Project Concept Note User Guide In Response to the Second Call for Project Concept Notes 2020-2021 Glossary Accredited entity (AE) Concept note (CN) An entity that is accredited by the GCF Board in accordance with the Governing Instrument and relevant Board Decisions. A document which provides essential information about a proposal to seek feedback on whether the concept is aligned with the objectives, policies and investment criteria of the GCF. Effectiveness The capability of producing a desired result. Effectiveness constantly measures if the produced/actual outputs meet the expected outputs. Efficiency A measurable concept, quantitatively determined by the ratio of useful output to total input, which can be expressed by the mathematical formula r = P/C, where P is the amount of useful output (product) produced per the amount C (cost) of resources consumed. Efficiency focuses on achieving the maximum output with minimum resources and may also be expressed as a percentage of the result that can ideally be achieved. Environmenta A reference point for identifying, measuring and managing l and Social environmental and social risks to determine the key environmental and Safeguards social risks the AE intends to address in the conceptualization, (ESS) preparation and implementation of funding proposals, and to provide guidance on how these risks are to be managed. Executing An entity through which GCF proceeds are channelled for the purposes entity (EE) of a funded activity or part thereof; and/or any entity that executes, carries out or implements a funded activity, or any part thereof. An AE may carry out the functions of an EE, though it is preferable if local and national actors execute projects/programmes. Investment Six investment criteria adopted by the GCF Board, namely impact criteria potential; paradigm shift potential; sustainable development potential; needs of the recipient; country ownership; and efficiency and effectiveness. National A core interface and the main point of communication between a Designated country and the GCF. The NDA seeks to ensure that activities supported Authority by the GCF align with strategic national objectives and priorities and (NDA) help advance ambitious action on adaptation and mitigation in line with national needs. Private Sector A project could be considered private when all financial resources that Project are provided for its implementation from financing entities are more than 50 % owned and/or controlled by private shareholders. Project A set of activities with a collective objective(s) and concrete outcomes and outputs that are narrowly defined in scope, space and time; and that are measurable, monitorable and verifiable. Programme A set of interlinked individual sub-projects or phases, unified by an overarching vision, common objectives and contribution to strategic goals, which will deliver sustained climate results and impact in the GCF result areas efficiently, effectively and at scale. Halaman 2 Introduction The objective of this user’s guide is to assist interested Project Proponents to develop a simplified Concept Note to be submitted to the Indonesia National Designated Authority for GCF -Secretariat, Fiscal Policy Agency - Ministry of Finance of Republic of Indonesia, in response to the Second Call of Project Concept Note Period 2020-2021. The Annex 5 in the Call of Project Concept Note Period 2020-2021 Document outlined a simplified format of a Concept Note (CN). The simplified CN presents a summary of the proposed project/programme. NDA will undertake a screening process of all submitted CNs against a set of eligibility criteria. The Project Proponents will receive result and initial feedback on whether the CN is aligned with the GCF’s objectives, policies, and investment criteria. The feedback will provide information to further develop and strengthen the project/programme idea into a full format of Project Concept Note, using a format given by the GCF. Putting together a full GCF CN requires investment of time and human resources. However, the information gathered at the stage of CN development will directly feed into the funding proposal and the opportunity to interact and receive early feedback from the GCF secretariat increases chances for success. Before developing the CN for a GCF project/program, it is important for Proponents to identify and answer below questions to further guide in generating ideas for Concept Note: ➢ What does the GCF support? ➢ How much and what type of finance is available and what does the proposed project/program need? ➢ Can the project/program secure a co-financing? ➢ What are the roles of different stakeholders that will be engaged in the proposed project/program, and how to engage them since the beginning of CN development? It should be noted that this user guide is only intended to guide the writing process in simplified CN. Once the Project Applicants/Lead Organization as the Project Proponents received results from NDA that their submission is successful and shortlisted, the Project Applicants/Lead Organization should refer to the complete user guide of full Concept Note template given by GCF, which can be accessed in https://www.greenclimate.fund/document/concept-note-template Step by Step User Guide Halaman 3 A. Project/Program Details This section intends to collect information to assess the economic and technical viability of the proposed project/programme. Please provide relevant details while adhering to the maximum number of pages. The information will be helpful for the review and assessment of the concept note. A.1 Context and Baseline (max. 1 page) Sub-sections Climate vulnerabilities and impacts in Indonesia GHG emissions profile in Indonesia Mitigation and adaptation need that the prospective intervention is expected to address How the project fits in with the National Policy Documents Main causes and barriers to be addressed Description Baseline information can be sourced from multiple sources including Studies, Surveys, Consultations, National Reports, Pilot projects, IPCC, IEA, IRENA, WRI, GAIN index, Global Climate Risk Index, etc. National GHG emission profile. Any assertions in the concept note must be evidence-based (e.g. from Biennial Update Reports, National Communication Reports to the UNFCCC, Sectoral emission profile report, etc). Adaptation needs are ideally disaggregated by gender and age, can be found in national vulnerability and risk assessments as well as adaptation policy processes such as the National Adaptation Plans (NAPs). Information can be found in INDCs or NDCs, as well as any