Your excellencies, distinguished guests,
Floods, fire, famine, disease, global mass displacement. A harrowing future awaits according to the latest IPCC report if we ignore the ultimate threat multiplier of climate change.
We know that climate change is accelerating, and its impacts are materializing faster than expected. The countries that are being hardest hit are often those that are least equipped to cope.
Fragile states have the most to lose from climate inaction but the most to gain from ambitious global climate action.
Climate positive investment can provide reliable energy access to diversify economic livelihoods; enhance resilience to extreme weather events and to economic shocks; strengthen community engagement and social capital; and foster inclusive, peaceful, and sustainable development pathways.
The mandate of the Green Climate Fund is to help countries realise their climate ambitions. We support four transitions. The energy transition to decarbonize the energy mix; the built environment transition to low emission climate resilient infrastructure; the green environment transition from extractive to sustainable natural resource management; and the human systems transition to sustainable livelihoods.
We allocate 50% of our resources to adaptation, prioritizing the most climate vulnerable states. But climate positive investments can face specific challenges in fragile states. For example, last year, GCF projects were brought to a halt in two countries that suffered a dramatic deterioration of peace and security.
So, what does it take to succeed, particularly within fragile environments?
- First, climate investors must be patient and prepared to take risks. Many fragile countries have a low credit rating and find it difficult to attract investment. GCF has a higher risk management and tolerance capacity than many funders. We can take first-loss positions, and offer long-term, concessional finance to demonstrate new climate solutions at commercial scale to crowd-in other investors.
- Next, we need to invest in capacity-building. In addition to de-risking investments, GCF is the largest source of grant-assistance to establish strong institutions, supportive policies and empower local actors to attract climate investment.
- Furthermore, robust environmental, social, and governance safeguards are essential. GCF has a comprehensive Environmental and Social Management System. We mainstream gender equality requirements throughout our entire project cycle and have developed an Indigenous People Policy to ensure the rights of groups who are often economically marginalized and vulnerable. An independent redress mechanism can be accessed by any community or individual fearing that their rights will be infringed by a GCF supported investment.
- Finally, clear metrics and indicators are essential to measure how climate finance impacts peace and security.
GCF’s new Integrated Results Management Framework includes 12 indicators that will allow us to better measure impact on peace and security, adjust our actions, learn lessons and share knowledge. It includes for example, the number of women and men covered by new or improved early warning systems, improved food security and with more climate-resilient water security.
One example of how these four approaches can be brought together is the Great Green Wall Initiative in the Sahel region.
Together with its partners, GCF is investing in a programmatic, regional approach, supporting sustainable livelihoods and a bioeconomy. Since 2019, we have approved 29 public and private sector projects in the region, totaling over USD 1 billion of GCF financing and almost USD 2.5 billion in co-financing.
One of our projects is enhancing the adaptive capacities of smallholder farmers whose livelihood and food security are threatened by climate change - providing agricultural insurance and strengthening climate weather information services.
Another is catalysing private sector investment in solar energy, providing accessible, reliable, and low-emission electricity to end users to accelerate economic development in the region.
Your excellencies, as we step up our investment in fragile states, GCF is looking forward to your insights and guidance on how climate finance investments in fragile states can best support inclusive, peaceful and sustainable development.
Thank you for your attention.