lessons from the unep asia-pacific nie … finance/asia...ii acknowledgement the authors would like...

United Nations Environment ProgrammeRegional Office for Asia and the Pacific (ROAP)2nd Floor, United Nations BuildingRajadamnern Nok AvenueBangkok 10200, Thailandhttp://www.unep.org/roap

Ministry of the Environment Government of Japan Godochosha No. 5, Kasumigaseki 1-2-2, Chiyoda-ku, Tokyo 100-8975, Japanhttps://www.env.go.jp

Guidance on direct access

Lessons from the uneP asia-Pacific nie accreditation suPPort ProGramme

ii

acknowLedGement

The authors would like to thank the NIE Accreditation Help Desk experts Mr Ahsan Uddin Ahmed, Mr Arivudai Nambi Appadurai, Mr Ranga Pallawalla, Mr Ravinder Singh and Mr Sanjay Vashist for their comments and sharing of lessons for this manual as well as our colleagues from the Adaptation Fund Board Secretariat for reviewing the manual. We would also like to acknowledge the funding support for this programme provided by Ministry of the Environment of Japan (MoEJ).

Prakash Bista and Anna-Katharina Deinhard

Citation: Bista, Prakash and Anna-Katharina Deinhard (2016). Guidance on Direct Access - Lessons from the UNEP Asia-Pacific NIE Accreditation Support Programme. UNEP-MoEJ, Bangkok.Cover photo: Peter Casier (CGIAR)

The contents of this publication do not necessarily reflect the views or policies of UNEP, MoEJ or any other contributory organizations or individuals.

While reasonable efforts have been made to ensure that the contents of this publication are factually correct and properly referenced, neither UNEP nor MoEJ accept responsibility for the accuracy or completeness of the contents, and shall not be liable for any loss or damage that may be occasioned directly or indirectly through the use of, or reliance on, the contents of this publication.

Guidance on Direct Access Lessons from the UNEP Asia-Pacific NIE Accreditation Support Programme − iii

contents

acknowledgement ..................................................................................................................................................... ii

acronyms ..................................................................................................................................................................... v

introduction ............................................................................................................................................................... 1 Rationale ......................................................................................................................................................... 1

module 1: direct and enhanced direct access ....................................................................................................... 2 Key messages ................................................................................................................................................. 2 History of Aid Effectiveness .......................................................................................................................... 2 Adaptation Fund and different Access Modalities ...................................................................................... 3 Designated Authority ..................................................................................................................................... 5 Case study 1 ................................................................................................................................................... 5 Case study 2 ................................................................................................................................................... 5

module 2: fiduciary standards and accreditation to the adaptation fund ....................................................... 7 Key messages ................................................................................................................................................. 7 Adaptation Fund Fiduciary Standards .......................................................................................................... 7 Implementing Entities and Accreditation to the Adaptation Fund ............................................................ 8 Streamlined Accreditation Process .............................................................................................................. 9 Case study 3 Implementing Entity vs Executing Entity ................................................................................................. 10 Case study 4 Tendency to avoid obvious strengths in selecting an NIE ...................................................................... 12

module 3: required capacity: financial management and integrity .................................................................... 12 Key message ................................................................................................................................................... 12 Required capabilities ..................................................................................................................................... 26 a) Legal status to contract with the Adaptation Fund Board ................................................................ 12 b) Accurately and regularly record transactions and balances in a manner that adheres to broadly accepted good practices, and ensure these are audited periodically by an independent firm or organization ........................................................................................................................................... 13 c) Internal Control Framework with particular reference to control over disbursements and payments ................................................................................................................................................ 14 d) Preparation of business plans and budgets and ability to monitor expenditure in line with budgets .................................................................................................................................................. 14

module 4: requisite institutional capacity ............................................................................................................ 15 Key messages ................................................................................................................................................. 15 Required capabilities ..................................................................................................................................... 15 a) Procurement procedures that are transparent and provide for competition .................................. 15 b) Ability to identify, develop and appraise projects .............................................................................. 16 c) Competency to manage or oversee the execution of the project/programme including managing sub-recipients and supporting project/programme delivery and implementation ....... 16 d) Capacity to undertake monitoring and evaluation ............................................................................. 17

module 5: required capacity: transparency, self-investigative Powers and anti-corruption measures ....... 18 Key messages ................................................................................................................................................. 18 Required capabilities ..................................................................................................................................... 18 a) Competence to deal with financial mismanagement and other malpractices ................................ 18 Case study 5 Transparency, Self-Investigative Powers and Anti-Corruption Measures ............................................ 19

iv

module 6: environmental, social and Gender safeguards .................................................................................... 20 Key messages ................................................................................................................................................. 20 Environmental and Social principles ............................................................................................................ 20 Gender principles ............................................................................................................................................ 21 Case study 6 Safeguards ................................................................................................................................................. 22

module 7: Post-nie accreditation – checklist for identification of adaptation projects ................................. 23 Key messages ................................................................................................................................................. 23 Background ..................................................................................................................................................... 23 Adaptation Fund’s project review criteria .................................................................................................... 23 Checklist for identification of adaptation interventions ............................................................................ 24 Executing Entities .......................................................................................................................................... 26 Suggestions for selecting and contracting an Executing Entity ............................................................... 26

module 8: accessing support – the uneP regional help desk and community of Practice .............................. 27 Regional Help Desk ......................................................................................................................................... 27 NIE Accreditation support .............................................................................................................................. 27 Project formulation support .......................................................................................................................... 27 Community of Regional Experts/Advisers .................................................................................................... 27 Knowledge sharing ......................................................................................................................................... 29

Bibliography ............................................................................................................................................................... 30

List of fiGuresFigure 1. Multilateral access ................................................................................................................................................. 4Figure 2. Direct access .......................................................................................................................................................... 4Figure 3. Enhanced direct access ....................................................................................................................................... 4Figure 4. NIE accreditation process for the Adaptation Fund (simplified) ................................................................ 9Figure 5. Flow chart of Streamlined Accreditation Process ......................................................................................... 10Figure 6. NIE Accreditation support provided by UNEP .................................................................................................. 28Figure 7. Project Preparation Support provided by UNEP .............................................................................................. 28

List of taBLesTable 1. Fiduciary standard and required capacity for the Adaptation Fund ........................................................ 8Table 2. Review Criteria for project and programme submission .............................................................................. 24

Guidance on Direct Access Lessons from the UNEP Asia-Pacific NIE Accreditation Support Programme − v

acronyms

AAA Accra Agenda for Action

ADB Asian Development Bank

AF Adaptation Fund

AFB Adaptation Fund Board

AFBS Adaptation Fund Board Secretariat

AP Accreditation Panel

CDM Clean Development Mechanism

CER Certified Emission Reduction

CSO Civil Society Organisation

DA Designated Authority

EbA Ecosystem based Adaptation

GEF Global Environment Facility

GCF Green Climate Fund

HLF High Level Forum

IE Implementing Entity

MIE Multilateral Implementing Entity

MOE Ministry of Environment

MOEJ Ministry of the Environment, Government of Japan

MOF Ministry of Finance

NCF National Climate Fund

NIE National Implementing Entity

PPRC Project/Programme Review Committee

RIE Regional Implementing Entity

ROAP Regional Office for Asia and the Pacific

SNIE Small National Implementing Entity

SIDS Small Island Developing State

UNFCCC United Nations Framework Convention on Climate Change

UNDP United Nations Development Programme

UNEP United Nations Environment Programme

Guidance on Direct Access Lessons from the UNEP Asia-Pacific NIE Accreditation Support Programme − 1

introduction

rationale

The United Nations Environment Programme (UNEP) runs a collaborative programme to support Asia-Pacific countries in building readiness for the accreditation of their National Implementing Entities (NIEs) to the Adaptation Fund (AF) and formulation of adaptation projects. Considering the modest progress of NIE accreditation in the region and addressing the capacity gaps, the UNEP Regional Office for Asia and the Pacific (ROAP) developed the support programme in close consultation with and financial support from the Ministry of the Environment of Japan (MOEJ) in 2012. The programme provides technical support to countries and nominated NIEs during the accreditation process, as well as in the formulation of projects/programmes to access funds from the AF Direct Access modality. This funding modality is expected to become prominent in the future climate financing landscape, including for the Green Climate Fund and its accreditation process. In addition to Direct Access, countries can utilize third parties like Regional Implementing Entities (RIEs) or Multilateral Implementing Entities (MIEs) to access funds.

Direct Access to funding, including NIE accreditation and its processes, compliance with fiduciary standards, environmental and social safeguards and gender policy, is a relatively new concept for many countries. The role and responsibilities of an accredited NIE are also relatively new. Direct Access, where a country can access funds directly from the AF and other funds adopting a similar modality, to manage adaptation/mitigation projects, requires an accredited NIE meeting the funds’ fiduciary standards, among others. Given current fiduciary capacities in most of the Asia-Pacific countries, the process of accreditation can be demanding, often requiring capacity enhancement. External technical support can help enhance national capacities in most countries.

This manual has been developed by UNEP, with financial support from MOEJ, mainly to share lessons from UNEP support to Asia-Pacific countries to meet the demands of a growing number of international climate funds requiring stringent fiduciary standards for Direct Access.

The lessons learned regarding challenges and enabling factors of accreditation, project development and approval, can be used to strengthen support processes for future accreditation of NIEs to the Adaptation Fund as well as other funds, including the Green Climate Fund (GCF).

The guidance manual comprises eight modules in addition to this introduction. module 1: Direct and Enhanced Direct Accessmodule 2: Fiduciary Standards and NIE Accreditation

to the Adaptation Fundmodule 3: Required Capacity – Financial Management

and Integritymodule 4: Required Capacity – Institutional Capacitymodule 5: Required Capacity – Transparency, Self-

Investigative Powers, and Anti-Corruption Measures

module 6: Environmental, Social and Gender Safeguardsmodule 7: Post NIE Accreditation – Checklist for

Identification of Adaptation projectsmodule 8: Accessing Support – the UNEP Regional Help

Desk and Community of Practice

The modules range from an introduction to the concepts of direct access, fiduciary standards and the accreditation process for the Adaptation Fund, to identification of suitable projects. The manual draws upon the rich and robust knowledge and experience of the team of experts and advisers involved in the project, international frameworks, publications, research material and case studies, among others to illustrate key messages in each module. Each module provides an overview of the topic and is supplemented by a variety of lessons learned and case studies.

The manual is expected to be developed further during the life of the project and shared in the public domain for use by any institution, development partner, country and/or national implementing entity (NIE) involved in accreditation or climate change adaptation project formulation.

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moduLe 1: direct and enhanced direct access

key messages

• The fiduciary standards for direct access to theAdaptation Fund draw upon some of the key issues identified during the 2nd High Level Forum for Aid Effectiveness in Paris, 2005.

• The Adaptation Fund is the first of its kind tointroduce direct access to countries with other climate funds following suit.

• The different modalities for accessing funds forclimate change adaptation include Multilateral Access, Direct Access and Enhanced Direct Access.

history of aid effectiveness

The Aid Effectiveness debate has been on the radar of international development actors since the early 2000s when it became apparent that the impact of sustainable development initiatives hinged not only on how much aid was given, but also how it was given.1

Aid Effectiveness is the overall effectiveness of development aid in achieving economic or human

development targets.

