Green Climate Fund plans to turn on money tap in 2015 - director

by Megan Rowling | @meganrowling | Thomson Reuters Foundation
Thursday, 4 December 2014 23:22 GMT

Congolese refugees, displaced by fighting between the Congo army and rebel group Allied Democratic Forces (ADF) last week, gather around dry water taps at Bukanga transit camp in Bundibugyo town camp, 376km (238 miles) southwest of Kampala July 17, 2013. REUTERS/James Akena

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Preparatory money will come in 2015, with first main projects funded in 2016, she says

LIMA, Peru (Thomson Reuters Foundation) - The fledgling Green Climate Fund plans to start providing small amounts of cash to developing countries before the end of 2015, its executive director said on Thursday.

Héla Cheikhrouhou told an online debate hosted by the Thomson Reuters Foundation that funding to help countries prepare to handle larger amounts of assistance will start to flow next year, and distribution of money for projects on the ground "will happen by 2016".

Twenty seven countries have already requested support to get ready to receive funding from the Green Climate Fund (GCF), she noted.

The GCF, which was set up by the U.N. climate talks and aims to become the main global mechanism for international climate finance, recently held a first pledging conference, raising more than $9.7 billion.

That is close to an informal goal of $10 billion, although developing countries had called for an initial capitalisation of £15 billion.

"I believe the pledges achieved so far are very significant within a short time, and already make the Fund the largest on climate," the GCF head said in the written debate. "This was a first step and we'll continue to raise funding on an ongoing basis."

She will call on ministers due to join U.N. climate negotiations in Lima next week to provide additional contributions to the GCF, she said, adding that there is "no certainty on which countries will pledge how much in Lima".

Pressure is growing on rich countries that have yet to contribute – including Australia, Ireland and Belgium – to step up. There are also hopes that other Latin American nations will join Mexico and Panama in putting money on the table.

Cheikhrouhou said she would also ask in Lima for developing nations to  take urgent action to enable "effective and efficient rollout of the fund resources".

The GCF board aims to discuss the first projects for approval at an October meeting, in line with a target of allocating money to both mitigation and adaptation projects in several countries in 2015, Cheikhrouhou said.

The fund's success will largely depend on the willingness of its board to accredit a wide range of bodies to carry out projects using GCF finance, she added.

They could include government agencies, multilateral development banks, non-governmental groups and private-sector organisations.

LOCAL RESULTS NEEDED

Experts participating in the discussion said it was important for local-level groups to be involved in carrying out GCF-backed projects.

Sven Harmeling, climate change advocacy coordinator for CARE International, said there was a need for "decent and very inclusive processes within countries, involving vulnerable communities".

 "Whether we (will) get this in the GCF is not secure yet, I fear," he added.

The GCF director said climate change adaptation - measures to help people adjust to more extreme weather and rising seas - is a priority for the fund because many countries are already experiencing impacts and adaptation has been "severely underfunded" so far.

The GCF will invest in adaptation through both public and private initiatives, with opportunities seen in ensuring water and food security, protecting ecosystems, and building resilient infrastructure, she noted.

When it comes to enticing the private sector – which so far has shown little interest in adaptation – the GCF is eyeing projects involving land use and disaster insurance.

"(The) private sector can invest in adaptation as part of its "operational risk management" – it can make business sense," Cheikhrouhou said.

Katie Sullivan, director for North American policy and climate finance with the International Emissions Trading Association, said businesses are "ready and armed to explore innovative mechanisms and instruments to help leverage and channel private resources into these critical adaptation projects".

But much outreach would need to happen in 2015 for them to be convinced of the benefits of getting accredited to the GCF, she added.

WHETTING POLITICAL APPETITE

Debate participants said good results from GCF projects at the local level could spur additional contributions towards an internationally agreed goal of $100 billion a year by 2020.

"Getting finance to support more real activities on the ground could help increase flows of money," said Brandon Wu, senior policy analyst with ActionAid USA. "Public finance is a matter of political will and this could help build it."

There have been worries that that the United States could renege on its pledge to give up to $3 billion to the GCF if it cannot get the spending approved by Congress, or that it could divert some of the promised sum elsewhere if it is dissatisfied with the fund's performance.

But David Waskow, director of the International Climate Initiative at the World Resources Institute, said the U.S. administration is "very committed to fulfilling the pledge".

"The (Green Climate) Fund can have broad appeal for the United States, including because it has a broad base of support from other countries," among them developing nations, Waskow said.

See a Storify version of the Thomson Reuters Foundation's climate finance debate here.

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