national, sub-national and sectoral policy documents related to climate change (e.g. 2020-2024 RPJMN, NDC Roadmaps, LCDI, Sectoral Strategic Plans, etc). Such as from the perspectives of social, gender, fiscal, regulatory, technological, financial, environmental, institutional, etc. A.2 Project / Programme description (max. 2 pages) Sub-sections Expected set of components/outputs and subcomponents/activities to address the barriers identified that will lead to the expected outcomes Climate rationale by describing the benefits of the proposed investment relative to the consequences of not making any investments • • • • • • • Describe in what way the involved stakeholders are well placed to undertake the planned activities and what will be the implementation arrangements and other relevant partners Description Impact: The project’s contribution to policy or programme objectives Outcome: Direct benefits to the target groups Outputs: Tangible products or services delivered Activities: Tasks to be undertaken. Identify anticipated climate risks, their impact, and the vulnerabilities of affected populations Clearly articulate proposed activities and how they address the expected climate risks, impacts and vulnerabilities. The project proponent is required to identify and consult with relevant stakeholders to gather contextualised information on the project/program’s target area and population. Consultations should involve the target population, inclusive of ethnic minorities, disabled, elderly, children, women, indigenous people, and others. Halaman 4 • Clearly elaborate the proposed stakeholder implementation arrangement Initial identification of gender and social gaps in your proposed project, related to climate change risks and impacts, as well as resilience Can be referred to a secondary data, e.g. for international reports from Global Gender Gap Report, Human and gender gap index, Human Development Report, etc. For national report can refer to BPS report (on number of population differentiated by gender) Risk identification (including environmental and social risk and risk mitigation plan), and Key financial and operational risks and any mitigation measures identified For environmental and social risks, refer to the ESS of the GCF, which are based on an interim basis on the International Finance Corporation (IFC)’s eight PS and their objectives. A.3 Expected project results aligned with the Six GCF investment criteria (max. 3 pages) All the relevant investment criteria should be considered for each proposal to understand its individual context and merits. A project may be less strong on one criterion (e.g. sustainable development potential) but stronger on another (e.g. impact potential). The two should be considered together and not in isolation. The methodology used for calculating the indicators and values should be provided. Project proponents can complement quantitative indicators with qualitative ones. However, not all indicators are applicable to all activities (to focus only on those relevant to the proposal, country context and GCF priorities on which the project/programme focuses). Sub-sections & Descriptions Indicative indicators (or assessment factors) [Mitigation]: project lifetime total emission reductions in tons of CO2eq to be reduced per annum. 1. Impact potential Separate indicators are [Adaptation]: the expected change in loss of lives, value of proposed for the impact physical assets, livelihoods, and/or environmental or social potential of mitigation and losses due to the impact of extreme climate-related adaptation projects. The disasters and climate change in the geographical area of the methodology used for project. Refer to the number of direct and indirect calculating the indicators and beneficiaries of the project, considering the needs of values should be provided. Indonesia which is vulnerable to the adverse effects of climate change. 2. Paradigm shift Degree to which the proposed activity can catalyse impact beyond a one-off project or program investment. At least one indicator should be met Describe any innovative ideas or elements, such as fostering new market segments, creation of business models and/or a. Innovation; the development or adoption of new technologies. As innovation is context-specific, the proposal should specify the circumstances in which the innovation takes place. Examples including multiples of initial impact size for both b. Potential for scaling up and mitigation and adaptation: specific values for scaling-up and replication; replication (e.g. a 30 MW hydroelectric power station that Halaman 5 can be replicated at four different specific sites in the region). c. Potential for knowledge and learning; d. Contribution to the creation of an enabling environment; e. Contribution to the regulatory framework and policies; f. Overall contribution to climate-resilient development pathways; 3. Wider benefits and priorities / Sustainable development: identify the positive co-benefits – with an associated indicator, baseline, and target values, disaggregated for men and women (if disaggregated data are available domestically) – in at least two of the four cobenefit areas. 4. Needs of recipients: Describe the scale and intensity of vulnerability of the country and beneficiary groups and elaborate how the project/programme addresses the identified needs. At least one indicator should be met. If the project/programme will generate useful lessons learned, a plan should be elaborated that specifies how those lessons can then be captured and shared with other individuals, projects or institutions, including through the monitoring and evaluation of the project/programme. • Highlight the aspects of market development and transformation in which the project/programme creates new markets and business activities at the local, national, or international levels. • If the project/programme addresses or eliminates systematic barriers to low-carbon and climate resilient solutions, or changes incentives by reducing costs and risks, these aspects can be highlighted. If the project/programme advances national/local regulatory or legal frameworks and is expected to bring significant benefits in this regard, please elaborate. Of particular interest, is the shifting or alignment of incentives to promote investment in low-emission or climate-resilient development, and/or the mainstreaming of climate change considerations into policies and regulatory frameworks at all decision-making levels. Consistent with a country’s climate change adaptation strategies and plans: show the degree to which the programme or