with the Ministry of Health and Environment of Antigua and Barbuda for Grenada 06 December 2019 | Strategic Frameworks

Programme title: Accelerating Grenada’s DAE Modality For The Effective Implementation The Country’s Goal Towards A Small Smart State

Country: Grenada

Division of Economic & Technical Cooperation (DETC), Ministry of National designated authority: Ministry of Finance, Planning, Economic Development and Physical Development

Implementing Institution: Department of Environment in Antigua and Barbuda

Date of first submission: 29 August 2019

Date of current submission / 10 November 2019 V.05 version number Readiness and Preparatory Support Page 2 of 38

How to complete this document? - Please visit the Empowering Countries page of the GCF website to download the Readiness Guidebook and learn how to access funding under the GCF Readiness and Preparatory Support Programme. - This document should be completed by National Designated Authorities (NDA) or focal points with support from their Delivery Partners where relevant. Once completed, this document should be submitted to the GCF by the NDA or focal point to [email protected]. - Please be concise. If you need to include any additional information, please attach it to the proposal. - If the Delivery Partner implementing the Readiness Support is not a GCF Accredited Entity for project Funding Proposals, please complete the Financial Management Capacity Assessment (FMCA) questionnaire and submit it prior to or with this Readiness Proposal. The FMCA is available for download at the Library page of the GCF website.

Where to get support? - If you are not sure how to complete this document, or require support, please send an e-mail to [email protected]. - You can also complete as much of this document as you can and then send it to [email protected], copying both the Readiness Delivery Partner and the relevant GCF Country Dialogue Specialist and Regional Advisor. Please refer to the Country Profiles page of the GCF website to identify the relevant GCF Country Dialogue Specialist and Regional Advisor. - We will get back to you within five (5) working days to acknowledge receipt of your submission and discuss the way forward.

Note: Environmental and Social Safeguards and Gender Throughout this document, when answering questions and providing details, please make sure to pay special attention to environmental, social and gender issues, particularly to the situation of vulnerable populations, including women and men. Please be specific about proposed actions to address these issues. Consult Annex IV of the Readiness Guidebook for more information.

Please submit the completed form to: [email protected]

Please use the following naming convention for the file name: “GCF Readiness Proposal-[Country]-[yymmdd]”

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1. SUMMARY Country name: Grenada Division of Economic & Technical Name of institution representing NDA or Cooperation (DETC), Ministry of Finance, Focal Point: Planning, Economic Development and Physical Development Name of contact person: Mr. Titus Antoine Contact person’s position: Head of DETC +1-473-440-2928/ +1-473-440-2731/+1-473- Telephone number: 440-2732 Country submitting the Email: [email protected] proposal Ministry of Finance, Planning, Economic Development and Physical Development Financial Complex, Carenage Full office address: St. George’s Grenada, West Indies

Additional email addresses that need to

be copied on correspondences: Date of initial 29 August 2019 submission Last date of 10 November 2019 Version number V.06 resubmission

☐ National designated authority ☒ Accredited entity ☐ Delivery partner

Please provide contact information if the implementing partner is not the NDA/focal point Name of institution: Department of the Environment, Ministry of Health,

Wellness and the Environment Which institution will implement the Name of official: Diann Black-Layne Readiness and Position: Chief Environment Officer Preparatory Support project? Telephone number: 268-462-4625/ 268-562-2568 Email: [email protected]; [email protected]

Full office address: Botanical Gardens, Factory Road, St. John’s, Antigua, West Indies Additional email addresses that need to

be copied on correspondences:

Title of the Accelerating Grenada’s DAE Modality For The Effective Implementation The Country’s Readiness Goal Towards A Small Smart State support proposal Readiness and Preparatory Support Page 4 of 38

Please select the relevant GCF Readiness activity area below (click on the box):

☐ I. Country capacity for engagement with GCF Type of ☐ II. Country programming process Readiness ☒ III. Direct access to climate finance support sought ☐ IV. Climate finance accessed ☐ V. Formulation of national adaptation planning and/or other adaptation planning processes Grenada is aiming to develop a climate smart country based on its Climate Smart Cities approach and is seeking funding support from the Green Climate Fund (GCF). With this objective in mind and with the assistance of GIZ, Grenada conducted a gap assessment comparing various institutions that could become Direct Access Entities for the GCF. On this basis, Grenada decided to put forward the Grenada Development Bank (GDB) as the first entity to access direct funding from the GCF and build the capacity of its Ministry of Finance via the first readiness application for Grenada. This application follows the completion of Grenada’s first GCF Readiness Programme that was implemented by GIZ. Further to Grenada’s first readiness and with the approval of the Enhanced Direct Access (EDA) Project with Antigua and Barbuda, Dominica and also Grenada, the country has decided to put forward the Ministry of Finance and the Ministry of Climate Resilience for direct access as a future EDA entity.

This application will, therefore, support one of the stated outputs (Output 1) of the EDA (GCF 061) which seeks to have at least three (3) additional direct entities accredited. It will strengthen financial institutions, promote openness, transparency and country ownership of climate adaptation actions across sectors and scales (national, community and individual) in these pilot countries. However, under the EDA Project, there are Brief summary of insufficient funds to undertake some activities related to strengthening institutional the request capacities in support of the accreditation process, in particular the production of operational manuals and provision of training to agencies. Given this limitation and the fact that related activities will be costly to execute, readiness support is requested.

This Readiness is therefore needed to: (1) Support further capacity building for the GDB, that is required in order for it to be able to act fully as a direct access entity; (2) Support EDA output for the accreditation of the Ministry of Finance and/ or the Ministry of Climate Resilience as Direct Access Entity for Grenada; and (3) Develop capacity for the accessing of additional GCF instruments to allow for the country to gain direct access for the people of Grenada to access the funds at all levels as the cornerstone of the whole of island approach to climate change transformation.

The Readiness support is to strengthen and diversify the institutional setting for direct access and thereby enable Grenada to become a “Smart Small State” by setting the country on a pathway to directly access concessional loans, guarantees, private equity, etc. Through this increased ownership, the country will be empowered to implement its climate strategies at the speed of science as well as at the level of community and use the right financial instruments for the country’s rapid transition.

Total requested USD 180,560 Anticipated duration 18 months amount and currency Readiness and Preparatory Support Page 5 of 38

☒ Yes ☐ No - Initial support on climate funding and access through the CF-Ready Caribbean project (funded by the German Ministry for Economic Cooperation and Development (BMZ); completed) - 3G –Getting Grenada GCF Ready: Country capacity for engagement with GCF and country Has the country received or is expecting to programming process (completed September receive other Readiness and Preparatory 2019) Support funding allocations (including - Climate Resilient Cities (in implementation) adaptation planning) from GCF or other - Mobilizing Finance with Grenada’s Private Sector donors? (draft) - Grenada’s NDA has provided USD100,000 of its 2019 readiness allocation in support of pre- accreditation capacity building for the OECS Commission; proposal under revision. Enhancing Direct Access (EDA) in the Caribbean (in implementation, together with Antigua & Barbuda and Dominica)

2. BACKGROUND

Building upon its already established climate processes, the Government of Grenada has identified needs to strengthen the country’s direct access climate funding through its national structures. Thereby, it seeks to conduct a gap assessment of the Ministry of Finance and the Ministry of Climate Resilience as potential DAE and to strengthen the ongoing capacity development of the GDB.

Within the climate finance readiness programme for the Caribbean financed by the German Government and implemented by GIZ, a scoping assessment of Grenada’s preparedness to access climate financing was conducted in 2015. The Cabinet approved the recommendation of the DAE Gap Assessment in September 2016. Based on this decision and the findings of the gap analysis, a capacity building program was planned to fill the identified gaps and support the accreditation process of the GDB resulting in the development of new policies needed for successful accreditation, the opening and populating of the GDB’s Online Accreditation System (OAS) account, submission of the accreditation documents to the GCF in August 2018, which was answered favorably but with conditions that require further capacity building for the GDB.

The Climate Resilient Water Sector in Grenada (G-CREWS) project, which was approved at the 19th GCF Board meeting held in February 2018, includes a component to be managed by the GDB as an Executing Entity (EE). This will help the GDB to gain experience in GCF projects and establish a stronger track record in implementing climate grant funds.

Furthermore, the EDA project in the Caribbean, implemented by the Department of Environment of Antigua and Barbuda, requires Grenada to strengthen its institutional climate structures, such as the capability to manage climate funds for national and communal processes in compliance with the GCF. The GDB is already on the track to fulfill the requirements as a fully operational DAE.

This request for additional readiness support is targeted to enhance Grenada’s outputs under the EDA project by preparing the Ministry of Finance for accreditation. This decision by the Government of Grenada is aimed at Readiness and Preparatory Support Page 6 of 38

strengthening and diversifying the institutional setting that can directly access concessional loans, guarantees, private equity, etc. reaching climate finance actors at the national to micro-levels, public, private and community levels thereby enabling Grenada to reach its stated goals of becoming a Smart Small State. Through increased ownership, the country will be empowered to implement its climate strategies autonomously, while having all the necessary safeguards for transparent allocation of resources with systems for rigorous fund management in place.

