New January 2013 FONERWA INCEPTION REPORT - CIDT · 2019. 3. 5. · Organising inaugural meetings...

FONERWA INCEPTION REPORT GOVERNMENT OF RWANDAEnvironment and Climate Change Fund(FONERWA) Design Project

January 2013

Introduction and background VSummary of inception phase activities’ status based on work plan VI

Section 1 Establishment of FONERWA 1

1.1 1.21.3 1.41.51.61.71.81.91.101.111.121.131.141.151.161.17

1.181.191.201.21

1.22

1.23

Mobilising the Fund Management Team (FMT) Meeting with REMA/MINIRENA/DFIDSubmitting a Costed Final Work PlanOrganising the Inception WorkshopPreparing and Submitting the Rolling Budget and Work Plan for 2 YearsFinalising the Full FONERWA Logical FrameworkEstablishing the FMT Office in KigaliLiaising with MINECOFIN to include reference to FONERWA in EDPRS 2Preparing the Prime Minister’s decree and Establishment of Governance StructureOpening a FONERWA Bank AccountFine Tuning the Design and Operational ManualSetting up the FONERWA Financial Management, Accounting and Procurement SystemFinalising Disbursement Mechanisms for Public and Private Sector BeneficiariesOrganising inaugural meetings for the FMC/FTC in November 2012Preparing and Submitting an Exit Strategy to FMC/FTCFinalising Grant Application Forms, Tools and ProcessesPreparing and Submitting the VfM Strategy for Prioritising Windows/Entry Points and Projects to the FMC/FTC and finalising a Fiduciary Risk Approach Preparing a List of Pipeline Projects that May be Eligible for FONERWA FinancingPreparing and Submitting a Communications Strategy for ApprovalOrganising the Public Launch of FONERWADiscussing and Finalising the Approach for Joint Programming with Other Similar Projects for Cost SavingsDiscussing and Finalising the Partnership with Business Development Fund and Private Sector FederationPreparing and Submitting the Inception Report

Section 2 Management of the fund 8

2.1 Functioning of FONERWA2.1.1 Organising Weekly Meetings, Bi-Weekly Management Clinics, Monthly Spot Checks

2.2 Internal resource mobilisation2.2.62.2.11

Finalising the Draft Ministerial Order for Collection of Fines/FeesProposing and the Finalising Ministerial Order for the establishment of an efficient EIA fee structure

2.3 External resource mobilisation2.3.62.3.7

Finalising the draft MoU between GoR and Development PartnersPresenting FONERWA Features to DPs during SWG Meetings

2.5 Provision of technical assistance2.5.3 Initiate and Roll Out a Technical Help Line Centre through Knowledge Management

Platform2.8 Communication and outreach services

2.8.12.8.22.8.3

Prepare and Submit a Communications Strategy for ApprovalEstablishing Visual Identity and Branding GuidelinesDeveloping and Circulating FONERWA Brochure

CONTENTS This Table of Contents includes the status for work plan items scheduled for completion in the inception phase.

Section 3 Monitoring and evaluation 13

3.13.5

3.6

Consulting with NISR/MINECOFIN on the feasibility of the Proposed FONERWA M&E FrameworkEnsuring Incorporation of at least 2 FONERWA M&E Indicators into the EDPRS 2 Policy and Result MatrixSubmitting Proposed Additional Reporting Templates for Approval

Section 4 Knowledge management 15

4.14.6

Establishing a System to Integrate Knowledge Management within the Project CycleEstablishing the Integrated Web Based Platform for FONERWA

Section 5 Capacity development 17

5.15.25.75.85.14

Conducting a Capacity Needs Identification/AssessmentDesigning the Capacity Building ProgrammeOrganising and Facilitating Training on Project Identification and FormulationIdentifying Trainers from GoR and BDF/BDSOrganising and Facilitating On the Job Training for the GoR/FONERWA Secretariat/ and BDF/BDS Trainers

Section 7 Project management 20

7.1

7.2

7.3 7.47.57.67.77.87.97.107.117.12

Preparing and Submitting a FONERWA Project Logical Framework to DFID-Rwanda and MINIRENA/REMAPreparing and Submitting FMT’s Work Plan and Budget for the next 2 Years including Procurement Strategy/ PlanEnsuring Project Management System is in Place including Financial Management and AccountingIdentifying and Recruiting Local Auditor Firm and Conduct Periodic Auditing of Project FinanceEnsuring the QA System is in PlaceRefining the Risk Assessment Matrix and Opening a Risk RegisterDrafting a Contingency PlanEnsuring Data Recording of All ProjectsSubmitting Quarterly Progress Reports to DFID-Rwanda and GoROrganising Quarterly Meetings with DFID-Rwanda /GoREnsuring Timely Recruitment of the Call-Down Consultants from the PoolPreparing and Submitting ToRs for Pool of Consultants to DFID-Rwanda and GoR as and when Required

CONTENTS This Table of Contents includes the status for work plan items scheduled for completion in the inception phase.

IV

LIST OF ANNEXES

1A Inception Workshop Agenda ATTACHED

1B Inception Workshop Attendance List ATTACHED

2 Revised FONERWA Logical Framework ATTACHED

3 Excerpt of FONERWA for ENR Sector Strategic Plan ATTACHED

4 Draft Prime Minister’s Order Determining the Composition of the FONERWA Managing

ATTACHED

5 Review of Financial Management, Accounting & Procurement Procedures ATTACHED

6 FONERWA Private Sector Targeting Strategy ATTACHED

7 Value for Money Strategy ATTACHED

8 Edited PPD and PD Forms with revised Guidelines for Screening ATTACHED

9 FONERWA Capacity Development Proposal ATTACHED

10 FONERWA Communication Concept Note ATTACHED

11 FMT Revised Work Plan ATTACHED

12 FMT Revised Budget WORK IN PROGRESS

13 Selection of Pipeline Projects for Potential FONERWA Financing

14 Concept Note on the Administrative Approach and Process for the Collection of Fees

ATTACHED

15 FMT Original Work Plan ATTACHED

16 Draft Letter to Honorable Minister of Finance and Economic Planning for Institutionalizing Public EIA fees into the Budgeting

ATTACHED

17 FONERWA Metadata Handbook ATTACHED

18 Revised FMT Logical Framework ATTACHED

19 Revised FONERWA Capacity Development Plan ATTACHED

20 Finance Assessment and Resource Mobilisation Strategy ATTACHED

21 Resource Mobilisation 6 Month Work Plan ATTACHED

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INTRODUCTION AND BACKGROUND

The following report sets out the status of inception phase activities scheduled from October to December, 2012, for the CIDT-led FONERWA Fund Management Team (FMT) Project, supported by DFID. Inception activities began with the mobilisation of the FMT in Kigali, Rwanda, and conclude with approval of this report.

The CIDT-led Fund Management Team proposed a phased approach to the 2-year Fund management consisting of Fund establishment; operationalisation and transfer of management (see Figure 1).

Figure 1. Phased approach to Fund management.

Phase 1 establishes the foundations of FONERWA operations by setting up key governance structures, identifying Secretariat staff, approving design features and formalising a working partnership with the Rwandan Development Bank (BRD) over the first 3 months.

Phase 2 features the bulk of FMT services during months 4-17, and involves initiation of quarterly application rounds, outreach in the form of communications and awareness raising, capacity building, resource mobilisation and periodic reviews to ensure delivery of results.

Phase 3 is the culmination of the work of Phases 1 and 2. During the final 6 months of the 2 year Fund operationalisation, phase 3 ensures that FONERWA management staff within the GoR is in place and sufficient resources mobilised to facilitate the continued function of the Secretariat and proposal financing beyond the 2 year operational period.

Phase 3: Transfer of Fund Management (month 18-24)- Ensure staffing- Ensure resources - Quality assured GoR management by the FMT- External evaluation of FMT

VI

SUMMARY OF INCEPTION PHASE ACTIVITIES’ STATUS BASED ON WORK PLAN

This inception report highlights progress made by the FMT under Phase 1 of the FMT Project (also known as the Inception Phase, see above background section). Inception phase progress is tracked against the Work Plan submitted as part of the Technical Proposal of the FMT Project (for ease of reference, the original Work Plan of the CIDT Technical Proposal is enclosed as Annex 15). The revised version of the Work Plan is enclosed in Annex 11.

The status of inception activities scheduled in the project Work Plan is summarised in Table 1 below. As per the project Work Plan, activity areas covered include: Establishment of the Fund, Management of the Fund, Monitoring and Evaluation, Knowledge Management, Capacity Building and overall FMT Project Management. The status of inception phase deliverables is summarised in Table 2 below, along with relevant comments.

