Annex 4. Enclosed Annexes Related to the Future 15 Month Period

Annexes:

Annex 4. Enclosed Annexes related to the future 15 month period

4.1 Review workshop report

4.2 CIDT Draft Exit strategy

4.3 Fmt Extension Proposal

4.4 Table of Annual Review Recommendations

ANNEX 4.1

DRAFT Report on

FONEWRA Retreat.

18-19 June 2014

Introduction

A two-day retreat was held for key staff involved with FONERWA on 18-19 June 2014. The retreat was held at the Plast Rock Hotel in Nyamata- town and facilitated by Liberal Seburikoko of Wasafiri Consulting. A full list of participants and their roles is presented in Annex 1.

This short report aims to synthesise the key points discussed and attempts to capture the key outcomes of the workshop.

Workshop Objectives

By the end of the workshop building on the previous workshops and work undertaken, we will:

Appreciate where we are now by having a quick update on previous mini-workshops
Appreciate the important role of FONERWA in Rwanda
Examine possible sustainable options for how FONERWA be institutionally positioned to serve as the national channel/platform for environment and climate financing.
Examine the pros and cons of each of the possible options
Develop a longer term shared sense of direction for FONERWA[1] in line with the above[2]
Examine internal lessons learnt and develop some ideas/plans for improving FONERWA design systems and processes
Participate in developing an immediate Action Plan for 2014-15

Session 1 - Welcome and looking back

In the first session introductions were made, the objectives of the retreat agreed and some useful ground rules established. Following this participants were given a “snapshot” of how FONERWA had been developed. The seven-step design process was outlined alongside the results hierarchy that was key in the design. The funding windows were outlined and the resource mobilisation process presented and explained. With the help of a face mask (worn by the presenter in her home country), a very helpful analogy on the cost of clean Rwandan air was presented.

Having been refreshed on the genesis of FONERWA, participants then viewed the draft of a short video that has been produced on FONERWA. In order to inform the required revisions to the video participants were invited to write their feedback comments on the video on post- its. The general perception was that the images were not reflecting the vision of FONERWA and consequently not consistent with the storyline. It was suggested that a new version of video be produced, based on comments provided so far, and shared with participants for validation prior to its being released in the public domain. A summary of the feedback is presented in Annex 2.

Session 2 - What has worked and what has not worked and needs to improve?

In the second session participants were invited to openly share their differing perceptions on what has worked in FONERWA and what needs to be improved. This helpful brainstorming session lead to some open and honest sharing of the very real successes of the FONERWA ‘experiment’ and the challenges ahead. Seven key messages came out this session:

Operationalizing FONERWA, with its strong governance structure, a competent and committed team as well as transparent processes was a massive achievement. As a result, setting up the fund and approving high quality projects was much faster than other similar funds around the world.
There were concerns that approved projects were not being implemented quickly enough. This could be due to limited support from FMT after projects are approved and a possible ‘relaxation’ attitude from some project developers as there was no deadline for effectiveness. It was suggested that the FMT institutes deadlines for effectiveness and reaches out strategically to FONERWA priority sectors such as agriculture, which felt somehow underserved.
The capacity for implementing projects was relatively limited. Yet unless projects were effectively implemented and delivered the expected results, it would be hard to mobilise additional funds. Participants suggested that the FMT devises an aggressive strategy for reaching to project developers after they were approved.
The delay in operationalizing FONERWA seem to have created some reluctance to own the FMT ‘baby’, as this was perceived to be too risky.
The 6-member FMT (with 2 additional CDKN-funded staff) currently has an insurmountable workload. As projects move into implementation and new calls for proposals are issued over the next couple of months, there is a pressing need to expand the team and evolve the FMT into a Secretariat.
Communication within FMT and between the FMC and FTC could be improved. For example, some FTC members were not aware of FONERWA’s M&E framework and there seem to be a lack of deliberate process for seeking feedback from FMT and FTC members on how FONERWA was perceived.
It was broadly recognised that FONERWA is still largely a DFID funded project at this stage and requires an institutional home for effective GoR ownership, management sustainability and further resource mobilisation

A summary of the successes and challenges are presented in Annex 3. This session served to inform the Action Plan discussed on Day 2 (Annex 5).

