GCF Board Approves Funding of $868.8m for Projects

Green Climate Fund. Wikipedia

New Delhi, 27 Feb (Radhika Chatterjee): The Green Climate Fund (GCF) Board approved 11 funding proposal applications amounting to a total of USD 686.8 million at its 41st meeting held in Songdo, Republic of Korea from February 17 to 20, 2025.

The funding proposals approved spread over 42 countries, and involved USD 1.5 billion in co-financing. According to the GCF’s Secretariat, following these approvals, the overall portfolio of the Board now consists of 297 projects, with a total GCF funding amounting to USD 16.6 billion and USD 62.7 billion with co-financing. Of this total amount, USD 5.3 billion has been disbursed so far. As of October 2024, in grant equivalent terms, 57% of the funding amount went to adaptation, and 43% to mitigation.  Investment is mostly via grants [74%], supplemented by loans [16%] and equity [10%]. [See details of funding proposals approved below.]

The Board also adopted a historic decision on establishing a regional presence of the fund. During the discussions on the regional presence of the GCF, almost all Board members expressed support for it, though some concerns were also raised about the costs involved, and the impact this would have on the Fund’s operations. Eventually, this matter was discussed in informal sessions for over a day and a half. On the last day of the meeting, the Board adopted a decision to establish a regional presence, before closing the meeting. (Separate article to follow with further details).

The Board meeting was presided over by newly elected Co-chairs Seyni Nafo (Mali) and Lief Holmberg (Sweden).

The Board also discussed proposals put forward by the Co-chairs regarding guidance to the GCF from the UNFCCC’s COP29 meeting [held in Baku, Azerbaijan last year], the work-plan update for 2025-2027, and modifications to the no-objection letter procedure. [See further details below].

Several developing country Board members, led by the African Group raised the issue of finding a space for discussions of the COP29 outcome on the new collective quantified goal (NCQG) on finance in relation to the guidance received by the GCF from the COP in Baku, and in the consideration of the Co-chairs’ work plan update. (Separate article to follow in this regard).

The question of uncertainties over the Fund’s resources in light of the United States’ rescinding on its pledged resources to the GCF was raised by Pacifica F. Ogola (Kenya) during the discussions on GCF’s status of resources. [According to the Status of GCF resources, pipeline, and portfolio, the U.S.’ unconfirmed pledges to the GCF amount to USD 3 billion for the second replenishment, as well as the USD1 billion outstanding from the USD 3 billion pledged during the initial resource mobilisation.The U.S under the Trump Administration, had on January 27 2025, notified the UN Secretary-General that it was rescinding any outstanding pledges to the GCF]. The GCF Secretariat in its response, said it would be taking the U.S recission into account in the update it would provide on the status of the fund’s resources to the Board at its next meeting

Also considered and taken note of by the Board were evaluations conducted by the GCF’s Independent Evaluation Unit (IEU) which included the Fund’s approach to Indigenous Peoples (IPs). A key recommendation made in the IEU’s evaluation in this regard provides for a consideration of a separate window for IPs to ease their access to funding. The recommendation reads as follows:

“In the medium to long-term, the GCF must address fundamental systemic barriers within the business model that limit the extent to which IPs can access the GCF. The GCF should consider an IPs-specific window or programme.”

Funding Proposals

The following 11 funding proposals were approved by the Board:

• Project titled ‘Strengthening the resilience of vulnerable communities within high climatic and disaster risk areas’ in Togo, with Banque Ouest Africaine de Développement (BOAD) as the accredited entity [AE]. The funding approved was USD 25 million.

• Project titled ‘Sustainable Communities for Climate Action in the Yucátan Peninsula (ACCIÓN)’ in Mexico, with Fondo Mexicano para la Conservación de la Naturaleza A.C. (FMCN) as the AE. The funding approved was USD 25 million.

• Project titled ‘Transforming Livelihoods through Climate Resilient, Low Carbon, Sustainable Agricultural Value Chains in the Lake Region Economic Bloc’ in Kenya, with the Food and Agriculture Organisation [FAO] as the AE. The funding approved was USD 29.2 million.

