At its 22nd meeting, the GCF Board approved nine new climate action projects totaling USD 440 million in GCF resources.
The Board adopted investment criteria indicators and policies in preparation for its first replenishment.
The GCF welcomed its new Executive Director Yannick Glemarec.
28 February 2019: The 22nd meeting of the Green Climate Fund (GCF) Board discussed the Fund’s first replenishment and strategic programming, and steps required to strengthen operations, reinforce standards and close policy gaps. The Board approved: nine new climate resilience and low greenhouse gas (GHG) emission projects totaling USD 440 million in GCF resources; and applications for accredited entities from Armenia, Australia, Benin, Luxembourg, Mexico, Morocco, Nepal, New Caledonia and Pakistan. The Board also announced Yannick Glemarec as the new GCF Executive Director.
The year 2019 marks a pivotal phase for the GCF as the Fund enters its first replenishment, urgently needed as the full amount of its initial resource mobilization will be invested over the course of 2019.
In four years of full funding operations, the GCF has reached 96 countries with project funding and over 120 countries with readiness support. These investments, totaling USD 4.6 billion in GCF resources to realize USD 16.4 billion of total investments, have been estimated to reduce 1.43 gigatons (Gt) of carbon dioxide equivalent (CO2 eq) and benefit over 270 million people directly. Demand for GCF funding is strong, which is evidenced by a USD 15 billion pipeline of funding proposals and concept notes, and a further USD 20 billion plus in project ideas emerging from developing countries’ and entities’ work programming. Yet demand for climate finance remains unmet.
Put into perspective, climate finance flows in 2016 totaled USD 681 billion – still less than fossil fuel investment of USD 742 billion for that year. Potential real estate assets at risk from climate change valued at USD 35 trillion, while total global assets under management amounted to USD 71 trillion. The GCF Board was reminded of this context as its 22nd meeting considered a strategic programming document outlining scenarios for the GCF’s first replenishment. The document notes that only 32%, or USD 149 billion, of annual global climate finance flows are invested in developing countries, based on 2015-2016 data and excluding China, which alone invested on average USD 103 billion during that period.
To build the capacity of developing countries and to enhance country ownership and access to the GCF, the Fund provides readiness support through its Readiness and Preparatory Support Programme, which provides resources up to USD 1 million per country per year in the form of grants or technical assistance. At its 22nd meeting, the Board took note of the evaluation of the Readiness Programme by the Independent Evaluation Unit, and adopted a work programme and budget that builds upon the evaluation findings and recommendations and provides USD 122.5 million for 2019 for its next phase of readiness support to developing countries.
The GCF Board also considered implementation of its initial Strategic Plan and a strategic programming document for the GCF’s first replenishment. A report on the implementation of the GCF’s initial strategy (GCF/B.22/Inf.13) points to the need to address project demand “outstripping” available GCF resources and to rethink existing access modalities to further expand accessibility and realize the GCF’s ambitions regarding investment in new technologies. The report also notes ongoing considerations of an integrated policy framework for funding proposals and questions relating to decision making in the absence of consensus.
Looking ahead, the Strategic Programming for the GCF First Replenishment (GCF/B.22/Inf.12) document assesses developing country needs, the GCF’s impact potential, scenarios for ambitious mitigation and adaptation impact and proposed programming directions. Several new programming directions are presented in the document under: portfolio-level goals; resource allocation, including country-driven pipeline programming and strategic requests for proposals; access modalities; and policies and instruments, including completion of funding proposal policies and a technical assistance and knowledge policy.
USD 4.6 billion in GCF resources reduced 1.43 Gt CO2eq.
Options for the GCF to deepen its “pursuit of impact” identified in the document include cross-cutting considerations such as: pursuing investments that aim to develop value chains for systemic change; helping countries strengthen the enabling environment for mitigation and adaptation and build well-functioning markets; and leveraging impact by mobilizing partnerships and crowding in capital from climate finance providers to build scale. Proposed GCF interventions to drive impact are outlined for forests and land use, energy efficiency, transport, buildings, cities, industries and appliances sectors. Opportunities to enhance the Funds’ actions to reduce vulnerabilities and build resilience are presented for the areas of: disaster risk reduction (DRR) and early warning systems; agriculture, food and water security; ecosystems and ecosystem services; health and well-being; and infrastructure. To ensure technical advisory services in these sectoral and key thematic areas, the GCF announced on 23 February the launch of a Framework for Communities of Practice, bringing together a network of globally renowned expert organizations for this purpose.
To address private sector underinvestment deriving from real and perceived investment risks, the document suggests that the GCF deploy flexible financial instruments, including debt, equity and guarantees, and combine these instruments with concessional financing to enhance the financial attractiveness of projects, and outlines specific actions in this regard.
The GCF Board approved the following projects and programmes totaling over USD 440 million:
- USD 96.5 million for REDD+ results-based payments for results achieved by Brazil in the Amazon biome in 2014 and 2015, with the UN Development Programme (UNDP);
- USD 8 million for Resilient Rural Belize (Be-Resilient), with the International Fund for Agricultural Development (IFAD);
- USD 29.6 million for Mali solar rural electrification project, with the West African Development Bank (BOAD);
- USD 18.8 million for Promotion of Climate-Friendly Cooking: Kenya and Senegal, with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ);
- USD 100 million for Nigeria Solar Independent Power Producers Support Program, with Africa Finance Corporation (AFC);
- USD 69.6 million for BOAD Climate Finance Facility to Scale Up Solar Energy Investments in Francophone West Africa in Benin, Burkina Faso, Guinea-Bissau, Mali, the Niger and Togo, with BOAD;
- USD 100 million for Embedded Generation Investment Programme in South Africa, with the Development Bank of Southern Africa (DBSA);
- USD 9 million for Enhanced climate resilience of rural communities in central and north Benin through the implementation of ecosystem-based adaptation in forest and agricultural landscapes, with the UN Environment Programme (UNEP); and
- USD 8.9 million for Building resilience of communities living in landscapes threatened under climate change through an ecosystems-based adaptation approach in Namibia, with the European Investment Fund (EIF).
Ahead of a pledging conference for the first replenishment of the GCF later this year, the Board meeting also moved to complete the policies and standards that guide the Fund’s climate activities. To strengthen implementation of the investment framework, the Board adopted investment criteria indicators (GCF/B.22/05), including impact potential, paradigm shift potential, sustainable development potential, needs of the recipient, country ownership, and efficiency and effectiveness. The Board also adopted a policy on cancellation and restructuring (GCF/B.22/04) to reinforce good management of its portfolio of projects. It welcomed recommendations from the Independent Evaluation Unit on how to improve the Results Management Framework (GCF/B.22/07), as well as the management response (GCF/B.22/07/Add.01) and action plan. On safeguards and standards, the Board adopted a policy on protection from sexual exploitation, sexual abuse and sexual harassment, together with guidelines and procedures for the Independent Redress Mechanism.
The Board meeting convened from 26-28 February 2019 at GCF headquarters in Songdo, Incheon, Republic of Korea. Established in 2010 as a dedicated multilateral fund to assist developing countries with their response to climate change, the GCF serves as an operating entity of the Financial Mechanism of the UNFCCC and the Paris Agreement on climate change. Its purpose is to promote a paradigm shift to low-emission and climate-resilient development, taking into account the needs of nations that are particularly vulnerable to climate change impacts. [GCF Press Release on 22nd Board Meeting] [GCF Press Release on Selection of New Executive Director] [Strategic Programming for the Green Climate Fund First Replenishment] [GCF Status of the Initial Resource Mobilization Process]