Both Table 1 and 2 use a traffic light system to reflect activities’ respective completion status. Activities designated with a Green traffic light are those that the FMT has completed and submitted. Yellow traffic lights indicate that activities were initiated but not completed by the FMT. Red lights indicate that the FMT has yet to initiate the activity due either to circumstances beyond its control, or in light of requests to delay the activity by the Government of Rwanda. Detailed justification of the delivery status of each activity is given in sections below.

Table 1. Status of inception phase activities from project Work Plan.

Activity number

Activity area Completed Partially Completed

Not Completed

1.0 Establishment of Fund

1.1 Mobilise Fund Management Team

1.2 Meet with Ministry of Environment and Natural Resources (MINIRENA)/Rwanda Environment Management Authority (REMA) & DFID Rwanda

1.3 Submit Costed Final Work Plan

1.4 Organise Inception Workshop

1.5 Prepare and Submit Rolling Budget and Work Plan for 2 Years

1.6 Finalise FONERWA Logical Framework

1.7 Establish Fund Management Team (FMT) Office

1.8 Liaise with MINECOFIN to include reference FONERWA in Economic Development and Poverty Reduction Strategy Paper (EDPRS) 2

1.9 Prepare Prime Minister's decree and Establishment of Governance Structure

1.10 Open a FONERWA Account

1.11 Fine Tune Design and Operational Manual

1.12 Set Up FONERWA Financial Management, Accounting and Procurement System

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1.13 Finalise Disbursement Mechanisms for Public and Private Sector Beneficiaries

1.14 Organise inaugural meetings for the FONERWA Managing Committee(FMC)/FONERWA Technical Committee (FTC) in November 2012

1.15 Prepare and Submit an Exit Strategy to FMC/FTC

1.16 Finalise Grant Application Forms, Tools, Processes

1.17 Prepare and Submit VfM Strategy for Prioritising Windows/Entry Points and Projects to FMC/FTC and Fiduciary Risk Approach

1.18 Prepare a List of Pipeline Projects that May be Eligible for FONERWA Financing

1.19 Prepare and Submit a Communications Strategy for Approval

1.2 Organise Public Launch of FONERWA

1.21 Discuss and Finalise Approach for Joint Programming with Other Similar Projects for Cost Savings

1.22 Discuss and Finalise Partnership with Business Development Fund and Private Sector Federation

1.23 Prepare and Submit Inception Report

2.0 Management of the Fund

2.1.1 Organise Weekly Meetings, Bi-Weekly Management Clinics, Monthly Spot Checks

2.2.6 Finalise Draft Ministerial Order for Collection of Fines/Fees

2.2.11 Propose and Finalise Ministerial Order for the establishment of an efficient Environment Impact Assessment (EIA) IA fee structure

2.3.6 Finalise draft Memorandum of Understanding (MoU) between GoR and Development Partners

2.3.7 Present FONERWA Features to Development Partners’ (DPs) during Sector Working Group (SWG) Meetings

2.5.3 Initiate and Roll Out a Technical Help Line Centre through Knowledge Management Platform

VIII


2.82 Establish Visual Identify and Branding Guidelines

2.83 Develop and Circulate FONERWA Brochure

3.0 Monitoring and Evaluation

3.1 Consult with NISR/MINECOFIN on feasibility of the Proposed FONERWA M&E Framework

3.5 Ensure Incorporation of at least 2 FONERWA M&E Indicators into EDPRS 2 Policy and Result Matrix

3.6 Submit Proposed Additional Reporting Templates for Approval

4.0 Knowledge Management

4.1 Establish a System to Integrate Knowledge Management within Project Cycle

4.6 Establish Integrated Web Based Platform for FONERWA

5.0 Capacity Development

5.1 Conduct Capacity Needs Assessment

5.2 Capacity Building Programme Design

5.7 Organise and Facilitate Training on Project Identification and Formulation

5.8 Identify Trainers from GoR and BDF/BDS

5.14 Organise and Facilitate On the Job Training for GoR/FONERWA Secretariat/ and Business Development Fund (BDF) /Business Development Services (BDS) Trainers

7.0 Project Management

7.1 Prepare and Submit a FONERWA Project Logical Framework to DFID-Rwanda and MINIRENA/REMA

7.2 Prepare and submit FMT's Work Plan and Budget for the next 2 Years including Procurement Strategy/ Plan

7.3 Ensure Project Management System is in Place including Financial Management and Accounting


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7.4 Identify and Recruit Local Auditor Firm and Conduct Periodic Auditing of Project Finance

7.5 Ensure QA System is in Place

7.6 Refine the Risk Assessment Matrix and Open a Risk Register

7.7 Draft a Contingency Plan

7.8 Ensure Data Recording of All Projects

7.9 Submit Quarterly Progress Reports to DFID-Rwanda and GoR

7.10 Organise Quarterly Meetings with DFID-Rwanda /GoR

7.11 Ensure Timely Recruitment of the Call-Down Consultants from the Pool

7.12 Prepare and Submitting ToRs for Pool of Consultants to DFID-Rwanda and GoR as and when Required

Table 2. Inception phase deliverables and comments.

Inception Phase Deliverables Status Comments

1.1 FONERWA Secretariat Fully Functional

1.2 FONERWA Governance, Systems and Processes ready and Functional

1.3 Inaugural Session of FMC/FTC Meetings Held

FMT will organise the inaugural sessions pending GoR approval.

1.4 FONERWA Officially Launched This activity was deferred as FONERWA is yet to be capitalised. The FMT is expected to officially launch FONERWA by end of February, 2013.

1.5 Joint Programming with other Projects Completed

1.6 Partnership with Implementation Organisations Fully Established

The partnership proposal and MoU with BDF are ready for discussion. The partnership is expected to be fully established by end of February, 2013.


X

1.7 FONERWA is referred in EDPRS II EDPRS drafting will be finalised in March, 2013. All necessary actions have been undertaken to ensure FONERWA is referred to in EDPRS.

1.8 FONERWA VfM, Fiduciary Risk Management Strategy Approved

Procurement and Financial Management Procedures (Section 4) of the FONERWA Operational Manual was reviewed and necessary amendments were made to minimise fiduciary risk. A VfM strategy is also in place.

1.9 FONERWA Inception Report Submitted and Approved

The Inception Report is expected to be approved by January, 2013.

1.10 Communication Strategy, Visual Identify and Branding Guidelines Established and Approved

A communications concept note is in place. Visual Identify and Branding Guidelines have been established and approved by the GoR.

1.11 FONERWA M&E Framework and Reporting Templates Refined, Approved and Operational

The M&E framework have been approved by both GoR and DFID-Rwanda. The reporting templates have been revised and are awaiting approval by end of January, 2013.

1.12 Capacity Needs Assessment is Conducted

1.13 Project Logical Framework, Work Plan, Budget and a Procurement Plan Submitted to DFID Rwanda/GoR for Approval

Project logical framework has been approved. Revised work plan and budget have been prepared. They will be submitted to DFID-Rwanda for approval.

1.14 Quality Assurance, Risk Assessment, Auditing and Reporting Systems is in Place

CIDT internal project management quality assurance, risk assessment, auditing and reporting systems are in place.

Note that in the sections below, section titles correspond with inception phase activities highlighted in Table 1 above. Given some numbered activities from the Work Plan take place in future project phases, corresponding activity numbers are not necessarily in sequential numerical order. See the Work Plan in Annex 15 for further reference.


SECTION 1 - ESTABLISHMENT OF FONERWA 1.1 Mobilising the Fund Management Team (FMT) 21.2 Organising an Inception Meeting with REMA/MINIRENA/DFID 21.3 Submitting a Costed Final Work Plan 21.4 Organising the Inception Workshop 21.5 Preparing and Submitting the Rolling Budget and Work Plan for 2 Years 31.6 Finalising the Full FONERWA Logical Framework 31.7 Establishing the FMT Office in Kigali 31.8 Liaising with MINECOFIN to include reference to FONERWA in EDPRS 2 31.9 Preparing the Prime Minister’s decree and Establishment of Governance Structure 31.10 Opening a FONERWA Bank Account 41.11 Fine Tuning the Design and Operational Manual 41.12 Setting up the FONERWA Financial Management, Accounting and Procurement System 41.13 Finalising Disbursement Mechanisms for Public and Private Sector Beneficiaries 41.14 Organising inaugural meetings for the FMC/FTC in November 2012 51.15 Preparing and Submitting an Exit Strategy to FMC/FTC 51.16 Finalising Grant Application Forms, Tools and Processes 51.17 Preparing and Submitting the VfM Strategy for Prioritising Windows/Entry Points and Projects to the FMC/FTC and finalising a Fiduciary Risk Approach 51.18 Preparing a List of Pipeline Projects that May be Eligible for FONERWA Financing 61.19 Preparing and Submitting a Communications Strategy for Approval 61.20 Organising the Public Launch of FONERWA 71.21 Discussing and Finalising the Approach for Joint Programming with Other Similar Projects for Cost Savings 71.22 Discussing and Finalising the Partnership with Business Development Fund and Private Sector Federation 71.23 Preparing and Submitting the Inception Report 7

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SECTION 1 - ESTABLISHMENT OF FONERWA

The primary objective of the FONERWA Inception Phase was to finalise Fund design features, governance, systems and procedures of FONERWA operations and management in the lead up to a Public Launch and acceptance of proposals. The FMT’s approach during this three month period was to ensure that the establishment of FONERWA was carefully adapted to the Rwandan context through close engagement of the Government of Rwanda, DFID and other relevant stakeholders. The inception process began in October 2012 with the recruitment of the Fund Management Team, and was successfully completed in December 2012 as the FONERWA Fund is now established and ready for capitalisation.

