GFC is taking the lead to show its commitment to ensuring countries are making individual and collective contributions to help vulnerable communities become better equipped to face climate adversities.
The world’s largest fund to help developing countries tackle the climate crisis, the Green Climate Fund (GCF), announced on Friday that it had approved $686.8 million in financing at a board meeting earlier this week.
This initial amount is supposed to attract more investments from various financial partners for 11 proposed projects across 42 countries. The GCF aims to mobilize around $1.5 billion and provide the necessary financial and infrastructural assistance to approximately 115 million people. These projects include efforts to improve forest resilience in Serbia and help vulnerable communities from Togo to become more climate resilient.
Reuters has reported that the GCF board co-chair Leif Holmberg said that the GFC is taking the lead to show its commitment to ensuring countries are making individual and collective contributions to help vulnerable communities become better equipped to face climate adversities. He added that this new investment approval proves that providing access to such vital financing in the face of the climate crisis remains the topmost priority of this Seoul-based group.
The GFC was created as part of the historic Paris Agreement and works to make developing countries achieve their Nationally Determined Contributions (NDC) goals of lowered emissions and other climate-friendly targets. The group’s financial support is a combination of grants, concessional debt and guarantees or equity instruments. The GCF has a network of over 200 accredited entities that work directly with developing countries, designing and implementing projects. It is also partnered with financial institutions at the local, domestic and international levels.
Earlier this week, the GCF approved $103.2 million in grant financing to improve the life-saving early warning systems in 7 vulnerable countries, namely Antigua and Barbuda, Cambodia, Chad, Ecuador, Ethiopia, Fiji, and Somalia. This is a five-year project led by the United Nations Development Program (UNDP) and will be beneficial to more than 26 million people. These countries are facing various climate adversities, like prolonged drought in Ethiopia and Somalia, and intense storms and rising sea levels in Fiji and Antigua and Barbuda.
Of the total budget of $114.6 million, $11.3 million is co-financed from different international organizations such as the International Federation of Red Cross and Red Crescent Societies (IFRC), the International Telecommunication Union (ITU), and the World Meteorological Organization (WMO) and the national governments of the involved countries. This financial and infrastructural collaboration is necessary because early warning systems are built on strong partnerships, which are essential to improving these systems.
Upon approving the $686.8 million investment, GCF Executive Director Mafalda Duarte emphasized the group’s need to become more active locally, not as a mere financial partner, but also working on the ground, saying ‘climate action is local.’ Additionally, although not many details were revealed, the GCF also announced its plans to establish a more regional presence. The group wants to work more closely in the countries it serves, which would help increase the impact of the projects with which it is involved.
This news comes shortly after the US government reneged on its pledge to financially support the GCF. Despite the Trump administration’s cancellation of $4 billion in US pledges to the group, the world’s largest fund was not to be deterred. The fund announced its plans to expand its total portfolio to at least $50 billion by 2030.
However, if the pledges are not realised, the group’s efforts to support the climate ambitions in the developing world will be severely restricted. While the US had pledged a total of $6 billion, only $2 billion of that promised amount was delivered, with the outstanding fund now cancelled. While the total amount would have made the US the single-largest contributor, other countries like Germany, France, Japan and the UK have made significantly larger contributions.
Despite such a huge setback, the recent news comes as a hope for the future. Along with the investments, the group’s initiative to establish a more local presence is also essential to push climate action across continents and build the necessary systems to protect marginalised and vulnerable populations.
