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Implementing Entities and their Role in Direct Access Projects

This article explores the role of Implementing Entities (IEs) in implementing projects funded by the Adaptation Fund through the direct access modality. It discusses the oversight role of IEs, the need for IEs to meet fiduciary standards, and the benefits of having a National Implementing Entity (NIE) accredited. The guidelines for selecting a NIE candidate are also outlined.

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Implementing Entities and their Role in Direct Access Projects

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  1. Roles of Implementing Entities Saly, Senegal 5September 2011 Mikko Ollikainen

  2. Direct Access and the role of NIEs • Through the direct access modality, countries may implement projects using an existing national institution that meets the fiduciary standards as set by the Adaptation Fund Board (AFB) • The direct access modality is offered for the first time in international climate finance by the AF

  3. What is an Implementing Entity? • One that is responsible for the oversight role for projects/programmes funded through the Adaptation Fund (AF) • The AFB cannot oversee all projects directly, therefore it entrusts this role to IEs • The IE will be responsible for all funds received from the AF for a project or programme • IEs can be Multilateral (e.g. UNDP), Regional (e.g. BOAD) or National (e.g. CSE, FNE)

  4. What is the oversight role of an Implementing Entity? • Full responsibility for the overall management of a project or programme financed by the AF • Within the project, specific responsibilities may be delegated to Executing Entities (project partners) but IE bears ultimate responsibility of EE actions • All financial, monitoring and reporting responsibilities • No differentiation between MIE, RIE and NIE

  5. Why do IEs have to meet the fiduciary standards? • A framework to check whether appropriate policies, processes and capabilities to successfully handle projects are in place • Compliance demonstrates ability to - meet responsibilities as Implementing Entity - enter into legal agreements with AFB

  6. Why would a country have a NIE accredited? • More ownership of the project • More control over the funds used to implement the project • Potentially, more efficient use of the money • Learning by doing and more indirect benefits • Possibly, getting prepared to implement projects under other direct funding sources

  7. Accreditation of NIEs -background and progress • October 2009: AFB invited countries to apply for NIE accreditation • January 2010: first applications, convening the Accreditation Panel • March 2010: accreditation of the first NIE: CSE, Senegal • Currently: 4 NIEs, several open applications

  8. First direct access project signature ceremony, November 2010

  9. Guidelines for DA to select a NIE candidate • The DA should have confidence that the proposed NIE can demonstrate and supply evidence of its fiduciary abilities and obtain the accreditation • A preliminary evaluation by the DA that the potential NIE meets the fiduciary standards and can demonstrate this during the accreditation process

  10. Guidelines for DA to select a NIE candidate (2) • The DA conducts a preliminary assessment that the potential NIE is the most capable within the country to take responsibility and accountability for the full project cycle • optimal organizational structure: • a separate corporate structure • implementation of projects is one of its significant activities

  11. Guidelines for DA to select a NIE candidate (3) • Potential NIE should have: • a zero tolerance for fraud which is demonstrated by its top management • the ability to take on the responsibility of the full project cycle in an environment free from direct and indirect fraud and corruption from its own staff and from third parties • the ability to resolve any allegations thereof in a transparent and complete manner • Legal personality • - • l

  12. Guidelines for DA to select a NIE candidate (4) • Potential NIE should: • Be able to work together with government entities, leveraging co-financing organizations and other stakeholders within the country in order to identify, appraise, implement and evaluate projects related to adaptation • bring a significant value added component to Adaptation Projects

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