The evaluation assesses how well the incremental funding principle is applied at the project level.

Designed to ensure GEF resources provide new and additional financing for global environmental benefits rather than substitute for development funds, the principle was reviewed through compliance and quality checks of 140 projects, surveys of 159 stakeholders, interviews, and field missions.

Findings show that incremental reasoning generally guides objectives and outcomes, helping secure global benefits and mobilize cofinancing, with GEF contributing about 40 percent of incremental costs.

Yet stakeholder understanding varies widely, with key terms often misunderstood. Incremental cost annexes are usually prepared late in project formulation and treated as procedural requirements, offering little value for design or negotiation. Reporting frequently omits essential elements such as baselines, alternatives, and socioeconomic effects, while guidance is viewed as overly complex and inconsistently applied.

The evaluation concludes that although incrementality remains central to the GEF mandate, current reporting practices add little to project quality.

It recommends replacing annex requirements with clearer integration of incremental reasoning into project design and focal area strategies.