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 Nationally Determined Contributions before being considered. The GCF also has a mandate to invest 50% of its resources on mitigation projects and 50% on adaptation projects.

Justification

• Since 2019, the GCF has doubled its portfolio and tripled the number of projects being implemented. In 2021, the GCF Board approved 32 projects in 67 developing countries worth $14.4 billion, including $11.5 billion in co-financing.
• GCF disbursements reached $2.3 billion in 2021, a 53% increase above 2020.
• The GCF allocates a minimum of 50% of its funds to 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:
  • $3.7 billion in funding for projects in Africa.
  • $2.9 billion to projects in LDCs.
  • $1.19 billion to projects in SIDS.
• The private sector comprised $3.4 billion of GCF’s portfolio in 2021. GCF funding avoided 2 billion tons of carbon emissions and benefitted 611.6 million people.