with the Corporación Andina de Fomento (CAF) for Republic of Chile 16 March 2017 Entity Support

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1 with the Corporación Andina de Fomento (CAF) for Republic of Chile 16 March 2017 Entity Support

2 READINESS AND PREPARATORY SUPPORT PAGE 1 OF 11 ver. 19 August 2016 Readiness and Preparatory Support Proposal How to complete this document? - A readiness guidebook is available to provide information on how to access funding under the GCF Readiness and Preparatory Support programme. It should be consulted to assist in the completion of this proposal template. - This document should be completed by National Designated Authorities (NDAs) or focal points with support from their delivery partners where relevant. - Please be concise. If you need to include any additional information, please attach it to the proposal. - Information on the indicative list of activities eligible for readiness and preparatory support and the process for the submission, review and approval of this proposal can be found on pages of the guidebook Where to get support? - If you are not sure how to complete this document, or require support, please send an to countries@gcfund.org. We will aim to get back to you within 48 hours. - You can also complete as much of this document as you can and then send it to countries@gcfund.org. We will get back to you within 5 working days to discuss your submission and the way forward. Note: Environmental and Social Safeguards and Gender Throughout this document, when answering questions and providing details, please make sure to pay special attention to environmental, social and gender issues, in particular to the situation of vulnerable populations, including women and men. Please be specific about proposed actions to address these issues. Consult page 4 of the readiness guidebook for more information.

3 READINESS AND PREPARATORY SUPPORT PAGE 2 OF 11 ver. 19 August 2016 SECTION 1: SUMMARY 1. Country submitting the proposal Country name: CHILE Name of institution (representing National Designated Authority or Focal Point): Ministry of Finance Name of official: Marcela Palominos Position: Head of Sustainable Development and Natural Resources Area Telephone: Full Office address: Teatinos 120, piso 11, Santiago, Chile mpalominos@hacienda.gov.cl 2. Date of initial submission 3. Last date of resubmission (if applicable) 4. Which entity will implement the Readiness and Preparatory Support project? (Provide the contact information if entity is different from NDA/focal point) 5. Title of the Readiness and Preparatory Support Proposal 13/02/ /02/2017 National Designated Authority Delivery partner x Accredited entity Name of institution: CAF Name of official: Antonio Garcia Position: Environment and Climate Change Executive Telephone: agarciap@caf.com Full Office address: Carrera Bogotá, Colombia Support for potential accreditation and executing entities of local agencies Support for potential accreditation and executing entities of local agencies The purpose of the proposal is to support for potential accreditation and executing entities of local agencies, specifically, for six local institutions. These entities have been prioritized for their strategic role in our country, which will increase access to climate financing, due to the variety of financial mechanisms and areas of projects that can be articulated with the Green Climate Fund. This proposal also considers the elaboration of a Gender Policy, which will serve as a guide for future projects that apply to the green climate fund. 6. Brief summary of the request (200 words) The following entities will be considered: 2 public institutions (Productive Development Corporation (CORFO) and the International Cooperation Agency (AGCI)); 1 banking institution (Banco Estado); and 3 non-profit private institutions (Foundation for Agrarian Innovation (FIA), Chilean Agency for Energy Efficiency (ACHEE), Natural Resources Information Center (CIREN)). For our country it is essential to have local agencies, because we will soon cease to belong to the list of countries eligible for OECD Official Development Assistance (ODA) funds, which in practice may limit our association with those agencies which prioritize this list of countries. Finally, it is important to emphasize that the proposed modality of work will allow generating valuable economies of scale and efficiency in the times. 7. Total requested amount and currency US$ Anticipated duration 12 months

4 READINESS AND PREPARATORY SUPPORT PAGE 3 OF 11 ver. 19 August 2016 Yes x No If yes, please attach the relevant scope of work, and briefly (100 words) describe the scope of support provided by other institutions This proposal seeks to complement our previous applications to readiness funds, which have not yet entered the execution stage. 9. Is the country receiving other Readiness and Preparatory Support related to the GCF? First, to date Chile has received approval from the Readiness Working Group (RWG) to execute Readiness Areas 1 and 2 with a total of US $ 300,000. Currently, this application / request is undergoing final stages of legal review focusing on contracts associated with the Grant Agreement. The proposal includes transversally supporting the accreditation process through the dissemination in local language of information provided by the Green Climate Fund. A second request for preparatory funds was submitted in November 2016, which aims to develop a National Policy on Social and Environmental Safeguards, adjusted to our local regulations. This policy could be institutionalized by any national institution, regardless of its scope of action or its legal nature. It is important to note that the validation of this policy does not contemplate a legislative process. This last application submitted in February 2017, seeks to support the agencies in a personalized way, using as input the results of the aforementioned consultancies. This set of consultancies will enable national capacities to be strengthened, not only in institutions seeking accreditation, but also in project promoters.

