to conditions to be achieved by the end of a project with reference
to the selected indicators; mid-term targets are conditions anticipated to be reached at the
half-way point of a project’s implementation.
4.5.4 Assumptions
The assumptions describe factors outside the project’s control that need to occur for one
level of the project description to achieve the next level up (e.g. outputs to outcomes). Typical
Chapter 4
assumptions include factors such as weather, economic and political situation, and community
participation.18
Table 17. Illustrative example: Indicators and corresponding means of verification, baseline, target and
assumptions from XacBank’s approved proposal: ‘Business loan program for GHG emission reduction’
Expected result Indicator Means of Baseline Target Assumptions

verification
Mid-term Final
(MoV)
(Year 2021) (Year 2025)
M1.0 Reduced Tonnes of XacBank 0 262,564.49 t CO2 525,128.98 t CO2
emissions through carbon dioxide program
increased low- equivalent monitoring
emission energy (t CO2eq) reports
access and power reduced or
generation avoided
M3.0 Reduced Tonnes of XacBank 0 334,597 t CO2 669,195 t CO2
emissions from carbon dioxide program
buildings, cities, equivalent monitoring
industries and (t CO2eq) reports
appliances reduced or
avoided
Sum 597,161.49 t CO2eq 1,194,323.98 million
t CO2eq
In the assumptions, project proponents identify events that can occur and impact the project,
but the probability of which is less than 100%. Assumptions and risks are strictly related. The
assumptions will assume that a certain statement is ‘true’, while the risk takes into account
the likelihood that a statement is ‘not true’. In other words, assumptions are positively worded
statements – ‘we will have the resources needed to complete the project’ – that can be turned
into risks by expressing the positive statement as negative – ‘we will not have the resources
needed to complete the project’.
The information provided under this section informs Section H – Results Monitoring and
Reporting of the GCF Funding Proposal and will help project proponents to fill in the log frame
template. Step 6 provides guidance on how to align a project against the GCF investment
criteria.
4.6 Step 6. How to align a project against the GCF investment criteria?
In formulating the proposal, the project proponent is expected to demonstrate the project
alignment with six investment criteria which are defined in the GCF’s Investment
Framework. The list of criteria is provided in Figure 15. The Fund’s Investment Framework details
possible indicators (or indicative assessment factors) that may help entities to quantify impact
potential. For example, a renewable energy project/programme may wish to provide the expected
number of MW of low-emission energy capacity installed, generated and/or rehabilitated.
For each of these investment criteria, the project proponent should select only the applicable
Chapter 4
and relevant sub-criteria and indicators, as follows:
nnthe activity-specific sub-criteria inform the approval process for project and programme
allocation decisions, and apply to both adaptation and mitigation actions
nnthe indicators (indicative assessment factors) seek to provide clarity on how the sub-criteria
can be assessed.
A list of potential activity-specific sub-criteria and indicators is provided in Annex 2. The methodology
used for calculating the indicators and values should be provided. Project proponents can
complement quantitative indicators with qualitative ones. However, not all indicators are applicable
to all activities, and funding proposals are to focus only on those relevant to the proposal, country
context and GCF priorities on which the project/programme focuses.19
4.6.1 Investment criterion 1: Impact potential

The proposal should specify the climate mitigation and/or adaptation impact of the proposed
project or programme. The Fund’s Investment Framework has four core indicators to which every
proposal note should respond. These core indicators should be based on supporting evidence
for the project/programme, if possible from evidence gathered from pre-feasibility or feasibility
studies.
The two core indicators for impact potential are:
nnmitigation core indicator: total t CO2eq to be avoided or reduced per annum
nnadaptation core indicator: expected total number of direct and indirect beneficiaries
and number of beneficiaries relative to total population (e.g. total lives to be saved from
disruption due to climate-related disasters).
Figure 15. GCF investment criteria and their definitions
Impact Does the programme/project contribute to the achievement of the Fund’s objectives
potential and result areas?
Paradigm shift To what degree can the proposed programme/project catalyse impact
potential beyond project investment?
Sustainable What are the programme/project’s wider benefits and priorities, including environmental,
development potential social and economic co-benefits? What is its gender-sensitive development impact?
Responsive to Does it fulfil the vulnerability and financing needs of the beneficiary country and
recipient’s needs population in the targeted group?
Promote country Does the beneficiary country own the project/programme? Does it have capacity – including
ownership policies, climate strategies and institutions – to implement a funded project/programme?
Efficiency and Is the project/programme economically and financially sound? In cases of mitigation-specific
effectiveness projects/programmes, are they cost effective and is co-financing available?
In addition to the core indicators above, specific values for other indicators may be provided
by the project proponent as necessary. Examples of qualitative indicators include the degree
to which the proposed activity avoids lock-in of long-lived, high-emission infrastructure
Chapter 4
(mitigation) or long-lived, climate-vulnerable infrastructure (adaptation).
4.6.2 Investment criterion 2: Paradigm shift potential

To demonstrate the paradigm shift potential of the project or programme, the proposal should
demonstrate the extent to which the proposed activity can catalyse impact beyond a one-
off project/programme investment, by emphasising and providing evidence for as many as
possible of the following paradigm shift factors.
nnPotential for scaling-up and replication (e.g. multiples of initial impact size) for
both mitigation and adaptation. Present specific values for scaling-up and replication
(e.g. a local private sector bank able to promote mitigation measures by offering soft loans
Figure 16. Elements of the mitigation core indicators Figure 17. Elements of the adaptation core
indicators
t CO2eq reduced as
a result of GCF-
Expected
funded projects/ Expected
total
programmes total
Volume of number of
Cost per t number of
finance beneficiaries
CO2eq direct and
leveraged by relative to
decreased for indirect
GCF funding total
all GCF-funded beneficiaries
(disaggregated population
mitigation Mitigation core Adaptation core
by public and
projects/
indicators private indicators
programmes
sources)
to women-led SMEs to make their businesses energy efficient or to generate clean energy
from renewable sources). A proposal with a high potential for scaling-up, for example an
early warning system for an individual province that can be scaled up to several surrounding
provinces, should present a concrete plan to do so. A proposal with high replication
potential, for example a hydroelectric power station in a region with several potential
sites identified in a supporting technical study, should also present specific replication
opportunities that can be explored.
nnPotential for knowledge and learning. Highlight any potential for knowledge sharing
or learning at project or institution level. For example, if the project or programme will
generate useful lessons learned, a plan should be elaborated that specifies how those
lessons can then be captured and shared with other individuals, projects or institutions,
including through the monitoring and evaluation of the project/programme.
nnContribution to the creation of an enabling environment. Provide the arrangements

that ensure long-term and financially sustainable continuation of key outcomes and
activities. In cases where the planned activities do not generate financial reflows, a
thorough explanation of long-term financial sustainability is needed. Project proponents
can also highlight the aspects of market development and transformation in which the
project/programme creates new markets and business activities at the local, national or
international levels. If the project or programme addresses or eliminates systematic barriers
to low-carbon and climate-resilient solutions, or changes incentives by reducing costs and
risks, these aspects may be highlighted.
Chapter 4
nnContribution to the regulatory framework and policies. If the project or programme

advances national/local regulatory or legal frameworks and is expected to bring significant
benefits in this regard, please elaborate. Of particular interest is the shifting or alignment
of incentives to promote investment in low-emission or climate-resilient development,
and/or the mainstreaming of climate change considerations into policies and regulatory
frameworks at all decision-making levels.
nnInnovation. Describe any innovative ideas or elements, such as fostering new market
segments, creation of business models and/or the development or adoption of
new technologies. As innovation is context-specific, the proposal should specify the
circumstances in which the innovation takes place.
Figure 18. Elements of the paradigm shift potential criterion
Contribution to the
creation of an enabling
environment Contribution to the
Potential for knowledge
regulatory framework and
and learning
policies
Contribution to the
regulatory framework and Paradigm shift
Innovation
policies potential
4.6.3 Investment criterion 3: Sustainable development potential

To demonstrate the sustainable development potential of the proposed project or programme,
the project proponent should describe the expected environmental, social and health, and
economic co-benefits, as well as the gender-sensitive development impact, which will aim to
reduce gender inequalities in climate change impacts. These co-benefits and wider positive
impacts may be drawn from an economic analysis of the proposed activities and can be
strengthened with more qualitative factors. Examples of sustainable development indicators
are presented in Table 18.
Table 18. Examples of sustainable development indicators
Economic Social Environmental Gender-sensitive

co-benefits co-benefits co-benefits development impact
• Total number • Improved • Improved air • Proportion of men and
of jobs created access to quality women in jobs created
• Amount education • Improved soil • Reduction of gender gap
of foreign • Improved quality in salaries
currency regulation • Improved • Increased number of
savings of cultural biodiversity women in leadership
• Amount of preservation positions
government’s • Improved
budget deficits health and
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reduced safety
4.6.4 Investment criterion 4: Needs of the recipient

To demonstrate the needs of the recipient, the project proponent should describe the scale
and intensity of vulnerability to climate change within the country and beneficiary groups, and
elaborate on how the project/programme addresses the needs identified. Examples include
the following.
nnVulnerability of the country and beneficiary groups (adaptation only). Describe the
scale and intensity of exposure to climate risks for the beneficiary country and groups, which
could include the exposure of people, social or economic assets, or capital to risks derived
from climate change. Exposure could be expressed in terms of population size and/or social
or economic assets or capital, including relevant gender-disaggregation indicators.
nnEconomic and social development level of the country and affected population.
Describe the level of social and economic development (including income level) of the
country and target population. Examples of the target population may include minorities,
disabled, elderly, children, female heads of households, indigenous peoples or others.
nnAbsence of alternative sources of financing. Describe the barriers that have created
the lack of alternative funding sources for the project/programme.
nnNeed for strengthening institutions and implementation capacity. Describe

the opportunities to strengthen institutional and implementation capacity in relevant
institutions.
Figure 19. Elements of the recipients’ needs criterion
Economic and social

development level of Absence of alternative
country and affected sources of financing
population
Vulnerability of country Needs for strengthening

and beneficiary groups Needs of institutions and
(adaptation only) recipient implementation capacity
4.6.5 Investment criterion 5: Country ownership

To demonstrate country ownership of the proposed project or programme, the project
proponent should ensure that activities to be financed by the GCF align with strategic national
objectives and priorities, and help advance ambitious action on adaptation and mitigation in
line with national priorities. In particular, the project proponent should demonstrate that the
project is coherent and aligned with the national climate strategy and action plan,
and how its objectives are aligned with the priorities identified in national climate policies and
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action plans.
Under this investment criterion, project proponents should also provide the following.
nnA brief description of the capacity of the AEs or EEs to deliver the project. This should
include a detailed overview of the AE or EE and the respective roles these entities will
play. The track record and relevant experience of the entities in similar or relevant project/
programme circumstances should be provided.
nnA description of a stakeholder engagement process including feedback received from

all relevant stakeholders.
Figure 20. Elements of the country ownership criterion
Capacity of Accredited Entities or

