Environment learning document (GEF Projects)

Learning note (draft)

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This Note provides general guidance on particular aspects of design
Version: January 2008

Core issues

The Global Environment Facility (GEF) provides incremental funds for development projects and activities that enhance protection of the global environment in the Focal Areas of Biodiversity, Climate Change, the Ozone Layer, International Waters, Persistent Organic Pollutants and Land Degradation. IFAD has full access to all GEF Focal Areas and grants as long as the intervention’s primary focus is Land Degradation (the objective is to mitigate the causes and negative impacts of land degradation on the structure and functional integrity of ecosystems through sustainable land management practices as a contribution to improving people’s livelihoods and economic well-being) - Operational Program 15 (consider other OPs with links to LD). GEF helps catalyze IFAD’s efforts in addressing the poverty-environment nexus and broaden the scope and impact of IFAD activities to improve the global environment.

The development of GEF project grants should coincide with IFAD Inception or Formulation stages to ensure greater coordination, convergence of implementation support, and operational strategies between the GEF and IFAD interventions.

Design of components for IFAD-GEF projects should, as a minimum, cover:

• consistency with GEF focal areas and operational programmes, strategic priorities and relevant country and regional strategic frameworks;
• institutional coordination and support: core commitments and linkages; consultation, coordination and collaboration between and among the GEF Agencies;
• monitoring and evaluation project design incorporating lessons from similar projects and describing the proposed M&E system in harmonization with the overall IFAD initiative;
• sustainability (including financial sustainability): factors that influence continuation of project benefits after completion of project implementation together with a well defined exit strategy plan;
• replicability: an outline of measures to replicate the project lessons and transfer experience as well as the proposed approach to knowledge transfer, if any; 
• stakeholder involvement and intended beneficiaries: major stakeholders relevant to project objectives and means to ensure participation in project development; GEF support should cover the same geographical area as the IFAD initiative;
• financing modality: details for co-financing plans – indicate the sources of co-financing, how they are classified (i.e. GEF Agency, Government, Multilateral Agency, Bilateral Development Cooperating Institution, NGO, Private Sector, Beneficiaries), and the type of co-financing (i.e. grant, loans, credits, equity investments, committed in-kind support, others-specified). It is important to indicate which activities will be co-financed by the IFAD Initiative. The co-financing has to be on a one to one basis (one USD GEF for a one USD co-financing).

Key tasks for design and review

• Project Rationale and Justification: demonstrate why a GEF investment is needed and what would be its added-value. The project should be placed in its wider context with strong links to country or regional policy and strategic trends. Indicate the contribution of the project to sectoral policy objectives, institutional development, and other objectives that would not be achieved without incremental GEF funding.
• Project design. Show that the project is consistent with the objectives of the respective GEF OPs and selected Strategic Priorities. Demonstrate that project design is in line with main IFAD’s strategic priorities and comparative advantages as a GEF EA and ensure that linkages with IFAD’s baseline interventions are operational, well integrated/planned and cost effective. Devise operational modalities for harmonization/synergy (institutional processes, financial, geographical coverage, targeting, lessons learned) of GEF-funded activities with IFAD and other initiatives and ensure synergies between international environmental conventions.
• Design of IFAD/GEF-related regional initiatives and partnership platforms should be primarily linked to IFAD’s projects and its respective regional strategies and opened-up to relevant partners in relation to their comparative advantages. Ensure cost-effective design (particularly in terms of implementation arrangements).
• Targeting:  Ensure that geographic and social targeting criteria are in line with IFAD’s operational measures for targeting - see Learning Note 2.3 – Project Targeting.
• Poverty-environment nexus. Show the links between the ecosystem (structure and functional integrity) and socio-economic dynamics, then present these in the context of a blended IFAD-GEF intervention linking the root causes of problems to threats, and generate a logical sequence of activities to address these causes. Flag any technical, institutional, economic and policy/legal shortcomings - see Learning Note 5.1 - Environment and Natural Resource Management.
• Incremental costs.  Apply and analyse the concept of incremental costs, as well as quantification of costs related to baseline activities (i.e. ongoing activities in the country’s national interest in the sectors and geographic areas related to those of the alternative). Clearly define the alternative ‘with GEF’ scenario (what occurs in addition to the existing baseline in order to achieve the outcomes) and show which activities and outputs suggested in the alternative scenario are incremental (producing global benefits) and which are not. Co-financing of the GEF alternative should be at least equal to or higher than 50% but avoid complex co-financing arrangements. Evidence/letters of co-financing should be provided. Incremental cost analysis should follow GEF requirements (see section C – GEF Background Information - reference “e” below for details).
• Institutional coordination. Design and agree on the organisational arrangements and responsibilities for implementation and monitoring. Carry out institutional/policy analysis of the capacities/capabilities of potential implementing agencies and service providers for project implementation; plans should address shortcomings in main sectors involved and linkages. Also explain how IFAD will ensure a high quality technical and financial implementation of the project (e.g. international project coordinator, supervision by country-based staff or HQ, or arrangements with other involved cooperating institutions) – see Learning Note 4.2 -  Pro-Poor Institutional Transformation.
• Replication.   Identify potential IFAD and any other relevant and cost-effective tools and mechanisms that could be used for replication at the country, the region and the global scales.
• M&E / Logical Framework.
  • Provide relevant, time bound quantitative/measurable indicators. Distinguish between impact and performance indicators.
  • Estimate baseline values for indicators and the Global Objective in the logical framework.
  • Develop linkages and ensure consistency between IFAD loan and GEF Monitoring and Evaluation systems/logframes.
  • Include a detailed annex on GEF M&E modalities, roles and responsibilities. Project cost should articulate such elements with appropriate line items.  

Other key tasks for consideration:

• Project Concept and PDF-B design should be simple and output-oriented to ensure easy and timely PDF-Bs implementation.
• IFAD projects that have GEF components should not include GEF funding in their costabs unless such grants are secured.
• Project costs should make clear distinction between activities that are eligible for GEF funding and those that should be born by baseline investments and co-financing. i.e. project operating costs and M&E-associated costs should be on the GEF grant. Also Project start up workshops should be included under the grant and not be funded through the SOF facility.
• As GEF projects are not eligible to SOF, start-up workshops should be financed by the GEF Grant.
• Risks should be assessed and effective mitigation measures should be identified and integrated into overall project design and cost.

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