Session 3 - Official Opening

In this session the Permanent Secretary of MINIRENA, Caroline Kayonga,welcomed everyone and thanked participants for coming to the retreat. She stressed the need for FONERWA staff to have time away from their busy schedules to think and learn lessons from their important work. She especially thanked the FMT for all their hard work over the past 18 months and congratulated them on their huge achievements. She also thanked the FMC for their helpful guidance. DFID were thanked for getting the FONERWA project fund ‘ball rolling’. It was noted that other development partners are following DFID and she was thankful to them all. It was noted that only the day before the retreat FONERWA had been successfully presented to the ongoing GoR Joint Sector Review. She noted that moving to implementation would most likely bring new challenges as these were unchartered waters and there were not many places to learn from.

Session 4 – Dreaming the Future

In this session the FONERWA Programme Manager, Alex Mulisa, outlined a longer-term vision for FONERWA. With the help of a powerful image of a possible trajectory of change towards a longer-term dream the options and steps for change were outlined and illustrated.

The need for short and long-term elements of the Green Growth Climate Resilient Strategy (GGCRS) was outlined, and it was carefully noted that ‘Green Growth’ is very much a national, strategic and high-level economic activity. It was also noted that unfortunately some people only consider the environmental aspects of this as they focus on the ‘Climate Resilience’ angle of the GGCRS. The importance of all aspects of the GGCRS is noted for the aim of poverty reduction.

It was also noted that while ‘Sustainable Development’ may be a buzz word in the development lexicon for some, it is of critical importance for Rwanda. It was noted that Rwanda has no choice but sustainable development and consequently Development Partners have no choice other than support it.

A number of participants were invited to share their longer term dreams – these included:

“Not waking up in the middle of the night and thinking of natural disasters and their effects”
“Green, Safe, Clean and wealthy”
“Being the first zero poverty country in Africa”
“That others look and learn from Rwanda’s success in developing a Green Growth Climate Resilient Strategy”

Session 6 - Roles and Responsibilities

In this session the current and possible roles and responsibilities of FONERWA and its stakeholders were examined and discussed.

In the wide ranging and open discussions a number of key questions and points emerged:

We need to be clear that FONERWA is intended for strategic and innovative ‘pilot’ interventions – it is not meant to be achieving GGCR objectives itself.
FONERWA in the operationalisation phase was intended to be a lean structure. It was an experiment.
But we found that there were greater demands for technical proposal support and implementation support.
And the FMT is currently under very real pressure to spend and spend fast.
The FMT is still on a steep learning curve
We could just go back to the original vision of an application processing facility.

We need to decide how big FONERWA wants to be. This is not clear at the present time.
FONERWA is demand driven. We need to let the demand determine supply.
The FMT has to grow by default to manage the compounding projects – over 20 likely by September.
It is unclear as to whether this can be sustained under current conditions
If the FMT increases in size the issue of Human Resources capacity will need to be addressed.
The FMT could be perceived as being a ‘department’ with different units with dedicated roles and responsibilities e.g. it could be perceived as having three distinct roles:
Resource mobilisation
Providing Technical Assistance for project preparation
Influencing implementation

The earlier we define what kinds of projects FONERWA supports, the better – but this is challenging to plan for given FONERWA is a demand-based facility.
We have an option of focusing on bigger projects but ideally we need to manage a portfolio – having a balance between large and small projects. How do we come up with this portfolio?
We need a strategic tool to help make decisions.
How can FONERWA meet the expectations of beneficiaries? How can we grow the fund?
Need a team that is commensurate with the level of responsibilities.
Does FONERWA need to bring in interns that can support operations?

