The Green Climate Fund (GCF) is intended to be the world’s leading international channel of public climate finance. As of September 2017, it had committed US$2.2 billion in funding to 43 projects and programmes across developing countries. This briefing aims to provide an initial assessment of whether the GCF is living up to its mandate. It looks at whether funds are being equitably disbursed, “country ownership” is being enhanced (encouraging devolved management rather than control by multilateral institutions), and vulnerable countries and communities are being targeted.
The report found that the GCF risks becoming a sideshow to big development banks and other multilateral institutions unless it rapidly changes course.
- Despite the fact that country ownership of activities was one of the main reasons for setting up the GCF, only seven percent of the funding already allocated will pass through “direct access” entities (national or subnational developing country institutions). Over half of allocated GCF funding is managed by just three international partners: European Bank for Reconstruction and Development (EBRD, accounting for 27.5 per cent), United Nations Development Programme (UNDP), and European Investment Bank (EIB).
- More than one-third of GCF financing is to be delivered through commercial banks, equity funds, and other financial intermediaries (FIs). This requires considerably more oversight, transparency, and capacity to exercise due diligence than the GCF currently has or seems likely to attain any time soon. Further, FI programmes complying with medium-risk safeguards have the potential to finance high risk sub-projects.
- Six large programmes and one large project — all run by international development banks — account for just over half of the funding allocated. Projects and programmes worth over US$50 million each account for over 80 per cent of the funding allocated so far. A simplified approval process for low-risk micro projects should be agreed as a matter of urgency.
- Only 27 per cent of the GCF funding allocated so far goes to adaptation. There is also evidence of bias in favour of a narrow definition of adaptation that minimizes the need to address the underlying socioeconomic factors that make marginalized populations more vulnerable to the impacts of climate change.
- The quality of the treatment of gender varies greatly. Thirty per cent of projects and programmes approved so far lack an easily accessible, publicly available stand-alone gender assessment, and 40 per cent lack stand-alone gender action plans. Even in cases where a gender action plan is articulated, insufficient budget is often allocated to achieve its goals.
- Only 4.7 per cent of the total GCF funds allocated so far have energy access as a primary focus, with several others including energy access as a minor component.