A defining feature of GCF in the world of climate finance is its unique ability to tap both public and private finance flows, seeking to engage across sectors to unlock high impact and paradigm shifting climate investments. GCF is able to offer and combine a full range of financing instruments, including loans, equity, guarantees and grants to design bespoke solutions that tackle specific investment barriers.
Public sector projects
GCF offers a variety of climate financing options that help developing countries mitigate the effects of climate crisis and help populations adapt to the changing climate. Financing for public sector projects is extended to developing countries and public sector entities, such as state-owned enterprises. These options may include loans and grants.
Private sector projects
The sheer scale of the climate challenge means that even though GCF is the largest international climate finance fund, it cannot hope to match the vast levels of financial resources available in the private sector. Combating climate change will require the global flow of private sector investment to align with low emission, climate-resilient pathways. A key GCF feature is its ability to partner with the business world to mobilise institutional investors at scale to fund climate action, and to encourage local private sectors in developing countries to deliver climate solutions. From the beginning, we have made significant efforts to create co-financing opportunities with both international financial entities and locally based entrepreneurs to fund mitigation and, increasingly, adaptation activities. This accords with a widespread recognition that the private sector will have to play a significant part in rechannelling current financial flows into new climate action pathways to help to raise the trillions necessary to address climate change.
GCF's private sector investments
GCF can finance private sector projects relating to mitigation and adaptation activities at all levels.
We use flexible financial instruments (including debt, equity, and guarantees) that can be combined with concessional funding to promote private sector investing in our core activities by:
- De-risking investments, including foreign exchange and investors’ default;
- Bundling small projects into portfolios, providing scale and making them attractive to institutional investors;
- Supporting capacity building amongst different groups and local institutions;
- Helping develop public-private partnerships for infrastructure resilience projects;
- Encouraging innovation, for example by overcoming scale problems and fragmentation within the supply chain;
- Being active in the clean energy, climate resilience and sustainability communities.
From idea to investment
- Pitch us an idea that supports the target developing country’s climate action plans and priorities – let’s talk informally
- Engage with the country NDA / focal point to ensure your idea aligns with their country needs and priorities – we can help you make these connections
- Turn it into a concept note for us - we will provide feedback
- If you are not already accredited, you will need to partner with an accredited entity or seek accreditation yourself
- At this point you need to show beneficiary countries are fully on-board by obtaining no-objection letters
- You can then submit a full funding proposal
- We will review the proposal – and so will our Independent Technical Advisory Panel
- Your project goes to our Board for decision
- Once approved, then we sign a Funded Activity Agreement