Second Overall Performance Study (OPS2) of the GEF

1. Second Overall Performance Study (OPS2) of the GEF OGUNLADE DAVIDSON OPS2 Member & Director , EDRC, University of Cape Town COP8 of the United Nations Framework Convention on Climate Change New Delhi October 25, 2002

2. Overall Goal of OPS2 To assess the performance of the GEF since its inception, with particular focus on the period since the restructuring of GEF in 1994.

3. OPS2 Team • Carried out in 2001 by an independent team of 8 professionals • Leif Christoffersen (Norway), Team leader • Ogunlade Davidson (Sierra Leone) • Maria Conception Donoso (Panama) • John Fargher (Australia) • Allen Hammond (U.S) • Emma Hooper (U.K) • Thomas Mathew (India) • Jameson Seyani (Malawi) Terms of Reference and team composition approved by GEF Council

4. Advisory Panel Jose Goldemberg (Brazil) Hisham Khatib (Jordan) Akiko Domoto (Japan) Corinne Lepage (France) Zhang Kunmin (China) Advisory panel selected by CEO/Chairman & Senior Monitoring and Evaluation Coordinator

5. Major Questions of OPS2 1. What are impacts or results related to global environment achieved through activities supported by the GEF? 2. What bearing do GEF relations with the UN Conventions have on these results? 3. How have GEF policies or programs influenced these results? 4. How have GEF institutional arrangements and relationships reflected on its performance?

6. OPS2 Approach 11 Country Visits: Argentina, Brazil, China, Jamaica, Jordan, Nepal, Romania, Samoa, Senegal, South Africa, and Uganda. Reviewed projects in Bulgaria, Hungary, Kenya, Lebanon, Tanzania. Regional consultations: Jamaica, Kenya, Mexico, Romania, Senegal,Thailand. Consultations with GEF Council, Secretariat, Implementing Agencies, Executing Agencies, Secretariats of UNFCCC, CBD, CCD, GEF-NGO Network Members.

7. Information Sources • Four program studies by the monitoring and evaluation team of GEF Secretariat and Ias • Evaluation reports of completed projects and IAs reports • Country and project visits and Regional consultations • Interviews with IAs, STAP, and Convention secretariats (CBD, UNFCCC, and CCD)

8. Limitations of Study • Limitations in data and information • Lack of baseline data on completed and on-going projects • Only 95 completed projects representing 12% of total portfolio • Lack of impact related data on projects during pilot phase • Lack of clear operational definition of global benefits

9. Visit 1- Coal Bed Methane in ChinaTechnology Development and Commercialisation • Implemented by UNDP with $10m of GEF Funds • GEF funds assisted development and dissemination of CBM technology • Findings • Gas recovery increased from 40 to 70% • Household use increased from 22,000 to 165,000, and sales as well • Inclusion of CBM technology in Schools and Colleges • Mastery of the technology that led to development of new techniques • Company formed, Tiefa Mining Co can now attract funds outside China for further development

10. Visit 2- Efficient Lighting in PolandMarket Transformation • Implemented by IFC aimed at replacing incandescent light bulbs with energy-efficient lamps (CFLs) – Less energy use leading to reduced GHG • Direct subsidy through competition, expanded distribution, product promotion, and education to increase use • Findings • After 1 year, penetration increased from 11.5 to 33.2 later to 50% • Price declined in real terms by 34% between 1995 and 1998 • High consumer satisfaction and awareness • After project completion: Development of a cooperative program, increased sales, new manufactures, etc

11. Visit 3- Planning for Adaptation to Climate Change Impacts: Caribbean States • Participation: 12 low-lying Caribbean Island countries • Project aims: establishing a planning process to cope with adverse impacts to climate change (VA, adaptation planning, and capacity building) • Involvement of university of West Indies and Regional organisations • Findings • Established a network of measuring devices and regional center • Integrating the monitoring system into global system • Strengthen human capacity in climate change issues • Identification of impacts and options for national development agenda • Establish a Regional Climate Change Centre of Excellence

