UN forum side event highlights need for GCF replenishment
This was one of the key messages at a recent GCF information panel held earlier this week during a UN forum addressing finance for global development.
Ambassador Luis Alfonso de Alba, the UN Secretary-General’s Special Envoy for the 2019 Climate Action Summit, said strengthening GCF “is fundamental not only because it is the biggest fund for climate at the moment, but because it has the potential to increase its resources significantly.” “We need the Fund to be able to gain the support of the international community and to widen its contributors,” he added.
The information panel “Transforming Climate Ambition to Action: The Role of the Green Climate Fund” was held on the sidelines of the recently concluded UN Financing for Development Forum in New York.
GCF Executive Director Yannick Glemarec thanked the governments of Germany and Norway for declaring they will double their contributions to GCF, while other panelists expressed a hope that other countries will follow suit later in the year. 2019 is a pivotal year for GCF as it enters its first replenishment to marshal further funds to finance low-emission and climate-resilient action in developing countries.
Highlighting the urgency of necessary climate action, Mr Glemarec said the world may have less than 12 years to ensure it does not cross the 1.5 degrees Celsius of warming as identified by the Intergovernmental Panel on Climate Change (IPCC) report last year, adding that currently “climate change is definitely running faster than we are.”
He said GCF is already helping developing countries raise their ambition for climate action, citing how the Fund’s financing is helping reduce the cost of renewable energy in Egypt and addressing energy scarcity in Kenya and Rwanda by financing off-grid solar power.
Aksel Jakobsen, State Secretary with Norway’s Ministry of Foreign Affairs, echoed the need for urgency in tackling the climate challenge by highlighting how migration this year, along with rising hunger, is mostly climate-related.
“What is striking from the challenge of global climate change is how it is threatening progress on global development, and it is threatening to drive 100 million people into poverty by 2030,” he said.
Panelists at the side event called on the need for a successful GCF replenishment this year, while some said GCF should increase the access of its funds to developing countries.
“The Green Climate Fund is the single most significant commitment of the international community to this idea that climate is only something that we can address together,” said United Nations Development Programme (UNDP) Administrator Achim Steiner.
Fiji’s Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum highlighted the need to make climate vulnerability estimates in order for countries to identify the scale of the need for climate finance. "There is a gap between what is required and what is available, so a blended finance approach is needed, combining public and private sources of funding." Minister Sayed-Khaiyum pointed out that "GCF is in a unique position to bring the private sector in" to climate projects.
Jamaica’s Minister of Finance and the Public Service Nigel Clarke highlighted the climate needs of Jamaica, emphasising the urgency for structural resilience and adaptation strategies in the face of increasing extreme weather events, in a country where 60% of the population live within 2 km of the coast. Minister Clarke pinpointed the need for facilitating access to climate finance, and the importance of encouraging co-investment, bringing together different sources of funding effectively.
Jennifer Morris, President of Conservation International, a GCF Accredited Entity, said climate change requires “radical collaboration.”
She added the flexibility of GCF financing can help to bridge the current gap in funding to preserve forests, mangroves and peat systems – accounting for 37 percent of the climate solution but currently receiving less than 3 percent of climate finance.
“That is what is brilliant about GCF, it is that you are kind of capital agnostic,” she said. “You actually develop the capital mix wherever you go depending on what is needed. And that is unique.”
In addition to its role as the largest dedicated climate fund for developing countries, a unique GCF feature is the ability to mix its financing with private sector investment to capture the large scale needed to progress climate action. The ways it does this include carrying the financial risk of private investments.
Mohan Vivekanandan, a group executive with the Development Bank of Southern Africa, also a GCF Accredited Entity, said South Africa’s experience in expanding the use of renewables shows the private sector can make services cheaper and more reliable.
Other panellists at the UN forum side event were XacBank President Amar Hanibal, and Pegasus Capital Advisors’s Partner and Chief Operating Officer Richard Davis.
The Fund will be hosting a second replenishment consultation meeting with its contributors and stakeholders at the end of August followed by a Replenishment Pledging Conference later in the year.