GRENADA’S READINESS BASELINE

Over the years, Grenada has benefited from previous readiness support and is also receiving ongoing regional readiness initiatives that are helping the country to deliver on proposed outcomes:

• 3G–Getting Grenada GCF Ready: Country Capacity for Engagement with GCF and Country Programming Process. Support was received under the Climate Finance-Ready Caribbean Project funded by the German Ministry for Economic Cooperation and Development (BMZ). This project focused on helping Grenada access international funds and providing guidance on how to effectively use climate finance. The project, which ended in September 2019 also addressed strengthening the institutional capacities of Grenada’s NDA. • Strengthening Institutional and Implementation Capacity for Delivery of Climate Change Investment Projects. The Caribbean Community Climate Change Centre (CCCCC) is serving as the Delivery Partner for this project. The project seeks to complement the readiness and preparatory funding support already received by Grenada from the GCF and to address readiness gaps related to Readiness and Preparatory Support Page 7 of 38

technical and institutional capacity at the national level. The project will enable Grenada to fulfill its climate change (adaptation and mitigation) goals and commitments as outlined in its Intended National Contributions (INDC) 2015 and its National Adaptation Plan (NAP) by developing its project pipeline in line with its country programme. Furthermore, this program will strategically position the Department of Economic & Technical Cooperation (DETC) and Grenada’s National Designated Authority (NDA) to identify, access, mobilize and manage climate financing in line with Grenada’s GCF’s country programme geared towards building the country’s climate resilience. Under this project, capacity building initiatives focused on the NDA staff and the Ministry of Climate Resilience. • Grenada’s NDA has provided USD100,000 in support of pre-accreditation capacity building for the OECS Commission; proposal under revision. • Enhancing Direct Access (EDA) in the Caribbean Project is in implementation together with Antigua and Barbuda and Dominica. • Support is currently being provided through the Climate Resilient Cities with New York University (NYU) as the Delivery Partner. The aim of this project is to enable Grenada to become the first smart small state. This project focuses on building the resilience of urban areas. Under this initiative, proposals for nine specific projects will be developed that will help protect the island from the impact of climate change, as well as help Grenada to meet greenhouse gas reduction targets, and stimulate economic growth. • Mobilizing Finance with Grenada’s Private Sector currently in concept phase • Grenada has also endorsed three regional programmes: 1. Caribbean Disaster Emergency Management Agency (CDEMA) Early Warning Systems (EWS) Regional Readiness Project 2. Enhancing Caribbean Civil Society’s Access and Readiness for Climate Finance submitted by Jamaica, in collaboration with the Caribbean Natural Resources Institute (CANARI). The Government of Grenada committed to support CANARI as the Delivery Partner by allocating USD $100,000)

Under this new Readiness with the Department of Environment in Antigua and Barbuda serving as the Delivery Partner focus will be placed on enhancing direct access and building on previous readiness initiatives and the accreditation aspirations, particularly for the for the Accountant General Department within the Ministry of Finance. The NDA staff who received previous training will be able to lend support to this project.

Beneficiaries of this support will include staff within the MoF and the Ministry of Climate Resilience, who will receive capacity building on GCF oversight functions, climate finance and project management functions. In addition, government ministries will benefit from the PSIP projects. Vulnerable communities located in the vicinity of degraded ecosystems and government infrastructure will indirectly benefit from the PSIP projects.

Direct beneficiaries of GDB will include staff, youth and vulnerable groups. Indirectly, owners of private homes will benefit from the revolving loan schemes mostly of which are single parent households headed mostly by females and small and medium-sized businesses also stand to benefit.

GDB received previous readiness support as part of the regional climate change project with GIZ, which has now closed. There are still outstanding activities to assist the GDB in receiving accreditation. These include developing a criteria for selection of beneficiaries to access on-granting and lending instruments, strengthening institutional capacity and safeguards and monitoring and evaluation mechanism (M&E), which is being sought for support under this Readiness project.

LAWS, REGULATIONS, POLICIES & INTERNATIONAL AGREEMENTS

As part of the Environmental Management Programme for the St. George’s Declaration, UNFCCC, CBD and other important multilateral environmental agreements (MEAs) each Party is required to prepare policy documents on how and when they plan to implement actions related to their commitments and or contributions. These plans are time bound and require a robust reporting and monitoring system. Documents for climate change includes the National Communications (every 4 years), the INDC (in 2015 and NDC in 2020), National Biodiversity Strategy and Action Plan (NBSAP), among others. These reports are the definitive source of actions from which programmes and projects are developed for financing.

Grenada also has in place the following laws and policies to adapt to the projected impacts of climate change. The Government signed on to the Paris Climate Change Agreement in September of 2015 and ratified the agreement in April of 2016. The National Climate Change Policy (2017-2021), together with the National Adaption Plan (NAP) and the National Determined Contribution (NDC), serves to link various efforts such as the National Sustainable Development Plan 2030, the National Growth and Poverty Reduction Strategy, Readiness and Preparatory Support Page 8 of 38

and the National Environment Management Strategy and Action Plan, amongst others, to: 1) provide a framework for climate mainstreaming, 2) establish implementation and resource mobilization mechanisms, and 3) prioritize activities from already existing sectoral and local plans with climate change adaptation aspects. It further strives to improve availability of sector-specific climate vulnerability data.

The draft National Climate Change Adaptation Plan (NAP) (2017-2021) is expected to be submitted to Cabinet for approval during the first half of 2018. It will be one of Grenada’s main mechanisms for accessing external climate finance and play a crucial role as a vehicle for strategic investments in the country’s climate- resilient development. Furthermore, the NAP will provide the framework for further mainstreaming of climate change considerations into planning and budgetary processes to “climate-proof” public and private investments, which will ensure efficient spending of scarce financial resources. The NAP will be the overall governance structure to coordinate and guide external financing and donor contributions on climate change. The National Climate Change Committee (NCCC) which is a Cabinet appointed committee to provide policy direction on climate change issues will be the forum to validate and access international contributions that link to climate adaptation. The EDA project will build the capacity of the National Climate Change Committee and support the operationalization of Grenada’s Sustainable Development Trust Fund.

In the National Determined Contribution (NDC) submitted in 2015, Grenada commits to reducing its greenhouse gas emissions by 30% below 2010 levels by 2025, with an indicative reduction of 40% of 2010 by 2030. The NDC also addresses adaptation actions to build resilience to climate change. Grenada has realized the need to take an integrated approach to adaptation by linking local activities with national policies and sector specific experiences. Mainstreaming climate change adaptation activities into national development planning is a major focus and several actions have been identified to support resilience building at all levels.

Other laws and policies that are indicative of the significant political and community support in Grenada for climate change include: • Revised Building Code for Grenada • Draft National Land Use Policy • National Disaster Plan 2011 • The National Agriculture Plan • Blue Growth Coastal Master Plan, 2016 • Caribbean Regional Strategic Programme for Climate Resilience • Sustainable Development Goals (SDGs)

FINANCING STRATEGY FOR CLIMATE CHANGE

The Eastern Caribbean including Grenada is prone to hurricanes, droughts and other natural disasters. These disasters are predicted to become more frequent and more intense as a result of climate change. One of the major consequences of the impacts of climate change is the impact of the global financial sector and its ability to make investments worldwide based on the perceived and real risks to these investments. The local financial sector which includes commercial banking, microfinancing entities, community financing programs (in Antigua, this is called “box hand”) and insurance may face severe difficulty due to increased real and perceived risk in investing within the region. This is true in all SIDS and especially true of Grenada which relies on its natural resources and its people as the major input into its economy. The country has limited debt space to borrow to recover after an extreme weather event or even to continue to borrow for investments. Further, the Grenadian currency Eastern Caribbean Dollars (ECD) is tied to that of eight (8) other countries and territories. This means that extreme weather events do not have to directly affect Grenada for it to have an impact on the economy of the country.

As the country works towards solving access to appropriate financing for economic growth, financing for the climate is a central issue that commands the attention of local stakeholders, including the private and community sectors. It is widely agreed that there has been an increase in the amount of funding available for financing environmental projects, yet Grenada struggles to access these in the scale, instruments and diversity of stakeholders that is needed. This Readiness seeks to assist the country to move towards diversifying its access to financing to meet the needs of the government, private sector and NGOs.

GRENADA’S FINANCIAL ARCHITECTURE AS A STRATEGIC APPROACH

Grenada’s climate financial architecture can still benefit from an additional policy and legal approach to set the stage for funds to flow down to the base of the pyramid as a force of social and environmental transformational change. Some additional principles may include:

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• The international and national goals may be to leverage scarce international financing to assist in the channeling of government and private sector investment flows towards decoupling economic growth from all types environmental damage including climate change; • The greening of the private and community financial sectors; • Build resilience in providing the teams that work together for the implementation of the NAPS and NDCs; • Build a coordinated and common approach to fundraising at the national and international level; • Provide regional support, lessons learnt with peer to peer exchanges; • Build capacity efficiently and effectively and introducing the correct amount of redundancy in the system thus mitigating the ability of Grenada as a small island state to keep the workflow going when someone leaves, or simply have to travel for work; and • Build the capacity of all stakeholders to be a functional partner preventing environmental degradation and providing them with the ability recover when there is a disaster with little outside support.