12. Impacts & Results – Climate Change • 270 projects in 120 countries for GEF funding of US$ 1 billion – 28 projects completed as of June 30, 2000. • Portfolio has demonstrated a wide range of approaches to promote energy efficiency and renewable energy. • Early projects focused on Technology, while later on market development and financing mechanisms. • Most effective in promoting energy efficiency. • Moderate success in promoting grid-connected renewable energy • Least success with off-grid rural renewable energy projects. • Important results achieved in a number of areas: • Technology Development and Demonstration. • Market-oriented approaches. • Capacity Building and Institutional Development. • Policy Development

13. Program & Policy Issues – Climate Change • Sharing Experience and Lessons gained from GEF projects be strengthened and accelerated as such transfer has been slow though there has been some recent efforts • Replication of Project Results is limited so far based on the limited number of completed projects • Strengthening Project Risk Assessment and Management so that projects can adjust to market changes, technology, macroeconomic conditions, co-financing and government commitments • Long-term Programmatic Approaches that co-ordinate and matched to a long-term strategy proved useful. • Enabling Activities were found generally useful but climate change is novel and complex and projects were focused on meeting UNFCCC obligations than national needs and priorities

14. Overall Conclusions – Climate Change • Target productive uses of renewable energy in rural areas • Create enabling environments for market transformation. • Make better use of differing capacities and special strengths of different IAs and EAs. • Enhance the learning capacity of the GEF – include Secretariat in mid-term reviews of projects. • Increase leveraging of projects – from 5:1 to 6:1 to 50:1 and higher.

15. Overall Findings – Relations with Conventions • The GEF has been responsive to the UNFCCC and CBD and the Operational strategy and programs reflect the objectives and priorities of the Conventions • Some confusion among IAs and countries in defining global environmental benefits and financing activities that primarily national benefits • The GEF has had some difficulties in translating broad convention guidance into practical operational activities. • Considerable progress has been made in improving communications between the GEF Secretariat and the Convention Secretariats.

16. Recommendations – Relations with Conventions • The GEF should adopt a cautious approach to funding any new rounds of enabling activities to the same convention. All such activities must be assessed for their effectiveness in responding to the convention guidance and to country needs. • GEF should continue support for capacity development of operaytional focal points, the national GEF coordinating structures and country dialogue workshops • Assessment of the use of national reports, national communications, and national action programs within the strategic frameworks for a country’s national sustainable development program and for GEF’s programming and project preparation activities. • It recommends that the GEF Council explore the feasibility of each country reporting directly to the appropriate convention on the effectiveness and results of GEF’s country-relevant support for both enabling activities and projects. • In its dialogue with each convention that it supports, the GEF should regularly seek to update and clarify existing priorities and commitments in light of each new round of guidance it receives.

17. Major Overall Findings/Conclusions 1. The GEF has produced significant project results that address important global environmental issues. 2. The GEF has been serving the UNFCCC and the CBD 3. Since the understanding of the GEF is very weak within recipient countries, substantial improvements are urgently needed in how GEF operates at the country level. 4. Stakeholder participation must be addressed more systematically. 5. Greater clarity needed to countries and project stakeholders on global benefits and incremental costs.

18. Findings/Conclusions (contd) 6. Improvements are needed in processing GEF projects and in improving GEF visibility through better information products and communication. 7. The catalytic role of the GEF needs better focus. 8. Small grants and medium-sized projects have produced good results and can be effective first steps in GEF programming aimed at subsequent larger projects. 9. The GEF needs to engage the private sector more extensively. 10. The institutional roles and responsibilities of GEF partners need clarification and modification.

19. Recommendations 14 Recommendations covering areas of GEF partnership, Strengthening Country Capacity, Operational Issues, Capacity of the GEF Secretariat, Strengthening GEF’s Institutional Capacity and Structure. • Presented to: • GEF Council in May 2002. • GEF Assembly in October 2002. Council recommended and GEF Assembly approved a Plan of Action covering the period 2002-2006 to follow-up on the recommendations.