Sub-sections 1.1 to 1.23 below provide a description of the inception work carried out to establish the FONERWA fund, along with a corresponding completion status, indicated by the traffic light system (green – completed, yellow – partially completed, red – yet to initiate).

1.1 MOBILISING THE FUND MANAGEMENT TEAM (FMT)

The Fund Co-ordinator was in place starting from October 1st, 2012. An additional three member team started work from November 4th, 2012. Members include a Financial Management, Accounting and Procurement Specialist, Monitoring and Evaluation Specialist and Executive Secretary. Contractual negotiations between CIDT and an Internal Tax Adviser were also completed, with the Adviser to be in post from the 15th of January, 2013. The Fund Management Specialist position remains vacant following withdrawal of the original candidate, as a result of her appointment to a high level Government of Rwanda position. A replacement candidate was secured after a proactive recruitment process. The candidate is likely to be in place, following consultation with DFID-Rwanda, towards the end of January, 2013. Since capitalisation of FONERWA is yet to be mobilised, the absence of the Fund Management Specialist did not have any implications on the day-to-day management of FONERWA. On the contrary, it resulted in significant cost savings by the FMT.

1.2 ORGANISING AN INCEPTION MEETING WITH REMA/MINIRENA/DFID

An inception meeting was held with DFID-Rwanda on October 16th, 2012. Inception meetings were also organised with REMA/MINIRENA on October 17th, 2012. These meetings provided an opportunity for the FMT to present its approach towards fund operationalisation, management and handover. Several other meetings were also held with the Ministry of Finance and Economic Planning (MINECOFIN), Business Development Fund (BDF) and key development partners including UNDP, KFW, EC and SIDA to update them on the status and progress on the operational phase of FONERWA.

1.3 SUBMITTING A COSTED FINAL WORK PLAN

Based on the progress made in Phase 1 (i.e. the Inception Period), a revised Work Plan was designed, which is enclosed under Annex 11. There have not been any substantial changes in this revised Work Plan except that some of the partially/not completed activities have been added to the Phase 2 (i.e. the Operationalisation Phase). A revised budget is also enclosed in Annex 12 (confidential and not for wider circulation).

1.4 ORGANISING THE INCEPTION WORKSHOP

A day-long Inception Workshop was held on the 20th of November, 2012. The aim of the workshop was to hold technical discussions regarding the proposed way forward for FONERWA operationalisation and management. The workshop was an opportunity to discuss the FONERWA Capacity Development Plan, M&E Framework, and Resource Mobilisation strategy, among others. The agenda of the workshop along with the list of participants are enclosed in Annex 1 a and Annex 1 b, respectively.

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1.5 PREPARING AND SUBMITTING A ROLLING BUDGET AND WORK PLAN FOR 2 YEARS

A rolling quarterly budget was prepared and submitted to DFID-Rwanda during the inception phase. The estimated budget for Quarter 2 is enclosed in Annex 12 (confidential). A similar rolling budget will be submitted on a quarterly basis based on the revised and final budget of FONERWA. For information on revised Work Plan, see Annex 10.

1.6 FINALISING THE FULL FONERWA LOGICAL FRAMEWORK

Following a series of consultative meetings, the FONERWA Logical Framework proposed during the design phase was revised. Key stakeholders engaged in this process included: MINIRENA, DFID, NISR and relevant sectors; consultation with 50+ stakeholders at the Inception workshop and ½ day workshop on November 21st, 2012. M&E indicators at the Outcome and Output levels were refined and baselines and targets were set. This logical framework is in a format acceptable to a range of Donor funding agencies and represents a 6-year timeframe aligned to Rwanda’s next EDPRS cycle. The revised logical framework is enclosed in Pg 21-26 of Annex 2.

1.7 ESTABLISHING THE FMT OFFICE IN KIGALI

Following consultation with MINIRENA/REMA/MINECOFIN regarding hosting of the Fund Management Team, a FONERWA office has been established. The Government of Rwanda, through REMA, has provided in generous contribution in the form of office space, electricity and internet provision. Equipment and furniture for the FONERWA office have been procured following GoR procurement procedure (i.e. competitive tendering, short listing). The Fund Management Team (FMT), which operates as the FONERWA Secretariat, is now fully functional.

1.8 LIAISING WITH MINECOFIN TO INCLUDE REFERENCE TO FONERWA IN EDPRS 2

Consultative meetings were held with MINECOFIN regarding inclusion of reference to FONERWA in EDPRS 2. Following a suggestion from the Director of Planning and Research of MINECOFIN, an excerpt was prepared and submitted to the Environment and Natural Resources (ENR) Sector for inclusion into the ENR Sector Strategic Plan. This has now been officially included into the plan and will be considered by MINECOFIN for incorporation into the final drafting of EDPRS 2. Additionally, FONERWA has been included in the Second Budget Call Circular for 2013/14 Medium Term Expenditure Framework (MTEF) statement, which reinforces the strong ownership of MINECOFIN and ensures that key sectors will consider FONERWA as a possible financing source as part of the budget preparation process. The excerpt is attached in Annex 3.

1.9 PREPARING THE PRIME MINISTER’S DECREE AND ESTABLISHMENT OF GOVERNANCE STRUCTURE

A draft Prime Minister’s Order determining the composition of the FONERWA Managing Committee, its powers, responsibilities and functioning was presented during the inception workshop. It was subsequently revised based on comments from participants. The final draft version is enclosed in Annex 4. This was submitted to REMA and MINIRENA in December, 2012 to initiate formal review processes for subsequent approval of the Prime Minister’s Order.

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1.10 OPENING A FONERWA ACCOUNT

An initial discussion was held with the Director General, National Budget Directorate, of MINECOFIN regarding the opening of a FONERWA account. DG MINECOFIN instructions specify that once the Fund is capitalised, a FONERWA account with possible sub-accounts for channelling EIA and environmental fees/fines will be opened and the Budget directorate will provide further guidance on their operational modality. Opening of such an account can be completed in less than one working day.

1.11 FINE TUNING THE DESIGN AND OPERATIONAL MANUAL

The FONERWA Design Document has been fine tuned following further consultations with key stakeholders. For example, the title of FONERWA Financing Window 2 has been changed to incorporate “Energy, R&D, Technology Transfer and Implementation”, in order to strengthen alignment with the FONERWA Law. The domestic capitalisation scenario was also updated, ensuring realistic estimation of EIA fees from both the public and private sector. Financial instruments targeting the private sector were further elaborated. The following sections of the Operational Manual (OM) were revised: Section 1 (Project Screening Procedure), Section 2(Logical Framework), Section 3(Monitoring and Evaluation Procedure) and Section 7 (Capacity Building Plan). In addition, Section 9 (VfM Strategy) was added to the OM.

1.12 SETTING UP THE FONERWA FINANCIAL MANAGEMENT, ACCOUNTING AND PROCUREMENT SYSTEM

A comprehensive review was conducted on Section 4 (Procurement and Financial Management Procedures) of the Operational Manual. Specific recommendations were made against some of the identified shortcomings of the manual, and an implementation plan of the system was developed to ensure minimal fiduciary risk and maximum transparency and accountability of fund management. The report is enclosed in Annex 5. This has been added as an addendum to Section 4 of the OM.

1.13 FINALISING DISBURSEMENT MECHANISMS FOR PUBLIC AND PRIVATE SECTOR BENEFICIARIES

Disbursement mechanisms of the Fund targeting the public sector will remain as per the FONERWA Design Document. Funds will be channelled following Government of Rwanda systems and processes, primarily through MINIRENA, once approved by the Fund Managing Committee. Performance Based Grants (PBG) will be the main financial instrument for the public sector in the short to long term. The Financial Management, Accounting and Procurement Guideline will be used to ensure transparency and improve fiduciary risk management. During the inception phase, financial instruments targeting the private sector, such as PBG, Guarantees, and Loan and Equity schemes have been further developed with detailed description of each of the instruments. A new instrument titled Quasi Equity Scheme, not proposed in the FONERWA Design Document, has also been developed and elaborated. A Fund Allocation Strategy, together with FONERWA Investment Options, has also been proposed. These options were presented during the inception workshop and comments were incorporated in the final drafting of the FONERWA Private Sector Targeting Report attached in Annex 6.