To do this, Grenada plans to continue to engage stakeholders in a participatory way. Currently, stakeholders want more involvement in the climate transformational change. Stakeholders such as NGOs and the private sector can enhance implementation and environmental, social and gender safeguards if invited to be represented on technical and oversight committees as well as to make recommendations to the Government on programme priorities. The government plans to focus on fundraising to compliment the country’s developmental programme to ensure that national, regional and global economic growth is increasingly low carbon and climate resilient. Stakeholders in Grenada can greatly assist with this goal.

NGOs and the private sector were anxious to be part of the solution for environmental and climate action and are ready to access whatever funding that comes their way even concessional loans. NGOs have indicated a willingness to borrow at concessional rates to ensure that their assets are climate resilient. The potential for local partnerships is unlimited and if fully accessed will reduce the need for significant capacity building within the government itself and build broad based support for climate action in Grenada.

Research has indicated the following is key to accessing and attracting international and local funding for climate change and the environment:

• Demand for projects: distinction must be made on what is a climate project and what is development. The Climate Funds are only providing financing for incremental cost only. • Developing appropriate institutional arrangements: to allow the channel of funds in an efficient, open and transparent manner to all sectors and stakeholders; • The policy and legal framework: The policy environment can create demand and reward “green behavior”. This is particularly important in the mitigation sectors of electricity, transportation, waste, and agriculture sectors as well as associated sectors such as banking, and insurance. • The role of partnerships: Grenada has invested in partnerships with international and regional agencies such as UNDP, GIZ and The Nature Conservancy as well as the OECS Commission and the Department of the Environment in Antigua and Barbuda (EDA Project) to assist the country in accessing financing. This has been the main reason for the increase access to climate finance.

The draft NAPs for Grenada has indicated over USD 200 million in financing is needed over the next 5 – 10 years for the initial adaptation requirements identified in the document. The World Bank has indicated that Grenada’s NDC will cost USD 0.16 billion for implementation most of these are for mitigation projects. While the policy statements identified projects in mitigation, adaptation, capacity building and technology transfer. The institutional arrangements are the traditional structure of the Ministry of Finance with the advent of the Grenada Sustainable Development Trust and the increase interest and capacity of the Grenadian Development Bank. The use of Direct Access Entities to assist Grenada to access international funding as an institutional option for the channeling of funds has been a part of the Grenada’s approach for some years. The advent of the EDA project as well as GCF Readiness positions Grenada direct access.

It is expected that these climate change cost estimates are conservative and did not adequately take into consideration the financing required by the private sector and NGOs can access financing to meet the objectives of the Paris Agreement. The total cost of climate change actions outlined within the NAPS and the INDC is conservatively estimated at about 40M USD per annum in projects and programmes for all sectors and stakeholders by 2030. Over the last 5 years, the average funding access for climate is not even 10% per annum of this amount. This means that the cost of climate and environmental action has been borne by the government, NGOs and the private sector.

Outputs of the Readiness includes:

• A country programme of policy and project priorities for Grenada; Readiness and Preparatory Support Page 10 of 38

• Work Programme for the Grenada Development Bank; • Capacity assessment for implementation of Work Programme; • Gender assessment of the Country Work Programme; • Gap assessment for entities under consideration for accreditation; • Training plan and over 50 persons trained to understand the GCF and implementation of the Work Programme for accreditation;

CAPACITY BASELINE OF THE GRENADA DEVELOPMENT BANK AND THE MINISTRY OF FINANCE

The key barriers to mainstreaming adaptation in Grenada that also are relevant in the region are:

1. lack of institutional capacity in key departments and executing entities to sustain long-term adaptation impact, and 2. lack of adequate and predictable finance for adaptation and resilience in micro, small and medium enterprises (MSMEs) and the public sector.

Most projects, including regional projects, tend to establish project-specific units and project-specific oversight committees. This arrangement is taxing on human resources in small island developing states, where Government agency units can consist of just 3-4 staff. In addition, creating parallel implementation and oversight processes duplicates existing arrangements.

To overcome the challenge of lack of institutional capacity, the approach by the Department of Environment in Antigua and Barbuda is to structure to project implementation using existing institutions and decision-making processes and building the capacity of its Project Management Unit (PMU). The OECS Commission will provide GCF oversight and policy documents (operational manual, technical and procurement) etc.) to support the accreditation process within the OECS region. Its Monitoring and Evaluation Unit (M&E) will also provide external M&E services to independently evaluate project results, and this will provide another layer of accountability to deliver timely results.

Grenada Development Bank

The GDB is charged with the responsibility of bringing about the economic development of the country. The bank offers financial and technical assistance in the areas of agriculture, fisheries, tourism, industry, housing, small business development and human resource development. The institution has been identified as the preferred financial institution for the implementation of a mechanism designed to provide revolving loans to the private sector for climate change adaptation. To support the revolving loan program, a Complaints and Redress Mechanism will be designed as a key activity under this Readiness Project that suits the bank’s structure, functions and that is in line with international best practice. This mechanism is expected to respond to complaints filed by individuals affected by the project. It will also have established policies and procedures for its responses.

The institution has a track record of administering donor funds and channelling them to the private sector. The Bank has also been nominated for accreditation to the Green Climate Fund (GCF) by Grenada’s NDA, and the EDA Project is designed to support accreditation of the NIE while the project will benefit from its experience and track record. The GDB has significant capacity to provide revolving funds but has limited capacity for on- granting. The bank has the legal and institutional framework to provide grants, loans and equity as well as other financial instruments. However, many of the grant programmes will have high operational and other costs that will limit the Bank’s involvement. The Bank has handled high risk loans and grants and have been able to reduce default rates significantly. This accomplishment places the bank in a good position to partner with the Community Climate Change Adaptation Fund (CCCAF).

The GDB is a great place to program the revolving component of the fund and unlike the Development Bank in Antigua and Barbuda, the GDB is ready to work with the GCF and even to program 2% loans. This is an important partner for the CCCAF, but it should not be the home of the fund. The Fund requires the segregation of duties and this will increase the operational cost of the bank.

The GDB has significant capacity to program revolving funds, but no actual study was shown to determine if the entity even wanted to do on-granting and if it has the capacity or can tolerate the financial risks that the GCF ESS safeguards will bring. Certainly, the transaction cost related to grants and a budget for this was not determined. The bank recognized that the citing of a community micro fund within a bank exposes the bank to significant risk with high transaction cost than if it were cited within a Government agency for example. The institution further noted that the Funds do not generate income to the Bank, and this can affect its positive indicators of success it has managed to achieve. The Bank indicated that as a development bank it has been working hard to meet key industry benchmarks and would like to assess any opportunity carefully, so that it can Readiness and Preparatory Support Page 11 of 38

focus on its bread and butter of lending and blending. It is, however, very happy to consider any options within this overall context. The Bank indicated that it is extremely interested in performing the treasury function of the EDA and other projects as well as the CCCAF.

Ministry of Finance, Planning, Economic Development and Physical Development

The Ministry of Finance has been identified in a pre-feasibility study as having the capacity to serve as an Executing Entity to implement the EDA Project in Grenada. The government entity will also be providing day-to- day oversight for the implementation of the EDA project in Grenada and the direct responsibility to managing the public sector grant programme of Output 2.

The government is seeking to increase its capacity in areas of climate finance by developing its financial architecture to include establishing of climate fund mechanisms and seeking accreditation to international funds. This approach provides financing options, such as, loans, grants, equity and other instruments to address climate vulnerability. The government’s approach to grant financing, as much as possible, is used to leverage development financing.

This has been the rationale for the centralization of the funding for the environment within the Ministry of Finance and to use these instruments to leverage infrastructure projects. This could reduce access to grant funding by the Ministry of Finance to leverage overall national developmental activity.

The Ministry of Finance has limited staff and would need its capacity built to better manage larger projects. Based on the reports from the PPCR experience, the World Bank provided a significant amount of capacity assistance to the Ministry. This came at a higher cost than if the Ministry built its own capacity.

Ministry of Climate Resilience the Environment, Forestry, Fisheries, Disaster Management and Information.

In an effort to prioritize climate resilient planning and investment at the national level, the Government of Grenada has created the Ministry of Climate Resilience, the Environment, Forestry, Fisheries, Disaster Management and Information.

The new ministry was created in 2018 and has the mandate of climate sensitizing Grenada’s entire Public Sector Investment Programme (PSIP). The Division of Environment sits within this new Ministry of Climate Resilience and is a key stakeholder in the development and implementation of the country’s climate change policies, plans, programmes and projects.

