GCF Paradigm Shift Revisited
The Green Climate Fund represents an innovative response to this defining challenge of the 21st century. Created in 2010 by 194 governments of the UN Framework Convention on Climate Change (UNFCCC), the Fund aims to support a paradigm shift in the global response to climate change. It allocates its resources to low-emission and climate-resilient projects and programmes in developing countries. The Fund pays particular attention to the needs of societies that are highly vulnerable to the effects of climate change, in particular Least Developed Countries (LDCs), Small Island Developing States (SIDS), and African States.
Responding to the climate challenge requires collective action and global solidarity – by actors in both public and private sectors. Among these concerted efforts, advanced economies formally agreed in 2010 to jointly mobilize USD 100 billion per year by 2020, from a variety of sources, to address the pressing climate mitigation and adaptation needs of developing countries. Governments also agreed that a major share of new multilateral, multi-billion dollar funding should be channeled through GCF.
The Fund seeks to create new models for climate finance, channeling investment from both the public and private sectors. It aims to maximize the impact of public finance in a creative way, and to attract new sources of private finance to catalyse investment in both mitigation and adaptation projects.
GCF Key Features
- Initial capitalization has raised more than USD 10 billion. Resource mobilization is ongoing.
- Commitment to aim for 50:50 balance between mitigation and adaptation investments over time.
- At least 50% of adaptation funding goes to the most vulnerable countries, including LDCs, SIDS, and African States.
- Direct private sector engagement in transformational climate-sensitive investments through the Private Sector Facility (PSF).
- Risk-bearing capacity, allowing the Fund to support innovation and leverage and crowd in additional financing.
- Variety of financial instruments available, including concessional loans, subordinated debt, equity, guarantees, and grants, giving flexibility to match project needs.
- Balanced governance structure that ensures consensus-based decisions between 12 developed and 12 developing countries.
2009: The Green Climate Fund first proposed at the Copenhagen COP 15
2010: GCF established by the United Nations at COP 16 in Cancun, Mexico
2011: Governing Instrument adopted at COP 17 in Durban, South Africa
2012: Board meets for first time, with equally balanced country representation
2013: Permanent headquarters established in Songdo, Republic of Korea
2014: Initial capitalization raises over USD 10 billion equivalent
2015: First funding decisions to be taken on projects and programmes