project reduces proposed risks of investment in technologies and strategies that promote climate resilience in developing countries. Economic co-benefits: e.g. total number of jobs created, amount of foreign currency savings, amount of government’s budget deficits reduced. Social co-benefits e.g. improved access to education, improved regulation or cultural preservation, improved health, and safety. Environmental co-benefits e.g. improved air and/or water quality, improved soil quality, improved biodiversity, and ecosystem services. Gender-sensitive development impact e.g. proportion of men and women in jobs created. Vulnerability of the country and beneficiary groups (adaptation only): scale and intensity of exposure to climate risks for the beneficiary country and groups, which could include the exposure of people, social or economic assets or capital to risks derived from climate change. Economic and social development level of the country and affected population: level of social and economic development (including income level) of the country and target population (e.g. minorities, disabled, elderly, children, female heads of households, indigenous peoples or others). Halaman 6 5. Country ownership: Coherence and alignment with the country’s national climate strategy and priorities AND Stakeholder engagement process and feedback received from CSO and other relevant stakeholders. 6. Efficiency and effectiveness: Separate indicators are proposed for the efficiency and effectiveness of mitigation and adaptation projects. Provide values and supporting justification, including the calculation methodology and citations of relevant studies (if applicable). At least one indicator should be met. Absence of alternative sources of financing: barriers that have created the lack of alternative funding sources for the project/programme. Needs for strengthening institutions and implementation capacity: opportunities to strengthen institutional and implementation capacity in relevant institutions. Detail how its objectives are aligned with the priorities in the NDCs, RPJMN, and/or other enabling policy and institutional frameworks. Emphasize the consultative process in the description of country ownership, both with the NDA and with the wider group of stakeholders. [Mitigation]: cost per tonne of CO2eq (total investment cost/expected lifetime emission reductions) [Mitigation]: indicate the ratio of co-financing (total amount of the GCF’s investment as percentage of project). For projects/programmes that may not leverage a significant level of up-front co-financing, the AE may instead demonstrate a significant level of indirect or long-term investment mobilized as a result of the proposed activities. [Mitigation]: provide an estimate of the expected economic internal rate of return and/or financial internal rate of return, depending on the needs of the project. Expected volume of finance to be leveraged by the proposed project/programs, disaggregated by public and private sources. [Mitigation and adaptation]: describe how the proposal applies and builds on the best practices in the sector B. Indicative financing / Cost information Section B provides an overview of the financial instrument(s) to be used in support of the proposed project or programme, and how the choice of financial instrument(s) will overcome barriers and leverage additional public and/or private finance to achieve project objectives. While the GCF has no clear requirements in terms of co-financing ratio required in a project or programme, securing cofinancing is highly recommended to encourage crowding in, that is, stimulating long-term investments beyond the GCF resources and up-front commitments. The GCF uses six financial instruments: grants, reimbursable grants, senior loans, subordinate loans, guarantees and equity investments. It is important to note that two or more instruments may be blended, with more than one instrument being used by the Fund itself on a particular project, or a Fund instrument or instruments being combined with instruments from other sources of financiers. Provide a breakdown of estimated costs according to the financing instruments and specify cofinancing information. Note that grants can finance activities that would have been left unfunded by the market such as information generation, data analysis, development and dissemination of knowledge products, and capacity building of national institutions for a robust policy reform and priority setting. B.1 Financing by components (max ½ page) Halaman 7 Descriptions Provide an estimate of the total cost per component and disaggregate the source of financing. Indicative indicators (or assessment factors) The ‘Indicative total cost’ should be the sum of ‘GCF financing’ amount and the ‘Co-financing’ amount. On the ‘GCF financing’, provide a breakdown by component and financial instrument. For each financing instrument, specify the amount. If you select ‘senior loans’ and/or ‘subordinated loans’, please specify tenor in years and pricing in percentage. On the ‘Co-financing’ section, specify financial instrument; provide amount and indicate currency; list the name of institutions that provide support for the proposed project/programme. B.2 Justification of GCF funding (max ½ page) Descriptions Explain why the project/programme requires GCF funding, i.e. explaining why this is not financed by the public and/ or private sector(s). Indicative indicators (or assessment factors) Describe alternative funding options for the same activities being proposed in the concept note, including an analysis of the barriers for the potential beneficiaries to access to finance and the constraints of public and private sources of funding. Justify the rationale of the GCF financial instrument(s) as well as how this will be passed on to the end-users and beneficiaries. The justification for grants and reimbursable grants is mandatory. In the case of private sector proposal, concessional terms should be minimized and justified as per the guiding principles applicable to the private sector operations. [Adaptation]: Describe how GCF funding will support activities that will remain unfunded through mainstream financial channels and targeting highly vulnerable populations, including minorities, disabled, elderly, children, female head of households, indigenous people and others. Halaman 8 Sekretariat NDA-GCF Indonesia Badan Kebijakan Fiskal Kementerian Keuangan Republik Indonesia Gedung R.M. Notohamiprodjo Building, Lantai 5 Jl. Dr Wahidin Raya No. 1 Jakarta Pusat 10710 Telepon: (021) 3483 1678 E-mail: [email protected]
