with the Chilean Development Cooperation Agency for Republic of Chile 28 January 2016 NDA Strengthening & Country Programming

with the Chilean Development Cooperation Agency for Republic of Chile 28 January 2016 NDA Strengthening & Country Programming

PAGE 1 OF 27 (Please submit completed form to countries@gcfund.org) Summary Country Chile Date of Submission 23/02/2016 NDA or Focal Point contact details Focal Point Name: Marcela Palominos; Position: Head of Sustainable Development and Natural Resources Area Email: mpalominos@hacienda.gov.cl; Tel: (56-2-28282392) Summary of proposed activities and timeline (please also include overall objective of the grant, requested grant amount and expected timeline for implementation) (maximum 350 words) The objective of this grant is to enhance country ownership and climate finance access during the early stages of the operationalization of the Green Climate Fund in Chile. In particular, it aims to develop the capacity of the National Designated Authority (NDA) to engage with regional, national & sub-national governments, civil society and private sector stakeholders with regard to the priorities of the Fund, taking a gender sensitive approach (readiness area 1). Furthermore, it aims to develop a strategic framework for national engagement with the Fund, as well as a country program, building on existing strategies & plans (readiness area 2). The implementation of these two components of the readiness programme is projected to generate national interest in the GCF opportunities and to strengthen Chile s access to climate finance through the preparation of the country programme. The strategic framework & country programme for engagement with the GCF will ensure that programmes/projects proposals to GCF will increasingly meet integration of national priorities as well as promote climate relevant transformational development. The grants activities planned start date is October 2016 and the planned end date is October 2017 (12 months). The estimated budget is USD 300 000. NOTES: (i) The Secretariat may provide feedback aimed at strengthening the approach proposed in the inception document to ensure consistency and coherence with the decisions on readiness taken by the Board and the Governing Instrument of the Fund

PAGE 2 OF 27 A. PROJET BACKGROUND & CONTEXT A.1 Assessment of strengths and needs of the NDA Climate change is becoming a national policy priority in Chile since the country is extremely vulnerable to its impacts. Due to the high vulnerability of Chile to climate change, local efforts will not be enough to close the gaps which are mainly related to financial options, capacity building of the NDA and the consolidation of an adaptation and mitigation project/programme portfolio to mobilize resources. For these reasons, we expect to have an important support from the Green Climate Fund and other international funds. Currently, Chile is in the process of elaborating the National Climate Change Action Plan. In this process, the country has identified a set of potential sectoral measures to implement through the year 2021. At the same time, mapping of the financial options (at the national and international level) is taking place and the outcomes will be available in the first semester of 2016. This initiative is at the early stage and it does not include yet the feasibility analysis. Even when the need for coordination of different strategies to align a variety of ongoing sectoral efforts to address climate change has been initially identified, it is still possible that other further needs, gaps and barriers hindering the development of climate action in Chile, will be identified in the near future. One of the strengths of the NDA is institutional in so far as the Ministry of Finance has high technical and economic credibility in Chile; it is known for a good fiscal management and efficient use of public resources. It has a proven track record for managing public policy and budget efficiently. It is a unique experience in Latin America to have the Ministry of Finance leading the climate change financial decisions, contributing to the development of a strong and ambitious project portfolio. This institutional arrangement contributes to add value to the decision making process through the integration of macroeconomic considerations of climate change measures. In this sense, the implementation of the readiness support is essential for the correct operation of the GCF in Chile to the extent that allows the country to have the resources to hire specialists on environmental issues and climate change as well as economists who contribute to analyze the climate change issues from a macroeconomic perspective. This support will allow us to strengthen the capacities of the NDA for the installation and operation of the Green Climate Fund. Also, the readiness support contributes to the development of the National Climate Change Action Plan with the identification of different mitigation/adaptation measures for the short and long terms, based on the national plans and national bodies (involving stakeholders such as other ministries, public agencies, civil society, academia and the private sector), facilitating communication and coordinated work with various public and private institutions It is expected at the end of the readiness support that the capacity of the staff of the Ministry of Finance will be strengthen to fulfil its role as NDA to the Fund. A.2 List of national climate change policies and initiatives Chile is a country that committed to strong climate change action. Its INDC was ratified by the Committee of Ministers for Sustainability and Climate Change based on five pillars: i) Mitigation; ii) Adaptation; iii) Capacity Building; iv) Technology Development and v) Financing. Two types of commitments were defined: First, a carbon intensity target, not including the land use, land use change and forestry sector (LULUCF), to reduce its CO2 emissions per GDP unit by 30% below their 2007 levels by 2030, assuming an economic growth that allows the implementation of measures. Second, specific contribution to the LULUCF sector related to the sustainable development and recovery of 100.000 hectares of forest land mostly with native species. At the same time various climate change initiatives are being implemented: - The Law N 20,698, published on October of 2013, includes the incentive to the expansion of the Nonconventional Renewable Energies (NCRE) by 2025, establishing a target of 20% of the energy under supply contracts generated from non-conventional renewable energies. In addition the recent tax reform was pioneered by including the first tax over CO2 emissions from fixed source (see below for details).

