“gcf and climate finance” · “gcf and climate finance” presentation given at the 2017...
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“GCF and Climate Finance”
Presentation given at the 2017 Climate Justice Seminar, hosted by the Center for United Nations
Constitutional Research in Epirus, Greece. July 18, 2017.
Ambassador Son Sung-Hwan is the former Climate Ambassador of South Korea, as well as an Executive
Advisor to the Global Climate Fund and Incheon Climate & Environment Center.
Effective and targeted climate finance can empower the countries most burdened by climate change to take ownership in adaptation and sustainable development.
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The Green Climate Fund and Climate Finance
Son Sung-hwan
Advisory Ambassador for Cooperation with GCF
Incheon City, Korea
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GCF : A key financial mechanism under the Paris Agreement
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World’s largest climate fund
Established by 196 Parties to the UNFCCC
Provide support to developing countries
Mitigation: reduce greenhouse gas emissions
Adaptation: adapt to unavoidable impacts
Investment mix: public and private sector
About GCF
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GCF : A unique institution-How does the Fund add value within the international
climate architecture?
Country Driven : Maximize Country ownership through NDAs and focal points
Balanced allocation between adaptation and mitigation
Balanced Governance : Equal voice for developed and developing countries
Diversity of partners : diversity of entities and accreditation pathways
- Fit for Purpose approach
Diversity of financial instruments
Dedicated Private Sector Facility (PSF)
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$10.1 billionSigned
38 countries, regions, cities
Contribution agreement or arrangements signed
Mobilizing financial resources at scale
$10.3 billionPledged (2016)
45 countries, regions and cities
Incl. 9 developing countries
Since first pledging conference and COP20
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Business model
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US$ 10.3 B in pledges
US$ 10.1 B in signedcontributions
42 governments, 8developing countries
Geographic balance
Resources for readiness
Significant allocation toprivate sector
State of Play: resources and allocation
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Eight strategic result areas - Key investment sectors
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Investment criteria
Impact potential
Paradigm shift potential
Sustainable development potential
Responsive to recipients needs
Promote country ownership
Efficiency & effectiveness
8
• Can the project contribute to GCF's objectives and result areas?
• Can the project catalyze impact beyond a one-off project?
• Does the project have long lasting benefits such as E&S, gender, development impact?
• Does the project benefit the country and the targeted population?
• Does the project benefit country’s policies, climate strategies, and institutions?
• Does the project foster cost-effectiveness and private sector funding mobilization?
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Key roles and functions of NDAs and focal points
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GCF Project Cycle –until approval
Funding Proposal Review
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4
3
21
Guarantees
GrantsEquity
Concessional Loans
Financial instruments
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Monitoring• Monitoring and Evaluation
• Multi-stakeholder engagement
• National priorities, strategies, plans
• Coordination
Planning• Institution building
• Programming and preparation
GCF Readiness Support:Helping countries to build capacities
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Readiness ProgrammeObjectives
• Institutional capacity building support
- NDA Strengthening support
• Accreditation support
-Technical assistance to direct access entities
• Country Programming support
- Prioritization, stakeholder engagement, mapping of
stakeholders in priority sectors
• Support for the development of project proposal
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Why the PSF?
In
possible
Possible
Interventions
Access to the
private sector
• to unleash the potential of the private sector for clean
energy and climate resilience in developing countries
• to fund and mobilize institutional investors and leverage
GCF’s funds to encourage corporates to co-invest
• Combine flexible financial instruments with concessional
funding
- Long-term debt, credit lines and refinancing
- Equity to develop a project to full bankability
- Guarantees to bear specific risks
• Accredited entities with private sector operations
• Actively engaging with pension funds, insurance
companies, corporations, local and regional financial
intermediaries, and the capital markets.
Private Sector Facility
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GCF IN NUMBERS- Status as of 2017.Q2
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GCF Project portfolio (1)
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GCF Project portfolio (2)
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READINESS RESULTS As of 30 June 2017
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• Country ownership (NDCs)
• Decouple economic growth from high emissions investment (e.g. radical shift in production patterns)
• Paradigm shifting integrated solutions
• Serve SDGs-COP through coordinated strategies
• Promote policy action and knowledge for systematic actions by the public and private sector
Summary- GCF is key to implement Paris Agreement
and country actions
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Challenges
• Empowering Direct Access Entities
- Promote country ownership
- Assist direct access entities in developing their project ideas
• Enhance complementarity and coherence with other climate finance delivery channels
- Adopted the Operation Framework
- Hold annual meeting of Funds
- Cooperate with the Standing Committee on Finance
- Complementarity and coherence at national level with other Funds
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Climate Finance
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Climate Finance landscapeClimate finance flows in 2013-2014 (2014, USD billion and annualized)
23Source: UNFCCC Standing Committee on Finance, 2016 Biennial Assessment and Overview of Climate Finance Flows Report
Multilateral Climate FundsIncluding UNFCCC Funds
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Climate Finance Flows in 2013-2014, as estimated in the second BA(Biennial Assessment and Overview of Climate Finance Flows) , by
Standing Committee on Finance in 2016
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Total public climate finance breakdown by type of recipient (2014, USD billion)
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• Developed countries were urged to scale-up their level of support with a
concrete roadmap with strategies and approaches to achieve the goal of
mobilising US$100 billion per year by 2020 for climate action in developing
countries.
• MRV ( Measurement, Reporting, Verification)
Developed country Parties should provide transparent and consistent
information on support for developing country Parties through public
interventions biennially in accordance with the modalities, procedures
and guidelines to be adopted by CMA* at its first session
* Conference of the Parties serving as the meeting of the Parties to the Paris Agreement
Paris Agreement and Climate Finance
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Mobilised Climate Finance in 2013 and 2014 by funding sources (OECD)
- Public finance levels : US$37.9 billion in 2013 , US$43.5 billion in 2014 - Aggregate levels : US$52 billion in 2013 , US$62 billion in 2014
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Estimated public finance levels
in 2013, 2014, and 2020
Roadmap to 2020 - based on OECD’s Projection of Climate Finance
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Projected finance levels in 2020
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Assessment
Developed countries
• With the addition of private finance, the projected overall finance levels in 2020 would amount to above USD 100 billion
• The Projection should be considered a conservative, indicative aggregation of public climate finance levels in 2020, rather than a firm prediction
• Public adaptation finance is projected to double between 2013-14 and 2020
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Developing countries
• Lack of definitional clarity
- The Roadmap is based on many sources of climate finance flows,
but they cannot be compared because of the lack of clarity on the
definition of climate finance
- Climate finance from the developed countries should be “new” and
“additional”, which is over and above the official development
assistance
• Support for mitigation and adaptation is unbalanced
• Improvements in climate finance tracking and reporting of data is needed
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Thank you!ευχαριστώ