Executing Entities to deliver
Stakeholder engagement
Coherence and alignment
process and feedback
with the country’s national
Country received from civil society
climate strategy and
organisations and other
priorities ownership
relevant stakeholders
4.6.6 Investment criterion 6: Efficiency and effectiveness

To demonstrate efficiency and effectiveness of the proposed project/programme, the project
proponent should conduct an economic and financial analysis making the case for strong
cost effectiveness and financial soundness (i.e. value for money). Project proponents should
demonstrate the following as relevant.
nnCost-effectiveness and efficiency. How the proposed financial structure (funding

amount, financial instrument, tenor and term) is adequate and reasonable in order to
achieve the project/programme’s objectives, including addressing existing bottlenecks
and/or barriers. How the structure provides the appropriate concessionality to make the
proposal viable, without crowding out private and other public investment.
nnCo-financing, leveraging and mobilised long-term investments (mitigation

only). For mitigation projects/programmes, the co-financing ratio (total amount of the
Fund’s investment as percentage of total project costs) should be provided. For projects/
programmes that may not leverage a significant level of up-front co-financing, the project
proponents may instead demonstrate a significant level of indirect or long-term low-
emission investment mobilised as a result of the proposed activities.
nnFinancial viability. The economic and financial rate of return (with and without the Fund’s
support). Other financial indicators, including the debt service coverage ratio, may be
provided as applicable. A description of the financial soundness in the long term beyond
the Fund’s intervention, as well as the Fund’s financial exit strategy in case of private sector
operations, should also be included.
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nnApplication of best practices. How the best available technologies and/or best practices
are considered and applied, including if applicable any innovations, modifications or
adjustments that are made based on industry best practices.
nnKey efficiency and effectiveness indicators (mitigation only).
• Estimated cost per t CO2eq to total investment cost divided by the expected lifetime of
emission reductions.
• Expected volume of finance to be leveraged by the proposed project/programme and

as a result of the Fund’s financing, disaggregated by public and private sources.
The information provided under this section will inform Section E of the GCF Funding
Proposal – Expected Performance against the Investment Criteria. Step 7 provides
guidance on how to identify the rationale for GCF involvement and demonstrate the long-
term sustainability of the proposed project.
4.7 Step 7. How to identify the rationale for GCF involvement?
This step describes how to justify the rationale for GCF involvement in a project or programme.
Project proponents are required to explain why the Fund’s support is critical for the project/
programme, in consideration of other funding alternatives and barriers. In addition, the funding
proposal should demonstrate how the project/programme’s sustainability (exit strategy) will
be ensured in the long run, after the project/programme is implemented with support from
the GCF and other sources.
Figure 21. Elements of the efficiency and effectiveness criterion
Financial viability
Co-financing, leveraging and

mobilised long-term Application of best practices
investments (mitigation only)
Key efficiency and

Cost-effectiveness and Efficiency and effectiveness indicators
efficiency effectiveness (mitigation only)
4.7.1 Value added for GCF involvement

The value added for the GCF’s involvement corresponds to how the GCF’s support enables
the project/programme to promote a transformational change by removing the barriers that
normally hinder the achievement of lasting impacts in the target country and population.
Project proponents are required to provide a justification for the funding requested, and the
financial instrument(s) proposed, in order to close the funding gap and bring the project/
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programme to completion. In the case of grant funding without repayment contingency,

financial and/or economic arguments should be provided to ensure that the GCF would
maximise its use of resources.
Project proponents can demonstrate the following as relevant.
nnAbsence of alternative sources of financing. Describe the barriers that have created
the lack of alternative funding sources for the project/programme.
nnPotential for crowding-in alternative sources of financing. Describe how GCF

funding can help leverage domestic funding, in particular private finance, by improving
the real and/or perceived risk and reward profile of climate investments.
nnHigh potential for replication and scaling-up. Describe how GCF funding can help
scale up past and/or existing investments with a high potential for scaling-up or replication.
nnTarget highly vulnerable populations (for adaptation projects). Describe how GCF
funding will support activities that will remain unfunded through mainstream financial
channels and targeting highly vulnerable populations, including minorities, disabled,
elderly, children, female head of households, indigenous people and others.
4.7.2 Exit strategy

Project proponents are required to explain how the sustainability of a programme or project
will be ensured in the long run, after the project/programme is implemented and the GCF
and co-financier funding runs out, taking into consideration its long-term financial viability (as
demonstrated in section 4.6).
The exit strategy is closely linked to the justification of the value added for GCF involvement, as
the removal of policy, legal, institutional, capacity and financial barriers will enable a programme
or project to be sustainable in the long term. In designing an exit strategy, project proponents
may use three approaches.
nnPhasing down. A gradual reduction of project activities, utilising local organisations to

sustain project benefits while the GCF and other co-financiers deploy fewer resources. For
instance, an ex-post plan for Operation and Maintenance (O&M) can be developed. This will
identify how resources allocated to human resources, tools, equipment and travel for O&M
funded by the GCF and other co-financers will decrease over time and will be supported
by domestic financing after the project/programme completion. Phasing down is often a
preliminary stage to phasing over and/or phasing out.
nnPhasing out. A withdrawal of involvement in a project without turning it over to another

institution for continued implementation. GCF funding can support activities promoting
permanent or self-sustaining changes, thus eliminating the need for additional external
inputs. This can include policy, regulatory and legal reforms to promote the creation of
enabling environment or the creation of Public-Private Partnerships (PPPs) to support
private sector participation in climate change investments.
nnPhasing over. The transfer of project/programme activities to local institutions or

communities, through a learning and knowledge management component to capture
and disseminate lessons learnt, and to support knowledge and skill transfer to promote
institutional capacity building of local organisations. For instance, GCF funding can support
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capacity-building activities that aim to promote knowledge and skills transfer as well as
peer-to-peer learning. Training of trainers is a possible approach to ensure that adequate
capacity to train new employees is developed in the local institutions, while enabling the
replication of best practices after the project/programme ends.
The information in this section will inform Section D of the GCF funding proposal template –
Rationale for GCF involvement. Step 8 provides an overview of the monitoring, evaluation
and reporting requirements for the project/programme.
4.8 Step 8. How to monitor, evaluate and report on a project?
This step provides an overview of the M&E and reporting responsibilities to the GCF. The AEs
are primarily responsible for the M&E of their funded projects or programmes, and will report
accordingly to the Fund.
Monitoring and evaluation requirements for the project or programme include:
nnlog frame and identification of indicators in the funding proposal
nnannual performance reports from the project or programme
nninterim and final evaluations at the project or programme level.
At the project funding proposal stage, the project proponent should indicate the activities,
outputs, outcomes and results to be achieved in relation to the results areas of the RMF and
the mitigation and adaptation PMFs. The AE should provide indicators at activity and output
levels and report on the PMF indicators at outcome and impact levels (see section 4.5) The GCF
Secretariat will undertake second-level monitoring by requesting the AEs to report regularly
on the indicators mentioned above and other relevant project performance indicators.
In addition, during the mid-term reviews it will be verified that the AE has performed the
required oversight on activities under the monitoring plans of projects financed by the Fund.
These include, among other things, periodic supervision missions, audit reviews and multi-
stakeholder engagement.
Reporting requirements for the project implementation and post-implementation period are
presented in Table 19.
Beyond the standard reporting requirements for a stand-alone project, a programme should
also include additional programme-level reporting. For example, the AE may report on
experience gained and lessons learned from the design and implementation of the programme
and how well the programme is achieving added value beyond what a collection of stand-
alone projects would have achieved.
The information provided under this section will inform Section H.2 of the GCF funding
proposal template – Arrangements for Monitoring, Reporting and Evaluation. Step 9
provides an overview of the budget sections of the GCF proposal, helping project proponents
to estimate the total budget of their project and fill in the relevant sections of the funding
proposal template.
Table 19. GCF reporting requirements

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Report Description Timing/frequency

Quarterly These should provide dates and amounts During
financial disbursed for each funded activity and implementation
management compliance with financial covenants. period
reports Quarterly
Semi-annual These should include a narrative report During
progress (with supporting data as needed) on implementation and
reports implementation progress based on the log post-
frame submitted in the funding proposal and implementation
considerations on the ongoing performance periods
of the project/programme against the GCF Semi-annual
Investment Framework criteria, including
updates on the indicators and a report on
ESS as well as gender. The report should align
with the modalities set out in the GCF RMF
and its PMFs for adaptation and mitigation, as
amended and updated from time to time.
Interim These assess the performance of the Mid-point
evaluation funded activity against the GCF investment evaluation during
report and final framework criteria, including financial/ implementation
evaluation economic performance, as part of the and final report at
report for each project/programme efficiency and project completion
funded activity effectiveness criteria.

4.9 Step 9. How to prepare a budget for your project?
This step helps project proponents put together the total budget for their proposed project or
programme. The key elements to estimate the total budget are presented in Figure 22.
The project proponent should present a financial analysis or integrated financial model that
includes projection covering the period from financial closing through final maturity of the
proposed GCF financing, with detailed assumptions and rationale. This is required for the entire
project cost (including co-funding), and is used to inform the level of concessionality the project
proponent will request from the GCF (see Step 10). As part of this analysis, it is also important
to identify and asses the social and economic cost–benefits of the project or programme –
to conduct an economic analysis. Although there is no specific guidance available from GCF
on discounting and other approaches, best practice project financial and economic analysis
procedures should be followed. A sensitivity analysis of critical elements (including discount
rate) and other cost parameters should be performed.
In addition, two summary budget breakdowns are required: first, at the output level; and
second, by major cost category, including project staff and consultants, travel, goods, works,
services, etc. To prepare the summary breakdown at the output level, a project proponent
must specify the local and foreign currencies (US dollars or euros) used, including a currency-
hedging mechanism. Data from the detailed project (activity level) budget can be used to
aggregate the cost of delivering project outputs (corresponding to sub-component and
component, respectively, in Table 20).
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Figure 22. How to estimate the total budget
TOTAL PROJECT COST
Execution Goods and

AE fee Total budget
costs services costs
Table 20. Table for presenting the breakdown of cost estimates
Component Sub-component Amount for Currency Amount Local GCF Currency of

(if applicable) entire project for entire currency funding disbursement
(includes project amount to recipient
co-financing)
Component 1 Sub-component 1.1 ……… Options ……… ………
Sub-component 1.2 ……… Options ……… ………
Component 2 Sub-component 2.1 ……… Options ……… ………
Total project financing
Source: GCF funding proposal template version 1.1

The sum of the estimated total cost of all the outputs will provide the project proponent with an
estimate of the total GCF funding amount. Project proponents can then prepare a breakdown
of cost estimates for total project costs and GCF financing by sub-component.
4.9.1 Fee arrangements

Project proponents should specify the fee arrangement between the Fund and the AE, in case
it is project/programme specific. In this case, the fee arrangement for the proposed project/
programme is aligned with the GCF interim policy on fees for AEs. Table 21 presents the fees
structure for AEs. The percentages shown represent the maximum administration fees that can
be charged by AEs for different project size categories.
Table 21. Schedule of cap on fees applicable to public sector projects/programmes
Project/programme size Fee cap