The number of donor governments and institutions grew rapidly in the past two decades and the total amount of aid surged. However, as most aid was in the form of tied funds, it only produced a limited and short-term impact. The fund management and reporting requirements of individual donors varied greatly,

“Direct access provides developing countries with the opportunity to strengthen local capacity and to build on local expertise”

(Fundecooperacion, NIE, Costa Rica)

“[With the] Centre du Suivi Ecologique (CSE) as a National Implementing Entity, Senegal has been empowered to switch from a “passive victim” to a dynamic actor in the fight against climate change impacts”

(CSE, NIE, Senegal)

putting strain on recipient countries. The fragmented development targets of individual aid packages also led to limited or no impact on the larger development objectives of recipient countries. Furthermore, reduced aid amounts and the growing number of aid providers which increased transaction costs, meant an overall reduction in the funds reaching targets.

Combined with other constraints such as corruption and duplication of efforts, among others, the issues outlined above led to the first High Level Forum (HLF) on Aid Effectiveness in Rome in 2002. The Rome Declaration issued by the Forum recommended the following principles of aid effectiveness:• thatdevelopmentassistancebedeliveredbasedon

the priorities and timing of the countries receiving it,

• that donor efforts concentrate on delegating co-operation and increasing the flexibility of staff of country programmes and projects, and

• that good practice be encouraged and monitored,backed by analytic work to help strengthen the leadership of recipient countries in determining their development path.

The Rome Declaration was followed by the Paris Declaration issued by the second HLF convened in the French capital in 2005. The Paris declaration laid out a practical, action-oriented roadmap with five principles to improve the quality and impact of aid. This was the first High Level Forum where both donors and recipients agreed to their shared accountability for the (five?) commitments:

1 Working Party on Aid Effectiveness, “Transforming Global Partnership for Development”, March 2010


Paris Declaration set forth five partnership principles of HLFs on Aid Effectiveness between donors

and recipients. It set the premise for international funds now utilizing Direct

Access modality.

• Ownership: Developing countries set their ownstrategies for poverty reduction, improve their institutions and tackle corruption

• Alignment: Donor countries align behind theseobjectives and use local systems

• Harmonization: Donor countries coordinate,simplify procedures and share information to avoid duplication

• Results:Developingcountriesanddonorsshiftfocusto development results and results get measured

• Mutual accountability: Donors and partners areaccountable for development results

The third HLF on Aid Effectiveness held in Accra, Ghana in 2008 agreed on the accra agenda for action (aaa) to reinforce the Paris Declaration’s five partnership principles, namely, encouraging local ownership, alignment of development programmes with the recipient country’s development strategy, harmonization of practices to reduce transaction costs, creation of results frameworks for development objectives, and ensuring mutual accountability.

The fourth HLF on Aid Effectiveness held in Busan, South Korea in 2011 known as the Busan Partnership for effective development co-operation further strengthened the five principles and embraced South-South and triangular development co-operation, including civil society organizations (CSOs) and the private sector in addition to traditional donors.2

adaptation fund and different access modalities

The Adaption Fund was established in 2001 at the 7th Conference of Parties to the United Nations Framework Convention on Climate Change (UNFCCC) in Marrakech, Morocco and was officially launched in 2007 in Bali, Indonesia to finance concrete climate change adaptation projects and programmes in developing countries that are party to the UNFCCC Kyoto Protocol. The fund’s primary source is donor funding along with the 2 per cent of Certified Emission Reduction (CER) issued for Clean Development Mechanism (CDM) projects. Funds are made available to projects and programmes based on national development priorities. The Operating Entity of the Fund is the Adaptation Fund Board (AFB) with the Global Environment Facility (GEF) as the Secretariat and the World Bank as the Trustee.

The AF draws on the five partnership principles of the HLFs on Aid Effectiveness in its operational modalities, especially the fiduciary standards for Direct Access funding (Fiduciary standards are covered in Module 2, with detailed requirements in Modules 3-5). In particular, the following main areas arising from the Paris Declaration:• Strengthening partner countries’ national

development strategies and associated operational frameworks (e.g., planning, budgeting and performance assessment frameworks)

• Defining measures and standards of performanceand accountability of partner country systems in public financial management, procurement, fiduciary safeguards and environmental assessments, in line with broadly accepted good practices

• Dealing with corruption and lack of transparency,which erode public support, impede effective resource mobilisation and allocation and divert resources away from activities vital for poverty reduction and sustainable economic development. Also, where there is evidence of corruption, it inhibits donors from relying on partner country systems.3

In the climate finance arena, the Adaptation Fund has pioneered direct access - an access modality that allows developing countries to receive funds for project and programme implementation directly without going through an intermediary. Direct Access, introduced by the AF, allows for accredited national implementing partners called National Implementing Entities (NIEs) to apply for and receive funds directly from international climate funds rather than going through a Multilateral Implementing Entity (MIE) as has traditionally been done.

A broader definition of ‘direct access’ refers to the ability of a national implementing agency to receive payments directly for project and programme implementation without having to go through an intermediary. This modality aims to simplify and accelerate the process of financial resources flow to developing countries and empowers recipients by enabling them to exercise more control over projects, including the financial administration.

Along with Direct Access, the international climate funds also allow for traditional access.

The traditional access modality is known as multilateral access, with fund oversight, management, and implementation carried out at the international level. Execution is either through a MIE or a national level institution. The country’s financial systems are not involved in the channelling of funds under this scenario. In the case of the AF, this option is highly exceptional and the amount of funding for MIS execution is strongly capped. The rationale here is the importance of building county capacity.

2 “The High Level Fora on Aid Effectiveness: A history”, OECD, www.oecd.org, retrieved 11 October 20133 Paris Declaration on Aid Effectiveness, 2005

4

direct access allows for implementation and execution at the national level, with fund management and oversight at the international level within the fund. The responsibility for administering the funds lies entirely with the recipient country.

The emerging Green Climate Fund (GCF) is also introducing an enhanced direct access modality, which

figure 1. multilateral access

figure 2. direct access

figure 3. enhanced direct access

INTERNATIONAL DOMAIN

NATIONAL DOMAIN


NATIONAL DOMAIN


NATIONAL DOMAIN

Fund Manager

Fund Manager

Fund Manager

Fund Oversight

Implementing Body

Implementing Body

Implementing Body

Executing Body

Executing Body

Executing Body

Executing Body


NATIONAL DOMAIN


NATIONAL DOMAIN


NATIONAL DOMAIN

Fund Manager

Fund Manager

Fund Manager

Fund Oversight

Implementing Body

Implementing Body

Implementing Body

Executing Body

Executing Body

Executing Body

Executing Body


NATIONAL DOMAIN


NATIONAL DOMAIN


NATIONAL DOMAIN

Fund Manager

Fund Manager

Fund Manager

Fund Oversight

Implementing Body

Implementing Body

Implementing Body

Executing Body

Executing Body

Executing Body

Executing Body

Based on UNDP/ODI 2011.



will place all aspects of funds management at the recipient country level through a national institution or a Funding Entity4, with limited oversight functions at the international level.

The figures below illustrate traditional access to funds vs. Direct and Enhanced Direct Access.

4 A Funding Entity is defined by the GCF Governing Instrument as the national legal entity and multilateral organization that has been accredited by the GCF Board as meeting its criteria for accessing funding in order to approve and fund eligible activities under the Fund.


designated authority

A Designated Authority is an individual and not an institution, a government official who serves as the country’s focal point to the AF. The appointment of a DA is not automatic through other focal point roles and needs to be done specifically by the government and communicated to the Adaptation Fund Board Secretariat (AFBS). The DA’s role in relation to the AF is to ensure the overall quality and feasibility of in-country AF projects. In other words, the DA has the function of being the caretaker of the country’s participation in the AF.

In particular, s/he is responsible for endorsing a) the accreditation application of National or Regional Implementing Entities before sending this to the fund’s secretariat for assessment, and/or b) proposals by National, Regional, OR Multilateral Implementing Entities for adaptation projects and programmes in the DA’s country.5

The responsibilities listed above require intense coordination and exercise of authority. The DA is, therefore, someone who is in a position to decide which entity is best suited for the country, whether an NIE, Regional Implementing Entity (RIE) or MIE. S/he also decides which organization or entity, best meets the criteria for accreditation.

During the implementation phase, the DA is responsible for endorsing all projects/programmes submitted for funding by the country and, hence, is someone with an impeccable understanding of national needs and priorities with knowledge of adaptation-related and sector strategies and policies. S/he observes the projects/programmes and provides input for and reviews annual status reports and terminal reports. S/he ensures that the government continues to endorse the implementing entity (IE) and the projects/programmes being implemented. The DA is, therefore, also eligible to call off any project should s/he cease to endorse the IE or the project.

case study 1

A newly formed, low-lying small island developing state (SIDS) in the South Pacific with a population just shy of 9,000 is intrigued by the prospect of direct access to the Adaptation Fund. Late last year, a tsunami hit its southern coast, destroying most aquaculture, crops and contaminating the freshwater supply. Also facing coastal erosion due to the rising sea level, it is clear that the country is in desperate need of climate change adaptation. However, attracting very few tourists and with little or no natural resources, the country is finding it extremely difficult to allocate resources to build capacity as required by the AF for direct access. An interview with the permanent secretary of the Ministry of Foreign Affairs and Environment revealed that the government is keen to establish an NIE for direct access, which it believes, may be possible given the political will. The country may wish to seek immediate assistance through a MIE or a RIE for a Multilateral Access and look into Direct Access to the AF as it gains experience in climate change projects.

case study 2

For the past seven years, the Ministry of Environment of Country X has been implementing medium-sized climate change projects funded by the GEF and the Asian Development Bank (ADB). It has highly qualified project management human resources and recently procured licenses for PeopleSoft, an enterprise resource planning software that complies with international standards. The country has stringent rules and regulations to ensure transparency and deal with corruption, for procurement, project management and other operating procedures as required by all internationally funded programmes and projects. The Designated Authority for the Adaptation Fund in Country X is keen on endorsing the Ministry of Environment (MOE) as an NIE candidate for the country to access funds directly from the AF.

It was also highlighted by the DA that the Ministry of Finance (MOF) is the only authority in the country with a legal mandate to enter into a contract with donors. Talks with the DA have indicated a possibly protracted and bureaucratic process to provide MOE with the legal status required by the AF. In fact,

5 “Parties’ Designated Authorities”, The Adaptation Fund, www.adaptation-fund.org, retrieved 11 October 2013

6

case study 2 (continued)

latest discussions indicate that such a change will not be possible in the country with its current set-up. In the past year alone, MOF implemented development projects worth over US$100 million in the country but does not have the human resources to oversee climate change projects.

UNEP was approached by the DA for advice to help with the country’s NIE accreditation application to the Adaptation Fund. You have been selected as one of the experts to lead a mission to Country X. To consider: A possible approach to support Country X could be to analyse required capacities that can be developed in the potential NIE.