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1.14 ORGANISING INAUGURAL MEETINGS FOR THE FMC/FTC IN NOVEMBER 2012

This task was deferred until January, 2013, as it was not deemed appropriate by the Government of Rwanda to hold a meeting prior to capitalisation of the fund. The FMT, however, intends to organise a FONERWA Technical Committee (FTC) meeting during the 1st week of February, 2013. The primary purpose of the meeting is to discuss resource mobilisation from both internal and external sources, in light of the current freeze of General Budget Support (GBS) by DFID and overall aid suspension by the Swedish International Development Agenda (SIDA).

1.15 PREPARING AND SUBMITTING AN EXIT STRATEGY TO FMC/FTC

Since there have been some significant changes in the aid landscape of Rwanda, there are likely to be implications to capitalisation prospect for the Fund. The aid situation is currently being closely monitored by the FMT and the Fund Coordinator is in regular contact with MINIRENA/REMA/DFID on the latest developments. The current aid suspension is an exception rather than the rule in Rwanda.

The FMT’s assessment of climate change financing in particular suggests that most of the financing from multilateral international sources is available for project based financing rather than to a basket fund. The only realistic sources of direct financing to a Fund such as FONERWA are bilateral sources. As a result, the FONERWA design, which is primarily based on sector budget support aid modality, may have to be significantly changed. This is particularly the case if the current aid suspension affects potential large-scale disbursements from the International Climate Fund (ICF) of the British Government. Given the current exceptional situation, the FMT proposes to defer this task of preparing an exit strategy until June, 2013. This postponement will enable a more realistic and context specific strategy to be developed based on a comprehensive assessment of current and future aid projections in Rwanda.

1.16 FINALISING GRANT APPLICATION FORMS, TOOLS AND PROCESSES

FONERWA Project Profile Document (PPD) and Project Development (PD) forms were revised during the inception phase, ensuring adequate reference to Value for Money (VfM) criteria (see Task 1.17 below for further information). VfM Guidelines for screening PPD and PD were also incorporated into Section 1 of the Operational Manual. The revised forms and guidelines for PPD and PD (Section 1 of the OM) are enclosed in Annex 8.

1.17 PREPARING AND SUBMITTING THE VFM STRATEGY FOR PRIORITISING WINDOWS / ENTRY POINTS AND PROJECTS TO FMC / FTC AND FINALISING A FIDUCIARY RISK APPROACH

A Value for Money Strategy (VfM) has been developed for the overall Fund and project level. VfM can be seen as both an assessment tool and as a concept (and process) promoting learning. Recognising that the approach needed to be both credible in demonstrating VfM and practical to use, the strategy seeks to utilise existing FONERWA processes and procedures as much as possible. After the finalisation of the FONERWA Logical Framework, the strategy identified and adapted indicators from this as VfM indicators against which performance will be assessed. It is possible that some potential projects will seek funding for projects not reflected by these indicators. Such proposals will need to identify and use VfM indicators, in line with the internal proposed project logframe /M&E indicators. These can aid future VfM refinement and learning under FONERWA.

FONERWA projects will be accessed via two frameworks: 1) a 3E’s management assessment of procurement, demonstrating economy through robust identification and purchase of inputs, efficiency through assessment of

6


inputs’ provision of outputs, and effectiveness by assessing outputs against identified objectives and needs; and 2) developing a simple cost-benefit measurement (CBA) analysis, generating Net Present Value and Cost Benefit Ratio indicators. Both of these utilise existing FONERWA records, gathered by the FONERWA Procurement and Financial Management and Monitoring and Evaluation Procedures. The VfM strategy includes case examples for application of both the frameworks, as well as an illustration on how to apply simple Cost Benefit Analysis. The detailed VfM strategy is enclosed in Annex 7. This strategy has been added as Section 8 of the OM.

Project-level VfM will be assessed by the above frameworks and Fund VfM will be assessed by collation and aggregation of project VfM information, supplemented by assessment of FMT-specific VfM indicators.

The FMT’s Fiduciary Risk Approach will build on Section 4 of the OM, as well as the addendum to it. For further details see task 1.12 above.

1.18 PREPARING A LIST OF PIPELINE PROJECTS THAT MAY BE ELIGIBLE FOR FONERWA FINANCING

Consultations were carried out by the FMT with relevant Sectors to identify potential pipeline projects. A draft list of projects have been identified within the Energy, Agriculture and Environment and Natural Resources sectors for possible financing, which align with FONERWA objectives. Consultations at the District level have also generated remarkable interest in identifying projects for financing from FONERWA. Ongoing strategic planning within Sector and District Development Planning processes, as well as the costing of plans by Sector Working Groups (SWGs) and Districts, will inform the formulation of EDPRS II. Once this exercise is completed in March, 2013, the FMT will be able to better prioritise pipeline projects and assess their potential funding through FONERWA. A preliminary list of projects is presented in Annex 13.

1.19 PREPARING AND SUBMITTING COMMUNICATIONS STRATEGY FOR APPROVAL

The primary objective of a FONERWA communications strategy is to facilitate resource mobilisation, with a focus on international public and private investors. The secondary objective is to raise awareness about FONERWA nationally and internationally, in order to generate interest and participation of potential Fund investors and beneficiaries, as well as share lessons learned. The strategy will offer a variety of communication tools that vary in terms of target audience, as well as required capacity and implementation costs. As the Fund evolves, the strategy will allow for flexibility in terms of prioritisation of resources and effort, subject to investment levels achieved and beneficiary demand. Above all, the strategy will emphasise activities that provide high Value for Money (VfM) by joint planning and implementing with other projects and programmes.

An initial concept note for elaborating a full communications strategy has been completed, along with a FONERWA website and logo, branding guidelines, promotional templates and FONERWA brochure. In order to maximise outreach, particularly at the international level (given the current aid landscape), elaboration and implementation of a full communications strategy will require further resources. The FMT is in discussions with CDKN to mobilise this additional funding for development of a comprehensive communications strategy, as well as implementation support to some key activities, including sponsoring an in-country, fulltime communication expert to support to the FMT/GoR.

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1.20 ORGANISING THE PUBLIC LAUNCH OF FONERWA

Based on a suggestion from the GoR, as well as DFID-Rwanda, a public launch of FONERWA has been delayed until January, 2013. Further discussions will be required with DFID and the GoR regarding the exact timing of this event. Following discussion between FMT and CDKN, the latter have expressed interest in sponsoring the launch event in Kigali, as well as organising an investors’ conference in London for capitalisation FONERWA. These proposals were formally submitted to CDKN as part of the Communication Concept Note, which is attached in Annex 10 of this report.

1.21 DISCUSSING AND FINALISING THE APPROACH FOR JOINT PROGRAMMING WITH OTHER SIMILAR PROJECTS FOR COST SAVINGS

The FMT Co-ordinator was invited to present FONERWA at the Global Poverty Environment Initiative (PEI) Africa Regional Meeting from the 11th to 14th of November, 2012. Additional meetings were held with UNEP/UNDP/PEI team in Rwanda, as well as the PEI Africa Regional Manager and PEI Programme Officer to agree on general and specific areas of collaboration with FONERWA. The Co-coordinator also attended a meeting on operationalising green economy in Africa in Nairobi. The meeting focused on existing national frameworks to implement green economy initiatives and FONERWA was discussed as one of the potential financing frameworks at the national level in Rwanda. The trips were financed by PEI, UNEP and GiZ respectively.

In addition, the FMT Co-ordinator facilitated a workshop in partnership with the Africa Adaptation Programme (AAP) in order to identify linkages with the AAP-Rwanda project Output on sustainable financing for climate change adaptation. Meetings were also held with CDKN to discuss possible financing of the FONERWA Capacity Development Plan and Communication Strategy. In order to reduce transaction costs, and avoid creating any parallels structure, CDKN expressed interest in using the FMT Project of DFID to channel financing, particularly for capacity development in environment and climate change initiatives in Rwanda. In response to CKDN requests, two indicative proposals were submitted by the FMT in December, 2012 for consideration. The Capacity Development Proposal and Communication Concept Note submitted to CDKN are enclosed in Annex 9 and 10, respectively.

1.22 DISCUSSING AND FINALISING PARTNERSHIP WITH THE BUSINESS DEVELOPMENT FUND AND PRIVATE SECTOR FEDERATION

Four consecutive meetings were held with BDF during the inception phase to discuss various partnership options. Two preferred partnership options were then shortlisted including: 1) Distributed Management and 2) Sole Management. These will be presented to BDF for further discussion in January, 2013. An MoU setting out an Institutional Framework, Resource, Management Fee and Service Coverage will also have to be agreed upon. For further details see pages 6-7 of Annex 6. Once the partnership framework is finalised with BDF, the FMT will hold discussions with Private Sector Federation on outreach services targeting the Private Sector.

