Climate Finance Fundamentals 11: The Green Climate Fund

The Green Climate Fund (GCF) is the most important multilateral climate fund supporting developing countries in implementing their climate goals to meet Paris Agreement targets.  With the ongoing revision of countries’ nationally determined contributions (NDCs) in the lead up to COP26 in Glasgow, UK, in 2021 and with countries struggling to achieve a green and resilient recovery from Covid-19, the role of the GCF in providing financial assurance and technical assistance to developing countries will be more important than ever.

Five years after Paris and five years into its full operationalization, the GCF has ramped up its activities, working now with 103 accredited implementing partners and having approved USD 7.2 billion for 159 projects and programs covering a wide range of sectors and targeting mitigation, adaptation and forest conservation.  A successful replenishment in 2019 confirmed its role as the major finance channel under the UN climate regime, netting USD 9.9 million from pledges by 31 contributors, three quarters of which have been already confirmed. While the United States has not contributed so far, and even is in arrears with USD 2 billion of its commitments made under the Obama administration going unfulfilled during the Trump era, the incoming Biden administration raises the hope of a generous contribution, ideally matching the doubling of pledge done by major industrialized countries in Europe for the GCF’s first replenishment period (GCF-1), which is ongoing until end of 2023. An updated strategic plan, just recently approved, will ensure that the GCF is doing its part to reaching the goals of the Paris Agreement.

While significant progress has been made in the GCF’s operations over the past five years since Paris, its accessibility, efforts to leverage additional resources, as well as the speed, quality and scale of GCF funding disbursement and implementation require further improvement. This analysis provides a snapshot of the operationalization and functions of the GCF at the end of the first year under GCF-1 and five years into the implementation of the Paris Agreement.