It may be an effective choice for Country X to select MOF as an NIE (due to constraints on acquiring legal status for MOE) and transfer the MOE portfolio of climate change projects and human resources. It is not always necessary for an NIE to have climate change activities as its core focus. What is necessary is that it meets all fiduciary requirements, environmental and social safeguards as well as gender policy norms.


key messages

• Direct Access strengthens national capacity andpromotes transparency.

• The Adaptation Fund’s fiduciary standards apply toNIEs, RIEs and MIEs.

• BothDesignatedAuthority and Implementing Entityplay important and separate roles.

• The NIE does not necessarily have to be theenvironment ministry or an entity working exclusively on climate change-related activities.

adaptation fund fiduciary standards

Direct Access to funds ensures that there are no intermediaries and all funds go directly to countries, providing them greater flexibility in managing projects. Some benefits of Direct Access are: a) strengthened readiness for climate financing; b) ownership at country level; and c) transparency throughout the project/programme cycle.

With greater flexibility in managing and implementing funds, comes greater responsibility for developing country partners. The partnership principles of the Paris Declaration gave rise to fiduciary standards set up by several international climate funds operating under the direct access model.

Fiduciary is commonly described as relating to or involving trust. Fiduciary standards, therefore, are a set of standards that foster a level of trust between a ‘trustee’ or the Fund and the ‘beneficiary’ or the IE. The standards ensure that the funds are managed properly and efficiently by the bodies receiving the funds and used only for the intended purposes. The Funds need NIEs to fulfil their requirements so they can ‘trust’ the NIE to handle projects in a transparent, effective and efficient manner, although, in case of the AF, no repayments are involved.

To attain this trust, NIEs need to demonstrate the capacity to meet the requirements of the Fiduciary Standard of individual Funds. Entities that attain the level of trust with the different Fund(s) are accredited for a limited duration of five years as implementing entities, enabling them to access funds without an

moduLe 2: fiduciary standards and accreditation to the adaPtation fund

intermediary. The Fiduciary Standards designed by the Funds, provide a framework for an entity to check whether it has the appropriate policies, processes and capabilities to successfully and independently implement projects.6

Fiduciary standards are a set of standards that foster a level of trust

between the Fund and the Implementing Entity (NIE, RIE, MIE).

Fiduciary standards differ for each Fund; however, the basic principles of undertaking risk management and strengthening national systems remain as follows:• Theuseofacountry’sowninstitutionandsystems,

where these are known to be adequate and used for agreed purposes, increase aid effectiveness by strengthening the partner country’s capacity to develop, implement and account for its policies to its citizens and parliament.,

• Country systems and procedures typically include,but are not restricted to, national arrangements and procedures for public financial management, accounting, auditing, procurement, project management including result frameworks and monitoring, environmental and social safeguards, gender policy and transparency.

• Partner countries undertake reforms necessaryto ensure that national systems, institutions and procedures for managing aid and other development resources are effective, accountable and transparent.

• Capacitydevelopmentistheresponsibilityofpartnercountries with donors playing a supporting role.

The Adaptation Fund applies the following standards which are the focus of this training manual. Details of each ‘capacity’ are made available in the following modules:

• Financial management and integrity• Institutional capacity• Transparency, Self-investigative powers, and Anti-

corruption measures

6 Adaptation Fund Board. NIE Accreditation Toolkit.

8

The three standards translate into a set of capacities that an Implementing Entity is required to possess before being considered for accreditation by the Adaptation Fund. The partner countries or nominated NIEs are required to provide documentary evidence of both frameworks being in place at the national level as well as their implementation with concrete examples. The table below outlines these capacities.

In order to access funds directly from the AF, a Designated Authority and a National Implementing Entity (NIE) are required to be nominated and endorsed at the country level. The terminologies vary from one Fund to another; however, the roles remain the same with few differences. Both entities have specific roles to play in the accreditation as well as project development and implementation processes. The primary objective of the required set-up is to ensure that risk assessment and management for handling the funds is done at the country level on behalf of the AF. The arrangement also serves to enhance the required national capacity to handle large donor-funded projects and programmes.

implementing entities and accreditation to the adaptation fund

Implementing Entities (IEs), as defined by the Adaptation Fund, are national, regional and multilateral institutions accredited by the Adaptation Fund Board (AFB) to be eligible to submit project/programme proposals for funding by the Fund. All parties to the Kyoto Protocol are eligible for direct access.

IEs are organizations and not individuals that meet the standards described in this manual and are accredited by a Fund to implement projects/programmes on behalf of countries. In case of the Adaptation Fund, these

Standards Capacity Required

Financial management and integrity Legal status

Financial statements and audit requirements

Internal control framework

Preparation of business plans and budgets

Institutional capacity Procurement

Project preparation and approval

Project implementation planning and quality-at-entry review

Project monitoring and evaluation

Project closure and final evaluation

Transparency, self-investigative powers and anti-corruption measures

Handling financial mismanagement and other malpracticesHandling social and environmental harm caused by projects

table 1. fiduciary standard and required capacity for the adaptation fund

entities are accredited for a period of five years, with the option of renewal and only one entity can be accredited per country.

Early involvement of stakeholders ensures a higher level of coordination between all actors in climate change adaptation

related activities, promotes greater transparency and ensures selection of the most suitable entity as NIE for the

country.

The accreditation of an NIE, through which a country may apply for direct access to financing from different Funds, means there are no intermediaries and all of the funds go directly to the country, ensuring greater flexibility in managing projects.

An IE is required to demonstrate capacities for all three standards listed in table 1 above with no exception. It is not always necessary for an NIE to have climate change as its core activity. Therefore, it is usually a good strategy to include all relevant stakeholders involved in climate change adaptation activities, during initial stocktaking consultations. The early involvement of stakeholders ensures a higher level of coordination in the implementation of projects and promotes transparency. It also ensures selection of the most suitable entity for the country.

A checklist of the required capacity is available from the Adaptation Fund’s NIE Accreditation Toolkit for its Direct Access modality.7 It may serve as a guide during the stocktaking exercise in identifying the most appropriate entity as an NIE.

7 Checklist: http://www.adaptation-fund.org/NIE/toolkit/EN/2checklist.html.


Once the NIE is identified, the Designated Authority (DA) informs the AFB of the nomination and the accreditation process can begin.

There are around 10 steps that the AFBS follows in assessing and accrediting an entity, as listed below:

1. The government of each eligible party is required to appoint a Designated Authority (DA) by sending an official letter to the AFBS.

2. The AFB sends letters to eligible parties to nominate a NIE.

3. The government/DA selects a potential NIE for accreditation by the Adaptation Fund and sends an official letter endorsing the NIE to the AFBS.

4. Applications for accreditation by potential NIEs are submitted online to the AF through the accreditation workflow system (http://accredit.adaptation-fund.org). For this purpose, the NIE is required to email to [email protected], requesting details registering as a user in this workflow and accessing the online application form.

5. The AFBS undertakes a preliminary screening of the submitted application for completeness. In case of gaps, it informs the NIE. The completed application with supporting documents is submitted to the Adaptation Fund Accreditation Panel for assessment.

6. The Accreditation Panel (AP) undertakes a detailed assessment of the application. Based on the assessment the Panel may:a. Find that the applicant meets the requirements

and approve accreditation; orb. Request additional information/clarification from

the applicant entity. c. Suggest that an on-site visit is required.d. Recommend that in view of substantial gaps in

certain areas of the Fiduciary Standards, the applicant entity needs to improve capacity in these areas for accreditation.

7. In case of any of the above mentioned situations the Adaptation Fund /Accreditation Panel holds further discussions with the applicant entity until the necessary information/documentation is provided by the applicant entity or the Panel feels that no further information is required.

8. The Panel makes a recommendation to the AFB.9. The AFB makes a final decision on accreditation of

the entity. 10. The AFBS communicates the Board’s decision to

the DA and the applicant entity.

The simplified flowchart in figure 4 describes the accreditation process.

Details of the fiduciary standards as required by the Adaptation Fund are explained in the following chapters.

streamlined accreditation Process

Recognizing the limitations facing some smaller entities, the AFB at its 23rd meeting in March 2014 decided to continue to consider for accreditation, Small National Implementing Entities (SNIEs) on the basis of a “Streamlined Accreditation Process”.

The process takes into account AP’s experience in considering options for small entities, compensating measures and controls and practices commonly used by small entities, while ensuring that the small entity applicant meets fiduciary standards, complies with the AF Environmental, Social and Gender policies, and does not expose the AF to any risk.

This process entails no changes to the fiduciary standards, but institutes appropriate mitigating measures and controls needed for the SNIEs to demonstrate the required competencies. The SNIE will have to make an official request to the AF to be considered under the streamlined approach.

Specifically, the mitigating measures and controls reflect the institution’s characteristics. As a result, the AP could recommend to the Board that the SNIE be accredited to manage projects subject to conditions, if needed, that reflect the type of entity, its size and risk profile.

The proposed process is based on the update from the Panel, in turn based on its experience in operationalizing the Streamlined Accreditation Process and in advising

figure 4. nie accreditation process for the adaptation fund (simplified)

NIE/DA

Application

AFBS/AP

AP Recommendation

Condition

AFB

Decision Approval

Non accredition

AccreditationReview

10

two SNIEs on viable alternatives to address the fiduciary standards requirements.

figure 5. flow chart of streamlined accreditation Process

DA Nominationspecifies SNIEP

Panel reviews andanalyses applicationthrough streamlined

process

Back and forth withapplicant depends onquality of application

Risk mitigationactions

Recommended forAccreditation

Decision byAdaptationFund Board

Applicantand DA agree

to pursueSNIE

Withdraw andnominate IEthat fulfillsstandards

Not inposition for

accreditation

Panel informsapplicant/Secre

tariat informs

Regularaccreditation

continues

No risk mitigationactions required

Panel reviews

DA Nomination through regular Accreditation

The steps necessary for the Streamlined Accreditation Process are shown in figure 5.

case study 3 implementing entity vs executing entity

NIE stands for ‘National Implementing Entity’. Sometimes, the term creates the misunderstanding that once accredited to the AF, the NIE will implement programmes and projects. In reality, the NIE has little involvement in actual implementation. Consequently, during the accreditation process, an assessment of the potential candidate’s strength is not based on its implementing capacity.

It is important to understand that to the AF, the potential NIE is primarily a ‘fund management entity’ supervising the implementation of projects and is expected, once accredited, to formulate projects. It is expected that the NIE, once accredited, will implement projects in association with ‘Executing Entities (EEs)’, collect funds from the AF following approval and signing of a project, disburse the fund according to the project financing framework to the respective EEs, implement monitoring and evaluation (M&E) plans through oversight and submit project progress and terminal reports to the AF Secretariat through the DA.Actual project implementation is the responsibility of the participating EE. Many countries choose a potential EE as the NIE, even though there may be significant gaps in meeting fiduciary standards. These countries are not successful in overcoming the accreditation hurdle involving the identified/chosen NIE and eventually cannot benefit from the direct access modality.