1.23 PREPARING AND SUBMITTING THE INCEPTION REPORT

The FMT project inception report was submitted on the 9th of January 2013 and is expected to be finalised by the 20th of January 2013, following incorporation of feedback from the GoR and DFID-Rwanda.


SECTION 2 - MANAGEMENT OF THE FUND2.1 Functioning of FONERWA 9 2.1.1 Organising Weekly Meetings, Bi-Weekly Management Clinics, Monthly Spot Checks 92.2 Internal resource mobilisation 9 2.2.6 Finalising the Draft Ministerial Order for Collection of Fines/Fees 9 2.2.11 Proposing and the Finalising Ministerial Order for the establishment of an efficient EIA fee structure 102.3 External resource mobilisation 10 2.3.6 Finalising the draft MoU between GoR and Development Partners 11 2.3.7 Presenting FONERWA Features to DPs during SWG Meetings 112.5 Provision of technical assistance 11 2.5.3 Initiate and Roll Out a Technical Help Line Centre through Knowledge Management Platform 112.8 Communication and outreach services 12 2.8.1 Prepare and Submit a Communications Strategy for Approval 12 2.8.2 Establishing Visual Identity and Branding Guidelines 12 2.8.3 Developing and Circulating FONERWA Brochure 12

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SECTION 2 - MANGEMENT OF THE FUND

The key objective of the FMT in managing FONERWA is to establish effective management systems and processes. This requires establishment of functional day-to-day management systems, internal and external resource mobilisation, technical assistance for the development of high-quality projects/programmes, proposal screening, disbursement of resources and awareness raising nationally and internationally. These activities contribute to achieving fund objectives and ultimately transfer of fund management to the GoR. During the inception phase, FMT methods focused on establishing robust and transparent Fund management systems, with in-built fiduciary risk management and VfM principles. Strategic management partnership agreements were also discussed with BDF (the Rwanda Development Fund), among other activities.

2.1 FUNCTIONING OF FONERWA

Robust and transparent management of FONERWA is the core business of the Fund Management Team. The unique nature of the FONERWA design requires a specialised approach to fund management that ultimately enables GoR (FMT counterparts) to access, absorb and channel both internal and external sources of finance, in order to realise local-level impacts. Apart from establishment of FONERWA, the FMT has undertaken activities under the Work Plan to ensure effective day-to-day functioning of the fund.

2.1.1 ORGANISING WEEKLY MEETINGS, BI-WEEKLY MANAGEMENT CLINICS, MONTHLY SPOT CHECKS

Fund Management Team members are required to submit their monthly work plans in advance and their progress is measured against this work plan. The Fund Co-ordinator holds a weekly meeting with the team to track progress and identify further strategies towards implementation of FONERWA, discuss challenges faced and draw up a weekly action plan. Monthly spot checks have also been regularly conducted by CIDT (the Service Provider, SP) on FMT finance. A weekly progress report on FMT initiatives has also been regularly submitted to both the GoR and DFID-Rwanda. Additionally, frequent consultations are maintained with the DFID climate and economic advisor and the GoR (REMA/MINIRENA/MINECOFIN) to conduct briefings and orient, adjust and adapt FONERWA processes to areas of strategic national importance and overall national planning landscape. The meetings have provided opportunities for ongoing capacity building and development of the FMT.

2.2 INTERNAL RESOURCE MOBILISATION

Internal resources help to provide a sustainable source of finance that is not subject to aid shocks. The FMT have undertaken the following immediate measures that will help facilitate collection of domestic revenue.

2.2.6 FINALISING THE DRAFT MINISTERIAL ORDER FOR COLLECTION OF FINES/FEES

Article 7 of the FONERWA law provides sources of domestic revenue for FONERWA. More specifically the Organic Law on Environment and FONERWA Bill has established several sources of financing for FONERWA. These include: environmental fines and fees, a percentage of capital projects’ budget to finance the monitoring of EIAs (minus operating costs), existing funds (Forestry and Water), other future environmental revenue and domestic seed financing from key sector ministries. However, neither law indicates the process of collecting fees emanating from fines and penalties mandated. As required by the GoR procedure, before a Ministerial order can be drafted to elaborate such processes, a consultative meeting with key stakeholders, and all District representatives in particular, needs to take place. Such a consultative meeting will also aim to establish the best procedure for collection of fines by Districts, as well as the percentage to be shared between Districts and the FONERWA fund. A concept note (see Annex 14) on the administrative approach and process for collection of fees has been

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developed and will be further discussed during the consultative meeting. The FMT is in touch with MINIRENA to organise the meeting in the second week of February, 2012.

2.2.11 PROPOSING AND FINALISING MINISTERIAL ORDER FOR THE ESTABLISHMENT OF AN EFFICIENT EIA FEE STRUCTURE

In order to capitalise FONERWA, Article 7 of the FONERWA law established several sources of revenue for the fund including zero point one per cent (0.1%) of public and private capital projects’ total cost (minus operating costs), for which environmental impact assessments are required. A letter requesting MINECOFIN to establish procedures for transferring a portion of the capital budget from the 2013-14 fiscal year to FONERWA for Environmental Impact Assessments on public projects has been drafted (See Annex 16). The estimated public contribution to FONERWA for EIA Monitoring for 2013/14 fiscal year is projected to amount to RWF 253.9 mn. A detailed breakdown of the fee has also been provided. Discussions are underway among key agencies, primarily REMA and the Rwanda Development Board (RDB), on the administrative procedures that must be followed in order to initiate and guide collection of the EIA contributions from private enterprises. It is currently envisaged that extensive consultations with the private sector players will be necessary in order to streamline fee collection processes.

2.3 EXTERNAL RESOURCE MOBILISATION

At the request of the Government of Rwanda, activities to accelerate external resource mobilisation were fast tracked during the inception phase, in light of the bilateral aid landscape. The FMT responded by carrying out the below activities, not included in the initial inception phase Work Plan:

a. Held discussions with the AfDB on potential for FONERWA capitalisation capitalisation (i.e. project based financing). A task team from AfDB was proposed to be sent to assess the national funding mechanism for climate change with a view to costing of the national strategy (the Green Growth and Climate Resilience strategy), as a outcome of the meeting;

b. Submitted a proposal and a formal letter requesting support to the AfDB Resident Representative to support Rwanda;

c. Currently supporting strengthening of Rwanda’s first application to the Adaptation Fund, due January, 2013;d. Held discussions with the REDD focal point geared to identifying potential collaboration and support to

FONERWA;e. Engaged in discussions with World Bank Rwanda Country Manager and KfW Country Director to explore

potential areas of WB/KfW support to FONERWA;f. Carried out consultations with the EU – Energy, Agriculture and Rural development teams for potential

funding from EU;g. Conducted consultations with the steering committee of the Africa Adaptation Programme (AAP) project in

Rwanda to adopt FONERWA as a financing mechanism for a long-term climate change adaptation programme in Rwanda. A concept note is being drafted for presentation to the Embassy of Japan to mobilise resources for FONERWA;

h. Consultations with PEI, Africa have concluded with plans to present FONERWA to the next Poverty Environment Partnership (PEP) meeting in May, 2013 to be held in Berlin, Germany, as an effective vehicle for external financial flows for mainstreaming environment and climate change in Rwanda;

i. Conducted a comprehensive review of over 36 bilateral, multilateral and private sources of climate change finance Rwanda is eligible to access; successfully establishing contact with over 10 sources to further discuss Rwanda’s access (See Annex 20);

j. Compiled a 6-month FMT work plan to accelerate Rwanda’s access to finance (See Annex 21).


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2.3.6 FINALISING DRAFT MOU BETWEEN GOR AND DEVELOPMENT PARTNERS

The draft MoU in Section 8 of the Operational Manual was reviewed but no further changes made. It is likely that in the future individual MoUs will have to be drawn up with Development Partners interested in capitalising the fund. This particular activity is presently not deemed appropriate given Rwanda’s current aid landscape, although the aid effectiveness principles based on which the MoU is designed will be applied in future MoUs with Development Partners. The appropriateness of this activity will need to be reviewed by the Fund Managing Committee.

2.3.7 PRESENT FONERWA FEATURES TO DPS DURING SWG MEETINGS

Rwanda is presently in the process of developing the second Economic Development and Poverty Reduction Strategy (EDPRS II). This is being carried out through the development of strategic plans at the sector level, and District Development Planning processes. There are two strategic levels at which Sector Working Group meetings have taken place with significant attendance and engagement of DPs by the FMT. These levels include the Environment and Climate Change Sub-sector Working Group meetings, co-chaired by DFID, and the Environment and Natural Resources Sector Working Group, co-chaired by SIDA. Various meetings have been held at both levels, providing opportunities to present FONERWA features, which key DPs commend in providing an effective incentive mechanism for mainstreaming of environment and climate change across key economic sectors. DPs that have been particularly active in the SWG meetings, and demonstrated interest in FONERWA features, include DFID, EU, SIDA, UNDP, KFW, GIZ and JICA. This is an on-going process that will continue throughout the strategic planning and review process, including the drafting and implementation of EDPRS II.

