GEF Secretariat Review for Full/Medium-sized Projects*
The GEF/ldcf/sccf Trust Funds

  
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GEF ID:	4918	
Country/Region:	India	
Project Title:	Partial Risk Sharing Facility for Energy Efficiency	
GEF Agency:	World Bank	GEF Agency Project ID:	128921 (World Bank)	
Type of Trust Fund:	GEF Trust Fund	GEF Focal Area (s):	Climate Change	
GEF-5 Focal Area/ LDCF/SCCF Objective (s):	CCM-2; Project Mana; 	
Anticipated Financing  PPG:	$0	Project Grant:	$18,000,000	
Co-financing:	$594,300,000	Total Project Cost:	$612,300,000	
PIF Approval:	April 13, 2012	Council Approval/Expected:	June 01, 2012	
CEO Endorsement/Approval		Expected Project Start Date:		
Program Manager:	David Elrie Rodgers	Agency Contact Person:	Ashish Khanna	

Review Criteria	Questions	Secretariat Comment at PIF (PFD)/Work Program Inclusion 	Secretariat Comment At CEO Endorsement(FSP)/Approval (MSP)	
Eligibility	1.	Is the participating country eligible?	DER, March 27, 2012. Yes.		
	2.	Has the operational focal point endorsed the project?	DER, March 27, 2012. Yes. An endorsement letter was signed by OFP Mr Pande in the amount of $19.8M.		
Agency’s Comparative Advantage	3. Is the Agency's comparative advantage for this project clearly described and supported?  	DER, March 27, 2012. Yes.		
	4. If there is a non-grant instrument in the project, is the GEF Agency capable of managing it?	DER, March 27, 2012. Yes, this project proposes a partial risk-sharing facility. Yes the agency is capable of managing it. Please clarify if this non-grant instrument is the type that will generate reflows to the GEF Trust Fund.

DER, April 12, 2012. The response indicates that the GEF funds will be used in the form of a grant and added to the Government of Indian resources. Considering that the CTF terms could be 0% interest for 40 years, the grant is acceptable. Comment cleared.		
	5. Does the project fit into the Agency’s program and staff capacity in the country?	DER, March 27, 2012. Yes.		

Resource Availability	6. Is the proposed Grant (including the Agency fee) within the resources available from (mark all that apply):			
	•	the STAR allocation?	DER, March 27, 2012. Yes.		
	•	the focal area allocation?	DER, March 27, 2012. Yes.		
	•	the LDCF under the principle of equitable access	DER, March 27, 2012. NA.		
	•	the SCCF (Adaptation or Technology Transfer)?	DER, March 27, 2012. NA.		
	•	Nagoya Protocol Investment Fund	DER, March 27, 2012. NA.		
	•	focal area set-aside?	DER, March 27, 2012. NA.		
Project Consistency	7. Is the project aligned with the focal /multifocal areas/ LDCF/SCCF/NPIF results framework?	DER, March 27, 2012.
a) This project will fall under CCM-2, Energy Efficiency. However, the write-up in section A.1.1 is dated. Please refer to the document GEF-5 Strategic Objectives GEF.R.5.Inf_.21 for proper citations. See especially pages 19-25 for proper citations to CCM-2.

DER, April 12, 2012. Comment cleared.		
	8.  Are the relevant GEF 5 focal/ multifocal areas/LDCF/SCCF/NPIF objectives identified?	DER, March 27, 2012. 
a) Please update Table A to include the following notation: Outcome 2.2 and Output 2.2.
b) There is some mention of innovative technologies and potential renewable energy investments in the CTF plan. Do those apply to the GEF project? If so, please include in Table A.
c) Please identify the measurable outputs for this project, especially in section B.2

DER, April 12, 2012.
a) Completed. comment cleared.
b) This project is only efficiency. Comment cleared.
c) Output measures on investment are reported. However, it is required that we have an estimate for energy savings and GHG benefits that will result due to the incremental activities enabled by the GEF project. The estimate provide in the response is a target if 98 million tons of CO2e per year. Comment cleared.

DER, April 17, 2012. The above emissions estimate may have been taken out of context. According to the CTF Plan for India the following applies:  "The global environmental benefits of a PRG of USD 25 million would be very substantial since it could support energy efficiency projects equivalent of 1000 MW or more. The avoided emissions on account of 1000 MW equivalent would 2MtCO2/year. GHG emissions estimated at about 2MtCO2/yr would result in cumulative emissions savings of approximately 40 million tons over a 20-year plant life." (page 24). Assuming the GEF and CTF funding along with the Government of India funding achieves proportional benefits for the $60 million capitalization of the PRGF, the emissions estimate is 60/25*2MtCO2/yr equals 4.8 MtCO2/yr or 96 MtCO2 over the 20-year plant life. More precise estimates are requested at CEO endorsement.		
	9.	Is the project consistent with the recipient country’s national strategies and plans or reports and assessments under relevant conventions, including NPFE,  NAPA, NCSA, or NAP? 	DER, March 27, 2012. Please identify if this project is consistent with India's National Communications.