What may be done if your case matches the above case study? Choose the potential NIE based solely on its ability and competence in exhibiting that it follows best practices in fiduciary management. Once the NIE is duly accredited with the AF, potential EEs will benefit by being involved in project implementation.


case study 4 tendency to avoid obvious strengths in selecting an nie

It is found that the government in country A tends to identify a potential NIE, thinking that the focal point ministry will have a say in the day-to-day management of the NIE and use of the resources the potential NIE might deal with. However, in this approach, the most suited entities with a better fiduciary management record do not get enough attention in the NIE identification process.

While the best candidates remain outside the discussion, an institution with relatively poor fiduciary management capabilities, receives undue favor. When the NIE accreditation application is sent to the AF, the weaker institution cannot get accredited.

Countries, such as A, have been found to wait for a long time just to give ‘legal mandate’ to a target NIE, just to make sure that their control over the potential NIE is upheld. This delays the process of application to the AF. Country A lost an enormous amount of time that should have been used to meet the NIE accreditation requirements.

Country A found it difficult to decide whether to apply on behalf of a newly established entity having its management and decision making under full control of the focal point ministry, or to select the apparently more competent entity, which is, however, outside the control of the ministry. The attempt to empower the relatively new entity and make it autonomous through a legal mandate, delayed the application process. Had the more suited entity been selected as the potential NIE and obtained accreditation, the focal point ministry could have developed suitable projects in association with the NIE.

What not to do: Avoid inventing a new NIE. Rather, provide full support to the better suited/competent NIE so that it can get accredited in a relatively shorter period of time. DO NOT stick to a plan that will take a long time materializing. Once accredited, the focal point ministry may develop projects with support from the accredited entity and receive financing.

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key message

• Existence of rules and procedures alone doesnot mean the standards are met. Demonstrating capabilities with evidence is essential.

required capabilities

While different Funds have different fiduciary standards, a common underlying requirement of all international climate funds is the IE’s transparency and capacity in delivering programmes and projects. The Adaptation Fund has divided these requirements into the following three categories: a) financial management and integrity, b) institutional capacity and c) transparency, self-investigative powers and anti-corruption measures. These standards apply to all implementing entities, be it an MIE, RIE or NIE. This module covers the financial management and integrity standard for the AF.

There are a little over 40 different standards and/or requirements under the Adaptation Fund and almost half of these requirements are under the Financial Management and Integrity category.

These include the following four concrete capabilities:

a) Legal status to contract with the Adaptation Fund Board.

b) Accurately and regularly record transactions and balances in a manner that adheres to broadly accepted good practices and ensure periodic audits by an independent firm or organization.

c) Internal Control Framework with particular reference to control over disbursements and payments.

d) Preparation of business plans and budgets and ability to monitor expenditure in line with budgets.

Note: The majority of examples are from the Adaptation Fund’s NIE accreditation toolkit published in 2012 as well as experiences from the on-going UNEP-MOEJ project on Direct Access in Asia and the Pacific.

Potential IEs that adhere to international accounting standards may find that they already meet the fiduciary requirements

under Financial Management and Integrity.

Some potential IEs may already meet these requirements. These, along with the other standards are a good practice for any organization dealing with large-scale funding.

moduLe 3: required caPacity: financiaL manaGement and inteGrity

Demonstration of capabilities with evidence is key. Existence of rules and procedures alone are not sufficient for an entity to meet the standards for accreditation.

Each capability required of an IE contains a subset of standards. This module explores these standards and aims to provide examples of acceptable practice for each.

It is crucial to note that these standards need to be demonstrated with evidence over a period of at least 24 months prior to the accreditation application by an IE. The mere existence of rules or provisions and processes within an entity is not considered sufficient.

capabilities and examples

a) Legal status to contract with the Adaptation Fund Board

The entity is required to demonstrate the following:1. Necessary legal personality/ legal capacity/

authority and ability to directly receive funds. Applicant entities should also provide a list of foreign loans/donor funds handled over the last two years.

Good example of legal statusThe applicant is a recently created government organization being its own legal entity. It was created by a Presidential Decree in 2008. According to the Decree, the “Fund shall be an instrument for financing programmes and projects aiming at rational management of the environment, improvement of living environment and promotion of sustainable development in the country. To this regard, it shall be responsible for: • Mobilizing subsidies granted by the Government, as

well as externalities and fines collected as part of the fight against environment pollution;

• Mobilizingexternalresourcesrelatingtoitsmissions;• Buildinganddevelopinginstitutionalandoperational

capacities of national partners in the field of environment management;

• Promoting practices of sustainable management ofnatural resources;

• Supporting programmes and projects relatingto environment protection and improvement of populations’ living environment;


• Following and assessing the execution of fundedprojects and their impact on the environment.”

The Presidential Decree requires the Fund to cooperate with public, private and non-governmental entities whose activities contribute to the implementation of the national environment management strategy. This makes the applicant a logical NIE for the AF with the right legal status.

The applicant should highlight the specific clauses of the decree which define the legal status/mandate/authority

b) Accurately and regularly record transactions and balances in a manner that adheres to broadly accepted good practices, and ensure these are audited periodically by an independent firm or organization

the entity is required to demonstrate the following:1. Reliable financial statements prepared in accordance

with internationally recognized accounting standards.2. Annual, externally audited accounts consistent with

recognized international accounting standards.3. Detailed departmental accounts.4. Use of accounting packages, recognized in and

familiar with accounting procedures in developing countries.

5. Capability for functionally independent, internal auditing in accordance with internationally recognized standards.

In order to meet the above requirements, an entity may provide the following documents as evidence:

• AuditedFinancialStatements for the last2-3years• External Auditor Reports for the last 2-3 years• AuditCommittee’sTermsofReference,composition

and evidence of effective functioning , including meeting agenda and minutes

• Name and brief description of accounting packageused

• Policy/charter and other publisheddocuments (likemanuals) that outline the entity’s internal auditing function

• Copies of internal audit plans for the last 2 yearsand the current year

• List of internal audit reports of the last 2 yearsand sample reports

• Status of action taken on recommendations/observations of external and internal audit reports

Good example of financial managementThe applicant has its own accounting system and its financial statements are prepared under the US GAAP(thus consistent with IFRS). While its own accountingsystem is not a “recognized accounting package”, the applicant is large enough to have a bespoke system and the 2013 annual report shows an unqualified opinion issued by leading international auditing firm PwC. Included is a statement on the adequacy of internal controls based on the COSO criteria issued

by management and referred to by the auditors as fairly stated. Thus, the Accreditation Panel can have confidence in the accounting system.

Good example of audited financial statementsThe application contains audited financial statements with an unqualified opinion from leading international auditing firm KPMG for each of the two years ofoperation in 2013 and 2014. The financial statements are in accordance with auditing standards issued by the Auditor General of the country. The applicantuses integral AdministrativeManagement software thatincludes an accounting module marketed by Datalogic, a local firm aiming to develop the product for the region. The application provided a link to the software company so that the Accreditation Panel could verify the appropriateness of the software.

marginally acceptable example of audited financial statementsThe applicant is a government ministry and its accounts are audited together with those of the government as a whole by the Auditor General. His latest report onthe 2014 financial accounts shows multitude examples of improper recording, non-compliance with rules and fraud.Butonlya fewcomments relate to theapplicant.AseparateletterfromtheAuditorGeneraltotheministryalso has no mention of significant outstanding issues. This would be acceptable for accreditation provided other parts of the application show evidence of strong governance systems and a strong internal audit.

acceptable example of internal auditWhile this small organization has no internal auditfunction, there is an annual management review by an external auditor. The management letter for 2014 covered the organizational structure of the applicant and a review of procedures regarding asset management, including procurement, accounting / cash/payments and other high/medium risk areas. The applicant takes the observations seriously and has fixed weaknesses and provided a status report listing actions taken.

Poor example of internal auditThe application makes reference to internal audit provisions which are adequate and contained in Section 36 of the country’s Financial Regulations. TheAuditor General in his report for 2013 is critical aboutthe internal audit’s effectiveness within the country. The organizational chart of the applicant has a few auditors but gives no information on internal audits done, the content of the annual report or audits planned. Nor is it clear whether aspects of the applicant’s projects, contracts and disbursements are audited. This informationdoesnotmeet theFiduciaryStandardsand accreditation would not be recommended by the Accreditation Panel.

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c) Internal Control Framework with particular reference to control over disbursements and payments

The entity is required to demonstrate the following:1. Use of a control framework that is documented

with clearly defined roles for management, internal auditors, the governing body and other personnel.

2. Proven payment/disbursement systems, including:• Policyorotherpublisheddocumentoutliningthe

entity’s control framework• Procedures describing the payment/

disbursement system with particular reference to project payments/ disbursements

In order to meet the above requirements, an entity can provide the following as evidence:

• Document outlining policies and procedures demonstrating control over key processes in the organization, including financial accounting, revenue generation activities, payment and disbursement, cash management, procurement, asset management and project management.

• Documented structure with clearly defined roles/responsibilities of key functionaries/bodies within the organization, with respect to the internal control system/activities.

• List of regularly produced management reports/information, including frequency of such reports, with respect to internal control. Sample reports should be provided to demonstrate that management is regularly informed of the effectiveness of the functioning of the internal control system and/or major risks faced by the organization and the mitigating actions taken. Evidence of action taken, wherever required, should also be provided. For the Payment and Disbursement system, an entity should provide specific information with respect to delegation of authority and clear segregation of approval and disbursement responsibilities/authorities, apart from the system for compliance checks/audits of the system, along with reports/evidence of compliance checks/audits of the system

Good example of an internal control frameworkThe institutional form of the applicant is that of a government corporation. According to the application, its 54 employees are recruited through competitive examinations, have an average age of 35 years and all managers have a university degree. It is the first regional agency of its kind to have been certified in 100 percent of its processes through the Certification of the Quality Management System according to ISO9001:2008. One of the documents created as part of thatprocess isQualityGuidelines (QGs). ISOcertificationmeans that the applicant has a strong capability to translate customers’ needs into its own systems and procedures and that the various authorities are described in written documents and that this was demonstrated with examples.

Poor example of an internal control frameworkThe applicant is a government ministry and refers to various documents in the application. These include the Financial Regulations setting out the duties and responsibilities of officials in relation to internal controls such as cabinet ministers, the Secretary General, theSecretary to the Treasury, the Accountant General, theChief Internal Auditor, chief budget managers and public officers as well as various committees. This would be inadequate and not acceptable in the absence of evidence from internal audit and/or another internal/external source, along with relevant reports, that the regulationsarecomprehensiveandadheredto.Withoutthat assurance, the required fiduciary standards would not be met and accreditation would not be recommended for the ministry.

