Overview of the Project Preparation Facility
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The Project Preparation Facility (PPF) provides financial and technical support through grants, both reimbursable and non-reimbursable, as well as equity, to support the development of high-quality project and programme funding proposals for submission to the Green Climate Fund (GCF).
Funding available is up to USD 1.5 million for each PPF application, commensurate with the needs of funding proposal being developed. The PPF supports Accredited Entities (AEs), particularly Direct Access Entities (DAEs), as well as Project Specific Assessment Approach (PSAA) applicants. This support contributes to enhancing the balance and diversity of GCF’s overall portfolio.
Support is available through two modalities: PPF funding; and PPF service.
PPF funding:
AEs and PSAA applicants receive funding in the form of grants, repayable grants or equity to undertake project preparation activities. They are responsible for managing the grant implementation processes, including procurement of consultants, and are accountable for the oversight, use, and reporting of the approved funds and activities.
In general, if PPF support results in a feasible project with potential for income generation, the PPF amount financed by the GCF should be repayable on terms and conditions to be determined at the Funding Proposal development and review stages. If an AE or PSAA applicant assigns a project supported by the PPF to a third party without prior approval of the GCF, the entity would repay the PPF funding to the GCF.
PPF service:
Project preparation activities are provided to the AE or PSAA applicant through a consultancy firm competitively procured by the GCF from a panel of 32 pre-qualified firms with Long Term Agreements with the GCF. The PPF Service modality is primarily intended for Direct Access Entities (DAEs) and aims to address the complexity of procurement and contracting of appropriate consulting service providers for complex project preparation activities. This modality also removes the need for the entity to enter into grant agreements and receive funds directly from the GCF.
A panel of 32 PPF Service firms have been pre-selected by the GCF based on their demonstrated expertise and proven track record in climate finance.
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PPF can support one or more of the following activities which contribute directly to the development of a Funding Proposal package.
Pre-feasibility and feasibility studies would assess the feasibility of the project’s design and activities, and compare climate scenarios with and without the project under a projection of climate change and against a baseline to determine the impact of the project. Studies would include data collection, research, site-specific technical appraisals, cost-benefit analysis, as well as market research and estimated GHG reduction and adaptation impact calculations.
Studies necessary to identify, assess and manage the environmental and social risks and impacts of project activities, in accordance with the GCF Safeguards standards and good international industry practices (GIIP).
Additional studies, plans or frameworks may be developed for projects with specific risks, including Resettlement Action Plans, Livelihood Restoration Plans, Biodiversity Management Plans, and Indigenous Peoples Plans (IPP) or Framework (IPPF). Stakeholder engagement plan (SEP), including free, prior, and informed consent (FPIC) where relevant, and grievance redress mechanisms.
Development of gender-responsive projects by funding gender studies that ensure that projects align with GCF’s Gender Policy. These studies help identify gender-specific needs and promote inclusive climate action from the early stages of project preparation.
Gender-related studies may include a gender assessment with baseline analysis, a project- or programme-level Gender Action Plan, and the integration of gender-responsive indicators and targets within the project’s results framework. Additional studies would relate to assessment of Sexual Exploitation, Abuse, and Harassment (SEAH) in projects, in accordance with GCF policy on SEAH.
Stakeholder engagement plans to ensure inclusive and participatory project design. These plans help identify key stakeholders, define consultation strategies, and promote engagement with affected communities, Indigenous Peoples, and marginalized groups.
Stakeholder engagement efforts would help projects align with GCF’s Environmental and Social Safeguards and Gender Policy to foster transparency, ownership, and social inclusion from the outset.
Risk assessments may include analysis on risk mitigation instruments; site-specific hazard assessments, including identifying hazards and determining mitigation measures; economic and financial analysis including sensitivity or cost-benefit analysis; or identification and financial management and capacity assessment of executing entities in the project.
Assessments of the climate motivations of the project and the expected mitigation and adaptation impact of planned activities.
Assessment of greenhouse gas emission reductions, adaptation benefits, identification of co-benefits or trade-offs, and alignment with national climate strategies, Nationally Determined Contributions, or National Adaptation Plans may be conducted. Assessments are especially critical during early-stage project development to refine the concept, theory of change, and results framework.
If not already included in the feasibility study, this activity may develop logical frameworks, including GCF-relevant indicators, project indicators, baselines and targets; assessment of the project against GCF Investment Criteria; or market assessment and recommendations.
Development of Terms of Reference (TOR); bidding documents; procurement packages; request for proposals; expression of interests; or prequalification criteria for procurement packages to be utilised during project implementation.
Advisory services required for costing and budgeting according to GCF standards, including in relation to incremental cost for adaptation or advisory services on legal, financial, tax, regulatory and governance matters to better structure the project.
Where necessary, and provided that sufficient justification is provided, other activities such as workshops and consultations or translation of documents.