• Multi-country project titled ‘Intensification of Agriculture and Agroforestry Techniques (IAAT) for climate resilient food and nutrition security’ in Tombouctou, Gao, Mopti, Koulikoro and Segou regions of Mali, with Save the Children Australia as the AE. The funding approved was USD 33.7 million.

• Multi-country project titled ‘RE-GAIN: Scaling solutions for food loss in Africa’, covering Burkina Faso, Ethiopia, Kenya, Malawi, Tanzania, Uganda and Zambia with AGRA as the AE. The funding approved was USD 75.6 million.

• Multi-country Project titled ‘Advancing Early Warnings for All (EW4All)’, with UNDP as the AE. The project aims to strengthen the resilience of communities in seven countries covering Antigua and Barbuda, Chad, Cambodia, Ecuador, Ethiopia, Fiji and Somalia. The funding approved was USD 103.2 million.

• Multi-country Project titled ‘Adapting tuna-dependent Pacific Island communities and economies to climate change’, with Conservation International as the AE. The funding approved was USD 107.4 million.

• Project titled ‘Enhancing the resilience of Serbian forests to ensure energy security of the most vulnerable while contributing to their livelihoods and carbon sequestration (FOREST Invest)’ in Serbia, with FAO. The funding approved was USD 25 million.

• Multi-country Project titled ‘Improving Climate Resilience by Increasing Water Security in the Amazon Basin Countries’ of Bolivia, Brazil, Colombia, Ecuador, Peru and Suriname, with the Interamerican Development Bank as the AE. The funding approved was USD 162.2 million.

• Project titled ‘Green Climate Finance Facility for Fostering Climate-Smart Agriculture’ in Senegal, with Le Banque d’Agricole as the AE. The funding approved was USD 23.9 million.

• Multi-country Project titled ‘Mirova Sustainable Land Fund 2 (MSLF2)’ aims to tackle challenges of land degradation and climate change in selected countries in Costa Rica, Cote d’Ivoire, Ghana, Malaysia, Morocco, Peru and the Philippines, with Mirova as the AE. The funding approved was USD 76.5 million.

During the consideration of the funding proposals, most Board members welcomed the focus on adaptation in six of the total projects that it considered. One of the proposals, from UNDP on ‘Advancing Early Warnings for All’ was approved with an amendment to one of the conditions laid out for the project by the Independent Technical Advisory Panel (ITAP) (See below for details).

The funding proposal from Save the Children for projects in Mali, though was approved, saw three Board members (Stephane Cieniewski (France), Henrik Bergquist (Sweden), and Lucretia Landmann (Switzerland)) withdrawing from consensus during the project’s approval by the Board. Bergquist cited governance risk and instability in Mali as the reason while Landmann cited concerns about whether the benefits would reach the beneficiary in the face of the difficulties that existed in the country.

Some highlights of the exchanges are below:

Isatou Camara (Gambia) welcomed the adaptation focus in the proposed funding proposals and appreciated the fact that a major share of the total funding in this round of proposals was allocated to Least Developed Countries (LDCs) in Africa. She emphasized the continued significance of GCF for the African region and encouraged prioritisation of direct access entities (DAEs) in delivering finance at GCF, adding that “it has always been the case that international access entities (IAEs) have been given preference and only 24% are given to DAEs”. She asserted the need to “enhance efforts to accelerate DAEs” as it “ensures country ownership and builds local capacity” in the region.

During the discussion of funding proposal submitted by the UNDP, Mohammad Ayoub (Saudi Arabia), while expressing support for the project, raised concerns regarding the “significant number of conditions” that were laid out for the project by the ITAP and asked for the rationale behind those conditions. He specifically referred to a condition that was related to “effectiveness of the funding activity” which linked each participating country to an overall early warning system and a monitoring and evaluation system, and also included national reporting. He asked for the removal of “national reporting” as a condition for the project as it was not relevant for the project in this particular instance and would set an “uncomfortable precedent”.

