Overview Overview

Project Funding

GCF does not implement projects directly itself, but through partnerships with Accredited Entities. This chapter explains the process of bringing a project proposal to GCF, from initial submission through to Board approval.

The Fund utilizes a variety a variety of financial instruments to realise these projects. These include grants, concessional debt financing, equity and guarantees. GCF private sector support includes assisting entities to tap financial markets.

Accredited Entities comprise the core of GCF’s funding proposal cycle. They are responsible for presenting funding applications to GCF, and then overseeing, supervising, managing and monitoring the overall GCF-approved projects and programmes.

It is not necessary for Accredited Entities to act as the direct implementer of funding proposals. Executing Entities can also do this on behalf of Accredited Entities by channelling funds and carrying out the funded activity. In these cases, Accredited Entities will continue to be important as they maintain oversight of Executive Entities’ GCF-related activities.

GCF project approval is built on the need to support developing country priorities. Developing countries nominate National Designated Authorities (NDAs) or focal points to act as the point of communication with GCF. Every project the GCF Board agrees to fund must be endorsed, expressed via a no objection letter, by the NDA or focal point. A full list of NDAs is available here.

GCF recognises developing countries may face capacity constraints in developing climate finance proposals. That is why it has established the Project Preparation Facility to provide financial support to help Accredited Entities prepare projects and programmes. The facility is specially targeted to support Direct Access Entities, and micro-to-small size category projects.

Generation of Funding Proposals

Accredited Entities develop funding proposals, in close consultation with NDAs or focal points, based on the differing climate finance needs of individual developing countries. Accredited Entities can also respond to Requests for Proposals issued by GCF to fill current gaps in climate financing. In issuing some Requests for Proposals, GCF may accept proposals from entities it has not yet accredited. However, non-accredited entities will have to team-up with Accredited Entities when formally submitting funding proposals to GCF. Entities that submit proposals through the Requests for Proposals can be prioritized when applying for accreditation.

Requests for Proposals

The GCF Board has established several supporting programmes to issue Requests for Proposals.

1. Micro- Small-, and Medium-Sized Enterprises Pilot Programme

The micro- , small-, and medium-sized enterprises pilot programme was established by the GCF Board in 2016 as part of the Private Sector Facility. The programme aims to support micro- , small-, and medium-sized Enterprises s in addressing mitigation and adaptation challenges. Further information on the micro- , small-, and medium-sized enterprises pilot programme can be found on the GCF website here.

2. Enhancing Direct Access

The GCF Board approved an initial allocation of USD 200 million for 10 pilots funding proposal adopting Enhance Direct Access implementation modalities.

Further details can be found on Enhancing Direct Access FAQ (Frequently Asked Questions) and on the GCF website here.

3. Mobilising Funding at Scale Pilot Programme

The GCF Board has allocated up to USD 500 million for the Mobilising Funding at Scale Pilot Programme to identify innovative, high-impact projects and programmes that mobilize private sector investment in climate change activity.

Details about how to access this Pilot Programme will be issued by the Fund once the modalities for the Programme have been approved.

How to submit a funding proposal How to submit a funding proposal

Step by step:
How to submit a funding proposal

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    Frequently asked questions

    1. 1. Is a concept note necessary before a funding proposal is submitted?
      No. The development of a concept note prior to a funding proposal is voluntary. It is recommended, however, as a useful first point of dialogue with the GCF Secretariat and the NDA or focal point to seek initial feedback.
    2. 2. How can the GCF support Accredited Entities and countries to prepare concept notes and funding proposals?
      The GCF Secretariat can provide informal feedback and advice to Accredited Entities as they prepare concept notes and funding proposals.

      GCF also provides financial assistance to Accredited Entities starting their project development processes through the Project Preparation Facility (PPF).  In addition, GCF support is available throughout the funding proposal cycle under the Fund’s Readiness and Preparatory Support Programme.