ESS AND GENDER IN GRENADA

The state of Grenada is a tri-island nation consisting of Grenada, Carriacou and Petite Martinique. It is located in the Caribbean and one of the smallest states in the world. Overall, the islands have an area of 344 square kilometers (133 square miles), with the island of Grenada being 311 square kilometres (121 square miles). According to the latest census of 2011 realised by the Central Statistical Office of Grenada, the Grenada’s population amounted to 105,539, out of them 52,531 were females (49.77%) and 53,008 were males (50,23%). According to the World Bank, the total population amounted to 106,825 in 2015 without specifying sex- disaggregated data. The majority of the country’s population lives on the biggest island Grenada and about 5.000 people in Carriacou (around 51% of whom are males) and 500 people on Petite Martinique.26 According to the Human Development Index (HDI) of 2016, Grenada’s HDI values 0.754. With this score, Grenada ranks 79 (together with Brazil) out of 188 countries and territories and is, therefore, placed in the high human development category. The HDI does not provide data on the Gender Development Index (GDI) and the Gender Inequality Index (GII) for Grenada. In fact, these indexes have never been measured for Grenada due to a lack of data provided by the Grenadian government.

The Gender and Social Inclusion Action Plan (GAP) done as part of a Country Gender Assessment (CGA) Synthesis that was prepared for the Caribbean Development Bank identified a low participation of women in the construction services sector and opportunities to increase gender impact of the project via services related to delivery of climate change information, adaptation and resilience services, e.g. EIAs, construction, project management, procurement, M&E, etc. Recommended activities in the GAP include partnering with entrepreneurship agencies and/or universities to facilitate continuous training in entrepreneurship for women, persons with disabilities (PWDs) and other vulnerable groups as it relates to climate change adaptation and resilience services.

This grant will contribute to the achievement of Sustainable Development Goals in the country:

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SDG 1 End poverty in all its forms everywhere SDG 3 Ensure healthy lives and promote well-being for all at all ages SDG 5 Achieve gender equality and empower all women and girls

In summary, the accreditation of direct access entities in Grenada will provide a more efficient approach to include the participation of government, private sector and civil society organisations in the transformational process. This is a good sign for Grenada and places the country in a good position to channel funding from international sources directly to the beneficiaries and communities.

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1. LOGICAL FRAMEWORK AND IMPLEMENTATION SCHEDULE

2 Activities Anticipated duration: Specify duration in multiples of six months (brief 1 Outcomes Baseline Targets description Monthly implementation plan of activities3 and deliverables) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Activity 1.1.1: Establish strategic agreements with the OECS Commission and St. George’s University in Grenada, relevant entities and other DAEs in the region to sustain training, project development and monitoring and Outcome 1: 1 NDA is in the evaluation support Institutional process of Sub-Outcome (for example via capacity and establishing a 1.1: NDA inter- 0 NDA does framework coordination coordination institutional not have agreements). This mechanisms mechanism, coordination established will support further x in place to meetings are mechanism coordination development and govern and conducted but mechanism implementation of coordinate not regularly the Country climate action Programme. (Such and finance agreements build on the approach used in the EDA with the OECS Commission for monitoring and evaluation. This Readiness can assist in formalizing this approach with the OECS Commission as well as entities for

1 For baselines rated at 1 or 2, please shortly elaborate on current baselines on which the proposed activities can be built on, processes that are in place that the current Readiness Proposal can strengthen, or any gaps that the proposed activities would fill in. If more space is needed, please elaborate this in Section 2. 2 Please include tangible and specific deliverables for each activity proposed, and the timeframe (month number) in which it will be delivered to GCF. Please note that during implementation all deliverables should be included within the implementation reports for GCF consideration. 3 If the duration of the proposal is longer than 24 months, please change the monthly columns to indicate 2 or 3 months each (e.g. change month “1” to month “1-2’ or “1-3”). Readiness and Preparatory Support Page 14 of 38 project development).

Deliverable 1.1.1: Framework agreements established with the OECS Commission and St. George’s University in Grenada, relevant entities and other DAEs in the region

Activity 1.1.2: Review of GIZ Readiness NDA capacity building support from previous readiness grant and identified capacity needs in climate relevant ministries and other agencies.

x Deliverable 1.1.2.: Capacity building lessons learned and broad- based capacity building needs and personnel identified within climate relevant ministries and agencies.

Activity 1.1.3: Develop Training of Trainers programme and Training Plan in collaboration with the OECS Commission and x St. George’s University in Grenada and other relevant entities to make sustainable a climate expert pool for short-term and long-term Readiness and Preparatory Support Page 15 of 38 consultancies. The NDA and training teams will work with these institutions to continuously build capacity over time and at the pace and capacity of the entities in collaboration with the EDA’s Component 1.

Deliverable 1.1.3: Training of Trainers Programme designed and Training Plan developed for the NDA in consultation with OECS Commission and St. George’s University and other relevant entities

Activity 1.1.4: Deliver training on procurement, financial management, project development, planning and monitoring processes, GCF policies and on ESS and social x x x x x x safeguards in six two-day workshops

Deliverable 1.1.4: Trained cohort of at least 6 local climate experts (of which at least 3 must be female and at least 3 must be under the age Readiness and Preparatory Support Page 16 of 38

of 35) within the Ministry of Finance and Ministry of Climate Resilience

Sub-outcome 1 Some 2 Stakeholders Activity 2.3.1: 2.3. stakeholders engaged in Develop a Stakeholder are being consultative communication engagement consulted processes strategy, action consultative (government plan, and process agencies, monitoring plan on private sector, the importance associations, and use of climate civil society, financing in academia and building resilience others) at the community and business level, targeting the financial, communities and the private sectors.

Outcome 2: Deliverable 2.3.1: Country Communication x programming strategy, action Process plan and monitoring plan developed on the availability of climate financing and climate financing institutions, the use of climate financing in homes and business (RE systems, climate- resilient materials), and workshops to the private sector and communities.

Readiness and Preparatory Support Page 17 of 38

0 No 2 The most Activity 2.5.1: appropriate appropriate Enhance climate climate climate rationale for three technologies technology finalized Concept have been solutions have Notes and identified been identified strengthen and and prioritized financial prioritized in accordance mechanisms in Sub-Outcome with national order to support 2.5: strategies and the development of Appropriate plans, based on concrete funding Climate a proposals Technology comprehensive solutions analysis of Deliverable 2.5.1: identified and technology Three finalized prioritized in options to Concept Notes x accordance address specific enhanced with with national climate impacts strong climate strategies and rationale and in plans for alignment with climate Country adaptation and Programme and mitigation financial

mechanisms strengthened for the building, energy and transport sectors

Activity 3.1.1. Conduct a pre- Sub-Outcome accreditation gap 3.1: Direct assessment and Access 2 Candidate prepare 1 Process Entities’ national entities personalized for Nomination: for accreditation action plans to identifying Both Ministries identified and address identified the direct assessed as nominated for gaps for the access potential DAE accreditation. Ministry of Finance Outcome 3: entities with action plan and the Ministry of Direct Access started, x for the Institutional Climate to Climate however, no consideration assessments Resilience. Finance entities have of the Cabinet. report and been action plan for nominated 4 accreditation for Deliverable 3.1.1. the approval of Pre-accreditation

the Cabinet gap assessment reports and action plans for the Ministry of Finance and the Ministry of

4 Partial assessment conducted by GIZ study. Since then the Government has restructured the ministry. A new assessment is therefore required. The Ministry of Climate Resilience is a new ministry formed in 2018. It has not been assessed. Readiness and Preparatory Support Page 18 of 38

Climate Resilience. Accreditation nomination letters issued by the NDA.

Activity 3.2.1: Develop Complaints and Redress Mechanism and guidelines for the GDB as the current nominated entity in the accreditation pipeline to enable

1 Nominated 2 Nominated it to report and Sub-Outcome DAEs have DAE application respond to 3.2: submitted an for accreditation complaints, as well Accreditation of x application submitted to the as policies for Direct Access for GCF and environmental and Entities accreditation approved social safeguards.

Deliverable 3.2.1: Complaints and Redress Mechanism, and guidelines on environmental and social safeguards developed for GDB.

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Activity 3.2.2: Deliver training to identified staff/local consultants to tailor operational manuals to ensure compliance with the AMA, FAA and other GCF requirements to x meet accreditation

Deliverable 3.2.2: Workshop materials, training plan, training report, and draft manuals

Activity 3.2.3: Consultant develops the workshop and delivers training to 25 people from various sectors and levels of the economy (of which 50 percent are women) in climate finance.

Deliverable 3.2.3: x Workshop developed; At least 25 people from various sectors and levels of the economy (of which 50 percent are women) are trained in climate finance and are actively involved in follow up processes

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1. ADDITIONAL INFORMATION (ONLY FOR ADAPTATION PLANNING SUPPORT)

This section is only to be completed when seeking support for formulation of national adaptation plans and/or other adaptation planning processes. Please see Part 3 Section 4 in the Readiness Guidebook.

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2. BUDGET, PROCUREMENT, IMPLEMENTATION, AND DISBURSEMENT

5.1 Budget plan Please complete the Budget Plan in Excel using the template available in the Library page of the GCF website.

5.2 Procurement plan Please complete the Procurement Plan in Excel using the template available in the Library page of the GCF website. For goods, services, and consultancies to be procured, please list the items, descriptions in relation to the activities in section 2, estimated cost, procurement method, relevant threshold, and the estimated dates. Please include the procurement plan for at least the first tranche of disbursement requested below and provide a full procurement plan for the entire duration of the implementation period if available at this stage.