2.5 PROVISION OF TECHNICAL ASSISTANCE

Provision of technical support and advice to public and private actors seeking to access the Fund is an essential service of the FMT, in order to help promote submission of high-quality proposals. During the inception phase, the FMT actively sought to stimulate demand amongst key stakeholders and solicit applications that are consistent with FONERWA’s outcome, purpose and focus areas (i.e. Thematic Financing Windows and Entry Points). Discussions and question/answer sessions were held with CO2Balance (a Project Developer based in the UK), as well as the UK Met Office, both of whom have shown keen interest to submit proposals once FONERWA opens applications rounds.

At the request of MINIRENA, the FMT is also providing support to Rwanda’s National Implementation Entity (NIE), under the Adaptation Fund, to refine a project concept note of approximately USD8 million for submission to the Adaptation Fund by end of January, 2013. If the concept note is approved, further technical support will be provided to develop a full proposal. While developing the concept note, the FMT is ensuring that the proposal is fully aligned with the objectives of FONERWA.

2.5.3 INITIATE AND ROLL OUT A TECHNICAL HELP LINE CENTRE THROUGH KNOWLEDGE MANAGEMENT PLATFORM

After a detailed discussion with the FMT Knowledge Management System specialist, it was decided to postpone this activity until the FONERWA website is fully developed and operational. The proposed Integrated Knowledge Management Platform will provide a public-facing, front-end, showcasing important projects, ideas, success stories and innovation inside of FONERWA. The back-end of the site will be a robust information gathering and sharing portal, through which password protected access users will get access to (as well as create) content that will improve their capacities, and support the FONERWA e-community. Contents will include information about projects completed, projects in the pipeline, lessons learned, project learning notes, as well as a dynamic


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user database where member expertise and project experience will be shared in an effort to promote more open dialogue. Since the platform will require an operational website, this activity is requested to be delayed until April, 2013.

The FMT has been equipped with project management software (i.e. Wrike) that is capable of managing and sharing knowledge within the team.

2.8 COMMUNICATION AND OUTREACH SERVICES

Throughout the two-year operational phase, numerous publications will be needed to raise awareness and report on the Fund’s activities and impacts. During the inception phase, the FMT have devised a communication concept note primarily aimed at increasing capitalisation and maximising awareness among potential financial contributors and beneficiaries (targeting both public and private sectors). The FMT is also engaged in consultation on outreach ideas and materials. For example, the FMT is channelling outreach through discussion forums such as Sector Working Groups (SWGs) at the national level, Provincial Steering Committee and Joint Action Development Forums (JADFs) at the District level. In addition, the FMT Co-ordinator provided technical support to DG, REMA in attendance of COP 18 in Doha, aimed at facilitating consultations, briefing and overall networking towards financing of FONERWA.

2.8.1 PREPARE AND SUBMIT A COMMUNICATIONS STRATEGY FOR APPROVAL

See 1.19 for further information.

2.8.2 ESTABLISH VISUAL IDENTITY AND BRANDING GUIDELINES

The FMT has established a brand image for FONERWA through the creation of a visual identity (typography, colours, photography) for FONERWA. The brand image has already received appreciation from key stakeholders across the GoR, the private sector and donor community. As part of FMT’s overall communication strategy, the FONERWA logo, branding kit, unofficial website and branding guidelines are now in place. As per the suggestion of the GoR, the FONERWA logo has been reviewed and accepted, and is in use by the FMT on official FONERWA documentation.

2.8.3 DEVELOPING AND CIRCULATING FONERWA BROCHURE

The FONERWA engagement document prepared for Rio+20 was further refined. Two hundred copies were published and they are already in circulation nationally and internationally, and are widely acknowledged for the good quality and content.


SECTION 3 - MONITORING AND EVALUATION3.1 Consulting with NISR/MINECOFIN on the feasibility of the Proposed FONERWA M&E Framework 14

3.5 Ensuring Incorporation of at least 2 FONERWA M&E Indicators into the EDPRS 2 Policy and Result Matrix 14

3.6 Submitting Proposed Additional Reporting Templates for Approval 14

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SECTION 3 - MONITORING AND EVALUATION

The FMT’s objective is to provide robust evidence of FONERWA’s value for money and impacts, as well as demonstrate accountability in decision making to ensure transparent use of funds. This is expected to be achieved through strengthening and iteratively revising the existing FONERWA M&E Framework (Operational Manual, Section 3), building on the GoR M&E system and processes and prioritising linkages across the GoR and Development Partners through integration with sector strategies, EDPRS II, the Policy and Result Matrix and Common Performance Assessment Framework (CPAF) of Development Partners.

In partnership with NISR, MINECOFIN and MINIRENA, the FMT’s inception work emphasised further elaboration of FONERWA key performance indicators (based on the finalised log frame, see action point 1.6 above) and discussion with relevant sectors including MINAGRI and MININFRA. In doing so, the FMT mapped current data sources, and assessed their reliability/feasibility across M&E outputs. The FMT also specified new data sources that may be required to ensure timely and accurate data collection using an onion-skin nesting approach. The FMT is now working on incorporating FONERWA indicators into relevant SWG log frames and M&E frameworks.

3.1 CONSULTING WITH NISR/MINECOFIN ON FEASIBILITY OF THE PROPOSED FONERWA M&E FRAMEWORK

Extensive consultation was undertaken by the FMT with NISR and MINECOFIN. The M&E framework in section 3 of the Operational Manual was refined based on the: 1) discussions, 2) revised FONERWA logframe and 3) feasibility of the indicators. A metadata handbook was prepared in close collaboration with NISR and relevant sectors. This handbook provides a description of each of the FONERWA indicators at outcome and output levels, along with their computational methodology, data sources, frequency of data collection, possible disaggregation and corresponding responsibility of data collection. Determining costing of data collection is still work in progress. The metadata is included in Annex 17.

3.5 ENSURING INCORPORATION OF AT LEAST 2 FONERWA M&E INDICATORS INTO EDPRS 2 POLICY AND RESULT MATRIX

The FMT held consultations with MINECOFIN regarding incorporation of the FONERWA indicators in the EDPRS 2 Policy and Results Matrix. At least two outcome-level FONERWA indicators are expected to be reflected in the Policy and Result Matrix, when it is finalised in March, 2013. The key entry point to ensuring that FONERWA is reflected in EDPRS II is strategic positioning of FONERWA within the Environment and Natural Resources sector strategic Plan (ENR SSP), particularly through the M&E framework. Two outcome FONERWA indicators – the climate change vulnerability index and the number of green jobs created – are reflected in the ENR SSP as well as guidelines for mainstreaming environment and climate change as a crosscutting issue, that is integral to the second budget call circular (BCC). Further consultations with the NISR were carried out to explore strategic approaches to refining and focusing indicators for inclusion in EDPRS II, including refining data collection processes and setting baselines.

3.6 SUBMITTING PROPOSED ADDITIONAL REPORTING TEMPLATES FOR APPROVAL

Preparation of an additional reporting template for VfM assessment at the project level was postponed until approval of the VfM strategy, both by the GoR and DFID-Rwanda. A template is expected to be ready by March, 2013.

SECTION 4 - KNOWLEDGE MANAGEMENT

4.1 Establishing a System to Integrate Knowledge Management within the Project Cycle 164.6 Establishing the Integrated Web Based Platform for FONERWA 16

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SECTION 4 - KNOWLEDGE MANAGEMENT

The FMT intends to establish an institutional culture of knowledge generation and sharing across FONERWA and FONERWA-financed projects, along with continuous learning for Fund managers. This is expected to be achieved over the two year period by: operationalising an Integrated Knowledge Management System, establishing thematic network groups, linking FONERWA with regional and International Resource Centres and organising learning Events/Seminars.

4.1 ESTABLISHING A SYSTEM TO INTEGRATE KNOWLEDGE MANAGEMENT WITHIN PROJECT CYCLE

During the inception phase, the FMT was expected to ensure the knowledge generated at the project and programme level is recorded and fed back to the Fund Technical and Managing Committees, and used for policy and strategy dialogue and decisions at sector and cross-sector levels. However, since FONERWA is yet to be capitalised and no projects have been financed, it was decided to defer this activity until March, 2013.

4.6 ESTABLISHING INTEGRATED WEB BASED PLATFORM FOR FONERWA

The FONERWA unofficial website is launched and can be accessed from www.fonerwa.org.rw. Initial changes to the logo requested by the Government slightly delayed the official launch. The website may be further modified and officially launched on the 31st of January.