PAGE 3 OF 27 Also the National Forestry Corporation (CONAF) is implementing the National Climate Change and Vegetation Resource Strategy (ENCCRV). This plan proposes climate change mitigation and adaptation measures aimed at supporting the recovery and protection of native lands and xerophytes. In addition, it promotes the plantation of vegetation in apt soils belonging to small and medium-sized producers. This initiative is based on the Law 20.283 (Recovery of Native Forests and Forestry Development) which seeks to recover national native forest and its promotion. - Chile currently carries out various initiatives for designing a strategy consistent with the objectives of a sustainable, competitive and low-carbon development. It includes the following tools: Chile s National Greenhouse Gas Inventory System, which contains all the institutional, legal and procedural measures set forth for the biennial update of the country s national inventory; National Climate Change Action Plan 2016-2021, which is currently being prepared with a cross-sectional integrated approach to mitigation, adaptation and capacity-building, which aims at implementing actions and allocating mitigation responsibilities; National Energy Agenda led by the Ministry of Energy, which includes the following targets: 30% reduction in the marginal costs of electric energy by 2018, 20% of the energetic matrix should be made up of non-conventional renewable energies by 2025, a 20% reduction in the energy consumption forecast by 2025, and the design of a long-term energy development strategy; National Sustainable Construction Strategy, led by the Ministry of Housing and Urban Development, which will set forth the guidelines to integrate the concept of sustainable development to the construction sector. This strategy seeks to articulate and link effective energy and environmental plans by establishing goals and objectives in the area of energy, water, waste and health for the long, medium and long-term; Nationally Appropriate Mitigation Actions (NAMAs) in all sectors of the economy; CO2 emission tax approved by the Tax Reform, Law 20.780 dated October 2014, which shall become effective on January 1, 2017, establishing an annual tax benefit lien on carbon dioxide, among other gases, produced by facilities whose stationary sources, made up of boilers or turbines, have an aggregate thermal power equal or higher than 50 MWt (thermal megawatts). The tax shall be equivalent to 5 US Dollars for every ton of CO2. Tax on the initial sale of lightweight vehicles pursuant to Law 20.780, which has been implemented since December 28, 2014 and which taxes CO2 emissions indirectly, by charging a higher tax inversely proportional to vehicle performance - Additionally, the Government of Chile currently carries out various projects and initiatives supported by international funds with the goal of creating inputs for designing a strategy consistent with the objectives of a sustainable, competitive and low-carbon development. One of these initiatives was the MAPS Chile project, undertaken to evaluate the potential impact of CO2 reduction from a set of climate mitigation measures. Another has to do with the Low Emission Capacity Building project (LECB- Chile) focuses on four mitigation-related components: (i) implementation of a national GHG inventory system (SNICHILE); (ii) creation of a carbon management program ( HuellaChile Program); (iii) support for the creation of measurement, reporting and verification systems (MRV) for NAMAs and (iv) design of a national strategy for low emissions development (LEDS) that incorporates the results of the first three components. - Following the provisions of the United Nations framework Convention on Climate Change (UNCFCC), Chile generated a portfolio of Nationally Appropriate Mitigation Actions (NAMAs), being the first country to register a NAMA in October 2012. At the present, Chile has a total of 5 NAMAs registered with the Registry of the UNFCCC and 4 more are in process for registration: o a) Renewable energy consumption in Chile o b) Program Management of organic waste in Chile o c) Implementation of National Strategy for Climate Change and vegetation resources o d) Agreements for cleaner production in Chile (APL) o e) Green Zone for transportation in Santiago A.3 Key stakeholders to be involved & Proposed process for multi-stakeholder engagement

PAGE 4 OF 27 The NDA is leading a multi-stakeholder engagement process, considering the active involvement of all sectors of society, including government institutions, private sector and civil society. In this process all the relevant government institutions are being consulted on past and current climate change-related initiatives: Governmental Ministry of Finance Role Focal Point of the GCF, overseeing the climate change policy dialogue and priorities, including the Readiness Programme. Ministry of Environment Ministry responsible for the design and implementation of policies, plans and programs on the environment. Ministry of Energy Develops and coordinates various plans and policies for the energy sector. Ministry of Transport and Telecommunications Designs national policies in infrastructure development, planning and systems designs. Ministry of Agriculture Designs and coordinates all policies and programmes for forests, forestry and the agriculture sectors. Ministry of Public Works Develops through service and quality standards, the construction of sustainable and efficient the national infrastructure. Ministry of Economy, Development and Tourism Promotes the modernization and competitiveness of the productive structure of the country, based on the criteria of efficiency and sustainability. Other entities National Agency for Climate Change Development Corporation to Production (CORFO) Recently created national agency announced by the President with the purpose to develop a comprehensive national strategy to engage the private sector in climate change initiatives. Improves competitiveness and productive diversification of the country, through investment promotion, innovation and entrepreneurship. The following list includes all the non-governmental institutions which have been active in the national debate to define the national agenda. It is a preliminary identification of key players that can be extended during the implementation of the readiness program. Non-Governmental Activity Generating Chile A.G. Gremial association of generators, whose objective is promoting the development of power generation in the country, based on sustainability, reliability and competitiveness. Carboneutral S.A Team of consultants with experience in environmental management process, greenhouse gas inventories, conservation of natural resources, clean development mechanism and sustainability.

PAGE 5 OF 27 Adapt Chile (ONG) Promotes the integration of the climate change in decision-making at local level and strengthening the responses to its impact. United Nations Development Programme (UNDP) Supports and encourages capacity building in the environmental sustainability area, among other. Interamerican Development Bank (BID) Foresters Association for Native Forests (AIFBN) (ONG) Chile Sustentable Terram (ONG) Fundacion Chile Consejo Minero Centro del Clima y la Resiliencia (CR2): Centro de Desarrollo Urbano Sustentable (CEDEUS): Centro de Cambio Global (CCG): Adaptación de la Agricultura al Cambio Climático (A2C2): Its objective is to achieve development in a sustainable and climate friendly way. Professionals of different fields who care about conservation and sustainable management of the native forests in Chile. Encourages the development of a citizen s proposal for social, political and economic transformations of Chile towards a development based on sustainability criteria. Contributes to create a model proposal for country development, based on environmental justice, safeguarding nature and protecting our environment. Delivers high-impact solutions to address the challenges of sustainability in Chile, development of human capital, education, aquaculture and entrepreneurship. Association that brings together the producers of copper, gold, silver and molybdenum of larger operating in Chile, be they public or privately owned. Center for Climate and Resilience Studies conducting interdisciplinary research of climate science in Chile to get a better understanding of the resilience variables. It has a research unit focused on climate dynamics. Center for Sustainable Urban Development. Contributes to the public discussion about the coming challenges confronting the development of cities in the XXI century. Research Center conducting studies to strengthen the capacity of the national and subnational levels to confront global changes through the promotion of links with the private and public sectors Research Center for Agricultural Adaptation to Climate Change. It promotes interdisciplinary studies to understand climate change challenges for agriculture in a Mediterranean environment; also seeking to strengthen the training of specialized human resources Centro de Agricultura y Medioambiente (AGRIMED) Agriculture and Environment Center. Its purpose is to promote the use of advanced technologies in order to study the environment and the development of sustainable strategies for the use of natural resources Centro de Investigación e Innovación para el Cambio Climático (CICC): Research and Innovation Center for Climate Change. It conducts basic and applied studies to understand the climate change effects on coastal ecosystems

