Udenrigsudvalget 2017-18
URU Alm.del Bilag 138
Offentligt
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Organisation Strategy for Denmark’s engagement with
the Global Green Growth Institute (GGGI) 2017-2019
15 September 2017
1. Objective
This Strategy for the cooperation between Denmark and Global Green Growth Institute
(GGGI) forms the basis for the Danish contributions to GGGI of 60 million DKK (2017 to
2019),
and it is the central platform for Denmark’s dialogue and partnership with GGGI. It sets
up Danish priorities for GGGI’s performance within the overall framework established by
GGGI’s own strategy.
In addition, it outlines specific goals and results vis-à-vis GGGI that
Denmark will pursue. Denmark will work closely with like-minded countries towards the
achievement of results through its efforts to pursue specific goals and priorities. Denmark has
supported GGGI since its inception in 2011.
As part of the appropriation process, an appraisal was conducted in May/June 2017 with visits
to Seoul, Philippines, Rwanda and Cambodia. Also a joint donor review lead by Denmark was
conducted in 2015.
2. The organization - the Global Green Growth Institute (GGGI)
Organisation/governance
GGGI is a relatively young International
Organisation, based in South Korea,
dedicated to a global transformation to
“green growth”. Denmark has supported
GGGI since 2011 under the Climate
Envelope.
Denmark was one of the founders of
GGGI as it transformed from a Korean
non-profit foundation to a fully-fledged
international organisation.
Global Green Growth Institute
Established
2010 (as a Korean
foundation)
2012 (as an international
organisation)
HQ
Seoul, Republic of Korea
Director General
Council Chair/
Pres. of Assembly
Human resources
Frank Rijsbermann (NL)
GGGI has a governance structure
consisting of an Assembly, Council and a
Secretariat with headquarters in Seoul. Part
of GGGI’s strength lies with its unique
governance structure where all members,
not only donors, decide in consensus.
Given that Korea has developed from
LDC-status and emerged from the middle-
income trap adds to GGGI’s value proposition.
Ethiopia as Acting
Chair/President
Ca. 200 staff (half in Seoul,
half in country offices)
Financial resources
2017: USD 45 million (core
(annual budget):
contributions)
De ark’s
DKK 60 million 2017-19
contributions
DKK 90 million 2014-16
DKK 90 million 2011-13
De ark’s
Member since 2012
membership
Council member in 2012-
13, 2014-15, 2016-17
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Denmark has influenced the development of GGGI through the GGGI Council and Assembly
and as a very active participant in sub-committees.
Denmark has been a member of the Council (Bestyrelsen) in three consecutive periods and one
of the most active members of the organization. Normally, members would only be members
of the Council in two consecutive periods and a contributing member should contribute
minimum 5 Mio. USD annually to be eligible for election to the Council. Thus Denmark will
not be in a position seek reelection to the Council in 2018-19. However, there will de-facto still
be an opportunity to participate in the work of the Council and associated sub-committees. UK
is likely to seek election to the Council in lieu of Denmark.
GGGI has 27 member countries with operations in the following member countries and
potential members: Cambodia, China, Columbia, Ethiopia, Fiji, India, Indonesia, Jordan,
Kiribati, Lao PDR, Mexico, Mongolia, Morocco, Mozambique, Myanmar, Nepal, Peru,
Philippines, Rwanda, Senegal, Thailand, Uganda, United Arab Emirates, Vanuatu, Viet Nam.
Underlined countries are not (yet) members. About half
of GGGI’s funds
are spend in LDCs.
Major donors are the Rep. of Korea, Norway, UK, Australia, UAE, Indonesia and Denmark.
EU is currently discussing membership.
Objectives
According
GGGI’s
founding document
the organsiation’s
objectives are to:
“promote sustainable development of developing and emerging countries, including the least
developed countries, by:
Supporting and diffusing a new paradigm of economic growth: green growth, which is a
balanced advance of economic growth and environmental sustainability;
Targeting key aspects of economic performance and resilience, poverty reduction, job
creation and social inclusion, and those of environmental sustainability such as climate
change mitigation and adaptation, biodiversity protection and securing access to
affordable, clean energy, clean water and land; and
Creating and improving the economic, environmental and social conditions of
developing and emerging countries through partnerships between developed and
developing countries and the public and private sectors.”
