Green Climate Fund (GCF)
The mandate of the Green Climate Fund (GCF) reads as follows, “In the context of sustainable development, the Fund will promote the paradigm shift towards low-emission and climate-resilient development pathways by providing support to developing countries to limit or reduce their greenhouse gas emissions and to adapt to the impacts of climate change, taking into account the needs of those developing countries particularly vulnerable to the adverse effects of climate change.”
The GCF is the youngest financial mechanism under the UNFCCC, established at COP16 in 2010, adopted in 2011, and has been operational since 2015. The GCF Secretariat is hosted by the Republic of Korea and led by an Executive Director. The World Bank functions as the interim trustee. The final trustee is yet to be selected. The Governing Board consists of 24 members, with equal representation from industrialized and developing countries. In February 2018, Paul Ocquist (Nicaragua) and Lennart Bage (Sweden) were elected as co-chairs. The Governing Board supervises the GCF and takes decisions on the
funding of proposals. Its sessions are open to four observers, two selected by NGOs and two by the private sector. Since the GCF started its operations, independent evaluation and integrity units have been established to ensure accountability, and so, an “Environmental and Social Policy” as well as an “Indigenous Policy” has been approved. A redress mechanism for complaint procedures has also been developed. Altogether, the GCF is the flagship channel for climate finance in the architecture of the Paris Agreement.
By 2016, initial pledges of USD 10.3 billion had been made, with the United States putting forward the largest pledge of USD 3 billion. There are severe doubts with regard to the fulfilment of this pledge under President Trump’s administration. Other primary donors are Japan (USD 1.5 billion), the UK (USD 1.13 billion), France and Germany (each pledging USD 1 billion), Sweden (USD 0.5 billion) and other, mostly developed countries have put forth pledges. There have also been some developing countries who have made pledges, as well as cities, such as the City of Paris. In March 2018, the GCF Board agreed on an 18 month replenishment process.
Eligibility to Receive Funding
Accredited entities (to the GCF) are eligible for support, and the GCF provides direct access. However, to become accredited there are high transparency and fiduciary standards that have been set by the Governing Board that must be met. Thus, the accreditation process is lengthy and the list of entities in the accreditation pipeline is long and it may take years to get through the accreditation phase. Readiness programs and a grant are available to applicants to ease the accreditation process and to widen the spectrum of accredited entities, including from resource poor climate vulnerable countries.
Regional Focus: The GCF has no regional focus. All developing country Parties to the Convention are eligible for funding. At least 10% of the funds are earmarked for LDCs, Small Developing Island States (SIDS) and African countries. These three groups are considered to be particularly climate vulnerable by the GCF. By March 2018, 81 projects had been approved, including 25 projects in LDCs and 14 projects in SIDS. In terms of regional representation, 28 of the approved projects are located in Africa, 30 in the Asia-Pacific region, 18 in Latin America and the Caribbean and 5 in Eastern Europe.
The GCF aims to enable and support adaptation, mitigation (including REDD+, i.e. “Reducing Emissions from Deforestation and Forest Degradation and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries”), technology development and transfer, capacity-building and the preparation of national reports. Countries are supported to develop and implement projectbased and programmatic approaches in accordance with climate strategies and plans (such as low-emission development strategies,
Nationally Appropriate Mitigation Action (NAMA), NAPA, National Adaptation Plans (NAPs) and others).
The GCF has identified eight main impact areas:
- Low-emission energy access and power generation;
- Low-emission transport;
- Energy efficient buildings, cities and industries;
- Sustainable land use and forest management;
- Enhanced livelihoods of the most vulnerable people, communities, and regions;
- Increased health and well-being, and food and water security; • Resilient infrastructure;
- Resilient ecosystems.
50% of the GCF portfolio should cover adaptation action. 20% should be earmarked for a specific private sector facility. By December 2017, 31% of the support provided was accounted for as adaptation, 40% as mitigation, and 29% was approved for transversal projects.
In line with the respective eligibility criteria and standards, recipient countries first have to appoint a National Designated Authority (NDA).
Next, a National Implementing Entity (NIE) needs to be nominated and accredited by the GCF. Alternatively, if there is no accredited NIE in a country, funds can be accessed through Multilateral Implementing Entities (MIEs), also called intermediaries, such as accredited MDBs or UN agencies. NGOs, private banks, or other organizations can also be accredited as an implementing entity.
By end of 2017, 75% of the projects had been implemented by international organizations and development banks, 8% by regional entities, and only 17% by accredited National Implementing
With regards to implementing entities, other partners, including sub-national institutions, NGOs, FBOs, or the private sector can be involved in project implementation as Executing Entities (EE).
Once an implementing entity has been accredited by the GCF, it can appoint an EE to prepare a funding proposal. The funding proposal requires the endorsement of the NDA and is then forwarded to the Fund Board through the NIE. The NIE is in charge of overseeing the development and approval of the project, and the monitoring of its implementation, while the EE is responsible for carrying out the project.
Funding proposals are usually developed in close cooperation with the Secretariat of the GCF. Funding decisions are taken by the Governing Board which meets four times a year. All decisions of the board are made available online.
A comprehensive Guide on how to access the GCF can be found on the GCF Website.
Green Climate Fund
Songdo International Business District
Incheon, Republic of Korea
Tel: +82 32 458 6059