The Green Climate Fund (GCF) and the Global Environment Facility (GEF) organized an event addressing their respective roles in blended finance during the 2019 UN Climate Change Conference in Madrid, Spain. The event, which convened on 9 December, discussed the ways in which the GEF and the GCF are using development capital to mobilize additional private finance to drive green investments and create new climate finance markets.

It addressed, inter alia: engagement between development and climate finance institutions to scale investments; the ways in which innovative equity, grant, guarantee and lending instruments deployed by the GCF and GEF are used to de-risk scalable projects and contribute to achieving Paris Agreement goals in developing countries; their motivation and role in providing project structures that have had a catalytic impact of blending project capital stocks; and why private institutions should be interested in working with the two entities.
 
Naoko Ishii, GEF CEO and Chairperson, underscored the need for radical changes in economic pathways and financing to support a shift to circular systems of food production and energy efficiency, among others.
 
Yannick Glemarec, GCF Executive Director, said the organization is fostering a shift towards low emissions development in low income countries, and highlighted GCF’s: 95 accredited partners for co-financing and co-implementation; grant and non-grant instruments that are specific to different projects; and mechanisms to reduce or share risk by ensuring projects are aligned to national priorities.
 
Speakers also highlighted:

• the Climate Resilience and Adaptation Finance and Technology-transfer Facility (CRAFT) to support the development and launch of the first private sector investment strategy for adaptation and resilience solutions;
• the need to replicate, scale up and standardize success stories;
• the need for transparency and full disclosure by investors on their activities;
• blended finance used to facilitate the retirement of carbon intensive stocks, such as fossil fuel investments;
• blended finance used to break through “sacred cows” that cause limitations on what is bankable or not, and build confidence for first time investors; and
• ways to avoid crowding out private investment and ensuring optimization, and making public climate finance catalytic.

[IISD RS Coverage of Side Event on Blended Finance] [GCF at COP 25 Website] [GEF at COP 25 Website]

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IISD Reporting Services is providing coverage of selected side events during the UN Climate Change Conference, which convened from 2- 13 December 2019.