Working across the thematic priorities of sustainable energy, green cities, sustainable
landscapes, and water & sanitation, GGGI aims to achieve these objectives through the
realization of six strategic outcomes: 1. GHG emission reduction, 2. Creation of green jobs, 3.
Increased access to sustainable services (eg. Clean affordable energy, sustainable public
transport, improved sanitation and sustainable waste management), 4. Improved air quality, 5.
Adequate supply of ecosystem services, & 6. Enhanced adaption to climate change
Staff
GGGI has seen strong growth in staff, with a doubling of the numbers over the last couple of
years. By the end of the year GGGI plans reach 313 staff members (133 in Seoul and 180 in
country offices).
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3. Key strategic challenges and opportunities.
Relevance for Danish strategy for development cooperation
Denmark’s
Strategy for Development Cooperation
and Humanitarian Action (January 2017)
identifies sustainable development
as one of the four priority areas for Denmark’s international
development cooperation. According to the strategy Denmark will invest in inclusive,
sustainable growth and development in the developing countries, focusing on energy, water,
agriculture, food and other areas where Denmark has special knowledge, resources and
interests. This will contribute to creating sustainable societies with economic freedom,
opportunities and jobs
–
especially for young people.
The concept of green growth supports the Danish priority of creating market based economic
growth. There are potential synergies with other forms of Danish development collaboration
within the areas of green growth, climate and environment.
Danish support to GGGI is part of the Danish Climate Envelope. The global climate
agreement from Paris in 2015 marked a breakthrough for the global regime on climate change
mitigation and adaptation. Together with the Sustainable Development Goals the Paris
agreement constitutes a regime for the much needed actions to combat climate change. Focus
now needs to be on implementation where GGGI can play an important role by helping to
create transformational green growth both in LDC and in partnership with transition and
growth economies. The latter economies will have an important role in fulfilling the SDGs and
finding solutions for their continued
growth without depletion of the Earth’s resources.
This is
an important part of GGGI’s partnership with
middle-income countries and other GGGI
partner countries.
GGGI’s
unique strength is that
its country offices are embedded in ministries (finance,
planning, energy, etc.) of their member countries from where it can help countries identify their
green growth potential that are translated into concrete strategies, planning and budgeting for
green growth. GGGI also assists in policy design and preparation of bankable projects. For
example, GGGI facilitated Mongolia’s National Action Plan for Green Development.
GGGI
has as part of its engagement assisted with the development of alternative heating sources (a
major source of air pollution and GHGE) in low-income areas and in designing energy efficient
public infrastructure.
GGGI’s work is firmly
rooted in the international development goals, including the SDGs and
the Paris Agreement. GGGI works closely with partner countries in implementing the NDCs
(National Determined Contributions) and links directly up with particularly the following SDGs
1. No poverty, 6. Clean water & sanitation, 7. Affordable and Clean Energy, 8. Decent work
and economic growth, 11. Sustainable cities and communities, 12 Responsible consumption
and production, 13. Climate action, 15. Life on Land and 17. Partnership goals.
Challenges for GGGI
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A recent evaluation conducted by independent consultants, a DFID annual review, as well as
the Danida appraisal
agree on GGGI’s main challenges. They also agree that
GGGI’s Strategic
Plan 2015-2020 is providing relevant guidance for GGGI, taking note of the latest global
agreements on Finance, Sustainable Development Goals and Climate. GGGI has delivered
results at output level but needs to demonstrate tangible outcomes for green growth, ensure
systematic knowledge generation, consolidate its organisation and more strongly embed all new
initiatives. It is expected that
GGGI’s members will
encourage GGGI to pursue these goals
during the annual meeting in October 2017.
GGGI should give high priority to
consolidating
its activities and organisation. This includes
establishing a strong corporate culture, consolidating and embedding tools and procedures, and
consolidating, unifying and focusing of global activities at headquarters and programs at
country level. GGGI must create an organsiation that delivers as one. The quick expansion of
staff is a key managerial challenge for the organisation to ensure quality and coherence in all
corners of the organization. This includes ensuring integration between headquarters and
country deliverables as well as between deliverables from different divisions as well as ensuring
synergy between country programmes and bankable projects.