DER, April 12, 2012. Comment cleared.		
	10.	Does the proposal clearly articulate how the capacities developed, if any,  will contribute to the sustainability of project outcomes?	DER, March 27, 2012. Yes.		

Project Design	11.	 Is (are) the baseline project(s), including problem (s) that the baseline project(s) seek/s to address, sufficiently described and based on sound data and assumptions?	DER, March 27, 2012. Yes.		
	12.	Has the cost-effectiveness been sufficiently demonstrated, including the cost-effectiveness of the project design approach as compared to alternative approaches to achieve similar benefits?			
	13.	Are the activities that will be financed using GEF/LDCF/SCCF funding based on incremental/ additional reasoning?	DER, March 27, 2012. Yes. The addition of GEF funding will provide added capitalization for the risk-sharing facility and attract additional private sector funding.		
	14.	Is the project framework sound and sufficiently clear?	DER, March 27, 2012. Please address the following comments:
a) Under Component A, it is important to clarify how the GEF funding will be used in the PRSF. We expect the GEF funding for the investment component will be applied in the form of a non-grant instrument that will generate reflows. We expect the principal and any earned returns to be returned to the GEF Trust Fund at the end of the project. Based on the track record for similar risk-sharing facilities, losses may be 10% or less, so the substantial majority of the principal and reflows would be expected.
b) How will the CTF funding be used? will it be invested pari passu with the GEF and BEE funding as part of the first loss position in the PRSF? On page 5 of the PIF there is an implication that the BEE, GEF and CTF funding will all be used in the same way "Using these $61 million of public resources.." Please clarify.
c) We note some inconsistencies in the GEF project proposal and the CTF India Investment plan as endorsed and found on the CTF web-site. Please explain the differences. For example, IFC is included in the CTF plan but not listed in the GEF PIF. The GEF funding in the CTF plan is listed some places as $35M and some places as $20M. Please clarify and attach the CTF document as an Annex to the PIF.
d) What are the proposed returns on the funding dedicated to the PRSF? These funds should earn a rate of return that is commensurate with the risk position.
e) The GEF has extensive experience working with the World Bank and IFC on risk sharing facilities. In early projects, a 10% first loss position was reasonable. In more recent projects, a lower first loss position, around 7% has become common as banks are becoming more comfortable with clean efficiency investments. Please justify whether the PRSF can be offered at a lower first loss rate such as 7% and still achieve the catalytic role identified in the PIF.

DER, April 12, 2012.
a) The response indicates that GEF resources will be used as a grant and along with the CTF funding will generate virtually no reflows. Comment cleared.
b) The response and revised PIF indicates that GEF and CTF funding will be pari passu when used in the risk sharing facility. However, the CTF funds may be a loan with 40 year maturity while the GEF funding will be a grant. Comment cleared.
c) This project will pursue the efficiency portion of the CTF plan. The IFC may pursue the RE part separately in a second phase. Comment cleared.
d) The GEF funding will follow the Government of India's own Partial Risk Guarantee Facility which asks for a guarantee fee of 1% if the total amount. The GEF funding will stay with the Government India and will not reflow to the GEF Trust Fund.
e) The proposed facility will mirror the conditions offered by the Government of India's own Partial Risk Guarantee Facility, which allows for covering 10% of the first loss. Comment cleared.		
	15.	 Are the applied methodology and assumptions for the description of the incremental/additional benefits sound and appropriate?	DER, March 27, 2012. Please address the following:
a) There is an inadequate description of the global environmental benefits. Please supply.
b) Considering the extensive documentation in the related CTF plan which has been approved by the CTF board, this PIF should be supplemented with additional information.

DER, April 12, 2012.
a) An indicative estimate of reductions of 98 million tons of CO2e per year has been provided.  At CEO endorsement we expect a detailed estimate of direct and indirect emission benefits from this project. Comment cleared.		
	16.	Is there a clear description of: a) the socio-economic benefits, including gender dimensions, to be delivered by the project, and b) how will the delivery of such benefits support the achievement of incremental/ additional benefits?	DER, March 27, 2012. Yes.		
	17.	Is public participation, including CSOs and indigeneous people, taken into consideration, their role identified and addressed properly?	DER, March 27, 2012. Yes. At CEO endorsement, we would like to see a much stronger description of involvement of small business associations.

DER, April 12, 2012. Explanation provided. Comment cleared.		
	18.	Does the project take into account potential major risks, including the consequences of climate change and provides sufficient risk mitigation measures? (i.e., climate resilience)	DER, March 27, 2012. Yes.		
	19.	Is the project consistent and properly coordinated with other related initiatives in the country or in the region? 	DER, March 27, 2012. Yes. At CEO endorsement, we would like to see stronger description of coordination with existing efficiency projects and also the IFC risk-sharing facilities.		
	20.	Is the project implementation/ execution arrangement adequate?	DER, March 27, 2012. Yes.		
	21.	Is the project structure sufficiently close to what was presented at PIF, with clear justifications for changes?			
	22.	If there is a non-grant instrument in the project, is there a reasonable calendar of reflows included?			