Good example of a disbursement systemOne attachment to the application is a Project DisbursementHandbookdescribingpolicies,guidelines,practices and detailed instructions on handling project disbursements and repayments, including the appropriate delegation of authority. It is written for the applicant’s staff and borrowers, including project staff from executing agencies. It demonstrates that disbursements are managed in accordance with principles and procedures applicable to investment projects or programmes.

d) Preparation of business plans and budgets and ability to monitor expenditure in line with budgets

The entity is required to demonstrate the following:• Long-term business plans/ financial projections

showing financial solvency• Evidenceofpreparationofcorporate,departmental/

ministry budgets and ability to spend against budgets- Long-term business plans or financial projections

for the next 3-5 years- Annual budgets for the organization and entities

within it - End-of-calendar/fiscal year or periodical budget

report

Good example of spending against project budgetThe applicant maintains a website which enables stakeholders to monitor the overall financial status of projects. Comprehensive detail as well as the status of individual disbursement transactions are available to donors. It demonstrates that the applicant is able to budget against projects and account correctly for the budget spending.


moduLe 4: requisite institutionaL caPacity

key messages

• AnNIEdoesnotnecessarilyhavetohaveexperiencein managing climate change adaptation projects. Capacity to oversee the execution of projects and regular monitoring are important.

• Certain functions can be ‘out-sourced’ providedsufficient evidence can be furnished of an efficient working relationship between the NIE and the ‘out-sourcing’ entity.

required capabilities

Institutional capacity is one of the three main standards for evaluating an implementing entity; almost half of the over 40 standards/requirements for accreditation under the Adaptation Fund fall under the requisite institutional capacity category.

The four concrete capabilities required for accreditation of a potential NIE include:a) Procurement procedures that are transparent and

provide for competition.b) Ability to identify, develop and appraise projects.c) Competency to manage or oversee the execution

of the project/programme, including managing sub-recipients and supporting project/programme delivery and implementation.

d) Capacity to undertake monitoring and evaluation.

This module explores these standards and aims to provide examples of acceptable practice for each.

Note: The majority of the examples are from the Adaptation Fund’s NIE accreditation toolkit published in 2012 as well as experiences from the on-going UNEP-MOEJ project on Direct Access in Asia and the Pacific.

It should be noted that the Adaptation Fund’s Accreditation Panel has experts with extensive experience in auditing and evaluating the efficacy of institutions.8 As such, if an applicant entity has experience in successfully recording and documenting its own institutional information, transparently procuring services and eventually addressing external audit findings, it has a good chance of meeting the Institutional Capacity requirements. It is equally important to note that an applicant entity does not necessarily need to have experience in managing climate change adaptation projects. What is important

is the entity’s ability to identify and appraise projects and oversee their execution either by itself or a third party.

An NIE should be able to identify, appraise and oversee the execution of projects and does not necessarily have to have experience in managing climate

change adaptation projects.

capabilities and examples

a) Procurement procedures that are transparent and provide for competition

The entity is required to demonstrate the following:1. Evidence of procurement policies and procedures

at national level consistent with recognized international practice (including dispute resolution procedures).

An applicant should provide the following:• Procurement policy/regulations• Detailedprocedures includingcompositionand role

of key decision making committees• Documents for two separate and large

procurements, demonstrating compliance with the policy/regulations/procedures

• Provision for oversight/audit /review of theprocurement function with actual samples of oversight / audit / review reports

• Procedures for handling/controlling procurement inexecuting agencies

Good example of how to procureOne of the attachments to the application is the comprehensiveProcurementGuidelines.ThepurposeoftheGuidelinesistoinformthoseimplementingaprojectthat it is financed in whole or in part by an applicant loan, grant or fund of the policies that govern the procurement of goods, works, and services required. Topics covered include international competitive bidding such as opening and evaluation of bids and other methods of procurement. It also mentions aspects of fraud and corruption.

8 “Supporting developing countries in undertaking concrete measures to adapt to the adverse effects of climate change,” October 2012, The Adaptation Fund, http://www.adaptation-fund.org. Retrieved 4 February 2015.

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Good example of how to procureThe application lists the reference to its procurement guidelines that are consistent with international procurement norms. The guidelines describe the basic principles of procurement including various procurement methods, policies and procedures for competitive bidding on goods and work and related services. The selection of consulting services is also covered. Contracts, including dispute resolution, are under national jurisdiction. The applicant gets into the procurement cycle of its executing agencies by giving a “non-objection” to contracts for its projects. A full dispute resolution mechanism is also in place. The guidelines are available online.

Poor example of procurement practiceThe applicant is part of a government structure and, therefore, subject to the country’s Public Procurement Authority. A June 2013 report on a procurement review of the applicant concluded that unless the recommendations of the review are implemented, the applicant will not comply fully with the Public Procurement legislation and the associated regulations and directives and punitive measures are considered. In this case, accreditation cannot be recommended until the Public Procurement Authority reaches a positive conclusion on the basis of a full review. This should be supplemented by a mechanism to assure the Accreditation Panel that appropriate systems and procedures are in place for procurement and are expected to be adhered to during the accreditation period.

b) Ability to identify, develop and appraise projects

This should include an impact (environmental, socio-economic and political) assessment study with risk assessment and mitigation plans.

The entity is required to demonstrate the following:1. Capability and experience in the identification and

design of projects (preferably adaptation projects)2. Availability of/access to resources and a track

record of conducting appraisal activities3. Demonstration of the ability to examine and

incorporate the likely impact of technical, financial, economic, social, environmental and legal aspects into the project at the appraisal stage itself

4. Evidence of procedures / framework in place to undertake risk assessment and integrate mitigation strategies / plans into the project document

The following documents should be provided in support of this capacity:• Details of the project approval process/procedure,

including formats/templates, roles and responsibilities• Policy and/or other published document(s) that

outline the risk assessment procedure/framework • Samples of completed project documents (for two

different projects), demonstrating the capacity to undertake project design and appraisal, including identification of all risks and planning of appropriate mitigation strategies/plans

Good example of identification, development and approval of projectsThe main purpose of the applicant is to define the strategy for the country. Since donor funding is asignificant part of the national budget, the applicant is heavily involved in the identification of projects. It does so by working with government bodies and other partners. Steering committees, created as projectsare identified, developed and appraised, are usually chaired by applicant staff. Projects cleared by a steering committee are sent for approval to the Cabinet. In case of approved programmes, the Steering committeeapproval is sufficient for a new project. The applicant provided documents demonstrating it has enough capability to identify suitable projects and see these through the development and appraisal stages, working in full partnership with all stakeholders.

Poor demonstration of identification, development and approval of projectsThe applicant has a planning cell that initiates appraisal of projects submitted by different agencies/departments. This follows a prescribed document for new projects called Development Project Performa/Proposal (DPP). The DPP includes basic project proposal elements such as objectives, budget and timing, pre-appraisal or investment feasibility study, a result-based monitoring framework, and a procurement plan. The explanation and the form are in two pages and there are no examples. From an accreditation viewpoint, this is not sufficient demonstration of evidence that the system is working. There is a pro-forma list of a Departmental Project Approval Committee (DPAC) made up of some 12 senior staff members of different government ministries and divisions but there is no example of how they work. The application thus needs to be expanded to provide evidence of these systems, before accreditation can be recommended.

c) Competency to manage or oversee the execution of the project/programme including managing sub-recipients and supporting project/programme delivery and implementation

The entity is required to demonstrate its competence to execute or oversee the execution of projects and programmes by submitting the following: • Evidence of institutional system for planning

implementation of projects, including M&E plans and undertaking Quality-at-Entry Reviews

• Evidence of preparation of project budgets forprojects being handled by the entity or any sub-entity within it

• Operational manual or written procedures for aproject review system during the design phase

• Sample Quality-at-Entry review reports for twoseparate projects

• Project budgets

The examples provided under monitoring and evaluation above also apply to this capability. Demonstration of the capacity to oversee the technical, financial, economic,


social, environmental and legal aspects of the project and their implications requires a demonstration of staff qualifications, experience and education.

Poor demonstration of capacity to manage or oversee projects

The application states that the various technical wings of the organization and its working with some technical directorates of ministries, , puts it in a unique position to oversee the technical, economic, financial, social, environmental and legal aspects of projects and their implications.Itstatesthatusually,aSteeringCommitteeisformed with members from relevant institutions to provide such oversight. It lists as an example, a project under implementation but this is only one example and very differentfromanadaptationproject.Betterexamplesneedto be provided for the application to be considered as having demonstrated sufficient evidence of management/oversight capacity required for accreditation.

d) Capacity to undertake monitoring and evaluation

The entity is required to demonstrate the following:1. Capacities for monitoring and independent

evaluation, consistent with the requirements of the Adaptation Fund.

2. Detailed project accounts which are externally audited

3. Evidence that a process or system, such as project-at-risk system, is in place to flag problems that may interfere with the achievement of project objectives, and to respond suitably to the problems.

Additional documents required to support this capability are:• Policy or other published document (M&E manual)

that outlines monitoring and evaluation requirements • Detailedproceduresandformatsformonitoringand

evaluation during project implementation• Recent sample project monitoring and evaluation

reports for two different projects.

Note: The M&E plan/system should also provide for monitoring and evaluating mitigation action outlined during the design, appraisal and quality at entry review.

Good example of how to monitorThe application included project guidelines for preparing a design and monitoring framework, primarily for design teams, governments and ministries, non-government stakeholders, applicant staff and consultants. The guidelines are a hands-on tool kit with a step-by-step description of the participatory process for developing the design and monitoring framework and explain the use of participatory design tools. The guidelines are practical with examples. Technical assistance is also available for project preparation. These, together with other manuals such as for disbursement and semiannual monitoring, make it clear that the applicant has the required capacity tomeettheFiduciaryStandard.Recentmonitoringreportsfrom at least two different projects, demonstrating that the system is working, are also provided.

Good example of evaluationThe applicant has an independent Evaluation Groupdirectly responsible to the Board and with links to itsEvaluation Committee. The applicant’s website has a separatesectiononM&Ethat includes itsannual reportand summaries of past reports. The positive finding of an external peer review of its evaluation function is available online with the documents of the Executive Board.

Poor example of risk management within projectThe application mentions that risk assessment is embedded in the project log-frames and in the project design document template, including sections on risk analysis, exit strategy and post-project sustainability. While that may be the case risk identification at theproject design stage could be stronger. For example, many appraisal documents do not include a section on risk management with suggested mitigating action. The treatment and mitigation could be stronger for many others. The focus on risk is so minimal that it does not meet the minimal AF Fiduciary standards.

Good example of monitoring/accounting for projectsThe application includes audited financial statements for several donor-funded projects of the Institute as of 2013. It involvestheopinionsofleadinginternationalauditorKPMG,a local auditor and the Auditor General of the country.All opinions are positive and give rise to confidence that project expenditures and procurement actions adhere to the loan provisions and national legislation.

Poor example of monitoring practiceThe application states that it has the technical capacity tomonitor and evaluate projects through aMonitoring andEvaluation Committee but does not demonstrate this or give further informationorexamples.Whenasked foradditionalexamples, the applicant provides quarterly monitoring reports from donor organizations. For accreditation purposes, the monitoring capability has not been demonstrated and accreditation cannot be recommended.

Project closure and final evaluationWith respect to closure and final evaluation of projects and programmes, the following will have to be demonstrated by an entity:• Understanding of and capacity to assess the

technical, financial, economic, social, environmental and legal aspects of projects

• Competence to execute or oversee execution ofprojects/programmes

• Entity’s policy with respect to closure andindependent evaluation of projects

• Project closure reports or independent evaluationreports with assessments of the technical, financial, economic, social, environmental, and legal aspects of projects

• Independent evaluation reports of completedprojects/ programmes

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key messages

• Difficult to obtain transparency policies andprocedures in a short time

required capability

Like modules 3 and 4, this module examines requisite standards for gauging transparency, self-investigative powers and anti-corruption measures. This is very important among the three categories and perhaps the most difficult to attain in a relatively short period of time for an applicant NIE if it is not practising transparency as a matter of routine.