A key challenge for GGGIis to demonstrate its value and potential in facilitating
transformational change, create
bankable projects
and green growth investments. GGGI’s
Green Investment Services have been strengthened. Different types of bankable projects and
financial mechanisms have been formulated. However, the analyses and descriptions of the
transformative nature and scalability of the existing projects are still of varying quality and the
relevance for transformative green growth is not always clear. GGGI will need to develop this
area further and create concrete transformational change. GGGI has in the past years achieved
its goals of leveraging Green investments but this sector needs to grow significantly.
GGGI has developed a significant partnership with
GCF
(Green Climate Fund) and will need
to develop further its partnership with esp. development banks and private investors in order to
leverage its bankable projects. In particular, the envisaged private sector cooperation remains a
challenge.
Half of GGGI’s portfolio is upon insistence from Denmark and other donors focused on
LDCs and GGGI has in the last year continued to
focus on pro-poor growth and social
inclusion.
A gender strategy was finalized in 2016. However, these aspects still need to be
translated into actual impacts on the ground. With the increased number of Least Developed
Countries, there has been an increased focus on adaptation aspects.
GGGI’s
communication
is making progress and becoming more focused but there are still
quite a number of initiatives to be taken to ensure more effective communication. A draft
communication strategy has been prepared. It would be critical to give priority specifically to
the planned upgrade of the webpage, enabling partners to seek information and knowledge
products, increase capacity at country level and ensure a systematic monitoring of the uptake of
communication activities and products.
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As is recognized by GGGI the output level monitored does not provide much information
about actual results in relation to green growth change and higher-level outcomes.
4. Danish priority areas and results.
GGGI needs to improve its
documentation of results,
not just its activities and
processes, in order to demonstrate its value. GGGI aims to assist countries to identify
the aspects of green economic change and work with them to understand how they can
translate this into policies, programmes and projects that will eventually
lead to real
change on the ground;
and by this generate examples which other countries would
want to follow. Moreover, GGGI needs to fully implement a
Result Based
Management
system, which enables the institution to make informed management
decisions regarding the effective use of resources to deliver on the envisaged results,
GGGI has continued to enhance the
effectiveness and value for money
required in a
young developing organisation. GGGI has given priority to and allocated relevant
resources to maintain focus on developing a sound financial management set-up.
Denmark should continue focussing on
the organisation’s internal efficiency and budget
flexibility. GGGI’s anti-corruption
policy and zero tolerance towards corruption is well
described and communicated. GGGI has upon suggestion from Denmark agreed to
develop a policy for communication with donors about detection and reporting of
irregularities.
Increasing GGGI’s focus on
poverty reduction and social inclusion
was previously
one of the main Danish priorities. These issues have now to a large extend been
integrated into the work of GGGI. While poverty reduction and social inclusion
remains a priority for Denmark, it is expected to require less attention.
Finally, increasing collaboration between
GGGI and Danish stakeholders’
should be
priority. Denmark will encourage further collaboration with Growth Advisors, Danida
Country Programmes and the Danish Energy Agency Programme, possibly with Danish
ear marked funding, where it makes sense. A Danish secondee could also help to
develop this. GGGI and its Director General is actively involved in P4G.
5. Budget
In 2017-18, GGGI is in a sound financial position, provided that all the expected funding
materialises; however, some of the expected funding is still not firmly committed. GGGI has
been unable to use the funding envelope in the start-up phase and expenditure execution
against budget has been low in previous years. However, improvements were seen in 2016, with
an execution rate of 75%, up from 68 % in 2015 and 63 % in 2014 (see figure). The low
execution rate has resulted in funds being carried forward. This has allowed GGGI to budget
for an expenditure level of around USD 50 million for 2017/18. For 2019/20, however,
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funding is expected to be at around USD 40 million per year rather than previous planning
figures of around USD 80 million per year. There is now agreement among donors that GGGI
should in the coming years remain on a budgetary level of USD 40-50 million.
Figure 2 GGGI budget and actual expenditure
Only part of the future funding has been secured. Changes in donor contributions could have a
significant impact
on GGGI’s financial position.
The organisation is therefore carefully seeking
to address the issue through a range of resource mobilisation initiatives. A likely outcome will
be that more funding will become earmarked.
The Danish contribution
to GGGI will be 60 Mio. DKK for the period 2017-19. Denmark
will as part of the contribution second a person that should be strategically placed in GGGI.
The two prior Danish contributions have been 90 Mio. DKK for a three-year period. It is
important that Denmark continues to give core funding to enable GGGI to do its strategic
work.
