Green Climate Fund

Description

The Green Climate Fund (GCF) is the world’s largest multilateral fund devoted to addressing climate change. It mobilizes private sector capital and is designed to finance transformative projects and bolster innovative climate change investments.

Use of Funds

The GCF provides grants, loans, guarantees, and equity. Projects are implemented through partnerships with accredited entities, including non-governmental organizations and multilateral development banks. The GCF uses a “country ownership” model, where projects must have state-level buy-in and align with national climate action plans before being considered.

Justification

• In 2020 the GCF Board approved 37 projects in 77 countries worth $4.9 billion, including $2.8 billion in co-financing.
• Over 70% of the GCF project portfolio is now under implementation and, despite the pandemic, the GCF achieved its target of disbursing $1.5 billion in climate financing by the end of 2020.
• The GCF attempts to maintain a minimum of 50% allocation of funds for low-income countries most vulnerable to the impacts of climate change, particularly African states, least developed countries (LDCs), and small island developing states (SIDS). To date, the GCF has provided:
  • $2.7 billion in funding for projects in Africa.
  • $2.1 billion to projects in LDCs.
  • $899 million to projects in SIDS.
• Within the GCF’s private sector portfolio, $3.4 billion is matched by $11.1 billion in co-financing. This private sector investment alone has avoided 672.5 million tons of carbon emissions and benefited 136.1 million people.