PAGE 6 OF 27 Fundación para la Investigación del Clima (FIC) A Non profit and private entity seeking to facilitate climate change research as well as climatology, environment and cooperation for sustainable development. It has an extended experience in analysis of local scenario of climate change, including a robust methodology to make statistical predictions. Our country is clearly vulnerable to climate change according to criteria established by the United Nations, thus it is necessary to extend the scope of the GCF to reach the subnational level. It is particularly important to reach the population that is, and will be most affected by climate change. There will be at least 6 regional activities allowing us to have a better understanding based on regional diagnoses. This will be an important input for the NDA, enabling the creation of synergies between different actors, sectors and regions. Thus it facilitates the process of a paradigm shift nationwide. The process for engagement of stakeholders includes the following actions: - Identification and mapping of key stakeholders (public and private) to plan the multi-stakeholder consultations to receive inputs and relevant information for the generation of the country programme. - The participation process includes the subnational level in order to have a clear understanding of the barriers confronting low emissions investments throughout the country. - The final output is the development of a work programme that includes the different regions of the country. As a result of these actions, Chile will engage in a multi-stakeholder process all sectors of society (government institutions, private sector and civil society at both, national and subnational levels) to strengthen a strategic approach and promote paradigm shifts towards low emission and climate resilient development pathways. This process has a gender sensitive approach, developing methodologies that contribute to a substantive participation of women in the country agenda setting. Finally, this process is aligned with the priorities of national institutions, including the Committee of Ministers for Sustainability and Climate Change whose purpose is to lead national policy on climate change and INDC commitments of Chile. B. DETAILED PROJECT ACTIVITIES B.1 Detailed plan for strengthening the NDA If applicable, please provide detailed information on the implementation of the proposed activities including workshops, trainings, etc. All activities should be included in the Implementation schedule in annex. The readiness support will help the NDA to strengthen its capacity to undertake Fund-related responsibilities and engage national stakeholders. For this particular area, the Ministry of Finance has planned the following work streams to strengthen knowledge-based capacity of the Focal Point to fulfil its role. Note these will be undertaken simultaneously (in parallel), and will require recruiting a part time consultant and two full time consultants. Work Stream A: Design of an Institutional Framework; support for project proposal applications, accreditation and dissemination Pursuant to the creation of an institutional framework to enable GCF activities in Chile. It is estimated that this activity will be completed within 12 months. It involves the development of guidelines for the evaluation of project proposals according to priorities and selection criteria of the Fund as well as the development of guidelines to work with stakeholders on the country programme. In addition, it includes the creation of a website (linked to documents in Spanish available on the GCF website to facilitate NDA communications with stakeholders on matters related to the Fund) hosted under the Ministry of

PAGE 7 OF 27 Finance s webpage. This (Chilean) website will contain a simplified version of GCF procedures and criteria for submitting projects and programmes. Moreover, methodological guidelines will be developed, containing relevant information such as the investment criteria, in order to streamline project proposals before submissions, including MRV methodologies, between others. The latter follows the procedure defined in section B.2 of this Inception Report. In addition, since there are only a few accredited entities that operate in Chile, the NDA will be proactive in providing information and supporting all potential national and international institutions that may be eligible for accreditation. Main expected results are: 1.1 Capacity of the NDA to effectively coordinate with different stakeholders at the country level strengthened. It includes the organization of meetings with key national stakeholders (Government institutions, private sector, financial and civil society) to discuss GCF opportunities, accreditation procedures and requirements. 1.2 NDA has adequate capacity for reviewing national funding proposals and issuing recommendations (or no objections) to apply to the Fund. This result will allow the establishment of a system for the evaluation of proposals aligned with GCF criteria. 1.3 Capacities established to promote and support the accreditation of local agencies to the Fund. This line of work will contribute to strengthen national capacities to identify potential local agencies that may be eligible for accreditation as implementing agencies with the Green Climate Fund, particularly public institutions exhibiting compatible regulatory mandates, and assessing any potential budget constraints. Also considers the development of methodological guidelines for the adoption of gender policies, environment and social safeguards and monitoring systems by the potential local agencies accredited. Work Stream B: Support for the legal analysis and the Board s decisions Many of the challenges associated with the institutionalization of the Fund in Chile are related with legal issues, which have complex implications to carry out. Also the GCF is in the process of defining their guidelines and policies, which requires knowledge and ability to interpret the Board s decisions for an adequate local management. These consultants will provide support on strategic priorities, contributing to build the knowledge and capacity of the NDA to undertake Fund-related responsibilities. The consultants provide support on strategic priority areas for engagement with the Fund. Main expected results are: 1.4. Legal analysis of agreements and contracts generated within the framework of involvement with the Green Fund. The consultant will conduct a desktop review to ensure the alignment of agreements subscribed between the NDA and GCF, with Chilean national legislation, in terms of approved funding proposal and national accredited entities activities and procedures. 1.5 Strategic analysis of the decisions discussed at each meeting of the Board. This result includes provide advise the NDA and its staff through day-to-day interactions as well as thinking on strategic areas for improving engagement with the Fund, and with other partners on climate finance mobilization. B.2 Detailed plan for developing the Country Programme Chile has carried out various initiatives to design strategies and plans that are consistent with sustainable, competitive and low-carbon development objectives, involving multi-stakeholder consultations, such as the Energy 2050 long-term energy policy consultation led by the Ministry of Energy, the National Climate Change Action Plan 2016-2021 (Ministry of Environment) and the National Climate Change and Vegetation Resource Strategy (Ministry of Agriculture through the National Forestry Corporation). These experiences represent necessary and important first steps towards creating policy frameworks with actual measures to deliver climate change actions within, and across sectors, but they also provide an indication of the human resources and timeframes that may be required to build a robust Country Programme. It is proposed that this Programme not only streamlines project/programme engagement with the GCF, while defining institutional roles and responsibilities based on Chile s progress, but it is also aimed at building an actual NDA capacity to anchor longer-term planning and decision making at the central level