5.3 Disbursement schedule Please specify the proposed schedule for requesting disbursements from the GCF. For periodicity, specify whether it’s quarterly, bi-annually or annually only.

Please choose one option among the two below and delete the one that does not apply to you. Please fill in information under brackets:

☐ Readiness Proposal that falls within a Framework Agreement with the GCF Disbursements will be made in accordance to [Clause xx] “Disbursement of Grants” and [Clause xx] “Use of Grant Proceeds by the Delivery Partner” of the Framework Readiness and Preparatory Support Grant Agreement entered into between GCF and, on Click or tap to enter a date. The Delivery Partner is entitled to submit [number] request(s) for disbursement each year.

☒ Readiness Proposal that requires a bilateral Grant Agreement to be signed with the GCF (please add more disbursement as needed) • The first disbursement amounting USD 100,000 will be transferred upon approval of the Readiness Request and effectiveness of the Grant Agreement; • The second disbursement amounting USD 50,000 will be transferred upon submission of two progress reports [1 after 6 months of project implementation and 1 after 12 months of project implementation] [and audited financial report5] , in form and substance acceptable to the Fund, [including an audited expenditure statement]; and • The third disbursement amounting USD 30,560 will be made upon submission of a completion report and financial report, in form and substance acceptable to the Fund, including an audited expenditure statement.

Please include an indicative disbursement table showing the expected amounts to be requested and keep to multiples of USD 5,000.

5 The first audited financial report is a condition for the second disbursement and is expected to be submitted with the second IPR. Readiness and Preparatory Support Page 22 of 38

3. IMPLEMENTATION ARRANGEMENTS AND OTHER INFORMATION

6.1 Implementation map Please describe how funds will be managed by the NDA and/or the Readiness Delivery Partner.

NATIONAL DESIGNATED AUTHORITY

The Department for Economic and Technical Cooperation (DETC) of the Ministry of Finance, Energy, Economic Development, Planning & Trade (MoFE) is Grenada’s National Designated Authority (NDA) for the GCF. The DETC represents Grenada as the national beneficiary of this GCF-funded project and ensures alignment of the project implementation with national policy objectives and goals. The NDA’s role will include country coordination among key stakeholders and ensure strong country ownership for the project.

The DETC is located within the Ministry of Finance and Energy with appropriate procurement and fiduciary handling capacity gained through several years of experience in managing World Bank and other donor funded projects. This arrangement will allow for utilization of the existing resources, assuring consistency of approaches across projects, and achieving economies of scale. Strengthened by its experience working with the World Bank, the DETC will establish a sound financial management system to produce accurate and timely reports.

The Delivery Partner for this Readiness Proposal is the Department of Environment (DOE) in the Ministry of Health, Wellness and The Environment in Antigua and Barbuda, which will be responsible for the implementation of the grant. The DOE is a Direct Access Accredited Entity to the Green Climate Fund, and it is the AE implementing the EDA project (GCF 061).

The Department of Environment has a Project Management Unit (PMU) to manage day-to-day project activities. The PMU of the DOE is designed to achieve efficiency and coordination in the management of projects from a variety of contributors, including government co-financing of projects. The DOE’s plans to use the EDA and the PMU to assist the DOE with the implementation of this Readiness.

The PMU in the Department of Environment promotes effective coordination when there are project activities that are inter-dependent for execution, such as in this case co-financing or in-kind support for project development. Antigua and Barbuda is a small island developing state (SIDS) and technical capacity, staff turnover and institutional memory loss/brain drain is one of the core risks to successful project implementation. Further, the PMU seeks to allow for all persons to participate in the implementation of the project to include persons with disabilities who may not be able to have the full capacity to work. The PMU promotes a team approach to meeting targets while promoting social and financial inclusion.

The PMU consists of regional and national project coordinators and consultants. It is structured to draw on expertise from the public sector (through civil servant secondment) and the private sector (contracted long- or short-term consultants) in accordance with its Operational and HR procedures. The structure and operations of the PMU is a risk mitigation measure to institutional memory loss/brain drain as well as ensure project outcomes while meeting legal and social benefits such as maternity, sick leave etc. without losing project momentum. As part of this Readiness delivery, the DOE will have staff hired within the proposed accredited entity in Grenada. The PMU ensure that it provides quality outcomes by presenting its outputs, work plans and outcomes to the Technical Advisory Committee (TAC), independent consultants and the Project Management Committee (PMC).

Project Management Committee (PMC) – Is a Cabinet appointed committee which consists of the Permanent Secretary, Deputy Permanent Secretary of the Ministry responsible for the environment and a representative of the Budget Office of the Ministry of Finance. The NDA to the GCF also sits on the PMC. The signatories to the accounts include the PS of Agriculture, Deputy PS of Agriculture and the PS responsible for UNDP. The PMC holds monthly meetings to take decisions on budget, procurement, audit reports etc. Members are normally members of the Civil service. The Cabinet may appoint any member it would like, Readiness and Preparatory Support Page 23 of 38

including NGO members, and the Chair of the National Steering Committees in Dominica and Grenada respectively will be invited to attend (virtually) PMC meetings when sub-regional EDA activities are being discussed. The roles and responsibilities of the PMC are:

(a) To approve a selection criterion and ensure that there is policy cohesion between project decisions, activities and the work of the central government. Project activities must conform to any central government financial and general policies; (b) To make final procurement decisions for the project being executed by or on behalf of the Department; (c) To act as the Audit Committee for the projects and the Department. A subcommittee may be appointed to perform this function; (d) The committee is responsible for the procurement of the auditors for the projects and to ensure that the Government’s Audit Department completes the annual Audit of the department by March of the following year; (e) The committee will also ensure that the project activities adhere to financial and management legislation as well as the procurement and audit standards of the Accredited Entity and any other national legislation that is relevant to the function of the Executing Entity and its Work Programme and projects. (f) To ensure that the use of government technical officers as well as project staff is conducted within the labour laws of the country as well as any relevant policies or labour agreements.

Audit Committee – The Audit Committee is a subcommittee of the PMC and meets at least three times per year to consider financial matters as well as matters related to complaints.

Ethics Committee – A subcommittee of the PMC that oversees the DOE Complaints Mechanism.

The Department of Environment is the national focal point for the Rio MEAs, The Adaptation Fund, The GEF and the GCF. The DOE has programmed over 4 Readiness Projects with the GCF including a NAPS for Antigua and Barbuda and NAPS for Dominica. The DOE as the climate change focal point has a mandate to develop and implement projects and programmes that will achieve transformational impact. These projects are expected to meet the UNFCCC’s vision and development objectives for vulnerable small island states. The Department has coordinated the country’s Nationally Determined Contributions (NDC) goals, with an estimated implementation cost of USD 450 – 670 million for climate resilience (adaptation), and low-carbon development (mitigation) goals estimated at USD 350 – 500 million. The on-granting and on-lending financial mechanism of the DOE – the Sustainable Island Resource Framework Fund (SIRF Fund) – plays a key role in vertically programming climate finance directly to communities and the local private sector.

After approval of the Grant for Grenada, a notification letter will be sent by the GCF to the NDA. The start date for project implementation will be in accordance with the grant agreement to be entered into between the grant recipient and the GCF or UNOPS as agent for the GCF and from that date, the end date of implementation will be calculated taking into account the total duration of the project as presented in the approved proposal.

The diagram below illustrates the flow of funds from the GCF to the Accredited Entity and the AE will have direct contractual arrangements with service providers. For the flow of communication, the AE will work closely with Grenada with the OECS Commission and St. George’s University to deliver training to selected staff from the Grenadian public service and the GDB. Oversight for the Readiness project will be provided on two levels—from the AE, which will be providing guidance based on its current operational standards and to ensure compliance with GCF guidelines. The OECS Commission will also provide support for the development of oversight and operational procedures as well as the development of technical and policy manuals based on GCF standards. The AE working along with the NDA will execute project activities with the entities nominated for accreditation (the Ministry of Finance, Ministry of Climate Resilience and Grenada Development Bank) and the outputs produced will be for the benefit of the intended beneficiaries of these entities. Readiness and Preparatory Support Page 24 of 38

Figure 1. Flow of funds and flow of information and communication for the Grenada Readiness Project

Within this portfolio of priorities, the Department of Environment’s prior experience has focused on ecosystem- based adaptation in waterways, water resources, coastal protection, resilient (grid-interactive RE) energy systems, and climate-proofing of buildings. Notable activities include revising the building code for climate adaptation standards, establishing a Revolving Fund Programme for adaptation to provide affordable loans to low-income female-headed households, and equipping desalination reverse osmosis plants with off-grid renewable energy to achieve a low-carbon resilient water supply in Antigua and Barbuda.

6.2 Risks, monitoring and evaluation (M&E), and other relevant information

Please include a set of identified risks and mitigation actions for each, monitoring plan, and any other relevant information you wish to bring to the attention of the GCF Secretariat but has not been included in the sections above.

