GCF Accreditation

In November 2020, KCB gained accreditation from The Green Climate Fund (GCF) as the first lender in Kenya to support climate mitigation and adaptation projects through green financing. The bank is able to front projects between 50 Million to 250 Million USD. This journey began with the bank’s nomination for accreditation in 2007 by the National Treasury. This created a paradigm shift in lending for KCB, allowing it to tap into green economy and increase its climate finance portfolio.

The GCF Funding Process

GCF is able to provide funding for projects through accredited entities. It’s not a requirement for AEs to implement the project but rather, this can be done by execution entities (EE). Through a 5-step process that is initiated with the provision of the concept note, the accredited entity can facilitate and oversee the execution of projects.

Concept Note

Entities send a Concept Note to GCF containing their idea and the objectives they hope to achieve with their project. This is an optional step, however, entities that submit a concept note have a higher chance of approval as early feedback can be provided on whether the project meets the GCF objectives and mandate.

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Funding Proposal

Accredited Entities submit a funding proposal to the GCF secretariat which are subject to review, along with the technical specifications and documents that need to accompany it. The Secretariat may contact the bank to further strengthen the proposal if necessary. It must also include an Impact Assessment to ensure GCF’s project standards are met, as well as a no-objection letter signed by the NDA of the country associated with the funding proposal.

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Assessment

The GCF secretariat then carries out a more refined assessment of the project proposal, ensuring it matches GCF investment criteria. Once done, the secretariat then passes its assessment on to the Independent Technical Advisory Panel (ITAP), along with the proposal and supporting documents for further assessment before submission to the Board.

Board Approval

A funding proposal package consisting of the funding proposal, supporting documents, a no objection letter signed by the NDA and the secretariat and ITAP assessments, is submitted to the GCF Board. Clarification from the bank may be sought and subsequently the Board may settle one of 3 possible decisions: Approve funding; Approve funding with condition to modify proposal; or Reject proposal.

Legal Arrangements

Following GCF Board approval of the funding proposal, the GCF Secretariat engages with the Accredited Entity to sign a Funded Activity Agreement. The signed Funded Activity Agreement lays the groundwork for the implementation phase of the project or programme.

GCF Assessment

Upon receiving a funding proposal, GCF reviews it for alignment with the GCF investment criteria. The proposal is also evaluated against the GCF policies for compliance which include;

The Final Assessment

The proposal then moves to the next level of assessment by an independent technical advisory panel comprising six international experts from both developed and developing countries, who based on the GCF investment criteria can request clarification or added conditions to the proposal.

The simple 9-step process between Ideation and GCF Investment

  1. Once approved, GCF signs a Funded Activity Agreement and execution of the project can begin
    Once approved, GCF signs a Funded Activity Agreement and execution of the project can begin
  2. The reviewed project will then go to the GCF Board for decision
    The reviewed project will then go to the GCF Board for decision
  3. GCF will review the proposal in greater detail, and so will their Independent Technical Advisory Panel
    GCF will review the proposal in greater detail, and so will their Independent Technical Advisory Panel
  4. Following GCF in principal approval of the project idea, a full funding proposal can be submitted
    Following GCF in principal approval of the project idea, a full funding proposal can be submitted
  5. Obtain No-Objection Letters from the NDA to show that the target country is fully onboard
    Obtain No-Objection Letters from the NDA to show that the target country is fully onboard
  6. Based on your idea and the preliminary feedback provided by the GCF Secretariat, create a Concept Note for Green Climate Fund
    Based on your idea and the preliminary feedback provided by the GCF Secretariat, create a Concept Note for Green Climate Fund
  7. Engage with the country’s National Designated Authority (NDA) / Focal Point to ensure your idea aligns with their needs and priorities
    Engage with the country’s National Designated Authority (NDA) / Focal Point to ensure your idea aligns with their needs and priorities
  8. Present your idea to GCF that supports you target country’s climate action plans and priorities
    Present your idea to GCF that supports you target country’s climate action plans and priorities
  9. If not already accredited, find an Accredited Entity (AE) to partner with, like the KCB Bank Kenya
    If not already accredited, find an Accredited Entity (AE) to partner with, like the KCB Bank Kenya

Things to Note

  1. Once approved, GCF signs a Funded Activity Agreement and execution of the project can begin
    Once approved, GCF signs a Funded Activity Agreement and execution of the project can begin
  2. The reviewed project will then go to the GCF Board for decision
    The reviewed project will then go to the GCF Board for decision
  3. GCF will review the proposal in greater detail, and so will their Independent Technical Advisory Panel
    GCF will review the proposal in greater detail, and so will their Independent Technical Advisory Panel
  4. Following GCF in principal approval of the project idea, a full funding proposal can be submitted
    Following GCF in principal approval of the project idea, a full funding proposal can be submitted
  5. Obtain No-Objection Letters from the NDA to show that the target country is fully onboard
    Obtain No-Objection Letters from the NDA to show that the target country is fully onboard
  6. Based on your idea and the preliminary feedback provided by the GCF Secretariat, create a Concept Note for Green Climate Fund
    Based on your idea and the preliminary feedback provided by the GCF Secretariat, create a Concept Note for Green Climate Fund
  7. Engage with the country’s National Designated Authority (NDA) / Focal Point to ensure your idea aligns with their needs and priorities
    Engage with the country’s National Designated Authority (NDA) / Focal Point to ensure your idea aligns with their needs and priorities
  8. Present your idea to GCF that supports you target country’s climate action plans and priorities
    Present your idea to GCF that supports you target country’s climate action plans and priorities
  9. If not already accredited, find an Accredited Entity (AE) to partner with, like the KCB Bank Kenya
    If not already accredited, find an Accredited Entity (AE) to partner with, like the KCB Bank Kenya

Glossary of terms

Accredited Entity. The entity which receives GCF Funds for climate projects. For Kenya, this is the KCB Bank.

Executing Entity. The entity that receives funds from the AE to execute projects.

Funded Activity Agreement. The final signed legal agreement between GCF and the AE.

Environmental and Social Standards.

Independent Technical Advisory Panel. The six-member expert panel that reviews the project proposal against GCF’s investment criteria and may request for further technical details and clarifications.

Green Climate Fund.

National Designated Authority. The country designated authority that issues the no-objection certificate for projects. For Kenya, this is the National Treasury.

Project Preparation Facility. Support by GCF from US$300,000 to US$1.5 million for every application to the PPF to enable the proposal to get to completion as per the GCF investment criteria and guidelines.

Simplified Approval Process. Application process for smaller-scale projects or programs up to US$ 10 million.