SECTION 5 - CAPACITY DEVELOPMENT 5.1 Conducting a Capacity Needs Identification/Assessment 185.2 Designing the Capacity Building Programme 185.7 Organising and Facilitating Training on Project Identification and Formulation 185.8 Identifying Trainers from GoR and BDF/BDS 195.14 Organising and Facilitating On the Job Training for the GoR/ FONERWA Secretariat/ and BDF/BDS Trainers 19

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SECTION 5 - CAPACITY DEVELOPMENT

The FMT’s capacity development efforts are geared towards building capacity across the GoR and Fund beneficiaries, with the aim of handing over full responsibility of Fund management to a GoR staffed Secretariat 6-months prior to the end of the 2-year operational phase. The FMT approach aims to initiate a programme of transformational learning interventions that support locally owned processes, and enables the successful and sustainable management of FONERWA beyond the 2-year operational period. The FMT’s progress on capacity development against the Work Plan during the inception phase is highlighted below.

5.1 CONDUCTING CAPACITY NEEDS IDENTIFICATION/ASSESSMENT

A number of capacity needs assessment studies have already been conducted in for the Rwanda Natural Resources and Environment sector. To avoid capacity needs assessment exercise fatigue and reinventing the wheel, it was agreed with the GoR to focus on reviewing the existing needs assessment reports, as well as the recent Capacity and Needs assessment analysis for the Ministry of Natural Resources, supported by UNDP. Some of the key findings from relevant reports and various interviews with the Public Sector Capacity Building Secretariat, MINIRENA and BDF are summarised below.

> Government departments do not have enough skilled staff in key posts to fulfil their workload. There is limited organisation and managerial capacity within private organisations to provide services to fill these gaps. There is also a lack of agreed professional standards governing the private sector;

> Capacity needs assessments have produced theoretical academic frameworks with limited application. There is a growing realisation for the need now to apply and ‘learn by doing’;

> It has been the experience of the Public Sector Capacity Building Secretariat that there has been a problem of capacity building focussing on short-term, individual self-development, particularly through attendance of external courses in other countries, and a lack of focus on long-term strategic development of staff within Rwandan institutions and organisations;

> Rwanda has a policy of ‘lean Government’, keeping its overall staffing numbers limited. Hence, so as to not distract them from their core work, capacity building programmes targeting Government staff must be designed to add to and aid the effectiveness of their work and the services they provide.

For further information, please see the FONERWA Capacity Development Plan in Annex 16.

5.3 DESIGNING CAPACITY BUILDING PROGRAMME

During the inception phase, the FMT conducted a stock taking exercise of all capacity building needs assessment carried out in the Environment and Natural resources Sector and more broadly for the Government of Rwanda (GoR). Based on the outcome of this exercise, the Capacity Development Plan (i.e. Section 7) of the Operational Manual was revised. The revised version, enclosed in Annex 19, includes priorities for capacity development interventions from January to June, 2013, as well as a revised timeline and target groups. As mentioned, a proposal for execution of the FONERWA Capacity Development Plan was submitted to CDKN for consideration of partial funding.

5.7 ORGANISING AND FACILITATING TRAINING ON PROJECT IDENTIFICATION AND FORMULATION

GoR institutions significantly rely on both internally as well as externally-financed projects to implement priorities under respective institutional mandates. This is evident at national, sub-national and local levels. However, the experience with project implementation is that most projects have poor implementation records. Reasons for this include: insufficient staffing, limited technical capacities, and project development by actors external to the departments and teams that are responsible for implementation.

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SECTION 5 - CAPACITY DEVELOPMENT

The FMT carried out extensive discussions that target effective project identification and formulation through workshop style discussions with diverse sectoral participants to facilitate cross-fertilisation of ideas and common concepts. These concepts will be taken forward with the assistance of international experts using a logical framework approach to engage national counterparts in identifying key concepts at impact, outcome and output levels to further inform project formulation. Additional engagement will involve small, sector-specific teams and/or one-on-one interactions at a sector level. For this approach, international subject matter experts will focus attention to facilitating sector specific technical teams to generate detailed technical ideas for successful project formulation.

5.8 IDENTIFYING TRAINERS FROM GOR AND BDF/BDS

In the initial process of facilitating training as is outlined in 5.7 above; national counterparts will be identified to be trained as trainers in subsequent to ensure more elaborate and scaled-up capacity development. For enhanced effectiveness, training modules will be developed with substantive inputs from, and coordination with, national trainers and the FMT as a measure to ensure sustainability of the ‘training of trainers’ (ToT) programme.

5.14 ORGANISING AND FACILITATING ON THE JOB TRAINING FOR GOR/FONERWA SECRETARIAT/ AND BDF/BDS TRAINERS

International consultants conducting training will be shadowed by GoR counterparts (trainers) who will in turn facilitate future sessions applying training modules that they will have participated in developing. Moreover, national trainers will engage in a process of learning-by-doing, which is envisaged to lead to transformational learning.

SECTION 7 - PROJECT MANAGEMENT 7.1 Preparing and Submitting a FONERWA Project Logical Framework to DFID-Rwanda and MINIRENA/REMA 24 7.2 Preparing and Submitting FMT’s Work Plan and Budget for the next 2 Years including Procurement Strategy/ Plan 24 7.3 Ensuring Project Management System is in Place including Financial Management and Accounting 24 7.4 Identifying and Recruiting Local Auditor Firm and Conduct Periodic Auditing of Project Finance 25 7.5 Ensuring the QA System is in Place7.6 Refining the Risk Assessment Matrix and Opening a Risk Register 25 7.7 Drafting a Contingency Plan 25 7.8 Ensuring Data Recording of All Projects 25 7.9 Submitting Quarterly Progress Reports to DFID-Rwanda and GoR 25 7.10 Organising Quarterly Meetings with DFID-Rwanda /GoR 26 7.11 Ensuring Timely Recruitment of the Call-Down Consultants from 26 the Pool 7.12 Preparing and Submitting ToRs for Pool of Consultants to DFID- Rwanda and GoR as and when Required 26

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During the inception phase, the Fund Management Team was supported by 7 Management Support Team members and 2 Short Term Subject Matter Specialists. The Fund Coordinator reported to both GoR and DFID-Rwanda throughout the inception phase on a weekly basis.

Activities of the management team were guided by the 2-year Work Plan based on the CIDT technical proposal (See Annex 15). Table 2 below details 14 key deliverables of the FMT for the inception period and their respective status using the traffic light system and explanatory comments where required.

Table 2. Inception phase deliverables.

Activity number

Activity area Completed Partially Completed

Not Completed

1.0 Establishment of Fund

1.1 Mobilise Fund Management Team

1.2 Meet with Ministry of Environment and Natural Resources (MINIRENA)/Rwanda Environment Management Authority (REMA) & DFID Rwanda

1.3 Submit Costed Final Work Plan

1.4 Organise Inception Workshop

1.5 Prepare and Submit Rolling Budget and Work Plan for 2 Years

1.6 Finalise FONERWA Logical Framework

1.7 Establish Fund Management Team (FMT) Office

1.8 Liaise with MINECOFIN to include reference FONERWA in Economic Development and Poverty Reduction Strategy Paper (EDPRS) 2

1.9 Prepare Prime Minister's decree and Establishment of Governance Structure

1.10 Open a FONERWA Account

1.11 Fine Tune Design and Operational Manual

1.12 Set Up FONERWA Financial Management, Accounting and Procurement System

1.13 Finalise Disbursement Mechanisms for Public and Private Sector Beneficiaries

1.14 Organise inaugural meetings for the FONERWA Managing Committee(FMC)/FONERWA Technical Committee (FTC) in November 2012

1.15 Prepare and Submit an Exit Strategy to FMC/FTC

1.16 Finalise Grant Application Forms, Tools, Processes

SECTION 7 - PROJECT MANAGEMENT

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1.17 Prepare and Submit VfM Strategy for Prioritising Windows/Entry Points and Projects to FMC/FTC and Fiduciary Risk Approach

1.18 Prepare a List of Pipeline Projects that May be Eligible for FONERWA Financing


1.2 Organise Public Launch of FONERWA

1.21 Discuss and Finalise Approach for Joint Programming with Other Similar Projects for Cost Savings

1.22 Discuss and Finalise Partnership with Business Development Fund and Private Sector Federation

1.23 Prepare and Submit Inception Report

2.0 Management of the Fund

2.1.1 Organise Weekly Meetings, Bi-Weekly Management Clinics, Monthly Spot Checks

2.2.6 Finalise Draft Ministerial Order for Collection of Fines/Fees

2.2.11 Propose and Finalise Ministerial Order for the establishment of an efficient Environment Impact Assessment (EIA) IA fee structure

