Since its inception in 1991, the GEF has engaged the private sector in a variety of ways, mostly through direct project support. A consistent theme in the numerous policy documents and assessments of GEF’s engagement with the private sector is that the private sector is integral to achieving the overall global environmental objectives of the GEF. The private sector has played and should continue to play a pivotal role in providing solutions that contribute to the protection of the global environment and promote thereby environmentally sound and sustainable economic development. Initial policy frameworks for private sector engagement were developed through GEF Council papers as early as 1996 that provided a foundation from which the GEF engaged with private sector, largely through direct project support. Most recently, two Council-approved documents detailed an updated strategy to enhance GEF’s engagement with the private sector. These were “GEF Strategy to Enhance Engagement with the Private Sector” (GEF/C.28/14) in March 2006, which was accompanied by an extensive information document “Additional Information to Support the GEF Strategy to Enhance Engagement with the Private Sector” (GEF/C.28/Inf.4). The 2006 private sector strategy documents included an innovative proposal to establish a pilot public-private partnership (PPP) initiative to enhance GEF engagement with the private sector. A pilot PPP initiative was approved by the GEF Council in June 2007 along with a funding allocation of $50 million. The concept was further developed as a pilot project in conjunction with IFC as a strategic partner, was renamed the GEF Earth Fund and was approved by Council in May 2008. The GEF Earth Fund (pilot project) was established with separate trust fund arrangements to promote projects, technologies and business models that will contribute to the protection of the global environment and promote thereby environmentally sound and sustainable economic development. This pilot project allows the GEF to demonstrate ways to more systematically engage with the private sector in order to reach beyond its traditional boundaries (in a number of ways), foster innovation and open new markets, and demonstrate the potential for strategic partnerships to achieve greater scale of investment than generally achievable through working with the private sector on individual projects through the normal GEF project cycle. The GEF Earth Fund is being managed based on the concept of “Platforms” under which a portfolio of projects will be managed. The portfolio of projects within each Platform has to be aligned with GEF Focal Areas or their equivalent, while projects within each Platform seek to address specific environmental challenges or seek to leverage particular business models or financial instruments. This is a delegated structure that allows projects to be approved by Agencies that manage Platforms approved by Council.
The first $30 million operational “Platform” of the GEF Earth Fund was approved by Council in May 2008, and is currently being managed by IFC. A second $5 million Platform proposal “Global Market Transformation for Efficient Lighting”, to be managed by UNEP, was submitted for Council approval in May 2009. Other Platform proposals are currently being prepared for submission to Council for approval during 2009, which will complete the initial funding allocation of $50 million. Although it is not contemplated that private for-profit corporations will manage Earth Fund Platforms, individual projects within the Platforms will generally involve the implementation, development and/or replication of projects, technologies and business models in partnership with the private sector through PPP. IFC also manages the trust fund for the GEF Earth Fund (pilot project), and in its role as fund manager and administrator, IFC disburses funding to entities approved to manage Platforms upon Council approval and CEO endorsement. In addition, IFC participates in GEF Earth Fund Board meetings as an observer. Further information regarding the GEF Earth Fund (pilot project) is provided in the document “The GEF Earth Board Procedures (Pilot Project) – Strategic Priorities, Governance and Operational Procedures” which was agreed with IFC and IBRD and submitted for Council approval in May 2009. |