PAGE 8 OF 27 of authorities that is typically critical to scale up the impact of aggregate government climate and GCFrelated actions. Given the thoroughness of the assessment at both, national and subnational levels in order to identify and validate country priorities (among other strategic outcomes), it is envisioned that Country Programme development will require at least one year to be completed (see below). During this process, all relevant stakeholders including the private sector, civil society and public sector will participate. Thus, the present Inception Report requests GCF support for the development of the Country Programme activities. To carry out this task, we expect to hire one full time senior consultant, supported by a junior professional to closely work with key stakeholders to develop a high quality investment programs. Main expected result are described below: 2.1.1. NDA team consolidated to review and analyze all the relevant information useful to plan long term actions on climate change (early stage of Country Programme). o The diagnosis includes a number of activities to ensure that mitigation and adaptation priorities are identified based on robust, complete and updated information sources. Thus, the first Country Programme aim is to concentrate a part of Focal Point efforts to define and validate national/subnational priorities in the mitigation and adaptation areas (objectives). The two consultant specialists will be working for a 12-month period to conduct in depth analysis of development plans, laws, databases available and regulations at the sectoral level to quantify the macroeconomic effect of the climate change vulnerability in Chile, making it possible to establish baselines and a potential econometric model to evaluate climate action impacts under GCF projects/programmes, as well as other public sector climate initiatives when relevant. It is expected that detailed information from an economic perspective, with an emphasis on the development of indicators to track progress, will be key products delivered through a report that summarizes main trends and findings in the country. This report (document) is envisioned to be a first draft of the Country Programme as such. It includes the following activities: 2.2.1. NDA has consolidated capacity to incorporate adequately the project portfolio and the Country Programme. o The Country Programme includes the monitoring the development of project portfolio. For this purpose a standardized procedures or system of Monitoring & Evaluation (M&E) will be developed, so that we can have an early feedback between the development of projects and programs under the development of project portfolio and the preparatory stage of the Country Programme. 2.3.1. Capacity of the NDA to define priority areas as well as activities for funding which are documented in the Country Programme. o Taking into consideration the diagnosis, we will proceed to assess how current public policies (development plans or national strategic) impact on mitigation and adaptation objectives identified in 2.2.1. At the same time, we will assess private sector initiatives, particularly the most innovative solutions with the participation of the key stakeholders. This analysis will allow identifying the most adequate technological as well as other options available for the introduction of effective measures in mitigation and adaptation, contributing to the paradigm shift towards low emission and climate resilient development. At this stage we will identify measures for mitigation and adaptation, with potential implementation in the short, medium or long term. These measures will be evaluated in terms of the main barriers, particularly in technology transference, behavioral barriers, and regulation among others. This activity is complemented with the analysis of the financial flows existing so that decisions are based on efficiency and effectiveness criteria. The final output is a document identifying short and long term opportunities for potential policies (including programmes and projects) to engage the private sector. o Development of a coherent framework that allows the elaboration of a future National Adaptation Plans

PAGE 9 OF 27 C: LOGICAL FRAMEWORK C.1 Detailed log frame with implementation schedule Please provide detailed log frame including activity level. See Annex I. Only sections relevant to the project should be filled in. Please refer to Annex 1 for detailed Logical Framework. D: CONSULTANTS AND EXPERT SUPPORT D.1 Consultants Please provide brief description of roles of the consultants. Detailed TORs should be provided in annex. Tasks are assigned according to Annex II: Implementation schedule Three consultants will be hired for Area 1: a. Economist- part time. Their role is associated with the following activities. 1.4.1.; 1.4.2; 1.5.1; 1.5.2.; 1.5.3. b. Advocate-full time:. 1.3.1.; 1.3.2.; 1.3.3.; 1.3.4. c. Environmental Engineer full-time: Their role is associated with activities 1.1.1; 1.1.2; 1.1.3.; 1.2.4.; 1.5.1.;1.5.2; 1.5.3..; 2.1.1 Two consultants full time will be hired for Area 2: d. Geographer full time: Their role is associated with activities 1.1.2; 1.5.3.; 2.1.1.; 2.1.2.; 2.1.3.; 2.3.1; 2.3.2. e. Graduate of Economics: Its role is associated with activities 2.1.2; 2.1.3. 2.3.1. Common activities of all consultants: 1.2.1; 1.2.2; 1.2.3; 1.2.5; 1.2.6; 2.2.1; 2.3.1, 2.3.2; 2.3.3. Notwithstanding any of the above, the idea is to build a team work. D.2 Procurement plan Please describe the different procurement packages and method of procurement used for each, using the attached template in Annex III. Disbursement will be made directly to AGCI through: - The first disbursement, which amounts to US$200,000 will be transferred upon the submission of an inception report from the FP, in form and substance acceptable to the Fund, which includes detailed implementation plan, procurement plan and budget; An initial big disbursement it is necessary due to the impossibility of AGCI to advance funds for these purposes. - The second tranche of US$50,000. will be transferred upon submission of an interim progress report and a financial report, including an expenditure statement after 6 months of implementation; and - The final disbursement of US$50,000. will be made upon submission of a completion report and financial report, including an audited expenditure statement. E: BUDGET E.1 Budget Please provide detailed budget using the attached template. Please refer to Annex XVI of the Standardized packages document to check the eligible expenses under the grant.

