Green Climate Fund
Background and objectives
The Green Climate Fund (GCF) was adopted by 194 governments as a financial mechanism of the United Nations Framework Convention on Climate Change at the end of 2011. Its goal is to limit or reduce greenhouse gas emissions in developing countries and help adapt vulnerable societies to the already-felt impacts of climate change. It aims to make an ambitious contribution to attaining the mitigation and adaptation goals of the international community with the goal of keeping the temperature increase of the planet below 2 degrees Celsius. Over time it is expected to become the main multilateral financing mechanism to support climate action in developing countries.
As of February 2016, the GCF had raised USD 10.2 billion equivalent in pledges from 42 state governments to finance adaptation and mitigation projects in developing countries.
Eligible areas of activity
The GCF seeks to have an impact within the following eight mitigation and adaptation results areas identified by the Fund's Board:
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The Fund has further identified five cross-cutting investment priorities which will deliver major mitigation and adaptation benefits:
- Transforming energy generation and access
- Creating climate-compatible cities
- Encouraging low-emission and climate-resilient agriculture
- Scaling up finance for forests and climate change
- Enhancing resilience in Small Island Developing States (SIDS)
Beneficiaries and implementing agencies
All developing countries, which are Parties to the Convention, are eligible to receive resources from the GCF.
The Fund gives recipient countries access to funding through accredited national and sub-national implementing entities (including NGOs, government ministries, national development banks, and other domestic or regional organizations that can meet the Fund's standards). Countries can also access funding through accredited international and regional entities (such as multilateral and regional development banks and UN agencies) under international access. Private sector entities can also be accredited as implementing entities.
Some funds will be distributed through Enhanced Direct Access (EDA), in which developing country-based accredited institutions receive an allocation of GCF finance and then make their own decisions on how to program resources. The EDA model differs from other arrangements in which finance is only accessible through discrete projects and programs approved by the GCF board.
The AfDB received GCF accreditation as an international implementing agency in March 2016.
AfDB and GCF
Between 2011 and 2015, as part of its Climate Change Action Plan (CCAP), the AfDB mobilized approximately US $12 billion of climate finance to support climate-resilient and low-carbon development in Africa. Nonetheless, Africa has not succeeded as much as other regions of the world in mobilizing the funding needed to implement climate-smart initiatives. With new GCF funds now available to be channeled through the AfDB, African countries will have additional resources to access.
From now on, AfDB will focus efforts on working with member states to bring funding proposals forward for submission to the GCF.
Finally, AfDB is committed to nearly tripling its current climate financing to reach US$5 billion a year by 2020. AfDB's climate spending will increase to 40% of its total new investments by 2020 compared to 26% on average from 2011 to 2014.
For more information on the Green Climate Fund, please visit: www.greenclimate.fund.