(% of GCF funding, on grant)
Micro (<US$10 million) 10
Small (US$10–50 million) 9
Medium (US$50–250 million) 8
Large (>US$250 million) 7
The present value of the fees paid over the life of a loan (disbursement and repayment periods)
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will be equivalent to the total amount of fees paid for a similar grant-funded project. The fees
cap on readiness grants will be 10%. In addition, the financial terms and conditions for non-
grant instruments to the public sector, other than concessional loans, will be established on a
case-by-case basis. Similarly, the fees for the private sector for both non-grant instruments and
concessional loans should be decided on a case-by-case basis.
The GCF fees can cover the following items (subject to specific arrangements with the EE):
nnproject or programme implementation and supervision (including consultancies and other

procurement)
nnproject or programme completion and evaluations
nnmonitoring and reporting
nnmaterial and equipment (including renting of meetings/workshops venues)
nnany contingencies.
In terms of disbursement, the fees on grants will be paid proportionally along with each grant
instalment, while the fees on loans will be paid semi-annually in advance.
A procurement plan should then be prepared according to national procurement and

transparency standards aiming to ensure a fair and transparent execution as per the GCF
fiduciary requirements.
The information provided in this section will inform Sections B1 and F4 of the GCF funding
proposal template – Description of Financial Elements of the Project/Programme and
Financial Management and Procurement. Step 10 provides guidance on how to justify

the level of concessionality of a project and estimate the amount of financing that the project
proponent intends to request to the GCF.
4.10 Step 10. How to justify the level of concessionality of a project?
Once a project proponent has estimated the project’s total budget, they need to identify to the
GCF the amount of financing they want to request, and provide further information to justify the
level of concessionality, the financial instruments used and the up-front co-financing provided.
The level of concessionality refers to a measure of the ‘softness’ of a credit reflecting the benefit
to the borrower compared with a loan at market rate. Technically, it is calculated as the difference
between the nominal value of a Tied Aid Credit and the present value of the debt service as of the
date of disbursement, calculated at a discount rate applicable to the currency of the transaction
and expressed as a percentage of the nominal value.
4.10.1 Justification of the level of concessionality

The GCF applies a ‘least concessional’ approach whereby it will seek to provide the least possible
concessional funding that makes the proposed project or programme viable. The reason for this is
to avoid crowding out other sources of finance that are readily available. Thus a project proponent
must provide strong economic and financial justification for the level of concessionality of finance
requested, particularly for a grant but also in estimating the loan rate and tenor requirements. The
level of concessionality should correspond to the level of the proposal’s expected performance
against the investment criteria – efficiency and effectiveness.
Chapter 4
For loans, a project proponent should determine the low interest rate based on:
nnrisk–return metrics that include yield curves of comparable traded debt
nnexpected loss norms
nnmarket comparability
nnthe reputation, capacity and expertise of the AE channelling agency.
The project proponent should also explain how market price or expected commercial rate
return was determined. In addition, they should provide an overview of the size of total
banking assets, debt capital markets and equity capital markets that could be tapped to
finance the proposed project/programme. To support this, an overview of market rates (i.e.
one-year Treasury bill, five-year government bond, five-year corporate bond and five-year
syndicate loan) is required, including examples or information on comparable transactions.
Figure 23. How to calculate the amount of GCF financing required
Amount
AE
Total project of GCF
management Co-financing
cost financing
fee
requested
Table 22. Illustrative example: Financial market overview from XacBank’s approved

proposal: ‘Business loan program for GHG emission reduction’
B.3. Financial Markets Overview (if applicable)
Financial barriers are one of the primary reasons for the Mongolian market to not adopt new,
energy efficient or renewable energy solutions. Currently, many Mongolian businesses or individuals
operate heavily under the short-term cost savings method, and as such, usually opt to purchase/
implement the cheapest possible solution, while not giving much thought to the long-term cost
potential of these cheaper, sub-par products or the cost saving potential of high quality, energy
efficiency or renewable energy solutions. To compound this problem, the Mongolian market has
extremely high financing costs, which come with relatively short loan tenors, and other mitigating
factors such as grace periods, guarantees, and equity investments are not adequately available. The
lack of available and accessible commercial finance on offer by local banks impedes the ability of
MSMEs to invest in energy efficiency and renewable energy solutions.
Overview of available market rates
Typically, most commercial banks in Mongolia offer loans in the local currency, Mongolian National
Tugrik (MNT) as well as U.S. Dollars (US $), however, as the Mongolian economy has been in
recession since early 2015, and the foreign exchange risk continues to rise due to the depreciation
of the MNT, most banks, including XacBank, have opted to offer loans in MNT only since late 2015.
As XacBank plans to disburse the loans in this program in MNTs, the below information of available
market rates only take into consideration the available MNT loans to the consumers of Mongolia.
The low-interest rate government loans are distributed through commercial banks. The market
interest rates for obtaining a loan vary widely, from low to extremely high. Loan rates typically
Chapter 4
available to the average MSME looking to implement EE/RE solutions tend to land on the high side,
which is the biggest barrier for most of them, followed by general awareness of the possibility of
such a solution’s availableness. As such, the program aims to offer rates on the lower side of the
spectrum of available, non-government subsidised rates to promote and catalyse EE/RE projects
and awareness in the market. Doing so will not cause a disruption in the market, but rather will
incentivise many MSMEs to pursue EE/RE solutions from both the market and demand side.
XacBank’s own EE/RE business loan program offers rates between 18.0% and 19.2% per annum in
MNT. These rates are comparably lower than the average business loan, which are usually above
20.2%. The reason that XacBank has been able to offer lower than market rates on these types of
loans is that we are constantly looking for ways to offer more competitive products by finding
concessional sources of funding from outside of Mongolia in order to offer better interest rates and
longer loan tenors. In the past, we have worked with international partners such as the European
Bank for Reconstruction and Development (EBRD) and the Global Climate Partnership Fund (GCPF)
to implement programs aimed at EE/RE solutions.
However, even with these partners, XacBank haven’t been able to meet the market demand for
the ideal EE/RE product that sufficiently incentivises a critical mass of Mongolian MSMEs to adopt
environmentally friendly and energy efficient solutions into their everyday business as of yet.
XacBank received US$20 million from the GCPF in 2013 and also US$15 million from the EBRD
(MonSEFF) in 2014 to establish its own Business Loan Program for GHG Emission Reductions (to
which this GCF program will be an extension of ). Still, as can be seen, the interest rate and loan tenor
for both these products are not a marked improvement over other loans available on the Mongolian
commercial banking market due to the fact that these funds were given to XacBank at relatively high
costs, the breakdown of which can be found in the financial model included in annex 2 of Xacbank’s
funding proposal.
4.10.2 Financial instruments

The project proponent should summarise the financial instrument(s) to be used in support
of the proposed project or programme, and how the choice of financial instrument(s) will
overcome barriers and leverage additional public and/or private finance to achieve project
objectives.
The GCF uses four financial instruments: grants, concessional loans, equity and guarantees.
Grants include reimbursable grants (providing funding after expenses have been incurred)
and non-reimbursable grants. Concessional loans include senior loans and subordinate loans.
It is important to note that two or more instruments may be blended, with more than one
instrument being used by the Fund itself on a particular project, or a Fund instrument or
instruments being combined with instruments from other sources of financiers.
Table 23. GCF financial instruments
Financial instrument Definition

Grants Resources generally channelled to fund investments without the expectation that the
money be repaid. Grants can be provided up-front or disbursed through an incentive-
based schedule after achieving specific goals.
Grants can finance activities that would have been left unfunded by the market such as
information generation, data analysis, development and dissemination of knowledge
products, and capacity building of national institutions for a robust policy reform and
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priority setting.
Reimbursable grant Assimilated to loans, reimbursable grants consist in contribution provided to a recipient
institution for investment purposes, with the expectation of long-term reflows at
conditions specified in the financing agreement. The provider assumes the risk of total or
partial failure of the investment; it can also decide if and when to reclaim its investment.
Non-reimbursable Unlike reimbursable grants, non-reimbursable grants are standard transfers made in
grant cash, goods or services for which no repayment is required. This amounts to direct aid as
opposed to repayable assistance.
Concessional loans The up-front transfer of resources from one party to another with the agreement that
the money will be repaid on conditions more favourable than market terms is known as
concessional or soft lending.
Concessional lending includes a grant component that can be quantified based on how
favourable the lending terms are (the ‘grant element’ of the loan).
Equity Consists of an investment into a project or asset to leverage debt and achieve better
returns.
Guarantees Commitments in which a guarantor undertakes to fulfil the obligations of a borrower to
a lender in the event of non-performance or default of its obligations by the borrower,
in exchange for a fee. They can cover the entire investment or just a portion of it (partial
guarantee).
Senior loans A senior bank loan is a debt financing obligation that holds legal claim to the borrower’s
assets above all other debt obligations. The loan is considered senior to all other claims
against the borrower, which means that in the event of a bankruptcy the senior bank loan
is the first to be repaid before all other interested parties receive repayment.

4.10.3 Identifying co-financing

While the GCF has no clear requirements in terms of co-financing ratio required in a project
or programme, securing co-financing is highly recommended to encourage crowding in, that
is, stimulating long-term investments beyond the GCF resources and up-front commitments.
The GCF welcomes the opportunity of co-financing project/programmes with other climate
funds or multilateral development banks, particularly in the early stages of operation as a
way to quickly scale up, capitalise on and learn from the knowledge and experience of these
institutions. Co-financing can also be sought from bilateral agencies, public finance sources,
private investments and other market sources instruments that can enhance the terms of
financing and make the investment viable. Beyond these sources of co-financing, further
investments that are directly or indirectly leveraged by the project can also be considered
as co-financing. The GCF specified that “for projects/programmes that may not leverage a
significant level of up-front co-financing, the AE may instead demonstrate a significant level of
indirect or long-term investment mobilised as a result of the proposed activities”.
4.10.4 Project financing information

Project proponents are requested to provide a breakdown of estimated costs according to the
financing instrument and co-financing information. In addition, a description is required of
how the choice of financial instrument(s) will overcome barriers, achieve project/programme
objectives and leverage public and/or private finance.
The following information should be provided in the funding proposal template.

nnTotal project financing. Requested GCF amount + co-financing amount.
Chapter 4
nnGCF financing to recipient. The proposal should include economic and financial
justification for the concessionality that GCF is expected to provide, particularly in the
case of grants. If the project proponent requests a loan, the proposal should also specify
the difference in the loan tenor and loan price between GCF financing and that of the AE
(taking into account that the level of concessionality should correspond to the level of the
project/programme’s expected performance against the investment criteria – efficiency
and effectiveness).
nnCo-financing to recipient. In terms of co-financing, the project proponent should
present the financial instrument(s), amount, currency, name of institution, tenor, pricing
and seniority of the co-financing arrangements.
Table 24. Financial instruments and relevant terminology
Term Explanation
Financial instruments Include loans, equity, guarantees and grants (see Table 23 for definitions)
Currencies accepted Euros (€) and US dollars (US$)
Loan tenor The length of time (years) during which payments are made; may be expressed in
years, months or days
Loan pricing (for loans only) Determining the interest rate for granting loans to creditors
Seniority The order of repayment in the event of a sale or bankruptcy of the issuer. Seniority
can refer to either debt or equity. Each security, either debt or equity, that an AE
issues has a specific seniority or ranking. Seniority or ranking may be pari passu,
senior or junior (see Table 25 for explanation of these terms).
Table 25. Debt seniority
Seniority level Definition