A concrete capability required of a potential IE, this means:a) Competence to deal with financial mismanagement

and other malpractices.

This module explores standards and aims and provides examples of acceptable practice for each.

Note: The majority of examples are taken from the Adaptation Fund’s NIE accreditation toolkit published in 2012 as well as experiences from the on-going UNEP-MOEJ project on Direct Access in Asia and the Pacific.

a) Competence to deal with financial mismanagement and other malpractices

The entity is required to demonstrate the following:• Evidence/tone/statementfromthetop,emphasising

a policy of zero tolerance for fraud, financial mismanagement and other malpractice involving the staff of the implementing entity or from any external sources directly or indirectly associated with projects

• Commitment to applying the Fund’s environmentaland social policy

• Evidence of an objective investigation function todeal with allegations of fraud and corruption

• Capacity and procedures to deal with financialmismanagement and other forms of malpractice

• Mechanismtodealwithcomplaintsofenvironmentaland social harm caused by projects/programmes [Demonstration of an accessible, transparent, fair and effective mechanism (either within the entity itself, local, national or project-specific) for receiving and handling complaints about environmental and social harm caused by projects/programmes]

The following documents should be provided in support of the capability:

moduLe 5: required caPacity: transParency, seLf-investiGative Powers and anti-corruPtion measures

• Copy of code of conduct/ethics applicable to thestaff

• Establishingavenuesforreportingnon-compliance/violation/misconduct and business conduct concerns, including on the entity’s website

• Details of policies and procedures relating tomanaging conflict of interest and ensuring whistleblower protection

• Organizationalstructureandprocesses/proceduresto handle cases of fraud and mismanagement and undertake necessary investigation.

• Data on cases of violation of code of conduct/ethics and fraud reported over the preceding two years, including number of cases, types of violation and summary of status/action taken.

• Periodical oversight reportsof theethics function/committee for the preceding two years

Good example of an anti-fraud practiceThe applicant’s management made investigation part of the internal audit function. The policy is set out in a legal document but is neatly summarized on the applicant’s website. The policy is mainly focused on fraud and corruption but, taken together with published core values, it is clear that mismanagement and other forms of malpractice are equally covered. An annual investigation report available on the website demonstrates the nature of the cases and that all complaints are taken seriously and acted upon. It is important to note that investigative activities also cover applicant projects implemented by third parties. For example, fraud related to tender documents would be covered.

Poor example of an anti-fraud practiceThe application refers to various national systems such astheOmbudsman,theAuditorGeneral,andthenationalpolice, the Prosecutor General, the Revenue Authorityand the Public Procurement Authority. The underlying message is that national systems work. There is some online evidence that the system works. For example, the former Director of the national procurement agency was tried for corruption. Nevertheless, it does not demonstrate how the applicant works with various national entities, that it has a no- tolerance approach to fraud at the top or that it deals in a preventive and timely fashion with financial mismanagement and other forms of malpractice in projects. There is no information of a whistleblower policy. Neither does it deal with the role of the organization in preventing as well as initiating and monitoring investigations of fraud and corruption in projects managed by it. There is also no information on a code of conduct for staff.


case study 5

transparency, self-investigative Powers and anti-corruption measures‘Transparency, self-investigative powers and anti-corruption measures’ are an integral part of the ‘Fiduciary Standard’ required by an organization to effectively manage funds and projects on a sustainable basis. The capacity of an NIE applicant to prevent corrupt practices in the management of financial resources infuses confidence among donors in the purpose for which the funds will be disbursed.

The Adaptation Fund requires that an NIE should have an inbuilt mechanism to deal with corruption and/or fraud through self-investigative powers, including independent investigations of any reported incident, protection of whistleblowers and as well as publicly available information as to how to lodge complains. The Fund would like to ensure that any applicant organisation emphasises a policy of zero tolerance for fraud, financial mismanagement and other forms of malpractice involving implementing entity staff or any external parties associated directly or indirectly with the projects. The organization should have the capacity and procedures to deal with financial mismanagement and other forms of malpractice.

In a given country ABC, there is no mechanism to deal with corruption; primarily due to an assumption by the Government that there is no occurrence of corruption due to its relatively small size where social pressure plays an important role in preventing any malpractice. However, after conducting a first assessment, some relevant policies are found to be in place, which are useful in the prevention of fraud and corruption such as a Code of Conduct for employees as well as Public Service Act.

Still the mechanisms in place may be termed ‘weak’ by the AF Accreditation Panel.

In order to demonstrate government capacity to tackle corruption, NIE experts worked with the NIE applicant to document the number of cases of fraud investigation and prosecution in recent years concerning Cabinet Ministers and senior public servants, submitted copies of relevant policies like the Public Service Act and Regulations and the Personnel Policy Manual.

While documenting policies and practices, recommendations were made to add a Policy of Zero Tolerance to all personnel policies, adopt a standard template for each ministry, add regulations to the Code of Conduct, specifically including the words “zero tolerance for fraud” and procedures to apply these (e.g. every new employee has to sign a statement after the Code of Conduct is shared with him/her)

To add investigative powers, coordination mechanisms were established and roles and responsibilities clarified to resolve difficulties such as those experienced between the Audit Division and the Public Expenditure Review Committee.

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key messages

• The safeguards ensure that projects have soundenvironmental and social standards

• Compliancewiththesafeguardsisnotonlyimportantwhen designing and implementing a project, but also needs be demonstrated at the accreditation level.

This module explores the AF Environmental and Social Policy (ESP) which was approved in November 2013, as well as the AF Gender Policy approved by the Board in March 2016. The ESP is covered by the Fiduciary Standards on transparency, self-investigative powers and anti-corruption measures

The ESP aims to ensure that projects and programmes supported by the Fund promote positive environmental and social benefits and mitigate or avoid adverse environmental and social risks and impacts. Both the ESP and Gender Policy are operationalized at two key stages: during the process of accrediting an NIE and during the process of project and programme review, both at the IE and the Board level.

Note: The majority of information in this module is taken from the Adaptation Fund’s guidance document for Implementing Entities on compliance with the Adaptation Fund Environmental and Social Policy. The guidance document is readily available on the Adaptation Fund website.

The Adaptation Fund published the following elements of IE compliance with ESP as stated below.

elements of ie compliance with the esP during the accreditation process9

The IEs are responsible for the environmental and social risk management of projects/programmes under their supervision. During the accreditation process, the Accreditation Panel will assess whether the IE has the capacity and commitment to address environmental and social risks, and whether a grievance mechanism is available in order to either be accredited or to maintain accreditation. The IE may demonstrate, in a written statement issued at the highest managerial level, its commitment that it will abide by the ESP inall projects/programmes funded by the Fund. The IE needs to demonstrate its capacity to screen and assess risks, avoid adverse impacts where possible, develop an environmental and social management plan, and

moduLe 6: environmentaL, sociaL and Gender safeGuards

monitor the work done by the Executing Entity/Entities (EE). During accreditation, the Accreditation Panel will review the environmental and social management system (ESMS) of the IE to determine whether it iscapable of delivering compliance with the ESP in theimplementation of the Fund’s projects/programmes. The elements of an ESMS are: identification of risksthrough screening and of impacts through assessment; formulation and implementation of environmental and social management plans; IE organizational capacity and competence; stakeholder engagement; monitoring and reporting; and a grievance mechanism.

environmental and social principles

The 15 environmental and social principles that are part of the ESP form the basis for identifying and managing environmental and social risks. Not all projects/programmes will encounter the issues addressed in each of the principles.

Principle 1: compliance with the law. Projects/programmes supported by the Fund shall be in compliance with all applicable domestic and international law.

Principle 2: Access and Equity. Projects/programmes supported by the Fund shall provide fair and equitable access to benefits in a manner that is inclusive and does not impede access to basic health services, clean water and sanitation, energy, education, housing, safe and decent working conditions, and land rights. Projects/programmes should not exacerbate existing inequities, particularly with respect to marginalized or vulnerable groups.

Principle 3: marginalized and vulnerable Groups. Projects/programmes supported by the Fund shall avoid imposing any disproportionate adverse impacts on marginalized and vulnerable groups including children, women and girls, the elderly, indigenous people, tribal groups, displaced people, refugees, people living with disabilities, and people living with HIV/AIDS.

Principle 4: human rights. Projects/programmes supported by the Fund shall respect and where applicable promote international human rights.

9 Adaptation Fund (2013). Guidance document for Implementing Entities on compliance with the Adaptation Fund Environmental and Social Policy. Available at: https://www.adaptation-fund.org/wp-content/uploads/2015/06/ESP-Guidance-document_0.pdf


Principle 5: Gender equality and women’s empowerment. Projects/programmes supported by the Fund shall be designed and implemented in such a way that both women and men 1) are able to participate fully and equitably; 2) receive comparable social and economic benefits; and 3) do not suffer disproportionate adverse effects during the development process.

Principles 6: core Labour rights. Projects/programmes supported by the Fund shall meet the core labour standards as identified by the International Labour Organization.

Principle 7: indigenous Peoples. The Fund shall not support projects/programmes that are inconsistent with the rights and responsibilities set forth in the UN Declaration on the Right of Indigenous Peoples and other applicable international instruments relating to indigenous peoples.

Principle 8: involuntary resettlement. Projects/programmes supported by the Fund shall be designed and implemented in a way that avoids or minimizes the need for involuntary resettlement. When limited voluntary resettlement is unavoidable, due process should be observed so that displaced persons shall be informed f their rights, consulted on their options and offered technically, economically, and socially feasible resettlement alternatives or fair and adequate compensation.

Principle 9: Protection of natural habitats. The Fund shall not support projects/programmes that would involve unjustified conversion or degradation of critical natural habitats.

Principle 10: conservation of Biological diversity. Projects/programmes supported by the Fund shall be designed and implemented in a way that avoids any significant or unjustified reduction or loss of biological diversity or the introduction of known invasive species.

Principle 11: climate change. Projects/programmes supported by the Fund shall not result in any significant or unjustified increase in greenhouse gas emissions or other drivers of climate change.

Principle 12: Pollution Prevention and resources efficiency. Projects/programmes supported by the Fund shall be designed and implemented in a way that meets applicable international standards for maximizing energy efficiency and minimizing material resource use, the production of wastes, and the release of pollutants.

Principle 13: Public health. Projects/programmes supported by the Fund shall be designed and implemented in a way that avoids potentially significant negative impacts on public health.

Principle 14: Physical and cultural heritage. Projects/programmes supported by the Fund shall be designed

and implemented in a way that avoids the alteration, damage, or removal of any physical cultural resources, cultural sites, and sites with unique natural values recognized as such at the community, national or international level. Projects/programmes should also not permanently interfere with existing access and use of such physical and cultural resources.