Project Financing	23.	Is funding level for project management cost appropriate?	DER, March 27, 2012. The GEF requested level of $300,000 is not excessive. However, we do not see any co-financing for the project management. Please identify some co-financing for project management at an appropriate level consistent with agency co-financing.

DER, April 12, 2012. Project management of $300,000 from co-financing has been identified. Comment cleared.		
	24.	Is the funding and co-financing per objective appropriate and adequate to achieve the expected outcomes and outputs?	DER, March 27, 2012. Yes.		
	25.	At PIF: comment on the indicated cofinancing;
At CEO endorsement: indicate if confirmed co-financing is provided.	DER, March 27, 2012. Yes.		
	26.	Is the co-financing amount that the Agency is bringing to the project in line with its role?	DER, March 27, 2012. 
a) Please provide additional description of the World Bank co-financing role. Other than CIF/CTF, is the World Bank providing any co-financing?
b) Also, please explain if the proposed $25 million is from the Climate Investment Fund or the Climate Technology Fund.
c) Will the CIF/CTF funds be provided as a loan or a grant? Please describe the terms.

DER, April 12, 2012.
a) The response indicates that "due to uncertainty of CTF availability, need for substituting CTF with some alternative source of funding will be evaluated during FSP preparation."  We presume this may mean additional from a non-GEF source. This must be confirmed by CEO endorsement. Comment cleared.
b) The CTF. Comment cleared.
c) A concessional loan is expected, with rates of return at 0% for 40 year tenor and .35% service charge. Comment cleared.		
Project Monitoring and Evaluation	27.	Have the appropriate Tracking Tools been included with information for all relevant indicators, as applicable?			
	28.	Does the proposal include a budgeted M&E Plan that monitors and measures results with indicators and targets?			
Agency Responses	29.	Has the Agency responded adequately to comments from:			
	•	STAP?	DER, March 27, 2012. NA		
	•	Convention Secretariat?	DER, March 27, 2012. NA		
	•	Council comments?			
	•	Other GEF Agencies?	DER, March 27, 2012. NA		
Secretariat Recommendation	

Recommendation at PIF Stage	30.	 Is PIF clearance/approval being recommended?	DER, March 27, 2012. Not at this time. Please address comments in boxes: 4,7,8,9,14,15,17,19,23,26,31.

DER, April 12, 2012.  Yes. There are some issues to deal with at CEO endorsement as identified in box 31.		
	31.	Items to consider at CEO endorsement/approval.	DER, March 27, 2012.
a) Please provide a stronger description of coordination with existing efficiency projects and also the IFC risk-sharing facilities.
b) Please provide a much stronger description of involvement of small business associations.

DER, April 12, 2012.
a) The response indicates there are no IFC RSF in India. Our comment meant that during project design and by CEO endorsement it is expected that project managers will carefully study and coordinate with risk-sharing facilities for energy efficiency projects within the region. There are significant lessons learned that can be applied.
b) The description in the PIF is helpful, but incomplete. At CEO endorsement we expect significant additional detail on coordination with small businesses.
c) We expect a detailed estimate of direct and indirect emission benefits from this project. 
d) The response indicates that due to uncertainty of CTF availability, the need for substituting CTF with some alternative source of funding will be evaluated during FSP preparation.  We presume this may mean additional funding from a non-GEF source. This must be confirmed by CEO endorsement.		
Recommendation at CEO Endorsement/ Approval	32.	 At endorsement/approval, did Agency include the progress of PPG with clear information of commitment status of the PPG?			
	33.	 Is CEO endorsement/approval being recommended?			
Review Date (s)	First review*	March 27, 2012	March 27, 2012	
	Additional review (as necessary)	April 12, 2012		
	Additional review (as necessary)			
	Additional review (as necessary)			
	Additional review (as necessary)			

*  This is the first time the Program Manager provides full comments for the project.  Subsequent follow-up reviews should be recorded. For specific comments 
     for each section,  please insert a date after comments. Greyed areas in each section do not need comments. 

Request for PPG Approval
Review Criteria	Decision Points	Program Manager Comments	
PPG Budget	1.	 Are the proposed activities for project preparation appropriate?		
	2.	Is itemized budget justified?		
Secretariat
Recommendation	3.	Is PPG approval being recommended?		
	4. Other comments		
Review Date (s)	First review*		
	 Additional review (as necessary)		
*  This is the first time the Program Manager provides full comments for the project.  Subsequent follow-up reviews should be recorded. For specific comments for each section, please insert 
      a date after comments.