Pari passu Refers to debt or equity that has equal rights of payment or equal seniority to loans,
bonds or classes of shares that have equal rights of payment or equal seniority.
Senior loans A debt financing obligation that holds legal claim to the borrower’s assets above all
other debt obligations. The loan is considered senior to all other claims against the
borrower, which means that in the event of a bankruptcy the senior bank loan is the
first to be repaid before all other interested parties receive repayment.
Subordinate (or junior) Loans that, in case of payment defaults or bankruptcy, have a lower repayment
loans priority compared with other company or project loans. Leverage is achieved since
subordinated debt strengthens a company/project’s equity profile and encourages
commercial lenders to provide senior debt financing. Concessional rates could also
be used in cases where high capital costs and risk perception barriers are being
addressed.
The project proponent should provide a confirmation letter or letter of commitment

issued by the co-financing institution.
nnFinancial terms between GCF and AE (if applicable). In cases where the AE deploys
the GCF financing directly to the recipient (i.e. the GCF financing passes directly from
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the GCF further to the recipient through the AE), or if the AE is the recipient itself, in
the proposed financial instrument and terms as described in part ‘b) GCF financing to
recipient’, this subsection can be skipped. If there is a financial arrangement between the
GCF and the AE, which entails a financial instrument and/or financial terms separate from
the ones described in part ‘b) GCF financing to recipient’, the proposal should include a
table specifying the proposed instrument and terms between the GCF and the AE. In this
table, project proponents should provide the following information: financial instrument,
amount, currency, tenor and pricing. In addition, they should provide justification for the
difference in the financial instrument and/or terms between what is provided by the AE to
the recipient and what is requested from the GCF to the AE.
The project proponent should finally submit a term sheet as an annex of the funding proposal –
agreed by all parties but subject to final internal approvals – setting out, in summary form,
the key terms and conditions relating to the proposed project or programme (for example,
the elected GCF holding currency for disbursements or any specific deviation, derogation or
modification that the AE is seeking to make to this agreement in the FAA).
The information provided will help project proponents to complete Section B2 of the GCF
funding proposal template – Financing/Cost information.
5. The GCF project cycle

Project proponents can submit funding proposals to the GCF through an AE. They can submit
spontaneously on an ongoing basis, or by responding to a request for proposals published
by the GCF, NDA/Focal Point or AE. The NDA/Focal Point and AE can also conduct multi-
stakeholder workshops to generate proposal ideas aligned with the national climate change
strategy, Nationally Determined Contribution and other national plans.
Table 26. The phases of the GCF project cycle
1. Concept note The project proponent may submit – through an AE – a concept
(voluntary) note for feedback and recommendations from the GCF, in
consultation with the NDA. Alternatively, the concept note
may be submitted by the NDA if an associated AE has not been
identified by the project proponent. The recommendation will
clarify whether the concept is i) endorsed; ii) not endorsed with a
possibility of resubmission; or iii) rejected.
If the project proponent submits a concept note through an
AE, the NDA will need to be copied on the submission. The GCF
Secretariat will review the alignment of the concept with the
investment framework, RMF and other Fund criteria, respond to
the submitter (with copy to the NDA), and provide feedback on
alignment with the Fund’s objectives.
2. Proposal The project proponent may submit a proposal to the GCF –
submission through an AE – in conjunction with the no-objection letter
signed by the NDA. At this stage, the GCF acknowledges the
submission and reviews it for completeness. The NDA should be
included in the different stages of communication.
3. Analysis and The GCF will carry out a desktop review that includes i) review
recommendation of the expected performance of the project against each of its
six investment criteria and the activity-specific sub-criteria of the
Chapter 5
fund; and ii) a review of consistency with its interim ESS, gender
policy and other policy guidelines.
Once the proposal has passed this initial review stage, the
Secretariat provides the proposal, supporting documentation
and the preliminary outcome of the review to the Fund’s ITAP.
The ITAP provides an independent assessment regarding the
expected performance of the project or programme against
the activity-specific criteria. A funding proposal may require
additional clarifications from the AE based on assessment by the
ITAP and the Secretariat, which the AE is expected to clarify.
After the ITAP assessment, the Secretariat compiles the funding
proposal package including i) the funding proposal; ii) the
no-objection letter issued by the NDA; iii) the outcome of the
Secretariat’s review; and iv) the outcome of the independent
assessment. The funding package is then submitted to the GCF
Board for consideration no later than three months before the
Board Meeting where the funding proposal will be considered.
Chapter 5. The GCF project cycle 57
4. Board decision Based on the funding package provided by the Secretariat, the
GCF Board will then make one of the following decisions by
consensus:
• approve funding
• approve funding with the conditions and recommendations
that modifications are made to the funding proposal
• reject the funding proposal.
GCF sends a notification to the AE, interim trustee and NDA
about the funding decision.
5. Legal Following the approval of funding for the proposal, an FAA is
arrangements negotiated and signed between the AE and the GCF.
6. Disbursement and The project then enters into the Fund’s portfolio, moving into
Implementation the implementation period whereby funds are transferred to
the AE according to agreed tranches as per the term sheet’s
disbursement schedule and other key terms and conditions. The
Fund’s fiduciary standards and ESS are applied, and an external
audit report is submitted.
7. M&E and reporting Following these steps, the project becomes effective and the
process of M&E and reporting commences and continues until
the project or programme closes and exits the Fund’s portfolio.
Figure 24. Overview of the GCF project cycle and different actors involved at each stage
National Designated Authority/funding proposal
No-objection
procedure 5
1 2 6
Legal arrangements
Accredited Concept note
Chapter 5
development Submission of
Entity
Trustee
Disbursement and implementation
(voluntary) funding proposal 7

3
Check for Analysis and
Monitoring, evaluation and reporting
completeness recommendation
Provide feedback and
Secretariat
recommendations
Technical Advisory Panel
(TAP) Assessment
4
Board
Board
decision
3 months 7 months 3 months
Source: adapted from GCF Process Flow Chart22

6. How to get started?

Project proponents may decide to prepare a one-step (full proposal) or two-step application
Resources (concept note followed by full proposal). While it is a voluntary step, developing a concept note
GCF (2015a) Concept Note is highly recommended as experience has shown that it leads to better proposals.23 It provides
User Guide. the opportunity to start a dialogue with the GCF Secretariat and receive valuable feedback
www.greenclimate.fund/ and guidance. In writing up a concept note, project proponents should use the GCF’s Concept
ventures/portfolio/fine-print Note template. The template, with guidance on how to complete it, is available on the GCF
website: www.greenclimate.fund/library.
If you decide to prepare a two-step application (concept note followed by full proposal), the
following checklist offers a guide to help you prepare your GCF project concept.
Set up a team to work on the project concept.
Engage with the NDA to communicate intention of developing a GCF project concept and
seek assistance.
Identify an AE to work through on your concept (it should be noted that while recommended,
this is not mandatory at the concept note stage; the NDA can also submit a concept note
without an associated AE and solicit feedback). When selecting an AE, identify areas of
expertise that they can provide to assist the development of the proposal (e.g. budgeting,
economic and financial analysis, pre-feasibility and feasibility studies, M&E, etc.).
Check the Fund’s calendar for upcoming submission deadlines, which generally coincide
with Board meetings. Proposals need to be submitted at least three months before the
Board to be considered. Ensure you leave yourself enough time to prepare the proposal.
Read the GCF concept note template and guidance documents.
Review examples of past proposals submitted to the selected fund to see what may be
expected from a proposal.
Develop a set of interventions and collect relevant baseline information:
• relevant scientific information about the impacts of and risks posed by climate change in
your country, if an adaptation project; national greenhouse gas inventories if a mitigation
project
• information on your country’s relevant national priorities and strategic frameworks for
sustainable development, poverty reduction and climate change
Chapter 6
• national vulnerability and risk assessments, economic studies and other research,
including past project evaluations, undertaken by other organisations (research centres,
universities, NGOs etc.).
The baseline for key indicators should be established from the available data as far as possible.
All information gaps to complete the GCF proposal should be identified and the required
activities to fill the gaps (e.g. vulnerability mapping, surveys, cost–benefit analysis etc.) should
be costed.
Chapter 6. How to get started? 59
Consult with key stakeholders including the target group (especially vulnerable
communities, minority groups, etc.), government staff from different ministries or
departments, other relevant organisations, and sector experts. The concept note should
reflect and harmonise stakeholders’ ideas and organise them into outputs–activities–
sub-activities of a single project component in full alignment with GCF requirements.
Conduct a pre-feasibility study and provide a clear indication of what must be covered in
detail in the full feasibility study during proposal development.
Conduct a preliminary social and environmental screening and provide a clear indication of
what must be covered in the full ESIA during proposal development.
Write your project concept, using simple, clear language to answer all the questions, and
illustrating with tables and bullet points where required to present information clearly and
simply:
• provide background information and project context (with clear adaptation/additionality

argument for adaptation projects)
• develop the project description, objective, outputs (expected results), activities, sub-
activities, inputs and indicators (at output level)
• determine the project’s system boundaries and scope
• describe the project’s impact using a compelling theory of change (using logic structure
of underlying problem, preferred normative solution, key barriers, targeted project
outputs, activities, sub-activities)
• define the paradigm shift potential, sustainable development potential, coherence

with country’s needs, how country ownership will be ensured (in project design and
implementation), and efficiency and effectiveness of the proposed project
• identify indicative co-financing and baseline investments
• draft likely implementation arrangements.
Provide relevant documentation:
map indicating the location of the project/programme
financial model
pre-feasibility study or brief feasibility study

Chapter 6
ESIA (if applicable)
evaluation report (if applicable).

7. Support available for the full proposal

preparation
The GCF’s Project Preparation Facility (PPF) provides support to turn a concept note into a full
funding proposal. The Board will approve requests for support from project proponents, by
reviewing and assessing them against GCF’s investment criteria as well as its justification of
needs for project preparation funding with information on the underlying project. The PPF is
available to all AEs, with preference given to direct access entities submitting projects under
the micro- to small-size categories (up to US$10 million).24
The PPF can support the following activities:
nnpre-feasibility and feasibility studies and project design
nnenvironmental, social and gender studies
nnrisk assessments
nnidentifying programme- and project-level indicators
nnpre-contract services including revision of tender documents
nnadvisory services and/or other services to financially structure a proposed activity
nnother project preparation activities.

