The Green Climate Fund (GCF) will consider accepting funds from the private sector in June 2015 to bolster much need finances for climate action.
GCF Executive Director Hela Cheikhrouhou said in Lima that the GCF would accept funds from private sector corporations and institutions but this will be finalised next year. The GCF which has crossed the ten billion $ mark during the U.N. climate talks, still needs much more to fill its coffers and help developing countries.
Ms. Cheikhrouhou said at a briefing that the first batch of mitigation and adaptation funds from the GCF would be disbursed by October 2015 and it was agreed during a board meeting in Barbados earlier this year that the first period of capitalisation would be for four years from 2015 to 2019. This was decided on a consensual basis. India suggested that the already existing Adaptation Fund could be used to kick-start the funding process of GCF but she said that the Adaptation Fund had its own secretariat and its own way of working, though it could be a point of reference.
The Adaptation Fund set up in 2001 was to be financed by a share of money from the Clean Development Mechanism (CDM) but is virtually stagnant now though Germany made for a fresh commitment of 55 million Euros.
The GCF is in the phase of accrediting local, regional and national implementing agencies which can have a direct access to it.
Another innovative feature of the GCF is that the Board has decided to work through intermediaries and deploy though them equity guarantees and loans and soon it will have financial instruments and partners for this purpose. By mid 2017, the GCF hopes to allot 60 per cent of its funds and hopefully that will trigger replenishing of the Fund. The period of future commitment will be decide then.
Union Minister of State for Environment Prakash Javadekar and Ministers from other developing countries have been stressing on funds for adaptation and the operationalising of the GCF.
Mr. Javadekar pointed out that that the world needs $600 to 1500 billion for climate action per year and a road map of finance was vital. An earlier study by the WRI on Fast Start Finance could also have some pointers on the operationalising of the GCF. Taryn Fransen who conducted a study in 2011 to shed light on climate finance, looked at what are the programmes that developed countries reported as climate finance.