5 READINESS AND PREPARATORY SUPPORT 2016 PAGE 4 OF 11 ver. 19 August SECTION 2: COUNTRY READINESS LOGICAL FRAMEWORK Please complete the table below, which enables a country to assess its readiness for the GCF and set targets for strengthening its readiness, including proposed outputs and activities to improve the country s readiness. For further guidance on completing the table, please refer to the guidebook Accessing the GCF Readiness and Preparatory Support Programme. OUTCOMES 1 BASELINE TARGET ACTIVITIES (including key outputs or deliverables where applicable) 1. Country capacity strengthened NDA/focal point lead effective 0 x1 2 0 x1 2 coordination mechanism 1.2 No objection procedure established and 0 x1 2 0 x1 2 implemented 1.3 Bilateral agreements between the country x0 1 2 x0 1 2 and the GCF executed 1.4 Monitoring, oversight and streamlining of climate finance x0 1 2 x Stakeholders engaged in consultative processes 2.1 Stakeholders engaged in consultative 0 x1 2 0 x1 2 processes 2.2 Country programmes, including x0 1 2 x0 1 2 adaptation priorities, developed and continuously updated 2.3 Stakeholder consultations conducted with 0 x1 2 0 x1 2 equal representation of women 2.4 Annual participatory review of GCF x0 1 2 x0 1 2 portfolio in the country organized 3. Direct access realized Candidate entities identified and nominated for accreditation 0 1 x2 0 1 x2 3.2 Direct access entity accredited 0 x x2 Support for potential accreditation and executing entities of local agencies 3.3 Entity/ies annual/multi-annual work programme developed x0 1 2 x Based on decisions: B.08/10, annexes XII, XIII & XIV; B.08/11; B.11/10, annex I; B.12/20, annex I

6 READINESS AND PREPARATORY SUPPORT 2016 PAGE 5 OF 11 ver. 19 August 3.4 Funding proposals through enhanced x0 1 2 x0 1 2 direct access modality approved 4. Access to finance Structured dialogue between the NDA/Accredited Entities and the GCF Secretariat organized 0 x1 2 0 x Country programmes, concept notes, including on adaptation, developed that x x1 2 This proposal also considers the elaboration of a Gender Policy, which will serve as a guide for future projects that apply to the Green Climate Fund. implement high-impact priorities identified in INDCs and other national strategies or plans 4.3 Project/programme preparation support, x x1 2 including for adaptation, to develop funding proposals provided 4.4 Funding proposals, including for adaptation, that are aligned with country priorities approved 0 x x2 5. Private sector mobilization Private sector engaged in country 0 x1 2 0 x1 2 consultative processes 5.2 Enabling environment for crowding-in 0 x1 2 0 x1 2 private sector investments at national, regional and international levels exists 5.3 Funding proposals for private sector 0 x1 2 0 x1 2 projects/programmes, including for adaptation, approved 5.4 Funding proposals under the Private Sector Facility programmes (small- and medium-sized enterprises and mobilizing funds at scale) submitted and approved x0 1 2 x0 1 2 TOTAL

7 READINESS AND PREPARATORY SUPPORT PAGE 6 OF 11 ver. 19 August 2016 SECTION 3: ADDITIONAL INFORMATION Please explain how this grant will help deliver on the country s readiness needs as identified above and build on institutions, processes or existing work already underway in the country (maximum 500 words) The present application to Preparatory Funds seeks to Support for potential accreditation and executing entities of local agencies The purpose of the proposal is to support for potential accreditation and executing entities of local agencies, specifically, for six local institutions. These entities have been prioritized for their strategic role in our country, which will increase access to climate financing, due to the variety of financial mechanisms and areas of projects that can be articulated with the Green Climate Fund. This proposal also considers the elaboration of a Gender Policy, which will serve as a guide for future projects that apply to the green climate fund. The following entities will be considered: 2 public institutions (Productive Development Corporation (CORFO) and the International Cooperation Agency (AGCI)); 1 banking institution (Banco Estado); and 3 non-profit private institutions (Foundation for Agrarian Innovation (FIA), Chilean Agency for Energy Efficiency (ACHEE), Natural Resources Information Center (CIREN)). For our country it is essential to have local agencies, because we will soon cease to belong to the list of countries eligible for OECD Official Development Assistance (ODA) funds, which in practice may limit our association with those agencies which prioritize this list of countries. Specifically, the following stages of work are proposed for each of the evaluation areas (fiduciary principles and standards, environmental and social safeguards, Gender policy): I) identification and analysis of relevant information of the institution Ii) Analysis of gaps and proposals of procedures that solve these gaps Iii) Support for the institutionalization of processes, including training of internal teams. A team of 8 consultants will be hired. The proposed roles are: 1 consultant (part time) will have the role of central coordinator. It will be the channel of communication with the Green Fund Secretariat for these purposes. 6 consultants (full time), each dedicated to an entity. 1 consultant (full time), will advise on gender approach to all entities. At the same time, this team will work in a coordinated way, in such a way to take advantage of the economies of scale detected during the process and, thus, to achieve an efficiency in the accreditation time. A national policy on social and environmental safeguards will be developed in parallel. This policy will serve as guide for working with the institutions. The general coordinator will be responsible for coordinating both initiatives. The consultant dedicated to the elaboration of a Gender policy should use national and international guidelines. Within its functions will be to support its institutionalization in the six institutions. This policy will serve as a guide for future projects that apply to the green climate fund. Finally, it is important to emphasize that the proposed modality of work will allow generating valuable economies of scale and efficiency in the times.