Resources
The application template is Requests for PPF support are usually in the form of grants, but private sector projects may
available on the GCF website: include other instruments, such as grants with repayment contingency and equity instruments.
www.greenclimate.fund/ The grant is capped at 10% of total funding requested, or a maximum of US$1.5 million.
documents/20182/104167/
Project_Preparation_Funding_ Applications must be submitted by the AE. The applicant must justify how the proposed
Application_Template. project or programme is aligned with national priorities and ensure full country ownership.
docx/65e91043-7122-4479- A no-objection letter from the NDA should be provided alongside the PPF application. It is
8778-b563b8ee3ee2 therefore recommended that the applicant consult the NDA on the concept note at an early
stage.
Chapter 7
Chapter 7
61
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Annexes
Annex 1. Illustrative example: Log frame from XacBank’s approved proposal
H.1.1. Paradigm shift objectives and impacts at the Fund level

Paradigm shift objectives
Shift to low- The MSME program will mainstream energy efficiency and renewable energy investments in the Mongolian private sector. It will do so by developing market
emission conditions conducive to renewable energy (RE) and energy efficiency (EE) investment, allowing it to compete alongside the traditionally cheaper, conventional,
sustainable high-emission alternatives. The program will access all sectors of the RE and EE supply chain, from producers to traders to installers to end-users, in order to
development significantly shift the needle on the green sector in Mongolia and allow the significant benefits of such investment to trickle down to the consumer level as
pathways well. In making capital available, capacity building and robust knowledge sharing between these sectors, the program will lessen the perceived and the actual
barriers to investment in EE and RE.
verification
(MoV) Mid-term (2021) Final (2025)
Fund-level impacts
M1.0 Reduced Tonnes of XacBank 0 262,564.49 tCO2 525,128.98 tCO2 Majority of the emission reduction is likely
emissions through carbon dioxide program to be achieved from energy efficiency
increased low- equivalent monitoring projects
emission energy (t CO2eq) reports
access and power reduced or
generation avoided
M3.0 Reduced Tonnes of XacBank 0 334,597 tCO2 669,195 tCO2 Emission reduction will be achieved
emissions from carbon dioxide program mostly from building sector as it is the
buildings, cities, equivalent monitoring majority of the emissionsa
industries and (t CO2eq) reports
appliances reduced or
avoided
Sum 597,161.49 tCO2eq 1,194,323.98 million tCO2eq
a. Emission reduction for cities, industries and appliances are not specified in our calculation, but included as the bulk of “other”.
65
66
H.1.2. Outcomes, Outputs, Activities and Inputs at Project/Program level
verification (MoV)
Mid-term (2021) Final (2025)
Project/program outcomes Outcomes that contribute to Fund-level impacts

M6.0 Increased 6.3 MWs of low XacBank program 0 60 MW As this calculation is based on the
number of small, emission energy monitoring reports minimum capacity factor of 20% for
Green climate fund proposal toolkit 2017: Toolkit to develop a project proposal for the GCF
medium and large capacity installed, a technology to be adopted, this
low-emission generated or indicator is most conservative, and
power suppliers rehabilitated can increase for technologies with
higher capacity factor.
M7.0 Lower 7.1 Energy intensity/ XacBank program 0 51,564 MWh/year 103,309 MWh/year Same as assumption in M3.0
energy intensity improved efficiency monitoring reports
of buildings, cities, of buildings, cities,
industries and industries and
appliances appliances
Project/program Outputs that contribute to outcomes
outputs
1. Commercially Volume of financing XacBank program 0 US $ 30 million US $ 60 million n/a
viable EE and monitoring reports
RE projects are
identified, financed
and implemented
2. Sustainable Number of loan XacBank program 0 240 loan officers 400 loan officers n/a
energy project officers are trained monitoring reports (60 per year for first
identification to offer Eco Products 4 years)
awareness capacity Number of SMEs
increased across who reach out to
local institutions XacBank about
participating
Annexes
H.1.2. Outcomes, Outputs, Activities and Inputs at Project/Program level
verification (MoV)
Mid-term (2021) Final (2025)
3. Increased Number of contacts XacBank program 0 900 MSMEs 1,700 MSMEs Based on existing data of active
awareness of made through monitoring reports (25% of active (50% of active MSMEs that XacBank worked with
benefits of EE and various marketing MSMEs) MSMEs)
RE projects events
Number of unique 479 2400 4800 Based on most up to date analytics
page views on Eco (from Jan–Oct 2016) data on existing EE program website
Banking program
website
Number of loan 3 loan inquiries per 576 loan inquiries 1,152 loan inquiries Based on current experience with
inquiries (regardless week (144 per year) existing EE loan program
of ultimate
acceptance)
Number of case 0 16 case studies 32 case studies