PAGE 10 OF 27 Category Outcome 1 Outcome 2 Total (USD) Consultants cost 127.273 72.727 200.000 Travel to regions of Chile 10.909 10.909 21.818 Workshop 7.727 7.727 15.455 Training 16.667 12.500 29.167 Other operating Cost 14.394 14.394 28.788 Contingency 2.386 2.386 4.773 Grand Total 179.356 120.644 300.000 *)Exchange rate estimate $660/US$ AGCI, as a government entity, does not charge a fee for his role as delivery partner Readiness_Proposal_ Budget_Template.xlsx

PAGE 11 OF 27 Annex I: Logical framework OUTCOMES Proyect summary Indicators BASELINES 1. NDA capacity to undertake Fund-related responsibilities and engage national stakeholders strengthened 1.1 Capacity to coordinate across stakeholders and facilitate effective consultation and communication 1.2 NDA with a system for reviewing proposals and issuing recommendations (or no objections) established 1.3 Legal analysis of agreements and contracts generated within the framework of involvement with the Green Fund 1.1 NDA has adequate capacity but requires additional support for its effective operationalization and engagement with the fund. 1.2 The capacity of the NDA is limited to develop a system for reviewing proposals and issuing recommendations and additional support is needed. 1.3 There is no capacity for permanent legal analysis of agreements and contracts generated within the framework of involvement with the Green Fund TARGETS/EXPECTED RESULTS 1.1 Capacity of the NDA to effectively coordinate with different stakeholders at the country level strengthened. 1.2 NDA has adequate capacity for reviewing national funding proposals and issuing recommendations (or no objections) to apply to the Fund. 1.3 Capacity developed for permanent legal analysis of agreements and contracts generated within the framework of involvement with the Fund. 1.4 Strategic analysis of the decisions discussed at each meeting of the Board 1.4 There is no capacity for an adequate strategic analysis of the Board s decisions and additional 1.4 Capacity developed for strategic analysis of the Board s decisions.

PAGE 12 OF 27 support is needed. 1.5 Promote and support the accreditation of local agencies before the GCF 1.5 The NDA has no capacity to promote and support the accreditation of local agencies before the Fund. 1.5 Capacities established to promote and support the accreditation of local agencies to the Fund 2. Strategic framework for engagement with the Fund developed 2.1 Reviewing national-level climate change information, including strategies, public policies, plans, relevant studies as well as identification of key stakeholders, existing funding mechanisms and regulations, among others. 2.1 There is information but it is scattered and fragmented, particularly on major institutional stakeholders (public and private) related to plans, policies, climate change studies as well as financial strategies and instruments that could be relevant for planning long term actions on climate change. 2.1 NDA has consolidated information at nationallevel of the climate change strategies, public policies, plans, relevant studies as well as key stakeholders, existing funding mechanisms and regulations, among others to assure a long term planning process. 2.2 Monitoring the development of project portfolio 2.2 The NDA has no capacity to monitor the project portfolio to ensure that is consistent with the Country Programme from the beginning. 2.2 The Country Programme incorporates valuable inputs resulting from the preparatory process of projects and programs in the priority areas defined by the Fund.

PAGE 13 OF 27 2.3 Development of a coherent framework that allows the elaboration of an initial Country Programme, and future national adaptation plans, including detailed information on country main barriers and priorities related to climate change 2.3 There is no coherent framework to develop an initial Country Programme and future National Adaptation Plans, that defines priorities or activities that can be funded by the GCF. 2.3 Priority areas defined, activities for funding established and document prepared (Country Programme and future National Adaptation Plans)

PAGE 14 OF 27 PROJECT SUMMARY INDICATORS BASELINES TARGETS/EXPECTED RESULTS 1.1.1. Periodic updating of the website incorporating decisions taken by the Board and NDA 1.1.1. There is no local website 1.1.1. Web site running and updated regularly 1.1 Capacity to coordinate across stakeholders and facilitate effective consultation and communication 1.1.2. Identifying and coordinating stakeholder meetings (projects, expert panels, regional visits, and potential local agencies) 1.1.2. Regular meetings with stakeholders are limited 1.1.2. Report of activities undertaken with stakeholders OUTPUTS 1.2 NDA with a system for reviewing proposals and issuing recommendations (or no objections) established 1.1.3. GCF and NDA documents disseminated to relevant stakeholders 1.2.1. Establishing a system or protocol for submitting, prioritizing projects as well as applying for preparatory funds 1.2.2. System or protocol of various internal procedures 1.1.3. There is no document detailing the engagement activities with national stakeholders. 1.2.1. There is no system or protocol for the postulation of local projects 1.2.2. There is a lack of a system to deal with various internal procedures 1.1.3. GCF and NDA documents disseminated and posted on the website. 1.2.1 Protocol (document) for the postulation and prioritizing of local projects established, including the procedure to apply for preparatory funds 1.2.2. System of various internal procedures established and documented 1.2.3. Preparation of official reports on submitting and selecting process for applicants and internal use of the NDA 1.2.3. There is no official document 1.2.3. Procedure document published

PAGE 15 OF 27 1.2.4. Organize periodic meetings of the NDA as well as with different stakeholders to carry out the process of submitting projects 1.2.4. Regular meetings with different stakeholders are limited 1.2.4. Minutes of meetings published 1.2.5. Permanent updating of procedures and protocols of official documents according to new decisions of the GCF and NDA. 1.2.5. There is no process for permanent updating local procedures 1.2.5. Procedure document published 1.2.6 Organize meetings with project applicants to feedback and monitor the process 1.3.1 Support for the analysis and signature of the Agreement on Privileges and Immunities 1.2.6 Regular meetings with project applicants are not realized. 1.3.1. There is no capacity to manage the Agreement on Privileges and Immunities 1.2.6 Minutes of meetings published 1.3.1. Agreement on Privileges and Immunities prepared and signed 1.3 Legal analysis of agreements and contracts generated within the framework of involvement with the Green Fund 1.3.2 Provide legal analysis of the contracts and agreements of the projects approved by the Fund, including those related to the intermediation between accredited entities and the public sector. 1.3.2 There is no capacity to analyze the legal implications resulting from the approval of projects by the Fund 1.3.2 Capacity developed to analyze the legal implications associated to the approval of projects by the Fund 1.3.3. Provide legal analysis of all the agreements related to funds, including those related to the intermediation between the GCF 1.3.3. There is no legal capacity to analyze the agreements between the GCF and the public sector 1.3.3. Capacity developed to analyze the legal implications of the agreements between the GCF and the public sector

