GCF is considering Renewing its Collaboration with UNDP

Under the shadow of unresolved corruption charges at two of its projects, the UN Development Programme is seeking to extend its collaboration with the UN’s flagship climate fund.

The Green Climate Fund was established to assist poor countries in reducing their emissions and dealing with the effects of climate change. In poor countries, it is up to agencies like the UNDP to provide programmes.

Despite allegations of corruption and worries about insufficient execution of UNDP rules at its regional bureaux, the GCF accreditation panel is proposing that the fund extend its connections with the UN development agency, its largest implementing partner, during a virtual board meeting this week.

Allegations of corruption have been levelled against UNDP-led projects approved by the fund in Armenia and Samoa. The GCF is awaiting the results of an investigation into the allegations by the UNDP.

Donor countries continue to press UNDP to demonstrate proof of corrective action in the wake of a long-running corruption scandal at one of its Russian programmes.

Allegations of millions of dollars being misappropriated in a Global Environment Facility-funded programme to improve energy efficiency in Russia have severely harmed the agency’s reputation.

UNDP’s request to extend its accreditation with the GCF was “cynical,” and the UN body should first “put its house in order.”

According to a UNDP spokesman, the agency underwent “an extensive and transparent due diligence procedure as part of the re-accreditation process,” and the charges levelled against its GEF-related programmes have been “significantly investigated”.

He went on to say that the agency was quickly implementing recommendations in response to the case and that its oversight policies were being strengthened.

In terms of both the number of projects supported and the amount of money raised, UNDP is the GCF’s most important implementing partner. The GCF board has authorised 35 UNDP projects totalling $2.4 billion as of the end of July.

Given UNDP’s role as a “go-to international implementing partner for GCF programmes for many developing countries,” Liane Schalatek, a climate finance expert with the Heinrich Boell Foundation and a close GCF watcher, described the re-accreditation of UNDP as “tricky”.

The GCF board meeting this week will determine whether UNDP has robust enough processes and oversight in place across the organisation to receive, investigate, and respond effectively to claims of corruption and mismanagement.

There is still a culture of covering up fraud and failing to protect whistleblowers, which hasn’t been properly addressed. Six UNDP projects were on the GCF’s watch list for careful monitoring as of July.

Corruption claims have been levelled against a $66 million flood management project in Samoa, which Climate Home previously reported aroused concerns among technical experts, and a $116 million project in Armenia to promote energy efficiency through upgrading buildings.

Specific concerns about charges of corruption at these programmes were not answered by the UNDP.

Re-accreditation recommendations were issued on the condition that the UN body develops anti-money laundering policies throughout the organisation and demonstrate corrective efforts in 2024 through an independent study.

In an update reviewed by Climate Home in July, UNDP head Achim Steiner warned the executive board that the UNDP has zero-tolerance for any fraud, misappropriation, or irregularities. Despite the fact that a whistleblower claimed Russian officials were awarding lucrative contracts to friends and family in the GEF-funded project nearly seven years ago, no one has been publicly held accountable. The complete tale of the ten-year Russia programme, which ended in 2017, has yet to be revealed.

Some funders are concerned about UNDP’s ability to deal with corruption claims.

The Netherlands suspended €10 million of its voluntary €30 million yearly contributions to UNDP after writing to Steiner in March 2020 to voice concerns, expressing unhappiness with UNDP’s response to the claims.

“UNDP should restore confidence that the alleged malpractices have been fully probed and that lessons have been broadly drawn to prevent such difficulties in the future,” stated a representative for the country’s foreign ministry.

Switzerland’s Konrad Specker stated at a GEF council meeting in June that his country shared “basic concerns” about UNDP. He went on to say that recommendations and legislation changes “do not really address the questions related to management behaviour and organisation culture”.

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