The Global Environmental Facility (GEF) Council is set to approve a spending package of over $700 million next week, including the first-ever projects supported by the Global Biodiversity Framework Fund (GBFF), amid mounting debate over the fund’s potential to effectively address the financing gap on biodiversity.

The GEF governing body will hold this year’s second meeting over June 17-20 in Washington, DC, with rich nations under increasing pressure to ramp up contributions to the GBFF. To date, the fund has raised just $226.8 mln, which has fuelled widespread concerns among developing countries.

During next week’s meeting, the GEF Council will decide on $736.4 mln in grants, including nearly $500 mln for 25 projects through the GEF Trust Fund, over $200 mln for 14 climate adaptation initiatives through the Least Developed Countries Fund (LDCF), and $37.8 mln for the GBFF’s first three projects.

“This is the first time the GEF has three Council meetings with three separate work programmes that complement each other. It is our family of funds approach bringing synergy for the good of the global environment,” GEF director of strategy and operations, Claude Gascon, told Carbon Pulse.

“The GBFF’s first work programme, less than a year after the launch of the new fund, shows the efficiency of our model,” he said, adding that the GBFF Council is also poised to approve measures that will make the fund’s governance more inclusive.

Its first three projects include one initiative in Mexico and two in Brazil, aimed at supporting a total of 30.5 mln hectares of marine and terrestrial protected areas.

Kickstarted in Aug. 2023 and administered by the GEF, the fund is intended to channel investments in species and ecosystem conservation and underpin the Kunming-Montreal Global Biodiversity Framework (GBF) implementation.

However, after Canada, Germany, Japan, and the UK made initial commitments, only Spain and Luxembourg have pledged contributions to the fund.

“VERY DISAPPOINTED”

“I and many others were very encouraged by the rapid establishment of the GBFF and by the initial contributions, particularly from Canada, and then the other contributions that have come since, although they have been smaller,” David Cooper, acting executive secretary of the UN Convention on Biological Diversity (CBD), told Carbon Pulse.

“Yet, it is very disappointing that that number hasn’t gone up very much since then. It needs to go up by an order of magnitude during the remaining period of the GEF-8 replenishment cycle, which ends on June 30, 2026.”

Cooper said he is optimistic that more contributions will be announced as governments approach the COP16 UN biodiversity summit, due to be held in Colombia over Oct. 21-Nov. 1, though he considers it unlikely that the fund will reach the capitalisation needed to achieve the GBF targets.

“Developed countries, and maybe countries in the Gulf, really need to look at what they could contribute,” he said.

The most immediate deadline among the GBF targets requires governments to ensure upwards of $20 billion annually in international resource flows to developing countries by 2025.

Global South nations have shown a growing interest in accessing funding for biodiversity, said Orissa Samaroo, vice president of the GEF agency at Conservation International, pointing out that the next few months could mark a watershed in the efforts to ensure adequate investments are ringfenced.

“Now is the time to scale up the early progress starting with the June Council meeting and looking forward through COP16 and beyond,” Samaroo, who is participating in next week’s Council meeting, told Carbon Pulse.

“We call on donor countries to signal substantial increases towards their contributions to the GBFF as an important indicator of progress towards the 2025 target,” added Andrew Deutz, director of global policy and conservation finance at The Nature Conservancy (TNC).

UNDER FIRE

In recent weeks, the GBFF has been at the centre of a spat over its potential to address the $700-bln financing gap on biodiversity, with some countries arguing that a separate global fund for biodiversity should be set up to enhance resource mobilisation.

Notably, Brazil, Indonesia, South Africa, Zimbabwe, and Kenya were among the countries in last month’s CBD negotiations calling for the establishment of a separate vehicle under the authority of the COP, while Norway, Switzerland, and Australia held that the GBFF already serves this purpose and a new fund is not necessary.

In a bid to strike a balance, the EU, Canada, Japan, Russia, and the UK suggested waiting until the COP17 summit in 2026 before making any decisions, though the proposal didn’t reach broad consensus.

“While there is significant debate about establishing new global funds for biodiversity, the focus should be on increasing the capitalisation of the existing funds, improving their governance and accountability, and streamlining access to multilateral funds for both developing countries and Indigenous Peoples and local communities,” Deutz told Carbon Pulse.

TNC welcomed the GBFF’s target of allocating 20% of its funding to Indigenous Peoples and local communities, but Deutz urged the Council to enhance the access modalities and ensure accountability for this target.

“Multilateral funding institutions need to evolve their decision-making processes to be more equitable and reflect the increased capacities of developing countries over the last three decades,” he said.

The GEF Council members will also meet as the LDCF governing body to approve $203 mln in climate adaptation funding.

If authorised, it would be the largest LDCF allocation in its history, and finance projects in Angola, Cambodia, Chad, Comoros, Gambia, Guinea, Laos, Sao Tome and Principe, Sierra Leone, Somalia, and Tanzania.

“Our LDCF work programme … will deliver much-needed support to many least developed countries in their adaptation challenges around the world with an increased participation of multilateral development banks,” said Gascon.

A NEW BOND

As well, the GEF governing body will discuss a $495.6-mln spending package on efforts to bolster biodiversity, climate change mitigation, waste reduction, and transboundary water management. Biodiversity projects account for $169.2 mln.

The GEF Trust Fund spending package to be discussed by next week’s Council. Source: GEF

These pledges are expected to generate as much as $5.8 bln in co-financing, the organisation estimated.

The meeting could also open the door to a new blended finance instrument, dubbed coral bond, an outcome-based bond to be issued by the World Bank building on the previously funded rhino bond.

“The new bond is significant because it will target improved management of an entire ecosystem in Indonesia rather than a single species, offering an opportunity to significantly increase the biodiversity impact in an area of unique marine richness,” said the GEF Council.

Since nature has moved up the GEF agenda, the world’s largest environmental donor has played a critical role in a number of initiatives aimed at steering biodiversity policies and markets at a national and international level.

It assists governments in developing their National Biodiversity Strategies and Action Plans (NBSAPs), which enable countries to meet their GBF targets through forming specific biodiversity policies.

It also participates in the joint initiative led by the UK and France to create an international biodiversity credit framework, set to be presented at the COP16 summit.

During its last meeting in February, the GEF approved a $916-mln spending package on efforts to tackle biodiversity loss, nature degradation, climate change, and pollution – the second largest allocation in its history.

By Sergio Colombo – sergio@carbon-pulse.com

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