      GCF focuses its readiness support on particularly vulnerable countries, including Least Developed Countries (LDCs), Small Island Developing States (SIDS), and African States. A minimum of 50 percent of country readiness funding is targeted at supporting these countries.

      GCF has funding available to provide readiness support to countries, and may seek the release of further resources depending on different country needs. Readiness support for individual developing countries is capped at USD 1 million per calendar year.

      This support can be provided to countries directly through NDAs or focal points through a wide range of delivery partners with relevant expertise and experience. Countries may also select other institutions well-versed in readiness activities as its delivery partner. These institutions can be international, regional, national, or sub-national, public or private.
    3. 3. What are the six investment criteria of the GCF?
      GCF has overall objectives to guide investment decisions. The six investment criteria are
      1. Impact/result potential: Potential of the programme/project to contribute to the achievement of the objectives and results areas of the GCF.
      2. Paradigm shift potential: Degree to which GCF can achieve sustainable development impacts beyond one-off project or programme investments by replicating and scaling them up.
      3. Needs of the recipient: Financing needs of the beneficiary country.
      4. Country ownership: Beneficiary country ownership of and capacity to implement a funded project or programme (including policies, climate strategies and institutions).
      5. Economic efficiency: Benefit-cost ratio of activity, translated to a measure of impact per US dollar delivered by the Fund.
      6. Efficiency and effectiveness: Financial soundness of the activity.

      More details about the investment criteria are available on page 5 of following GCF Board document.
    4. 4. What are Requests for Proposals?
      GCF targets areas to fill gaps in climate financing through Requests for Proposals which are focused on specific themes. It is possible to check what these are by monitoring this section of the GCF website.
    5. 5. Can Board decisions to reject a project proposal be challenged or appealed?
      Yes. It Is possible for the NDA or focal points of relevant developing countries to request a reconsideration of funding decisions. They should contact the Independent Redress Mechanism, one of a number of GCF-related bodies that act independently of the GCF Secretariat and GCF Board.

      More details about the scope of the  Independent Redress Mechanism is set out in this Board document.
    6. 6. What is GCF’s Results Management Framework?
      The Results Management Framework is the benchmark to assess funding proposals. There are eight result areas which GCF Secretariat and ITAP assessors use to determine how the logic model driving proposals demonstrate how inputs and activities are converted to changes in the form of results. The eight result areas are:

      Shifting to low-emission sustainable development pathways through:
      1. Low-emission energy access and power generation
      2. Low-emission transport
      3. Energy efficient buildings, cities and industries
      4. Sustainable land use and forest management

      Increasing climate-resilient sustainable development for:
      1. Enhanced livelihoods of the most vulnerable people, communities, and regions
      2. Increased health and well-being, and food and water security
      3. Resilient infrastructure and built environment to climate change threats
      4. Resilient ecosystems

      More detailed information about GCF Results Management Framework is available here.
    7. 7. What are the GCF environment and social safeguards?
      GCF interim environmental and social safeguards standards are drawn from the International Finance Corporation’s Performance Standards, which describe approaches to managing environmental and social risks and impacts. They are grouped into eight performance standards:
      1. assessment and management of environmental and social risks and impacts
      2. labour and working conditions
      3. resource efficiency and pollution prevention
      4. community health, safety and security
      5. land acquisition and involuntary resettlement
      6. biodiversity conservation and sustainable management of living natural resources
      7. Indigenous peoples
      8. cultural heritage

      In reviewing funding proposals, the GCF Secretariat will check how the Accredited Entity follows its Environmental and Social Safeguards (ESS). More detailed information is available in the following document.
    8. 8. What are the GCF gender requirements?
      The GCF Gender Policy and Action Plan is based on guidance by the United Nations Framework Convention on Climate Change (UNFCCC) supporting gender equality, equity and sensitivity.

      While reviewing Accredited Entity funding proposals, the GCF Secretariat checks how gender considerations are translated into specific actions to meet gender – related standards and assesses whether projects/programmes submitted are consistent with approaches outlined in GCF’s Gender Policy and Action. More detailed information is available here.

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