8 SECTION 4: BUDGET, PROCUREMENT, IMPLEMENTATION AND DISBURSEMENT PAGE 7 OF 11 ver. 16 August 2016 READINESS AND PREPARATORY SUPPORT OUTCOMES ACTIVITIES TOTAL COST EXPENDITURE AND IMPLEMENTATION SCHEDULE COST CATEGORIES (same as in section 2) (same as in section 2) (per activity) (add columns if >24 months) Centralized planning. Point of contact with GCF. Coordinates other instances developed in parallel (ESS) Consultants Travel Workshops/ Trainings Others 6m 12m 18m 24m Support for potential accreditation and executing entities of local agencies I) identification and analysis of relevant information of the institution II) Analysis of gaps and proposals of procedures that solve these gaps US$ US$ US$ US$ III) Support for the institutionalization of processes, including training of internal teams. Elaboration of a Gender Policy, based on national and international guidelines. Development of a Gender Policy Elaboration of guides and manuals that allow including a gender perspective in institutional processes and projects. US$ US$ US$ US$7.200 Support the institutionalization of Gender Policy in institutions External audit US$ US$ US$ 4.000

9 PAGE 8 OF 11 ver. 16 August 2016 READINESS AND PREPARATORY SUPPORT CONTINGENCY (UP TO 5%) US$9.000 US$5.000 US$4.000 PROJECT MANAGEMENT COSTS (UP TO 10%) US$ US$ TOTAL US$ US$ US$ US$ Procurement plan For goods or services to be procured/hired, list the items to be procured/hired (including consultants), the estimated cost of each item, and the procedure to be used (i.e. direct procurement, open tender, shopping, other and related thresholds). Please include the procurement plan for at least the first tranche of disbursement requested below. To comply with the proposed activities, it is necessary to hire 8 professionals (see detail in attached table). The procurement process will follow the last version of CAF s Manual of Procurement of Goods, Consulting Services and Works (NM/ DFLA 038). The Chapter VIII of this Manual includes all the details and thresholds for the procurements and are presented in the table below. 1. Project Procurement Thresholds 1. The following CAF process thresholds shall apply to procurement of goods and works Threshold (Amount in USD) Method General procedures 0 5,000 (Only for the purchase goods) ,000 (Only for the purchase goods) (Only for the purchase of services, consultancy and works) 10,001 50,000 (For the purchase of goods, services, consultancy and works) Direct contracting Market Direct contracting Market 1.Receive at least one offer. 1. Market ; 2. Receive at least two (2) offers 3. Select the best offer based on the completion of an evaluation. 1. Receive at least one offer. 1. Market ; 2. Receive at least three (3) offers from different providers; and