Principle 15: Lands and soil conservation. Projects/programmes supported by the Fund shall be designed and implemented in a way that promotes soil conservation and avoids degradation or conversion or productive lands or land that provides valuable ecosystem services.

Gender principles

The Fund’s Gender Policy has only recently (March 2016) been approved by the Board. The policy underlines the Fund’s stance that gender is an important factor in developing interventions to enhance the climate adaptive capacity of women as well as men. The policy has the following objectives and principles:• Ensure more effective, sustainable and equitable

adaptation outcomes and impacts• Provide women andmenwith equal opportunity to

build resilience, address their varying vulnerabilities and increase their capability to adapt to climate change impacts

• Address and mitigate potential project risks forwomen and men

• Contribute toknowledgeanddatagapsongender-related vulnerability and accelerate learning about effective gender-equal adaptation measures and strategies

• Adoptmethodsandtoolstopromotegenderequalityand reduce gender discrimination and disparity in funding operations

• Measure how activities affect women and men’sresilience to climate change and their ability to address the underlying social and cultural determinants of gender-related vulnerability to climate change

An applicant IE is required to document an institutional capacity and commitment to apply the Fund’s gender policy and to demonstrate its ability to implement it. The IE may demonstrate its ability and commitment to implement the gender policy through: a. An institutional framework for gender mainstreaming,

such as designated expert staff and/or commitment at the highest management level to gender equality;

b. Own policies, strategies and action plans addressing gender equality and gender-responsive activities, or through implementation track records;

c. An ability to undertake socioeconomic and gender assessments or similar methods to assess the potential roles, benefits, impacts and risks for women and men;

d. An ability to identify measures to avoid, minimize and/or mitigate adverse gender impacts; and/or

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e. A monitoring and evaluation process that incorporates gender mainstreaming, including the use of gender-disaggregated indicators and can

case study 6

safeguardsEnvironmentandSocialSafeguards are an integral part of the Adaptation Fund fiduciary standards to ensure the protection of the poorest and most vulnerable people and the environment. The robust organisation policy is an indication that the entity is committed to addressing environmental and social risks in its role as an NIE. It is not common for a single entity in a small developing country to have all necessary policies. The Help Desk encouraged transferring some of these from other official entities because with proper documentation / laws, the government can be shown to be working in a synchronised / coordinated manner.

In country X, a policy on environment and social safeguards was found to be missing in the candidate nominated by the designated authority to be the NIE to the Adaptation Fund. However, it was noticed that environment standards of the Ministry of Environment Services were being applied and could be referred to as an interim measure. Borrowing from another ministry can be a solution, especially in a small country like X. At least, this demonstrates an in-house capacity in the government and for the nominated NIE, being a government organisation, it is possible to transfer the capacity and institutional history with proper documentation. As a first step, the Help Desk facilitated a statement from the top management, communicating the entity’s commitment to abide by the AF’s environmental and social policy.

In addition, as proof of evidence of the policy being practiced, country X was advised to provide samples of project documents that already apply environmental and social safeguards - although these projects are generally prepared by regional development banks and not sufficient to meet AF requirements, it shows initial application and experience. For instance, the Project Implementation Document for such a project provides a well-structured Risk Management Matrix. Associated monitoring reports were also added.

As a permanent solution, it was recommended to draft a policy to be integrated into the EIA along with a copy of the Environmental Act 2003 with the explanation that it was being amended to include social aspects such as gender and protection of indigenous people.

provide support from social and gender experts during project implementation.


key messages

• The Designated Authorities endorse projects and,therefore, it is crucial for them to be involved during the project identification and design phases.

• It is important to prove that climate change is theprimary cause of the problem that the project will address and that the adaptation measures are suitable.

• It is equally important, among other criteria, todemonstrate that the project is consistent with national or sub-national sustainable development strategies, especially if instruments such as NAPAs, National Communications or intended nationally determined contributions (INDCs) exist.

Background

The average gap of one year between the accreditation of an entity to the Adaptation Fund and the submission of a proposal, coupled with the limited accreditation duration of five years , suggests the importance for prospective NIEs to start identifying project proposals during the application phase itself. The UNEP Direct Access support programme advocates development of project proposals by an NIE applicant during the phase of application for accreditation. Adaptation projects are of long-term duration and it makes sense to submit a proposal as early as possible.

This module examines instructions from the Adaptation Fund for preparing a request for project funding and provides good practice for preparing a climate change adaptation project.

moduLe 7: Post-nie accreditation – checkList for identification of adaPtation Projects

adaptation fund’s project review criteria

Before a proposal can be submitted for financing by the AF, it must be endorsed by the Designated Authority. In order to make the most informed decision, the DA should have at hand “Instructions for preparing a request for project or programme funding from the Adaptation Fund” (amended in November 2013) and the “Adaptation Fund Project/Programme Review Criteria.” It is thus necessary for the accredited NIE to remain constantly in communication with the DA and to include him/her in the project identification and development phase. Involvement of other stakeholders like sectorial ministries and executing entities will also be useful to have a robust project or programme proposal from the outset. This further ensures that all submitted projects take fully into consideration possible duplication of efforts as well as linkages and synergies with overlapping projects.

According to the Operational Procedures and Guidelines of the AF, the Designated

Authorities must endorse the project proposal as being a concrete adaptation

project and in line with country’s development priorities.

The Adaptation Fund, through its Project/Programme Review Committee (PPRC) examines the proposals under five major review criteria, namely: a) country eligibility, b) project eligibility, c) resource availability, d) eligibility of NIE/MIE and e) implementation arrangement. An exhaustive list is given below in table 2:

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Review Criteria 1. Country Eligibility • Is the country party to the Kyoto Protocol?

• Isthecountryadevelopingcountryparticularlyvulnerabletotheadverseeffects of climate change?

2. Project Eligibility • HasthegovernmentendorsedtheprojectthroughitsDesignatedAuthority?• Does the project / programme support concrete adaptation action to

assist the country in addressing the adverse effects of climate change and develop climate change resilience? • Does the project / programme have economic, social and environmental

benefits, with particular reference to the most vulnerable groups and include gender considerations? • Is the project / programme cost-effective?• Is the project / programme consistent with national sustainable

development strategies, national development plans, poverty reduction strategies, national communications or adaptation programs of action or other relevant instruments? • Doestheproject/programmemeetrelevantnationaltechnicalstandards,

where applicable? • Is there duplication with other funding sources?• Doestheproject/programmehavealearningandknowledgemanagement

component to capture feedback and lessons? • Has the project / programme provided justification for the funding

requested on the basis of the full cost of adaptation? • Does the project / programme align with the AF results framework?• Has the sustainability of the project/programme outcomes been taken

into account when designing the project?3. Resource Availability • Is the requested project funding within the cap of the country?

• Is the Implementing Entity management fee at or below 8.5 per cent ofthe total project/programme budget before the fee? • Are the project/programme execution costs at or below 9.5 per cent of

the total project/programme budget before the fee? 4. Eligibility of NIE/MIE • Has the project been submitted through an eligible NIE/MIE accredited

by the Board? 5. Implementation Arrangement • Is there adequate arrangement for project management?

• Are there measures for financial and project risk management?• Are project monitoring and evaluation arrangements clearly defined,

including a budgeted M&E plan? • Isaprojectresultsframeworkincluded?Arerelevanttargetsandindicators

disaggregated by sex?

table 2. review criteria for project and programme submission10

checklist for identification of adaptation interventions

All developing country parties to the Kyoto Protocol are eligible for funding under the Adaptation Fund. Country allocation also takes into account the Strategic Priorities, Policies and Guidelines of the Adaptation Fund, specifically:11

• Level of vulnerability to climate change• Level of urgency and risks arising from delay of

action• Ensuring access to the fund in a balanced and

equitable manner• Lessons learned in project and programme design

and implementation to be captured

10 Adaptation Fund Board. (2015). Project/Programme Review Criteria. Available at: https://www.adaptation-fund.org/wp-content/uploads/2015/03/ Review-Criteria-5.12.pdf11 Decision 1/CMP.4 of the Kyoto Protocol, December 2008, www.unfccc.int extracted 4 February 2015


• Securingregionalco-benefitstotheextentpossible,where applicable

• Potential for maximizing multi-sectorial or cross-sectorial benefits

• Adaptivecapacity to theeffectsofclimatechange• Potential for learning lessons in project and

programme design and implementationWhen identifying adaptation projects or complementing existing projects with adaptation measures, it is crucial to select projects that will make sustainable, long-term contributions to enhancing adaptive capacity and resilience to climate change. The Adaptation Fund and other international climate funds require proposals to be concrete adaptation projects and not ‘business as usual.’ Detailed analysis of specific projects is, therefore, required.

The following checklist with recommended actions can serve as a good starting point in assessing the suitability of an adaptation project:

1. what kind of activities does the project support and what approach does it follow?

Adaptation to climate change can take many forms depending on the type of activities and, therefore, different approaches to implementation may be chosen. For example, in the land use sector, a project might focus on Ecosystem based Adaptation (EbA). Generally, maintenanceand restoration of ecosystem services can enhance adaptive capacity of ecosystems to climate change. Activities under the proposal, therefore, should be clearly identified and the implementation approach should be transparent.

Examples of activities supported by the Adaptation Fund include:

a. Waterresourcemanagement,landmanagement,agriculture, health, infrastructure development and fragile ecosystems.

b. Improving the monitoring of diseases and vectors affected by climate change, related forecasting and early-warning systems and, in this context, improving disease control and prevention.

c. Capacity building, including institutional, for prevention, planning, preparedness and management of disasters relating to climate change.

d. Strengthening and, where needed,establishing national and regional centers and information networks for rapid response to extreme weather events, utilizing information technology as much as possible.

2. who are the project stakeholders?Stakeholder consultations enable a projectduring the identification and design phase, to bring in expertise from different sectors, helping strengthen the scientific reasoning behind project proposals. Identifying stakeholders can also

help build greater synergies between projects underway and ensure that proposals complement existing adaptation interventions. Stakeholderscan include national, regional and multilateral partners to potentially broaden funding sources and provide access to a larger knowledge base. Broad stakeholder consultations are,therefore, recommended at an early stage in the identification and development of proposals.

3. are the problem(s) identified in the proposal directly caused by climate change?

Increasingly, international climate funds require projects to be concrete adaptation interventions and as such, problems that the proposed project aims to tackle should be clearly identified as directly resulting from climate change; the adaptive nature of the interventions should also be identified. As part of background documentation, relevant climate change scenarios based on the best available scientific information should be outlined.

4. how does the proposed project overcome these problems to enhance adaptive capacity or resilience?

The objectives of the project as well as the positive and possible negative impact of the intervention should be clearly outlined. It is crucial to indicate how the proposed intervention will enhance or at least, maintain the resilience of a given sector or system. A logically sound results framework is crucial for clearly defining project objectives, in addition to identifying baselines and how the proposed activities might ameliorate the adverse impact.

5. how feasible are the activities or interventions proposed? have risks and mitigation plans been identified?