2.3.6 Finalise draft Memorandum of Understanding (MoU) between GoR and Development Partners

2.3.7 Present FONERWA Features to Development Partners’ (DPs) during Sector Working Group (SWG) Meetings

2.5.3 Initiate and Roll Out a Technical Help Line Centre through Knowledge Management Platform


2.82 Establish Visual Identify and Branding Guidelines

2.83 Develop and Circulate FONERWA Brochure

3.0 Monitoring and Evaluation

3.1 Consult with NISR/MINECOFIN on feasibility of the Proposed FONERWA M&E Framework


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3.5 Ensure Incorporation of at least 2 FONERWA M&E Indicators into EDPRS 2 Policy and Result Matrix

3.6 Submit Proposed Additional Reporting Templates for Approval

4.0 Knowledge Management

4.1 Establish a System to Integrate Knowledge Management within Project Cycle

4.6 Establish Integrated Web Based Platform for FONERWA

5.0 Capacity Development

5.1 Conduct Capacity Needs Assessment

5.2 Capacity Building Programme Design

5.7 Organise and Facilitate Training on Project Identification and Formulation

5.8 Identify Trainers from GoR and BDF/BDS

5.14 Organise and Facilitate On the Job Training for GoR/FONERWA Secretariat/ and Business Development Fund (BDF) /Business Development Services (BDS) Trainers

7.0 Project Management

7.1 Prepare and Submit a FONERWA Project Logical Framework to DFID-Rwanda and MINIRENA/REMA

7.2 Prepare and submit FMT's Work Plan and Budget for the next 2 Years including Procurement Strategy/ Plan

7.3 Ensure Project Management System is in Place including Financial Management and Accounting

7.4 Identify and Recruit Local Auditor Firm and Conduct Periodic Auditing of Project Finance

7.5 Ensure QA System is in Place

7.6 Refine the Risk Assessment Matrix and Open a Risk Register

7.7 Draft a Contingency Plan

7.8 Ensure Data Recording of All Projects


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7.9 Submit Quarterly Progress Reports to DFID-Rwanda and GoR

7.10 Organise Quarterly Meetings with DFID-Rwanda /GoR

7.11 Ensure Timely Recruitment of the Call-Down Consultants from the Pool

7.12 Prepare and Submitting ToRs for Pool of Consultants to DFID-Rwanda and GoR as and when Required

Regular FMT reporting to the GoR and DFID-Rwanda is planned for the 2-year FONERWA operationalisation period, and will guarantee follow up and close monitoring of project management which will help ensure successful implementation of FONERWA.

7.1 PREPARE AND SUBMIT A FONERWA PROJECT LOGICAL FRAMEWORK TO DFID-RWANDA AND MINIRENA/REMA

Based on the revised FONERWA programme level log frame, the FONERWA project log frame was further refined. This has now been accepted by the FMT Service Provider to monitor the performance of the FMT and approved by DFID-Rwanda. The project log frame is enclosed in Annex 18.

7.2 PREPARE AND SUBMIT FMT’S WORK PLAN AND BUDGET FOR THE NEXT 2 YEARS INCLUDING PROCUREMENT STRATEGY/ PLAN

See action 1.3 and 1.5 above for more information on the revised Work Plan and budget. Since furniture and office equipment have already been procured using GoR systems and procedures, a Procurement Strategy is no longer required at the programmatic level. Project Procurement Plans will, however, be prepared by the project implementers and will have to be approved by the FMT before any financial disbursement.

7.3 ENSURE PROJECT MANAGEMENT SYSTEM IS IN PLACE INCLUDING FINANCIAL MANAGEMENT AND ACCOUNTING

The FMT project’s financial management and accounting follows the University of Wolverhampton ISO 9001 certified system. The FMT is supported by a CIDT Project Manager, as well as a CIDT Financial Assistant. The financial disbursement is authorised by the Head of Finance of the University and the procedures ensure that the project is executed against its approved Work Plan, as well as budget. The Project Manager also reports to a Project Management Central Committee, which is Chaired by Dean of the School of Education, to provide quarterly update on progress made and challenges faced.


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7.4 IDENTIFY AND RECRUIT LOCAL AUDITOR FIRM AND CONDUCT PERIODIC AUDITING OF PROJECT FINANCE

A recruitment process has been undertaken to identify a local audit firm that will ensure internal audits of FONERWA operations adhere to internationally accepted principles. Among prospective firms, 5 have been shortlisted and it is anticipated that the winning firm will be in place by the end of January 2013, following the conclusion of the procurement process.

7.5 ENSURING A QA SYSTEM IS IN PLACE

The on-going reviews from weekly planning meetings, the oversight and capacity development of FMT and the internal audit teams as well as external audits that will support the operationalisation phase are all geared to ensuring QA systems and processes are in place to successfully operationalise FONERWA.

The Project Manager, together with the Fund Co-ordinator have developed-

> Detailed start-up procedures, including the production of a project risk register; > A monthly progress report assessing risk; > Compulsory quarterly reviews of each consultant team member’s performance; > Detailed rules on the internal approval of all deliverables before submission to the client.

The Fund Coordinator and the Project Manager have been monitoring inputs and outputs of the FMT and call down consultants with respect to both the quality and work plans. The FMT members have been preparing detailed weekly work plans for every component of their job description. The quality check of all consultants’ work has been instituted through supervision of performed work, resource management, quality management and implementation management prior to the approval of the delivery of outputs.

7.6 REFINING THE RISK ASSESSMENT MATRIX AND OPEN A RISK REGISTER

The FONERWA Risk Assessment Matrix has been updated and FMT is tracking identified risks, implementing mitigatory activities where necessary and also monitoring if the assumptions are holding true. All risks and potential mitigations are discussing during the weekly meetings of FMT.

7.7 DRAFTING A CONTINGENCY PLAN

FMT is closely monitoring the possible consequences of general budget suspension by some of the key development partners on FONERWA capitalisation. Given the current uncertainty in aid disbursement for FONERWA by bilateral development partners, the FMT proposes to review and assess the situation once again in March, 2013 before developing a contingency plan.

A contingency plan is in place regarding all other aspects of project management including replacement plans for consultants who may no longer be available in the short to medium term.

7.8 ENSURING DATA RECORDING OF ALL PROJECTS

The FMT has held discussions on data tracking and recording of all projects. A database of all projects to FONERWA will be kept current with regular status updates/amendments based on projects’ progress. This will


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be designed in a way that is integral to the Integrated Knowledge Management within Project Cycle in 4.1 above. The database system for all projects will be developed concurrently with the establishment of the Integrated Knowledge Management platform. A data recording and tracking system will be ready by June, 2013.

7.9 SUBMITTING QUARTERLY PROGRESS REPORTS TO DFID-RWANDA AND GOR

Throughout project inception, the FMT has submitted activity/progress reports on a weekly and monthly basis. Monthly reporting is a requirement for payment of FMT members. This has been the practice for the inception period and will continue for the FONERWA operationalisation period. Additionally, the first quarterly FMT report has been submitted to CIDT for purposes of compiling the inception report, which will serve as the quarterly report to DFID-Rwanda and GoR. Following the inception report, quarterly reports will be regularly submitted to ensure partners are updated on the progress and challenges of FONERWA management, as well as the FONERWA outputs.

7.10 ORGANISING QUARTERLY MEETINGS WITH DFID-RWANDA /GOR

During the inception phase, more frequent meetings were held, often on a weekly basis. Although this is likely to continue, regularly scheduled meetings on a quarterly basis will be formalised following inaugural FTC/FMC meetings.

7.11 ENSURING TIMELY RECRUITMENT OF THE CALL-DOWN CONSULTANTS FROM THE POOL

The arrangement of a call-down consultant pool is instrumental to providing support to potential project development on short notice. The experience during the inception phase while seeking support to refining the project proposal to the Adaptation Fund (AF) provides the FMT with confidence that the call-down consultant pool is an ideal arrangement for providing reliable support for resource mobilisation, as well as capacity development to the FMT, BDF and FONERWA beneficiaries. To the extent possible, forward planning will be carried out to ensure adequate notice and preparation of call-down consultants.

7.12 PREPARING AND SUBMITTING TORS FOR POOL OF CONSULTANTS TO DFID-RWANDA AND GOR AS AND WHEN REQUIRED

The experience of the inception phase has shown that development of specific ToRs for the call down consultants is more focused and is based on a work order model that allows for very targeting outputs. This in turns facilitates ease of identification of the type of expertise required from the consultant pool. An output based ToR has been developed for all FMT members, management support team and call down consultants. The ToRs serve as the basis of all contracts/payments. ToRs are available upon request.

In summary, out of 54 actions over the Inception Phase across 6 work streams, 40 have been fully implemented, while 7 have been partially implemented. FMT could not initiate the implementation of 7 remaining activities for reasons mentioned above. These have been re-programmed in the revised work plan with a new timeline.

New January 2013 FONERWA INCEPTION REPORT - CIDT · 2019. 3. 5. · Organising inaugural meetings...

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