USD 501.1 million in GCF resources for new climate projects and taken significant steps to strengthen results management for its growing portfolio
The four new climate projects approved during the meeting will mobilize a total of USD 2,949 million for climate action in Africa, Asia, and Latin America, with three of the four new projects targeting support to the most vulnerable countries including Least Developed Countries, Small Island Developing States, and African states. The newly approved projects and programs increase the GCF total portfolio to USD 8.85 billion, worth USD 33.2 billion including funding from all sources. They are listed below and more details of each are available on the GCF website.
The Board also approved the Integrated Results Management Framework (IRMF), a significant development that strengthens the GCF policy framework and improves the Fund’s ability to measure its impact. The IRMF has been agreed upon after constructive negotiations between Board members to finalize the text. The new policy will merge existing frameworks into an updated results architecture. This framework will enable more consistent measurement and reporting of results from the project level, further boosting the ability of GCF to measure and report the impact of its investments.
The four-day, virtual Board meeting also approved entities for accreditation and re-accreditation, reviewed the performance of the Fund during the COVID-19 pandemic, and discussed further policy reforms. “With the addition of USD 500 million in new projects by the Board, the Green Climate Fund is now investing nearly USD 9 billion in low-emission, climate-resilient development. GCF is the largest dedicated climate fund and is playing a key role to support climate action in developing countries, particularly Least Developed Countries, Small Island Developing States, and African states,” at the close of the meeting, Co-Chair José De Luna Martínez, from Mexico, stated.
“GCF has a critical role to play in ensuring that finance is provided to developing countries as part of our global climate commitments. The Fund continues to improve the efficiency of the implementation of its portfolio and the Board now needs to prioritize policy reforms that are needed as GCF continues to grow, as it did today with the adoption of the new Results Management Framework,” Co-Chair Jean-Christophe Donnellier, from France, added.
“The Secretariat’s report to the Board this week demonstrated a remarkable success as we continue to hit our performance targets in spite of the COVID-19 pandemic. Our portfolio is growing, and the delivery of funds on the ground is accelerating. 75% of our projects are now under implementation and the time taken for project proposals to be approved and funded continues to fall. We are determined to hit the objectives set within our strategic plan for the period up to 2023, including achieving a 50/50 balance between adaptation and mitigation investments, and we will step up our efforts to prioritize adaptation projects for our next Board meeting,” GCF Executive Director Yannick Glemarec stated.
The twenty-ninth Board meeting approved ten new entities for accreditation, nine of which are regional or national direct access entities, increasing the proportion of DAEs to 63% of GCF’s project partners. Five of the newly accredited entities are national financial institutions of which three are national development banks. This demonstrates GCF’s approach of tapping the potential of public development banks to finance the green and climate-resilient transition. For the first time, two existing Accredited Entities were approved for re-accreditation following assessment by the Secretariat and Accreditation Panel.
The four-day virtual meeting reviewed the performance of the Fund as it accelerates the implementation of its portfolio despite the COVID-19 pandemic. At the mid-point of the year, GCF has already reached 95% of its targets for programming and disbursement targets, as a result of efficiency measures and adaptive management approaches.
The Board also considered positively the Long-Term Vision on Complementarity, Coherence, and Collaboration between the Green Climate Fund and the Global Environment Facility, an initiative aimed at strengthening support to developing countries and maximizing the efficiency of the climate finance landscape.
The following projects were approved during the meeting:
- ‘Building Climate Resilient Safer Islands in the Maldives’ is a USD 25.1 million project undertaken with the Japan International Cooperation Agency (JICA). The funding will enhance coastal management to protect these climate-vulnerable islands from the impact of sea-level rise. This exemplifies GCF’s support for Small Island Developing States (SIDS) to adapt to climate change which now amounts to a total of USD 649 million.
- ‘Light Rail Transit for the Greater Metropolitan Area’ is a USD 271.3 million project which will be undertaken in Costa Rica with the Central American Bank for Economic Integration (CABEI). CABEI is one of GCF’s ‘direct access entities’ (DAEs) – sub-national, national, and regional organizations that are working close to the ground in developing countries. As part of its strategic plan for 2020-2023, GCF is committed to significantly increasing the funding that is channeled through direct access entities. At present, 15% of the portfolio is allocated via DAEs (in grant equivalent terms).
- ‘Transforming Eastern Province through Adaptation’ is a USD 33.8 million project with IUCN in Rwanda. African states, particularly Least Developed Countries (LDCs) such as Rwanda, are highly exposed to climate impacts such as drought, heatwaves, and changes in rainfall patterns that are threatening the resilience of smallholder farmers. This project is part of the USD 1.26 billion GCF is investing in adaptation action in Africa to help to protect lives, support livelihoods, and encourage sustainable management of ecosystems.
- ‘Leveraging Energy Access Finance (LEAF) Framework’ is a USD 170.9 million private-sector project in six African countries undertaken with the African Development Bank. Around 570 million people in Sub-Saharan Africa lack access to energy. The LEAF framework will allow African states to leapfrog carbon-intensive energy models by crowding in private capital investment to deliver decentralized, renewable energy access. This is part of GCF’s strategy to mobilize climate finance by leveraging public funds to de-risk private investment – making blended finance work for early-stage markets. 15% of GCF’s portfolio in grant equivalent terms targets the private sector (33% in nominal terms). GCF is committed to significantly increasing the mobilization of its private sector projects under its Private Sector Facility.