PROJECT RISKS AND MITIGATION MEASURES

The AE has identified risks that the project may likely be exposed to and an approach on how to manage these risks has been proposed. Over the life of the project, the AE as the implementing entity will be mainly responsible for monitoring and mitigating against identified risks and others that may arise. A set of measures have been designed and will be put in place with the objective of mitigating against these risks to an acceptable level.

The project will be managed in accordance with the Department of Environment’s Enterprise Risk Management Policy and Manual as well as further risks identified during the Readiness launch for Grenada. During implementation, focus will be placed on implementing risk mitigation measures that would help the project meet its outcomes. The approach to risk management for this project will include either treating, tolerating, transferring, terminating or offsetting any risks. Readiness and Preparatory Support Page 25 of 38

The following areas and actions have been defined as part of this approach:

• Availability of adequate and affordable consultancy and non-consulting service providers: This is a risk to the project that can result in low quality of technical outputs (secondary impacts including contract termination and mediation), delays due to long procurement processes, or budget overruns. Mitigation measures that will be implemented by the AE include building local capacity through international-local “mentoring” contract arrangements and entering into MOUs with technical partners (the DOE has signed a MOU with the OECS Commission and other service providers Grenada may consider the same approach for this Readiness project). • Scope creep: Stakeholder input, if unmanaged, can result in dilution of targeted project interventions due to scope creep. The AE with intervention from the NDA will manage scope creep by ensuring that adjustments to the project will be in alignment with its intended objectives as well as with the guidance of the Cabinet and CCCC . • High level political buy in: Without high level buy-in, the project pipeline will not achieve its transformational objectives. Mitigation measures that can be implemented by the NDA include maintaining the close alignment with Grenada’s Medium-Term Development Strategy in particular and managing bipartisan consultations in the event that the governing political party changes. If this occurs it may create a risk that would be driven by a possible change in priorities. The NDA will ensure that the project will be in accordance to national strategies and plans. • Delayed disbursements: The time between submission of reports/request for disbursement, and receipt of GCF disbursement, can range from 1 to 12 months. As a mitigation measure, the Delivery Partner will maintain close communication with the GCF’s project unit to reduce the time it takes to process disbursements. The AE will plan for this and proactively request disbursements in order to ensure that project activities continue uninterrupted. • Project management/fiduciary management capacity: The AE has a track record and experience with GCF standards and processes in project management, financial management, procurement, as well as monitoring and evaluation which reduces implementation risk. At the launch of this Readiness Project, the project implementation plan will be registered and tracked through a dashboard system that is presented to the AE’s Project Management Committee (PMC). The AE transitioned to a cloud- based project management software in 2018 and will do the same for Grenada. The tracking system will include project and fiduciary management requirements per the Readiness Grant Agreement and standard conditions, as well as the AE’s requirements, such as quarterly reports from the Internal Auditor Unit in Grenada.

Furthermore, Grenada has in place two institutions that monitor and regulate financial activities as it relates to anti-money laundering and terrorist financing. The Grenada Authority for the Regulation of Financial Institutions (GARFIN) is responsible for regulating and supervising the non-bank financial sector in Grenada with specific responsibility for the administration of an impressive slew of legislation and Financial Intelligence Unit (FIU) was formally established in January 2003, pursuant to the Financial Intelligence Unit Act, 2003.

Among the regulations that the project has to abide by include: • Anti-Money Laundering and Terrorist Financing) (Amendment) • Proceeds of Crime (Amendment) Act No. 10 of 2013 • Proceeds of Crime (Amendment) Act No. 33 of 2013 • Proceeds of Crime (Amendment) Act No. 11 of 2014 • Act No. 4 of 2015 Proceeds of Crime Amendment Act 1 • Terrorism (Amendment) Act No. 3 of 2015 • Act 19 of 2017 Proceeds of Crime Amendment Act 2 • Proceeds of Crime (Anti-Money Laundering and Terrorist Financing) (Amendment) Guidelines SRO No. 58 of 2014 • Proceeds of Crime (Anti-Money Laundering and Terrorist Financing) (Amendment) Regulations SRO No. 25 of 2013

All financial management risks will be reassessed during the project. Additional risks and mitigation measures are described in Annex 5. Readiness and Preparatory Support Page 26 of 38

ARRANGEMENTS FOR MONITORING, REPORTING AND EVALUATION The Readiness Proposal and its outputs will be tracked as part of the M&E Framework for the Enhanced Direct Access Project since the outputs are related. The M&E Unit of the Organization of Eastern Caribbean States (OECS) Commission will be contracted to provide monitoring and independent evaluation of project results (EDA Sub-component 1.4 Monitoring, evaluation, reporting and promoting learning). Information generated by the OECS M&E Unit will promote accountability and maximize learning opportunities for the sub- region. The reporting requirements and frequency is provided in Annex 4.

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ANNEX 1: BUDGET

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ANNEX 2: PROCUREMENT PLAN

5.2 Procurement Plan For goods, services, and consultancies to be procured, please list the items, descriptions in relation to the activities in Section 3, estimated cost, procurement method, relevant threshold, and the estimated dates. Please include the procurement plan for at least the first tranche of disbursement requested below and provide a full procurement plan for the entire duration of the implementation period if available at this stage.

Thresholds (Min-Max monetary value Projected Estimated Estimated Item Item Description Procurement Method for which indicated Contracting Cost (US$) Start Date procurement method must Date be used) Goods and Non-Consulting Services Catering, stationary, Workshop/Training 13,200.00 Competitive – RFQ - 3 Quotations less than $20,000 Month 5 Month 6 rapporteur Professional services Professional Services for climate rationale 21,000.00 Competitive - ITB $20,000 - $500,000 Month 1 Month 3 – Companies/Firm strengthening Catering, stationary, Workshop/Training 1,350.00 Competitive – RFQ - 3 Quotations less than $20,000 Month 12 Month 13 rapporteur Catering, stationary, Workshop/Training 5,490.00 Competitive – RFQ - 3 Quotations less than $20,000 Month 4 Month 5 rapporteur Professional Services Audit Firm 6,000.00 Price Verification - Non-competitive less than $10,000 Month 11 Month 12 – Companies/Firm

$ Sub-Total (US$) 47,040.00

Consultancy Services Consultant - Individual Local consultant 5,760.00 Competitive – RFP - 3 Bids/Proposals less than $20,000 Month 0 Month 1 - Local Training and capacity Consultant - Individual building needs 9,200.00 Competitive – RFP - 3 Bids/Proposals less than $20,000 Month 1 Month 3 - Local specialist Local consultant to Consultant - Individual develop training of 16,100.00 Competitive – RFP - 3 Bids/Proposals less than $20,000 Month 1 Month 3 - Local trainers programme Readiness and Preparatory Support Page 29 of 38

Consultant - Individual Communications 14,400.00 Request for Proposal (RFP) $20,000 - $500,000 Month 1 Month 4 - Local Specialist Consultant to conduct Consultant - Individual capacity assessment 18,500.00 Competitive – RFP - 3 Bids/Proposals less than $20,000 Month 0 Month 1 - Local and action plans

Local consultant for Consultant - Individual development of 13,200.00 Competitive – RFP - 3 Bids/Proposals less than $20,000 Month 10 Month 12 - Local complaints and redress mechanism Local consultants for Consultant - Individual development of 17,280.00 Competitive – RFP - 3 Bids/Proposals less than $20,000 Month 10 Month 12 - Local training manuals

Consultant - Individual Climate Finance 18,000.00 Competitive – RFP - 3 Bids/Proposals less than $20,000 Month 1 Month 4 - International Specialist Consultant - Individual PMC Consultant 5,400.00 Sole Source (DSSP) less than $20,000 Month 0 Month 1 - Local

$ Sub-Total (US$) 117,840.00 Readiness and Preparatory Support Page 30 of 38

ANNEX 3: NO-OBJECTION LETTER Readiness and Preparatory Support Page 31 of 38

ANNEX 4: ARRANGEMENTS FOR MONITORING, REPORTING AND EVALUATION

M&E ACTIVITY PRIMARY RESPONSIBILITY TIME FRAME Inception Report Project Manager/Project 1 month after project inception Coordinator meeting PMU National Designated Authority/Focal Point Grenada Annual work plans, budgets and Project Manager/Project By 15 January each calendar procurement plans Coordinator year PMU National Designated Authority/Focal Point Grenada Measurement of Project Indicators OECS Commission Ongoing Project Manager/Project Coordinator Data Management Unit (DMU) Semi-Annual Progress Reports National Designated Authority/Focal Semi-annual (including updates on the indicators Point Grenada and a report on ESS as well as gender)

M&E Reports on progress related to OECS Commission with support Quarterly performance in accordance with from EDA M&E Officer and M&E monitoring and reporting Associate requirements Quarterly Financial Accredited Entity & NDA Focal Point Quarterly Management/Expenditure Reports Grenada Delivery Partner: Accounts Unit Disbursement Requests Accredited Entity & NDA Focal Point The first disbursement: upon Grenada approval of the Readiness Delivery Partner request and effectiveness of the Grant Agreement

The second disbursement: upon submission of two progress reports [one report after 6 months of project implementation and another report after 12 months of project implementation and an audited financial report6], in form and substance acceptable to the Fund, [including an audited expenditure statement].