studies published published (4/year published (4/year)
with emphasis on
showcasing women-
led MSMEs)
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68
Activities Description Inputs Description
1. Financing of projects which increase the generation of renewable Financial resources and technical expertise deployed to develop, assess, finance
energy, the efficient use of resources of MSMEs and report on projects
1.1. Financing of MSMEs Checking and financing of MSME- Internal financial, technical, • Financial, technical and environmental experts
sized, standardised investments environmental and IT experts; required for customised investment plan
following credit analysis and External experts to be contracted formulation and assessment, including for on-
eligibility assessment based on pre- when necessary site visits to clients’ facilities;
established list of BATs with the aid of
• Financial, technical and IT experts required for
technical advisory the compilation of pre-assessed standardised
BAT measures, to be used by XacBank to verify
eligibility of smaller-scale investments;
• Financial resources, on commercial and/or
concessional terms, deployed to support the
implementation of the eligible projects.
1.2. Reporting Estimating and reporting the level Internal expertise to aggregate • Dedicated expertise required for the
of enhancement of resource use database, webpage; aggregation and maintenance of results tracking
efficiency and/or climate resilience at Use verification methods databases and webpages with the estimated
the Program levels impact of the financed projects and measures;
• Verification methods required to verify the
physical implementation of projects (on a
sample basis for the smaller scale projects).
1.3. Financing women-led MSMEs Finance 50% women-led MSMEs Same as 1.1. Same as 1.1.
fund-wide
2. Capacity building of financial institutions in originating, assessing, Expertise and skills transfer for capacity enhancement
financing and tracking sustainable energy and climate resilience
projects
2.1. Internal Training Training of Business Banking Conduct internal training every first Training experts complemented by financial and
department staff and retail staff quarter of the year. technical experts, required to develop training
to market the benefits of EE and materials and deliver targeted training sessions for
RE projects, and training of client a range of XacBank staff: sales, client relationship
relationship managers to recognize managers, credit experts, lender’s engineers (the
clients with investment potential latter applies to 2.2 as well).
Annexes
Activities Description Inputs Description
2.2. Customer Training Development of MSME training Conduct minimum 1 training per Training offered to Mongolian MSMEs about how
programs to teach basic ability to year to identify potentially fruitful projects in their own
identify potential projects from business venture, opening up the pipeline of
MSME leaders eligible projects and increasing capacity of local
businesses to access climate finance.
3. Awareness raising among MSMEs and individual clients Experience and skills transfer for marketing and awareness raising
3.1. Development of Marketing Development of marketing strategies Use internal experts on marketing Marketing and design experts from XacBank’s
Strategy for XacBank catered to the offerings and design works marketing team to complement implementing
of this specific program. Create financial experts, so as to develop marketing tools,
specific marketing tools (such as and program website;
brochures etc.) to market XacBank’s
capacity to finance RE and EE
projects
3.2. Marketing events Engagement of XacBank’s existing Organize minimum 1 marketing Same as 3.1, plus marketing experts and event
and prospective clients on MSME event per year using internal and organizing resources for client events, including
and individual levels via targeted external resources, including the access to civil organizations, and women in
marketing events engagement of clients business organizations
3.3. Website update Development of a program-specific Make website update as necessary Same as 3.1.
content on XacBank’s website to
market the facility and to report on
the progress of the program
3.4. Awareness raising Ensure additional effort is put Same as 3.2. Same as 3.2.
forth for awareness raising within
women’s spaces and businesswomen
communities
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70
Annex 2. Performance Management Framework for mitigation
Source: GCF, 2015d26
Expected results Indicators Baseline data Targets Data sources Frequency Responsibility Assumptions/notes
(indicative) and collection
methods
Paradigm shift objective
Shift to low- M-1 Tons of carbon Assumed business- The Fund would Every five Fund Secretariat
emission, sustainable dioxide equivalent as-usual emissions coordinate with years
development pathways (t CO2eq) emitted by trajectory measured the UNFCCC data
countries receiving in t CO2eq emitted
mitigation funding by countries
M-2 Cost per Not required Executing Every five Fund Secretariat Provides information to help
t CO2eq decreased Entity (EE)/ years reduce the expected cost of
for all Fund-funded Implementing mitigation
mitigation projects Entity (IE) results
reports and
energy balances
M-3 Volume of public Project/ Beginning IEs To effectively bring about
and private funds programme and end a paradigm shift in the way
catalysed by the Fund proposals and of an societies approach mitigation,
(core indicator) end-of-project investment the private sector must be
reports engaged given its sizeable
role in the energy sector. This
indicator – consistent with the
Fund’s Governing Instrument – is
a proxy indicator that measures
catalysed funding, including
private sector funding. It should
be tracked by all projects and
programmes.
Annexes
methods
Impacts (strategic level)
1.0 Increased low- 1.1 Level of national/ Existing mix of Data from Mid-term IEs
emission energy access regional capacity power generation transmission and end of
and power generation (MW) from low- system operator investment
emission sources or dispatch centre
(renewable energy)
2.0 Increased access to 2.1 Emissions levels Existing transport Data from Ministry Annually IEs Draw on data available from
low-emission transport from vehicles emissions of Transport UNFCCC reporting
3.1 Annual energy Energy balance data Statistics office Mid-term and end IEs
savings (GWh) or Ministry of of investment
Energy
4.1 Forest area under Existing levels Ministry of Mid-term and end IEs Approach to measurement of
improved management Forestry and of investment forestry management will draw
and reduced carbon remote sensing on UNFCCC decisions 9/CP.19 to
emissions practices 15/CP.19 and related decisions
regarding REDD+
Decision B.05/03, Annex I,
from the October 2013 Board
meeting included
(g) Sustainable land use
management to support
mitigation and adaptation;
and (h) Sustainable forest
mitigation as initial result areas
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72
methods
5.0 Increased gender- 5.1 Number and Existing legislation Gender-sensitive Annually EEs This indicator will measure
sensitive low-emission gender sensitivity of analysis of the the government’s enabling
development policy, laws and sector low-carbon environments for low-carbon
mainstreamed in strategies supported enabling development
government by the Fund environment
6.0 More small, 6.1 MW of capacity Existing set of low- Data from the Annually EEs This will focus on solar, wind,
medium and large from low emission emission suppliers transmission geothermal and similar suppliers
low-emission power sources system operator
suppliers or dispatch centre
7.0 Lower country 7.1 Energy savings Existing energy use Utilities are Annually EEs This may require aggregating
energy intensity (GWh) expected to country-level statistics in key
trajectory be the primary emitting sectors of each city
source of data
8.0 Increased use of 8.1 Number Existing transport Records of Annually EEs Assumes that a portion
low-carbon transport of passengers use Ministry of of investments will target
(disaggregated Transport or vehicle fleets and possibly car
by gender where licensing bureau manufacturers
possible) using low-
emission vehicles
8.2 Modal share (by Existing transport Transportation Annually EEs Survey would determine
transportation type) use household the predominant types of
survey with sex- transportation used (pedestrian,
disaggregated bicycle, bus, rickshaw, collective
data taxi, rail, car, etc.) by women
and men. Repeated over time
to determine any movement to
low-emission modes
Annexes
methods
9.0 Stabilisation of 9.1 Rate of net Existing levels of REDD+ action Annually EEs The approach to forestry
forest coverage deforestation and deforestation and areas compared measurement will draw on
forest degradation degradation to baseline using UNFCCC decisions 9/CP.19 to
records of forest 15/CP.19 and related decisions
management regarding REDD+
agencies Decision B.05/03, Annex I,
from the October 2013 Board
meeting included:
(g) Sustainable land-use
mitigation and adaptation
(h) Sustainable forest
mitigation
as initial result areas
9.2 Trend in women/ Current trend Household Annually EEs
men’s livelihood from surveys with sex-
sustainable forestry disaggregated
data
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74
Annex 3. Performance Management Framework for adaptation
Source: GCF, 2015d27
Expected results Indicators (indicative) Baseline data Targets Data sources and Frequency Responsibility Assumptions/notes
collection methods
Increased climate-resilient sustainable development
Impacts (strategic level)
1.0 Increased 1.1 Percentage reduction Baseline already Third-party Annually Implementing Direct measure of impact,
resilience and in the number of people available through monitoring plus Entities (IEs)/ but the results will depend
enhanced affected (cf. CRED definition; CRED survey of targeted (Independent on whether and when
livelihoods see Endnote 15) by climate- populations, Evaluation Unit, extreme climate events
of the most related disasters, including disaggregated by sex IEU) occur. An indicator over the
vulnerable people, the differences between and income levels long term
communities and vulnerable groups (women,
regions elderly, etc.) and the
population as a whole
1.2 Number (percentage) Pre-project/ Household survey of Mid-term IEs Outcome based on Global
of households adopting a programme men and women and end of Environment Facility
wider variety of livelihood assessment investment (GEF) Outcome 1.3, and
strategies/coping Pilot Program for Climate
mechanisms Resilience (PPCR) A1.1
(core), and Adaptation Fund
Outcome 6
Indicator is consistent
with GEF Least Developed
Countries Fund (LDCF)/
Special Climate Change
Fund (SCCF) indicator 1.3.1
Annexes
collection methods
2.0 Increased 2.1 Percentage of food- Pre-project/ Household survey of Mid-term IEs Variant of GEF LDCF/SCCF
resilience of health secure households (reduced programme men and women and end of indicator 1.2
and wellbeing, and food gaps) assessment investment
food and water
2.2 Percentage of Pre-project/ Household survey of Mid-term IEs Replication of PPCR indicator
security
households with year-round programme men and women and end of A1 (non-core)
access to adequate water assessment investment
(quality and quantity for
household use)
2.3 Climate-induced Pre-project/ Hospitals and health Mid-term IEs/IEU This outcome is based on
disease incidence in areas programme centre records and end of GEF outcome 1.2 and PPCR
where adaptation health assessment disaggregated by sex investment; A1.2
measures have been (aid agency records) and This indicator replicates the
introduced (percentage of continuing GEF (LDCF/SCCF) indicator
population) (IEU) 1.2.1 with a slight rewording
for clarification
IEs would select from a range
of indicators similar to those
provided in GEF Outcome
1.2 and various toolkits
2.4 Area (ha) of agricultural Not required Programme reports Mid-term IEs This is a fairly simple
land made more resilient and records and end of measure that tracks GCF-
to climate change through investment funded activities in this
changed agricultural thematic area
practices (e.g. planting
times, new and resilient
native varieties, efficient
irrigation systems adopted)
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76
collection methods
3.0 Increased 3.1 Value of infrastructure Not required Replacement cost Mid-term IEs Must ensure that inflated
resilience of made more resilient to of infrastructure and end of property values not included
infrastructure rapid-onset events (e.g. estimated to have investment in these calculations
and the built floods, storm surges, been saved from
environment to heatwaves) and slow-onset weather events
climate change processes (e.g. sea level rise) (weather intensity
threats factored in)
3.2 Number of new Not required Programme reports Mid-term IEs Replication of Adaptation
infrastructure projects and records and end of Fund Indicator 4.1.2
or physical assets investment
strengthened or
constructed to withstand
conditions resulting
from climate variability
and change (e.g. to heat,
humidity, wind velocity and
floods)
4.0 Improved 4.1 Area (ha) of habitat Not required Programme reports Mid-term IEs/IEU Consistent with Adaptation
resilience of or kilometres of coastline and records and end of Fund Outcome 5. These
ecosystems rehabilitated (e.g. reduced investment (process) indicators measure
external pressures such with climate- the interventions made but
as overgrazing and land related not the ability of ecosystems
degradation through damage to the to withstand weather
logging/collecting); restored project area events. However, the area
(e.g. through replanting); or continued to of ecosystems requiring
protected (e.g. improved fire be monitored rehabilitation or restoration
management; flood plain/ via IEU due to recent events should
buffer maintenance) decline as the project is
implemented.
Annexes
collection methods
4.0 Improved 4.2 Number and area Not required Programme reports Mid-term IEs From GCF IR8
resilience of of agroforestry projects, and records and end of
ecosystems forest–pastoral systems, investment
(continued) or ecosystem-based
adaptation systems
established or enhanced
Project/programme outcomes (country-driven)
5.0 Strengthened 5.1 Degree of integration/ Pre-project/ Quality scorecard Annually Executing Indicator is consistent with
government mainstreaming of climate programme with standards Entities (EEs) the Climate Investment Fund
institutional change in national and sector assessment (CIF)-PPCR indicator A2.1
and regulatory planning and coordination (core) and Adaptation Fund
systems for in information sharing and Outcome 7
climate-responsive project implementation
development [Core indicator]
planning
6.0 Increased 6.1 Evidence that climate Pre-project/ Scorecards to Annually EEs This indicator aligns with
generation and data are collected, analysed programme measure climate CIF-PPCR B3, but adds an
use of climate and applied to decision- assessment information additional component of
information in making in climate-sensitive generation, analysis ‘collecting and analysing’
decision-making sectors at critical times by the and communication climate data, critical
government, private sector aspects of reliable climate
and men/women information systems that must
[Core indicator] continuously assess climate
variability
6.2 Perception of men, Pre-project/ Household survey Annually EEs Consistent with GEF
women, vulnerable programme and survey of Outcome 2.1
populations and emergency assessment managers of
response agencies of the emergency response
timeliness, content and reach agencies with data
of early warning systems disaggregated by sex.
[Core indicator]
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78
collection methods
7.0 Strengthened 7.1 Extent to which Not required Programme reports Annually EEs Replication of CIF-PPCR
adaptive capacity vulnerable households, and records indicator B1 (Core) and
and reduced communities, businesses, linked to GEF Outcome 2.1
exposure to and public sector services
climate risks use improved tools,
instruments, strategies
and activities (including
those supported by the
Fund) to respond to climate
variability and climate
change
[Core indicator]
8.0 Strengthened 8.1 Percentage of target Pre-project/ Survey of targeted Annually EEs Consistent with GEF
awareness of population aware of the programme populations, Outcome 2.3.1 and AF
climate threats potential impacts of climate assessment disaggregated by sex Outcome 3
and risk reduction change and range of and income levels
processes possible responses
[Core indicator]
Additional tracking measure
Number of direct and Not required Project records Annually EEs Consistent with Adaptation
indirect beneficiaries, Fund and PPCR tracking
disaggregated by sex and indicators
income level [This measure tracks the
scope and developmental
potential of GCF-funded
projects and programmes by
counting and categorising
the number of vulnerable
people it supports.]
Annex 4. Performance Management Framework for REDD+ activities
Annexes
Expected results Indicators Reporting responsibility/ Assumptions/notes

