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Climate Finance Fundamentals 11: The Green Climate Fund

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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.

In 2022, with in-person Board meetings resumed after the Covid-19 pandemic, the GCF was able to advance a number of important policy and framework reforms stalled during virtual meetings throughout 2020 and 2021, including most prominently revising its accreditation framework and strategy, updating its simplified approval process, finetuning its adaptation approach and providing improved guidance to its implementation partners on how to articulate the climate rationale of their funding requests. The Secretariat continued with efforts to speed up the disbursement of approved funding. It also issued guidelines and improved operational procedures intended to drive up the overall quality and impacts of GCF projects and programmes, both approved and in the pipeline.

As of October 2022, the GCF had accredited 114 implementing entities as partners to deliver projects (with two added in 2022), and had approved USD 11.4 billion for 208 active projects. Throughout 2022, the GCF Board in four Board meetings approved 19 funding proposals worth USD 1.42 billion in GCF resources. This was less than in previous years, as the GCF was facing financial constraints to its commitment authority in the third year of its first replenishment period (GCF-1, 2020–2023), leaving a number of approval-ready proposals lingering.

With 100% of the USD 9.9 billion in pledges by 34 contributors confirmed as of September 2022, the GCF is thus on track to reach its annual programming goals set for GCF-1, as it sets its views to its second replenishment period (GCF-2, 2024-2027). The replenishment process formally kicked off in July 2022 and includes an update to the GCF’s strategic planning and operational modalities required for a successful resource mobilization effort, which will culminate with a high-level pledging conference in September 2023. At the same time, the GCF Secretariat is looking for new leadership with the current executive director retiring in April 2023.

These efforts come as the Fund seeks to confirm and maintain its role in the climate regime as the major finance channel under the UNFCCC and as the largest multilateral climate fund within a dynamically changing global climate finance landscape and with discussions about a new collective goal on climate finance post-2025 ongoing. This Climate Finance Fundamental (CFF) provides a snapshot of the operations, programming and functions of the GCF at this crucial phase for its future. Past editions of this CFF further detail the design and initial operationalisation phases of the Fund.

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Date of Publication
March 2023
ODI and the Heinrich Böll Stiftung Washington, DC
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