The third disbursement: upon submission of a completion report and financial report, including an audited expenditure statement.

Interim Evaluation Report Delivery Partner Every six (6) months or from External Consultant the Readiness Project’s date Accredited Entity & NDA Focal Point of effectiveness Grenada

6 The first audited financial report is a condition for the second disbursement and is expected to be submitted with the second IPR.

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Monitoring of environmental and Project Manager/Project On-going social risks Coordinator Accredited Entity & NDA Focal Point Grenada Project Management Committee PMC Quarterly Meetings Project Manager/Project Coordinator Reports to the Public-Sector Project Coordinator Economic Quarterly Investment Programme (PSIP) Development Planning Unit, Ministry of Finance Annual Performance Report (APR) Project Coordinator Annually (12 months from the GCF Secretariat Project’s date of effectiveness) Annual Project Financial Audits Independent External Auditor No later than 3 months after the end of each calendar year or completion of the Readiness Support Project Final Report Project Manager Within 3 months after project Project Coordinator completion PMU Readiness Project Completion Project Manager No later than 3 months after Report Project Coordinator completion of Readiness Economic Development Project Planning Unit, Ministry of Finance

Final Independent Evaluation Project Manager Within 6 months after Project Coordinator project completion Economic Development Planning Unit, Ministry of Finance External Consultant

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ANNEX 5: RISK REGISTER

GCF Project: Accelerating Grenada’s DAE Modality for the Effective Implementation the Country’s Goal Towards a Small Smart State Risk Register document information

Code: DOE-GCF-Risk Register

Version: 0.0

Date of version: August 27, 2019

Created by: DOE-Project Management Unit

Approved by: Diann Black-Layne, Project Manager

Confidentiality level: Low

Risk Register Change History

Date Version Edited by Description of change

Aug. 2019 0.0 Diann Black-Layne, Project Initial risks and mitigation measures Manager

Aug. 2019 0.0 Ezra Christopher, DOE, Initial risks and mitigation measures M&E, Consultant

Aug 2019 0.0 Martin Barriteau, Project Initial risks and mitigation measures Coordinator of the EDA

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Risk Register Reference Information

How to score risks in the Risk Register – level of risk probability, impact and overall threat

Source: DOE’s Risk Management Policy

PROBABILITY (P) IMPACT (I) PRIORITY/ SERIOUSNESS (OVERALL RISK) LEVEL) When assessing likelihood, a When assessing the potential impact of The seriousness rating is combination of the future a risk, the ability to deliver, continuity of calculated by multiplying the probability and the frequency of operations, financial losses, resource impact risk ranking and the past occurrences is considered. losses and credibility are considered. likelihood risk ranking:

Very unlikely (1): The event has Low/non-existent (1):Can still achieve Composite score: never happened or is very objectives with limited constraints. Low = 1 – 3 unlikely to happen (e.g. more than once in 20 years). Minor (2): Can still achieve objectives, Medium = 4 – 6 but not fully or in timely manner. Unlikely (2): The event has only High = 7 – 9 happened once in the last 5–10 Moderate (3): The event hinders the years or is unlikely to happen in institution or the project’s objectives or the next ten years. systems.

Likely (3): The event has happened once in the last 2–4 years or is likely to happen in the next 2–4 years.

Risk Register for the Grenada Readiness Project – Entire Project

Risk code Entire Project Entire Project Risk category Compliance Compliance Subcategory Compliance with National Law Breach of GCF Policies and Procedures Description The Grenada Development Bank A breach of procedures will involve the (GDB), is a national entity that is GDB and the Ministry of Finance failing to expected to comply with the laws of comply with the standards set by the GCF Grenada in the execution of its and the DP through articulated policies and functions. Following a gap procedures. assessment conducted by the GIZ as part of Grenada’s first Readiness engagement, the GDB was considered to be the first entity that should become a Direct Access Entity for the Green Climate Fund. The Ministry of Finance and the 1. The procedures and requirements may Ministry of Climate Resilience are a become overwhelming and government entities which are bureaucratic as they may not be bound to adhere to all national laws. tailored to local circumstances 2. Unfamiliarity with GCF procedures which could delay implementation. Inherent Prob. Very Unlikely (1) Very Unlikely (1) risk Impact Minor (2) Minor (2) Priority/Seriousness Low (2) Low (2) Risk tolerance This risk is accepted with the Mitigation measures will control and reduce assumption the internal controls of the risk the DP and Grenada’s Government will be sufficient to mitigate against this risk if developed during project implementation. Project activities will also be monitored. Mitigation Compliance with the law will be 1. The DP will conduct ongoing monitored. monitoring and evaluation and take Readiness and Preparatory Support Page 35 of 38

corrective action as required to ensure compliance with GCF and DP policies and procedures. 2. Internal processes and policies will be evaluated for this risk. 3. The DP will continue to monitor for changes in laws and regulations that may impact on project activities and take action as required. The DP will also conduct peer review exchanges with authorities. Residual Prob. Very Unlikely (1) Very Unlikely (1) risk Impact Minor (2) Minor (2) Priority Low (2) Low (2)

Key risk indicator List of compliance breaches List of grievances and complaints concerning procurement procedure

Risk code Entire Project Entire Project Entire Project Operational and Institutional Operational and Institutional Operational and Institutional Risk category Risk Risk Risk Human Resources: Availability Delayed Disbursements Human Resource Capacity of adequate and affordable Subcategory consultants and non-consulting service providers This is a risk to the project that The time between submission Technical capacity, staff can result in low quality of of reports/requests for turnover and institutional technical outputs (secondary disbursement, and receipt of memory loss/brain drain is one impacts including contract GCF disbursement, can range of the core risks to successful termination and mediation), from 1 to 12 months. project implementation. The delays due to long government also have an procurement processes, or existing attrition policy. For budget overruns. every 10 staff leaving the civil service only 3 can be hired.

Ministry of Finance staff unfamiliar with the demands and requirements of the Description Readiness process and may need to be trained prior to implementation.

The Division of Economic & Technical Cooperation (DETC) within the Ministry of Finance, Planning, Economic Development and Physical Development does not have the full staff capacity to coordinate Readiness activities

Prob. Very Unlikely (1) Likely (3 ) Likely (3) Inherent Impact Minor (2) Moderate (3) Moderate (3) risk Priority Low (2) High (9) High (9) This risk is being controlled The DP ensures timely reports Build a staff sustainability plan through mitigation measures to and insist that the donor within the project. Hire and reduce the risk. disburses funding on time. train staff as part of plan; Risk tolerance Request transfers and seconded staff to support DETC. 1. Mitigation measures The Delivery Partner will 1. Project design on DP to Mitigation include building local maintain close communication coordinate the training. Readiness and Preparatory Support Page 36 of 38

capacity through with the GCF’s project unit to Extensive training of international-local reduce the time it takes to personnel will be financed, “mentoring” contract process disbursements and the and knowledge sharing arrangements and DOE will plan for this and provided by DP staff, who entering into MOUs with proactively request have supported its technical partners. disbursements in order to accreditation process. 2. The DOE has signed a ensure that project activities 2. As a government entity, MOU with the OECS continue uninterrupted. the MOF being made a Commission and other DAE demonstrates service providers Grenada ownership of climate may consider the same change funding and can approach. better integrate activities 3. All HR and procurement with national climate decisions will be screened action plans. for this risk. 3. The DP will support the MOF to access climate finance that can be used to the benefit the country directly. 4. Following the preparation and approval of Readiness, the project will provide support for capacity building of the DETC. 5. As part of this Readiness delivery, the DOE will have staff hired within the proposed accredited entity in Grenada.

Residual Prob. Very Unlikely (1) Unlikely (2) Likely (3) risk Impact Minor (2) Minor (2) Moderate (3) Priority Low (2) Medium (4) High (9) Time to process and fulfill Retention rates; staff turnover disbursement request; Key risk Qualified candidates recruited Ongoing project delays indicator and retained

Risk code Entire Project Risk category Project Stakeholder Risk Subcategory Scope Creep Description Stakeholder input, if unmanaged, can result in dilution of targeted project interventions due to scope creep. Inherent risk Prob. Likely (3) Impact Minor (2) Priority Medium (6) Risk tolerance Mitigation measures will control and reduce the risk Mitigation Cabinet guidance and the National Climate Change Committee (NCCCC) are mitigation measures to manage scope creep. Residual risk Prob. Likely (3)

Impact Low (1) Priority Low (3) Key risk indicator Slow implementation; activities not in alignment with budget and procurement

Risk code Entire Project Entire Project Risk category Project/Programme Risk Project/Programme Risk Subcategory High level Political Buy In Changes in Ministerial Portfolio Readiness and Preparatory Support Page 37 of 38

Description Without high level buy-in, the project pipeline Project implementation can be delayed when will not achieve its transformational there are changes to ministerial positions objectives. and policies. This can be changes in the ministries, minister, permanent secretaries and heads of department. Inherent risk Prob. Likely (3) Likely (3) Impact Moderate (3) Moderate (3) Priority High (9) High (9) Risk tolerance Mitigation measures will control and reduce Mitigation measures will control and reduce the risk. the risk. Mitigation Mitigation measures include maintaining Establish communication strategy for key close alignment with Grenada’s Medium- policymakers. Bring attention to the risk as Term Development Strategy in particular soon as it is Identified. Have senior level and managing bipartisan consultations in the staff at the DoE provide training and event that the governing political party awareness of the project to the new officials. changes. Address any recommended changes to any new procedures. Refer to Project Cooperation Agreement to bring to attention of policymakers to Within the Grant Agreement, include a government’s commitments. clause emphasizing the respect of institutional role (all throughout the life of the Identify ministers who share similar vision to project) irrespective of changes in key serve as project champions. personnel and institutional framework. Residual Prob. Likely (3) Likely (3) risk Impact Moderate (3) Minor (2) Priority High (9) Medium (6)

Key risk indicator High-level national government support Effectiveness in implementation exists for policies and programmes.

