Climate Finance Fundamentals 11: The Green Climate Fund
The Green Climate Fund (GCF) became fully operational in 2015 as a dedicated fund to help developing countries shift to low-emission and climate-resilient development pathways. While the GCF is an operating entity of the Financial Mechanism of the United Nations Framework Convention on Climate Change (UNFCCC) and serves the Paris Agreement (UNFCCC, 2015), it remains a legally independent institution hosted by South Korea. The GCF has its own Secretariat with the World Bank as its Trustee. The 24 GCF Board members, with equal representation of developed and developing countries and support from the Secretariat, have been working to operationalise the Fund and implement its vision since their first meeting in August 2012.
Throughout 2020 and 2021, the GCF’s long-overdue work to address gaps in essential policies and frameworks came largely to a halt due to the Covid-19 pandemic. The GCF Board could not agree on some of the more controversial policies via virtual meetings. However, the Secretariat continued to keep pace with efforts to speed up the development and approval of proposals and disbursement of approved funding. It also issued guidelines and improved operational procedures intended to drive up the overall quality of GCF projects and programmes, both approved and in the pipeline.
As of October 2021, the GCF had accredited 113 implementing entities as partners to deliver projects (with ten added since 2020), and had approved USD 10 billion for 190 projects. The 30th virtual meeting of the GCF Board in early October 2021 approved 13 of these project proposals worth USD 1.21 billion in GCF resources. Despite the continued disruptions caused by Covid-19, in 2021 the GCF programmed more than USD 2.9 billion for 32 projects and programmes as well as readiness and preparatory support, with commitment authority under its first replenishment period (GCF-1, 2020–2023).
With close to 95% of the USD 9.9 billion in pledges by 34 contributors confirmed as of October 2021, the GCF is thus on track to reach its annual programming goals set for GCF-1 and make its overall contribution to reaching the goals of the Paris Agreement, as guided by its updated strategic plan.
The Fund’s role in a post-2020 climate regime as the major finance channel under the UNFCCC, and as the largest multilateral climate fund, was confirmed by successful replenishment in 2019. However, its accessibility and efforts to leverage additional resources require further improvement while the speed and scale of GCF funding disbursement and implementation has markedly picked up in 2021. This Climate Finance Fundamental (CFF) provides a snapshot of the operationalisation and functions of the GCF at the half time under GCF-1. Past editions of this CFF further detail the design and initial operationalisation phases of the Fund.