Budget, Mio. DKK
Core Funding
Secondment*
Reviews
2017
20
2018
19
1
2019
18.5
1
0.5
*Additional funding for the Danish secondment will be paid by 680.000 DKK remaining on the 2014-16
contribution and GGGI core funds.
6. Risk assessment and mitigation
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GGGI is a young organisation and in a build-up and change process, therefore a great deal of
uncertainty exists as to the future financial sustainability, effectiveness, efficiency and impact of
the organisation. Medium to high risk with high impact exists in relation to fast achievement of
concrete results and making the new financial mechanisms work, consolidating the organisation
and its financial future. The risks are recognised by GGGI and relevant initiatives are taken to
reduce these risks. A relatively high-risk level is to be expected in a young and rapidly
expanding organisation. It is envisaged that the risk level will be reduced as the organisation,
programmes and new tools are consolidated. It should, given the history of the organisation, be
noted that no risk has been identified in relation to financial management.
Contextual risks
Risk Factor
Long lead time for
green growth
investments, and later
than expected results
on the ground
Likelihood
Medium
Impact
Medium
Risk response
GGGI convey to
partners and donors,
what will be delivered
by GGGI and the
realistic timeframe for
their realisation
GGGI secure efficient
and uniform planning
processes and resources
use. Strengthen capacity
of country teams
GGGI continues a
participatory and
demand based
approach, embedded in
national institutions and
priorities. Continues to
strengthen in-country
presence
Background to assessment
Several of the bankable projects are
complex and require long lead
times and this can be a problem in
relation to Partner and donor
expectations on rapid results on the
ground. Further, GGGI does only
facilitate and are not controlling
actual investments
Lack of capacity and
ownership among
country level partners
for mainstreaming
green growth
Low
High
Green growth is a contested area,
and although there are key
stakeholders in countries
promoting it, there are also a
number of stakeholders against it
Programmatic risks
Risk Factor
Consolidation of
GGGI is not managed
properly. GGGI do
not ensure consistency
between priorities and
available resources and
do not give attention to
development of a
uniform corporate
culture
Challenges over time in
GGGI’s financial
Likelihood
Medium
Impact
High
Risk response
GGGI is aware of the
importance of
consolidation.
Implementation of
initiatives for planning
and working as one-
GGGI will, if
implemented, reduce
risks. New major
initiatives and
expansions should be
avoided.
Continued strong
efforts to secure
Background to assessment
This risk relates to the
organisation’s management of
multiple level and multi-faceted
change processes. If managed well,
it will have important positive
impacts on the organisation’s
ability to deliver results
Medium
High
This risk is related to GGGI’s
ability to continue to attract
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sustainability and shift
in balance between
core and earmarked
funding are having
negative impact on
GGGI’s stability
and
ability to fully decide
on priorities
Inadequate
identification of
barriers of a political
economic nature and
change areas for green
growth implementation
Inadequate ability to
achieve
transformational
change.
Medium
Medium
Medium
High
additional funding also
at country level.
Planning for operation
under different budget
scenarios including how
to address the balance
between core and
earmarked funding.
Further keep
management organs
(MPSC) fully informed
about and involved in
discussion of budget
scenarios
GGGI is working on
ensuring better and
more practical analytical
work and tool
development work.
Integrate more context
analysis and identify
change areas
Continued focus on
innovation and
improved management.
Continued focus on
recruiting and keeping
the right talent. Focus
on consolidation and
not spread resources
too thin (both
geographic and
thematic focus)
funding and sufficient core
funding, which is based on how
GGGI is able to deliver results. It
is also related to how GGGI is able
to respond to a changing donor
landscape
GGGI has produced a number of
too comprehensive/complicated
guidance documents on green
growth with little consideration of
context/political economy
One of GGGI’s key strengths is to
be flexible and innovative. This is
required to achieve
transformational change.
Institutional risks
Risk Factor
Major mismanagement
of funds or corrupt
practises in GGGI will
have serious negative
impact on the
reputation of GGGI
and its donors
Likelihood
Low
Impact
High
Risk response
GGGI has good
financial management
systems, controls and
staff in place
Background to assessment
Given the history of
Denmark/GGGI and the
implications on GGGI operations
and delivery of results, it is very
important that good financial
management is maintained
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