B.36/16: Local currency financing pilot programme
The Board, having considered document GCF/B.36/16 titled “Consideration for a Local Currency Financing Pilot Program”:
- Takes note of the ongoing work by the Secretariat and the Investment Committee, as well as comments by Board members at the thirty-sixth meeting of the Board, to develop a local currency financing pilot programme that addresses current barriers and risks associated with currency fluctuations at the programme/project level as mandated by decision B.33/14;
- Also takes note of the approaches listed in annex V that can be used to support local currency financing;
- Requests the Secretariat to develop, under the guidance of the Investment Committee, a framework that specifically addresses the scope and criteria for local currency financing pilot projects, with particular attention to, inter alia, additionality, direct access entity eligibility, implications to the GCF balance sheet and commitment authority, and cost of all-in concessionality for each project/programme utilizing local currency financing, and to provide the framework for consideration by the Board at its thirty-seventh meeting;
- Also requests the Secretariat to continue to explore, under the guidance of the Investment Committee, financing approaches under “Approach B” for local currency financing as set out in annex V, taking into account the framework developed under paragraph (c), for consideration by the Board at its thirty-seventh meeting;
- Reaffirms decision B.34/22, paragraph (e), pursuant to which the Secretariat is requested, in consultation with the Budget Committee with respect to any related budgetary implications, to explore the mitigation of the wider emerging financial risks outlined in section II of document GCF/B.34/13 and to present to the Board any recommended action for its consideration; and
- Requests the Secretariat, in consultation with the Budget Committee with respect to any related budgetary implications, to explore the wider application of decision B.19/04, paragraph (a) (iii), on the foreign exchange commitment risk buffer to allow it to be used to support margin calls on the Fund in connection with the deployment of the local currency financing approaches set out in annex V, with a view to the Investment Committee and, if applicable, the Risk Management Committee, making a recommendation to the Board for its consideration no later than its thirty-ninth meeting.