PAGE 16 OF 27 and the public sector 1.3.4. Legal analysis of the Board s decisions 1.3.4. There is no legal capacity to analyze the Board s decisions 1.3.4. Capacity developed for permanent legal analysis of the Board s decisions 1.4 Strategic analysis of the decisions discussed at each meeting of the Board 1.4.1. Documentation and analysis of the Board s decisions 1.4.2. Prepare proposals to modify protocols and website content according to the new decisions of the Boar 1.4.1. There are limited capacities to analyze the implications of the Board s decisions 1.4.2. There is no capacity to prepare proposals to modify protocols according to the new Board s decisions and communicate them on the website 1.4.1. Board s decisions analyzed and documented 1.4.2. Documents with updated protocols published and incorporated regularly on the website. 1.5.1. Identifying and mapping local agencies with potential to meet the GCF requirements 1.5.1. The capacity to identify local agencies with potential to meet the GCF requirements is limited. 1.5.1. Capacity developed to identify and map out local agencies with potential to meet the GCF requirements 1.5 Promote the accreditation of local agencies before the GCF 1.5.2. Identify and provide analysis of the gaps affecting potential entities (public or private) to be accredited to the GCF. 1.5.3. Permanent support to the institutions in the process of accreditation before the GCF 1.5.2. There is no capacity to identify and analyze the potential gaps affecting the local entities to be accredited to the GCF 1.5.3. There is a limited capacity to support the local institutions in the process of 1.5.2. Booklet with agencies 1.5.3. NDA Documents published on the website. Develop of methodological guidelines for the adoption of gender

PAGE 17 OF 27 accreditation before the GCF policies, environment and social safeguards 2.1.1. Identifying and mapping key stakeholders to plan multistakeholder consultations, at both national and subnational levels 2.1.1. There is no capacity to plan a multi-stakeholder consultations 2.1.1. Report on the activities planned, including key national and subnacional stakeholders 2.1 Reviewing national-level climate change information, including strategies, public policies, plans, relevant studies as well as identification of key stakeholders, existing funding mechanisms and regulations, among others. 2.1.2. Systemization of plans, policies as well as studies of climate change in Chile (mitigation and adaptation) to do a rapid assessment (Desktop Assessment) and begin preparing the Country Programme. 2.1.2. There is no capacity to review all the relevant information, given its dispersion that could be useful to plan long term actions on climate change 2.1.2. 2 Country Programme 2.1.3. Review of existing information, including funding mechanisms and regulation with potential to scale up in the country 2.1.3. There is no capacity to review the existing information on funding mechanisms and regulation 2.1.3. Country Programme 2.2 Monitoring the development of project portfolio ( Area 4 GCF) 2.2.1 Management ensures early feedback between development projects and programs, and the development of the preparatory stage of the Country Programme. 2.2.1. The NDA has no capacity to monitor the project portfolio (Area 4) to ensure that is consistent with the Country Programme 2.2.1. Feedback report per project plus complementary Minutes 2.3 Development of a coherent framework that allows the elaboration of an initial Country Programme, including detailed information on country main barriers and priorities related to climate change 2.3.1. Develop the structure for strategic planning in climate change in the areas prioritized by the Green Climate Fund conducting to the preliminary version of the Country Programme 2.3.1. There is no capacity to conduct a national process of strategic planning. 2.3.1. Framework of future national adaptation plans

PAGE 18 OF 27 Note: Please fill in only sections relevant to the project 2.3.2. Convene all stakeholders including interested national and regional accredited entities to review and validate the Country Programme and framework of national adaptation plans 2.3.3. Develop workshops and public events to report the main results and conclusions of the Country Programme. and framework of national adaptation plans 2.3.2. There is a limited capacity to convene an validate complex process of national planning 2.3.3. There is no local capacity to develop the Country Programme that identify the national priorities and key activities to Finance by the Fund.. 2.3.2. National workshops realized to validate de Country Programme and framework of national adaptation plans 2.3.3. Country Programme and framework of national adaptation plans workshops realized

PAGE 19 OF 27 Annex II: Implementation schedule OUTCOMES OUTPUTS ACTIVITIES YEAR 2016 YEAR 2017 Q4 Q1 Q2 Q3 Q4 1. NDA capacity to undertake Fundrelated responsibilities and engage national stakeholders strengthened 1.1. Capacity to coordinate across stakeholders and facilitate effective consultation and communication 1.2. NDA with a system for reviewing proposals and issuing recommendations (or no objections) established 1.1.1. Periodic updating of the website incorporating decisions taken by the Board and NDA 1.1.2. Identifying and coordinating stakeholder meetings (projects, expert panels, regional visits, and potential local agencies) 1.1.3. GCF and NDA documents disseminated to relevant stakeholders 1.2.1. Establishing a system or protocol for submitting, prioritizing projects as well as applying for preparatory funds 1.2.2. System or protocol of various internal procedures 1.2.3. Preparation of official reports on submitting and selecting process for applicants and internal use of the NDA 1.2.4. Organize periodic meetings of the NDA as well as with different stakeholders to carry out the process of submitting projects 1.2.5. Permanent updating of procedures and protocols of official documents according to new decisions of the GCF and NDA. 1.2.6. Organize meetings with project applicants to feedback and monitor the process 1.3.1. Support for the analysis and signature of the Agreement on Privileges and Immunities 1.3.2. Provide legal analysis of the contracts and agreements of the projects approved by the Fund,

PAGE 20 OF 27 1.3. Legal analysis of agreements and contracts generated within the framework of involvement with the Green Fund including those related to the intermediation between accredited entities and the public sector. 1.3.3. Provide legal analysis of all the agreements related to funds, including those related to the intermediation between the GCF and the public sector 1.3.4. Legal analysis of the Board s decisions 1.4. Strategic analysis of the decisions discussed at each meeting of the Board 1.4.1. Documentation and analysis of the Board s decisions 1.4.2. Prepare proposals to modify protocols and website content according to the new decisions of the Boar 1.5. Promote the accreditation of local agencies before the GCF 1.5.1. Identifying and mapping local agencies with potential to meet the GCF requirements 1.5.2. Identify and provide analysis of the gaps affecting potential entities (public or private) to be accredited to the GCF. 1.5.3 Permanent support to the institutions in the process of accreditation before the GCF (Develop of methodological guidelines for the adoption of gender policies, environment and social safeguards) 2. Strategic framework for engagement with the Fund developed 2.1. Reviewing national-level climate change information, including strategies, public policies, plans, relevant studies as well as identification of key stakeholders, existing funding mechanisms and 2.1.1. Identifying and mapping key stakeholders to plan multi-stakeholder consultations, at both national and subnational levels 2.1.2. Systemization of plans, policies as well as studies of climate change in Chile (mitigation and adaptation) to do a rapid assessment (Desktop Assessment) and begin preparing the Country Programme.