Ayoub said that the ITAP is independent from the Secretariat to avoid a conflict of interest between panel and the Secretariat, adding that the ITAP reports to the Board and the conditions presented are for the Board’s consideration.  He added that “the Board has the right to carefully consider those conditions and has the obligation and duty to review the documents, to assess them, and to make any changes that we would like to make.” The Board agreed to remove the condition for national reporting in respect of the project proposal.

Accreditation of new entities

The Board accredited six new entities [for accessing GCF funds], out of which five are DAEs and one is an international access entity. One of the AEs approved is the first DAE from Burkina Faso. Following are the details of the AE applications approved at the Board meeting:

• “ARMSWISSBANK” Closed Joint Stock Company (ArmSwissBank), based in Armenia;

• Development Bank of Rwanda (B.R.D) Plc (DBR), based in Rwanda;

• Fonds d’Intervention pour l’Environnement (FIE), based in Burkina Faso;

• Trade and Development Bank Group (TDB), based in Burundi and Mauritius;

• ECOWAS Bank of Investment and Development (EBID), based in Togo and

• ACTED, based in France.

Changes in the ‘No Objection Letter’ [NOL] procedure

According to the background document made available on the no objection procedure, in 2014, “the Board had adopted the initial no-objection procedure…to ensure consistency with national climate strategies and plans and country-driven approaches and to provide for effective direct and indirect public and private sector financing by the Fund. A key element of the no-objection procedure is that each relevant country shall, through its national designated authority (NDA), communicate its’ no objection to the relevant funding proposal to the Secretariat prior to the funding proposal’s approval by GCF… However, concerns were raised in the past by some Board members… on the current scope of the NOL template… which requires NDAs to confirm statements that were not reasonably within their knowledge or ability.”

The Board approved changes in the NOL procedure by deleting certain paragraphs [ viz. paras 9 (c) and 11] of the initial no objection procedure.

The Co-chairs had proposed adjustment to the NOL template seeking to address a legal liability concern that placed the responsibility on NDAs to ensure that each subproject within a program complied with national regulations. The proposed modification involved deleting paragraph 9 (c) and paragraph 11 from the existing template to mitigate this issue. Paragraph 9 (c) read as follows: “The submitted funding proposal is in conformity with relevant national laws and regulations, in accordance with the Fund’s environmental and social safeguards.” Paragraph 11 read as follows: “In the case of funding proposals relating to a programme, the no-objection will apply to all projects or activities to be implemented within the approved framework.”

The Board agreed to the deletion of the paragraphs above and to insert a new paragraph 10 into the procedure which reads as follows:

“10. Notwithstanding any no-objection communicated by the NDA or focal point, the accredited entity shall take the necessary measures to ensure that the relevant project, programme and, where applicable, any subprojects under a programme, are implemented in a manner consistent with applicable national laws.”;

Following are a few highlights of the discussion:

Teuea Toatu (Kiribati) who is a new Board member from the Small Island Developing States (SIDS) seat, said the NOL procedure can have potential implications for country ownership. Calling the NOL as a key tool employed by the Secretariat to ensure country ownership, he said the “real issue is the inadequacy or insufficiency” of NOL and related procedures in terms of defining explicitly the obligations and responsibilities of AEs and NDAs. He said the burden of proof falls on the NDA and asked “why should they have to certify the actions of AEs” and that it was “totally unfair” on the country’s NDA. While he expressed full support for the modification of the NOL procedure, he also cautioned that a proper NOL procedure has to be accompanied by an effective redress mechanism that would hold AEs accountable, otherwise the whole exercise would be “futile”.

Joan Frederick Baudet Ferreira Franca [Board member from Brazil] welcomed the changes made to the NOL procedure and said that Brazil’s understanding is that any potential future intention to modify NOL procedure should always preserve country ownership, safeguard capacity of NDAs, and should always ensure that both public and private sector entities respect national priorities.

Next Board meeting

The Board also agreed that its next meeting will be held in Port Moresby, Papua New Guinea from June 30 to 3 July, 2025. – Third World Network