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June 2015 (Issue 2)

GCF Dispatch

A roundup of news from the Green Climate Fund
June 2015 – Issue 2

The Green Climate Fund is pleased to share its second GCF Dispatch, a short compilation of news related to the development of the Fund. This roundup covers recent activities that have helped advance the Fund’s operationalization in the lead up to the Paris Climate Change Conference. For more frequent updates, follow the Fund on Twitter @GCF_News.

Executive Viewpoint – Adding value within the international climate finance architecture

The Green Climate Fund was a well-talked about subject at the recent Climate Conference in Bonn. The Fund joined UNFCCC’s 42nd Session of Subsidiary Bodies to inform Parties about the state of affairs at GCF. In addition to two formal side events that were convened with Board members and their Co-Chairs, GCF organized multiple briefings with negotiating groups to help clarify questions related to the Fund’s operationalization and first allocation of resources.
Parties to the Convention met in Bonn to advance the formulation of the Universal Climate Agreement that is to be adopted at the 21
st Session of the Conference of the Parties (COP). Its Ad-Hoc Working Group on the Durban Platform for Enhanced Action (ADP) suggested that GCF is to act “as the main operating entity of the Financial Mechanism for the implementation of [the Paris] agreement,” and to strengthen the Fund by “ensuring predictable, sustainable and adequate resources.” The two ADP Co-Chairs, Ahmed DJOGHLAF (Algeria) and Daniel REIFSNYDER (United States of America), invited GCF to further explain its main features at the forthcoming ADP session in August.
Earlier this month at the G-7 Summit in Germany, Heads of state restated their “strong commitment to the Copenhagen Accord to mobilizing USD 100 billion a year by 2020 from a wide variety of sources, both public and private.” They also reaffirmed their “ambition to make the Green Climate Fund fully operational in 2015, and a key institution of the future climate finance architecture.”
In order to succeed, countries must agree to put in place predictable, long-term flows of official climate finance up until and beyond 2020, including quantities significantly larger than initial pledges made to GCF to date. Total official commitments to date are a good start but only a fraction of what is needed to achieve the planet’s climate change objective. There is increasing discussion about how the necessary investments in mitigation and adaptation might be financed, particularly in developing countries. This dialogue will continue at the UN High-Level Event on Climate Change on 29 June in New York, as well as at the Third International Conference on Financing for Development on 13 July in Addis Ababa, Ethiopia, in which the Fund will participate.

Wanted: High-quality funding proposals

The Fund has already started receiving voluntary concept notes and project ideas. Accredited entities and National Designated Authorities (NDAs) can submit funding proposals to GCF at any time, using the funding proposal template available on the Fund’s website. Accredited entities are expected to submit their first funding proposals to the Fund during the coming months. They may first choose to complete a Concept Note to present their project or programme idea, in order to receive early feedback or recommendations. GCF’s full Funding Proposal Template is to be submitted to: [email protected].
Concept notes and funding proposals should be prepared in close collaboration with the relevant National Designated Authorities and duly consider GCF’s Investment and Results Management Frameworks. Funding proposals need to demonstrate how the proposed projects or programmes will perform against the investment criteria and achieve strategic impact results.
In order to ensure country leadership, the Fund’s Board will only consider funding proposals which are submitted with a formal letter of no-objection, in accordance with the Fund’s initial no-objection procedure.

Essential Knowledge of GCF – ELEMENTS 01

The Fund has launched its first resource guide to assist NDAs and focal points of recipient countries in understanding the operational modalities of the Fund. Engaging with the Green Climate Fund, this first series of GCF ELEMENTS, presents the three key steps to working with the Fund and sets out the respective roles and responsibilities of NDAs and focal points in relation to their countries’ engagement with GCF. The guide also describes the six fundamental stages that accredited entities follow when submitting funding proposals to the Fund.
The information presented in this publication is tailored to the needs of NDAs and focal points. The content will be complemented and revised on an ongoing basis. Additional guides are under development in addition to materials currently available on the GCF website. Your comments would be appreciated to help improve the next edition of this publication. Send feedback to coun[email protected].

Next regional workshops for NDAs in Fiji and Egypt

Almost 130 developing countries have now established their NDA or focal point for GCF. The Fund’s allocation framework provides for adequate levels of readiness funding to developing countries on an ongoing basis, and this stream of funding continues to be implemented according to the choices made by NDAs. Around 70 readiness requests have been received, 20 of which are currently being processed by the Fund. Grant agreements have been issued to Ethiopia, Togo, Dominican Republic and Micronesia. At least 50 percent of the total will be delivered to particularly vulnerable countries, including small island developing states (SIDS), least developed countries (LDCs) and African states.
In order to enable as many NDAs as possible to actively engage in the Fund’s ongoing multi-stakeholder dialogue, GCF will convene its next regional workshops for NDAs in the Pacific region (27 – 29 July in Nadi, Fiji), and in the Africa and Middle East region (5 – 11 September in Alexandria, Egypt). Further details will be communicated to NDAs and focal points in due course.
Meanwhile, the Fund’s network of entities is growing fast. To date, more than 50 applicants have submitted their request for accreditation, including the 7 entities that have already been accredited, as well as at least 13 entities that will be considered for accreditation by the Board at its tenth meeting in July. Applications for accreditation continue on an ongoing basis through the Fund’s online accreditation system.

B.10 in Songdo

Final preparations are under way for the tenth meeting of the Board next month at GCF Headquarters in Songdo. Key agenda items include discussions on Additional Modalities that Further Enhance Direct Access, the Fund’s Risk Management Methodology, and the Level of Concessional Terms for the Public Sector. Documents for the meeting that have not yet been made available will be published shortly.

Six billion — and counting

A significant portion of pledges to the Fund have already been converted into contribution agreements: in May, the signature of Japan's contribution marked a turning point, as the Fund became effective with more than 50 percent of total pledges signed into actual agreements. This means the Fund can begin to allocate resources to climate-sensitive projects and programmes in developing countriesThe Fund’s Board will likely consider some initial projects later this year, ahead of COP 21 in Paris.
It is essential that new and additional resources continue to be pledged to the Fund, especially in the run-up to COP 21. Scale is essential for GCF to deliver on its ambitious mandate — this can include resources from public sources as well as from private, philanthropic and potential alternative sources. GCF’s initial resource mobilization period is 2015-2018, and the Fund accepts new pledges on an ongoing basis. The lead countries that made pledges to the Fund in 2014 were joined earlier this month by Malta, increasing the total number of contributing countries to 34.
Close to USD 6 billion equivalent have been signed in contributions to date, i.e. approx. 60 percent of the USD 10 billion equivalent that GCF received in pledges in 2014The objective is to convert the remaining 40 percent – more than USD 4 billion – into contribution agreements within one year, so that, by COP 21, all pledges made in 2014 will have been signed into contributions.
You can find GCF's current key messages in the 3-Minute Brief about the Fund that was presented to negotiators at the recent Bonn Climate Conference. 

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