PAGE 21 OF 27 regulations, among others. 2.1.3. Review of existing information, including funding mechanisms and regulation with potential to scale up in the country 2.2 Monitoring the development of project portfolio ( Area 4 GCF) 2.2.1. Management ensures early feedback between development projects and programs and the development of the preparatory stage of the Country Programme. 2.3 Development of a coherent framework that allows the elaboration of an initial Country Programme, including detailed information on country main barriers and priorities related to climate change 2.3.1. Develop the structure for strategic planning in climate change in the areas prioritized by the Green Climate Fund, conducting to the preliminary version of the Country Programme 2.3.2. Convene all stakeholders including national and regional accredited entities to review and validate the Country Programme and framework of national adaptation plans 2.3.3 Develop workshops and public events to report the main results and conclusions of the Country Programme.and framework of national adaptation plans.please indicate the activities that will be executed in order to generate the outputs and outcomes outlined above, which are derived from the standardised programmes of work. Indicative time frames for the completion of relevant activities should also be included. Please fill in only sections relevant to the project.

PAGE 22 OF 27 Annex III: Procurement Plan The procurement plan will cover the implementation period. The implementing entity shall update the procurement plan throughout the duration of the project at least annually by including contracts previously awarded. All procurement plans, their updates or modifications shall be published on the website of the implementing entity. General Information Project Name: : Readiness and Preparatory Support Programme Country: Chile Executing Agency: International Cooperation Agency of Chile (AGCI) Grant Amount: US$300,000 Date of First Procurement Plan Grant Agreement Number: Date of updated Procurement Plan A. Process Thresholds, Review - Month Procurement Plan 1. Project Procurement Thresholds 1. The following national process thresholds shall apply to procurement of goods and works Method Open competitive/full Tender Request for three quotations Single source / Shopping Petty Cash Procurement of Goods and Works (*) Threshold USD 67241 > USD 200,000 (> 1000 UTM) USD 6724 > USD 67241 (>100 UTM) USD 0 > USD 6724 (<100UTM) 0 > USD 6724 (<100UTM) (*)UTM (monthly tax unit) = $45.724 (july 2016); Dollar : $680/US$ (27 june 2016)) AGCI has a Procedures manual of purchases and contracts (attached). 2. National Prior or Post Review 2. The following national prior or post review requirements apply to the various procurement and consultant recruitment methods used for the project. Procurement Method Prior or Post Comments Procurement of Goods and Works Open competitive/full Tender Prior Request for threes quotation Prior Single source / Shopping Post Petty Cash Post Recruitment of Consulting Firms Request for three quotations Prior Recruitment of Individual Consultants Recruitment in the form Honorario (*) Prior Personal Honorario a Suma Alzada : corresponds to independent staff, which makes the provision of services to the State. According to the procedures manual Recruitment Selection and Employment of AGCI, the administrative act that accompanies the hiring via this mode it corresponds to an exempt resolution approving the contract, and which is subsequently registered in the registration system SIAPER of the Comptroller General of the Republic

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PAGE 24 OF 27 3. Goods and Works Contracts Estimated ( insert amount) 3. The following table lists goods and works contracts for which procurement activity is either ongoing or expected to commence within the next 12 months. General Description Office supplies and printing materials Provision workshop/ meeting material Provision of transport services/ refund Provision of hotel services for workshops and meeting of stakeholders including refreshment and hall rent Provision of accommodation International training for NDA staff Contract Value Procurement Method 22.727 Request for Quotation for services/ Single source Request for Quotation for services/ Single source 7.273 Request for Quotation for services/ Single source 18.182 Request for Quotation for services/ Single source 11.818 Request for Quotation for services/ Single source 29.167 Request for Quotation for services/ Single source Prequalification of Bidders (y/n) Advertisement Date (quarter/year) Comments N 4q/16 to 3q/17 It includes equipment for consultants and impressions N 4q/16 to 3q/17 N 4q/16 to 3q/17 It includes transfers to regions N 4q/16 to 3q/17 It includes costs of workshops in regions N 4q/16 to3q/17 It includes hotel costs and per diem regional travel N 4q/16 to 3q/17 It includes seven international travel to Board Meeting 4. Consulting Services Contracts Estimated ( insert amount) 4. 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 Method 1 Hiring one national 36.364 Modality consultants (part Honorarios time) Hiring four national 163.636 Modality consultant (full Honorarios time) Audit 6.061 Modality Honorarios Others 4.773 Contingency Advertisement Date (quarter/year) International or National Assignment Comments 4q/2016 National Includes 1 consultant 4q/2016 National Includes 4 consultant 3q/2017 National In the case of hiring consultants, AGCI will use the modality Honorarios, that will streamline recruitment.

