Green Climate Fund (GCF) is a financial mechanism under the UNFCCC which helps fund climate finance investment in low-emission, climate-resilient development through mitigation and adaptation projects and programmes in developing countries.
The GCF was set up by the 194 countries who are parties to the United Nations Framework Convention on Climate Change (UNFCCC) in 2010, as part of the Convention’s financial mechanism. It aims to deliver equal amounts of funding to mitigation and adaptation, while being guided by the Convention’s principles and provisions. The GCF is based in the new Songdo district of Incheon, South Korea.
GCF aims to catalyse a flow of climate finance to invest in low-emission and climate-resilient development, driving a paradigm shift in the global response to climate change. It is intended that the Green Climate Fund be the centrepiece of efforts to raise Climate Finance under the UNFCCC, and raise $100 billion a year by 2020.
When the Paris Agreement was reached in 2015, the Green Climate Fund was given an important role in serving the agreement and supporting the goal of keeping climate change well below 2 degrees Celsius.
GCF provides support to project all over the world with the majority of projects being implemented in Africa, Asia Pacific, Latin America and the Caribbean and Eastern Europe.
The fund aims at funding equally climate change mitigation and adaptation strategies.
GCF aims at engaging directly with both the public and private sectors in transformational climate-sensitive investments. GCF engages directly with the private sector through its Private Sector Facility (PSF), benefiting from the capacity to bear significant climate-related risk, allowing it to leverage and crowd in additional financing. The Fund offers a wide range of financial products including grants, concessional loans, subordinated debt, equity, and guarantees. This enables it to match project needs and adapt to specific investment contexts, including using its funding to overcome market barriers for private finance.
An important and valuable mechanism of GCF is the so called “Readiness Programme”, which is aimed at enhancing countries ownership. This mechanism supports such activities as development of National Climate Change Adaptation Plans and/or activities aimed at enhancement of the ability of an entity to seek accreditation with the Fund, including for the fast-track accreditation process (pre-accreditation support).
GCF somewhat differs from the general project cycle previously described. A simplified version of GCF project cycle is presented in the below.
An important element in the GCF project cycle is Accredited Entities – organisations that develop funding proposals to be considered by the Fund and oversee, supervise, manage and monitor their respective GCF-approved projects and programmes and meets certain GCF standards based on financial standards, environmental and social safeguards, and gender. They can be private, public, non-governmental, sub-national, national, regional or international bodies. There are two types of GCF Accredited Entities:
- Direct Access Entities are sub-national, national or regional organizations that need to be nominated by developing country National Designated Authorities (NDAs) or focal points;
- International Access Entities can include United Nations agencies, multilateral development banks, international financial institutions and regional institutions. GCF considers these organizations to have the wide reach and expertise to handle a variety of climate change issues, including ones that cross borders and thematic areas.
GCF Project cycle (following the link to get the full description of the project cycle)
Headquarters: Songdo Business District, 175 Art Center-daero, Yeonsu-gu, Incheon 22004, Seoul, Republic of Korea.
Public organizations: GCF Country Programming: Tel: +82 32 458 6010, email: email@example.com Corporate organizations: GCF Private Sector Facility, Tel: +82 32 458 6061, email: firstname.lastname@example.org;