frequency
Shift to low-emission sustainable As per the general mitigation PMF Secretariat/annual Derived from mitigation PMF
development pathways
Impacts (Fund level)
4.0 Reduced emissions from land Tonnes of carbon dioxide Secretariat based on aggregate Derived from mitigation PMF
use, deforestation, forest degradation, equivalent (t CO2eq) reduced reporting and analysis across Fund/
sustainable management of forests (including increased removals) annual
and conservation, and enhancement of from REDD+ activities
forest carbon stocks
Programme outcomes (national or sub-national)29
A. Reduced emissions (t CO2eq) from Reduced emissions (t CO2eq) Executing Entities (EEs)/biennial or The Fund will disburse results-based payments in accordance
deforestation otherwise defined with the guidance in decision 9/CP.19 which requires, inter alia:
• results in t CO2eq that have undergone technical analysis
referred to in 14/CP.19
• a reference emission level/reference level that has
undergone technical assessment referred to in 13/CP.19
• the most recent summary of information showing how all
the safeguards referred to in 1/CP.16 have been addressed
and respected, consistent with 1/CP.16, 12/CP.17, 9/CP.19
and 12/CP.19
• a national strategy or action plan as referred to in 1/CP.16
• information on the national forest monitoring system as
referred to in 14/CP.19
The source for the above information will be the UNFCCC
REDD+ information hub.
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80
Expected results Indicators Reporting responsibility/ Assumptions/notes
frequency
B. Reduced emissions (t CO2eq) from Reduced emissions (t CO2eq) EEs/biennial or otherwise defined
forest degradation
C. Reduced emissions and increased Reduced emissions and increased EEs/biennial or otherwise defined
removals (t CO2eq) through the removals (t CO2eq)
conservation of forest carbon stocks
D. Reduced emissions and increased Reduced emissions and increased EEs/biennial or otherwise defined
removals (t CO2eq) through the removals (t CO2eq)
sustainable management of forests
E. Increased removals (t CO2eq) Increased removals (t CO2eq) EEs/biennial or otherwise defined
through the enhancement of forest
carbon stocks
Remarks: REDD+ programmes supported by the Fund through REDD+ result-based payments are envisaged to use relevant indicators in this PMF and can identify additional
indicators that are relevant and compelling in light of specific circumstances on a case‐by‐case basis. The Fund is a continuously learning institution. The PMF results, indicators
and associated methodologies will be refined and adapted as needed based on the experience gained and lessons learned from the implementation.
Annex 5. Indicative indicators to select for each of the six GCF investment criteria
Annexes
Criterion Definition Coverage area Activity-specific sub-criteria Indicative indicators (or assessment factors)
Impact potential Potential of the Mitigation impact Contribution to the shift to low-emission • Expected tonnes of carbon dioxide equivalent (t CO2eq) to be reduced or
project/programme sustainable development pathways avoided (PMF-M Core 1)31
to contribute to the • Degree to which activity avoids lock-in of long-lived, high-emission
achievement of the infrastructure
Fund’s objectives and • Expected increase in the number of households with access to low-emission
result areas energy
• Degree to which the project/programme supports the scaling up of low-
emission energy in the affected region by addressing key barriers
• Expected number of MW of low-emission energy capacity installed,
generated and/or rehabilitated
• Expected increase in the number of small, medium and large low-emission
power suppliers (PMF-M 6.0 and related indicator/s), and installed effective
capacity
• Expected decrease in energy intensity of buildings, cities, industries and
appliances (PMF-M 7.0 and related indicator/s)
• Expected increase in the use of low-carbon transport (PMF-M 8.0 and related
indicator/s)
• Expected improvement in the management of land or forest areas
• Contributing to emission reductions
• (PMF-M 9.0 and related indicator/s)
• Expected improvement in waste management contributing to emission
reductions (e.g. the change in the share of waste managed using low-carbon
strategies and/or the change in the share of waste that is recovered through
recycling and composting)
and/or
• Other relevant indicative assessment factors, taking into account the Fund’s
objectives, priorities and result areas, as appropriate on a case-by-case basis
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82
Impact potential Potential of the Adaptation impact Contribution to increased climate- • Expected total number of direct and indirect beneficiaries,
(continued) project/programme resilient sustainable development (reduced vulnerability or increased resilience); number of
to contribute to the beneficiaries relative to total population (PMF-A Core 1),
achievement of the particularly the most vulnerable groups
Fund’s objectives • Degree to which the activity avoids lock-in of long-lived, climate-
and result areas vulnerable infrastructure
(continued)
• Expected reduction in vulnerability by enhancing adaptive
capacity and resilience for populations affected by the proposed
activity, focusing particularly on the most vulnerable population
groups and applying a gender-sensitive approach
• Expected strengthening of institutional and regulatory systems
for climate-responsive planning and development (PMF-A 5.0 and
related indicator/s)
• Expected increase in generation and use of climate information in
decision-making (PMF-A 6.0 and related indicator/s)
• Expected strengthening of adaptive capacity and reduced
exposure to climate risks (PMF-A 7.0 and related indicator/s)
• Expected strengthening of awareness of climate threats and risk
reduction processes (PMF-A 8.0 and related indicator/s)
and/or
• Other relevant indicative assessment factors, taking into account
the Fund’s objectives, priorities and result areas, as appropriate on
a case-by-case basis
Annexes
Paradigm shift Degree to which Potential for scaling Innovation • Opportunities for targeting innovative solutions, new market
potential the proposed up and replication, Level of contributions to global low- segments, developing or adopting new technologies, business
activity can catalyse and its overall carbon development pathways, models, modal shifts and/or processes
impact beyond contribution to consistent with a temperature increase of • Expected contributions to global low-carbon development
a one-off project global low-carbon less than 2°C pathways consistent with a temperature increase of less than 2°C as
or programme development demonstrated through:
Potential for expanding the scale and
investment pathways being • a theory of change for scaling up the scope and impact of the
impact of the proposed programme or
consistent with a intended project/programme without equally increasing the total
project (scalability)
temperature increase costs of implementation
of less than 2°C Potential for exporting key structural • a theory of change for replication of the proposed activities in the
(mitigation only) elements of the proposed programme or project/programme in other sectors, institutions, geographical areas
project elsewhere within the same sector, or regions, communities or countries
as well as to other sectors, regions or
countries (replicability)
Potential for Contribution to the creation or • Existence of a monitoring and evaluation plan and a plan for
knowledge and strengthening of knowledge, collective sharing lessons learned so that they can be incorporated within
learning learning processes or institutions other projects
Contribution Sustainability of outcomes and results • Arrangements that provide for long-term and financially
to the creation beyond completion of the intervention sustainable continuation of relevant outcomes and key relevant
of an enabling Market development and activities derived from the project/programme beyond the
environment transformation completion of the intervention
• Extent to which the project/programme creates new markets and
business activities at the local, national or international level
• Degree to which the activity will change incentives for market
participants by reducing costs and risks, eliminating barriers to the
deployment of low-carbon and climate-resilient solutions
• Degree to which the proposed activities help to overcome
systematic barriers to low-carbon development to catalyse impact
beyond the scope of the project or programme
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84
Paradigm Degree to which Contribution to Potential for strengthened regulatory • Degree to which the project or programme advances the national/
shift potential the proposed the regulatory frameworks and policies to drive local regulatory or legal frameworks to systemically promote
(continued) activity can catalyse framework and investment in low-emission investment in low-emission or climate-resilient development
impact beyond policies technologies and activities, promote • Degree to which the activity shifts incentives in favour of low-
a one-off project development of additional low- carbon and/or climate-resilient development or promotes
or programme emission policies, and/or improve mainstreaming of climate change considerations into policies and
investment climate-responsive planning and regulatory frameworks and decision-making processes at national,
(continued) development regional and local levels, including private-sector decision-making
Overall contribution Potential for expanding the proposal’s • Scaling up the scope and impact of the intended project/
to climate-resilient impact without equally increasing its programme without equally increasing the total costs of
development cost base (scalability) implementation
pathways consistent Potential for exporting key structural • A theory of change for replication of the proposed activities in the
with a country’s elements of the proposal to other project/programme in other sectors, institutions, geographical
climate change sectors, regions or countries areas or regions, communities or countries
adaptation (replicability) • Degree to which the programme or project reduces proposed risks
strategies and plans of investment in technologies and strategies that promote climate
(adaptation only) resilience in developing countries
Sustainable Wider benefits and Environmental Expected positive environmental • Degree to which the project or programme promotes positive
development priorities co-benefits impacts, including in other result areas environmental externalities such as air quality, soil quality,
potential of the Fund and/or in line with the conservation, biodiversity, etc.
priorities set at the national, local or
sectoral level, as appropriate
Social co-benefits Expected positive Potential for externalities in the form of • Social co-benefits
social and health expected improvements, for women
impacts, including and men as relevant, in areas such as
in other result areas health and safety, access to education,
of the Fund, and/ improved regulation and/or cultural
or in line with the preservation
priorities set at the
national, local or
sectoral levels, as
appropriate
Annexes
Sustainable Economic Expected positive Potential for externalities in the form • Economic co-benefits
development co-benefits economic impacts, of expected improvements in areas
potential including in other such as expanded and enhanced
(continued) result areas of the job markets, job creation and
Fund, and/or in line poverty alleviation for women and
with the priorities men, increased and/or expanded
set at the national, involvement of local industries;
local or sectoral increased collaboration between
level, as appropriate industry and academia; growth of
private funds attracted; contribution
to an increase in productivity and
competitive capacity; improved
sector income-generating capacity;
contribution to an increase in energy
security; change in water supply and
agricultural productivity in targeted
areas, etc.
Gender-sensitive Potential for reduced Explanation of how the project • Gender-sensitive development impact
development gender inequalities activities will address the needs of
impact in climate change women and men in order to correct
impacts and/or prevailing inequalities in climate
equal participation change vulnerability and risks
by gender groups
in contributing to
expected outcomes
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86
Needs of the Vulnerability and Vulnerability of the Scale and intensity of exposure of • Intensity of exposure to climate risks and the degree of
recipient financing needs country (adaptation people, and/or social or economic vulnerability, including exposure to slow-onset events
of the beneficiary only) assets or capital, to risks derived from • Size of population and/or social or economic assets or capital of
country and climate change the country exposed to climate change risks and impacts
population
Vulnerable groups Comparably high vulnerability of the • Proposed project/programme supports groups that are identified
and gender aspects beneficiary groups as particularly vulnerable in national climate or development
(adaptation only) strategies, with relevant sex disaggregation
Vulnerability and Economic and Level of social and economic • Level of social and economic development (including income
financing needs social development development of the country and target level) of the country and target population (e.g. minorities,
of the beneficiary level of the country population disabled, elderly, children, female heads of households, indigenous
country and and the affected peoples, etc.)
population population
(continued)
Absence of Opportunities for the Fund to • Explanation of the existing barriers that create absence of
alternative sources overcome specific barriers to financing alternative sources of financing and how they will be addressed
of financing
Need for Opportunities to strengthen • Potential of the proposed programme or project to strengthen
strengthening institutional and implementation institutional and implementation capacity
institutions and capacity in relevant institutions in the
implementation context of the proposal
capacity
Annexes
Country ownership Beneficiary country Existence of a Objectives are in line with priorities in • Programme or project contributes to country’s priorities for
ownership of, national climate the country’s national climate strategy low-emission and climate-resilient development as identified in
and capacity to strategy Proposed activity is designed in national climate strategies or plans, such as Nationally Appropriate
implement, a Coherence with cognisance of other country policies Mitigation Actions, National Adaptation Plans or equivalent, and
funded project existing policies demonstrates alignment with technology needs assessments, as
or programme appropriate
(policies, climate • Degree to which the activity is supported by a country’s
strategies and enabling policy and institutional framework, or includes policy or
institutions) institutional changes
Capacity of AEs or Experience and track record of the AEs • Proponent demonstrates a consistent track record and relevant
EEs to deliver or EEs in key elements of the proposed experience and expertise in similar or relevant circumstances as
activity described in the proposed project/programme (e.g. sector, type of
intervention, technology)
Engagement Stakeholder consultations and • Proposal has been developed in consultation with civil society
with civil society engagement groups and other relevant stakeholders, with particular attention
organisations and being paid to gender equality, and provides a specific mechanism
other relevant for their future engagement in accordance with the Fund’s
stakeholders Environmental and Social Safeguards and stakeholder consultation
guidelines. The proposal places decision-making responsibility
with in-country institutions and uses domestic systems to ensure
accountability
Efficiency and Economic and, Cost-effectiveness Financial adequacy and • Proposed financial structure (funding amount, financial instrument,
effectiveness if appropriate, and efficiency appropriateness of concessionality tenor and term) is adequate and reasonable in order to achieve the
financial soundness regarding financial proposal’s objectives, including addressing existing bottlenecks
of the project/ and non-financial and/or barriers
programme aspects • Demonstration that the proposed financial structure provides the
least concessionality needed to make the proposal viable
Cost-effectiveness (mitigation only) • Demonstration that the Fund’s support for the project/programme
will not crowd out private and other public investment
• Estimated cost per t CO2eq (PMF-M Core 2) as defined as total
investment cost/expected lifetime emission reductions, and
relative to comparable opportunities
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88
Efficiency and Economic and, if Amount of Potential to catalyse and/or leverage • Expected volume of finance to be leveraged by the proposed
effectiveness appropriate, financial co-financing investment (mitigation only) project/programme and as a result of the Fund’s financing,
(continued) soundness of the disaggregated by public and private sources (PMF-M Core 3)
project/programme • Co-financing ratio (total amount of co-financing divided by the
(continued) Fund’s investment in the project/programme)
• Potential to catalyse private- and public-sector investment,
assessed in the context of performance on industry best practices
• Expected indirect/long-term low-emission investment mobilised
as a result of the implementation of activity
Programme/project Expected economic and financial • Economic and financial rate of return with and without the Fund’s
financial viability internal rate of return support (i.e. hurdle rate of return or other appropriate/relevant
and other financial Financial viability in the long run thresholds)
indicators • Description of financial soundness in the long term (beyond the
Fund’s intervention)
Industry best Application of best practices and • Explanations of how best available technologies and/or best
practices degree of innovation practices, including those of indigenous peoples and local
communities, are considered and applied
• If applicable, the proposal specifies the innovations or
modifications/adjustments made based on industry best practices
89
Endnotes
1. GCF Board Decision on Further 11. An example of an Involuntary Resettlement
Development of the Initial Investment Due Diligence Report can be found in FP036
Framework. Available at: https://goo.gl/ ‘Pacific Renewable Energy Investment
BHJTNE Facility (Cook Islands: Rarotonga Battery
Storage Supply Systems)’. Available at:
2. Eco Ltd (2016) ‘GCF insight story in advance
www.adb.org/sites/default/files/project-
of the 13th GCF Board Meeting’. 27 June.
document/210836/49450-004-rpddr-01.pdf
Chislehurst, UK: Eco Ltd. www.ecoltdgroup.
com/wp-content/uploads/2016/03/Eco- 12. An example of an Indigenous People
GCF-insight-16-2-Key-Findings-v1.pdf Planning Framework can be found in RF008
‘Fiji Urban Water Supply and Wastewater
3. The NDA and Focal Point are the
Management Project’. Available at:
government counterparts of the GCF. The
www.adb.org/sites/default/files/linked-
main difference between the two is that
documents/49001-002-ippfab.pdf
the Focal Point is an individual and not an
institution mandated to liaise with the Fund. 13. GCF (2016e) GCF Environmental and
Management System, Annex I, Draft for
4. GCF (2014b) Initial Results Management
consultation, 15 December 2016. Seoul:
Framework of the Fund. Seoul: Green
Green Climate Fund. www.greenclimate.
Climate Fund. www.greenclimate.fund/
fund/documents/20182/24913/DCP_15-12-
ventures/portfolio/fine-print
2016_-_GCF_Environmental_and_Social_
5. UNEP (1989) The Montreal Protocol on Management_System.pdf/3b05eb86-4636-
Substances that Deplete the Ozone Layer. 4179-aa1d-ebfcec34037e
Nairobi: United Nations Environment
14. GCF (2014b) Op. cit.
Programme. http://ozone.unep.org/en/
handbook-montreal-protocol-substances- 15. “People requiring immediate assistance
deplete-ozone-layer/5 during a period of emergency, i.e. requiring
basic survival needs such as food, water,
6. UNFCCC (2014) Greenhouse Gas Inventory
shelter, sanitation and immediate medical
Data. New York: United Nations Framework
assistance.” “Appearance of a significant
Convention on Climate Change. http://
number of cases of an infectious disease
unfccc.int/ghg_data/items/3800.php
introduced in a region or a population that is
7. IPCCC (nd) National Greenhouse Gas usually free from that disease.” CRED, EM-DAT:
Inventories. Intergovernmental Panel on The international disaster database. Available
Climate Change: www.ipcc-nggip.iges.or.jp/ at www.emdat.be/explanatory-notes
8. Wintergreen, J. and Delaney, T. (nd) ‘ISO 16. GCF (2014b) Op. cit.
14064, International Standard for GHG
17. GCF (2014d) Initial Logic Model and
Emissions Inventories and Verification’.
Performance Measurement Framework
Boonton, NJ: First Environment, Inc.
for REDD+ Results‐based Payments. Seoul:
www3.epa.gov/ttnchie1/conference/ei16/
session13/wintergreen.pdf
fund/ventures/portfolio/fine-print
9. GIZ and WRI (2015) Environmental and
18. Sweeny, D. and Pritchard, M. (2015) The
social safeguards at the Green Climate Fund.
Pacific guide to project proposal preparation
Eschborn, Germany and Washington, DC:
for the Kyoto Protocol Adaptation Fund. Apia,
Deutsche Gesellschaft für Internationale
Samoa: Secretariat of the Pacific Regional
Zusammenarbeit and World Resources
Environment Programme.
Institute. www.gcfreadinessprogramme.
www.sprep.org/attachments/Publications/
org/sites/default/files/Environmental%20
CC/pacific-guide-to-project-proposal-
and%20Social%20Safeguards%20at%20
preparation-for-kyoto-protocol-adaptation-
the%20Green%20Climate%20Fund.pdf
fund.pdf
10. GCF (2017) ‘Accreditation to the Green
19. GCF (2015d) ‘Further development of
Climate Fund’. Seoul: Green Climate
the Initial Investment Framework: sub-
Fund. www.greenclimate.fund/
criteria and methodology’. Meeting of
documents/20182/319135/1.3_-_
the Board, 28–30 June 2016, Songdo,
Introduction_to_Accreditation_Framework.
Republic of Korea, agenda item 11. Seoul:
pdf/4d44997c-6ae9-4b0e-be5d-
32da82e62725
fund/documents/20182/24949/
GCF_B.09_07_-_Further_Development_of_
the_Initial_Investment_Framework__Sub-
Criteria_and_Methodology.pdf/18db33f8-
a55b-488f-8a6b-5df68f39a137
20. GCF (2015b) ‘Initial monitoring and stakeholders, and to help ensure a project’s
accountability framework for accredited alignment with ongoing country processes.
entities’. Meeting of the Board 2–5 However, some respondents noted that this
November 2015, Livingstone, Republic voluntary step would not save them time
of Zambia, agenda item 10. Seoul: Green over the longer term. www.ecoltdgroup.
Climate Fund. www.greenclimate.fund/ com/wp-content/uploads/2016/11/GCF-
documents/20182/87610/GCF_B.11_05_-_ insight-June-2016.pdf
Initial_monitoring_and_accountability_
24. GCF (2017) Op. cit.
framework_for_accredited_entities.
pdf/9dfc58ab-6653-41f7-af8b-273fef5c6603 25. GCF (2016f ) ‘Consideration of funding
proposals – Addendum I Funding
21. GCF (2013) ‘Business Model Framework:
proposal package for FP028’. Meeting of
Results Management Framework’.
the Board 13–15 December 2016, Apia,
Meeting of the Board 8–10 October 2013,
Samoa, agenda item 16(e). Seoul: Green
Paris, agenda item 4(b). Seoul: Green
documents/20182/490910/GCF_B.15_13_
documents/20182/24937/GCF_B.05_03_-_
Add.01_-_Funding_proposal_summary_
Business_Model_Framework__Results_
package_for_FP028.pdf/3fd1df6e-18eb-
Management_Framework.pdf/d6e50312-
45be-83db-3c3706821d9d
fbbf-4cb4-b96b-a47e47cc6f4d
26. GCF (2015d) Op. cit.
22. GCF (nd) Proposal Approval Process: Process
Flow Chart. Seoul: Green Climate Fund. 27. GCF (2015d) Op. cit.
www.greenclimate.fund/ventures/portfolio/
fine-print 28. GCF (2015d) Op. cit.
23. Eco Ltd conducted a survey in May–June 29. Countries may report on the outcomes
2016 to understand what is working (t CO2eq) of each REDD+ activity (A.–E.)
– and not working – in GCF project separately or in a combined manner.
development. GCF stakeholders, including 30. GCF (2015d) Op. cit.
NDAs, AEs, project developers and other
key stakeholders, were asked to give their 31. PMF-M Core 1 refers to a linkage with
views on the key issues facing GCF project the first core indicator in the mitigation
development. Respondents mostly agreed Performance Measurement Framework,
that, while a voluntary step, submitting a as contained in document GCF/B.08/07.
concept note helped them design a better PMF-A 5.0 refers to a linkage with the
GCF project. Concept notes are seen as an indicator 5.0 in the adaptation Performance
opportunity to obtain technical inputs, as a Measurement Framework, and so on.
tool to communicate more easily with other
Editing, design and layout: Green Ink (www.greenink.co.uk)
www.cdkn.org e: [email protected] t: +44 (0) 207 212 4111
This document is an output from a project commissioned through the Climate and Development Knowledge Network (CDKN) and Acclimatise. CDKN is a programme funded by the
UK Department for International Development (DFID) and the Netherlands Directorate-General for International Cooperation (DGIS) for the benefit of developing countries. The views
expressed and information contained in it are not necessarily those of or endorsed by DFID, DGIS or the entities managing the delivery of the Climate and Development Knowledge
Network, which can accept no responsibility or liability for such views, completeness or accuracy of the information or for any reliance placed on them.
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained
in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information
contained in this publication, and, to the extent permitted by law, the entities managing the delivery of CDKN and Acclimatise do not accept or assume any liability, responsibility or
duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. CDKN is
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Toolkit to develop a project proposal for the GCF