PAGE 25 OF 27 Terms of references of Consultants for support program of Green Climate Fund AREA 1: National Consultant 1 for area Strengthening Focal Point : - This consultant will have at least a Master s degree in Climate Change/Environment/Natural Resources/Development studies/economy with extensive experience (at least 5 years) in consulting related to topics of climate change. - The consultant must know the relevant institutions and stakeholders for the decision-making, so he/she can generate effective communication between the focal points and this. - The consultant must have an extensive knowledge of the main challenges, politics and national strategies in the areas of mitigation and adaptation. - The consultant should have strong analytical, writing and presentation skills in English. - The consultant must have the planning skills and synthesis in the drafting of documents. - The specific tasks for the consultant are: Develop a proposal of institutional framework for the operation of the Green Climate Fund in the country. Design a guideline for the evaluation of projects, reflecting the national priorities and selecting criteria aligned to the relieved by the GCF. Create a web page with relevant information of the GCF, which allow a simplified reading of the stakeholders who wish to apply with a project or accredited as implementing agencies. Planning several regional visits with stakeholders. Elaborate methodological guides in the area of: gender policies, environment and social safeguards and monitoring systems. Also, identify financing alternatives for climate change and national environmental legislation, to facilitate the nomination to the GCF. Organize periodic meetings with the civil society, non-lucrative organization, private sector and public sector to discuss about the opportunities that are provided by the GCF. Identify accreditation opportunities of local agencies and disseminate relevant information that supports the postulation of local agencies to accreditation in our country. Develop a system of internal monitoring, which allows us to monitor the development of the readiness according to its original programming. Provide support to analyze the documents and the decisions adopted by the Board of the Green Climate Fund. Provide technical support to the Chilean alternate member of the Board of the Green Climate Fund. Consultant 2 area Strengthening Focal Point Legal Advisor (Consultant). Under the guidance of the Focal Point, the Consultant will provide a detailed study of the existing (including proposed/draft) legal framework related to the master agreements of the Green Climate Fund. It includes review and analysis of legal texts and gaps in the legal framework as well as national and international regulations. The Legal Advisor must have the following skills and experiences: Advanced degree in environmental issues and law, preferably with specialization in natural resources and public policy for sustainable development, with related experience in international environmental agreements, with at least 5 years of experience in projects or institutions linked to climate change; Must have proven capacity to prioritize multiple tasks, meet deadlines even in imperfect conditions and thrive as part of a small team; Outstanding oral and written communication skills, with an ability to sum up key points concisely;

PAGE 26 OF 27 Tasks: Provide recommendations on the existing gaps to comply with the Green Climate Fund requirements, drafting legal texts. The Legal consultant shall also analyze current and future legal challenges related to the implementations of the readiness program as well as projects and recommend how to overcome them. The consultant shall advise on what are the legal framework necessary to satisfy the requirements of the national laws as well as the Green Climate Fund and the Accredited Entities to allow for the future implementation of projects and programs. Review of the legal implications resulting from the decisions adopted by the Board of the Green Climate Fund. National Consultant 3 for area Strengthening Focal Point : Under the guidance of the Focal Point, the Consultant will provide support for assessing key opportunities and challenges for the implementation of NDA in Chile. The Consultant must have the following skills and experiences: Master s degree in Climate Change/Environment/Natural Resources/Development studies with extensive experience (at least 5 years) in consulting related to topics of climate change; Knowledge of key stakeholders (public and private) related to climate change issues, including excellent networking skills; The consultant must have an extensive knowledge of the main challenges, politics and national strategies in the areas of mitigation and adaptation; The consultant should have strong analytical, writing and presentation skills in English; The consultant must have the planning skills and synthesis in the drafting of documents; Tasks: Support the development of the institutional framework for the operation of the Green Climate Fund in the country. Provide support in producing communicational outputs such as success stories, lessons learnt, including social media, country programs, and others. Gathering information and engage with key partners (Accredited Entities, Ministry of Environment, Ministry of Energy, Ministry of Agricultures, as well as World Bank, UNDP, private organizations and others) to help coordinate meetings and workshops. Provide logistic support to prepare concept notes and funding proposals and related activities to advance the country pipeline projects. Design a guideline for the evaluation of projects, reflecting the national priorities and selecting criteria aligned to the relieved by the GCF. Elaborate methodological guides in the area of: gender policies, environment and social safeguards and monitoring systems. Also, identify financing alternatives for climate change and national environmental legislation, to facilitate the nomination to the GCF. AREA 2:National Consultant 4 for area Country Programme : The consultant in charge of the development of the country program must have the following characteristic for the function: - Will have at least a Master s degree in Climate Change/Environment/Natural Resources or in related fields, with at least 5 years of experience in projects or institutions linked to climate change. - Must lead and coordinate the relevant activities to develop of the country program. - The consultant should have strong analytical, writing and presentation skills in English. - The consultant must have the knowledge about:

PAGE 27 OF 27 o o o o o The operation of various international funds related to the climate change. Implementation and applicability of MRV criteria in our country. Knowledge of national priorities, as well the mitigation and adaptation policies in Chile. The consultant must know the relevant institutions and stakeholders for the decision-making, so he/she can generate effective communication between the focal points and this. Extensive knowledge of literature about climate change, serve as input to make a national diagnosis on previously prioritized areas. Moreover, in the order to achieve a more comprehensive analysis of the climate change problematic, will be required a second junior consultant, linked to the economy/finance area, and to have: University Degree in social sciences, business administration, economics or finance; Experience in conducting research, desk review and other is a strong asset; Ability to work under the pressure, with minimum supervision and on-distance; Demonstrated initiative, tact and high sense of responsibility and discretion; Both consultants will work in the development of the country program with the following specific tasks: Identify the priorities objective of the country in areas of mitigation and adaptation, in a national and sectoral level. Review literature for the realization of a sectoral diagnosis in the priority areas of the GCF. Define baseline and estimation of impacts through econometric models for the different sectors of the economy. Analyze the actuals strategic plans and national public policies, that they are linked directly or indirectly to face the effects of climate change. Identify initiatives from the private sector, which will contribute to achieving of the objectives of mitigation and adaptation aforementioned. Identify development opportunities or technological transfers that will contribute to the achievement of the objectives previously mentioned. Evaluation of the different barriers (behavior, regulatory institutions, financial and techniques, etc) and co-impacts of potential measures identified from the public sector, private sector or technological opportunities. MRV standard criteria include for each analyze measures. Develop the structure for strategic planning in climate change in the areas prioritized by the Green Climate Fund conducting to the preliminary version of the Country Programme and future National Adaptation Plans. Is important to notice, that both in the area of strengthening the focal point, as in the country's development program, will deliver reports to learn about the progress that each consultant has in their area, so that finally everything is compiled and published in a final report.