10 PAGE 9 OF 11 ver. 16 August Select the best offer based on the completion of an evaluation. READINESS AND PREPARATORY SUPPORT 50, ,000 (For the purchase of goods, services, consultancy and works) 150,001 Until the next amount indicated below, depending the type of purchase. From 250,000 For Consultancy services From 500,000 for the purchase of goods and commercial or professional services From 2.000,000 for the purchase of works Market Private bidding International Public bidding 1. Prepare Terms of Reference; 2. Market of potential providers; 3. Receive at least three (3) offers from different providers; and 4. Perform an evaluation based on the criteria indicated in the terms of reference. Private bidding to select providers Request for Proposal. An evaluation Committee will review the offers and select the provider. International Public bidding process for the selection of providers Request for Proposal. An evaluation Committee will review the offers and select the provider. 2. Consulting Services Contracts Estimated The following table lists consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 12 months. General Description Contract Value Recruitment Method1 Consultant 1 US$ Market Consultant 2 US$ Market Consultant 3 US$ Market Consultant 4 US$ Market International or Advertisement Date (quarter/year) National Assignment Comments(*) 1st quarter of 2017 National Consultant 1: General Coordinator: Consultant with financial / administrative / economic specialization, with experience of at least 5 years, whose dedication will be part time (45 hours per month), for a period of 12 months. 1st quarter of 2017 National Consultant 2- Corfo: Consultant with financial / administrative / economic specialization, with experience of at least 4 years, and whose dedication will be full time (180 hours per month), for a period of 12 months. 1st quarter of 2017 National Consultant 3- AGCI: Consultant with financial / administrative / economic specialization, with experience of at least 4 years, and whose dedication will be full time (180 hours per month), for a period of 12 months. 1st quarter of 2017 National Consultant 4- Bank State: Consultant with financial / administrative / economic specialization, with experience of at least 4 years, whose dedication will be full time (180 hours per month), for a period of 12 months. Consultant 5 US$ Market 1st quarter of 2017 National Consultant 5- FIA: Consultant with financial / administrative / economic specialization,

11 PAGE 10 OF 11 ver. 16 August 2016 READINESS AND PREPARATORY SUPPORT with experience of at least 4 years, and whose dedication will be full time (180 hours a month), for a period of 6 months. Consultant 6 US$ Market 1st quarter of 2017 National Consultant 6- ACHEE: Consultant with financial / administrative / economic specialization, with experience of at least 4 years, and whose dedication will be full time (180 hours per month), for a period of 6 months. Consultant 7 US$ Market 1st quarter of 2017 National Consultant 7- CIREN: Consultant with financial / administrative / economic specialization, with experience of at least 4 years, whose dedication will be full time (180 hours per month), for a period of 6 months. Consultant US$ Direct contracting 1st quarter of 2017 National Consultant 8- Gender Policy: Consultant with specialization of social sciences, with experience of at least 4 years, whose dedication will be full time (180 hours per month), for a period of 8 months. External Audit US$4.000 Direct contracting N.A National (*)All consultants must have an advanced level of the English language and will be prioritized those consultants who have experience with ISO standards.

12 PAGE 11 OF 11 ver. 16 August 2016 READINESS AND PREPARATORY SUPPORT SECTION 5: IMPLEMENTATION ARRANGEMENTS AND OTHER INFORMATION Please attach an implementation map or describe how funds will be managed by the NDA/FP or delivery partner If the entity implementing the readiness support is not an accredited entity of the GCF, please complete the Financial Management Capacity Assessment (FMCA) questionnaire and submit it with this proposal. CAF will act as Delivery Partner of the GCF Readiness and preparatory support project in support of the National Designated Authority (NDA) of Chile, the Ministry of Finance. The administration, oversight, and support in the implementation of the project will be managed by the Direction of Environment and Climate Change (DACC) of CAF, which is also the direction that host the GCF Focal Point of CAF for its function of Accredited Entity to the GCF. A CAF Executive from the DACC will be in charge of the project management of the GCF Readiness and Preparatory support, in close coordination with CAF GCF Focal Point. A coordination mechanism will be established between CAF DACC and the NDA to implement the activities of the Readiness and preparatory support project. CAF, as Delivery Partner, will administer the readiness funds and will be responsible for providing and contracting the services described in this proposal, in accordance with CAF s Manual on Good and Services Procurement, as reviewed by the GCF during CAF s Accreditation successful process; as well as reporting on the implementation progress in accordance with the Framework Readiness and Preparatory Support Grant Agreement to be entered between CAF and the GCF. CAF will assume the administrative implementation of the project, in coordination with the designated focal point in the Ministry of Finance through the designated focal point. CAF will ensure the transparent execution of resources, assuring that it be in accord with the budget previously presented to the GCF and that both the contracting, purchases and disbursements in general be carried out under its manuals, procedures and regulatory guidelines. The CAF s accompaniment to the NDA also considers a technical support in the implementation of resources. CAF will support in the follow-up and monitoring of the technical products developed by subcontractors, guaranteeing that they be in agreement with the clauses established in the contracts (professional services contracts, service orders or other), ensuring quality control and providing technical inputs in the whole process of the Readiness and preparatory support implementation. CAF is in the process of entering into a Framework Agreement with the GCF, therefore this proposal will be managed at portfolio level by CAF, in accordance to the Framework Readiness and Preparatory Support Grant Agreement to be entered between GCF and CAF. The disbursements of the grants resources from GCF to the CAF shall thus follow the disbursement schedule described in the Framework Agreement. Other relevant information This box provides an opportunity to include any important information you wish to bring to the attention of the GCF Secretariat, but did not have an opportunity to provide in the sections above.

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