Risk code Entire Project Entire Project Risk category Delivery Partner Risk Delivery Partner Risk Subcategory Project Management/Fiduciary Management Monitoring & Sustainability Capacity Description Overextension of technical staff. Budget allocations/counterpart funding may be insufficient to carry out activities.

Good data and reliable M&E systems are critical to project success. Inherent risk Prob. Likely (3) Likely (3) Impact Minor (2) Minor (2) Priority Medium (6) Medium (6) Risk tolerance Mitigation measures will control and reduce Mitigation measures will control and reduce the risk the risk. Mitigation At the launch of this Readiness Project, the 1. The DP will work with DETC on project implementation plan will be preparing financial reports registered and tracked through a dashboard 2. DP implementation support will include system that is presented to the Project specialists in M&E to provide continued Management Committee (PMC). The DoE support to strengthen this area. transitioned to a cloud-based project 3. Strong and independent M&E management software in 2018 and will do Framework to analyze data and make the same for Grenada. The tracking system recommendations for policy will include project and fiduciary interventions. management requirements per the Readiness Grant Agreement and standard conditions, as well as DoE’s requirements, Readiness and Preparatory Support Page 38 of 38

such as quarterly reports from the internal Auditor Unit in Grenada.

Residual Prob. Likely (3) Likely (3) risk Impact Minor (2) Low (1) Priority Medium (6) Low (3)

Key risk indicator Ongoing project delays Budget allocated to M&E and related activities

Readiness Grant Budget Preparation Guidelines

The following considerations are important when completing the budget: 1. Before preparing the Readiness and PPF budget, please read the full guidance on our website (https://www.greenclimate.fund/how-we-work/empowering-countries). 2. You can select the appropriate budget categories from the dropdown list in the budget plan: 3. To insert additional rows, right click on the row number below where you wish to insert the new row and choose INSERT. 4. Additional budget categories may be added by manually typing them on the Budget Category sheet. :

Project Management Cost: Project management costs (PMC) are the direct administrative costs incurred to execute a project. They should cover only incremental costs incurred due to the GCF contribution. In most cases, these costs are directly related to the support of a dedicated project management unit (PMU) which manages the day to day execution related activities of the project.

General Principles for PMC costs: 1. The percentage of PMC financed by GCF should not be more than the percentage share of the overall budget financed by GCF 2. PMC budget thresholds: Up to 7.5 per cent of total activity budget. > PMC exceeding 7.5 per cent for the readiness (including NAPs) proposals, and PPF proposals, up to $ 3 million will require detailed documentation and justification supporting the entire PMC budget. > The PMC should be shown as a separate component in the project budget. A detailed breakdown of PMC should be provided by budget category. > Indicative list of eligible project management costs: > Project staffing and consultants: Project manager, Project Assistant, Procurement personnel, Finance personnel & Support/admin. Personnel > Other direct costs: Office equipment, Mission related travel cost of the PMU, Project management systems and information technology, Office supplies, Audit cost

Contingency : 1. Select the appropriate % of Contingency Budget from the dropdown list :

2. Contingency budget for unforeseen costs arising during the project implementation should not be included in the outcome budget separately. 3. Contingency budget must be used for any unforeseen programme (output level) cost that is unrelated to implementation/service fee. 4. Any use of contingency must be reported to and agreed by the GCF Secretariat in writing in advance provided with justifications that are acceptable to the GCF 5. If you get to the end of the project and you haven’t spent Contingency, you can’t increase the scope of the project or buy some more equipment to use it up.

6. The Budget Notes sheet should be used to record explanations, further details or cost breakdowns for individual lines

If you are unsure about how to complete the budget template, please send your query to: [email protected] 5.1 Budget Plan Please add rows for Outcomes, Outputs and Cost Categories as required. Additional budget categories may be added by manually typing them on the Budget Category sheet.

Detailed Budget (in US$) Disbursement Plan Total Budget Outcomes Budget Budget Categories Unit # of Unit Unit Cost Total Budget Total Budget (per outcome) 6m 12m 18m 24m 30m 36m choose from the drop-down list note # (per budget category) (per sub-outcome) Outcome 1: Consultant - Individual - Local W/Day 80 72 1 5,760 5760 Institutional capacity and W/Day 80 115 2 9,200 9200 coordination mechanisms in Sub-Outcome 1.1: Consultant - Individual - Local 44,260 place to govern and NDA inter-institutional coordination mechanism Consultant - Individual - Local W/Day 140 115 3 16,100 16100 coordinate climate action Workshop/Training Workshop 6 2,200 4 13,200 13200 and finance Sub-outcome 2.3: Stakeholder engagement Consultant - Individual - Local W/Day 200 72 5 14,400 14,400 79,660 14400 consultative process

Outcome 2: Country Sub-Outcome 2.5: Appropriate Climate Technology solutions Programming Process Professional Services – identified and prioritized in accordance with Lumpsum 1 21,000 6 21,000 21,000 10500 10500 Companies/Firm national strategies and plans for climate adaptation and mitigation

Sub-Outcome 3.1: Direct Access Entities’ Consultant - Individual - Local Month 3 6,167 7 18,500 18500 Nomination: Both Ministries assessed as - 31,700 0 potential DAE with action plan for the consideration of the Cabinet Consultant - Individual - Local Month 6 2,200 9 13,200 13200 Workshop/Training Workshop 1 1,350 10 1,350 1350 Outcome 3: Direct Access to Consultant - Individual - Local W/Day 240 72 11 17,280 73,820 17280 Climate Finance Sub-Outcome 3.2: Accreditation of Direct Access - 0 0 42,120 Entities Consultant - Individual - International W/Day 60 300 13 18,000 9000 4500 4500 Workshop/Training Workshop 2 2,745 14 5,490 2745 2745 - 0 0 Total Outcome Budget 153,480 99,405 30,945 23,130 - - - Consultant - Individual - Local Month 18 300 5,400 Actual amount and % Maximum PMC that Audit Fee Lumpsum 2 3,000 6,000 of PMC requested: can be requested: Project Management Cost (PMC) - do not change the formula do not change the formula Up to 7.5% of Total Activity Budget - 11,400.00 11,511.00 - 7.43% 7.50%

FOR GREEN CLIMATE FUND SECRETARIAT'S USE ONLY Breakdown (per budget category) Total (per budget category) Audio Visual & Printing - Audit Fee 6,000 FOR GREEN CLIMATE FUND SECRETARIAT'S USE ONLY Consultant - Individual - International 18,000 Consultant - Individual - Local 99,840 Total Outcome Budget 153,480 Professional Services – Companies/Firm 21,000 Project Management Cost (PMC) 7.4% requested 11,400 IT Equipment - Contingency 1% requested 1,535 Office Supplies - Travel - International - Travel – Local - Sub-Total (Total Outcome Budget + Contingency + PMC) 166,415 Workshop/Training 20,040 0 - Delivery Partner Fee (DP) - Up to 8.5% of the Sub-Total 14,145 0 - 0 - 0 - Total Project Budget (Total Activity Budget + Contingency + PMC + DP) $ 180,560 0 - Total Outcome Budget + PMC 164,880 Budget Note Detailed Description

Example - "A" Example - One national consultant (climate change sepcialist) for 30 working days @ $500 per day for activity 1.1.1, 1.1.2 1 1 local consultant for activty 1.1.1 2 1 local consultant for activty 1.1.2 3 local consultant (s) for activty 1.1.3 4 6 two day in house workshops @ 10 persons for Activity 1.1.4 5 1 communications specialist to coordinate activities for Activity 2.3.1 6 Professional services for climate rationale strenghtening for Activity 2.5.1 7 1 local consultant for Activity 3.1.1

9 1 local consultant for activty 3.2.1 for complaints mechanism 10 1 in house full day workshop @ 5 persons for Activity 3.2.2 11 2 local consultants, part time for 6 months @ $72 per day for Activity 3.2.2

13 1 climate finance specialist for Activity 3.2.3 14 Two day in house workshop @ 25 persons for Activity 3.2.3 Budget Categories Audio Visual & Printing Audit Fee Consultant - Individual - International Consultant - Individual - Local Professional Services – Companies/Firm IT Equipment Office Supplies Travel - International Travel – Local Workshop/Training

Indicate additional budget categories