The Green Climate Fund can start to allocate cash to projects in developing countries after receiving cash from Japan that pushed the fund’s total capital past a key milestone.
Japan’s contribution of $1.5 billion brings the fund’s coffers to $5.5 billion, or 59% of the total amount pledged mainly by developed nations last year, the fund’s secretariat said in a statement on Thursday.
The GCF, having hit its 50% funding threshold, can now begin considering which proposals to finance and is aiming to submit to its board “some initial projects” ahead of the Paris UNFCCC talks in December, the secretariat added.
The first set of projects are due to be finalised for approval at the GCF Board’s next meeting in November.
The GCF’s recent impact analysis said the fund will prioritise projects that are not adequately supported by existing climate finance mechanisms, in particular for cities, land management and the resilience of small island states.
Though the fund is required to split 50-50 its cash between adaptation and mitigation, observers expect carbon-cutting CDM projects and Programmes of Activities (PoAs) to apply and receive at least a small share of the money.
The role of CDM projects and the potential for the GCF to reduce risks for other climate-related private sector investments will be discussed at a panel session at next week’s Carbon Expo in Barcelona, with speakers including the GCF’s Private Sector Facility director Samy Ben-Jaafa.
“The Fund will likely be able to leverage some of its capital multi-fold with private sector cash, under measures aimed at reducing risks for investors, according to estimates made by Bank of America Corporation,” the GCF secretariat said.
By Ben Garside – firstname.lastname@example.org