23 May 2015: The Government of Japan and the Green Climate Fund (GCF) have signed a contribution arrangement confirming the conversion of Japan’s pledge of US$1.5 billion equivalent, which carries the Fund over the required 50% threshold to begin allocating resources for projects and programmes in developing countries.

With the Japanese announcement, the GCF has formally reached “effectiveness” and will begin considering funding proposals with the aim of submitting initial projects to the GCF Board in advance of the Paris Climate Change Conference in December 2015.

The Japanese contribution brings the total signed contribution agreements to US$5.47 billion equivalent, or 58.5% of the amount that countries committed at the GCF’s High-level Pledging Conference in Berlin in November 2014.

Atsuyuki Oike, Japan’s Ministry of Foreign Affairs, noted that the finalization of his country’s contribution arrangement came just in time for the 7th Pacific Islands Leaders Meeting, which met from 22-23 May 2015 in Japan to address financing for climate adaptation in small islands.

The GCF aims to finalize its first set of projects for approval by the GCF Board at its 11th meeting in November 2015. An initial version of the Fund’s project proposal form is available online for use by GCF national designated authorities and accredited entities that will channel GCF resources into projects.

With the GCF’s declaration of effectiveness sending a “strong signal to global financial markets,” the hope is that the corporate sector will put money into mitigation and adaptation projects in developing countries. The GCF should be able to leverage some of its capital with private sector cash, with measures aimed at reducing investor risks for investors.

To accelerate private sector investment in low-emission, climate-resilient activities, the GCF’s Private Sector Facility will work with international businesses, capital markets and the local private sector in developing countries. The Fund has also identified strategic priority areas and global investment opportunities that: are not adequately supported by existing climate finance mechanisms; and can be used to maximize the GCF’s impact, especially investments in efficient and resilient cities, land‐use management and resilience of small islands.

Héla Cheikhrouhou, GCF Executive Director, urged governments that have not yet pledged to the Fund to do so. To date, 33 governments, including eight developing countries, have pledged close to US$10.2 billion equivalent, with 21 of them signing a part or all of their contribution agreement. [GCF Press Release] [IISD RS Story on the 9th Meeting of the GCF Board]