The World Bank Group plays three major roles in the GEF: (a) as the Trustee of the GEF and related trust funds; (b) as one of the three original Implementing Agencies of GEF-funded projects; and (c) providing administrative services as the host of the functionally independent GEF Secretariat.

The principal objectives of this Review were (1) to help improve the relevance and effectiveness of the Bank Group’s partnership with the GEF, and (2) to draw lessons for the Bank Group’s partnership with the GEF and other large global partnership programs. The GEF is representative of the growing number of large partnerships in which the Bank has become involved that are financing country-level investments to achieve specific Millennium Development Goals, that have inclusive governance structures, and that subscribe to the 2005 Paris Declaration on Aid Effectiveness. Pre-dating the Millennium Declaration by a decade, the GEF also provides a longer time period from which to draw lessons about the Bank’s involvement in such programs.

This Review found that the mandates and strategies of the Bank Group and the GEF have been highly compatible and mutually relevant both in the past and today. The Bank views the GEF as a key contributor to innovative and risk-sharing approaches, while the GEF perceives the Bank as having a key comparative advantage in leveraging GEF funding to generate global environmental benefits in large projects. The GEF has also contributed to mainstreaming environmental objectives into the Bank Group’s corporate strategies, to the development of national environmental policies, to piloting and demonstrating new technologies and approaches, and to initiating new business lines in the Bank Group.

However, the Review also found that the organizational effectiveness of the Bank Group-GEF partnership has diminished over time due to a number of factors, including the growing number of GEF Agencies, repeated reforms to the GEF’s project cycle and Agency fees, the introduction of new resource allocation systems in the GEF, and the emergence of funding alternatives to the GEF in the climate change area. These have contributed to increased competition among GEF Agencies, unclear partnership responsibilities for quality assurance and cost recovery, a declining World Bank share of GEF funding over time, and reduced opportunities for private sector participation in GEF projects.

Each of these issues needs to be addressed as part of a comprehensive solution to revitalizing the GEF-Bank Group partnership. The two parties need to agree on what type of partnership is mutually desired in the future and either to re-establish the conditions for a close partnership based on collaboration and complementarity, or to redefine the roles and responsibilities of the Bank Group as a GEF Agency.

The Review also reinforces findings from previous IEG reviews in relation to the Bank Group’s involvement in global partnership programs like the GEF.

  • Large global partnerships are usually independently governed; their main accountability is not towards the World Bank, but towards a governing body which can impose changes in project-cycle management on the Bank. The Bank needs to carefully consider potential implications along its entire project cycle, when considering a project implementation role in large partnership programs.
  • The World Bank does not have a formal operational policy for hosting the management units (secretariats) of partnership programs, even though it has been hosting an array of large and small programs, exercising varying degrees of independence, for over 40 years. The Bank needs to effectively address the issue of hosting the secretariats of all types of partnership programs located in the Bank.