The strength of the proposal hinges on clear and logical statements on how realistically the envisaged activities can be carried out. A logical framework analysis that drills down from project outcomes down to outputs and activities in a sound manner, taking into consideration any constraints, is, therefore, crucial. The framework is also expected to clearly outline the risks and proposed mitigation action to address risks.

6. how can the impacts of the activities or interventions be measured?

Related to the above, is determining the effectiveness or otherwise of the adaptation intervention. To meaningfully measure the impacts, it is crucial to have reliable baseline figures. The proposal should successfully present the projected scenario without any adaptation measures and compare that with projected, quantifiable (if possible) achievements of the project. Reduction of vulnerability and resilience should be measurable in some way.

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7. how is the policy environment in the country?To ensure that the project will be supported by the wider political community, appropriate decision-makers will have to be identified at the local, regional and national level. In consultation with these individuals, it needs to be determined if and how the adaptation intervention can be integrated into existing frameworks in the long term. Here, it is important to consider the workon existing adaptation plans such as national adaptation plans (NAPs), NAPAs or National Communications.

A detailed assessment of projects will be covered in module 8 of this manual. However, it is advisable to start examining the above checklist from the very beginning in order to ensure the robustness of the proposal and avoid any possible delays in accessing funds for implementation.

executing entities

The selection of a project execution modality is part of the project design and should be undertaken before the submission of the proposal to the AF. In selecting an Executing Entity, priority should be given to institutions in relevant sectors so that the benefits of capacity building and sustainability of the project are retained. Such preference should, however, be without prejudice to technical and managerial capability and competence.

Executing Entities are organizations that execute adaptation projects and programmes supported by the

Fund under the oversight of the Implementing Entities. The overall responsibility of programming the funds accessed from the AF, however, lies with the IEs.

Depending on the capabilities of the IEs, and much will depend on the area of work of the entities, an accredited entity may decide to execute the project itself or through a third-party executing entity.

Although the AF prescribes no specific selection criteria for an Executing Entity, the fiduciary standards required of the IE should be adhered to by the Executing Entity, specifically in the areas of financial management and reporting, procurement and transparency. The IE should apply the most stringent criteria in selecting an Executing Entity as it is the IE that is accountable to the AF and not the Executing Entity.

suggestions for selecting and contracting an executing entity

There are no restrictions on the number of executing agencies in a country. However, it is recommended to have one Executing Entity per project. The IE should select the Executing Entity through a competitive tender process that should be initiated by a formal Request for Expression of Interest. In operation, the Executing Entity should be fully advised by the IE.

The Executing Entity must be a legal entity registered in the country and must have the mandate to work anywhere in the country. It could be any type of organization that fulfills the above criteria.


At its 21st meeting, the Adaptation Fund Board discussed the need for a range of capacity enhancement measures, ranging from support in the identification of potential NIEs within a country to strengthening the appraisal, design, implementation and monitoring of adaptation projects and programmes undertaken by NIEs and RIEs. The AFB had previously requested that multilateral organizations offer financial and technical support for the establishment of NIEs.

To this end, capacity enhancement support for direct access to climate funds is now offered by several bilateral development partners, non-governmental organizations (NGOs) as well as some funds and multilateral partners.

These include, but are not limited to, the United Nations Environmental Programme (UNEP), the United Nations Development Programme (UNDP), the German Society for International Cooperation (GIZ), the USAID “Adaptation Asia-Pacific” Project, the Ministry of Environment of Japan and the GCF secretariat as well as international networks such as the Climate & Development Knowledge Network.

This module describes the UNEP regional support programme in Asia and the Pacific.

regional help desk

The Regional Help Desk is one of the key building blocks of the support programme for receiving requests from countries, conducting an initial assessment, developing a roadmap for support, connecting countries/nominated NIEs with right expertise and generating and sharing knowledge. The Regional Help Desk also takes proactive measures to addresses countries’ demands. The Help Desk aims to provide prompt support to countries throughout the NIE accreditation as well the project/programme formulation processes. The demand-driven nature of support means that countries or NIEs may pick and choose from the menu of services provided at any phase, or opt for the entire package.

The Help Desk tackles country requests through a blended approach of both face-to-face support and an online knowledge base. The knowledge base, or an online platform, is a living document that accumulates experiences or lessons learned from country-level interactions and serves as a repository of information pertinent to NIE accreditation and project formulation procedures. It serves as a around-the-clock primary-

moduLe 8: accessinG suPPort – the uneP reGionaL heLP desk and community of Practice

level Help Desk support.

The face-to-face aspect or Regional Experts and the International Adviser provide targeted support to countries with their combined knowledge and expertise on the AF Direct Access modality as well as secondary-level support when adequate support is not readily available through the knowledge base.

The Regional Help Desk has four main operating components, namely: NIE Accreditation Support, Project Formulation Support, Community of Regional Experts/Advisers and Knowledge Sharing.

nie accreditation support

The support programme requires an introduction of the project and the available support to and dialogue with countries in the region to obtain their formal request. The support can cover any phase of the NIE accreditation process. Therefore, the component is divided into the following activities as shown in figure 6

Project formulation support

The support programme also provides assistance to countries at any stage of the formulation of an adaptation project by the NIE and the executing agencies. All support is demand-driven, ensuring country ownership of projects. This component encompasses analysis of project concepts to ensure these are addressing the adverse impacts of and risks of climate change and the formulation of proposals in line with the template prescribed by the AF. Activities under this component are shown in figure 7:

community of regional experts/advisers

This component of the support programme covers experts within an established network, particularly the Asia Pacific Adaptation Network (APAN), enhances their understanding of the NIE accreditation and project formulation process, fostering a community experts to provide capacity development and accreditation support to countries as well as for project formulation. This group of practitioners is complemented by an International Adviser providing national-level support to countries through a demand-driven process. In addition to ensuring cultural sensitivity, regional experts, trained by UNEP and Accreditation Panel members bring with them a robust knowledge of NIE accreditation to complement national expertise. This

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figure 6. nie accreditation support provided by uneP

figure 7. Project Preparation support provided by uneP

Outreach anddialogue tointroduce supportprogramme andobtain request forsupport

Support NIEidentification andselection,assessment ofcapacity gaps

Support capacitydevelopment planand subsequentassistance tocapacitydevelopment.

Assistance forpreparation ofNIE accreditationapplication andaddressingfeedbacks.

Introduce checklistfor identificationof adaptationprojects

Assistance indeterminingimplementationmodality,includingassistance inidentification ofexecutingagency(ies)

Guidance onprojectpreparation,justification andsustainabilitystrategies;

Primaryassessment ofprojectproposals.


component comprises the following: a. Periodical Training of Trainers b. Deployment procedures and managementc. An International Adviser for national-level support

and regional workshopsd. A database of adaptation project development

experts from UNEP rosters

knowledge sharing

An integral part of a sustainability strategy, knowledge sharing and retention are addressed by this overarching component. In order to provide high quality and consistent support to involved parties, there is also a need for standardized and peer-reviewed training material covering all aspects of accreditation and direct access modalities. This component, hence, includes and supports the other components through the following activities: a. Development and periodic updates of the training

manual including:• Customizable presentations and brochures• Good practice examples from the region and

abroad • Case studies on accreditation and project

development processesb. Regional knowledge sharing workshopsc. An Internet-based platform that includes but is not

limited to a training manual, a list of experts and a calendar of adaptation events in the region.

adaptation fund’s readiness Programme for climate finance

Besides the UNEP Help Desk, countries can turn to other venues for support in seeking accreditation for direct access, including directly from the Adaptation Fund.

The Adaptation Fund’s Readiness Programme for Climate Finance aims to help strengthen capacities of national and regional entities to receive and manage climate financing, particularly through the Fund’s direct access facility, and to adapt and build resilience to changing climate conditions in sectors ranging from agriculture and food security to coastal zones and urban areas.

core activities:• Intensiveworkshopsofstakeholdersinthefullcycle

of climate finance, ranging from accreditation to project design and implementation, to monitoring and evaluation.

• A South-South grants programme will supportexperienced NIEs to assist countries seeking to be accredited for climate finance.

• Technical Assistance (TA) grants aim to strengthencapacities of accredited NIEs, particularly in environmental and social risk management while designing and implementing adaptation projects.

• Promotion of online collaboration and knowledgesharing.

• Climate Finance Ready – an online platform forclimate finance readiness.

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BiBLioGraPhy

Adaptation Fund Board. (2013). Operations Policies and Guidelines for Parties to Access Resources from the Adaptation Fund. Available at: https://www.adaptation-fund.org/wp-content/uploads/2016/04/OPG-amended-in- March-2016.pdf

Adaptation Fund Board (2015). Adaptation Fund Board Ethics and Finance Committee Terms of Reference. Available at: https://www.adaptation-fund.org/wp-content/uploads/2015/01/AFB.B.5.5%20Board%20Committees.pdf

Adaptation Fund Board (2014). AdaptationFundBoardProjectandProgrammeReviewCommitteeTermsofReference. Available at: https://www.adaptation-fund.org/wp-content/uploads/2015/03/Review-Criteria-5.12.pdf

Adaptation Fund Board. (2010). An Approach to Implementing Results-Based Management – RBM. AFB/EFC.1/3. Available at: http://www.adaptation-fund.org/wp-content/uploads/2015/01/AFB.EFC_.1.3.An%20Approach%20to %20Implementing%20RBM.pdf

Adaptation Fund Board. (2011). NIE Accreditation Toolkit. Available at: https://www.adaptation-fund.org/wp-content/ uploads/2015/07/Accreditation-Toolkit-English-14.pdf

Adaptation Fund Board. (2009). Accessing Resources from the Adaptation Fund Handbook. Available at: http:// www.preventionweb.net/files/13786_Handbook.English1.pdf

Leary, N., J. Adejuwon, V. Barros, I. Burton, J. Kulkarni, and R. Lasco (Eds.). (2008). Climate Change Adaptation. Earthscan. UK. 381pp.

OECD. (2013). The High Level Fora on Aid Effectiveness: A history. Paris.

Bird, N., Billett, S. and Colon, C. (2011). Direct Access to Climate Finance: Experiences and lessons learned. ODI/ UNDP Discussion Paper, New York: UNDP.

USAID. (2009). Evaluation Guidelines for Foreign Assistance. Planning and Performance Management Unit, Office of the Director of U.S. Foreign Assistance Final Version: March 25, 2009.

USAID. (2009). Evaluation Standards. Planning and Performance Management Unit Office of the Director of U.S. Foreign Assistance Final Version: March 25, 2009.

Van den Berg, R. D., and O. Feinstein (Eds.). (2009). Evaluating Climate Change and Development. World Bank Series on Development, Volume 8.

World Bank. (2008). Guidelines for GEF Agencies in Conducting Terminal Evaluations. Evaluation Document No. 3. 180pp. GEF EO

United Nations Environment ProgrammeRegional Office for Asia and the Pacific (ROAP)2nd Floor, United Nations BuildingRajadamnern Nok AvenueBangkok 10200, Thailandhttp://www.unep.org/roap

Ministry of the Environment Government of Japan Godochosha No. 5, Kasumigaseki 1-2-2, Chiyoda-ku, Tokyo 100-8975, Japanhttps://www.env.go.jp

