S ignposts Review of the Global Environment Facility June 2012 Earth Fund From June to August Fund was restructured from aiming to create partnerships 2010, the Global with the private sector to leveraging private sector funding. Environment Facil- The premise of the Earth Fund was to establish platforms ity’s (GEF’s) Evalua- that provided the technical expertise and financial and tion Office conducted a operational autonomy to launch, support, and supervise review of the GEF Earth Fund. The review considered the projects. As of May 2010, the entire $50 million authorized context in which the Earth Fund has operated, focusing on for the Earth Fund pilot had been allocated among five the changes that have taken place within the GEF during platforms, only one of which—the International Finance the time of the Fund’s establishment. The review included Corporation (IFC) Earth Fund—has approved projects and four areas of assessment: allocated its Earth Fund appropriation. Because the other ●● Compliance with Council decisions——the extent to platforms are in the very early stages of implementation, which the design, development, and implementation of the review could not report on results on the ground. the Earth Fund responded to GEF Council decisions ●● Review of Earth Fund activities—a desktop review of Findings the Earth Fund and its implementation progress The Earth Fund did not achieve its purpose. The Fund did not attract private funding at the level necessary to ●● Engagement with the private sector—exploration of achieve its stated purpose, nor did it establish sufficient engagement at different levels (Earth Fund, platforms, partnerships with the private sector. It also experienced sev- and projects) eral issues with regard to its management set-up, funding, ●● Efficiency of the Earth Fund—efficiency of the Earth and learning mechanisms. Fund’s project cycle, and the roles and responsibilities of different stakeholders Although the Earth Fund was intended and expected to be set up as a fund, it over time became a grant- Context ing mechanism. In the GEF Earth Fund, ownership is not defined, and risks and returns are not clearly allocated. The GEF Earth Fund derives from the Public- Alignment of economic interest and clarity of purpose are Private Partnership Initiative established in 2007 as part of needed to define workable investment regulations. an effort to enhance engagement with the private sector. It evolved out of the GEF’s long-standing desire to demon- The Earth Fund committed the allocated $50 million in strate the value of public-private partnerships in support- five platforms in just over two years, but did so by fall- ing its mandate to generate global environmental benefits ing back on GEF “business as usual.” The private sector and support countries in meeting national responsibilities has not shared responsibilities or accountability, manage- under various conventions. ment was not visionary and strategic, and administration has not been adapted to meet Earth Fund needs. In 2008, the Public-Private Partnership Initiative was renamed the Earth Fund. As approved by the GEF Coun- Engagement with the private sector—the purpose of cil and endorsed by the GEF Chief Executive Officer, the setting up the Earth Fund—was relegated mostly to the Review of the Global Environment Facility Earth Fund S ignposts project level. The Fund lacked transparent and efficient liaison between private and public sectors; establish a approaches and procedures for engaging the private sec- program to regularly scan the broader environmental tor, stemming from a lack of a clear definition of the purpose finance space; rethink expectations of financial sustain- and priority areas of the Earth Fund, and secondarily from ability; and define the products, services, and markets the GEF and GEF Agency culture, which is different from for the next phase of the Earth Fund. that of private enterprise and NGOs. ●● Clarify access to the redefined Earth Fund. The Expectations regarding cofinancing and reflows were GEF Secretariat should prepare an international call for unrealistic. There is a mismatch between the GEF’s expressions of interest in partnering with the GEF in the expectations of cofinancing and the value placed by the pri- Fund’s second phase and invite respondents to make vate sector on collaboration with the GEF, especially under formal proposals to operate Earth Fund platforms. difficult global financial and economic conditions. ●● Strengthen management of the Earth Fund. Opera- tional management should remain with the GEF Sec- The Earth Fund did not clearly communicate its purpose retariat and be strengthened to ensure appropriate internally or externally, nor was there a plan for learning financial resources are allocated by the GEF Council, from its experience. There was no framework or strategy to staff experienced in working with the private sector in define how the Earth Fund was going to be presented to the the GEF focal areas are recruited and assigned ade- general public, to the private sector, or within GEF partner- quate management authority; a monitoring and evalu- ships, causing confusion regarding the Earth Fund itself, its ation system is established at the Earth Fund level; a management, operations, and procedures, as well as limit- knowledge-sharing mechanism and communications ing the fund’s ability to identify potential partners. strategy are designed and implemented; and financial The Earth Fund governance and management structure management of the trust fund is established. had several weaknesses, which were revealed during implementation. Several weaknesses were found by the Follow-up review, including the existence of too many partners with The Council requested that the GEF Secretariat—in col- no clear implementation roles, and no clear accountability. laboration with the GEF Agencies and representatives of the private sector, foundations, and civil society organiza- Recommendations tions—prepare a revised strategy for enhancing engage- ●● The Council should ask the Secretariat to revise the ment with the private sector for the May 2011 Council Earth Fund for its second phase. The second phase meeting. This strategy was to provide a clear analysis of should meet the following conditions: its objectives, the gaps and opportunities for GEF activities, to secure niche, and market barriers should be defined and dis- good value for GEF resources. seminated; access to its new trust fund should be clari- fied; and its management strengthened. Photo: Courtesy of Apple’s Eyes Photos via freedigitalphotos.net. ●● Redefine Earth Fund objectives, niche, and mar- The GEF Evaluation Office is an independent entity reporting ket barriers. The GEF Council should provide strate- directly to the GEF Council, mandated to evaluate the focal area gic guidance to the Secretariat on how to narrow and programs and priorities of the GEF. focus the scope of the Earth Fund. Working with the The full version of Review of the Global Environment Facility Earth Fund (Evaluation Report No. 62) is available on the GEF Agencies and private sector representatives, the GEF Evaluation Office website, www.gefeo.org. For more Secretariat should identify areas of work where the information, please contact the GEF Evaluation Office at gefevaluation@thegef.org. Earth Fund can act as a credible technical partner and