CDKN is a programme funded by the UK Department for International Development (DFID)

This report should be quoted as:

Front cover photo: Balaram Mahalder, Wikimedia Commons

Glossary of key terms vii

1. Essentials to know before developing a GCF project 3

2. Key project design elements 8

3. The GCF proposal template 11

4. How to put together a GCF funding proposal: a stepwise approach 15

5. The GCF project cycle 56

6. How to get started? 58

7. Support available for the full proposal preparation 60

Annex 1. Illustrative example: Log frame from XacBank’s approved proposal 65

Annex 2. Performance Management Framework for mitigation 70

Annex 3. Performance Management Framework for adaptation 74

Annex 4. Performance Management Framework for REDD+ activities 79

List of figures and tables

Figure 2. Two-step and one-step approval processes xviii

Figure 3. GCF funding windows 3

Figure 4. GCF strategic impact areas 4

Figure 5. Total project costs 4

Figure 6. GCF architecture 5

Figure 7. Support provided by the GCF’s Private Sector Facility 7

Figure 8. Six levels of logic models 8

Figure 9. Overview of the IFC’s Performance Standards 9

Figure 10. Six principles of the GCF’s Gender Policy 10

Figure 11. Three levels for integration of gender considerations into a funding

Figure 12. Key elements in undertaking a scoping analysis 16

Figure 13. Backcasting approach to developing a log frame 22

Figure 14. How to integrate gender into a project? 32

Figure 15. GCF investment criteria and their definitions 41

Figure 16. Elements of the mitigation core indicators 41

Figure 17. Elements of the adaptation core indicators 41

Figure 18. Elements of the paradigm shift potential criterion 42

Figure 19. Elements of the recipients’ needs criterion 44

Figure 20. Elements of the country ownership criterion 44

Figure 21. Elements of the efficiency and effectiveness criterion 46

Figure 22. How to estimate the total budget 49

Figure 23. How to calculate the amount of GCF financing required 51

Table 1. National Designated Authority, Accredited Entity and Executing Entity 6

Table 4. Selected data analysis methods 19

Table 5. Selected consultation methods 21

Table 6. Mitigation and adaptation fund-level impacts 22

Table 7. Mitigation and adaptation project/programme-level outcomes 23

Table 9. The IFC’s Performance Standards 26

Table 10. Risk levels and categories 27

Table 11. GCF ESMP requirements 29

Table 12. Illustrative example: Environmental and social report disclosure information

Table 14. Mitigation indicators 36

Table 15. Adaptation indicators 37

Table 16. REDD+ indicators 38

Table 17. Illustrative example: Indicators and corresponding means of verification,

Table 18. Examples of sustainable development indicators 43

Table 19. GCF reporting requirements 48

Table 20. Table for presenting the breakdown of cost estimates 49

Table 21. Schedule of cap on fees applicable to public sector projects/programmes 50

Table 22. Illustrative example: Financial market overview from XacBank’s approved

Table 23. GCF financial instruments 53