Under the discussion on possible options a number of possible scenarios and ideas were put forward:

FONERWA just collapses due to ‘staff burnout’ – we need to avoid this!
FONERWA withers and dies due to lack of funding – we need to avoid this!
We think out of the box and outsource functions on a temporary basis, as long as they achieve results. This is needed as long as it’s demand driven.
We transfer technical capacity building functions and knowledge management and information provision to a possible Climate Change Innovation Centre this could leave the FMT only processing proposals.
We transfer technical capacity building functions to the National Capacity Building Secretariat (NCBS)– we could also work with them to develop capacity of sector specialists.
We somehow tap into the resources of the line agencies and others e.g. we consider:
Can a strategic linkage be made with the MINECOFIN unit in charge of project monitoring and implementation?
Can FONERWA push the GoR to support the implementation and M&E
Can FONERWA build strategic partnerships with research organisations, universities, etc?

It was concluded that FONERWA needed to have an aggressive strategy that focuses on results and can establish clear priorities

Session 7 - Institutional Positioning

In the discussions on institutional positioning it was agreed that FONERWA needs:

An institution that can deliver on its mandate and have a holistic approach.
To consider the short, medium and long-term options
In the short term, these could include:
Keeping a lean team
Expanding the team into four departments: Project appraisal, project development, resource mobilisation, implementation and Monitoring and Evaluation.
Building synergies with MINECOFIN’s PMMU or PITT to support FONERWA
Empowering the FMT, give them resources and institutional support
Capacity development: Work with other government departments (e.g. NCBS, ministries), universities, research institutions
Outsourcing: e.g. Auditing, call down etc.
In the longer term, these could include:
Offloading technical capacity functions, information sharing and support to the Climate Innovation Centre
Outsourcing: as above

Building on all the above comments and the wide-ranging discussions, a number of possible institutional options were drawn up and considered.

The perceived advantages and disadvantages of each of the institutional options were discussed. In total eight options were considered. These were ranked in terms of preference (for short and longer terms) and the following short-term options were retained through a process of elimination:

Preferred option: Independent agency under MINECOFIN
Second best option: Independent agency under MINIRENA

The table below provides a summary of the perceived advantages and disadvantages of each of the 8 institutional options:

Option 1 - Independent agency under the Office of the President / Notes on Participants Ranking - Low
Perceived Advantages / Perceived Disadvantages

Done in other countries
Greater gravitas given by the GoR
More interest coming from donors
Good idea for resource mobilisation

Poor idea for implementation
Can’t run away from ministries because they are perceived to be weak.
Doesn’t achieve practical implementation purposes (e.g. capacity building)

Option 2 - Independent agency under the Office of the Prime Minister / Notes on Participants Ranking - Low
Perceived Advantages / Perceived Disadvantages

Done in other countries
Greater gravitas given by the GoR
More interest coming from donors
Good idea for resource mobilisation

Poor idea for implementation
Can’t run away from ministries because they are perceived to be weak.
Doesn’t achieve practical implementation purposes (e.g. capacity building)

Option 3 - Independent agency under MINIRENA / Notes on Participants Ranking - #2 Short term
Perceived Advantages / Perceived Disadvantages

MINIRENA is mandated to deal with the cross-sectoral CC activities
Mandated by Law to house FONERWA.
Technical understanding of the sector.
Political alignment with mission.
International connections.
Can strengthen the ministry.
Connections/synergies with other MINIRENA agencies.
Builds on existing structures

MINIRENA is weak, and will likely be weak for some time to come, as is generally the case for ministries of environment elsewhere. It will be hard to bridge this gap.
Will likely result in a duplication of mandate between FONERWA and REMA.
Lack of adequate ownership to date.
Not as strategic as MINECOFIN.
Low resource mobilisation.
Project appraisal and implementation championed by MINECOFIN.
Blurs the division of labour of mainstreaming.
Conflict of interest perceived that REMA/RNRA/MINIRENA will unfairly get resources.
MINIRENA has multiple mandates, and this could potentially confuse the ministry on a longer term basis that would preclude ownership.
Potentially more difficult to recruit new staff in a short time.
Limited leverage.
Managing a fund doesn’t fit its mandate or capacity.

