By Megan Rowling and Valerie Volcovici
PARIS, Dec 11 (Thomson Reuters Foundation) - As international climate talks headed into their final hours on Friday, the head of the United Nations' Green Climate Fund said the fund's future role in delivering tens of billions of dollars in climate aid after 2020 is unclear in the draft Paris deal.
At last year's climate summit in Peru, the fledgling fund - set up under the U.N. negotiations - was in the spotlight as countries lined up to make public pledges, bringing its total resources to over $10 billion.
The money is to be spent on projects to help poor countries curb carbon emissions and weather the impacts of climate change.
But in Paris, the latest version of the legally-binding climate agreement, released on Thursday evening, makes no direct mention of the fund's role in delivering more than $100 billion annually in climate aid, a key element of a new global deal.
The draft is "silent on the trajectory" of the Green Climate Fund (GCF) and other U.N. funds after 2020, when the Paris agreement would take effect, Héla Cheikhrouhou, the GCF's executive director, said in an interview at the talks.
"The latest agreement draft... does not give clarity," she said. "I would have preferred to see text that talks to the growth" of the U.N. funds, she added.
When the GCF was set up in 2010, there were expectations it would be the main conduit for climate funding from donors to developing countries.
The 2009 Copenhagen Accord, which created the fund, said "a significant portion" of the $100 billion a year rich nations promised to mobilise by 2020 should flow through the GCF.
Cheikhrouhou said she did not know why a reference to the role of the fund had been removed from the draft but she remained "cautiously optimistic" it would return to the final agreement, due on Saturday.
Giza Gaspar-Martins, chair of the group of 48 least developed countries at the talks, said the current text reflected the need to recognise other smaller U.N. funds as channels for finance, particularly those focused on adaptation.
"(The GCF) is certainly a very important member of the ecosystem that serves climate finance, but it is not the only one," the Angolan diplomat told the Thomson Reuters Foundation.
"We also have to admit that in the future, we may find it necessary to establish new ones."
VALUE NOT VOLUME
In November, the Green Climate Fund approved its first set of eight projects, to which it allocated $168 million.
They include improving early warning systems to help Malawi respond to extreme climate events, a programme to manage climate change-induced water shortages in the Maldives, and a green bond to spur renewable energy investment in Latin America.
The fund's board has set a goal of committing up to $2.5 billion in 2016, but Cheikhrouhou said supporting quality projects was more important than the volume of spending.
"Pushing money out of the door is not necessarily a good thing," she said. "We need to make sure we are investing in the right opportunities and only invest once we have great proposals."
Over the past few months, civil society groups and some developing countries have raised concerns the fund is heading in the wrong direction by emphasising the role of the private sector and steering towards loans rather than government grants.
"This is not how we had hoped the GCF would function," said Brandon Wu, a climate finance expert with international charity ActionAid. "It would not be surprising if developing countries are feeling a bit of caution about the GCF at this point."
Niranjali Amerasinghe of the World Resources Institute said the Green Climate Fund needed to make sure it sticks to its mission to finance programmes that will create a "paradigm shift" in order to become the primary vehicle for global climate finance.
"The GCF needs to identify its niche relative to other funds," she said.
But whether or not the fund's importance is specifically mentioned in the post-2020 Paris deal will have little impact on its future, some say.
"It is still a fund that developing countries think is the most fair and equitable way of channeling resources to those that are most vulnerable," said Heather Coleman, climate change policy manager for Oxfam America.
(Reporting by Valerie Volcovici and Megan Rowling; editing by Laurie Goering. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, corruption and climate change. Visit www.trust.org)