Integration for greater impact

3.4 Efficiency in resource use

This section reviews administrative and operational efficiency, comparing the GEF’s administrative costs with those of peer environmental funds. It also examines operational efficiency across the project cycle, focusing on how quickly GEF‑committed resources move from approval to disbursement, reach beneficiaries, and support the achievement of intended objectives.

Administrative efficiency

The GEF ranks as the most efficient among the vertical climate funds in terms of administrative costs/expenditure ratios. Administrative costs typically account for between about 1 and 18 percent of total expenditures across various funds⁴. The GEF’s LDCF had the lowest administrative cost share at 1 percent⁵, while the GCF recorded the highest at 17.63 percent over 2021–23. With an administrative cost-to-expenditure ratio of 3.7 percent, the GEF Trust Fund maintained a relatively low overhead compared to several other funds, highlighting its operational efficiency. The GEF’s disbursement-to-approval ratio is 76 percent compared to 31 percent for the GCF and lower ratios for other vertical climate funds (G20 SFWG 2024). Agency fees for the GEF are about 9 percent, which is in line with other climate funds.

Financial efficiency also improved under SGP Operational Phase 7 (OP7, 2020–24). The grant ratio (the percentage of the total GEF envelope of grants disbursed to SGP grantees for projects on the ground) increased from 64 in 2020–21 to 66 in 2023–24, and cofinancing increased as well.

Operational efficiency

Assessing the efficiency of the GEF activity cycle is crucial for understanding how effectively and promptly the GEF partnership translates replenishment resources into tangible environmental results. Delays in the activity cycle can hinder timely achievement of results and reduce the overall effectiveness of interventions. Recognizing this issue, the GEF Council, the GEF Secretariat, and other partners have placed increased emphasis on improving cycle efficiency.

The GEF has sustained—and, in some areas, improved—its activity cycle efficiency in GEF-8 compared to previous replenishment periods. Over the past four years, notable operational efficiency gains have been observed in some stages of the activity cycle (table 3.6). Project identification form (PIF) submissions for stand-alone full-size projects continued to receive timely approvals, maintaining the efficiency gains first observed in GEF-7—some of which were initially enabled by pandemic-related shifts to virtual workflows. The time from PIF approval to CEO endorsement also improved, with approved full-size projects from GEF-8 reaching endorsement in a median of 18 months, compared to 23 and 22 months for the GEF-7 and GEF-6 periods, respectively. Seventy-three percent of GEF-8 full-size project approvals met the 18-month threshold for CEO endorsement, which is a substantial improvement over GEF-7 and GEF-6, where only 14 percent and 25 percent, respectively, of approvals had met this threshold. In contrast, the transition from CEO endorsement to first disbursement has slowed, partly because of pandemic-related delays. Projects endorsed in 2022–23 disbursed funds in a median of 20 months, compared to 9- and 11-month medians for GEF-7 and GEF-6, respectively. In terms of implementation, full-size projects take about 75–78 months from start to completion, and medium-size projects take about 60 months.

Table 3.6 Efficiency of activity cycle: median time taken between steps in months

Different project modalities vary in preparation time and time taken to reach key implementation milestones. For example, while recent child projects approved under integrated programs require a similar amount of preparation time as those prepared under other programs and stand-alone projects, they have taken longer to reach first disbursement. Notably, the implementation duration for child projects under integrated programs has been somewhat shorter than that of child projects in other programs and stand-alone projects. Medium-size projects typically have shorter preparation and implementation durations than full-size projects.

Multiple financing windows add complexity for countries and Agencies. The GEF has five competitive windows using GEF Trust Fund resources: the Non-Grant Instrument Program, the Inclusive GEF Assembly Challenge Program, the Innovation Window, the SGP Civil Society Organization (CSO) Challenge Program (GEF ID 11757, International Union for Conservation of Nature), and the System for Transparent Allocation of Resources (STAR) Competitive Window for Policy Coherence. In addition, the Global Biodiversity Framework Fund represents a new funding source with its own selection process, as do some components of the Gustavo Fonseca Youth Conservation Leadership Program. The LDCF and the SCCF have a competitive window as well: the Challenge Program for Adaptation Innovation. CSOs and community-based organizations now have multiple entry points to access GEF resources, including the SGP through FAO and Conservation International (in addition to UNDP); the SGP CSO Challenge Program; the SGP Microfinance Initiative (GEF ID 11903, World Bank), which provides support through microfinance institutions; and the Inclusive Conservation Initiative, launched in GEF-7. These various windows have their own processing timelines and procedures, adding to complexity for countries as well as Agencies.

Despite efficiency progress in the SGP, administrative burdens pose efficiency obstacles, such as manual paperwork, procurement and disbursement delays, and constrained country teams. Many national coordinators juggle proposal screening, site monitoring, and accounting with little clerical help. There is a risk that cost-effectiveness gains at the portfolio level may be offset by slow disbursements on the ground.