Option 4 - Independent agency under MINICOFIN / Notes on Participants Ranking #1 Short term option
Perceived Advantages / Perceived Disadvantages

It’s a fund, so belongs with a financial institution.
Aligns with MINICOFIN mandate.
Strong internal/external message of the value of FONERWA.
Strong experience in fund management.
It has domestic and external capitalisation.
They also deal with international funds and they have a lot of influence.
National capacity building secretariat is under MINECOFIN.
This would also support the implementation synergies between PMMU and PITT.
International preference for CC: GCF also wants to see the importance of Ministries of Finance. This is also much more effective than having it under MINIRENA.
This aligns with the principles of GCF, supports accreditation, and the possibility of enhanced direct access.
This is also closely aligned with energy needs.
Minimises conflict of interest across line ministries.
Give FONERWA a neutral home which it needs.
Birds eye view: Strategic orientation in terms of other projects being financed across the country (e.g. across all sectors).
Already providing strongest technical expertise to the FTC.
Greater influence.
Have convening powers. Would help awareness of FONERWA across GoR and DPs.
Positive image and respect from applicants.
PFM expertise.
Sends a clear message that economic development is about green growth, not just environment.
More attractive place to work as it can attract and retain staff.
Transparency and VfM.
Streamlining climate financing at the national level.
Great chance for influencing implementation of EDPRS II and GGCRS.
Would support a long-term dream of CC/env finance flowing across ministries, in line with aid effectiveness principles.
MINECOFIN would force other ministries and agencies to actually learn about how to operationalise CC/Env and would build greater capacity more quickly (similar to gender).

MINECOFIN speaks a totally different language than environment.
They don’t have capacity in this area and they don’t want to set a precedent of taking in every fund.
It’s unknown if UNDP funds follow if went to MINECOFIN.
Lack of legal mandate and the key decision makers need convincing.
Potentially slow buy-in by policy makers.
Long approval process of the change.
Potential conflict of interest of resource mobilisation and allocation.
Could be perceived as disempowering MINIRENA.
Uncertain time period for transitioning to MINECOFIN.

Notes: Need to examine and pursue GCF institutional arrangements – this will be explored in the forthcoming CDKN institutional study, which will consider MINIRENA, MINECOFIN and other innovative arrangements outlined here.
Option 5 - Public Enterprise with financial autonomy
(Like BNR, RSSB, BRD, with lean structure) / Notes on Participants Ranking - #1 Medium term option
Perceived Advantages / Perceived Disadvantages

Issues decided by a Board, not by the GoR.
Has much more financial and operational autonomy
Would avoid the issue of MINECOFIN objectives.
Less bureaucracy.
Strong autonomy with a Board.

Unclear as to what services will FONERWA sell? (FONERWA doesn’t have services as such).
Seems that you might need revenue generation capability.

Notes: We need to know the status of a public enterprise and whether the enterprise would need to report to MINECOFIN.
We also need to explore if we could have a hybrid option where we have a not-for-profit social enterprise organisation (this could possibly be a viable long-term option)
Option 6 – Out of government Not-for-Profit Social Enterprise / Notes on Participants Ranking - Low
Perceived Advantages / Perceived Disadvantages

Can work like RALGA.
Special Purpose Entity/Vehicle (Grow Africa was considering piloting one such model in Agriculture sector along the potato value chain in Musanze district, in collaboration with MINAGRI)

Needs someone that is passionate about driving it forward

Option 7 – Autonomous fund (like Agaciro) with percentage contribution from GoR annual / Notes on Participants Ranking - Low
Perceived Advantages / Perceived Disadvantages

Independent fund with Board.
Doesn’t get hung up in GoR bureaucracy.

Very different from Agaciro.
FONERWA much more complicated operationally.

Option 8 – Independent Bank – Long Term Option / Notes on Participants Ranking - Low
Perceived Advantages / Perceived Disadvantages

Would make it part of strategic private sector targeting.

Might move away from FONERWA mandate of giving grants

Session 7 - Capacity Development